Dec 2021 - Visor Finance Unlimited Minting - $8.2m (Global)
"Visor Finance is a Uniswap based protocol that is specialized in NFT smart vaults for liquidity provisioning. It predicts the DeFi ecosystem where market conditions can unlock liquidity from networks of independent smart vaults."
"Visor allows DeFi participants to utilize NFT Smart Vaults for liquidity provisioning and active liquidity management on Uniswap v3." "Visor's community is thousands strong and is distributed across a variety of channels."
"As @uniswap v3 makes liquidity provision more complicated for the common man, @VisorFinance allows you to compete with professional liquidity providers by pooling peoples liquidity together and dynamically concentrating it around price to maximize returns for you."
"It is the season of giving, and Visor Finance is going all in. Visor allowed an anonymous actor to mint $8.2M in VISR."
"On December 21st 2021 02:29:11 PM UTC a malicious contract drained Visor Finance’s staking contract of 8,812,958 VISR tokens." "Hackers used the IVisor delegateTransferERC20 interface to generate the exploit. The hackers also used the withdrawal function of the staking contract to call for the desired VISR amount. As a result, reliance on an external IVisor delegateTransferERC20 implementation by the caller allowed the exploit to succeed."
"As long as the hacker passes their own contract as “from” and the contract has an Owner() method of msg.sender, then they can mint as many shares as they want to any address using vvisr.mint()."
"The attack was made possible by implementing the IVisor delegateTransferERC20 interface and calling the staking contract’s withdraw function with the desired VISR amount. Dependence on arbitrary IVisor delegateTransferERC20 implementation by caller allowed for the attack to take place."
"The staking contract should not rely on a user provided contract to implement the required transfer function. The staking contract should instead rely on a fixed transfer implementation such as ERC20.transferFrom."
"The attacker transferred ownership of the contract to its own address, before executing the exploit transaction, minting 195k vVISR tokens."
"These were then burned for 8.8M VISR before being swapped via Uniswap v2 for ETH and washed via Tornado Cash in 7 subsequent transactions totalling 113 ETH ($450k) so far."
"Post exploit, VISR’s price witnessed a steep drop amounting to 94 percent. At press time, VISR was trading at the price of $0.054998, with a market cap that stood slightly over $1 million, according to CoinMarketCap data."
"We will only manage funds using contracts audited by tier one audit firms." "We are engaged with both Quantstamp and ConsenSys Diligence for December and January audits and this new staking contract will be included."
"Launching a new token that replaces the old one is confusing if the ticker stays the same. What we have opted to do is replace the old VISR token ticker symbol with the new one. All tokenomics will stay the same and there will be a redemption (from the time of the snapshot) of 1:1 with the new token, including those staked in the vVISR contract and the those staked in Tokemak. We have already begun the process of listing the new token on various registries in order to make sure the new token is visible and recognized by dexes and wallets starting day one. No one should buy VISR as it will not be redeemable for the new token."
"Since the initial grant from Visor in May 2021, Gamma’s team has worked closely with Visor and has made extraordinary progress on defining and becoming the leading active liquidity manager."
"For the past 6 months the Gamma team has worked on all the tooling necessary to interface with position management as well as develop active liquidity strategies managing $25M in TVL and 40+ pairs for both retail LP’s and projects. We have an incredible structure in place that allows us to execute on the most competitive aspect of active liquidity management: the strategies."
"In addition to managing all positions, Gamma also develops and maintains the Active Strategy Framework, Uniswap position discovery for Mainnet, and Optimism and various deployed strategies that are currently active across all pairs."
"Visor is merging with Gamma Strategies." "[W]e have reached unanimous agreement as two teams that the appropriate outcome is to merge the protocol, treasury and personnel with Gamma Strategies." "Tomorrow, Gamma will be providing liquidity for $GAMMA and will be distributing tokens to all VISR, vVISR and tVISR holders at time of snapshot (occurred December 21st)."
"GAMMA token has been minted and all tokens will be distributed to all VISR, vVISR and tVISR holders at time of snapshot within the next 24 hours." "The $GAMMA token has been distributed to all addresses and liquidity has been deployed to Uniswap v3 of identical amounts and price at the time of the snapshot."
Further Analysis
Due to a bug in the Visor Finance smart contract, an attacker was able to mint an unlimited number of VISR tokens. These were then sold on the open market. The Visor Finance project has merged with Gamma Strategies, and all affected users will be issued new GAMMA tokens.
How Could This Have Been Prevented?
In general, complex smart contract hot wallets shouldn't be in charge of minting. Instead, this should always be the responsibility of a simple multi-sig wallet with cold storage keys held by trusted individuals. If a hot wallet is needed for distribution, that should be audited by two competent firms and never exceed a value which the project can self-insure from other liquid assets.
More Cryptocurrency Exchange Hacks/Scams/Frauds
Mirror Protocol Governance Attack > > < < SolNFTMinting Solana Auto-Approve Theft Whiskeytango99
Sources/Further Reading
Rekt - Visor Finance - REKT (Jan 3)
Visor Finance - Active Liquidity Management on Uniswap v3 (Jul 14)
@GammaStrategies Twitter (Jan 3)
Post Mortem For Vvisr Staking Contract Exploit And Upcoming Migration (Jan 3)
Visor Merges With Gamma A Re Org Focusing On Security And Performance (Jan 3)
Defi Hack: Visor Finance to launch new token post 94% drop in price after exploit (Jan 3)
Visor Finance Suffers another DeFi Hack as Losses Mount Up to $8.2M (Jan 3)
This is why Visor Finance (VISR) price plummeting (Jan 3)
@GammaStrategies Twitter (Jan 3)
Santa Hackathon? Visor Finance Marks 7th Hack in December (Dec 1)
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