Resources

People often ask me "How did you learn how to hack?" The answer: by reading. This page is a collection of the blog posts and other articles that I have accumulated over the years of my journey. Enjoy!

Fei Protocol is a direct incentive stable coin which is undercollateralized and fully decentralized.

A recent update to their code fixed a reentrancy. This occurs when the check-effect-interaction pattern is not used. In other words, doing some action then updating the state of the contract later.

Why is this a bad flow? When sending money, or performing actions against a smart contract, a hook can be set on that interaction. Then, within the hook, the code can be called once again, putting the contract into a very weird state.

In this case, not all of the reentrancy bugs were fixed. The attacker abused two functions in this case: exitMarket and borrow. exitMarket verifies that a deposit is no longer being used as collateral, then withdraws it. borrow lets a user take out a loan.

The reentrancy attack was performed by calling borrow using a smart contact. When the function sends the loaned amount of money, it has NOT updated the internal state of that the asset is being used as collateral. As a result, a nested call can to exitMarket extracts the collateral for the loan.

This leads to the ability to extract the deposit used as collateral for the loan. This effectively allows infinite money to be borrowed, since nothing is used as collateral. $80 million was stolen using this technique.