CryptoPunks holder recovers lost NFT after Yuga Labs pulls off white-hat rescue from Flooring Protocol bug

Losing a CryptoPunk to a smart contract bug is the kind of thing that keeps NFT holders up at night. Getting it back, though, is the kind of thing that almost never happens. Yuga Labs executed a white-hat operation on June 8, recovering 68 NFTs valued at over $500,000 from the Flooring Protocol after an accounting bug exposed the platform’s liquidity pools to exploitation. Among the rescued assets: two CryptoPunks, 29 Bored Apes, and four Mutant Apes. What actually went wrong The Flooring Protocol, an NFT fractionalization platform, had a flaw buried in its accounting and ownership verification logic. An attacker discovered that the bug allowed them to mint near-infinite fpToken balances, which is the protocol’s internal token used to represent fractional ownership of NFTs. The exploit enabled dust amounts of WETH to drain pools, a slow bleed that could have eventually emptied the protocol of its highest-value assets. The architect of Flooring Protocol, known as 0xFreeLunch, took responsibility for the vulnerability. Yuga Labs intervened before the damage spread further. The company deployed a defensive contract that effectively mirrored the exploit’s own mechanics, using the same ...