Missing Harberger Fee Deduction in CollectionToken.mint
Summary
Bug Report: Harberger Fees Not Deducted During Liquid Listing
1. Bug Title: Missing Harberger Fee Deduction in CollectionToken.mint
2. Trigger Condition:
This bug is triggered whenever a user creates a Liquid Listing for an NFT. The CollectionToken contract, responsible for minting the fungible representation (ƒ tokens) of the listed NFT, does not deduct the pre-paid Harberger Fees as specified in the whitepaper.
3. PoC Flow:
User Lists NFT: A user initiates a Liquid Listing for a non-floor NFT, setting a desired floor multiple (redemption price).
CollectionToken.mint Called: The platform calls the CollectionToken.mint function to issue ƒ tokens to the user representing the initial liquidity received for the listing (equivalent to one floor NFT).
No Fee Deduction: The mint function in CollectionToken.sol unconditionally mints the full _amount of ƒ tokens to the user without deducting any pre-paid Harberger Fees.
4. Impact:
Free Liquidity Exploitation: Users can list their NFTs at extremely inflated prices while still receiving the full amount of floor tokens (1 ƒ token), effectively obtaining free and unbacked liquidity.
ƒ Token Depegging: The unchecked minting of ƒ tokens without proper fee deduction dilutes their value and leads to a disconnect between the token price and the actual market value of the underlying NFTs.
Unhealthy Listing Ecosystem: Incentivizes manipulative listings with exorbitant redemption prices, hindering legitimate trading and "Trade-Up" opportunities.
Protocol Sustainability Threat: Undermines the core value proposition of the Harberger Fee model, which is designed to encourage fair pricing and discourage price manipulation.
5. Code Snippet: CollectionToken.mint:
/**
* Allows our creating contract to mint additional ERC20 tokens when required.
*
* @param _to The recipient of the minted token
* @param _amount The number of tokens to mint
*/
function mint(address _to, uint _amount) public onlyOwner {
if (_to == address(0)) revert MintAddressIsZero();
_mint(_to, _amount); // <--- Full amount minted without fee deduction
}
Recommendation:
Modify the CollectionToken.mint function to first calculate and deduct the pre-paid Harberger Fee from the total _amount before minting the remaining amount of ƒ tokens to the user. This modification will ensure that users pay the required interest on their listings, promoting fair pricing and a robust ecosystem.
Rough Corduroy Eagle
High
Missing Harberger Fee Deduction in CollectionToken.mint
Summary
Bug Report: Harberger Fees Not Deducted During Liquid Listing
1. Bug Title: Missing Harberger Fee Deduction in CollectionToken.mint
2. Trigger Condition:
This bug is triggered whenever a user creates a Liquid Listing for an NFT. The CollectionToken contract, responsible for minting the fungible representation (ƒ tokens) of the listed NFT, does not deduct the pre-paid Harberger Fees as specified in the whitepaper.
3. PoC Flow:
CollectionToken.mintfunction to issue ƒ tokens to the user representing the initial liquidity received for the listing (equivalent to one floor NFT).mintfunction inCollectionToken.solunconditionally mints the full_amountof ƒ tokens to the user without deducting any pre-paid Harberger Fees.4. Impact:
5. Code Snippet:
CollectionToken.mint:Recommendation:
Modify the
CollectionToken.mintfunction to first calculate and deduct the pre-paid Harberger Fee from the total_amountbefore minting the remaining amount of ƒ tokens to the user. This modification will ensure that users pay the required interest on their listings, promoting fair pricing and a robust ecosystem.Root Cause
No response
Internal pre-conditions
No response
External pre-conditions
No response
Attack Path
No response
Impact
No response
PoC
No response
Mitigation
No response