Key Takeaways:
Yuga Labs, the creator of Bored Ape Yacht Club, recovered 68 NFTs valued at more than $570,000 in a whitehat operation Sunday after an exploit hit the defunct liquidity platform Floor Protocol.
"The goal was to remove exposed NFTs from vulnerable Flooring pools before another malicious actor could exploit the same paths and extract them first," pseudonymous Yuga Labs VP of Blockchain 0xQuit said on X.
The recovered haul includes 29 Bored Apes, four Mutant Apes, one Bored Ape Kennel Club NFT, two CryptoPunks, one Azuki, two Elementals, 26 Captains, one Moonbird and two Doodles, according to Yuga Labs CEO Michael Figge. The rescue was led by 0xQuit with support from security researcher Coffee and liquidity assistance from GrailsOTC, which helped provide funds and NFTs to move exposed assets out of vulnerable pools.
The incident highlights the risks of NFT financialization protocols, where complex smart contracts combining fractional ownership, vault structures and redemption mechanics can create large asset-level exposure when the underlying collateral consists of rare NFTs rather than fungible tokens.
How the Exploit Worked
Floor Protocol, which entered sunset mode in September 2025, allowed users to deposit NFTs into pools and earn fungible fpTokens that could be traded or burned to redeem the underlying asset. The attacker started with a small amount of wrapped Ether and abused a flaw in the protocol's packed accounting logic to mint a near-infinite fpToken balance.
According to 0xQuit, a maliciously crafted token ID created a "ghost ownership state" where ownership checks passed under one reading while internal bookkeeping diverged under another. Two unchecked underflows followed, wrapping the attacker's balance to an enormous figure, which allowed them to dump fpToken prices toward zero and drain the affected pools.
Floor Protocol's architect said aggressive bit-level code contributed to the vulnerability being missed during security reviews.
Why Yuga Labs Stepped In
Researchers then found a second attack path that exposed higher-value pools containing blue-chip NFT collections. Those assets had escaped the first wave only because their pools held little liquidity. Bored Ape floor prices stood near 9 ETH, or about $15,000, while CryptoPunks held above 32 ETH, or roughly $55,000, according to CoinGecko data.
At those levels, the 29 Bored Apes alone were worth about $441,000, the largest single line in the haul. The exploit struck over the weekend, when fewer teams monitor on-chain activity.
Former Floor Protocol CEO FreeLunchCapital said the protocol faced liquidity issues and organizational changes that left parts of the NFT division unmanaged. FreeLunchCapital said they had continued providing liquidity and kept some of their own NFT assets on the platform to help users exit positions, adding that those assets became a primary target during the exploit.
Broader Market Context
The NFT market has cooled considerably since early 2022, when Bored Apes routinely traded above $300,000 and daily sales volumes for Ethereum NFTs exceeded $100 million. By comparison, the top sales volume day in 2026 stands at $32.3 million, CryptoSlam data shows. Despite the decline, CoinGecko data showed overall NFT market capitalization at about $1.4 billion as of Monday.
Yuga Labs is maintaining control of the assets as it works with Floor Protocol developers to find a solution and return the NFTs to their rightful owners. The rescue reinforces Yuga Labs' role as a steward of major NFT ecosystems beyond its own collections, but it also highlights how interconnected NFT liquidity infrastructure has become — and how fragile that infrastructure remains when placed inside experimental financial protocols.
This article is for informational purposes only and does not constitute investment advice.
