How the Creator of DefiLlama Got a Concise, No-Fluff Security Review for Their NFT Lending Protocol
Challenge
NFT lending protocols face unique security challenges: oracle manipulation risks, edge cases in liquidation logic, and the complexity of handling non-fungible collateral. 0xNgmi needed confidence that LlamaLend's novel architecture was bulletproof before launch.
Solution
AuditBase delivered thorough analysis covering NFT collateral flow, oracle security, liquidation logic, interest accrual verification, and pool isolation—in the concise, no-fluff format the team requested.
“I really like the tool and how concise your report is. I feel like some audits add lots of padding that is completely useless.”
0xNgmi
Founder, DefiLlama
The Client
LlamaLend is an NFT lending protocol built by 0xNgmi, the pseudonymous creator of DefiLlama—the most widely used DeFi analytics dashboard in the industry, tracking over $50B in total value locked across hundreds of protocols.
LlamaLend solves a specific problem: enabling holders of small, illiquid NFT collections to access liquidity without selling. Users can deposit NFTs and borrow ETH up to one-third of floor value, paying interest only for the time they borrow. The protocol features a unique liquidation model where collection owners—not automated systems—decide how to handle defaults.
What We Did
- NFT collateral flow analysis tracing the complete lifecycle of deposited NFTs from collateralization through potential liquidation scenarios
- Oracle security review examining the single-request price attestation system for manipulation vectors and edge cases
- Liquidation logic audit validating the owner-controlled liquidation mechanism and late fee calculations that scale linearly over time
- Interest accrual verification confirming accurate time-based interest calculations and proper handling of partial repayments
- Pool isolation analysis ensuring proper separation between lending pools to prevent cross-contamination of risk
What We Found
Our review identified targeted improvements to strengthen LlamaLend's security posture—delivered in the concise format the team requested:
LOW — Oracle Price Staleness Window Recommended adding configurable staleness checks to the price attestation system to handle edge cases where signed prices might be replayed after significant market movement.
INFORMATIONAL — Late Fee Precision at Boundary Identified minor precision considerations in the 24-hour late fee scaling calculation. Documented expected behavior at edge cases for transparency.
INFORMATIONAL — Event Emission Completeness Suggested additional event emissions for off-chain indexing, improving integration with analytics tools like DefiLlama's own tracking infrastructure.
LlamaLend's core lending mechanics, liquidation system, and interest calculations were confirmed secure. The protocol's novel design choices—particularly the owner-controlled liquidation model—were validated as sound.
The Result
LlamaLend launched with confidence, providing NFT holders in underserved collections access to liquidity they couldn't get elsewhere. The protocol now operates on Ethereum, enabling borrowing against NFT collateral with the security assurance that comes from thorough—but not bloated—review.