Submitted by xiaoming90, also found by cccz, imare, unforgiven, and csanuragjain
The NTokenMoonBirds Reserve Pool only allows Moonbird NFT to be sent to the pool contract as shown in Line 70 below.
https://github.com/code-423n4/2022-11-paraspace/blob/c6820a279c64a299a783955749fdc977de8f0449/paraspace-core/contracts/protocol/tokenization/NTokenMoonBirds.sol#L63
Note that the NTokenMoonBirds Reserve Pool is the holder/owner of all Moonbird NFTs within ParaSpace. If there is any airdrop for Moonbird NFT, the airdrop will be sent to the NTokenMoonBirds Reserve Pool.
However, due to the validation in Line 70, the NTokenMoonBirds Reserve Pool will not be able to receive any airdrop (e.g. Moonbirds Oddities NFT) other than the Moonbird NFT. In summary, if any NFT other than Moonbird NFT is sent to the pool, it will revert.
For instance, Moonbirds Oddities NFT has been airdropped to Moonbird NFT nested stakers in the past. With the nesting staking feature, more airdrops are expected in the future. In this case, any users who collateralized their nested Moonbird NFT within ParaSpace will lose their opportunities to claim the airdrop.
Loss of assets for the user. Users will not be able to receive any airdropped assets for their nested Moonbird NFT.
Update the contract to allow airdrops to be received by the NTokenMoonBirds Reserve Pool.
LSDan (judge) decreased severity to Medium
