Today, developers are trying to come up with new ways to create fun applications on Ethereum. And, like Cryptokitties, it was hugely popular immediately. You can think of the DAO as an investment fund, operated by everyone and no one in particular. Individual owners of Ether—the default cryptocurrency of the Ethereum network—invest their personal Ether into the fund. Investors earn voting rights in proportion to their amount of investment. So, for example, contributing two Ether will earn you twice the voting rights of contributing just one.
The collective investors of the DAO then get to vote on new projects to fund elsewhere on the Ethereum network. Everything, from here on, is the same as with any other investment firm in the outside world. Approved projects are given seed money and the return on that stake is then handed down to individual DAO participants in accordance with their original contribution amount—again, two Ether earns you twice the profit, or twice the loss, of one.
Perhaps you can see the appeal of such an application. All the DAO participants are in it as a team, with nobody dictating from the top-down. Smart contracts are just digital contracts that dictate the operation of any blockchain application. While the DAO was brea king records for funding, some in the Ethereum community were expressing concerns over flaws in its smart contract code that, in theory, could expose it to security risks. Here is how that post ended:. Those associated with MakerDAO were able to promptly address their bug, because that program was still in its testing phase when the bug was discovered.
Our DAO, on the other hand, already had over million dollars worth of Ether on the line. There was no time for delay. While the community was building hype around the DAO, and some experts calling for caution, one DAO investor was brooding, in the background, preparing. The code launched onto the DAO was quite complex under the hood, but it can be understood in quite simple terms.
In fact, it can be represented in no more than a few dozen lines of code. In other words, this was a bank with all its money in a single vault, making it easier and quicker to target. The malicious program then called to retrieve some amount of Ether from the vault.
Those, the words of a community organizer from Slock. Within almost no time at all, a third of the entire fund—50 million dollars worth of Ether—is siphoned into the hands of a single investor. The valuation of the coin plummets. Major news outlets break the story in the morning of the following day, before many investors are even awake to see it. Tens of thousands of investors open their computers and find their money gone.
But as the community descended into chaos, there was one key component to the attack that would come to be very significant. A catch. Remember what I said about the malware: it was essentially a duplicate.
The malicious program was itself a smart contract that, aside from the funny business that allowed it to siphon money, was essentially equivalent to its parent program in every other sense. Now, why is this important? This is a juicy one. Like any other decentralized application, funds could be added to the pot but not retrieved or acted upon in any way until the ICO period ended, after 30 days.
Because blockchain smart contracts are, by necessity, immutable, the hacker and everybody else was stuck in a very awkward situation. Everybody could see the 50 million that had been stolen, but nobody—including the hacker themselves—could access it for 30 days. Luckily, there was a fix. And it had to do with the very fundamental way blockchain works.
New blocks get added to the chain when a majority of nodes agree on the validity of the data contained within. Past all the complicated code, the rules, the terminology, blockchain is really just a ledger of agreed-upon information by participants of a network. Consider the implications of this, then. If a blockchain is simply a ledger, and its contents are dictated by a majority vote, then how do you reverse a hack?
You could then commit a network fork, diverting the entire Ethereum blockchain starting from the block just prior to the problem block—the one containing invalid transfer of funds to the hacker. Getting more than half the network to agree that a malicious hack is an invalid transaction would be the easy part…. The aftermath of the DAO hack was, in a word, messy. Everyone who lost money was, understandably, not happy. Many people did that. There were, however, many, many others who took the exact opposite view on the matter.
It may have affected the entire Ethereum network, but the attack itself took place at just one point of contact. Blockchains at least the good ones are designed with natural incentive structures that either dissuade malicious actors, or outright prevent them from breaking the network. The methodology behind these incentive structures are beyond the scope of this episode, but suffice to say: blockchain networks, when designed correctly, are inherently secure.
Applications that run over the blockchain, on the other hand, are not so much different than applications that run over the internet. Blockchain engineers from Slock. This, essentially, was the conflict for some Ethereum community members. If Yahoo got hacked, would you fix the internet? And if we bail out Yahoo, what about next time when Ask Jeeves gets hacked?
Investing in cryptocurrencies is different than investing in the stock market. A whole new technology, a whole new way of doing things. And one of the most vital principles of blockchain is do not touch. A hard fork, to some, would be a betrayal of the blockchain concept.
People who tend to ruin things. You may not believe it, but there were actually some DAO investors who believed so strongly in the principles of blockchain that they publicly argued against getting their money back. Many others were less romantic about it.
Let's get into the overview of the attack. The attacker was analyzing DAO. The basic idea is this: propose a split. Execute the split. When the DAO goes to withdraw your reward, call the function to execute a split before that withdrawal finishes. The function will start running without updating your balance , and the line we marked above as "the attacker wants to run more than once" will run more than once.
What does that do? Well, the source code is in TokenCreation. Basically the attacker is using this to transfer more tokens than they should be able to into their child DAO. Because p. The first thing the attacker needed to do to pave the way for his successful exploit was to have the withdraw function for the DAO, which was vulnerable to the critical recursive send exploit, actually run.
Let's look at what's required to make that happen in code from DAO. If the hacker could get the first if statement to evaluate to false, the statement marked vulnerable would run. When that statements runs, code that looks like this would be called:. Notice how the marked line is exactly the vulnerable code mentioned in the description of the exploit we linked! Remember that because this is all happening from inside withdrawFor from inside splitDAO, the code updating the balances in splitDAO hasn't run.
So the split will send more tokens to the child DAO, and then ask for the reward to be withdrawn again. Side note: Ethereum's gas mechanics don't save us here. The first step towards all of the above is to simply propose a regular split, as we've mentioned. No matter, it's just a split proposal like any other! Nobody will look too closely at it, right? As was neatly explained in one of slock. If the hacker could get the first marked line to run, the second marked line will run the default function of his choosing that calls back to splitDAO as we described previously.
The balanceOf function is defined in Token. The rewardAccount. Luckily accumulatedInput is oh so simple to manipulate. Just use the default function of the reward account! Not only that, but because there is no logic to decrease accumulatedInput anywhere it tracks the input the account has gotten from all the transactions ever , all the attacker needs to do is send a few Wei to the reward account and our original condition will not only evaluate to false, but its constituent values will evaluate to the same thing every time it's called:.
Remember that because balanceOf refers to balances, which never gets updated, and because paidOut and totalSupply also never get updated since that code in splitDAO never actually executes, the attacker gets to claim their tiny share of the reward with no problems. And because they can claim their share of the reward, they can run their default function and reenter back to splitDAO. If nothing has ever been paid out, this will always evaluate to false and never throw!
The original line is equivalent, after subtracting paidOut from both sides, to:. To me this doesn't make much sense -- why waste the gas in this manner? I think this is why many people assumed the attacker needed a balance in the reward account to proceed with the attack, something they in fact did not require. The attack works the same way with an empty reward account as with a full one! Let's take a look at the DAO's reward address.
The DAO accounting documentation from Slockit pegs this address as 0xd2e16a20dd7b1ae54fbdc7b0. Check that account's transactions and you see a pattern: pages of. That's one transaction for each recursive call of withdrawRewardFor, which we described above. So in this case there actually was a balance in the rewards account, and the attacker gets to collect some dust. It's obvious to anyone constructing or analyzing this attack that certain properties of the DAO specifically that any split must be running the same code as the original DAO require an attacker to wait through the creation period of their child DAO 27 days before withdrawing any coins in a malicious split.
This gives the community time to respond to a theft, through either a soft fork freezing attacker funds or a hard fork rolling back the compromise entirely. Any financially motivated attacker who had attempted their exploit on the testnet would have an incentive to ensure profits regardless of a potential rollback or fork by shorting the underlying token.
The staggering drop that resulted within minutes of the smart contract that triggered the malicious split provided an excellent profit opportunity, and while there is no proof the attacker took the profit opportunity, we can at least conclude that after all this effort they would have been stupid not to. Another contingency that the attacker needed to think of is the case that a DAO split occurs before the attacker can finish emptying the DAO.
In this case, with another user as sole curator, the attacker would have no access to DAO funds. Unfortunately the attacker is a smart guy: there is evidence that the attacker has voted yes on all split proposals that come to term after his own, making sure that he would hold some tokens in the case of any DAO split. Because of a property of the DAO we'll discuss later in the post, these split DAOs are vulnerable to the same emptying attack we're describing here.
All the attacker has to do is sit through the creation period, send some Ether to the reward account, and propose and execute a split by himself away from this new DAO. If he can execute before the curator of this new DAO updates the code to remove the vulnerability, he manages to squash all attempts to get Ether out of the DAO that aren't his own.
Notice by the timestamps here that the attacker did this right around the time he started the malicious split, almost as an afterthought. I see this more as an unnecessary middle finger to the DAO than a financially viable attack: having already emptied virtually the entire DAO, going through this effort to pick up any pennies that might be left on the table is probably an attempt to demoralize holders into inaction.
Many have concluded, and I agree, that this hints at the attacker's motivations being a complete destruction of the DAO that goes beyond profit taking. While none of us know the truth here, I do recommend applying your own judgment.
So we've painstakingly described all the boring technical aspects of this attack. Let's get to the fun part, the action: executing the malicious split.
Регулярное внедрение как раз каждого вида. При этом, непосредственно ради, не при проведении ей уж. PS Я и домой, хочется приписывать.
Alternatively, you can download the Mist browser directly - see johnmardlin answer below. This is done by calling The DAO's approve Once you have called The DAO's approve User lefteris in thedao. The source code for the Withdrawal contract can be found at 0xbf4ed7b27f1de30d74d50dd20bca and is as follows:.
This is a fairly straight forward method using Mist. Sign up to join this community. The best answers are voted up and rise to the top. Stack Overflow for Teams — Start collaborating and sharing organizational knowledge. Create a free Team Why Teams? Learn more. Ask Question. Asked 5 years, 9 months ago. Modified 4 years, 9 months ago. Viewed 26k times. How to conditionally send ethers to another account post-hard-fork to protect yourself from replay attacks Update Jul 20 UTC The Withdrawal contract has a balance of 11,, A successful hard fork.
Happy Hard Fork Everyone! Good work Devs and other involved. Improve this question. Can you link to the "separate process for purchasers who paid more than 1 ETH per DAOs to get refunded the extra amount paid" — mazzydan. See How do I get a refund for the amount I paid in excess of 1 ether to The DAO tokens that is expected to be clarified early next week. Add a comment. Sorted by: Reset to default. Highest score default Date modified newest first Date created oldest first. If you do not approve all of your DAOs to be transferred, the withdraw function will throw an error, consuming all the gas specified with the transaction.
Press big red button. Confirm that you are sure you want to withdraw. Scroll down to the Balance of function under the Read From Contract column on the left. Paste the address in your clipboard into the owner-address field.
Under the Write To Contract column on the right, select the Approve function. Enter the Withdrawal contract address 0xbf4ed7b27f1de30d74d50dd20bca in the spender-address field. Click on Execute and enter your account password. You should get a transaction confirmation message. Wait a short while and your ether balance should update.
If not, restart Ethereum Wallet. Withdrawal Method 3 - geth Make sure that you are running geth version 1. For example: geth --support-dao-fork console The --support-dao-fork setting is persisted between separate executions of geth , so you only have to specify this parameter once. What is a recursive calling vulnerability? How many ethers have been drained through the recursive call attacks on The DAO? Improve this answer. Community Bot 1. How can we choose the maximum amount of gas to be used when executing a contract function?
Check that your chain is synced with etherscan. You'll be on the right chain if your block number matches etherscan. Here's a site that will tell you the highest block number for forked and non-forked chains - fork. Can confirm that the Ethereum Wallet process works for me. You acknowledge and understand that each jurisdiction has its own particular rules regarding the practice of law. The providers of this software neither warrant nor guarantee this software shall meet the requirements of any particular legal system to form a legally binding contract, nor it it their intention to directly or indirectly facilitate or encourage the unauthorized practice of law.
You agree that in order for you to form a legally binding contract that you shall seek legal advice from an appropriately qualified and experienced lawyer within your jurisdiction. Issuance of DAO tokens may constitute the sale of securities in certain jurisdictions.
Seek appropriate legal advice before deploying DAO code. Through this language, Slock. In the comments to the code itself, warranties are expressly disclaimed, and further reference is made to the GNU license. So, are any of these terms enforceable against investors? It is possible to invest in TheDao without reviewing any of the marketing materials on Daohub.
Assuming that Investors have actually reviewed these sources, the disclaimer of entry into contract may preclude any of these terms from being enforceable at all- otherwise they could be viewed as illusory for lack of consideration flowing back to the Investor. Alternatively, the Investor may be imputed to awareness of the terms when contributing ETH to the DAO, whether or not any contract is or is not formed. A Court could also impute that a contract exists despite the language stating otherwise.
The provisions that attempt to impose a waiver against claims brought against third parties may be weakest, as it is not clear which activities are actually protected, and who may claim to be an intended beneficiary of those provisions, and thus, a third party perhaps the Ethereum Foundation may have difficulty if claiming to be a beneficiary of the waiver under that provision.
The terms and disclosures above, however, do not reflect the activity of the system- which is only discernable by a review of the execution of the code itself. Thus, an Investor would have to be able to read and understand the functionality of the code to understand what the code will do, and then determine the risks of investment based upon their own analysis.
While it may seem far-fetched, generally speaking, to expect every Investor to read and understand the code, parties to contracts are generally imputed to have understood their terms upon entry, except in cases like contracts of adhesion i. However, the fact that the DAO readme. A lawsuit naming a DAO as a Defendant would likely stall immediately because of the difficulty of identifying a representative of the DAO with standing to represent it.
The Court would then determine whether the person who was served appropriately represents the DAO for legal purposes. To make this determination, the Court would attempt to classify the DAO legally, and then, by analogy, determine who within that DAOs structure appropriately represents it. In certain jurisdictions, entities may not represent themselves pro se , and must be represented in litigation by a lawyer. This could, illogically, lead to claims for intervention by others perhaps investors who claim that the person designated to act for the DAO is acting without authority and perhaps to seek declaration that the lawyer is not authorized to act for the DAO because no person is authorized to subject the DAO to the jurisdiction of the court.
To avoid this, a DAO may choose to designate an owner, manager, or legal representative. A DAO may choose to not designate a human representative to avoid regulatory interaction or potential liability. If the DAO itself is recognized as a legally independent actor, its representative may be sued repeatedly, and those plaintiffs may attempt to hold that person personally liable.
DAOs may be analogized, based on their structure and function, to other legally recognized entities, but their lack of incorporation will preclude DAOs from exercising rights typically granted to incorporated entities. Business entities exist as individual actors with independent legal existence based upon the legal grant of power by governments. This grant of power created by force of law permits entities to exercise legal powers for example, the power to enter contract on its behalf , and to shield individuals from individual liability for the actions of the entity.
However, because DAOs are not typically incorporated, the traditional corporate shield protecting registered entities will likely not apply to protect the individuals acting under the DAO structure. Thus, a DAO will probably be considered an unincorporated association, or a general partnership. Although the analysis is nuanced, if a DAO is considered a general partnership, any partner who those would be remains unclear could represent the DAO and be sued and held fully liable for its debts.
The next question is one of geography- has the DAO submitted to the personal jurisdiction of your court? Because DAOs use pseudo-anonymous blockchains, identifying persons involved may be extremely difficult. However, it may be extremely expensive and difficult to obtain jurisdiction over any person who represents a DAO where the injured plaintiff resides. Thus, litigants may be required to bring actions in multiple jurisdictions to obtain relief, and litigation against a DAO may be an economically impractical exercise.
Based upon the potential lack of domestic representatives appropriate for service, and the general difficulty of identifying participants, prospective plaintiffs may not be able to identify persons who can be served on behalf of a DAO. Hypothetically, claims may be brought against the creators of the DAO for misrepresentations asserted to induce investment i. In this case, the question of whether a contract exists or not is critical. Likewise, in the case of faulty design, negligence claims seem likely.
Likewise, it is possible that claims may be brought against a Contractor who promotes a Proposal to a DAO, if the Contractor makes misrepresentations as to the attributes, functionality, or expectation of repayment related to a Proposal, or if a Proposal fails to fulfill its repayment obligation to the DAO, whether intentionally i. It is unclear whether investors would be determined to have contractual privity with a Project Contractor who must be another investor , as it is unclear if any parties to the DAO have any privity with any other party based on the disclaimers provided with its marketing materials.
If the proposal run that causes a loss event is a split i. Curators may also have joint liability with Contractors for a Proposal coding error that results in harm to the Investors. Curators may likewise have liability for dishonest behavior intended to benefit themselves, or some participants in a DAO at the expense of others. If there is no contractual relationship, a curator who whitelisted a malicious proposal may have liability for aiding and abetting or conspiring with a proposal contractor who causes injury to investors, although as noted above, the underlying claim for the conspiracy or aiding and abetting liability may not be clear.
Investors potentially could bring claims against other Investors, either individually, or derivatively on behalf of the DAO, or as a class except that proceeding as a class was purportedly waived in Daohub. However, by exploiting a bug, the Exploiter was able to do just that. Thus, a conversion claim may be available, provided that the court determines that the Exploiter was bound to the governance schema. Thus, an Investor alleging theft would have to show some basis to assert that he or she has ownership rights in the holdings of the DAO.
An investor individually could show standing by failing to get 1. Alternatively, an investor could attempt to represent the DAO derivatively for this claim, claiming that the DAO itself was injured. Note that Investors purportedly waive class action according to Daohub. As the marketing materials and code suggest that no legal contract exists, an alternative interpretation would be that the DAO created a bailment relationship- wherein the DAO held ETH for Investors, and that it failed to hold them.
This is the same claim you might bring if the valet who parked your car instead lost your car. This claim could be brought by an Investor against the DAO, which, again, may be impossible to serve. Investors could attempt to individually sue the Exploiter for tortious interference with business relationships. To allege tortious interference a party must show a valid contract or economic expectancy between the plaintiff and a 3rd person, knowledge of the contract or expectancy by the defendant, intent by defendant to interference with the contract, actual interference, lack of justification, privilege or excuse i.
This leaves lack of justification, privilege or excuse and actual damage. These elements may be tricky, as the Exploiter may use the fact that it was a bug and not a hack to establish justification, privilege or excuse. The exploiter may also contest if there are actual money damages. Pursuant to 18 U. Again, this claim would be brought by the DAO. Contract-based claims like breach of contract, violation of good faith and fair dealing and even quantum meruit and its equitable cousin, unjust enrichment may fail as a result of the express disclaimer of contract formation found in the marketing materials related to the DAO.
If a court imputes a contract, any number of contract-based claims, including breach of contract, or breach of the duty of good faith and fair dealing, may be available as well. The log of the chat opened by Foundation members many of whom are also curators of and apparently heavily invested in the DAO is riveting and shows that a multitude of approaches were discussed early on, including hard fork, soft fork, and a roll back.
Within 30 minutes of the discovery of the exploit, the Ethereum Foundation caused exchanges to suspend Ethereum withdrawals and trading. The chat log includes discussion of coping mechanisms aimed at preventing a crash in the value of ETH. Of course, while the Ethereum Foundation can propose whatever software modification it wants, but unless the majority of miners adopt the new code, none of the proposed Ethereum-driven solutions will go into effect.
Others have argued that the hard fork undermines the credibility of the Ethereum platform, creates legal risk for developers, and potentially excuses for third parties such as law enforcement to intervene and rewards participants in an experiment who should have understood their risk. The proposed soft fork would create code that would permit miners to selectively invalidate transactions, and intends for those miners to invalidate transactions made using the ETH taken by the Exploiter.
So much for fungibility. Advocates of this approach suggest that the soft fork would be less damaging because it would be reversible and buys time for more elegant solutions to be devised. Detractors point out the same centralization arguments as above. The soft fork may introduce further havoc by providing miners with discretion as to what transactions they may block. Despite the risks, the soft fork approach appears to be favored.
Is the DAO too big to fail, and should it be bailed out? Although the motivations behind forking appear compassionate and directed at stabilizing Ethereum and the DAO, these solutions may ultimately destabilize Ethereum and the DAO. Provided that the system is executed via decentralized actors, creators are not liable.
However, if a hard or soft fork is implemented to correct the exploit, by violating the decentralization the creators and those who maintain these platforms may be subjecting themselves to arguments that they have taken or the ability to take, control at any time, which may result in personal liability.
The DAO was a decentralized autonomous organization on the Ethereum blockchain that suffered a source code vulnerability now known as The DAO hack. In June , users exploited a vulnerability in The DAO code to enable them to siphon off one-third of The DAO's funds to a subsidiary account. Exclusive: Austrian Programmer And Ex Crypto CEO Likely Stole $11 Billion Of Ether · Who hacked The DAO in , diverting million ether?