Indexed Finance Thwarts Hijacking Attempts, Plans Compensation for Hack Victims
Summary:
After two successful defenses against hijacking attempts, Ethereum-based project Indexed Finance is returning control of its DAO back to its original founders. The remaining treasury will be used to compensate those affected by the $16 million hack in 2021. The community thwarted two seizure attacks, after which a 'poison pill' was approved allowing the Indexed DAO team to burn the remaining treasury funds if necessary to deter future attacks. After a second attack negotiation, the attacker withdrew their hostile proposal and Indexed Finance founders now plan to use the remaining funds to reimburse victims of the previous year's attack.
In 2021, Ethereum-based Indexed Finance was targeted by hackers and lost $16 million. Two recent hijacking attempts have been effectively fended off. The management of the project's decentralized autonomous organization (DAO) will now revert to its original creators, with plans to use the remaining treasury funds to recompensate the victims of last year's hack. Laurence Day, a previous central member of the project, released information on X detailing how the Indexed community successfully warded off two attempts to hijack the DAO's remaining treasury. The culprits managed to amass substantial amounts of the protocol’s NDX tokens, with intentions to take over the DAO's near $120,000 digital asset holdings via duplicitous plans.
The first plot, which was devoid of a title or description in a clear bid to evade detection, was stopped when Day and other community members rallied the Indexed DAO to vote against it. Despite the attacker's proposal initially being on the brink of acceptance within an hour, a sufficient number of negative votes prevented it from passing. Despite this success, the likelihood of a further attack was anticipated. Day's thread also highlighted another potential vulnerability that could expose funds beyond the DAO's treasury if managed by a malicious entity. To curtail the potential of another attack, a 'poison pill' proposal was approved by the Indexed DAO. This decision permits the ability to burn the remaining treasury money if necessary to deter prospective attackers.
Predictably, a second attack occurred, with the attacker asking for 50% of the remaining treasury, indicated through on-chain messages. In response, Indexed founder Dillon Kellar offered a counter-proposal of $10,000 in DAI stablecoins, along with a cautionary notice about the possibility of burning the entire treasury if there was a refusal. After an unsuccessful renegotiation attempt for $17,000 by the perpetrator, they agreed to the original offer and discontinued their hostile proposal four hours before Kellar's deadline. The DAO will now be managed by a multisig comprised of Day, Kellar, and the anonymous co-creator PR0. Their intention is to use the remaining treasury to reimburse the victims of the 2021 attack.
Published At
11/26/2023 11:44:41 AM
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