DYOR Crypto Wiki
Tag: Visual edit
Tag: Visual edit
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== Basics ==
* Ethereum Token Project to be a [[Decentralised Autonomous Organisation (DAO)|Decentralised Autonomous Organisation]]. Had a huge [[ICO]].
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* Ethereum Token Project that aimed to be a [[Decentralised Autonomous Organisation (DAO)|Decentralised Autonomous Organisation]]. Had a huge [[ICO]].
 
* ''"The now infamous DAO [https://medium.com/coinmonks/breaking-down-buterin-hitzig-and-weyls-liberal-radicalism-paper-ba5192248b2 was essentially] a [[decentralised]] crowdfunding organisation which aggregated pledged [[ETH]] into a pool. Investors were then able to vote, proportional to their DAO [[token]] holdings, on which projects they wanted the DAO to fund."''
 
* ''"The now infamous DAO [https://medium.com/coinmonks/breaking-down-buterin-hitzig-and-weyls-liberal-radicalism-paper-ba5192248b2 was essentially] a [[decentralised]] crowdfunding organisation which aggregated pledged [[ETH]] into a pool. Investors were then able to vote, proportional to their DAO [[token]] holdings, on which projects they wanted the DAO to fund."''
 
* In essence, the platform would allow anyone with a project to pitch their idea to the community and potentially receive funding from The DAO. Anyone with DAO tokens could vote on plans, and would then receive rewards if the projects turned a profit. With the financing in place, things were looking up.
 
* In essence, the platform would allow anyone with a project to pitch their idea to the community and potentially receive funding from The DAO. Anyone with DAO tokens could vote on plans, and would then receive rewards if the projects turned a profit. With the financing in place, things were looking up.
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* ''"The DAO [https://tokentuesdays.substack.com/p/the-rise-of-daos went on] to host the biggest blockchain crowdsale to date. At its peak, 14% of all [[ether]] in existence was held in the DAO contract - a crazy notion relative to something like [[DeFi]] today (11-12-2019) which holds ~2% of all Ether in circulation. DAO tokens were freely traded on secondary exchanges like [[Poloniex]] and [[Kraken]] as everything was looking good and functioning well."''
 
* Stopped after exploit of the contract, also known as The DAO Hack. This hack led to the split between [[Ethereum (ETH)|Ethereum]] and [[Ethereum Classic (ETC)|Ethereum Classic.]]
 
* Stopped after exploit of the contract, also known as The DAO Hack. This hack led to the split between [[Ethereum (ETH)|Ethereum]] and [[Ethereum Classic (ETC)|Ethereum Classic.]]
* For an explanation of this whole episode [https://medium.com/swlh/the-story-of-the-dao-its-history-and-consequences-71e6a8a551ee go here]
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* For an explanation of this whole episode [https://medium.com/swlh/the-story-of-the-dao-its-history-and-consequences-71e6a8a551ee go here].
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== The Hack ==
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* [https://tokentuesdays.substack.com/p/the-rise-of-daos From] [[Token Tuesdays]] (11-12-2019):
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''"In early June, just 3 months after it’s launch, community members started vocalizing vulnerabilities surrounding recursive calls. Almost immediately after, a hacker exploiting the issues in questions as fixes were undergoing voting.<br>
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<br>
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Without going into too much detail, the attacker was able to “ask” the DAO contract to give [[ETH]] back multiple times before the [[smart contract]] could update its balance. Here’s a great explainer for anyone interested in going deeper into what happened.<br>
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<br>
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Upon the attack being triggered, ⅓ of the DAO funds (roughly 4% of all Ether in circulation) was siphoned and held in [[Escrow Contract|escrow]]. One of the more fascinating aspects regarding the hack was that multiple sources cited that more funds could have been taken but for some reason the attack stopping at about a third of the way there.<br>
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<br>
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In the next few weeks, the community rallied together to figure out a mechanism for retrieving the stolen funds. In July of 2016, Ethereum [[forked]] and returned the stolen funds back to the original owners. This is what created [[Ethereum Classic (ETC)|Ethereum Classic]] as we know it today.<br>
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<br>
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Upon the hack being reversed, DAO [[tokens]] became redeemable for ETH (1 ETH = 100DAO) signaling when the DAO started losing traction. By September, many exchanges were delisting DAO tokens and in the coming summer, the [[SEC]] stepped in and labeled DAO tokens a security - effectively marking it game over."''
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== Community members ==
 
* [[Vitalik Butterin|Butterin, Vitalik]]; signatory
 
* [[Vitalik Butterin|Butterin, Vitalik]]; signatory
 
* Jentzsch, Christoph; wrote the code
 
* Jentzsch, Christoph; wrote the code

Revision as of 03:37, 21 January 2020

Basics

  • Ethereum Token Project that aimed to be a Decentralised Autonomous Organisation. Had a huge ICO.
  • "The now infamous DAO was essentially a decentralised crowdfunding organisation which aggregated pledged ETH into a pool. Investors were then able to vote, proportional to their DAO token holdings, on which projects they wanted the DAO to fund."
  • In essence, the platform would allow anyone with a project to pitch their idea to the community and potentially receive funding from The DAO. Anyone with DAO tokens could vote on plans, and would then receive rewards if the projects turned a profit. With the financing in place, things were looking up.
  • "The DAO went on to host the biggest blockchain crowdsale to date. At its peak, 14% of all ether in existence was held in the DAO contract - a crazy notion relative to something like DeFi today (11-12-2019) which holds ~2% of all Ether in circulation. DAO tokens were freely traded on secondary exchanges like Poloniex and Kraken as everything was looking good and functioning well."
  • Stopped after exploit of the contract, also known as The DAO Hack. This hack led to the split between Ethereum and Ethereum Classic.
  • For an explanation of this whole episode go here.

The Hack

"In early June, just 3 months after it’s launch, community members started vocalizing vulnerabilities surrounding recursive calls. Almost immediately after, a hacker exploiting the issues in questions as fixes were undergoing voting.

Without going into too much detail, the attacker was able to “ask” the DAO contract to give ETH back multiple times before the smart contract could update its balance. Here’s a great explainer for anyone interested in going deeper into what happened.

Upon the attack being triggered, ⅓ of the DAO funds (roughly 4% of all Ether in circulation) was siphoned and held in escrow. One of the more fascinating aspects regarding the hack was that multiple sources cited that more funds could have been taken but for some reason the attack stopping at about a third of the way there.

In the next few weeks, the community rallied together to figure out a mechanism for retrieving the stolen funds. In July of 2016, Ethereum forked and returned the stolen funds back to the original owners. This is what created Ethereum Classic as we know it today.

Upon the hack being reversed, DAO tokens became redeemable for ETH (1 ETH = 100DAO) signaling when the DAO started losing traction. By September, many exchanges were delisting DAO tokens and in the coming summer, the SEC stepped in and labeled DAO tokens a security - effectively marking it game over."

Community members