Indexed Finance Foils Two Hijacking Attempts, Returns Control to Founders
Indexed Finance, a project on the Ethereum blockchain that experienced a $16 million hack last year, has successfully thwarted two attempts to hijack its decentralized autonomous organization (DAO). The project’s founders will regain control of the DAO and plan to allocate the remaining treasury to victims of the 2021 hack.
The First Hijacking Attempt
In a thread on X (formerly Twitter), Laurence Day, a former core contributor, revealed how the Indexed community overcame two hijacking attempts on the DAO’s treasury. Both attackers had acquired a significant amount of the protocol’s NDX token and aimed to gain control of the DAO’s approximately $120,000 in digital assets through malicious proposals. The first proposal, lacking a title or description, was blocked as community members voted against it.
Anticipating Copycat Attacks
As the Indexed team openly coordinated votes against the first proposal, Day anticipated the possibility of a copycat attack. He also highlighted another vulnerability that could put funds beyond the treasury at risk if they fall into unfriendly hands.
Mitigating Future Attacks
To mitigate the threat of another attack, the Indexed DAO approved a “poison pill” proposal. This grants them the authority to burn the remaining treasury funds if necessary to deter potential attackers.
The Second Attack and Resolution
In the anticipated second attack, the assailant initially sought to negotiate for 50% of the remaining treasury. Indexed founder Dillon Kellar responded by offering $10,000 worth of Dai (DAI) and warned of burning the entire treasury if the attacker refused. After attempts to counter-negotiate failed, the attacker accepted the original offer just four hours before Kellar’s ultimatum. Control over the DAO will now return to a multisig controlled by Day, Kellar, and the pseudonymous co-founder PR0. They plan to compensate victims of the 2021 hack using the remaining treasury funds.
Hot Take: Indexed Finance Overcomes Hijacking Attempts, Restores Control to Founders
Indexed Finance has successfully defended its decentralized autonomous organization against two hijacking attempts on its treasury. The efforts of the community and founders allowed them to regain control and allocate remaining funds to victims of a previous hack. This incident highlights the importance of proactive measures in protecting blockchain projects from malicious actors. By implementing a “poison pill” proposal and negotiating with the attacker, Indexed Finance demonstrated its commitment to safeguarding its ecosystem. This outcome serves as a reminder that vigilance and resilience are crucial in maintaining the integrity of decentralized systems.
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