Indexed DAO Overcomes Security Threats, Plans Victim Compensation

Kelvin Munene Murithi
November 26, 2023
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DAO Projects

Indexed Finance has successfully averted two aggressive takeover attempts on its Decentralized Autonomous Organization (DAO). This blockchain-based entity, victim to a significant $16 million hack in 2021, faced recent threats from attackers aiming to commandeer its treasury. Yet, the community’s vigilance and strategic maneuvers ensured its safety, safeguarding assets worth about $120,000.

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The Battle Against Malicious Proposals

The first sign of danger emerged when an attacker, leveraging significant holdings in the protocol’s NDX token, launched a covert proposal to seize control. This move, lacking any title or description, nearly slipped under the radar. However, the Indexed community, led by former core contributor Laurence Day, mobilized swiftly. They rallied a formidable defense, casting enough dissenting votes to thwart the attack barely an hour before its potential success.

Recognizing the likelihood of a repeat assault, Day and the team prepared. They anticipated another attempt, potentially exploiting an identified vulnerability that could endanger funds beyond the immediate treasury. They adopted a defensive strategy – a ‘poison pill’ proposal. This tactic would enable the burning of the treasury funds, a drastic measure aimed at deterring future attacks.

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Indexed Finance Negotiations and Resolution

Indeed, a second threat materialized. This time, the attacker, emboldened, sought a direct negotiation, demanding a significant portion of the treasury. In a calculated move, Dillon Kellar, a founding member of Indexed, countered with an offer – a mere fraction of the demand, paired with a stark ultimatum. With the clock ticking, the attacker capitulated, accepting the $10,000 counteroffer and retreating.

In response to these threats, the Indexed team adjusted their strategy. They canceled the ‘poison pill’ proposal and instead transferred control of the timelock to a 2/3 multisig. This multisig, managed by Day, Kellar, and the pseudonymous co-founder PR0, represents a strategic pivot to ensure greater security and governance stability. This decisive action marks the end of a tumultuous chapter for Indexed, with the community emerging more robust and united in the face of adversity.

As Indexed Finance transitions from defense to restitution, the focus shifts to healing and rebuilding trust within the community. This episode not only demonstrates the resilience and solidarity of the Indexed DAO but also highlights the evolving nature of security and governance in the DeFi space. With the attackers thwarted and plans for victim compensation in place, Indexed Finance looks to a future where such incidents serve as lessons for more robust, more secure decentralized financial systems.

Read Also: Zipmex Thailand Announces Trading Halt Amid Regulatory Compliance

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.