Comment by ThomasRooney | Hacker News Reader

Comment by ThomasRooney | Hacker News Reader

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- I don't think there's any definitive details yet, but it could be an instance of this attack [1].

The code behind the DAO is available here [2].

Apparently [3], there's a bug where one can recursively call `splitDAO` multiple times to extract ether from the contract if one has a split open.

- Ether can go missing when it is sent to a public address which has no known corresponding private key. It's a "we can't inverse a hash" type of problem.

- People lose if they're holding a long position on ETH, or have DAO which they can now no longer recoup to ETH. People gain if they're shorting ETH, or are the attacker themselves (it looks like the ETH from the dao is going to this address [4])

- Looks to be an existential threat to the DAO from where we're standing right now. I can't see any mitigations but an entire Ethereum blockchain split.

[1] https://blog.slock.it/no-dao-funds-at-risk-following-the-eth...

[2] https://github.com/slockit/DAO/blob/develop/DAO.sol

[3] http://pastebin.com/DykumjLs

[4] http://etherscan.io/address/0x304a554a310c7e546dfe434669c628...

Ah, I see: the money isn't missing, it's just gone to an unknown party (the hacker) - so we're practically watching a bank heist in progress, where the "good guys" are trying to slow down the robber's getaway vehicle (by flooding the transaction network).

I looked into this a bit more, and it seems very likely that the attackers are exploiting a recursive call - from https://live.ether.camp/account/304a554a310c7e546dfe434669c6..., I can see that most of the transactions are internal, with the API reporting monotonically increasing call-depth values. It seems like there are three recursive calls involved here: one call in the DAO, a second call to transfer money to the attacker, and a third "dummy" call which appears to transfer nothing (but presumably kicks off the next recursion into the DAO).

The scary thing, to me, is that someone else could figure out the bug right now and start exploiting it - presumably, all the relevant code is open source.

I'm not sure someone else could start exploiting the bug - I suspect that they need to have DAO tokens and successfully vote to split their share off into a new sub-DAO they control first, and if I recall correctly there's a minimum voting period that has to elapse for that to happen.

This is astonishing. The company behind the DAO knew that the bug in question affected withdrawals from the DAO rewards balance and wrote a blog post saying this isn't an issue because it's empty, but either didn't bother checking whether withdrawals of of people's original capital through the splitDAO mechanism (which is possible) had the same bug, or did and pretended it didn't exist and everyone's funds were fine.

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