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Indexed Finance, an Ethereum-based platform that had $16 million worth of crypto assets stolen in a hack attack in 2021, successfully prevented two takeover attempts and will now return the funds in the treasury to the victims of the hack attack. Laurence Day, a former executive of Indexed, explained how the Indexed DAO community came together to thwart the two attempts to seize the remaining funds.
How did the Indexed Finance Process Begin?
In the hack attacks on the platform, the protocol’s native token, NDX, was used to purchase large amounts, and the attackers tried to seize approximately $120,000 worth of crypto assets still controlled by the DAO through malicious proposals.
The first proposal against the DAO, which did not contain any title or description to avoid detection, failed to achieve its goal after Day and other participants called on the Indexed DAO community to vote against it. The malicious proposal expected to be accepted within an hour before enough “no” votes were cast.
As a result of these developments, the Indexed team had to publicly criticize the votes against the proposal. Day stated that he suspected a mimic attack would occur. Furthermore, as Day revealed in his own post, a security vulnerability outside the DAO’s treasury could also put other funds at risk if malicious actors gained control of the DAO.
Noteworthy Action from the Founder
According to messages sent on-chain, the attacker attempted to negotiate for 50% of the initially targeted treasury. Dillon Kellar, the founder of Indexed, responded with an offer of $10,000 in DAI stablecoin and threatened to burn the entire treasury if the attacker did not accept this offer.
After trying to negotiate for four hours and offering $17,000, the attacker finally accepted the initial offer and withdrew the malicious proposal. The control of the DAO will now be transferred to a multisig controlled by Day, Kellar, and PR0, who plan to reimburse the remaining treasury funds to the victims of the 2021 hack attack.
