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.
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.
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.
