Indexed Finance’s Resilience: Defending the DAO and Charting a New Course
Indexed Finance, a prominent Ethereum-based project, recently emerged victorious in thwarting two aggressive takeover attempts on its Decentralized Autonomous Organization (DAO). This achievement is a significant milestone for the organization, especially in the wake of a substantial $16 million hack in 2021. With the Indexed DAO now secure, the focus shifts toward redistributing its treasury funds, specifically targeting compensation for victims of the previous breach.
Table of Contents
Defending Against Malicious Proposals
Former core contributor Laurence Day recounted the community’s unified effort to repel two takeover attempts on the Indexed DAO.
The initial threat surfaced when an attacker, holding a substantial amount of the protocol’s NDX token, stealthily proposed a takeover without a title or description. The Indexed community, led by Day, swiftly mobilized opposition votes, preventing the proposal’s passage just before it could take effect.
Anticipating further attacks, the team introduced a ‘poison pill’ proposal—a safeguard allowing the burning of treasury funds to deter potential threats.
Negotiations and Resolution
The foresight of the Indexed DAO proved crucial when a second attack loomed. The attacker, seeking a significant share of the treasury, was met with a strategic counteroffer by Dillon Kellar, a founding member. The proposal involved offering about $10,000 in DAI stablecoins or the threat to burn the entire treasury. Ultimately, the attacker accepted the terms, retracting their proposal.
Following these events, the Indexed team restructured their defense strategy, focusing on restitution. They transitioned governance control to a multisig system to enhance security and stability.
Progressing Towards Healing and Trust-Building
As the defensive stance eases, Indexed Finance now concentrates on healing and reinforcing trust within the community. This recent experience underscores not only the resilience and unity of the Indexed DAO but also the evolving challenges of security and governance in DeFi.
With threats neutralized and plans underway to compensate victims of the 2021 hack, Indexed Finance prepares to embark on a new phase.
This chapter signifies more than a successful defense—it’s a testament to resilience, adaptability, and the unwavering commitment to a secure and transparent DeFi ecosystem.