If you found my article, I would consider it a reasonable assumption that you already understand the importance of this
Brief Introduction
The splitDAO function was created in order for some members of the DAO to separate themselves and their tokens from the main DAO, creating a new âchild DAOâ, for example in case they found themselves in disagreement with the majority.
The child DAO goes through the same 27 day creation period as the original DAO. Pre-requisite steps in order to call a splitDAO function are the creation of a new proposal on the original DAO and designation of a curator for the child DAO.
The child DAO created by the attacker has been referred as âdarkDAOâ on reddit and the name seems to have stuck. The proposal and split process necessary for the attack was initiated at least 7 days prior to the incident.
The exploit one alone would have been economically unviable (attacker would have needed to put up 1/20th of the stolen amount upfront in the original DAO) and the second one alone would have been time intensive because normally only one splitDAO call could be done per transaction.
One way to see this is that the attacker performed a fraud, or a theft. Another way, more interesting for its implications, is that the attacker took the contract literally and followed the rule of code.
In their (allegedly) own words:
@stevecalifornia on Hacker News – https://news.ycombinator.com/item?id=11926150
“DAO, I closely read your contract and agreed to execute the clause where I can withdraw eth repeatedly and only be charged for my initial withdraw.
Thank you for the $70 million. Let me know if you draw up any other contracts I can participate in.
Regards, 0x304a554a310c7e546dfe434669c62820b7d83490″
The HACK
An “attacker” managed to combine two “exploits” in the DAO.
1) The attacker called the splitDAO function recursively (up to 20 times).
2) To make the attack more efficient, the attacker also managed to replicate the incident from the same two addresses (using the same tokens over and over again (approx 250 times).
Quote from “Luigi Renna”: To put this instance in a natural language perspective the Attacker requested the DAO âI want to withdraw all my tokens, and before that I want to withdraw all my tokens, and before that I want to⌠etc.â And be charged only once.
The Code That was Hacked
Below is the now infamous SplitDAO function in all its glory:
function splitDAO(
uint _proposalID,
address _newCurator
) noEther onlyTokenholders returns (bool _success) {
...
// Get the ether to be moved. Notice that this is done first!
uint fundsToBeMoved =
(balances[msg.sender] * p.splitData[0].splitBalance) /
p.splitData[0].totalSupply;
if (p.splitData[0].newDAO.createTokenProxy.value(fundsToBeMoved)(msg.sender) == false) // << This is
the line the attacker wants to run more than once
throw;
...
// Burn DAO Tokens
Transfer(msg.sender, 0, balances[msg.sender]);
withdrawRewardFor(msg.sender); // be nice, and get his rewards
// XXXXX Notice the preceding line is critically before the next few
â˘http://hackingdistributed.com/2016/06/18/analysis-of-the-dao-exploit/ Question: So what about Blockchain/DLs?
totalSupply -= balances[msg.sender]; // THIS IS DONE LAST
balances[msg.sender] = 0; // THIS IS DONE LAST TOO
paidOut[msg.sender] = 0;
return true;
}
The basic idea behind the hack was:
1) Propose a split.
2) Execute the split.
3) When the DAO goes to withdraw your reward, call the function to execute a split before that withdrawal
finishes (ie recursion).
4) The function will start running again without updating your balance!!!
5) The line we marked above as “This is the line the attacker wants to run more than onceâ will run more
than once!
Thoughts on the Hack
The code is easy to fix, you can just simply zero the balances immediately after calculating the fundsToBeMoved. But this bug is not the real issue for me – the main problem can be split into two areas:
- Ethereum is a Turing complete language with a stack/heap, exceptions and recursion. This means that even with the best intentions, we will create a vast number of routes through the code base to allow similar recursion and other bugs to be exposed. The only barrier really is how much ether it will cost to expose the bugs.
- There is no Escape Hatch for “bad” contracts. Emin Gun Sirer wrote a great article on this here: Escape hatches for smart contracts
Whilst a lot of focus is going in 2) – I believe that more focus needs to be put into making the language “safer”. For me, this would involve basic changes like:
- Blocking recursion. Blocking recursion at compile and runtime would be a big step forward. I struggle to see a downside to this, as in general recursion doesn’t scale, is slow and can always be replaced with iteration. Replace Recursion with Iteration
- Sandbox parameterisation. Currently there are no sandbox parameters to sit the contracts in. This means contracts the economic impact of these contracts are more empirical than deterministic. If you could abstract core parameters of the contract like the amount, wallet addresses etc etc and place these key values in an immutable wrapper than unwanted outcomes would be harder to achieve.
- Transactionality. Currently there in no obvious mechanism to peform economic functions wraped in an ATOMIC transaction. This ability would mean that economic values could be copied from the heap to the stack and moved as desired; but critically recursive calls could no revist the heap to essentially “duplicate” the value. It would also mean that if a benign fault occured the execution of the contract would be idempotent. Obviously blocking recursive calls goes some way towards this; but adding transactionality would be a material improvement.
I have other ideas including segregation of duties using API layers between core and contract code – but am still getting my head around Ethereumâs architecture.
