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Critical Update on DAO Vulnerability

blog.ethereum.org

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Re: Critical Update on DAO Vulnerability

#471

Post by [deleted] »

dzdt wrote: post #319
3pt14159 wrote: post #310

Earlier quoted context omitted.

There is nothing stoping you from getting involved in a much more complex scheme of contracts. You could easily set up a system where a web of trust filtered, community funded "court" creates a wallet that is used for mitigating disputes. If a judgement (done by key signing votes) goes against a user you decrement how much they are going to get after the period ends and you increment how much the claimant gets. If no…

Your word "easily" translates to "I haven't really thought hard about it and I am not an expert but it seems easy to me." That is a trap for beginners to cryptographic systems. Getting it right in all details is HARD, as has been proven time and again by failures. The theory is hard, the implementation is hard, and making it usable is hard.

[deleted]

Re: Critical Update on DAO Vulnerability

#472

Post by amluto »

benmmurphy wrote: post #140

My guess at how the attackers are doing it: They are calling splitDAO: https://github.com/slockit/DAO/blob/develop/DAO.sol#L618 splitDAO calls withdrawRewardFor which ends up calling back into the users contract. https://github.com/slockit/DAO/blob/develop/DAO.sol#L686 withdrawRewardFor(msg.sender); // be nice, and get his rewards totalSupply -= balances[msg.sender]; balances[msg.sender] = 0; paidOut[msg.sender] = 0;…

This makes sense to me, but where's the actual code that calls into the attacker's contract and lets the attacker call back into splitDAO?

And how on Earth is it a good idea to allow one contract to call another? There are any number of more sensible ways to communicate that don't have this problem: allow contracts to pass messages to other contracts, allow contracts to subscribe to each other's events, etc.

Re: Critical Update on DAO Vulnerability

#473

Post by Everhusk »

joosters wrote: post #26

Just remember, when the developers inevitably appear with suggestions about how to stop the hack, roll back the blockchain, or come up with other schemes to block the hackers, they are showing everyone that all the talk of blockchains being decentralised, or being beyond the control of governments or other powers... is a complete lie. If this hack can be stopped, then it demonstrates that the currency can be manipula…

Also just remember, that Rome was not built in one day. Progressing mankind with a functioning DAO is most likely worth much more than even a $200M failure (worst case scenario) if you look at how it could increase world productivity/efficiency.

Re: Critical Update on DAO Vulnerability

#474

Post by erikpukinskis »

imglorp wrote: post #214

This is what concerns me about contract programming. With human contract law, if there's a minor typo or loophole, participants can generally see the spirit and intent, and at worst go to a judge who will usually enforce the intent. But with software contracts, only the characters matter and there's no intent anywhere: either you get paid or you don't. ETH is advising, "Contract authors should ... be very careful abo…

I'm surprised no one has mentioned: Human contract law still applies in this case. DAO members can still go to the FBI and try to find the "attacker". They can still ask the courts to try to take their Ethers back.

Re: Critical Update on DAO Vulnerability

#475

Post by qwtel »

kauffj wrote: post #335
nsajko wrote: post #317

Earlier quoted context omitted.

Why are prediction markets a huge boon for the world? Isn't that just a fancy term for betting anyway?

They provide a far more accurate insight into the likelihood of events than any other alternative. You can think of it as betting if you like, but it's betting with lots of positive externalities. Consider a business that needs to reason about the probability of a law passing, severity of global warming, or any number of other difficult to predict events. Prediction markets would provide by far the most accurate insi…

EDIT: Moved to the correct location in the discussion tree.

It's very frustrating for me to see "probability of a law passing" and "severity of global warming" being thrown in the same basket.

While the first lends itself naturally to be framed as a binary prediction market (and there are good reasons to believe that the market will produce reliable forecasts), "severity" doesn't lend itself to be framed in this way (in Taleb terms, it is a non-linear payoff from a complex domain, "4th quadrant"). Ignoring that there is a lot of ideology involved in defining the exact terms, in my mind it is just unreasonable to expect prediction markets (or any mechanism for that matter) to deliver reliable results in this case.

Even when not accepting the Taleb argument regarding our ability to predict, at least it should be acknowledged that it is not straight-forward to generalize from binary outcomes to open-ended ones.

Re: Critical Update on DAO Vulnerability

#476

Post by amluto »

Wow, theDAO has a shockingly cavalier attitude to security (https://github.com/slockit/DAO/wiki/The-DAO-v1.0-Code):

> At the time of deployment, it was discovered that the solidity compiler is not deterministic. AST nodes are identified by their raw pointers. So if we iterate over data structures, different raw pointers might result in a different iteration order.

> We originally wanted to let the community deploy The DAO and then just check the bytecode, but this was not possible at the moment of deployment. So instead a fixed transaction bytecode was provided for the community to deploy.

Shouldn't they have waited to deploy until they figured out how to make it verifiable?

Re: Critical Update on DAO Vulnerability

#477

Post by penguinduck »

cpa wrote: post #233
sznurek wrote: post #195

I have a (maybe naive) question: why is the person draining ETH from DAO called "attacker"? I seems to me that the idea behind smart contracts was to have unambiguous description of what are participants agreeing to. The "attacker" is doing precisely this - I had not heard of any bug in Ethereum implementation that is used, only "bug" in DAO's smart contract. So he is allowed to do this, by contract definition. Isn't…

Obviously you're right, that's tautological! The "attacker" didn't do more than what the system allowed her to do. People have expectations about what the DAO is and isn't. I'd guess that very few people bothered to read the source code of the contract, let alone look for vulnerabilities. So you have a group of people who have agreed on an informal contract (we pool money, votes are weighted by the sum I've put…) but…

It's not a bug by definition of what contracts are. A contract can't have a bug because the implementation IS the specification. That is the whole point of the system. Even the DAO website says so itself. The code itself has the ultimate say:

> Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO’s code set forth on the blockchain; to the extent you believe there to be any conflict or discrepancy between the descriptions offered here and the functionality of The DAO’s code at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413, The DAO’s code controls and sets forth all terms of The DAO Creation.

Nobody should have entered this contract if they disagree with the above. Yet now, suddenly most people who are a part of it seem to disagree with it!

Re: Critical Update on DAO Vulnerability

#478

Post by grandalf »

masklinn wrote: post #425
grandalf wrote: post #381

Earlier quoted context omitted.

> No-one can write bug-free code Perhaps, but nobody can write a bug-free legal contract either, and no legal system is without bugs. Sadly, for the legal system, many of the bugs are due to corruption, so they are actually more akin to systematic exploits being done again and again by malicious actors (who often happen to be wealthy or powerful). Also, in terms of how drastic this bug is, suppose $5M gets stolen ove…

> Perhaps, but nobody can write a bug-free legal contract either, and no legal system is without bugs. The difference is that when there is an issue with a legal contract you can defer to an arbiter (a judge) and discuss whether that is a bug or a feature as soon as a divergence of interpretation is detected. Hell, even just having a sentient empowered human in the loop is sufficient, with fully automated response sy…

You are describing human judgement or human discretion. It's probably a given that AI will surpass humans in judgement and discretion of many things in the coming years and would be at least as able to avoid reacting to a false-positive as any human.

The problem (and the thing you propose as a solution) is deferring to an arbiter. This is not human judgement as much as it is human authority. We conflate the two in meatspace because of the social rank conferred upon such positions (this is the same drive that makes humans bow before gods and dictators)

The very idea of decentralization is a different authority model than what is typically in human institutions. In theory, institutions managed in a decentralized and anonymous way have the potential to achieve a form of democratic governance that is far more resistant to corruption than any form previously invented.

In meatspace, a judge must be chosen, elected/appointed, confirmed, etc., and when that judge needs to be replaced we take an entirely different (largely unknown) judge and do a full-scale migration to that new judge's "firmware".

With smart contracts, we can divide the execution into many smaller smart-contracts, each with a specific domain of expertise. This makes versioning, incremental improvement, and extreme transparency possible.

If you listen to us SCOTUS argument, particularly when a case involves discussion of the intent of specific words in a law, it becomes clear how utterly mutable all of the constructs are. While the SCOTUS is a world-class institution in terms of its overall quality, it is reinforced using a highly centralized model of human authority, with all its problems.

Re: Critical Update on DAO Vulnerability

#480

Post by TillE »

Angostura wrote: post #256
joosters wrote: post #169

Earlier quoted context omitted.

...but they didn't halt trading until they were asked to, so clearly it wasn't totally in their interests? Exchanges are in a difficult position once the 'head' of ethereum tells them to stop. It's a sign that the blockchain might be forked, so any further trades they make might be undone - they simply have little choice but to stop after being told to do so.

> but they didn't halt trading until they were asked to, so clearly it wasn't totally in their interests? I didn't stop eating excess salt until my doctor asked me to do so - and it was totally in my interest.

A surprising number of people seem to believe in the near-perfect efficiency of markets, that every participant is making optimal decisions based on their own goals.

This is, of course, absurdly optimistic.

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