Startup Funding Platform DAO Maker Hacked For $7M

Crypto startup funding protocol DAO Maker has become the latest to be exploited with a loss of $7 million through an admin wallet breach.

On August 12, the DAO Maker protocol – not to be confused with DeFi lending protocol MakerDAO – announced that a malicious actor accessed one of its wallets using admin privileges.

The hacker was able to test the vulnerability to steal 10,000 USDC stablecoins before repeating the process 15 times. The cybercriminal continued until a total of $7 million had been pilfered, it added.

“A total of 5251 users were affected, losing $1250 USD on average per user. Fortunately, users with up to $900 have remained completely unaffected.”

Hunting the Hacker

Christoph Zaknun, CEO of DAO Maker, stated that the team had moved the unaffected funds to a brand-new secure wallet. Users are still able to withdraw their funds unimpeded, should they choose to do so.

The flaw was with the SHO (Strong Holder Offering) contract, which it states “has always been a hotspot for potential risk.” The protocol put contingencies in place, such as capping the maximum individual deposit amount to $10,000 USDC.

The SHO contract has been secured in order to prevent situations like this from occurring in the future, it added.

DAO Maker is working with security firm Cipher Blade to track the perpetrator. They have already identified an implicated Binance account and are closely collaborating with Etherscan to learn more about the hackers’ whereabouts, it added.

“Over the next five days, DAO Maker will devise a set of solutions to alleviate the incurred damages and work in full force to bring the hacker to justice through the massive forensics investigation undertaken.”

According to its website, DAO Maker creates growth technologies and funding frameworks for startups while simultaneously reducing risks for investors. It aims to allow retail traders to invest in crypto startups just like venture capitalists but on a smaller scale.

Companies using its governance tech have a combined market capitalization of $16.2 billion, it reports. The protocol has a TVL of $30.9 million in its DAO staking vaults.

DAO Token Price Rebounds

The protocol’s native token, DAO, tanked 17.5% from $2 to $1.65 as news of the hack broke. However, it has since recovered 21.5% on the day to trade at $2.14 at the time of writing according to CoinGecko.

DAO tokens are trading 75% down from their all-time high of $8.71 in mid-April.

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