DESCRIPTION OF EVENTS
Vether is a "strictly-scarce Ethereum based asset." "Vether is designed to be a store-of-value with properties of strict scarcity, unforgeable costliness, and a fixed emission schedule." It describes itself as "[a]n asset that stores value created by dreamers and builders. With limited supply and with technical properties that allow for even fairer distribution and transparent costs."
"There will only be 1,000,000 Veth ever." "No one can control it and there’s no blacklist. Every day a portion gets released to whoever burns Ether for it. This mechanism is called Proof-of-Value." "Every Veth in the world was paid for by Ethereum."
"Vether’s still in its infancy and its beauty is in its simplicity. At the same time, as with every major crypto (ETH, BTC, etc.), it has its share of growing pains."
After the Blurr exploit, "the plan was to release a new asset (Vether V2) that removed the ability to burn ERC-20 tokens." "With an effort at fairness, Strictly-Scarce added an upgrade feature where you could send your Vether V1 and in essence trade it for Vether V2 as long as you were in the owner’s snapshot taken."
"A member of the Vether Discord community, JasonTheMerchant, wanted to see if there was a bug and found one. Because of a missing underscore, “_”, someone could potentially claim that full amount set aside for upgrading. This would require burning for Vether V1 contract over a few days, but once an owner in the snapshot did this, they could claim everything unclaimed by the V1 owners. The countdown clock was on."
"Despite calls to the community to upgrade, there were still more than 10,000 Vether V1 left to be upgraded. There was still a chance someone could claim 10,000 Vether V1 within the week and take the remaining un-upgraded Vether V2. Although the only people who could exploit this were owners in the snapshot, the community felt the risk was not worth it both due to the large outstanding amount and also the desire that folks would not lose what was rightfully theirs."
"This led the community to ask Strictly-Scarce to create V3, a version without burning but with the ability to still upgrade with the proper constraints in place."
Vether is a stablecoin minted from Ethereum.
The protocol was upgraded to improve the minting process.
However, this upgrade process had a vulnerability, which would have allowed someone to take assets. This led to a protocol upgrade.
HOW COULD THIS HAVE BEEN PREVENTED?
There were no losses from this exploit.
Vether Contract Upgrade (Jul 14)
What is Vether? - Vether (Aug 15)
Vether - A strictly-scarce Ethereum based asset. (Jul 13)
Ethereum Transactions Information | Etherscan (Aug 15)
Vether (VETH) Token Tracker | Etherscan (Aug 15)