Force DAO Hedge Fund Hack

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Force DAO

The Force DAO is an investment strategy smart contract. This contract had an exploit, which allowed a hacker to take some funds.

The team analyzed the attack, and made a plan to relaunch with a new token that would reimburse the original token holders.

This is a global/international case not involving a specific country.

About Force DAO

"Force is a community of strategists, developers and researchers identifying and productizing alpha across decentralized finance." "Force DAO is a collective of investment strategists working to identify and productize alpha across DeFi. We're starting with Yield Automation on Ethereum L1, and will soon be expanding with new products to other EVM compatible chains."

"Force is a protocol and DAO dedicated to producing superior returns by adhering to community-proposed strategies and rewarding the strategists with powerful incentives." "Force DAO is a DAO for strategists, building the people’s gateway to quant finance. Built on decentralized blockchains, Force DAO brings strategists together with community investors to find yield-bearing DeFi opportunities."

"According to the developers, attackers took advantage of a vulnerability in a smart contract. The team estimated the damage at 183 ETH ($367,000)."

"Our team is aware of the xFORCE contract exploit and has identified the nature of the issue. There are no further funds available on the xFORCE contract to be exploited. All other vaults are safe." "Please halt all trading on both Sushiswap and Uniswap."

"We take responsibility for this engineering oversight and have begun processes to ensure any such incidents are mitigated in the future. We also want to thank the White Hat hacker who helped deter further FORCE tokens from being drained. We have a bounty for you."

"The xFORCE vault is a xSUSHI contract fork. The implementation used assumes tokens revert the transaction on failure." "The token used by Force DAO is an Aragon Minime token that returns a false bool if “transferFrom” fails (instead of reverting)." "The exploiters were able to deposit FORCE tokens that would fail the transferFrom call and receive xFORCE tokens, as the xFORCE contract expects a revert from the token but instead receives false." "A user could then withdraw these newly minted xFORCE tokens for the remaining FORCE tokens in the vault, and liquidate them for ETH on exchanges." "This could’ve been prevented by using a standard Open Zeppelin ERC-20 or adding a safeTransferFrom wrapper in the xSUSHI contract."

"We’re currently engaged with 2 separate security firms to review and analyze our repos to ensure all contract systems perform as designed."

"[P]roject lead developer Alberto Sevallos has said the team will announce a plan to reimburse affected users in the coming days." "This incident will only make us stronger, as a team of builders and a community. And we look forward to sharing the new products we've been working on."

"At 2:26 PM +UTC, through our communication with a CEX, we were able to recover 45 ETH from the exploiter's address."

"The purpose of this post is to layout our team’s plan to: Remediate community members that suffered losses throughout the April 4th exploit, Launch the new FORCE token, aimed to go live by April 20th, 2021."

"Our team has recovered an additional 40 ETH from one of the exploiter's who came forward. We're thankful for his honesty." "An additional 13 ETH were sent from an exploiter's address to our dev multisig. This transaction was sent anonymously. Thank you."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Force DAO Hedge Fund Hack

Date	Event	Description
April 4th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $367,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered has been estimated at $106,000 USD.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Decentralized smart contracts are impossible to prove secure, and exploits can only be revealed over time.

Proper safe storage of funds should be an offline multi-signature wallet held by trained and background checked operators.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.