Fries Fund DAO Profanity Address Exploit

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Fries Fund DAO Homepage/Logo

Fries Fund proposed to create a social experiment where they would purchase and run multiple fast food franchises governed by a DAO. Unfortunately, when setting up their smart contract, they took advantage of a service called Profanity to generate vanity wallet addresses. It was believed that the smart contract had subsequently been transfered to a multi-signature wallet, however this was not actually the case. An attacker was able to exploit the Profanity vulnerabilities to generate the same wallet themselves. Once they gained access to the wallet, they drained all connected smart contracts. The project lost millions of dollars. Some in the community ran a proposal to attempt to earn more funds, however this was ultimately not successful. The website of the project is presently offline and there don't appear to be any plans to relaunch it.

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

About Fries Fund DAO

"It has come to our attention that the refund deployer contract was exploited and managed to obtain FRIES tokens which were subsequently refunded for USDC and sold into the Uniswap pool. This is an ongoing investigation; exploiter is invited to contact us for dialogue."

"A post-mortem report will be released shortly, followed by a plan afterwards in how to move forward. We are still in the process of negotiation acquisitions so a successful deal is still possible with the right plan. Also, contract exploits are currently patched."

"On October 27th, 5:58PM UTC, friesDAO contracts were exploited by an attacker taking control of our own deployer address through a profanity attack vector. The hacker was able to drain the treasury of its USDC through the refund contract, drain the FRIES tokens in the staking contract, subsequently selling it all into the Uniswap pool. All transactions in the main attack with the refund contract were confirmed in the same block, then three hours later, the attacker came back for the staking pool"

"This address was generated for KCHUP (0x51D35a4cfea3e5fb387e467d31cc0c87f6038a) to have a vanity address (51D35 = “SIDES”) using Profanity, a local multithreaded GPU vanity address miner that was considered safe at the time of generation. Profanity has options to generate a deployer address such that the first contract it deploys will have the address desired.

However, ownership of the contracts had not been transferred to a different address such as the multisig after deployment in case of any changes or bugs needed, specifically due to the high risk of how the refund contract interacts with funds. Thus it was determined that it was safer to leave room for emergency changes and that considering our primary developer Slip was internally doxxed, that any attempt of theft would immediately implicate the developer. In fact the initial deployment of the refund contract had issues and had been redeployed to fix a calculation error"

"As time progressed and the contracts appeared to be working properly, the developer unfortunately forgot to transfer ownership of these contracts to the multisig and had assumed they were already transferred when in reality, the deployer address (0x6B20) still had full ownership and control over these contracts. Note that the deployer address’ private key never left the metamask and was never exported out in any external format including to the developer himself.

It is possible that the way the attacker got the private key was first by guessing that the deployer address was a vanity address through implication of the vanity “SIDES” contract address for KCHUP.

Subsequently, the attacker brute-forced the private key using profanity’s now known vulnerabilities, which dramatically reduces the possibilities of private keys due to flaws in generation and is susceptible to even consumer grade computing power."

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 - Fries Fund DAO Profanity Address Exploit

Date	Event	Description
February 20th, 2022 10:47:00 AM MST	FriesDAO Funds Raised	FriesDAO announces that they successfully raised $5.4m and provides paperwork for themselves as a Wyoming DAO LLC.
October 27th, 2022 1:17:00 PM MDT	Twitter Post	The Fries DAO team announces about the exploit on Twitter.
October 30th, 2022 11:52:00 AM MDT	Web3IsGoingGreat	The news is shared on the Web3IsGoingGreat website.
October 30th, 2022 12:02:59 PM MDT	Reddit Parody Post	A post is made about the incident on Reddit.
January 10th, 2023 2:01:00 PM MST	Salvage Proposal	A proposal is shared to potentially salvage the project.
October 27th, 2023 11:58:00 AM MDT	Time of Exploit	The reported time of the exploit on the blockchain.
December 6th, 2023 1:37:52 PM MST	Last Site Capture	The last time the site was captured online.

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 $2,300,000 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

There do not appear to have been any funds recovered in this case.

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?

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.