The DAO was launched on April 30th, 2016, and had raised over $100 million by May 16th, 2016.
It had become the largest contract on the Ethereum blockchain. There was a lot of hype in the Ethereum community because the vision of Ethereum and the use of smart contracts were becoming a reality. The news had hit the front page of The New York Times and much of /r/ethtrader rejoiced: "ARE YOU SERIOUS!?!? FRONT PAGE!!!"
The warnings before the DAO launch were there. Posts on reddit issued warnings about the security firm who did a poor audit on the code. And hours before the close of the token sale, Vitalik Buterin tweeted this:
But many choose to ignore these signs and I will admit that I was one one of them. I put some of my Ether into The DAO because just like the rest of community, I wanted it so badly to work. The DAO and slock.it were suppose to be one of Ethereum's proposed killer apps but all it did was just fall flat of it's face.
On June 17th, 2016, a flaw in the code allowed someone to move 3,641,694 Ether into a sub-DAO that they alone control.
I remember that night extremely well. It was about 1AM and I had just gone to bed and was about to fall asleep when I heard an alert on my phone go off. Then another, and another. I got out of bed to check it out and saw that it was all alerts from The DAO slack group.
Community organizer for slock.it and The DAO, Griff Green, began messaging alerts to the community asking for help and that it wasn't a drill.
I immediately got on my computer and began following the events of the night unfold. The top post on /r/ethereum was "I think The DAO is being drained right now" and EthereumWiki had tweeted that an attack was taking place.
Exchanges and Vitalik Buterin met in a slack group to discuss the attack and freezing of trades across exchanges. The chat was later leaked and can be found here. It is an extremely interesting read and has many good moments including the Chief Security Officer of Bittrex saying "fuck this coin"
Vitalik Buterin makes a post in /r/ethereum telling all exchanges to stop Ether trading
Poloniex eventually freezing ETH trading.
People wanted blood and found it in slock.it's Chief Operating Officer, Stephan Tual. Tual tweeting memes mere hours into the attack to hopefully calm nerves.
The price of Ether begins dropping on Poloniex once trading is back open.
Day's later, the hacker supposedly releases a note which can be read here and concludes with:
I hope this event becomes an valuable learning experience for the Ethereum community and wish you all the best of luck.
The attacker has never been found and search to find him/her continues today.
I think there are many takeaways and lessons to be learned from The DAO attack.
Especially in this time of explosive growth of "initial coin offerings". Today, Reuters reported that ICOs have sparked concern among experts who warn that the lack of transparency a concern for both investors and regulators. The article further goes on to say:
The Securities and Exchange Commission is said to be taking a hard look at the increased use of such offerings, with the growth of so-called ICOs surging in recent months.... with critics likening the phenomenon to the dotcom bubble in the 1990s, while proponents say the use of such coins and offerings facilitates the type of innovation that could radically transform existing business processes and industries.