Ethereum price has plummeted over the past few days as details of a huge loss of Ether by the DAO, a distributed autonomous organization which allows users to support start-ups by voting on fund distribution, has come to light. On Friday, a malicious actor exploited a weakness in the DAO code to take 3.6 million Ether, then worth over $70 million. People have argued that Ether value is not important – it the applications that can be built on top of it that make it special, however, this has not stopped a huge outcry from cryptocurrency users as to the resolution of the situation, or the loss of value for people who have invested in Ethereum and the DAO.
There have been numerous proposals of ways to deal with the problem at hand, ranging from people who want to do nothing to those who want to set Ethereum back to the state it was a few hours before the attack. Soft fork options that have been proposed include being able to blacklist addresses, which others argue goes against the idea of a decentralised and unprejudiced blockchain, or one to freeze the assets that would give more time for another solution to be implemented.
Those that arguing for doing nothing put forward the point that was a problem with the DAO code and the community shouldn’t be bailing it out; if one company’s mistake is rectified why not cover for others? It is the job of the DAO to make sure its code is secure.
On the other hand, it has been noted that what has happened is tantamount to theft and should be dealt with as such. This has led to some exchanges, such as Kraken, halting the withdrawal of Ether temporarily. Other measures that have been called for include Ethereum to be reset to a few hours before the attack, although this would have huge implications for anyone who has made transactions on Ethereum since then. Alternatively, there has been talks of implementing hard forks to allow asset to be recovered or other ways to avoid the same situation happening in the future; although, unless a project is coded correctly this could give rise to a number of issues between people who disagree with what is a loophole in code and what is meant to be allowed.
Vitalik Buterin, founder of Ethereum, was the one to propose a soft fork to freeze the assets for a month to give time for debate to take place until a hard fork can be implemented to allow the retrieval of funds without rolling Ethereum back to a previous version. Polls being held on the opinions of miners from Ethpool & Ethermine currently hugely in favour of soft fork.
Responding to a post on Reddit asking what his thoughts were and what he was doing about the situation, Butelik said: “Today I was in a meeting discussing possible university collaborations in order to get perhaps 5-20 more researchers and developers to work on Ethereum smart contract privacy and programming language safety in the next year; before that I was in online chats and in-person meetings with people from the Chinese community discussing DAO issues and getting feedback from them. Yesterday I was writing EIPs as well as discussing possible modifications to high-level programming languages to mitigate smart contract dangers in the future. I also checked up on the Go devs to see what the progress on the soft fork is. I also spent some time thinking about implementation details and writing a document describing a possible initial Ethereum 2.0 protocol combining a simple implementation of Casper plus sharding.”
Not much is known about what will happen yet but what is certain is that the consequences have the potential to be game changing for Ethereum.