# kaal:claim:2922176-035

**Claim.** Fundamental flaws in the DAO's code allowed hackers to move one third of contributed funds to a subsidiary account, ending that initiative, but the flaws were in the implementation and do not defeat the DAO vision, which developers continue to rebuild.

**Type.** failure  **Support.** evidenced

**Holds when.**

- the original DAO, launched May 2016 on Ethereum

**Source quote.**

> The initial DAO did not end well, but DAO enthusiasts and coders are developing new structures to address the flaws of the existing DAO infrastructure. Fundamental flaws in the DAO code made it possible for hackers to transfer one third of the total contributed funds to a subsidiary account.

**From.** Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, *The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies* (2017), VI. Decentralized Corporate Governance, page 46

**Cite as.** Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176

**Verify.** sha256 of source PDF `fa4e986917d437cb1504281e7b986be2698e9507d8feaf426c9d7d1754ca882c` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Fenwick%20et%20al.%20-%202017%20-%20The%20%E2%80%98Unmediated%E2%80%99%20and%20%E2%80%98Tech-Driven%E2%80%99%20Corporate%20Governance%20of%20Today%27s%20Winning%20Companies.pdf

**Failure mode.** DAO code flaw exploit  (family: smart-contract-bug-and-exploit)

**Topics.** dao, blockchain, smart-contracts, decentralization, governance-design

**Keywords.** dao, blockchain, smart-contracts, code-vulnerability, decentralized-governance

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3227933-035
- restated_by: https://wulfkaal.github.io/claims/2939127-030
- extended_by: https://wulfkaal.github.io/claims/2998033-007
- restated_by: https://wulfkaal.github.io/claims/3373393-030

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.