# kaal:claim:2939127-030

**Claim.** Fundamental flaws in the DAO's code let hackers move one third of its total funds to a subsidiary account, and that hack together with further technological limitations destroyed the DAO initiative.

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

**Holds when.**

- the DAO as launched in May 2016 on Ethereum

**Source quote.**

> Alas, things went terribly wrong with the DAO. Fundamental flaws in the DAO code enabled hackers to transfer one-third of the total funds to a subsidiary account.92 This hack in combination with additional technological limitations brought down the DAO initiative.

**From.** Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, *Legal Education in the Blockchain Revolution* (2017), III.4. Limitations, page 33

**Cite as.** Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, Legal Education in the Blockchain Revolution (2017). SSRN: https://ssrn.com/abstract=2939127

**Verify.** sha256 of source PDF `abcef529c7200261c59eec43018375b3b26e3186239fb9d002bacc298dba26ff` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Fenwick%20et%20al.%20-%202017%20-%20Legal%20Education%20in%20the%20Blockchain%20Revolution.pdf

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

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

**Keywords.** dao, smart-contracts, code-vulnerability, ethereum, governance

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3373393-030
- restates: https://wulfkaal.github.io/claims/2922176-035
- extended_by: https://wulfkaal.github.io/claims/2998033-007
- extended_by: https://wulfkaal.github.io/claims/3227933-035
- restated_by: https://wulfkaal.github.io/claims/3071378-012

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