# kaal:claim:3227933-035

**Claim.** Fundamental flaws in the DAO's code allowed hackers to transfer one third of the total contributed funds to a subsidiary account, and this together with other technological limitations ended the initiative, but the authors argue it did not end the underlying vision of decentralized autonomous organization.

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

**Holds when.**

- the DAO, 2016

**Source quote.**

> To be sure, fundamental flaws in the DAO code made it possible for hackers to transfer one-third of the total contributed funds to a subsidiary account. This, and other technological limitations meant the end of the initiative

**From.** Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, *Why 'Blockchain' Will Disrupt Corporate Organizations* (2018), 7. Decentralized Autonomous Organizations, page 16

**Cite as.** Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933

**Verify.** sha256 of source PDF `a9e9660c4dc25a2202f1da4e762f5885256e05f68c53ca51942f5833a7a4c108` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Fenwick%20et%20al.%20-%202018%20-%20Why%20%27Blockchain%27%20Will%20Disrupt%20Corporate%20Organizations.pdf

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

**Topics.** dao, governance-design, blockchain

**Keywords.** dao-hack, code-vulnerability, governance-failure, blockchain

**Related claims.**

- restates: https://wulfkaal.github.io/claims/2922176-035
- restated_by: https://wulfkaal.github.io/claims/3373393-030
- extends: https://wulfkaal.github.io/claims/2939127-030
- extends: https://wulfkaal.github.io/claims/2998033-007
- restates: 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.