Build Finance DAO was bought up by the enemy and the treasury was drained

When the DAO administration was taken over by Build Finance, apparently hostile, the attacker withdrew the funds from the DAO. But calling this incident an attack is, by definition, incorrect. Because while the attacker clearly failed to enforce the intent and purpose of the DAO, he broke no rules. It is worth remembering that DAO always adheres to the principle of “code is the law”.

Build Finance DAO is a decentralized, community owned and controlled autonomous venture builder.

Build Finance DAO produces, funds and manages community-owned DeFi products. DAOs are involved in identifying business ideas, organizing teams, raising capital, helping to manage product units, and providing shared services. In other words, a Build Finance DAO is a DAO that provides services to other DAOs.

Takeover of the DAO treasury

Follow thread Posted by the BuildFinance Twitter account, the DAO admin privileges have been hijacked by a malicious individual. He proposed and successfully enforced the governance proposal to control the BUILD token contract.

“The attacker successfully took over by having enough votes in favor of the proposal and not enough votes against the proposal to prevent the takeover.”

Apparently this crash wasn’t even the first attempt. A previous malicious takeover attempt had failed, likely due to a lack of adequate funding. According to the tweet, the attacker with the ENS domain Suho.eth proceeded to charge, try again and then succeed.

“When this happens, the attacker has full control of the governance contract, key minting and treasury. The DAO no longer controls any part of the critical infrastructure. Do not buy BUILD tokens on any platform.”

Drain liquidity pools on balancer and uniswap

According to the announcement, due to the structure of the Build DAO governance model, the attacker successfully accessed the DAO’s treasury. It looks like he just grabbed enough governance tokens to take power, and this DAO doesn’t appear to have put mechanisms in place to protect the treasury against such usurpation.

When the attacker took power, they minted 1,107,600 BUILDs ($1.7 million) in 3 transactions, withdrawing most of the funds from the DEX Balancer and Uniswap liquidity pools. The attacker then takes control of the balancer pools through the governance contract and withdraws all remaining funds, including 130,000 METRIC tokens, and attempts to sell these tokens wherever liquidity is available, creating strong selling pressure on the assets .

BUILD .Token price chart | Source: CoinMarketCap

As a result of this incident, the BUILD price fell from around $1.50 just before the attack to almost zero at the time of writing. However, the METRIC token survived the crash without much damage. In fact, the METRIC price has increased by almost 80% in the last 24 hours.

“Very elusive future for BUILD”

According to BuildFinanace’s tweet, the attacker has no control whatsoever over any part of METRIC or the Metric Exchange infrastructure, but offers a warning: The supply shock is believed to have caused a large shift in METRIC’s distribution, and it’s still possible that part of these tokens are under the control of the above unknown bad actors.

“We deeply regret to inform the community of the complete and irretrievable loss of assets in the treasury of BUILD DAO due to the actions of a bad actor.”

According to the tweet, members of the Build Finance team have contacted the attacker directly but “do not appear interested in dialogue, much less a chargeback.”

“It’s difficult to see a future for BUILD based solely on brand awareness and intellectual property. They don’t have liquid coffers.”

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