The algorithmic stablecoin TSD was attacked and returned to zero. Should DAO governance be "backed up"?
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
On the morning of March 15th, Beijing time, the algorithmic stablecoin True Seigniorage Dollar (TSD) officially issued a document stating that the project was attacked by hackers and overissued 11.8 billion stablecoin TSD, causing the price to tend to zero.
The official explained the hacker's specific attack methods:
Due to the long lock-up period of DAO and the decline in income, users are no longer bound to DAO, resulting in a smaller size of the entire pool;
The hacker gradually bought TSD when it was at a low price, with a share of more than 33% in the DAO; he then proposed an implementation plan and voted for it; since he had enough shares to complete the voting process, the implementation plan passed smoothly;
Only 9% of DAOs with developer accounts have already voted and failed once when enabling the cross-chain bridge. In this case, the developer account does not have enough power to vote against the attacker.
In the implementation of the new scheme, the hacker added code to mint, minted 11.8 billion TSD for himself, and sold them all on Pancakeswap (the DEX on BSC).
Odaily query found that the current price of TSD on Pancakeswap is 0.000000012 BUSD, which is almost zero. However, what is strange is that the number of TSDs in the Pancakeswap liquidity pool is not 18 billion as the official said, but only 304 million. Where did the remaining 17.7 billion go? As follows:
As of press time, the project party has not announced the hacker address and other follow-up compensation plans.
"Such attacks are sad, but this is how decentralized DAOs work." The official said.
However, this explanation does not satisfy users, and many users questioned that the attack was a scam directed and performed by the project's official website:
……
"I call it a dictator attack."
"All of this didn't happen in a flash. What did the team do?"
"Dude, your project was a scam from the start."
True Seigniorage Dollar (TSD) is a decentralized algorithmic stablecoin project launched on January 1 this year. It was developed by an anonymous team. The project is benchmarked against Basis and was originally developed on Ethereum. In the official introduction, TSD uses TWAP (time-weighted average price) to stabilize the price, and the goal is to maintain the price TSD=$1 for a long time.
Coingecko data shows that when the project was launched, the price once soared to $32, and then plummeted below $1; since January 11, the price has remained below $0.1.
On January 26, the project turned to the popular BSC for development, and launched the liquidity mining pool of the governance token DAO and the stable currency TSD on Pancakeswap for mining. Among them, TSD once had an annualized return of 25596.45%, and DAO's seven-day annualized return once reached 136598%, attracting many investors.
In this attack, it is inappropriate for officials to place the blame on decentralized governance.
As the leader of the project, the development team pre-mined part of the TSD tokens in the early stage. Now that the incentives have been taken, they should fulfill their responsibilities, but looking at the whole incident, the development team did nothing, whether it was early warning or aftermath.
