The question becomes, how do you get two alien binary logics to communicate?

Mathematician Claude Shannon with his labyrinth-traversing mouse Theseus, invented in 1950.

Hegel 2.0 The imaginary history of ternary computing

appropriate Key Management

Summarization of Methods for DeFi Optimization

Summarization of Methods for Smart Contract Vulnerability Regulation

Summarization of Methods for Smart Contract Vulnerabilities Detection

Summarization of Real-world Attacks Exploiting Different Types of Vulnerabilities

While the 푐 cannot be measured directly from technicalmethods, it requires analysis of specific social situations, sothe oracle problem is controversial in terms of social issues.

Oracle risks can be divided intotechnical and social problems

A Survey of DeFi Security: Challenges and Opportunities

However, the thesis is confirmed mainly by the fact that, on October 2020, an attacker used a flash loan to borrow enough MKR to pass a governance proposal to change the MKR oracle whitelist parameter and managed to push his feeder to the allowlist

Miners Extractable Value (MEV) Problem”

Question 1 (Incentive Security). Is there mutually profitable con-tinued participation across all required parties?

The Ethereum mempool is a Dark Fores

The diagram below shows how The DAO ecosystem is built using Ethereum.

Copyright © 2020 George Samman and David Freuden

The Medianizer algorithm

Oracle Module logic

Empirical Measurementson Pricing Oracles andDecentralized Governancefor Stablecoins

Now the Code Runs Itself

Comparison of the MakerDAO with the gold bullion and gold exchange standard

On-chain governance is facilitatedby three central smart contracts.

A DAO is a blockchain-based system thatenables people to coordinate and govern themselvesmediated by a set of self-executing rules deployed ona public blockchain, and whose governance isdecentralized (i.e., independent from centralcontrol).

According to Cuende, “A DAO is an internet-native entity with no central management which isregulated by a set of automatically enforceable ruleson a public blockchain, and whose goal is to take a lifeof its own and incentivize people to achieve a sharedmission.

he De-Central Bank in Decentralized Finance:A Case Study of MakerDAO

The Proposed Taxonomy

Time constraints

Generating randomness.

Exception disorder

Unpredictable state

Stack size limit.

Ether lost in transfer

Immutable bugs

Keeping secrets.

Reentrancy

Call to the unknown

Type casts

Gasless send

Taxonomy of vulnerabilities in Ethereum smart contracts

A survey of attacks on Ethereum smart contracts

Unknown Unknowns

Arithmetic Issues

Front-Running

Denial of Service

It was first unveiled during a multimillion dollar heist which led to a hard fork of Ethereum. Reentrancy occurs when external contract calls are allowed to make new calls to the calling contract before the initial execution is complete.

Blockchain technology suffers from several cybersecurity vulnerabilities

A Taxonomy of Blockchain Threats andVulnerabilities

Pooling capital is just one of the potential operational efficiencies presented by DAOs

Members rely on smart contracts as the primary glue to manage member-to-member transactions.

how to manage open source technology that—by design—involves highly autonomous software.

modern-day alchemists who minted Bitcoin

Our findings indicate that vault management has improveda lot over the observation period, which we consider acornerstone of Maker’s resilience to stress situations likeBlack Thursday.

MAKERDAO

While the events ofMarch 2020 were unfortunate for several users, the resilienceat protocol level proved to be good even under stress.

Empirical Evaluation of MakerDAO’s Resilience

MakerDAO is intensifying its strategic shift to embrace real world assets.

Oracle-governance attacks in Maker

honest 10% MKR coalition

Whether intentional or not, Maker’s solution to these issues has been to centralize governance ownership and place a trust link to Maker (though it may not necessarily be invoked unless presented with a serious threat).

how tokens need to be distributed to secure the system

‘Attack DAO

large acquisition would have a market squeeze effect and may be difficult if many MKR holders are honest, long-term hodlers.

They are entrusted with three important tasks that are related to oracle security.

Actual profitability may be significantly higher

At current prices, Maker governance is vulnerabl

The attack could potentially be successful with much less, however. For instance, voter participation is typically very low, the network can be clogged so that honest participants have little chance to react, and dishonest MKR holders could collude with miners to censor voting and CDP collateral transactions. Another added complexity is that MKR is burned when closing a CDP. Thus an attacker in the MKR→Dai Exit Attack could seem to attack the oracle with <50% of MKR and, once the CDP holders start closing the CDPs, actually gain the full 50%.

MKR→CDP Exit Attack

MKR→Dai Exit Attack

Assuming honest MKR governance, oracle manipulation may be reasonably controlled.

global settlement

trusted oracles

o maintain security, MKR value needs to grow substantially faster than Dai and collateral supplies. Dai and CDP holders need to bid up these prices for their security. Essentially, stable asset holders need to hold significant positions in a very risky asset in order to secure their stable position, which may defeat the purpose of the stablecoin.

Either the market doesn’t realize that the potential for MKR governance attacks should lead to a lower bound on pricing, or the market is saying that MKR would be worth more if it were fully decentralized.

fully decentralized’ Dai is insecure from incentive misalignment.

These attacks affect both the current single-collateral Dai (SCD or ‘Sai’) and the upcoming multi-collateral Dai (MCD) implementations, as well as similar systems with on-chain governance.

51% attacks

Vulnerabilities in Maker: Oracle-Governance Attacks, Attack DAOs, and (De)Centralization

bug bounty program

ANALYSIS OF ATTACK EVENTS

Application Layer Vulnerabilities

Smart Contract Vulnerabilities

onsensus Mechanism Vulnerabilities

Data Security Vulnerabilities:

Security Analysis of DeFi: Vulnerabilities, Attacksand Advances

Empirical Measurements on Pricing Oracles andDecentralized Governance for Stablecoins

Governance: The Way Forward

The malicious party could elect a completely new set of external pricefeeds to compute the reference price of collateral asset, since it is calculated as the median pricefeed. Inside the MakerDao V2 median contract, for example, if a malicious entity can changethe bar parameter that represents the size of the quorum, or if the attacker can successfullypermission a new set of price feeds to replace the existing quorum, they could skew the value ofthe reference price. This would cause the Oracle to use an incorrect price Poracle to determine thevalue of CDPs and thereby the supply of Dai in circulation, destabilizing the stablecoin from itspar value to the dollar. Even if the market stabilized and the system recovered from this attack,during the period when Dai was de-pegged, the attacker can take profits through price arbitragesimilar to the Synthetix oracle attack that had occurred

Choice of price feeders.

How to turn $20M into $340M in 15 seconds

These valuable contributions strengthened the system and should be actively encouraged in the future.

(e.g., the ability to quickly onboard new collateral types and change risk and auction parameters).

A diverse collateral portfolio would have reduced the impact of severe market events on the system

Maker Governance moved fast to vote in Debt Auction parameter fixes and changes and additions to the system. The community quickly launched further analytic tools, allowing observers to better follow system fixes and changes. See the changelog.  The zero-bid events of March 12-13 led to a collateral auction shortfall amounting to approximately 5.4M+ Dai. Around 1,200 Maker Vaults became under-collateralized and were subsequently liquidated. As noted above, the Maker community is currently discussing the circumstances surrounding the zero bids and resulting liquidations

MakerDAO liquidations on March 12 and 13

Projects must strike a balance

Under such a scheme, even if an attacker makes a malicious proposal, voters have the ability to respond and shut it down.

For instance, some projects have time locks so that a coin can’t be used to vote for some period of time after it has been exchanged.

introduce frictions that make it harder for an attacker to exercise voting power even once they have acquired tokens.

The more community members are free to gain governance power and influence the protocol, the easier it is for attackers to use that same mechanism to make malicious changes. 

progressively decentralizing

To reduce liquidity indirectly, projects can provide incentives that make individual token holders less willing to sell.

so almost paradoxically, projects might want to reduce liquidity for the sake of protecting governance.

Nevertheless, designers can limit the value of attacks by limiting the scope of what governance can do

A framework for assessing and addressing vulnerability

inefficient outcomes

From the DAO’s perspective, the attacker’s anonymous accounts could contribute to the appearance of a healthy level of decentralized voting power

Beanstalk, a stablecoin protocol, found itself susceptible to governance attack via flashloan

In one prominent example, Steemit, a startup building a decentralized social network on their blockchain, Steem, had an on-chain governance system controlled by 20 witnesses. Voters used their STEEM tokens (the platform’s native currency) to choose the witnesses. While Steemit and Steem were gaining traction, Justin Sun had developed plans to merge Steem into Tron, a blockchain protocol he had founded in 2018. To acquire the voting power to do so, Sun approached one of the founders of Steem and bought tokens equivalent to 30 percent of the total supply. Once the then-current Steem witnesses discovered his purchase, they froze Sun’s tokens. What followed was a public back-and-forth between Sun and Steem to control enough tokens to install their preferred slate of top 20 witnesses. After involving major exchanges and spending hundreds of thousands of dollars on tokens, Sun was eventually victorious and effectively had free reign over the network. 

But permissionless voting is vulnerable to governance attacks,