# Case: Contract DAO, in light of NDX exploit By [0xAdil](https://paragraph.com/@0xadil) ยท 2022-12-09 --- _Originally published on Oct 18, 2021 at pint.network/t/case-contract-dao/_ In light of recent [Indexed Finance exploit](https://web.archive.org/web/20211016080053/https://ndxfi.medium.com/indexed-attack-post-mortem-b006094f0bdc), and even brighter light of the engineer (allegedly sole dev of exploited code) owning up his aged process in producing the exploited code, the plausible social handle of Patron#1 expressed his opinion on the spectacle, and constructed a mental model immediately thereafter while addressing the call of nature. Since then, we have worked on the conception of an on-chain, transparent accountability method to **elevate from invisibility, the cognitive processes and concerns of individual engineers** within teams building solutions around smart contracts. Note: Following conception is limited to persons that launch any part of their creation for consumption on-chain. For novice readers, we must first lay out the typical team and organizing structures in the public eye, by somewhat stereotyping them. * Completely anonymous persons: no active digital presence except attribution to certain projects * Pseudo-anonymous persons: near whole digital presence eg. 0xMaki * Known persons: fairly self-doxed * Pseudo-known persons: doxable without special effort Any given combination of the above forms a typical team. As to why mentioning this obviosity is important, we shall discuss forthwith. * * * Ideally, this case makes for better publication after our planned introduction of a novel form of decentralized governance. But given the freshness of a real case that this conception is conceived from, we figured a basic form of it be released, later followed by details. The Problem ----------- The Indexed Finance case is a highlight in a sense that the team has very swiftly pursued investigation, intelligence provision, and finding leverage against the BASEd atypical germanic (yes, we do our own forensics) "exploiter", while also being transparent. All of this coming in sync from any given team, is a rare occurrence. Especially the engineer coming out identifying the core issue, as we paraphrase: Explaining in hindsight, how his "mechanic" solution to a critical problem was to his own speculation at the time, and how his mind eventually rationalized the implementation to be "secure", while his act of speculating to be justified as a rational event in his then occurring hindsight. [https://web.archive.org/web/20211016064935/https://twitter.com/d1ll0nk/status/1448856748467630085](https://web.archive.org/web/20211016064935/https://twitter.com/d1ll0nk/status/1448856748467630085) Without interrogating him about the past, we hypothesize that the rationalization was a consequence of the heat of launch and team's collective euphoria of bringing out something grand. This is a critical hypothesis, and may raise opposition, but to start, we'll take that as a minor consideration into subsequent problem space. > 3/ After a fairly long time of this, and after assessing a number of other options for rebalancing, I decided that it was the optimal solution for the protocol and that it was in fact safe; that I had been right to worry about it, but wrong about it actually being insecure. ~ @d1ll0nk on Twitter **In the engineer's own realization in the thread, a vulnerability deployed on-chain, winning the test of time and desired use, does not make it a non-vulnerability!** This may sound logical, yet it's a realization pivotal to security landscape of our context, because it's contrary to beliefs held by any mind resident within centralized and specifically, traditional enterprise solutions. Those resident minds are making their way into smart contract development, quite expectedly, the space is not exactly delegating such tasks to toddlers who have born into the fairly prominent decentralized space, neither is there a cohesive global effort within primary academia, even in the developed world, for decentralized-first engineering, as it was for early software engineering. The Solution-like ----------------- Following will be presented story-like: Alice, Bob and Chad are all pseudo-anonymous persons. They have united their brilliant minds to build a protocol on Ethereum and eventually multi-chain, which will pool user's fund and multiply their usual gains by a significant factor. Alice, commonly agreed to be the head honcho, takes input from the lead engineer Chad, and goes out with branding, markets the hell out of their novel mechanisms in as obfuscate language as possible to not compromise the IP pre-launch. Thousands start pouring into the telegram and twitter follower count skyrockets. Bob being a regular reader of crypto research content, exploits, limitations, reader of `rekt.news` and `pint.network`, raises the concerns with pooling as visioned by the team i.e. so much liquidity from public stakeholders in a novel protocol. Bob understands holding liquidity better than anyone, because of all the money he has received from Alice in the past. It's not just Chad that will build the protocol, Bob can code too, so can Alice, and they all will have to contribute significantly given their engineering background, as they do not favor raising institutional capital, while Bob has pledged not to invest his personal financial capital. So Bob digs the web, lands on a very early publication by PINT Network, proposing a solution-like that works on following core principles: > All team members, to gain a competitive advantage, by virtue of decentralized social responsibility, are in their own identities, bound to a public contract which demands following: > > * All smart contracts and any future manifestations of the same, deployed by the team in relation to collective identity of the contracts, are provable by this contract, to be the same as registered by final consensus of particular deployments. > > * The provability of final consensus, is co-provable to individual testimonies of team members. These may be in nature of time-proof comments on the subject of consensus. > Bob's face is illuminated by the metaphoric lightbulb, as using this mechanism, will take the righteous burden of accountability from individual team members, as their thoughts and concerns beyond code, at the time of launch, are written in the metaphoric stone, true to the spirit of decentralization. But will Bob find a verifiably well-audited implementation of such a contract, that does not compromise the IP and competitive edge of their project? Is Bob going to find it in the cache of PINT Network? Those are important questions indeed... * * * [https://web.archive.org/web/20211024010200/https://pint.network/t/case-contract-dao/](https://web.archive.org/web/20211024010200/https://pint.network/t/case-contract-dao/) --- *Originally published on [0xAdil](https://paragraph.com/@0xadil/case-contract-dao-in-light-of-ndx-exploit)*