DROPS

Document

DOI: 10.4230/LIPIcs.AFT.2024.28

SoK: Attacks on DAOs

Authors: Rainer Feichtinger, Robin Fritsch, Lioba Heimbach, Yann Vonlanthen, and Roger Wattenhofer

Published in: LIPIcs, Volume 316, 6th Conference on Advances in Financial Technologies (AFT 2024)

Abstract

Decentralized Autonomous Organizations (DAOs) are blockchain-based organizations that facilitate decentralized governance. Today, DAOs not only hold billions of dollars in their treasury but also govern many of the most popular Decentralized Finance (DeFi) protocols. This paper systematically analyses security threats to DAOs, focusing on the types of attacks they face. We study attacks on DAOs that took place in the past, attacks that have been theorized to be possible, and potential attacks that were uncovered and prevented in audits. For each of these (potential) attacks, we describe and categorize the attack vectors utilized into four categories. This reveals that while many attacks on DAOs take advantage of the less tangible and more complex human nature involved in governance, audits tend to focus on code and protocol vulnerabilities. Thus, additionally, the paper examines empirical data on DAO vulnerabilities, outlines risk factors contributing to these attacks, and suggests mitigation strategies to safeguard against such vulnerabilities.

Cite as

Rainer Feichtinger, Robin Fritsch, Lioba Heimbach, Yann Vonlanthen, and Roger Wattenhofer. SoK: Attacks on DAOs. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 28:1-28:27, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

Copy BibTex To Clipboard

@InProceedings{feichtinger_et_al:LIPIcs.AFT.2024.28,
  author =	{Feichtinger, Rainer and Fritsch, Robin and Heimbach, Lioba and Vonlanthen, Yann and Wattenhofer, Roger},
  title =	{{SoK: Attacks on DAOs}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{28:1--28:27},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-345-4},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{316},
  editor =	{B\"{o}hme, Rainer and Kiffer, Lucianna},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2024.28},
  URN =		{urn:nbn:de:0030-drops-209640},
  doi =		{10.4230/LIPIcs.AFT.2024.28},
  annote =	{Keywords: blockchain, DAO, governance, security, measurements, voting systems}
}

Document

DOI: 10.4230/LIPIcs.AFT.2023.24

Batching Trades on Automated Market Makers

Authors: Andrea Canidio and Robin Fritsch

Published in: LIPIcs, Volume 282, 5th Conference on Advances in Financial Technologies (AFT 2023)

Abstract

We consider an automated market maker (AMM) in which all trades are batched and executed at a price equal to the marginal price (i.e., the price of an arbitrarily small trade) after the batch trades. We show that such an AMM is a function maximizing AMM (or FM-AMM): for given prices, it trades to reach the highest possible value of a given function. Competition between arbitrageurs guarantees that an FM-AMM always trades at a fair, equilibrium price, and arbitrage profits (also known as LVR) are eliminated. Sandwich attacks are also eliminated because all trades occur at the exogenously-determined equilibrium price. Finally, we show that our results are robust to the case where the batch has exclusive access to the FM-AMM, but can also trade on a traditional constant function AMM.

Cite as

Andrea Canidio and Robin Fritsch. Batching Trades on Automated Market Makers. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 24:1-24:17, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

Copy BibTex To Clipboard

@InProceedings{canidio_et_al:LIPIcs.AFT.2023.24,
  author =	{Canidio, Andrea and Fritsch, Robin},
  title =	{{Batching Trades on Automated Market Makers}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{24:1--24:17},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-303-4},
  ISSN =	{1868-8969},
  year =	{2023},
  volume =	{282},
  editor =	{Bonneau, Joseph and Weinberg, S. Matthew},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2023.24},
  URN =		{urn:nbn:de:0030-drops-192139},
  doi =		{10.4230/LIPIcs.AFT.2023.24},
  annote =	{Keywords: Arbitrage profits, Loss-vs-Rebalancing (LVR), MEV, Sandwich attacks, AMM, Mechanism design, Batch trading}
}

Search Results

Documents authored by Fritsch, Robin

SoK: Attacks on DAOs

Abstract

Cite as

Batching Trades on Automated Market Makers

Abstract

Cite as

Thanks for your feedback!

Could not send message