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Long-Overdue Reimbursements: DAO Maker Hack Victims’ Wait Continues

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Long-Overdue Reimbursements: DAO Maker Hack Victims' Wait Continues

DAO Maker, a crypto fundraising platform, is seeking to raise funds for new Web3 projects in 2024. Victims of its August 2021 hack claim that they were never reimbursed for their losses, despite promises from the development team. They argue that DAO Maker is responsible for the hack as it was allegedly due to the negligence of its developers. The hack resulted in approximately $7 million of users’ funds being stolen. The team initially agreed to compensate investors with an airdrop of 500 USDC per person and the remaining losses would be covered through an IOU token called USDR. Victims state that USDR redemptions were never allowed and they have not been compensated for their remaining losses.

SOMA Analytics, a decentralized finance researcher, has also accused DAO Maker of forcing through a proposal to cancel the reimbursement plan. They claim that the team used its large token supply to ensure the vote’s outcome. The researcher further alleges that the proposal was deleted to remove evidence of the team’s failure to reimburse victims. It is important to note that DAO Maker is separate from MakerDAO, a stablecoin protocol.

DAO Maker is a fundraising platform that focuses on supporting Web3 projects governed by decentralized autonomous organizations (DAOs). It offers various systems for investors to participate in token offerings, such as the Strong Holder Offering (SHO). The SHO allows investors to use DAO tokens to allocate DAO Power to a specific coin offering. The more DAO Power allocated, the higher the chances of winning a participation slot. If successful, the investor’s allocation is funded by their USDC balance, and they can purchase coins in the offering.

During the August 2021 hack, the SHO contract holding USDC funds was exploited, resulting in the theft of $7 million. The team acknowledged the hack and announced a compensation plan, which included an immediate airdrop of 500 USDC per impacted investor and the issuance of USDR tokens. These tokens were to become redeemable for DAO tokens after one year.

Victims claim that they were not able to redeem their USDR tokens as promised. They discovered a liquidity pool for USDR, but the tokens were not in a 1:1 ratio to USDT. As a result, the tokens were practically worthless, and the liquidity pool was later shut down, leaving holders with no means to cash out.

SOMA Analytics alleges that there was a cover-up by the DAO Maker team regarding the USDR redemption process. The team created a proposal to abandon the redemption, which was passed but deleted from its Snapshot webpage. The researcher claims the team used its tokens to outvote tokenholders and ensure the vote’s outcome. They argue that the six wallets that voted for the 50% haircut were created just before the vote and received substantial amounts of DAO tokens within two days, suggesting involvement from the development team.

Despite being able to gain DAO Power with USDR tokens, investors argue that the tokens have little value as they do not guarantee earnings. The compensation promised through the voting process was never distributed.

reached out to DAO Maker for comment but did not receive a response. The platform continues to provide fundraising services, and its native token, DAO, has a market cap of $153 million.

4 thoughts on “Long-Overdue Reimbursements: DAO Maker Hack Victims’ Wait Continues

  1. This is absolutely outrageous! DAO Maker needs to take responsibility for their negligence and compensate the victims.

  2. I hope DAO Maker learns from this incident and takes concrete steps to prevent such hacks in the future. Security should always be a top priority.

  3. The victims trusted DAO Maker with their funds, and they were let down. This is a clear case of negligence.

  4. I can’t believe DAO Maker would do this to its users! People trusted them with their funds and they were let down.

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