Breaking news: DAO Maker scams investors for $4.4k

Platform hacking and compensation

The case was on 12 August 2021. About 7 million USDC were stolen from the DAO Maker contract. On the same day a post from DAO Maker came out saying that compensation plans would be submitted within 5 days. 

A compensation plan did appear. The DAO Maker administration returned 500 USDC each to all victims after some time and also promised to return the remaining funds after a year, but at the same time 10% more. All victims were temporarily given USDR tokens, which were later to be exchanged at the rate of 1 USDR = 1.1 USD in DAO.

It would seem - the situation has been solved, the victims will get their lost money back in the form of DAO tokens and moreover - they will add 10% on top.

However as you understand August 19, 2022 has long ago passed, the exchange of USDR to DAO has not happened yet.

Who has suffered

The original hack affected 5,521 users to the tune of 7k USDC. All were refunded 500 USDC each worth 2.6k USDC, and the remaining amount to be refunded was distributed as USDR, which was to be converted at the rate of 1 USDR = 1.1 USD into DAO.

Also after USDR distribution, liquidity was created on Uniswap, in which DAO Maker team contributed 1 million USDC, but immediately after pair creation on Uniswap USDR rate rolled below 1$ and was trading around 0.5-0.9$ (for 1 USDR) until last.

In the end the 1 million USDC deposited ran out, but judging by arbiscan, there were at least 3,500 USDR holders who either never sold their USDR at an undervalued rate, or were buying it in the hope of getting more USD in DAO tokens at the time of conversion.

By the way, I'm one of the victims too. I wanted to wait for exchange of USDR to DAO, so I didn't sell my 2000 USDR to Uniswap, and now not only I can't do it, but also probably I won't get anything at all.

DAO Maker has backtracked

What happened next? First the admins in the DAO Maker chat were feeding promises that there would be a return sometime in Q4 2022.

The following article with the detailed compensation plan has been removed from Medium, you can follow the link and check:

The article is also missing from the archive:

Later all mentions of the hack were removed from the DAO Maker News Telegram channel, fortunately I still have a couple of forwarded chat posts, I attached screenshots in the first chapter. I can forward these messages to anyone who wants them on Telegram and you can verify their authenticity.

I didn't even try to look on Twitter, they probably wiped all the social networks with information about the hack.

Then, on 12 October 2022, DAO Maker admins decided to play black: pulled USDR from liquidity pool, then they without announcements in social networks and began voting and proposed 3 ways of solving the situation with USDR.

1 way: DAO Maker will algorithmically sell DAO, not to dump DAO heavily and distribute to affected USDC.

2 way: 10% of redeemed DAOs from Venture Yield will be distributed monthly to USDR holders instead of dripping to those steaming DAOs from their platform.

3 way: Don't do the USDR exchange because, QUOTING: "most people who wanted to sell have already sold using the USDR-USDC liquidity pool".

Of course it makes no sense for DAO holders to shoot themselves in the foot and it would make more sense to choose option 3, at the time of writing it is leading in the voting. Voting ends on 16 October 2022.

P.s. If you have a DAO or USDR and want to help restore justice, then vote for option 1 at the link above.

Interesting fact from subscriber: 10 days ago 2 new wallets had a total of 500k DAO tokens deposited and sent to the stack and then voted for option 3. Those are the 2 biggest votes. Voting manipulation or just coincidence? The question is rhetorical.


DAO Maker is still one of the top lunchpads, nevertheless the administration of the project obviously does not know how to answer for their words. Personally, after such a situation I have no trust in this platform, I will definitely never buy their DAO token. Please give publicity to this situation and do not allow the sly foxes from DAO Maker to implement their scam plan.

Source: Teletype

Jack Evans

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments.

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