The current issues with The DAO have taken the world by storm, and not in a good manner. After information leaked about a critical bug that is draining The DAO’s Ethereum balances, a lot of traders panicked. But in the end, things are not as dire as they first appeared.
First of all, it is important to note The DAO developers were aware of this bug that allowed Ethereum funds to be drained. They also pointed out this would not be a significant issue a handful of days ago, yet chaos still ensued. At things stand, all of the leaked funds is held in a Child DAO. This also means the funds cannot be withdrawn for another 27-ish days.
The DAO Incident Explained
The exploit itself is a recursive calling vulnerability, containing the “split” function. As the attacker called this function recursively inside the split, they can collect Ether multiple times with one transaction. At the date of writing, that amount was still increasing at regular intervals.
What is most important is how this is an issue with The DAO itself, and not Ethereum. Once the news broke about this incident, both DAO tokens and ETH started dropping in value as traders