# How Did the DAO Hack Use a Reentrancy Vulnerability? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

---

## How Did the DAO Hack Use a Reentrancy Vulnerability?

In the 2016 DAO hack, the attacker exploited a reentrancy vulnerability in the withdrawal function. The attacker called the function to withdraw funds, and before the DAO's ledger was updated to reflect the withdrawal, the attacker's contract "re-entered" the withdrawal function, calling it again.

This process was repeated, allowing the attacker to drain a large amount of Ether from the DAO before the contract could update the balance. The vulnerability lay in the order of operations: the contract sent the funds before updating the internal state, a critical design flaw.

- [What Is a Reentrancy Attack in Smart Contract Security?](https://learn.greeks.live/path/what-is-a-reentrancy-attack-in-smart-contract-security/)

- [What Is Reentrancy and Why Is It a Critical Smart Contract Vulnerability?](https://learn.greeks.live/path/what-is-reentrancy-and-why-is-it-a-critical-smart-contract-vulnerability/)

- [How Did the DAO Hack Relate to Integer Overflow?](https://learn.greeks.live/path/how-did-the-dao-hack-relate-to-integer-overflow/)

- [How Does a Reentrancy Attack Specifically Exploit Smart Contract Logic?](https://learn.greeks.live/path/how-does-a-reentrancy-attack-specifically-exploit-smart-contract-logic/)

- [How Does a Reentrancy Attack Relate to the DAO Hack?](https://learn.greeks.live/path/how-does-a-reentrancy-attack-relate-to-the-dao-hack/)

- [Could Modern DeFi Security Tools Have Prevented the DAO Hack?](https://learn.greeks.live/path/could-modern-defi-security-tools-have-prevented-the-dao-hack/)

- [Define a “Reentrancy Attack” in Smart Contracts](https://learn.greeks.live/path/define-a-reentrancy-attack-in-smart-contracts/)

- [What Is a ‘Front-Running’ Attack in the Context of an Oracle Price Update?](https://learn.greeks.live/path/what-is-a-front-running-attack-in-the-context-of-an-oracle-price-update/)

## Glossar

### [Reentrancy Vulnerability](https://learn.greeks.live/area/reentrancy-vulnerability/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Exploit ⎊ Reentrancy vulnerabilities represent a critical flaw in smart contract design, particularly prevalent in decentralized finance (DeFi) protocols and crypto derivatives.

### [The Dao Hack](https://learn.greeks.live/area/the-dao-hack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Exploit ⎊ The Dao Hack, occurring in June 2016, represents a critical inflection point in the evolution of decentralized autonomous organization (DAO) security and smart contract auditing within the Ethereum ecosystem.

### [Vulnerability](https://learn.greeks.live/area/vulnerability/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Exposure ⎊ Vulnerability within cryptocurrency, options, and derivatives manifests as quantifiable risk to capital stemming from imperfectly hedged positions or systemic dependencies.

### [DID](https://learn.greeks.live/area/did/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Attestation ⎊ Decentralized identifiers (DIDs) within cryptocurrency and financial derivatives represent a verifiable digital identity, moving beyond centralized authorities to establish trust through cryptographic proofs.

### [DAO Hack](https://learn.greeks.live/area/dao-hack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Event ⎊ A security breach targeting a Decentralized Autonomous Organization, typically exploiting flaws in governance mechanisms or smart contract logic to illicitly transfer pooled assets.

## Discover More

### [How Does a DAO Treasury Use Vested Tokens for Future Funding Rounds?](https://learn.greeks.live/path/how-does-a-dao-treasury-use-vested-tokens-for-future-funding-rounds/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a DAO Treasury Use Vested Tokens for Future Funding Rounds?](https://learn.greeks.live/wp-content/uploads/2025/10/Intricate-Quantum-Circuitry-Modeling-Illustrating-Decentralized-Finance-Option-Hedging-Mechanisms.webp)

Reserving a portion of the unvested token supply for strategic sales or grants to secure future funding without immediate market dilution.

### [What Is the "Approve-and-Pull" Race Condition Vulnerability and How Can It Be Mitigated?](https://learn.greeks.live/path/what-is-the-approve-and-pull-race-condition-vulnerability-and-how-can-it-be-mitigated/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the "Approve-and-Pull" Race Condition Vulnerability and How Can It Be Mitigated?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Engineering-of-DeFi-Yield-Enhancement-Structures-Highlighting-Staking-Mechanisms-and-Liquidity-Provision-Prowess.webp)

A contract could spend your old allowance and new allowance before the change is fully confirmed. Fix by setting to 0 first.

### [How Did the Role of Speculators in the CDS Market Contribute to the 2008 Financial Crisis?](https://learn.greeks.live/path/how-did-the-role-of-speculators-in-the-cds-market-contribute-to-the-2008-financial-crisis/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Did the Role of Speculators in the CDS Market Contribute to the 2008 Financial Crisis?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Leveraged-Token-Mechanics-Revealing-Hidden-Volatility-Surface-Parameters-in-Digital-Asset-Swaps.webp)

Speculators created a huge, hidden web of bets on debt, causing a domino effect of losses when the market crashed.

### [What Is a "Re-Entrancy Attack" and Why Is It a Common Smart Contract Vulnerability?](https://learn.greeks.live/path/what-is-a-re-entrancy-attack-and-why-is-it-a-common-smart-contract-vulnerability/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a "Re-Entrancy Attack" and Why Is It a Common Smart Contract Vulnerability?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Ledger-Tokenization-Construct-Bifurcation-High-Frequency-Arbitrage-Mechanism-Visualization.webp)

A re-entrancy attack is a malicious contract repeatedly calling a vulnerable contract before its state is updated, allowing for fund draining.

### [What Specific Code Vulnerability in the DAO Contract Allowed the Reentrancy?](https://learn.greeks.live/path/what-specific-code-vulnerability-in-the-dao-contract-allowed-the-reentrancy/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Specific Code Vulnerability in the DAO Contract Allowed the Reentrancy?](https://learn.greeks.live/wp-content/uploads/2025/10/Dissecting-Actuator-Mechanism-Within-Decentralized-Exchange-Execution-Engine-Protocols.webp)

The contract sent Ether to the user before updating their internal balance, allowing a recursive call to drain more funds.

### [What Is a Reentrancy Attack in the Context of Smart Contract Vulnerabilities?](https://learn.greeks.live/path/what-is-a-reentrancy-attack-in-the-context-of-smart-contract-vulnerabilities/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Reentrancy Attack in the Context of Smart Contract Vulnerabilities?](https://learn.greeks.live/wp-content/uploads/2025/10/Fluorescent-Margin-Call-Indicator-Interfacing-with-Layered-Digital-Asset-Ledger-Tapes.webp)

A malicious contract repeatedly calls a vulnerable contract before the initial transaction state is updated, allowing funds to be drained multiple times.

### [How Did the Dodd-Frank Act in the US Address the Need for Central Clearing?](https://learn.greeks.live/path/how-did-the-dodd-frank-act-in-the-us-address-the-need-for-central-clearing/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Did the Dodd-Frank Act in the US Address the Need for Central Clearing?](https://learn.greeks.live/wp-content/uploads/2025/10/Cryptographic-Atomic-Custody-Orbits-a-Singular-Black-Hole-Derivative-Settlement-Node.webp)

Dodd-Frank mandated central clearing for most standardized swaps and increased regulatory oversight to reduce systemic risk post-2008.

### [What Role Do Transaction Confirmation Times Play in the Vulnerability to a 51% Attack?](https://learn.greeks.live/path/what-role-do-transaction-confirmation-times-play-in-the-vulnerability-to-a-51-attack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Role Do Transaction Confirmation Times Play in the Vulnerability to a 51% Attack?](https://learn.greeks.live/wp-content/uploads/2025/10/Telescopic-Antennas-Intersecting-Over-Gritty-Digital-Asset-Settlement-Surface.webp)

Shorter confirmation times increase vulnerability by giving the attacker less time to create a longer, secret chain before the transaction is deemed final.

### [How Did the Opacity of the Over-the-Counter (OTC) CDS Market Hide Systemic Risk?](https://learn.greeks.live/path/how-did-the-opacity-of-the-over-the-counter-otc-cds-market-hide-systemic-risk/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Did the Opacity of the Over-the-Counter (OTC) CDS Market Hide Systemic Risk?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Entanglement-Visualization-of-Intersecting-Collateralized-Debt-Positions-in-Decentralized-Finance.webp)

Private OTC trading meant no one knew the total risk or who was exposed, causing panic and a credit freeze when losses hit.

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**Original URL:** https://learn.greeks.live/learn/how-did-the-dao-hack-use-a-reentrancy-vulnerability/
