The price of ether, the native currency that powers the blockchain platform ethereum, sank yesterday following an Ethereum Foundation blog post that pointed out a flaw in a proposed plan meant to rescue funds lost in an attack on one of its signature projects, The DAO.
The flaw would leave the distributed organization open to a denial of service (DOS) attack, and fears of such an event have driven ether prices lower, according to traders.
Ether prices fell to as little as $11.60 during yesterday's session, down roughly 17% from their opening price of $13.95, Poloniex figures reveal. The digital currency later recovered, opening at $12.18 on 29th June and rising to a press time total of $12.69.
Still, the event showcases the sensitivity in the market to the current situation, which could find ethereum developers taking divisive steps to return funds to investors.
Members of the ethereum development community have been scrambling to find a solution to the hack that resulted in the theft of 3.6m ether tokens since it occurred almost two weeks ago. One potential solution that has generated visibility is a soft fork that would attempt to blacklist the address holding the confiscated funds, though it now appears unlikely as miners have largely stopped voting for the proposal.
At this point, it looks uncertain "whether they'll even be able to put together a sufficiently safe soft fork in the limited weeks they have," algorithmic trader Jacob Eliosoff told CoinDesk. As a result, many are leaning toward either implementing a hard fork solution or simply letting the hacker keep the funds, he added.
Sources point to the event as contributing to "uncertainty" in ethereum's market, which could continue for weeks.
Due to provisions in The DAO's coding, the attacker is currently prohibited from spending the confiscated funds, a safety mechanism that remains in place, but only until 14th July.
Charles L. Bovaird II is a financial writer and consultant with strong knowledge of securities markets and investing concepts.
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