Hifi DAO suffers governance takeover attack; team estimates losses of about $20,000 and asks users to withdraw collateral immediately
Hifi Finance disclosed in a post on October 29, 2026, that Hifi DAO had suffered a governance takeover attack, and HIFI token holders were in effect no longer able to control the protocol, the governance smart contract, or the HIFI token supply. The team reminded all users with collateral in Hifi Protocol to withdraw immediately, and specifically asked the controllers of two addresses (0xe97f2d37f9612b702d1a2eb5288bd62de95864b8 and 0xd10ce1caaabd338258392a7cf6c662fd09421146) to remove the WETH from the protocol.
Hifi Finance said the core team failed to detect and stop the governance attack in time and takes full responsibility for this. The team has now taken measures to greatly limit the scope of the attack’s impact, and the final loss has not yet been determined, with an initial estimate of about $20,000. The DAO has sufficient funds and will compensate all affected parties; the DAO’s own liquidity has been permanently withdrawn from decentralized trading platforms. In addition, all outstanding debt backed by RWA collateral will be directly managed by the core team and will no longer be handled through the compromised smart contract. The relevant debt still has sufficient capital support and is expected to be repaid in full according to the original maturity date of March 26, 2027; the protocol will no longer issue new debt. The team said it will later release a complete investigation report.
Original source:
Title: Hifi DAO Governance Attack Publisher: Hifi Finance Publication date: 2026-10-29 URL: https://blog.hifi.finance/hifi-dao-governance-attack-073fb5ab4b12 Nature of source: direct post by the party involved Verification status: full text read in this article, accessed on 2026-10-30/31 Supporting content: confirmation of governance takeover, user withdrawal request, two WETH addresses, team responsibility statement, estimated loss of about $20,000, DAO compensation and liquidity withdrawal, RWA debt management arrangement, and maturity date of March 26, 2027
ABAB AI Insight
Hifi Finance is a fixed-rate lending protocol on Ethereum, formerly known as Mainframe, that supports fixed-term lending backed by crypto assets and real-world assets (RWA). The attack was disclosed on October 28, 2026 by on-chain researcher Spreek and involved Proposal 21: the proposal passed and was queued with about 29.45 million HIFI votes in favor, 0 against, reaching quorum, and planned to upgrade the BalanceSheet implementation and mint 25 million HIFI to an attacker-controlled Safe. The proposal was described as “Upgrade BalanceSheet implementation and distribute HIFI tokens,” and part of the attacker’s funds were moved through Tornado Cash, with the vote concentrated in the roughly 6 minutes before the deadline. Spreek’s analysis showed that the upgraded harvestIdle function treated collateral deposited before the upgrade as “idle,” allowing it to be swept out, involving about 8.79 WETH and other collateral, mainly HC1, valued at about $1 million according to the protocol’s oracle pricing.
The team’s official statement differs from Spreek’s report in amount: earlier reports said users’ collateral worth about $1 million was transferred or at risk, while Hifi’s official estimate puts the combined loss at about $20,000, and says it has taken measures to limit the impact. The official statement did not provide on-chain details of the specific mitigation measures, but confirmed that the DAO’s own liquidity has been permanently withdrawn from the DEX, and that outstanding debt related to RWA is now managed directly by the core team rather than interacting with the compromised contract. The debt is expected to be repaid in full on the original maturity date, and no new debt will be issued. HIFI token price has recently been at a low level, around $0.0013, with a total supply of about 142 million.
In terms of capital and governance, Hifi did not disclose any new financing. The attack exposed the vulnerability of DAO governance under low participation: the quorum threshold was about 2.84 million HIFI, allowing a small number of wallets to dominate the vote, and there was no on-chain guardian to cancel the proposal. The team acknowledged a monitoring failure and pledged to compensate affected parties with DAO funds. The off-chain management arrangement for RWA debt means the on-chain liquidation mechanism for the related loans is no longer effective, relying on off-chain coordination between the core team and the collateral issuer.
This incident shifted control of the Hifi protocol from HIFI holders to the attacker and the related Safe, and users need to withdraw remaining collateral on their own to limit further losses. If similar low-barrier governance attacks recur in other RWA or fixed-rate protocols, they could accelerate demand for multisig guardians, higher quorum thresholds, or voting delay mechanisms. The key point to watch is the verified amount of on-chain losses in the official follow-up report, as well as whether the RWA debt is repaid in full on time.
ABAB News · Cognition Law
The quorum threshold in low-participation DAOs makes governance takeovers possible through concentrated voting at the last minute.
The official loss estimate and the on-chain collateral risk disclosure may differ by an order of magnitude, and the full report is needed for verification.