The DAO, once hacked in 2016, returns to fund Ethereum security

After almost ten years, the decentralized autonomous organization The DAO, killed by a major hack in 2016, has been reborn as TheDAO Security Fund, designed to strengthen the security of the Ethereum (ETH) blockchain.

According to Ethereum developer and one of TheDAO's curators, Griff Green, the fund now holds more than 75,000 ETH ($203 million) recovered after the hack and left unclaimed.

"From wallet UX and smart contract security, to incident response and core protocol security, we'll fund the work that makes Ethereum and our L2 [Layer 2] ecosystem safer," Green said, adding that the Ethereum Foundation's Trillion Dollar Security initiative will be used as context when allocating funding to specific projects.

The Foundation's initiative is an ecosystem-wide effort to upgrade Ethereum's security.

Green said the fund will invite "broad ecosystem participation" when allocating capital, while ensuring the funding process is open and that funding rounds are run by independent operators selected through an application process opening soon.

The fund, which stewards ETH from the ExtraBalance contract and TheDAO’s Curator Multisig, plans to stake 69,420 ETH to generate yield (currently 3–5%), effectively creating an endowment. The contract still has parties that can claim funds, while the Multisig has no clear claimants.

"That yield, alongside the 4,600 ETH worth of funds in TheDAO’s Curator multisig, will be used to fund Ethereum security initiatives," Green explained, adding that "some ETH" will be left in the ExtraBalance Withdrawal contract so people can still claim the funds.

Besides Green, the fund's other curators include Ethereum co-founder Vitalik Buterin and prominent participants in this ecosystem, such as Taylor Monahan, Jordi Baylina, pcaversaccio, Alex Van de Sande, and Pol Lanski.

The history of The DAO is as follows: In 2016, The DAO raised more than $150 million. Then, in the same year, it was hacked, losing around a third of the raised funds. After controversial decisions, including a hard fork, the stolen funds were recovered, while the original Ethereum chain has been operating since then as Ethereum Classic (ETC).

"While the hard fork was able to address the standard DAO token claims, it couldn’t solve everything. TheDAO Curator Multisig (which already had special powers over some DAO functions) was therefore enshrined with the additional abilities it needed to resolve the remaining edge cases and ensure all the ETH recovered was claimable by its original owners," Green said, adding that, back then, a clear intention was set that if these edge case funds were not claimed, they would be used to support Ethereum security.

According to the developer, more than 80% of the edge-case funds have been claimed, while claims continue to happen, but at a slow pace.

Unlock more exclusive Cybernews content on YouTube.