$220M DAO Hack Funds Repurposed for Ethereum Security Endowment

The genesis of the DAO Security Fund lies in the unresolved aftermath of the 2016 DAO experiment’s collapse. Following a contentious hard fork that created Ethereum Classic and reimbursed most investors, a small share of funds remained locked in unresolved ‘edge-case’ contracts overseen by a group of curators. As Griff Green, a co-founder of Giveth and original signatory to those funds, explained on Laura Shin’s Unchained podcast, these leftover holdings—approximately 70,500 ETH from the DAO’s ExtraBalance contract and 4,600 ETH from a curator multisignature wallet—have appreciated dramatically with Ethereum’s price rise. Valued at roughly $220 million today, they now exceed the DAO’s original $150 million raise.

Green framed the initiative as the culmination of the DAO hack’s lasting impact. “The DAO really kick-started the security industry in Ethereum,” he stated. “Before the DAO hack, there was no audit industry.” The 2016 attack, which exploited a smart contract flaw to drain about $60 million, was a pivotal crisis that exposed the ecosystem’s immaturity. By repurposing these once-stranded assets, the fund aims to turn that historic failure into a perpetual source of strength, directly funding the security culture the hack itself helped forge.

The operational blueprint for the endowment emphasizes sustainability and decentralized oversight. The vast majority of the 75,000 ETH—about 69,420 ETH—will be staked. This creates a long-term endowment where the staking rewards, not the principal, will be deployed to fund security projects. A portion of the ETH will remain liquid to address any outstanding claims from the original DAO collapse, ensuring historical obligations are met.

Critically, governance of the fund will rely on community-driven mechanisms rather than core developer oversight. As Green outlined, funding decisions will be made through innovative models like quadratic funding, retroactive funding, and ranked-choice voting. Independent operators will oversee grant rounds. This structure ensures the fund serves the broad ecosystem’s needs as defined by its participants, aligning with Ethereum’s decentralized ethos. The initiative is stylized as TheDAO, a nod to its origins while marking its new purpose.

Overseeing this new chapter is a board of curators comprising prominent Ethereum figures, signaling the initiative’s significance. The board includes Ethereum co-founder Vitalik Buterin, MetaMask security researcher Taylor Monahan, and ENS co-founder Alex Van der Sande. Their involvement bridges the project’s origins with its future-focused mission, lending credibility and deep ecosystem insight to its stewardship.

The fund’s ambition, as expressed by Green, extends beyond incremental improvements. “I want to see Ethereum reach a point where people feel it’s safer to store assets on Ethereum than in a bank,” he said. This vision underscores the endowment’s role in supporting the foundational security required for mainstream adoption. By providing a sustainable, decentralized funding stream for audits, bug bounties, protocol analysis, and other defensive measures, the DAO Security Fund aims to institutionalize the security mindset born from the 2016 crisis, protecting an ecosystem whose value and complexity have grown exponentially since its earliest and most consequential failure.