Introduction
Nearly ten years after a significant hack that led to the separation of Ethereum into two distinct chains, the assets from the infamous 2016 DAO failure are set to be transformed into a substantial crypto security fund. Griff Green, a co-founder of Giveth and a member of the original group that managed the recovered DAO assets, announced on Laura Shin’s Unchained podcast the launch of the DAO Security Fund. This initiative aims to allocate approximately 75,000 ETH, equating to around $220 million, to enhance the security of the Ethereum network.
The Impact of the DAO Incident
Green emphasized that the DAO incident served as a pivotal moment for the evolution of security standards within Ethereum.
“The DAO really kick-started the security industry in Ethereum,”
he stated, noting that prior to this event, the industry lacked a formalized audit system. The DAO Security Fund marks a critical transition, turning a past calamity into a prospective source of enduring financial support for network security, repurposing previously unclaimed assets from the DAO collapse.
Recovery of Funds
During the turbulent phase of the DAO’s fall, most investors regained their losses through a controversial hard fork, yet a small fraction of funds remained trapped within complex contracts managed by appointed curators. As Ethereum’s market value has surged since 2016, these leftover assets have appreciated, now exceeding the original $150 million raised by the DAO. Green mentioned that the fund will specifically access around 70,500 ETH from the DAO’s ExtraBalance contract and another 4,600 ETH from the curator multisignature wallet.
Funding and Governance
Most of the ETH will be staked, about 69,420, to create a sustainable endowment, with the accrued staking rewards being allocated to various security projects. A portion of the ETH will stay liquid to manage any continuing claims from investors.
Funding allocations will leverage community-governed processes, including quadratic funding, retroactive funding, and ranked-choice voting, while independent operators will administer grant sessions.
Curators and Future Vision
Moreover, an updated board of curators for this new initiative, presented as TheDAO, has been assembled, consisting of prominent figures such as Ethereum co-founder Vitalik Buterin, MetaMask security researcher Taylor Monahan, and ENS co-founder Alex Van der Sande. Green articulated an ambitious vision, stating,
“I want to see Ethereum reach a point where people feel it’s safer to store assets on Ethereum than in a bank.”
