Unclaimed funds from Ethereum (ETH) 2016 DAO hack will fund a $220 million security initiative nearly a decade after the exploit that defined the network's early history.
TheDAO Security Fund will deploy 70,500 ETH worth approximately $206.6 million that remained unclaimed in the ExtraBalance account created during the controversial hard fork that split Ethereum and Ethereum Classic (ETC).
Griff Green, an original DAO curator who participated in the White Hat Group rescue effort, announced the initiative will stake 69,420 ETH to generate roughly $8 million in annual yield for ongoing security grants.
What Happened
The funds originated from TheDAO crowdsale when the token price increased near closing, with some participants paying between 1.05 and 1.5 ETH per 100 DAO tokens rather than the initial 1 ETH rate.
After the June 2016 hack in which attackers obtained 4.5 percent of all ETH in existence, the community hard forked to return funds via a Withdraw Contract that reimbursed participants at the original 1 ETH per 100 DAO token rate.
The overage paid by late participants remained unclaimed for nearly ten years as the ExtraBalance account appreciated from the original sale price to current valuations exceeding $200 million.
An additional 4,600 ETH worth of DAO tokens totaling $13.5 million from the Curator Multisig will be allocated to security grants distributed through DAO-style mechanisms including quadratic funding, retroactive public goods funding, and ranked-choice RFPs.
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Security Infrastructure
TheDAO Security Fund will support Ethereum mainnet, layer 2 networks, smart contract auditing, incident response, research, user protection, infrastructure, operational security, and education initiatives while excluding EVM-compatible alternative layer 1 blockchains.
Potential recipients include security organizations like SEAL and SEAL 911, auditing firms Trail of Bits and OpenZeppelin, user protection tools Revoke.cash and Blockaid, infrastructure projects L2Beat, and operational security products including Yubikey and Signal.
The Ethereum Foundation will establish eligibility criteria for each funding round while Giveth, Green's organization, will support grant operators selected through application processes.
DAO Revival Context
Green acknowledged the DAO ecosystem faces significant challenges, noting Eigenlayer, Apecoin DAO, Jupiter DAO, and Scroll DAO have closed or paused operations while other communities like Cronos experienced centralized entities overruling governance processes.
The initiative attempts to demonstrate DAO coordination mechanisms nearly ten years after TheDAO's 2016 launch became Ethereum's first major application before the hack triggered an existential crisis that ultimately strengthened the network's security focus.
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