- Almost 10 years after its hack, TheDAO is back.
- Around 75,000 unclaimed Ether will be put into play to fund security initiatives.
Fade, a pseudonymous researcher at crypto market maker Wintermute, was eight years old when TheDAO was hacked, nearly killing a fledgling blockchain known as Ethereum.
Nearly 10 years later, his research inspired a proposal to fund initiatives that make the use of Ethereum more secure. And the funds would come from a huge amount of unused crypto recovered after the hack.
This week, those responsible for distributing this crypto said that around 75,000 Ether had gone unclaimed by their original owners. As discussed almost 10 years ago, this Ether, currently worth over $220 million, will be used.
“The DAO Security Fund will activate over 75,000 ETH (over $220 million) to strengthen the security of Ethereum, ensuring that it is ready to become the backbone of the global financial infrastructure,” crypto entrepreneur Griff Green wrote in a blog post explaining the decision.
The hack
In 2016, TheDAO, a cooperatively managed venture capital fund, became one of the largest crowdfunding initiatives in world history, attracting over $150 million in Ether.
But it was quickly hacked, sparking a contentious debate over whether to fork Ethereum, turning the clock back to the point before the hack. While this would allow the stolen Ether to be recovered, it would also challenge the idea that the blockchain was tamper-proof and fit to serve as a neutral basis for a new decentralized internet.
The pro-fork camp won and the Ether was recovered. Although most of this Ether was easily claimed by its original owners, there were “extreme cases,” Green wrote. A crypto wallet containing hard-to-claim Ether was created, with control distributed among a select group of people, including Green.
After January 31, 2017, any unclaimed funds would be used to fund a nonprofit organization “to support smart contract security,” according to a blog post published shortly after the hack. Apparently, this commitment has been all but forgotten – until now.
Forgotten but not lost
Fade recently discovered the 10-year-old blog post “while looking through old contracts,” he wrote on X.
“I made the proposal to use these funds,” he added, a claim Green confirmed in his most recent post.
Green said TheDAO, resurrected as a security-focused grantmaking organization, would be guided, in part, by the Ethereum Foundation’s Trillion Dollar Security initiative, which identified six priorities for security-focused software developers.
But TheDAO will also be guided by Ethereum users, who will have the opportunity to vote on how to allocate funding across multiple rounds.
The vast majority of the approximately 75,000 Ether available can still be claimed. Rather than distributing this Ether to fund security work, TheDAO will stake it, with the resulting yield used to fund security initiatives on an ongoing basis.
According to Green, Ethereum co-founder Vitalik Buterin, Metamask security researcher Taylor Monahan, and four others will lead the TheDAO security fund.
“The DAO Security Fund marks the beginning of a new phase for Ethereum’s security story,” he wrote. “The world is ready for our technology, we want to make sure our technology is ready for the world.”
Aleks Gilbert is DL News’ DeFi correspondent based in New York. You can contact him at aleks@dlnews.com.
