TLDR
- Ethereum has repurposed unclaimed DAO hack funds to create a $220 million security endowment.
- The DAO Security Fund will focus on audits, incident response, infrastructure, and user protection across Ethereum’s ecosystem.
- Funding for the initiative comes from 70,500 ETH, valued at approximately $206 million, and additional DAO tokens.
- The Ethereum Foundation will oversee funding distribution using mechanisms like quadratic funding and retroactive grants.
- Grants from the fund will support Ethereum’s mainnet, layer 2 networks, and security organizations.
Ethereum has repurposed unclaimed funds from the infamous 2016 DAO hack, establishing a $220 million endowment. The initiative, called the DAO Security Fund, aims to improve security across the Ethereum ecosystem. The fund will focus on areas like audits, incident response, infrastructure, and user protection.
Ethereum Repurposes Funds for Security Initiative
The DAO hack, which saw an attacker siphon off 4.5% of all ETH in circulation, led to Ethereum’s first crisis. Following the hack, Ethereum underwent a hard fork that resulted in the creation of Ethereum Classic. Nearly a decade later, Ethereum is redirecting the unclaimed funds to strengthen its security as the network scales.
Ethereum’s DAO Security Fund is primarily funded by 70,500 ETH from an unclaimed ExtraBalance withdrawal contract. This amount is valued at roughly $206 million, while around 4,600 ETH and DAO tokens, valued at $13.5 million, also contribute. The majority of the ETH will be staked to generate an estimated $8 million in annual yield, supporting ongoing security efforts.
Distributed Funding Mechanisms to Support Security Efforts
Funding will be allocated through DAO-based mechanisms, including quadratic funding, retroactive grants, and ranked choice voting. The Ethereum Foundation will set eligibility criteria for each round of funding. Grants will support Ethereum’s mainnet, layer 2 networks, smart contracts, user protection, infrastructure, and operational security.
Griff Green, a former DAO curator, emphasized that the fund is aimed at redirecting long-dormant capital toward network safety. “This initiative will help Ethereum manage increasing amounts of value while strengthening its security framework,” Green said. The initiative is a part of Ethereum’s broader Trillion Dollar Security plan.
DAO Security Fund to Enhance Ethereum’s Ecosystem
The DAO Security Fund will support various projects, including security organizations like SEAL and auditing firms such as OpenZeppelin and Trail of Bits. It will also fund user protection tools like Revoke.cash and infrastructure projects like L2Beat. The Ethereum Foundation will work alongside organizations like Giveth to manage the grants.
The fund’s primary focus is on Ethereum’s mainnet and layer 2 networks. It excludes EVM-compatible alternative layer 1 blockchains, ensuring that the focus remains on Ethereum’s ecosystem. By funding projects across the Ethereum network, the initiative will address growing concerns over phishing, wallet drains, and operational risks.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
