Ethereum developer Griff Green has announced the launch of TheDAO Security Fund, a new initiative aimed at bolstering the security of the Ethereum ecosystem. The fund will utilize unclaimed Ethereum (ETH) from the infamous 2016 DAO hack. These funds, which have significantly appreciated in value over the years, will be used to support various Ethereum security initiatives.
The DAO was a decentralized autonomous organization that aimed to create a new model for organizing commercial and non-profit enterprises. In April 2016, it launched via a token sale and became one of the largest crowdfunding campaigns in history. However, in June 2016, a vulnerability in The DAO's code was exploited, leading to the siphoning of a significant portion of its funds – 3.6 million Ether, which was about a third of the total 11.5 million Ether committed to The DAO, valued at approximately $50 million at the time. This incident led to a hard fork in the Ethereum network to restore the funds to their original owners, resulting in the creation of Ethereum Classic (ETC).
The unclaimed ETH from the DAO hack, which was originally intended to reimburse participants at a rate of 1 ETH per 100 DAO tokens, will now be redirected to the new security fund. The fund will consist of approximately 70,500 ETH from the ExtraBalance withdrawal contract and around 4,600 ETH worth of DAO tokens from TheDAO Curator Multisig. Initially valued at $6 million, these assets are now worth approximately $200 million. Some reports value the fund at $220 million or $250 million.
The DAO Security Fund will support a range of security measures within the Ethereum ecosystem. This includes initiatives focused on the Ethereum mainnet, layer 2 networks, smart contract auditing, incident response, research, user protection, infrastructure, operational security, and education. It will exclude EVM-compatible alternative layer 1 blockchains.
To ensure the fund's sustainability, the 69,420 ETH will be staked to generate an estimated $8 million in annual yield for ongoing security grants. The funding mechanism will adopt a grassroots-oriented model, incorporating quadratic funding and retrospective grants. The Ethereum Foundation's Grants Management team will oversee eligibility verification for each funding round, and this initiative is considered part of the Ethereum Foundation's broader "trillion-dollar security plan". Potential recipients of the security grants include security organizations like SEAL and SEAL 911.
Griff Green was also a community manager who organized the White Hat Group, a volunteer group of coders, to recover funds from the other 500 wallets before they could be hacked.
The launch of TheDAO Security Fund marks a significant step towards enhancing the security of the Ethereum network and preventing future exploits. By repurposing unclaimed funds from a past crisis, the Ethereum community aims to create a more secure and resilient ecosystem for its users.
