TheDAO’s unclaimed ether from its 2016 hack is being repurposed into a new $220 million Ethereum security fund, according to people familiar with the initiative. The effort is being led by Ethereum co-founder Vitalik Buterin alongside other early Ethereum contributors, marking a rare attempt to turn one of crypto’s most infamous incidents into a long-term defensive asset for the network.
The capital, which has remained dormant for years following the collapse of TheDAO, will be redirected toward protecting Ethereum’s ecosystem from future vulnerabilities, exploits, and systemic risks.
Key Takeaways
- Unclaimed ETH from TheDAO hack will fund a new $220 million Ethereum security initiative.
- The effort is backed by Vitalik Buterin and other early Ethereum figures.
- The fund aims to improve long-term ecosystem security and resilience.
- The move reframes a historic hack into a protective resource.
From Historic Hack to Security Resource
TheDAO hack in 2016 resulted in the loss of millions of dollars worth of ether and ultimately led to Ethereum’s contentious hard fork. According to reporting by CoinDesk, a portion of the hacked ETH remained unclaimed for years, creating legal and governance ambiguity around its use.
Developers involved in the new initiative argue that redirecting the funds toward security research and defense aligns with Ethereum’s broader mission and benefits the ecosystem as a whole.
Purpose of the New Security Fund
Sources cited by Bloomberg say the fund will be used to support audits, bug bounties, incident response coordination, and security-focused infrastructure across Ethereum. Rather than acting as an investment vehicle, the fund is designed as a protective backstop for the network.
Organizers emphasize that the initiative is preventative in nature, aiming to reduce the likelihood and impact of future exploits.
Ethereum OGs Take a Long-Term View
Vitalik Buterin and other early Ethereum contributors have repeatedly stressed that security is the network’s most critical long-term challenge. In past public statements covered by Reuters, Buterin has argued that ecosystem-level defenses are just as important as protocol upgrades.
TheDAO fund repurposing reflects that philosophy, focusing on collective protection rather than individual recovery.
Community and Governance Considerations
The use of legacy funds tied to TheDAO raises governance questions, but early reaction within the Ethereum community has been largely supportive. Analysts note that transparency around fund allocation and oversight will be essential to maintaining trust.
Observers say the initiative could set a precedent for how dormant or abandoned on-chain assets are handled in the future.
What To Watch Next
- Details on how the security fund will be governed and deployed.
- Announcements of supported security programs or audits.
- Community feedback on the use of legacy DAO funds.
- Whether similar initiatives emerge across other blockchains.
This article is for informational purposes only and does not constitute financial advice.