In 2016, TheDAO raised over $150M USD, making it the largest crowdfunded project at the time, collecting roughly 14% of all ETH in existence. What followed became a defining turning point for Ethereum and cryptocurrencies in general.
Long story short, TheDAO was hacked. With the help of white hat hackers and an Ethereum hard fork, DAO token holders were able to recover their ETH and also claim ETC on Ethereum Classic. To my knowledge, TheDAO hack is the only major exploit where the stolen funds were fully recovered and everyone, including the hacker, actually ended up with more funds than they had before!
But fund recovery is never simple. While the hard fork was able to address the standard DAO token claims, it couldn’t solve everything. TheDAO Curator Multisig (which already had special powers over some DAO functions) was therefore enshrined with the additional abilities it needed to resolve the remaining edge cases and ensure all the ETH recovered was claimable by its original owners.
Several reputable members of the Ethereum community (including myself) stepped up to become members of TheDAO Curator Multisig, aka “Curators”, to ensure the recovery process was completed. And in doing so, a clear intention was set: If these edge case funds were not claimed, they would be used to support Ethereum security.
After January 31st, 2017 the unclaimed ether will be sent to a not-for-profit entity to support smart contract security.
- TheDAO’s Edge Cases Multisig (Post Hard Fork), Aug 2, 2016
If you want to learn more about TheDAO story, check out Christoph’s blog post, and if you want a detailed play-by-play of the adventure, check out Laura Shin’s book, the Cryptopians, pages 121-231.
TheDAO Security Fund is now being formed to fulfill that original intention: To put long-idle resources to work in service of Ethereum’s security. In a twist that could only happen in TheDAO story, the unclaimed, “edge case” funds are now worth considerably more than what TheDAO originally raised 🤯.
Ethereum security is the priority. From wallet UX and smart contract security, to incident response and core protocol security, we'll fund the work that makes Ethereum and our L2 ecosystem safer.
We're not starting from scratch. The Ethereum Foundation's Trillion Dollar Security initiative has mapped the biggest opportunities for impact. We'll use that context, plus ongoing conversations with ecosystem partners, to shape the scope of each funding round.
We will honor TheDAO's original mission by inviting broad ecosystem participation in determining how this funding is allocated. We will use open, bottom-up mechanisms, such as quadratic funding, retroactive funding, RFP rank-choice voting and more to allocate funding in rounds. Funding rounds will be run by independent operators selected via an application process opening soon, connect with us here if you are interested.
The Ethereum Foundation’s Grants Management team will provide the eligibility requirements for each round and Giveth will support the operators in everything else, guiding them throughout the process. Each round will conclude with a public retrospective to refine the mechanism and improve our processes.
TheDAO Security Fund stewards ETH from two sources:
~70,500 ETH from the ExtraBalance contract, which has parties that can claim
~4,600 ETH (DAO & ETH) in TheDAO’s Curator Multisig, which has no clear claimants.
The 69,420 ETH, mostly from the ExtraBalance contract, will be staked to generate yield, effectively creating an endowment. That yield, alongside the 4,600 ETH worth of funds in TheDAO’s Curator multisig, will be used to fund Ethereum security initiatives. We will leave some ETH in the ExtraBalance Withdrawal contract so claims can continue as before.
Important clarification: this fund will not use the ETH in the main DAO withdraw contract that was enshrined by the hard fork and is redeemable for DAO tokens. DAO tokens will continue to be redeemable for ETH. We are only working with the edge case contracts that were set up by the Curators in the months following the hard fork.
For a decade, the current set of “OG Curators” stewarded these smart contracts, volunteering their time and taking on personal risk. Thank you for joining me in carrying that responsibility.
As this work enters its next phase, some of these OG Curators will continue to support the system by providing guidance and oversight. Read more about the OG Curators and our support of this transition in this post.
Vitalik and I will join five new Curators to actively steer TheDAO Security Fund toward making the most secure blockchain in the world, even safer.
Welcome TheDAO’s new Curators:
Over the past decade, Ethereum has grown into critical global infrastructure. That growth has been made possible not only by protocol upgrades and tooling, but by a wide network of organizations, research teams, auditors, first-responders, and open-source contributors. They work behind the scenes to reduce risk and protect users, often preventing issues no one ever hears about and only receiving minor donations in return, if they are lucky.
TheDAO Security Fund marks the start of a new phase for Ethereum’s security story. The world is ready for our tech, we want to ensure our tech is ready for the world.
In an ETHSecurity chat, a well respected security researcher recently commented:
The goal of TheDAO Security Fund is to make Ethereum so safe, life savings will be better off stored in a defi protocol rather than a bank.
We’re launching today. If you are reading this, you’re early and have a chance to help shape what comes next. If you represent an L2, a protocol built on Ethereum, a potential round operator, an Ethereum security related project, or are simply interested in the long term success of Ethereum, please reach out!
Big on-chain transactions are expected! TheDAO Curator Multisig will update its signers and transfer assets into new multisigs designed specifically to operate this fund. The whale alerts will show up on your timeline when we remove the 70k ETH from the ExtraBalance Withdraw contract to stake them. Some ETH will stay in the ExtraBalance Withdraw contract to keep claims open.
The staking operations will be managed by Dappnode, with nodes using different client implementations on 6 continents and distributed validator keys in several Dirks, equally distributed. The setup allows for geographical decentralization, resilience and client diversity, and it facilitates operations as any single machine/node/dirk can be maintained without having to interrupt operations. Over time, Dappnode will be piloting initiatives to utilize validators run by home stakers around the world, leveraging fully decentralized infrastructure and contributing to a healthier home operator ecosystem.
Thank you to everyone who contributed time, context, and feedback in its earliest phases: PC, Matta, Eliza, Fredrik, Edu, Lanski, Mehdi, Samczsun, Vitalik, Isaac, Dickson, John, Vinay,
If you’d like to follow updates or get involved, you can find us here:
Website: https://thedao.fund/
Farcaster: https://farcaster.xyz/thedaofund
In 2016, TheDAO raised over $150M USD, making it the largest crowdfunded project at the time, collecting roughly 14% of all ETH in existence. What followed became a defining turning point for Ethereum and cryptocurrencies in general.
Long story short, TheDAO was hacked. With the help of white hat hackers and an Ethereum hard fork, DAO token holders were able to recover their ETH and also claim ETC on Ethereum Classic. To my knowledge, TheDAO hack is the only major exploit where the stolen funds were fully recovered and everyone, including the hacker, actually ended up with more funds than they had before!
But fund recovery is never simple. While the hard fork was able to address the standard DAO token claims, it couldn’t solve everything. TheDAO Curator Multisig (which already had special powers over some DAO functions) was therefore enshrined with the additional abilities it needed to resolve the remaining edge cases and ensure all the ETH recovered was claimable by its original owners.
Several reputable members of the Ethereum community (including myself) stepped up to become members of TheDAO Curator Multisig, aka “Curators”, to ensure the recovery process was completed. And in doing so, a clear intention was set: If these edge case funds were not claimed, they would be used to support Ethereum security.
After January 31st, 2017 the unclaimed ether will be sent to a not-for-profit entity to support smart contract security.
- TheDAO’s Edge Cases Multisig (Post Hard Fork), Aug 2, 2016
If you want to learn more about TheDAO story, check out Christoph’s blog post, and if you want a detailed play-by-play of the adventure, check out Laura Shin’s book, the Cryptopians, pages 121-231.
TheDAO Security Fund is now being formed to fulfill that original intention: To put long-idle resources to work in service of Ethereum’s security. In a twist that could only happen in TheDAO story, the unclaimed, “edge case” funds are now worth considerably more than what TheDAO originally raised 🤯.
Ethereum security is the priority. From wallet UX and smart contract security, to incident response and core protocol security, we'll fund the work that makes Ethereum and our L2 ecosystem safer.
We're not starting from scratch. The Ethereum Foundation's Trillion Dollar Security initiative has mapped the biggest opportunities for impact. We'll use that context, plus ongoing conversations with ecosystem partners, to shape the scope of each funding round.
We will honor TheDAO's original mission by inviting broad ecosystem participation in determining how this funding is allocated. We will use open, bottom-up mechanisms, such as quadratic funding, retroactive funding, RFP rank-choice voting and more to allocate funding in rounds. Funding rounds will be run by independent operators selected via an application process opening soon, connect with us here if you are interested.
The Ethereum Foundation’s Grants Management team will provide the eligibility requirements for each round and Giveth will support the operators in everything else, guiding them throughout the process. Each round will conclude with a public retrospective to refine the mechanism and improve our processes.
TheDAO Security Fund stewards ETH from two sources:
~70,500 ETH from the ExtraBalance contract, which has parties that can claim
~4,600 ETH (DAO & ETH) in TheDAO’s Curator Multisig, which has no clear claimants.
The 69,420 ETH, mostly from the ExtraBalance contract, will be staked to generate yield, effectively creating an endowment. That yield, alongside the 4,600 ETH worth of funds in TheDAO’s Curator multisig, will be used to fund Ethereum security initiatives. We will leave some ETH in the ExtraBalance Withdrawal contract so claims can continue as before.
Important clarification: this fund will not use the ETH in the main DAO withdraw contract that was enshrined by the hard fork and is redeemable for DAO tokens. DAO tokens will continue to be redeemable for ETH. We are only working with the edge case contracts that were set up by the Curators in the months following the hard fork.
For a decade, the current set of “OG Curators” stewarded these smart contracts, volunteering their time and taking on personal risk. Thank you for joining me in carrying that responsibility.
As this work enters its next phase, some of these OG Curators will continue to support the system by providing guidance and oversight. Read more about the OG Curators and our support of this transition in this post.
Vitalik and I will join five new Curators to actively steer TheDAO Security Fund toward making the most secure blockchain in the world, even safer.
Welcome TheDAO’s new Curators:
Over the past decade, Ethereum has grown into critical global infrastructure. That growth has been made possible not only by protocol upgrades and tooling, but by a wide network of organizations, research teams, auditors, first-responders, and open-source contributors. They work behind the scenes to reduce risk and protect users, often preventing issues no one ever hears about and only receiving minor donations in return, if they are lucky.
TheDAO Security Fund marks the start of a new phase for Ethereum’s security story. The world is ready for our tech, we want to ensure our tech is ready for the world.
In an ETHSecurity chat, a well respected security researcher recently commented:
The goal of TheDAO Security Fund is to make Ethereum so safe, life savings will be better off stored in a defi protocol rather than a bank.
We’re launching today. If you are reading this, you’re early and have a chance to help shape what comes next. If you represent an L2, a protocol built on Ethereum, a potential round operator, an Ethereum security related project, or are simply interested in the long term success of Ethereum, please reach out!
Big on-chain transactions are expected! TheDAO Curator Multisig will update its signers and transfer assets into new multisigs designed specifically to operate this fund. The whale alerts will show up on your timeline when we remove the 70k ETH from the ExtraBalance Withdraw contract to stake them. Some ETH will stay in the ExtraBalance Withdraw contract to keep claims open.
The staking operations will be managed by Dappnode, with nodes using different client implementations on 6 continents and distributed validator keys in several Dirks, equally distributed. The setup allows for geographical decentralization, resilience and client diversity, and it facilitates operations as any single machine/node/dirk can be maintained without having to interrupt operations. Over time, Dappnode will be piloting initiatives to utilize validators run by home stakers around the world, leveraging fully decentralized infrastructure and contributing to a healthier home operator ecosystem.
Thank you to everyone who contributed time, context, and feedback in its earliest phases: PC, Matta, Eliza, Fredrik, Edu, Lanski, Mehdi, Samczsun, Vitalik, Isaac, Dickson, John, Vinay,
If you’d like to follow updates or get involved, you can find us here:
Website: https://thedao.fund/
Farcaster: https://farcaster.xyz/thedaofund
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Will some funds be put towards white hat hacking of old, potentially unsafe contracts holding large amounts of ETH, to prevent attacks like November's Balancer V2 hack? Although these smart contracts don't affect core protocol security directly, dumping tons of hacked ETH suppresses price, which does affect security, and it's bad PR for smart contracts in general.
GM
Milady
This will be a fun thing to bring up at the bar this weekend and watch people's heads spin "So — you see — like $60M got lost a decade ago. But, they fixed it and got a lot of people their money back. "So that was cool, and now there's $200M left over from the fix." https://paragraph.com/@thedao.fund/thedao-security-fund-activating-75000-eth-for-ethereum-security