The DAO That Got Hacked Now Guards $150M in Security Funds

75,000 ETH sitting dormant for a decade. Now it's about to move. The Decentralized Autonomous Organization that became crypto's most notorious cautionary tale is staging an unlikely comeback as a $150 million security endowment for Ethereum.

Ten years after the hack that nearly broke Ethereum, the leftover funds are being weaponized against the very vulnerabilities that created the crisis in the first place.

When Code Wasn't Law

Summer 2016. The DAO was crypto's largest crowdfunding experiment—until a smart contract exploit drained millions in ether. The Ethereum community faced an existential choice: let the hacker keep the funds or break the "code is law" principle with a controversial hard fork.

They chose the fork. 97% of investor funds were recovered, but roughly 3% remained trapped in complex smart contract edge cases—overpayments, burned tokens from sub-DAOs, and other anomalies that didn't cleanly map back to investors.

Those few million dollars in leftover ETH? They're now worth $150 million at today's prices.

"Six Volunteers Guarding $300 Million"

Griff Green, one of the original DAO curators who led the post-hack recovery efforts, has been quietly managing these residual funds for a decade alongside fellow volunteers. But the math stopped making sense.

"Six volunteers were securing $300 million with decade-old keys. It didn't make sense," Green told CoinDesk. "With all these AI hacks and stuff, we just got kind of scared."

The old security model—a handful of people with aging cryptographic keys—simply couldn't protect nine-figure sums in today's threat landscape.

From Cautionary Tale to Security Arsenal

Instead of letting the funds sit idle forever, the team is transforming them into Ethereum's largest community-driven security initiative. The strategy: stake the ETH, use the yield to fund security research and rapid-response efforts, while keeping compensation claims open indefinitely.

The DAO Security Fund will distribute capital through quadratic funding, retroactive public goods funding, and ranked-choice voting—a bottom-up approach that contrasts sharply with the Ethereum Foundation's traditional top-down grants.

"We can stake these funds, keep claims open forever, and use the staking rewards to fund Ethereum security projects," Green explained.

The Security Problem That Won't Go Away

For Green, the urgency is personal. Despite Ethereum's maturation, he sees the ecosystem as fundamentally vulnerable in new ways.

"MetaMask, hot wallet keys, just any kind of private keys on your daily driver computer is probably the main fuel for a whole cyber crime industry," he said. "The fact that we have hot keys with billions of dollars sitting on like 10,000 laptops spread out throughout the world has an industry of cybercrime."

The persistence of hacks, phishing schemes, and smart contract exploits frustrates him. "Not only amazes me, it disappoints me and frustrates me."

The Bigger Bet

The fund's revival reflects a larger conviction: that Ethereum is approaching a inflection point. "Ethereum is at the cusp of being the financial backbone of the world, if it fixes security," Green argues.

But that's a big "if." While institutional adoption accelerates and tokenized assets proliferate, the underlying security challenges remain stubbornly persistent. Hot wallets, social engineering attacks, and smart contract bugs continue to drain billions from the ecosystem.