Almost 10 years ago, Ethereum suffered a crushing blow that nearly destroyed the young network. Now, the platform has found an unexpected silver lining—turning forgotten money from that catastrophe into a defense mechanism against future attacks.
Ethereum advocate Griff Green revealed this week that dormant funds from the 2016 DAO breach will power a massive security program. The move represents an ironic twist: money originally lost to hackers will now help stop them.
When Ethereum Nearly Collapsed
The DAO hack is one of cryptocurrency’s darkest points. In June 2016, an unknown hacker found weaknesses in a DAO, a decentralized autonomous organization, which was basically a community-run investment fund on the Ethereum blockchain. The attacker stole about $50 million worth of ETH, which was nearly 4.5% of all ETH at the time.
Post this, the Ethereum community faced a tough choice: let the hacker keep the funds, or modify the blockchain’s history to get the money. The community chose the latter and implemented a hard fork—creating a new version of Ethereum that erased the theft. However, this decision split the community, creating two separate blockchains that exist today: Ethereum and Ethereum Classic.
Green, who helped recover stolen funds as part of the response team, explained that while most victims eventually got their money back, complicated situations left significant amounts trapped in various smart contracts. “There’s a lot of money just sitting in random contracts that were supposed to be returned to people who were affected by the hack,” Green explained during a media interview.
Turning Lost Funds Into Protection
The new DAO Security Fund will gather approximately 70,500 ETH from an unclaimed withdrawal contract—currently worth around $206 million—plus another 4,600 ETH and DAO tokens from a special wallet, valued at roughly $13.5 million. Instead of letting this money sit idle, organizers will stake most of it, which means locking it up to earn rewards. This process should generate about $8 million every year to fund security work.
This money will be used for having better security audits and infrastructure, building emergency response teams, and more comprehensive user protection across Ethereum’s main network and its layer-2 solutions. They can be thought of as faster, cheaper versions of Ethereum that still connect to the main chain. Green emphasized an ambitious goal: “I really want to see the DAO security fund come to a place where people feel that it’s safer to store assets on Ethereum than in a bank.”
If successful, the fund could become the foundation of Ethereum’s long-term resilience and growth plan. This also shows that the crypto community is now treating security not as a one-time expense, but as core infrastructure. The message is clear: Ethereum intends to make trust something that it continuously earns.
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