# TheDAO is Back as a $220M Ethereum Security Fund

*Author: David Christopher*
*Published: Jan 29, 2026*
*Source: https://www.bankless.com/thedaos-unclaimed-funds-become-220m-ethereum-security-fund*

---

Unclaimed funds from TheDAO, the 2016 hack that nearly ended Ethereum before it began, are being repurposed into a $220M security fund for the Ethereum ecosystem, [Unchained](https://unchainedcrypto.com/exclusive-thedao-to-become-new-220-million-ethereum-security-fund/) reports.

### **What's the Scoop?**
- **Sources of Funds:** The fund draws from two pools. First, 70.5K ETH (~$206.6M) from the "ExtraBalance," which represents overpayments from participants who bought DAO tokens above the 1 ETH per 100 token base price. Second, 4.6K ETH worth of tokens (~$13.5M) from the Curator Multisig, including tokens accidentally sent to TheDAO or its Withdraw Contract.
- **Staking for Yield:** 69,420 ETH will be staked to create an ongoing endowment, currently generating approximately $8M annually in yield for security grants.
- **Grant Process:** Funding will be distributed through DAO mechanisms including quadratic funding, retroactive funding, and RFP ranked-choice voting. The Ethereum Foundation will set eligibility criteria for each round, with Giveth supporting operators.
- **Potential Recipients:** Groups like SEAL 911, Trail of Bits, OpenZeppelin, Quantstamp, Revoke.cash, Blockaid, L2Beat, and Safe could qualify for funding.

### **Bankless Take:**
It’s a nice twist that Ethereum's most notorious security failure will become a permanent source of security funding. The timing is notable too. [Vitalik recently wrote](https://farcaster.xyz/vitalik.eth/0x4857318b) that Ethereum needs "*more DAOs — but different and better DAOs," *arguing that token-holder voting designs are* "inefficient, vulnerable to capture, and fail utterly at the goal of mitigating the weaknesses of human politics*." Now here we have TheDAO Security Fund's using quadratic funding, retroactive grants, and ranked-choice voting — all attempts to build something closer to that vision.
---

*This article is brought to you by [MetaMask](https://www.bankless.com/sponsor/metamask-1776260643?ref=thedaos-unclaimed-funds-become-220m-ethereum-security-fund)*