Olivia Capozzalo & Camila Russo
January 29, 2026

gm Defiers!

Today’s big story:

Ethereum community members are reviving The DAO as an Ethereum-security-focused fund using unclaimed ETH from the 2016 DAO hack.

In other news:

Senate Ag advances market structure bill
Fidelity announces its stablecoin
Augur unveils oracle infra for DeFi
ZetaChain 2.0 brings private memory and AI interoperability to creators [SPONSORED]
5 crypto lending platforms & loans for fast capital access [SPONSORED]

The Defiant’s 2025 in review:

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

Stellar: The Proving Ground for Real-World Privacy

The latest Stellar upgrade, X-Ray, delivers zero-knowledge cryptography that lets developers build privacy into their apps—protecting what matters while keeping Stellar radically open, trusted, and ready for real-world finance.

We’re back! Here’s what you need to know in web3 today

📈 Markets in the Past 24 Hours

TICKER	VALUE	24H
Bitcoin	$83,857	-6.27 %
Ethereum	$2,792.78	-7.10 %
BNB	$861.54	-4.31 %
XRP	$1.8	-6.07 %
Solana	$116.63	-7.26 %

Today’s Big Story

How The DAO that Almost Killed Ethereum Came Back to Make it Stronger

A message in the dust. A hero on Telegram. A teenager reading old blog posts. A pile of leftover ETH repurposed into an endowment.

The message hits Griff Green’s phone. A flare in the desert.

He’s at Burning Man, August 2025. Griff runs a camp called Decentral, a crypto outpost in the desert city that disappears in a week. Out here, you learn quickly what matters and what doesn’t. Notifications usually don’t.

But this one is from “PC,” as in pcavesaccio from SEAL 911.

Griff likes to go off-grid when at Burning Man. But if you’ve been in crypto long enough, you know that if you get a message from one of SEAL 911's core members, you drop everything.

Griff replied immediately and was relieved to see it wasn’t an emergency. Not exactly.

It was a funding question.

And that question would lead to a series of events culminating in what Griff would never have imagined: the return of The DAO. Yes… that DAO.

Quick flashback to 2016: One of the first projects to launch on Ethereum was having a crowdsale to become a sort of decentralized VC – it was called “The DAO,” and all the biggest ETH names were involved. It raised about $150 million in ETH, roughly 14% of all ETH in circulation at the time. Solidity was only a few months old, and there were no audits or security practices. So, surprise, The DAO was hacked shortly after launch. The exploit led to a hard fork that created Ethereum Classic.

Griff was one of the white-hat hackers in the so-called Robinhood group, which launched a counterattack against the hacker. Later, he helped lead the recovery efforts for those who sent ETH to The DAO, a process that’s been ongoing for years, post-hard fork.

That’s why a message from PC comes in.

PC co-founded SEAL 911, an emergency hotline for Ethereum security incidents. The Telegram chatbot that works like calling 911: users type in panic, and behind the scenes the message routes to a rotating network of white hats who have seen every flavor of failure and jump to help the victims.

SEAL 911 is the kind of public good everyone praises and almost no one consistently funds. Not because people don’t care, but because the victims SEAL helps are often the ones who can’t pay, the ones who just lost their money.

It’s a persistent problem in open source systems – the tragedy of the commons. Who pays for goods that benefit everyone but no one is directly responsible for?

This is the part that makes Griff laugh once he’s back from the playa — a brilliant idea on how to help solve this problem for Ethereum security, doesn’t come from a foundation, or a grant committee, or a billionaire benefactor.

It comes from a kid. A 17-year-old developer working at Wintermute.

His name, Griff says, is Fade.

Fade was eight years old when The DAO got hacked. Now he’s old enough to read ancient smart contracts and old crypto blog posts. And in one of those posts, he found a line that suggested unclaimed funds from The DAO could one day support Ethereum security. He dug around old The DAO contracts and found about $14 million worth. It sat there, like a buried vault, waiting for someone to notice it again.

He tells PC, from SEAL 911: What if The DAO funds security?

When Griff hears PC’s idea, he realized him and Fade had only noticed part of the available funds, and smiling ear to ear, he says, “yeah $14 million could help Ethereum security – but how about the $200 million that's over here in this other contract?”

They immediately got to work to make it happen, and today, they announced it. The DAO is officially back.

Here’s how it’s going to work.

After the hack, Ethereum hard-forked. All the ETH tied up across DAO-related contracts (the main DAO, sub-DAOs, child DAOs, the sprawling ecosystem of contracts people had split into) got pulled into one place: a withdrawal contract. That contract still exists. It still holds ETH.

Griff is emphatic about what they are not doing: they are not touching anyone’s claims. If you have DAO tokens, you can still redeem. If you can prove you’re owed money from some edge-case transaction, they’ll still honor it.

So where does this “extra” ETH come from?

One big bucket is called extra balance — ETH that people paid during The DAO crowdsale when the price for DAO tokens rose over time. Early on, 1 ETH bought 100 DAO tokens. Later, it cost more: 1.05, 1.1, climbing up to 1.5 ETH for the same 100 DAO. That difference — the “extra” paid by late buyers — accumulated into its own pool.

After the fork, that pool was enormous: around 344,000 ETH. A separate token and withdrawal process was created to let those contributors reclaim the extra portion. But only about 80% of it was claimed. The rest sat there, and over time, it became a meaningful endowment.

The other bucket involved child DAOs, people who split from the main DAO, burned their DAO tokens, received child DAO tokens, and had their ETH moved into those child structures. Those were largely claimed, down to crumbs.

And then there were the truly chaotic bits: DAO tokens sent to the wrong address, ETH tossed into contracts by mistake, proposal deposits, all the “2016 crypto” behavior Griff describes as people “throwing tokens everywhere.” They recovered what they could, returned what they could, and the rest accumulated because the ecosystem was too young to have guardrails.

Fast-forward ten years: those leftovers are no longer trivial.

And now the risk flips.

Griff describes the curator multisig like an antique safe left open in a museum. The contract was written in 2015, when Solidity was nine months old. The keys have existed for a decade — exposed to malware risk, human error, social engineering, wrench attacks. North Korea doesn’t need to break cryptography; it just needs three humans to have a bad day.

“It’s kind of scary, to be honest,” he said in an interview.

After carefully considering how to best use those funds, the solution becomes elegantly Ethereum:

Don’t spend the principal. Stake it. Fund security with the yield.

They move the funds into a more modern, monitorable setup, rotating away from ancient risk. They use a geographically diverse node setup managed with Dappnode — multiple nodes, multiple countries, specialized ops architecture. The staking rewards become the budget.

Griff estimates the early pace at something like four to five ETH per day, once they’re actually earning — though he notes the staking deposit queue is long, so they’ll only be able to stake in two months. Still, the shape of the thing matters more than the exact number: it turns dead, politically radioactive money into a living stream that pays for the kinds of work Ethereum relies on but struggles to fund.

And then comes the part that makes it feel like The DAO is truly back: How decisions get made.

There are seven curators — Griff, Vitalik Buterin, Alex Van de Sande, Jordi Baylina, pcaversaccio, Taylor Monahan, and Pol Lanski from Dappnode. Their job isn’t to pick winners directly. It’s to pick round operators — the teams and tooling that will run security-focused funding rounds.

The rounds might look like retroactive public goods funding, quadratic funding, ranked-choice voting, RFP-driven grants, or badgeholder systems. The goal is to fund Ethereum security the way Ethereum funds other public goods, but with a focus the ecosystem has strangely never had: dedicated, recurring security rounds.

Griff is clear about the philosophy: Ethereum security affects everyone, so everyone should be a stakeholder.

The fund isn’t just a grant program. It’s meant to become a rallying point, a place where the security people who already do heroic work in private, fragmented ways can coordinate, co-fund, and build coalitions.

Because five to ten million dollars a year won’t “solve” security. But it can do something arguably more valuable: it can organize attention.

Griff’s worldview has hardened into something paradoxical and practical: he’s a crypto anarchist who tells newbies to open a Coinbase account because self-custody, done irresponsibly, is a meat grinder. He’s watched phishing evolve into an industry. He’s watched scam compounds operate like factories. He’s watched nation states treat private keys like an export.

The original DAO was supposed to be a decentralized venture fund, a machine for allocating capital without gatekeepers.

It failed in spectacular fashion.

But the failure also forced Ethereum to grow up.

Now the DAO resurfaces, and it’s poetic: lack of security killed The DAO, and now The DAO is back to fund security for Ethereum.

In Griff’s telling, the full-circle moment lands with a kind of quiet disbelief:

“Who would’ve thought The DAO, the experiment that nearly broke Ethereum, could become a force that strengthens it?”

But here we are.

Ethereum is taking the most infamous chapter in its origin story and turning it into a funding mechanism for survival.

With love,

Cami, founder of The Defiant

Forwarded this newsletter? Subscribe for daily insights and curated news from The Defiant team, Monday-Saturday. It’s free.

Subscribe to Defiant Daily

🎬WATCH

How Stablecoins Are Rewiring Global Payments | Borderless CPO Alex Garn

In this episode of The Defiant Podcast, Chris Storaker sits down with Alex Garn, chief product officer at Borderless, to unpack how stablecoins are quietly transforming cross-border payments — and what it actually takes to move money at scale across jurisdictions.

We explore why stablecoins are moving beyond trading and DeFi collateral into real-world enterprise payments, where they already outperform legacy rails on settlement speed, transparency, and custody — especially across emerging market corridors like Latin America and Southeast Asia.

Top News in the Past 24 Hours

Senate Ag Committee Advances CFTC-Focused Portion of Market Structure Bill The Senate Agriculture Committee, led by Chairman John Boozman, has advanced the Digital Commodity Intermediaries Act today, a step toward establishing a comprehensive regulatory framework for crypto. Why it matters: The Senate Banking Committee has yet to vote on its more comprehensive version of the CLARITY Act.
Fidelity’s Choice of Ethereum for its Stablecoin Puts Focus on Public Blockchains Fidelity’s decision to launch its new USD stablecoin, FIDD, on Ethereum is sparking fresh discussion over whether public blockchains are becoming the preferred infrastructure for large financial institutions. Why it matters: TradFi institutions have typically favored private or privacy-focused blockchains for on-chain products so far.
Augur Reveals Lituus Oracle Infra to Fight Market Manipulation Across DeFi Early decentralized prediction market protocol Augur has released new blockchain oracle infrastructure designed to make dishonest reporting extremely costly in a bid to become a shared truth layer across DeFi. Why it matters: The OG prediction market project says it wants the infra to support other prediction market platforms, rather than competing with them directly.