TheDAO Security Fund has launched the second round of its ETHSecurity Initiatives program, seeking $1.77 million to fund 10 Ethereum security projects. Seeded by a $220 million endowment of unclaimed funds from the 2016 DAO hack, the fund utilizes a co-funding model to filter and validate project urgency. This initiative comes amid a record surge in crypto exploits, with TRM Labs reporting over $1.2 billion lost across 276 incidents in 2026, exacerbated by the rise of AI-driven debugging and exploitation tools.
TheDAO Security Fund round two
- ▪TheDAO Security Fund opened the second round of its ETHSecurity Initiatives program on September 15, 2026, featuring 10 Ethereum security projects requiring approximately $1.77 million in funding.
- ▪In the first round of the ETHSecurity Initiatives program, more than 20 ecosystem funders and 3,934 donors contributed over $1.6 million to Ethereum security projects.
- ▪The second round of the ETHSecurity Initiatives program is scheduled to close at the end of January 2027, with any unfunded projects closing with it.
- ▪In mid-November 2026, 200 ETHSecurity Badge holders will rank any unfunded projects, with the highest-ranked projects receiving completion funding from the treasury of TheDAO Security Fund.
Co-funding model for projects
- ▪Current projects in the second round of the ETHSecurity Initiatives program include a $600,000 grant to the Vyper Foundation for a verified compiler and $300,000 to Auditware for a privacy-preserving endpoint detection tool.
- ▪TheDAO Security Fund's co-funding model requires companies that benefit from Ethereum security work to help fund the initiatives, using co-funding as a filter for project urgency and pricing.
- ▪Under the ETHSecurity Initiatives program rules, at least one-third of every project budget must go to adoption milestones, with payments withheld until approved by an independent reviewer.
2026 crypto hack surge
- ▪TRM Labs recorded 207 crypto attacks in the first half of 2026, the highest number recorded in any six-month period, though total losses fell by more than half.
- ▪TRM Labs reported that total crypto losses in 2026 exceeded $1.2 billion across 276 incidents following a Coldcard hardware wallet exploit in late July 2026.
AI exploitation of vulnerabilities
- ▪TheDAO curator Griff Green stated that draft milestones for security projects can be rewritten due to the rapid speed of development driven by artificial intelligence tools.
- ▪Anthropic's Frontier Red Team reported in December 2025 that AI agents developed exploits worth $4.6 million in simulation and uncovered two novel zero-day vulnerabilities in smart contracts.
TheDAO endowment funding history
- ▪TheDAO Security Fund endowment holds 69,000 staked ETH, which earns approximately 5 ETH per day to support Ethereum security.
- ▪TheDAO Security Fund is seeded by a $220 million endowment built from unclaimed 2016 DAO crowdsale overage money left over after the hard fork following the 2016 DAO hack.
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