The DAO was a decentralized autonomous organization and investor-directed venture capital fund built on Ethereum. It was created by the team at Slock.it, primarily Christoph Jentzsch, Simon Jentzsch, and Stephan Tual.
Slock.it
Slock.it was a German company founded by Christoph Jentzsch, Simon Jentzsch, and Stephan Tual. The company's original vision was to build "Ethereum Computer" devices that could enable smart locks and IoT rentals on the blockchain. The DAO was conceived as a funding mechanism for Slock.it and other Ethereum projects.
Token Sale
The DAO launched its token sale on April 30, 2016, with a 28-day crowdfunding window. It became one of the largest crowdfunding campaigns in history:
- By May 10: raised over $34 million
- By May 15: surpassed $100 million
- By May 21: exceeded $150 million from over 11,000 investors
- At its peak, The DAO held nearly 14% of all Ether tokens in circulation
DAO tokens became tradable on cryptocurrency exchanges on May 28, 2016.
The Hack
On June 17, 2016, an attacker exploited a recursive call vulnerability in The DAO's smart contract code to drain approximately 3.6 million ETH (about $50 million at the time) — roughly one-third of The DAO's total funds. The stolen funds were moved into a child DAO subject to a 28-day holding period.
Prior to the hack, security researchers had warned about vulnerabilities. A paper co-authored by Dino Mark, Vlad Zamfir, and Emin Gün Sirer called for a temporary moratorium on The DAO. Peter Vessenes of the Blockchain Foundation blogged about recursive call vulnerabilities on June 9, and researchers affiliated with IC3 (Initiative for CryptoCurrencies & Contracts) raised further alarms on June 16.
The Hard Fork
The Ethereum community debated how to respond. On July 20, 2016, the Ethereum network executed a hard fork to move the funds in The DAO to a recovery address, allowing original token holders to reclaim their ETH. Those who disagreed with the fork continued to use the original chain, which became known as Ethereum Classic.
DAO Curators
The DAO had a group of curators responsible for whitelisting proposals. These included prominent members of the Ethereum community:
- Vitalik Buterin
- Vlad Zamfir
- Christian Reitwiessner
- Gavin Wood
- Alex Van de Sande
- Fabian Vogelsteller
Aftermath
By September 2016, DAO tokens were delisted from major exchanges including Poloniex and Kraken. The DAO crisis became a defining moment in Ethereum's history, leading to important lessons about smart contract security, governance, and the immutability debate that continues to shape blockchain development.
Griff Green, The DAO's community manager, organized a volunteer group known as The White Hat Group to recoup funds from other vulnerable wallets before they could also be exploited.