Ethereum Security Fund Begins Second Round with $1.77M Allocation

The DAO Security Fund has begun its second funding round, allocating approximately $1.77 million (about 24.72 billion KRW) to tackle 10 security tasks in the Ethereum ecosystem. The fund is requesting that beneficiary ecosystem companies share costs for these security initiatives. The second round was announced on the 15th.

The fund operates by publicly listing security tasks, presenting budgets and goals, then accepting project and company participation before distributing funds, with rounds scheduled to conclude by January 2027. This round includes proposals such as a $600,000 (about 816 million KRW) allocation for Vyper Foundation's formal verification compiler development and a $300,000 (about 48 million KRW) allocation for Auditware's privacy-focused endpoint detection tool. Formal verification is the process of validating that software meets specified mathematical conditions, while endpoint detection tools are security software designed to identify anomalies in devices and systems connected to a network.

At least one-third of each task's budget must be allocated to stages verifying actual implementation and usage, with funds disbursed only after independent reviewers confirm adherence to predefined criteria. Up to half of the first milestone amount can be paid in advance. Tasks are conducted through either Request for Proposal (RFP) methods where teams are not pre-selected or grant-based approaches targeting specific teams.

Griff Green, curator of The DAO Security Fund, stated that shared funding acts as a 'filter,' suggesting that if beneficiary teams do not share costs, the task may be unnecessary, non-urgent, or overpriced. This approach uses shared funding both as a financing mechanism and to validate the necessity and cost of tasks.

The first round raised over $1.6 million from more than 20 ecosystem sponsors and 3,934 donors. The fund has distributed over 1,000 ETH across 135 security projects since its inception. In the previous round, 134 projects were supported, with plans to expand RFP-based approaches targeting major ecosystem projects in this second round.

The DAO Security Fund was established using assets recovered after the 2016 TheDAO hack but not claimed, staking approximately 69,000 ETH. It utilizes rewards from these stakes for Ethereum security initiatives. Rising virtual asset attacks have driven increased security support; TRM Labs reported a record 207 attacks in the first half of 2026, though total losses decreased by over half compared to the previous year's first half. However, cumulative losses exceeded $1.2 billion following a cold wallet exploit in late July 2026.

Security tasks are not limited to individual project audits but also include public goods across the ecosystem such as compilers, wallets, signing processes, incident response, formal verification, and Ethereum core protocol and layer-2 security. Over 200 ETHSecurity Badge holders will evaluate unallocated tasks in mid-November, with higher-ranked tasks included in funding allocations based on evaluation and shared funding procedures.