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The DAO Hack

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Table of contents
    1. 0.2. What Happened During the DAO Hack
    2. 0.4. Why The DAO Hack Was Pivotal

The DAO Hack was a major security breach in 2016 where an attacker exploited a vulnerability in The DAO, a decentralized investment fund built on Ethereum, stealing about $60 million worth of ETH.

What Happened During the DAO Hack

The DAO (Decentralized Autonomous Organization) raised over $150 million in ETH through a crowdsale to fund decentralized projects. However, a flaw in its smart contract allowed a hacker to repeatedly withdraw funds by recursively calling the “split” function before the system updated the balance. This exploit siphoned off roughly one-third of the DAO’s funds into a child DAO controlled by the attacker.

Why The DAO Hack Was Pivotal

The hack triggered a major crisis in the Ethereum community. To recover the stolen funds, a controversial hard fork was implemented, effectively creating two blockchains: Ethereum (ETH) and Ethereum Classic (ETC). This event reshaped discussions around smart contract security, decentralization, and blockchain governance.