The DAO’s 2016 exploit prompted Ethereum’s contentious hard fork.
The DAO was an investor-directed venture fund implemented as a smart contract on Ethereum. Its 2016 token sale attracted roughly 11.5 million ether, making it one of the largest crowdfunding efforts of its time. On June 17, an attacker exploited a recursive-call vulnerability and moved about 3.6 million ether—approximately one-third of the funds—into a child DAO.
Because the stolen ether was subject to a contract-imposed holding period, the Ethereum community had time to debate a response. On July 20, 2016, the network executed a hard fork that redirected the affected funds to a recovery address, allowing original participants to reclaim them.
Not everyone accepted the intervention. Nodes that continued following the unforked chain formed Ethereum Classic, while the forked chain retained the Ethereum name. The incident remains a landmark debate over “code is law,” governance, immutability, and whether a blockchain community should reverse an exploit.