The DAO was a decentralized venture capital fund built on the Ethereum blockchain. It was created to allow investors to pool their money and vote on investment decisions without a central authority.
The DAO raised over $150 million worth of Ether (ETH) through a crowdfunding campaign, making it one of the largest crowdfunding efforts at the time.
On June 17, 2016, an unknown attacker exploited a vulnerability in the DAO's smart contract code. The flaw allowed the attacker to recursively call the withdrawal function, draining funds into a separate account controlled by the attacker.
The attacker managed to siphon off approximately $50 million worth of Ether.
The Ethereum community was divided on how to respond. Some proposed a soft fork to freeze the stolen funds, while others advocated for a hard fork to reverse the transactions and return the funds to the original investors.
Eventually, the Ethereum community decided to implement a hard fork, creating a new version of the Ethereum blockchain that effectively reversed the hack. This new chain became the main Ethereum blockchain (ETH), while the original chain continued as Ethereum Classic (ETC).
