Mining is underway for a new Ethereum blockchain, following a hard fork that refunds ether to original investors of the hacked DAO
Jordan Pearson / Motherboard :
Context & Ripple Effects
The arc runs from The DAO's $168M raise from roughly 10,000 investors through the June exploit, in which a still-unknown attacker siphoned $50M+ in ether while project leaders debated whether to change the code at all — with stolen funds frozen in the meantime (hacker siphoned $50M+ worth of Ether) and later moved into an alternative wallet. Today's news closes that loop: the debated code change has been executed as a hard fork, and mining is underway on the new chain that refunds ether to original DAO investors.
It matters because the fork converts a month-long governance argument into a fait accompli — Ethereum's leadership chose intervention over immutability, and the market is already pricing the fallout, with ether down around 18-21% over the past week amid the broader crypto selloff.
First-order effects
- Original DAO investors can now recover their ether on the new chain, unwinding the freeze that had held their funds since the June exploit.
- Miners face an immediate choice between committing hash power to the new refunding blockchain or continuing on the pre-fork chain where the stolen ether remains with the attacker.
Second-order effects
- Holders and exchanges must decide which chain's ether they treat as 'the' asset, splitting liquidity and pricing across two ledgers during an already weak market.
- The unknown attacker retains claim to the stolen funds on any unforked continuation of the old chain, keeping the dispute alive wherever that chain retains miner support.
Third-order effects
- The episode sets a structural precedent: Ethereum's developers have demonstrated willingness to rewrite history to reverse a large theft, weakening the 'code is law' guarantee that distinguished blockchains from conventional databases.
- Future smart-contract platforms now inherit a governance question the DAO crisis forced into the open — who decides when code gets overridden — a tension Bloomberg's retrospective on the flaw and the rescue effort keeps alive a year later.
The trend: Blockchain governance is shifting from strict immutability toward coordinated developer intervention when enough value is at stake, with the DAO fork as the defining test case.