DAO

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= TheDAO is a specific project within Ethereum, not to be confused with the general concept of Decentralized Autonomous Organization ; it's a crowd-run, computer-managed distributed investment fund

URL = https://daohub.org/


Description

0. Ryan Shea

"The DAO is a digital pool of funds that is governed by code. Anyone can contribute funds to the pool to purchase voting power in it, and a quorum of shares is required to release funds to support select projects, just like with Kickstarter. This “group fund” was implemented on a digital currency platform called Ethereum and recently raised $150 million from hundreds to thousands of backers." (https://blog.blockstack.org/simple-contracts-are-better-contracts-what-we-can-learn-from-the-dao-6293214bad3a#.ce3g8vvb9)

1.

"A Decentralized autonomous organizations (“DAO”) is a new type of organization, best comparable to a digital company, but without an attached legal entity. Made from irrefutable computer code, it is operated entirely by its community, which backs its future growth by purchasing DAO tokens using ETH, the fuel of the Ethereum network." (https://slock.it/dao.html)


2.

"The DAO model answers the question "How can revenue be generated within a purely decentralized environment" by aligning the incentives of real world Contractors with the incentives of a DAO." (https://slock.it/dao.html)


Discussion

The $50m Crisis

Ryan Shea:

"Last week, cryptocurrency security researchers identified vulnerabilities in both the code that governs The DAO and in the Ethereum programming language (Solidity) that The DAO was written in. This week, it was discovered that an attacker was exploiting the bugs in The DAO and managed to withdraw over $50 million worth of Ether from the fund.

In order to avert the disaster of a $50M loss, the Ethereum core developers have presented a proposal whereby the withdrawal would be reversed and the code of the contract would be replaced with a simple contract that would allow the original funders to recover their funds." (https://blog.blockstack.org/simple-contracts-are-better-contracts-what-we-can-learn-from-the-dao-6293214bad3a#.ce3g8vvb9)


As a network, the DAO is in fact a state, and it needs democratic governance

Read the full article here: Why Networks Are States That Need Democratic Government

Curtis Yarvin:

"What's the right lesson for the decentralization community to learn from the collapse of the DAO?

Perhaps the simplest lesson is that even decentralized networks need governments, and have governments. Every network is a state. Every state has a government.

In Dijkstra's terms: decentralization theater considered harmful.

Decentralization theater means any system that produces not decentralization, but the appearance of decentralization. Security theater is the enemy of real security; decentralization theater is the enemy of real decentralization.

A network without decentralization theater is one that admits:

  • any network is a digital state with a central government.
  • any new state is born at war with full emergency powers.
  • limiting and/or eliminating governance is a slow, hard task."

(https://urbit.org/blog/dao/)

More Information

  • good technical details about how the DAO works, ://hackingdistributed.com/2016/06/13/the-dao-can-turn-into-a-naturally-arising-ponzi/