The DAO
TheDAO
= 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/
Definition
1. 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)
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)
More Information
- good technical details about how the DAO works, https://hackingdistributed.com/2016/06/13/the-dao-can-turn-into-a-naturally-arising-ponzi/