The DAO close to $100m in funding. Soon to be the largest crowdfunding ever
daohub.org
daohub.org
> The DAO’s Mission: To blaze a new path in business organization for the betterment of its members, existing simultaneously nowhere and everywhere and operating solely with the steadfast iron will of unstoppable code.
This is meaningless to me. It means nothing.
When I see web pages like this, I wonder how people can waste money on web pages like this. All style, zero substance.
This could be "social experiment" by a bunch of pot smoking college students in a dorm somewhere, for all it speaks to me.
People are investing in this because they want to participate in the future blockchain/non-blockchain projects which will seek funding from the DAO.
Others can submit proposals to this smart contract, and community can vote on it (in proportion of their investment).
But programs which run on Ethereum blockchain are officially called contracts.
That said, technically bitcoin is a smart contract too, a Smart Contract for a virtual currency.
Bitcoin is considered the first DAO. This interview explains it pretty well: https://www.youtube.com/watch?v=Pn_7fdmfZY8&feature=youtu.be...
The DAO is a new type of DAO that instead inflating it's own currency to incentivize humans to do things, it actually is bootstrapped by the people who Create the tokens during the Creation phase.
All DAOs are autonomous. The DAO is run by DAO token holders, they can vote to send money to Proposals.
The idea is that the DAO Token Holders want to make a change in the world, but don't have the time or the plan to do it.
The DAO and it's Proposals are a special type of software called smart contracts. They can be thought of a digital safe that only releases digital currency according to the rules of the Smart contract. The DAO only sends money out when the DAO Token Holders Vote to agree to it and Proposals will have daily/weekly/monthly payment schedules.
Slock.it is hoping that The DAO will choose the Universal Sharing Network to be their flag ship product. We (I work for Slock.it) led the development of The DAO's Code (the [Standard DAO Framework](https://github.com/slockit/DAO) ) so it is specifically designed for the project.
Slock.it will submit a Proposal to The DAO to build the Universal Sharing Network in 2 weeks asking for The DAO to send an amount of digital currency (ETH) to the Smart contract, that ETH will be sent to Slock.it slowly over time and if at any time The DAO doesn't think Slock.it is doing a good job, it can Fire Slock.it and take back the money that is left in the smart contract.
We hope The DAO will be an Ethereum/IoT DAO, and that the DAO Token Holders are excited about that... However we do not know if this will be the case.
This is our [Proposal Overview](http://download.slock.it/public/DAO/Proposal1.pdf)
If you want to learn more about Slock.it's dream to build a Universal Sharing Network, check out this interview: https://youtu.be/Pn_7fdmfZY8?t=4894
If you want to see Christoph walk thru the code for the Sample proposal watch here: https://youtu.be/5BkQ0te_TA0?t=4587
The page was designed for people who already know what is a DAO and need information on that specific DAO.
The DAO is a group of people putting together their money to manage it and make more. This is done through proposals and members voting on passing them.
Based on the proposals that are accepted, the DAO can be anything really: a hedge fund, VC fund, lottery-system, gambling pot, etc.
What it becomes is still undefined and we can only see with time based on proposals and how the members vote. That alone is really interesting and exciting to me: will members actually make intelligent decisions or will it crash and burn?
The DAO also shows the power of the underlying crypto, Ethereum, on which this was built.
I'm a part of a different project on Ethereum (Augur) and we went out of our way to simplify everything so that anyone, regardless of sophistication can understand. We had the first big crowdsale on the platform and did quite well in a very bear market, I credit much of that to simplifying the idea as much as possible.
This is a huge problem with Ethereum projects as there are so many cool ideas but they are so developer-centric that they lose anyone with unnecessary big words and weird language.
With all that said, the DAO seems to be a very cool project and has found a huge level of success with this major flaw, which says something. I just wonder what they could be doing if the message was something that could be figured out by a newbie in under 3 minutes.
I think what it is supposed to be is a way to make investments in a kind of non-centralized VC fund, and you buy money by transferring bitcoins or ether into dao token. Then a central committee figures out a list of ventures to fund. The members get proportional votes based on the size of their investments.
If you search on youtube, you find some people discussing that part of the aims were to allow people to make pre-ipo investments without being accredited investors. In the US, you can't buy certain speculative investments without have a million bucks net worth (= an acc. inv.). So it's all these things together. Plus those crazy, no info web pages.
Could they really have so many millions of investments? I've had this idea (not exactly original :-) that at some point technology really would accelerate out of the control of central authorities, whether you call it Ray Kurzweil's Singularity or ultimate cyber freedom.
If we ever did get autonomous companies or foundations, controlled by computer code, could we allow them to exist without govt control? Suppose you had a company lead by say a Viv type AI which had 10 million in bitcoins and it was running in a 3rd world country, outside the US, and it's goal was to file lawsuits to stop the federal govt, or the EU or something?
I think the problem with the website is the people who created it are so deep into this stuff that they think it does a sufficiently decent job of explaining it. They've forgotten just how much of a learning curve there is for someone outside of the Ethereum community, much less anyone unfamiliar with blockchain technology. They may have not even planned for the website to explain it to such people, thinking they would be uninterested or unable to figure out how to participate anyway.
[1] https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-...
I'd rather the talented team behind slock.it work on the DAO full time than on slock.it.
Ethereum provides the decentralized infrastructure to support the voting and disbursement of funds from 'TheDAO' to the winning proposals. I don't know enough about ETH to understand the high level view of how it really works. It seems like all the websites devoted to Ethereum/DAO write in this entirely-devoid-of-substance style which is so breathless about how much it will change the world, it can't seem to actually tell you what's really going on.
Crucially, I'm not sure it's quite fair to describe this as $100m in funding. You can get your share of ETH back at any time, minus amounts that have been committed to approved projects. Ethereum must somehow guarantee this property.... It is amazing what a large percentage of all ETH (currently stands at 13%) has been committed, but I assume the refundable nature of it all is what's driving such large involvement.
One thing I found interesting is that the first 'Proposal' on TheDAO is for Slock.it, which itself is run by a team which was highly involved in starting Ethereum. If you read Slock.it and try to understand what they are doing, you will find it's exactly like trying to read and understand TheDAO -- so many words which just totally fail to make any kind of discernible point.
So I googled it and found this: “decentralized autonomous organizations” (DAOs) https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-...
The way I understand it, it is for building an organization that is somehow "autonomous" and decentralized. I put the autonomous in quotes because I am still not sure what that means, though I understand the decentralized part.
Two other descriptions, from slightly skeptical observers, were: Decentralized Corporation Decentralized Venture Capital
And the original proposal for "The DAO" can be found here: https://download.slock.it/public/DAO/WhitePaper.pdf.
E.g. suppose that at some point organization members decide that it should pay do monthly payments to some address to pay for certain work. A DAO noted this decision and started to execute it.
At a later point members might change their mind, they no longer want this payments to be made. But DAO will keep making them if there is no way for members to cancel this execution.
Thus DAO members do not have a complete control over the thing. It is autonomous.
Is it a blockchain-centred crowdfunding platform?
Yes. It's a blockchain powered crowdfunding platform. Except it isn't just a medium to pre-order cool projects online(like Kickstarter is).
Regular crowdfunding allows accredited as well as non-accredited investors to lock their money in with a start-up in exchange of various type of securities (preferred equity/convertible debt etc...). In this scheme the investors have most of the time absolutely 0 liquidity to exit their investment until the start-up goes public.
The DAO proposals in contrast offers a revenue sharing proposition. The startup can receive a lump sum or stream of payments in exchange for a promise to execute on their business plan. Once the company gets revenue (on the blockchain) a piece of it (like 1%) will be redistributed to token holders (as a form of dividend if you want).
In contrast to illiquid/bottom line offer available in regular crowdfunding platforms, the DAO offers a topline/liquid investment. The liquidity comes from the fact that although the DAO technically "locks" its investment with the startup, the DAO token themselves are a tradeable assets which can be exchanged against other cryptocurrencies (BTC mainly) as soon as the DAO is officially created.
In this light the DAO is akin to some kind of decentralized investment firm because the token holders are not directly owners of any share in the beneficiary business. On the other hand it is a transparent investment firm because no portfolio manager takes discretionary decisions about which startup funds will be allocated to.
the fund allocation logic is organized as "proposals" that can be voted in a secure and transparent fashion on the ethereum blockchain through a smart contract.
hope this clarifies some aspects of that project!
>By Creating DAO tokens through interaction with The DAO’s smart contract code, you expressly agree to all of the terms and conditions set forth in that code. If you do not understand or do not agree to those terms, you should not Create DAO tokens.
They are saying you need to fully understand all the code, in order to responsibly decide whether you should click a button. But the code is off somewhere else, with no links to it in the shrink-wrap license. For all I know some of the code is buggy or impossible to understand. How many people putting in money have read all the code before doing so? Does all the code even exist yet? Are they agreeing to contracts now that will be hammered out in the future, by a democracy? Tyranny of the majority, anyone? Tyranny of the majority enforced by code sounds even more scary.
Then:
>The use of The DAO’s smart contract code and the Creation of DAO tokens carries significant financial risk, including using experimental software.
The risk part I get, that's pretty standard. But I'm to agree to abide by contracts set out in code I can't see, probably can't understand, and running in experimental software?
What could possibly go wrong?
Also pretty much entirely contained in the whitepaper.
My understanding is that this code is written, deployed, and verified by third parties. The ecosystem has tools to let people check sourcecode against deployed contracts.
[1]: https://etherscan.io/address/0xbb9bc244d798123fde783fcc1c72d...
Or they may be laundering money as well, I wouldn't spend too much time thinking on this.
The "process" is: the community approves or declines plain English Proposals backed by smart contract code aimed at building products or services for the benefit of its members. All operational elements are programmed into the Proposals submitted by Contractors. The Proposals submitted will give day-to-day operational control over to the Contractors, while enforcing strict payment schedules executed in predefined instalments.
It seems like they're going to raise a bunch of money, and then vote on what to do with it. The premise I guess is that it's a "distributed autonomous organization" but I imagine the initial investors have a large stake in the amount funded so far, and their politics will decide what happens to the majority of investors who hold virtually no votes in comparison. This seems like a certain type of investment scheme...
https://etherscan.io/address/0xbb9bc244d798123fde783fcc1c72d...
The DAO is a DAO specifically designed to raise money for other DAOs. The unique thing about it over other crowdfunding platforms is that voting rights are implemented in an Ethereum contract hence enforceable with no central authority.
But my God, that site is horrendous.
Other than that this is the most information sparse webpage I've visited for a long time.
This web site reads like some of the really bad TEDx talks "its going to revolutionize the world" but what it is, well that is a mystery.
..and to convert that to USD or whatever you can even use https://duckduckgo.com/?q=1+ETH+in+USD&ia=cryptocurrency or check the price directly at one of the exchanges that trades ETH/USD, like https://www.kraken.com/charts.
Edit: For the interested, the distinction between a pyramid scheme and a Ponzi scheme is that a pyramid scheme is relatively more upfront about how it generates returns, and relies on the investors themselves to recruit new investors, not the fund manager.
A Curator is a failsafe mechanism that indirectly prevents malicous actors from executing 51% attack. Curators do not add centralization to the DAO: they are nominated by the DAO Token Holders themselves, and can be fired at any time, for any reason. Curators curate the whitelist, the list of Contractors authorized to receive ether from the DAO. A Curator therefore holds two primary functions:
First, when a DAO Token Holder submits a Proposal in the form of a smart contract, the Curator checks that the published Contract on the Ethereum blockchain matches the source code the Contractor claims to have deployed (this is done by comparing bytecode).
Second, a Curator confirms that a Proposal comes from an identified person or organization. This is done by asking the entity submitting the Proposal to send a signed transaction with a certain set of data only known to the Curator and the author of the Proposal, thereby confirming the author of the Proposal.
The above are the only two functions of a Curator. For clarity, the following tasks are therefore not the role of a Curator, but instead the role of the DAO as a whole:
Evaluate whether a Proposal is ‘good’ or not. Audit the Proposal’s smart contract code. Provide legal advice regarding the Proposal (if any). Take responsibility for the Proposal.
http://www.chicagotribune.com/bluesky/ct-crowdfunders-decisi...
the DAO is basically a decentralized kickstarter that for now, is going to invest in blockchain startups, but it can fund whatever it wants :D