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The legal status of The DAO is subject to intense discussion. None of the contents of this wiki is intended to be, nor should it be construed as, legal advice. |
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Note | There is a common confusion floating around you shall be aware of and avoid. A DAO is the term to qualify a decentralized autonomous organization. The DAO is the chosen name given by its creators to the first created DAO on the Ethereum network. |
The ideal of a decentralized autonomous organization is easy to describe: it is an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do.
A DAO is represented by smart contracts on the Ethereum Blockchain. Its contains functions which, as a whole, have analogies to a crowdfunding vehicle governed by participants' votes, to seek out and fund proposals.
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Creation
The DAO creation period ended on 28 May 09:00 GMT and is, as of today Jun 04 2016, the highest ever crowdfunded project in the world.
Its public address is 0xbb9bc244d798123fde783fcc1c72d3bb8c189413. Visiting the link will show you a balance of 11,727,782.774716786 Ether, roughly Million $162.
Because the DAO consists of computer code, it interacts with the physical world through Contractors.The creators of these proposals act similar to a contractor, with the DAO as its client. The DAO therefore does not "invest" in these proposals, because it does not acquire equity in the contractors. Instead, in return for receiving a funding by The DAO, contractors deliver services, infrastructures or products yielding a return to The DAO.
The DAO charges for the use of its the products or services. This revenue is then sent directly to the DAO in the form of ETH. The DAO then has the option to accumulate this ETH to support its growth, or redistribute it to the DAO Token Holders as a reward.
Central to the DAO system is the concept notion of decentralized autonomous entities.They can be corporations, companies or applications. Unfortunately, no one even knows what all of these individual terms mean, and there is a lack of coherent terminology.
In this sense, The DAO is something entirely new. It’s something between a traditional corporation, a VC fund and a Kickstarter — only entirely decentralized, democratic and existing only in code.
Smart contracts
A smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated.
Token
In exchange for supporting The DAO financially (in the form of Ether), backers get DAO tokens, which they can then use to vote on the direction of the organization. They can use their tokens to vote on big governance issues (akin to traditional shareholders) but also on minute details of how The DAO spends its resources. In this way, token holders have total control over The DAO’s assets and its actions.
DAO tokens do not represent or constitute an equity ownership stake, share, or equivalent in ANY public or private company, corporation, or other entity in any jurisdiction; DAO tokens are only for use in connection with The DAO under the terms of The DAO’s smart contract code and do not entitle any holder of DAO tokens to any additional rights with respect to any other corporation, company, or entity in any jurisdiction.
DAO token trading
Trading starts on May 28th.
The DAO token statistics
Etherscan website lets you find useful information about the DAO token, like its address, supply number, value in Ether, transaction numbers or holder number.
The website will list too all the proposals and votes once the mechanism starts to be active.
Decentralized applications
Curators
Contractors
Proposals
People with projects they’d like to build for The DAO can submit ideas in the form of a proposal written in plain English accompanied by smart contract code. The code automatically executes payments so long as certain agreed-upon conditions are met. Because this is all built on top of Ethereum, which allows for robust smart contracts, this can all be done autonomously.
Split
This feature allow DAO Token Holders to leave The DAO at anytime and retrieve their ETH not already assigned to proposals.
https://daostats.github.io/index.html
This is the top page of all content related to "The DAO" (http://www.daohub.org)
https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/
https://github.com/slockit/DAO
https://blog.ethereum.org/2014/08/21/introduction-futarchy/
https://dappsforbeginners.wordpress.com/
https://en.wikipedia.org/wiki/The_DAO_%28organization%29
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DAO in a nutshell
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The Decentralized Autonomous Organization (DAO) is a virtual entity that exists in cyberspace / the internet. It comes into existence when a group of people decide to form a DAO.
Once this initial decision to create is taken the participants may decide to extend participation to a wider community. It is possible that this process could well be entirely anonymous (subject to the technical skills of the participants).
A DAO may be established with a view to raising or investing / managing funds raised, for example to develop a specific idea or a range of ideas or within a particular sector. Alternatively the purpose of the DAO could well be civic - to remove the inherent weaknesses of outdated political structures. Participants / investors 'invest' their funds from their own cryptocurrency holdings or by converting fiat to Ether (the unit of the Ethereum platform). This transfer of ether appears on the Blockchain.
In exchange for ether, tokens are created which represent membership as well as ownership of a portion of the DAO; these tokens are assigned to the account that sent the ether. The amount of tokens created is proportional to the amount of ether transferred.
The ownership of these tokens can be transferred to other accounts using transactions on the Ethereum blockchain as soon as the funding period is over.
The DAO purely manages funds, it exists purely in the ether. In itself, it does not build a product, write code or develop hardware. It requires contractor(s) to accomplish these and other goals. Contractors are hired when their proposal to the DAO is approved.
Every member of the DAO is allowed to submit proposals to spend a portion of the total ether raised, denoted by transfer, on funding projects.
Members of the DAO cast votes weighted by the amount of tokens they control. Tokens are divisible, indistinguishable, fungible and can easily be transferred between accounts. Within the contracts, the individual actions of members, cannot be directly determined.
An important (r)evolutionary step
The DAO structure is a most important (r)evolutionary step:-
- it allows the DAO Token holders to control 100% of funds from day one
- it is immutable code-wise
- it removes the layers of intermediaries
- it negates Government, corporate & community paralysis due to corruption & ineptitude
Creation
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The DAO is the first Ethereum blockchain DAO ever created. Its creation, a 28 day period, ended on 28 May 09:00 GMT and is, as of Jun 2016, the highest ever crowdfunded project in the world.
Its address on the Ethereum blockchain is 0xbb9bc244d798123fde783fcc1c72d3bb8c189413. Visiting the link will show you a balance of 11,727,782.774716786 Ether, roughly Million $162.
A standard DAO framework has been written by Slock it and can be found on its Github. This framework is written in Solidity to run on the Ethereum blockchain. It has been developed free and open source, so everyone can reuse it to create its own Decentralized Autonomous Organization.
See also
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