Introduction to the DAO

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.

"The 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. 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 notion of decentralized autonomous entities.

DAO in a nutshell

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 Alternatively the purpose of the DAO could well be civic - to remove the inherent weaknesses of outdated political structures.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

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.

Token

During the initial creation phase where 'The DAO' is funded via ETH, new DAO tokens have been created. Each DAO token holder (a.k.a. DAOTH) is granted voting rights and complete control over The DAO's digital assets proportional to the amount of DAO tokens they hold. The simplest way to buy tokens during the sale period will be to send ETH directly to The DAO's contract. In return, the contract will automatically send you your tokens. This must be done from a wallet in which you own the private keys, and ideally should be done using a wallet like Mist where you can watch and interact with contracts and track the corresponding tokens.
There is no cap to the number of tokens which may be sold nor the total value which could be raised during the creation period.

DAO tokens:

• Allow the holder to vote on any expenditure the DAO could make
• Are fully transferable. They can be traded peer-to-peer or on an exchange
• Represent a relative portion of The DAO's crypto assets at any given time

You will find a lot of information about the DAO token on Etherscan: number of transaction, proposal list, ongoing votes, smart contract source, token holders...

Token price

During its 28 day creation period, DAO token prices have been fixed this way:

• A price of 1ETH / 100DAO for the first 14 days,
  
• an increase of 0.05ETH each day for the next 10 days
• finally a 4 day period of 1.5ETH / 100DAO.
   

 Once the creation period is over, the DAO token will be traded on some exchanges  like any other market.

Contractors

A DAO is purely software: in itself it does not have the capabilities to manufacture a product, write code, develop hardware or sweep the streets. It requires actors in the physical world for this purpose, called Contractors. Contractors submit Proposals for the development of products or services—these Proposals are written in plain English and backed by a software code in the form of a smart contract that defines the relationship between The DAO and the Contractor: deliverables, responsibilities, and operating parameters.

The DAO Token Holders may debate the viability and profitability of Proposals off-chain through the discussion forums DAOHub.org, daohub slack team, on-chain threaded discussions, etc).

 Smart contracts

INCOMPLETE

Smart contracts are short computer programs which encode business logic and are automatically enforced by the network’s consensus algorithm.

Please visit the  Smart contract section of the wiki for a complete revue.

Curators

A Curator is an entity employed by The DAO to act as its real world intermediary, as The DAO itself it does not have the capabilities to build a product, write code, or develop hardware; The DAO purely manages funds. 
The curator is the only entity that is allowed to add contractors to the DAOs whitelist, authorizing them to receive ether from the DAO.

Proposal

https://blog.slock.it/how-to-create-gorgeous-proposals-81eb3f606226#.c82vurucs

Framework

List of proposals

The DAO consider it website is a place dedicated to proposals. Once a new proposal and its description is added, members have the capability to express opinion using the consider it technology.

This website is a very good place to test and expose proposals to critique, and a chance to gain traction. This is not officially affiliated with the DAO and is a tool to use as is. You need to register before you post a proposal or express your opinion.

Whitelist

Voting mechanism

13 days for a proposal to be fully vetted. If enough quorum (20%)

Split

DAO 2.0

Improvements in the performance of DAO governance are currently in development, and these are what generally fall under the title “DAO 2.0”.

See also

• slock it blog: A primer to DAO
• Daohub: about