Knowledge (XXG)

The DAO

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As an on-chain organization, The DAO claimed to be completely transparent, since everything was done by the code which anyone could see and audit. However, the complexity of the code base and the rapid deployment of the DAO meant that neither the coders, the auditors, nor the owners could ensure the
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associated with The DAO and recommended that investors in The DAO hold off from directing The DAO to invest in projects until the problems had been resolved. An Ethereum developer on GitHub pointed out a flaw relating to "recursive calls". On June 9 it was blogged about by Peter Vessenes, founder of
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In May 2016, the plan called for The DAO to invest Ether into ventures. It would back contractors and receive in return "clear payment terms" from contractors. The organizers promoted The DAO as providing investors with a return on their investment via those "clear payment terms" and they warned
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On June 17, 2016, the DAO was subjected to an attack exploiting a combination of vulnerabilities, including the one concerning recursive calls, that resulted in the transfer of 3.6 million Ether - around a third of the 11.5 million Ether that had been committed to The DAO - valued at the time at
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Members of The DAO and the Ethereum community debated what to do next, with some calling the attack unethical but valid, since it did not violate DAO rules as coded, while others called for the Ether to be re-appropriated and/or The DAO to be shut down. The DAO community manager, Griff Green,
547:(ICOs) and The DAO, examining "whether The DAO and associated entities and individuals violated federal securities laws with unregistered offers and sales of DAO Tokens in exchange for 'Ether,' a virtual currency." The SEC concluded that DAO tokens sold on the Ethereum blockchain were 399:, with no physical address or officials with formal authority. The theory underlying the DAO was that keeping operational power directly in the hands of owners, not delegated to managers, would ensure that invested funds would be used in the owners' best interests, thus solving the 506:
The DAO has a democratized organizational structure so that control can be spread among members, with no official leadership or regulation. Normally, there is no way to recover funds if a member mistakenly transfers cryptocurrency to the wrong wallet, including in case of fraud.
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When it reaches the end of the funding phase on May 28, it will begin contracting blockchain-based start-ups to create innovative technologies. The extraordinary thing about The DAO is that no single entity owns it, and it has no conventional management structure or board of
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The code behind The DAO had several safeguards against anyone capturing the voting rights of shareholders to win investments. However, this would not prevent fraudulent or over-optimistic proposals. A paper cited a "number of security vulnerabilities".
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Additionally, to function in the real world, contractors would likely need to convert the invested Ether into national currencies. In May 2016, attorney Andrew Hinkes said that those sales of Ether would likely depress its market value.
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protecting investors from individual legal and financial liability for actions taken by The DAO and its contractors. It was unclear if The DAO was selling securities, which are highly regulated, and if so, what type of securities.
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The DAO was intended to operate as "a hub that disperses funds (currently in Ether, the Ethereum value token) to projects". Investors receive voting rights by means of a digital share token; they vote on proposals submitted by
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by 15 May 2016. On 17 May 2016, the largest investor in the DAO held less than 4% of all DAO tokens and the top 100 holders held just over 46% of all DAO tokens. The fund's Ether value as of 21 May 2016 was more than
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the Ethereum blockchain to restore approximately all funds to the original contract. This split the Ethereum blockchain into two branches, each with its own cryptocurrency, where the original unforked blockchain continued as
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to move the funds in The DAO to a recovery address where they could be exchanged back to Ethereum by their original owners. However, some continued to use the original unforked Ethereum blockchain, now called
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The DAO did not hold the money of investors; instead, the investors owned DAO tokens that gave them rights to vote on potential projects. Anyone could pull out their funds by the time they first voted.
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described The DAO as "a paradigm shift in the very idea of economic organization. ... It offers complete transparency, total shareholder control, unprecedented flexibility, and autonomous governance."
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organized a volunteer group of coders known as The White Hat Group to recoup the funds in the other 500 wallets before they could also be hacked. Eventually on July 20, 2016, the Ethereum network was
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start-up) were listed as seeking potential funding on the daohub.org website during the May "creation period". Both Jentzsch brothers were involved in Slock.it as well.
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around $ 50 million. The funds were moved into an account subject to a 28-day holding period under the terms of the Ethereum smart contract so were not actually gone.
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a vulnerability in The DAO code to enable them to siphon off one-third of The DAO's funds to a subsidiary account. The Ethereum community controversially decided to
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On June 16, further attention was called to recursive call vulnerabilities by bloggers affiliated with the Initiative for CryptoCurrencies & Contracts (IC3).
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The DAO's reliance on Ether allowed people to send their money to it from anywhere in the world without providing any identifying information.
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Experiments in Algorithmic Governance: An ethnography of "The DAO," a failed Decentralized Autonomous Organization
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the Blockchain Foundation. By June 14, fixes had been proposed and were awaiting approval by members of The DAO.
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computer code behind the organization was written principally by Christoph Jentzsch, and released publicly on
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In order to provide an interface with real-world legal structures, the founders of The DAO established a
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campaigns in history, but it ceased activity after much of its funds were taken in a hack in June 2016.
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Regulation of Financial Institutions eJournal: Social Science Research Network (SSRN). 5 December 2017.
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them. The profits from an investment will flow back to their stakeholders as specified in an on-chain
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volunteer make sure the projects are legal and the contractors properly identified before
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Bitcoin and Beyond: The Challenges and Opportunities of Blockchains for Global Governance
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The DAO of accrue. A new, automated investment fund has attracted stacks of digital money
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investors that there was a "significant risk" that the ventures funded by them may fail.
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intended behavior of the organization, with the eventual attacker finding an unexpected
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Christoph Jentzsch at the Festival of the Future (Festival der Zukunft) from 1E9 and
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The “Autonomous Corporation” Called the DAO Is Not a Good Way to Spend $ 130 Million
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On 28 May 2016 the DAO tokens became tradable on various cryptocurrency exchanges.
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Dhanani, Ali; Hausman, Brian J. (2022). "Decentralized Autonomous Organizations".
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Morrison, Robbie; Mazey, Natasha C. H. L.; Wingreen, Stephen C. (27 May 2020).
193:. After launching in April 2016 via a token sale, it became one of the largest 2519: 2410: 2355: 2242: 2194: 2120: 1822: 1817: 1615: 1309: 524: 467: 209: 1440: 1423: 2350: 2252: 2179: 2085: 1937: 799:"The DAO: How the Employeeless Company Has Already Made a Boatload of Money" 357: 1198:"Digital currency Ethereum is cratering amid claims of a $ 50 million hack" 2682: 1424:"The DAO Controversy: The Case for a New Species of Corporate Governance?" 652:
The DAO: How the Employeeless Company Has Already Made a Boatload of Money
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and had no conventional management structure or board of directors. The
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By September 2016, the value token of The DAO, known by the moniker
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The DAO was launched on 30 April 2016 with a website and a 28-day
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The Decentralized Autonomous Organization and Governance Issues.
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A $ 50 Million Hack Just Showed That The Dao Was All Too Human
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Early decentralized business based on the Ethereum blockchain
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How Coders Hacked Back to ‘Rescue’ $ 208 Million in Ethereum
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Paper Points Up Flaws in Venture Fund Based on Virtual Money
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and therefore possible violations of U.S. securities laws.
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As of May 2016, The DAO had attracted nearly 14% of all
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From the original on 2017-07-24. Retrieved 3 Oct 2023.
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May 20, 2016 200:The DAO had an objective to provide a new 131: 25: 1439: 587: 585: 372:de-listed DAO trading pairs, followed by 274:). The DAO had in effect become defunct. 212:enterprises. It was instantiated on the 2666: 1516:U.S. Securities and Exchange Commission 559: 541:U.S. Securities and Exchange Commission 2740:Decentralized autonomous organizations 1226:Klint Finley for Wired. June 18, 2016 738:. Swinburne University of Technology. 2560:Decentralized autonomous organization 569:Staff, The Economist. May 21st, 2016 386:decentralized autonomous organization 314:(ETH)—the digital value token of the 187:decentralized autonomous organization 45:Decentralized autonomous organization 7: 2630: 300:The token sale had raised more than 872:from the original on 4 October 2016 837:from the original on 14 August 2016 327:, from more than 11,000 investors. 238:(Munich, Germany on July 22nd 2022) 204:business model for organizing both 1270:Securities and Exchange Commission 903:. 18 December 2016. Archived from 592:Popper, Nathaniel (17 June 2016). 14: 2570:Distributed ledger technology law 1377:from the original on 24 June 2016 1208:from the original on 11 June 2017 1074:from the original on 17 June 2016 1001:from the original on 10 June 2017 604:from the original on 20 June 2017 2717: 2705: 2693: 2681: 2669: 2641: 2629: 2618: 2617: 1543:Vessenes, Peter (18 June 2016). 1473:from the original on 30 May 2016 1403:from the original on 30 May 2016 1279:from the original on 9 June 2018 1245:Pearson, Jordan (24 July 2017). 811:from the original on 23 May 2016 527:venture), and Mobotiq (a French 451:Société à responsabilité limitée 189:and a form of investor-directed 32: 1522:from the original on 2017-10-10 1352:from the original on 2016-05-26 1338:Castillo, Andrea (2016-05-24). 1317:from the original on 2016-05-17 1175:from the original on 2017-02-14 1146:from the original on 2021-01-19 1060:Macheel, Tanaya (19 May 2016). 1039:from the original on 2016-05-27 961:Morris, David Z. (2016-05-15). 943:from the original on 2017-06-25 780:from the original on 2016-05-01 742:from the original on 2016-05-16 709:from the original on 2020-11-08 695:Waterss, Richard (2016-05-17). 1138:Vessenes, Peter (2016-06-09). 304:by 10 May 2016, and more than 1: 2712:Free and open-source software 1027:Popper, Nathan (2016-05-21). 447:limited liability corporation 773:International Business Times 732:"The radical DAO experiment" 730:Rennie, Ellie (2016-05-12). 318:network—by 12 May, and over 1631:Cryptographic hash function 1303:Bannon, Seth (2016-05-16). 1196:Price, Rob (17 June 2016). 766:Allison, Ian (2016-04-30). 490:The risks included unknown 297:to fund the organization. 2771: 1340:"Can a Bot Run a Company?" 929:Vigna, Paul (2016-05-16). 18: 2613: 2590:Initial exchange offering 2565:Decentralized application 2545:Cryptocurrency in Nigeria 31: 2595:List of cryptocurrencies 2482:Crypto service companies 2273:Cryptocurrency exchanges 1455:Peck, M. (28 May 2016). 1441:10.3389/fbloc.2020.00025 388:that exists as a set of 342:security vulnerabilities 2745:Cross-platform software 1555:DuPont, Quinn (2017). “ 1428:Frontiers in Blockchain 401:principal–agent problem 2530:Complementary currency 1636:Decentralized exchange 1621:Cryptocurrency tumbler 545:initial coin offerings 543:published a report on 239: 2585:Initial coin offering 2540:Cryptocurrency bubble 2071:Basic Attention Token 1641:Decentralized finance 1626:Cryptocurrency wallet 831:"Hard Fork Completed" 804:The New York Observer 539:On 25 July 2017, the 233: 2580:Environmental impact 2550:Cryptocurrency scams 631:Technology Review. 242:In June 2016, users 191:venture capital fund 116:+18 000 stakeholders 21:Dao (disambiguation) 19:For other uses, see 2235:Inactive currencies 936:Wall Street Journal 523:Slock.it (a German 368:In September 2016, 134: 122:Number of employees 28: 1695:Proof of authority 1666:Non-fungible token 1646:Distributed ledger 1233:2016-07-26 at the 1120:2020-11-08 at the 907:on 12 October 2018 868:. 24 August 2016. 668:2018-06-04 at the 638:2016-06-02 at the 598:The New York Times 576:2017-11-18 at the 496:programming errors 376:in December 2016. 240: 133:The DAO (software) 2657: 2656: 2477: 2476: 1956: 1955: 1656:Lightning Network 1272:. 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1894: 1892: 1889: 1885: 1879: 1876: 1875: 1873: 1871:RandomX-based 1869: 1863: 1860: 1858: 1855: 1854: 1852: 1849: 1845: 1839: 1836: 1834: 1831: 1829: 1826: 1824: 1821: 1819: 1816: 1815: 1813: 1810: 1806: 1800: 1797: 1794: 1791: 1790: 1788: 1785: 1781: 1775: 1772: 1770: 1767: 1765: 1762: 1760: 1757: 1755: 1752: 1750: 1747: 1745: 1742: 1740: 1737: 1736: 1734: 1731: 1727: 1724: 1721: 1720:Proof of work 1717: 1711: 1710:Proof of work 1708: 1706: 1703: 1701: 1698: 1696: 1693: 1692: 1690: 1687: 1683: 1677: 1674: 1672: 1669: 1667: 1664: 1662: 1659: 1657: 1654: 1652: 1649: 1647: 1644: 1642: 1639: 1637: 1634: 1632: 1629: 1627: 1624: 1622: 1619: 1617: 1614: 1613: 1611: 1607: 1603: 1596: 1591: 1589: 1584: 1582: 1577: 1576: 1573: 1566: 1562: 1558: 1554: 1550: 1546: 1541: 1540: 1536: 1521: 1517: 1513: 1507: 1504: 1499: 1495: 1488: 1485: 1472: 1468: 1464: 1463: 1462:IEEE Spectrum 1458: 1451: 1448: 1442: 1437: 1433: 1429: 1425: 1418: 1415: 1402: 1398: 1392: 1389: 1376: 1372: 1366: 1363: 1351: 1347: 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469: 465:In May 2016, 460: 458: 456: 452: 448: 444: 439: 436: 432: 430: 426: 422: 418: 412: 410: 404: 402: 398: 395: 391: 387: 379: 377: 375: 371: 366: 364: 359: 353: 349: 346: 343: 338: 335: 333: 328: 317: 313: 312: 298: 296: 291: 289: 285: 277: 275: 273: 269: 265: 261: 256: 254: 249: 245: 237: 232: 228: 226: 222: 218: 215: 211: 207: 203: 202:decentralized 198: 196: 192: 188: 184: 175: 172: 170: 166: 163: 160: 156: 152: 142: 140: 136: 126:0 (automated) 125: 119: 115: 111: 107: 104: 101: 96: 92: 86: 82: 76: 72: 68: 65: 62: 59: 56: 53: 49: 46: 43: 39: 35: 30: 22: 2646: 2634: 2622: 2499:Initiative Q 1857:Bitcoin Gold 1749:Counterparty 1744:Bitcoin Cash 1564: 1561:archive link 1549:the original 1524:. 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" 417:contractors 358:hard forked 284:open source 225:open-source 79:Area served 2734:Categories 2520:BitLicense 2464:QuadrigaCX 2447:bankruptcy 2411:ShapeShift 2356:Crypto.com 2243:BitConnect 2195:MobileCoin 1964:currencies 1823:Bitconnect 1818:Auroracoin 1722:currencies 1688:mechanisms 1616:Blockchain 1609:Technology 1526:2017-08-03 1477:2 February 1356:2016-05-25 1321:2016-05-16 1310:TechCrunch 1179:2017-02-14 1150:2021-06-10 1098:econotimes 1043:2016-05-22 976:2016-05-16 947:2016-05-16 784:2016-05-01 753:directors. 746:2016-05-12 713:2016-05-17 555:References 549:securities 535:Regulation 525:Blockchain 468:TechCrunch 397:blockchain 308:-worth of 217:blockchain 210:non-profit 206:commercial 158:Written in 139:Repository 89:Key people 2688:Economics 2351:Coincheck 2253:KodakCoin 2101:Shiba Inu 2086:KodakCoin 2076:Chainlink 2002:Injective 1976:Avalanche 1938:Primecoin 1686:Consensus 1500:(5): 3–9. 519:Proposals 461:Marketing 455:Neuchâtel 390:contracts 380:Operation 295:crowdsale 248:hard-fork 244:exploited 2676:Internet 2624:Category 2346:Coinbase 2326:Bitstamp 2306:Bitpanda 2296:bitFlyer 2291:Bitfinex 2215:SafeMoon 2175:Filecoin 2154:USD Coin 2022:Polkadot 2017:Peercoin 1997:Gridcoin 1991:Ethereum 1971:Algorand 1948:Vertcoin 1918:AmbaCoin 1848:Equihash 1838:Litecoin 1833:Dogecoin 1793:Ethereum 1769:Peercoin 1764:Namecoin 1759:MazaCoin 1661:MetaMask 1520:Archived 1471:Archived 1401:Archived 1375:Archived 1350:Archived 1315:Archived 1274:Archived 1250:. 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Gox 2430:Defunct 2416:Uniswap 2376:Genesis 2311:Bithumb 2286:Binance 2258:OneCoin 2220:Stellar 2106:The DAO 2096:Polygon 2066:Aventus 1981:Cardano 1774:Titcoin 1739:Bitcoin 1730:SHA-256 1283:13 June 1212:17 June 995:Reuters 970:Fortune 911:17 June 876:17 June 841:21 July 608:3 March 421:curator 392:on the 278:History 183:The DAO 169:License 70:Founded 27:The DAO 2469:Thodex 2396:Kucoin 2391:Kraken 2371:Gemini 2341:Circle 2316:BitMEX 2301:Bitkub 2248:Coinye 2210:Ripple 2185:Helium 2149:Tether 2054:tokens 2052:ERC-20 2027:Solana 1986:EOS.IO 1890:-based 1878:Monero 1850:-based 1828:Coinye 1811:-based 1809:Scrypt 1786:-based 1784:Ethash 1732:-based 1563:). 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Index

Dao (disambiguation)

Decentralized autonomous organization
Cryptocurrency
software
venture capital
fund
Total assets
ETH
Repository
github.com/blockchainsllc/DAO
Solidity
License
GNU LGPL
decentralized autonomous organization
venture capital fund
crowdfunding
decentralized
commercial
non-profit
Ethereum
blockchain
code
open-source

Deutsches Museum
exploited
hard-fork
Ethereum Classic
delisted

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