A new entity called The DAO, based on Ethereum, has raised more than $100 million since late April and will use the funds to support projects in the sharing economy. The DAO wants to be a model for a new kind of organization, created and run using blockchain software rather than conventional corporate structures.
The DAO ‒ an acronym for Distributed Autonomous Organization ‒ is similar to an open venture capital fund based on Ethereum smart contracts. Everyone can purchase DAO voting shares, called DAO tokens, with ETH (the currency unit of the Ethereum blockchain). Shares in The DAO can be purchased using ETH until May 28th. The Fortune article emphasizes that The DAO, concerned with possible regulatory issues, states its tokens are not a form of equity.
VentureBeat notes that The DAO is structured as a series of smart contracts granting token holders voting rights (somewhat similar to more traditional corporate equity) and “control” over their proportion of invested ETH. The DAO’s infrastructure enables voting on any sort of expenditure the organization could make (such as hiring and paying contractors to work on their proposals, investing the ETH fund into another asset, and even “splitting” the DAO).
“The DAO’s inception last Saturday led to both the highest increase of new accounts and the highest ever number of Ethereum transactions,” wrote Stephan Tual in May 6 in an article titled “ The Inexorable Rise of The DAO .” Today, the DAO is about to become the largest crowdfunded project in human history, noted Erik Voorhees on May 14. “To say the DAO is a momentous event in the history of Ethereum, and blockchains in general, is an understatement,” added Tual.
The DAO is a for-profit Distributed Autonomous Organization that wants to leverage the wisdom of the crowds to benefit DAO Token […]
