Nobody knows right now if there are likely to be lawsuits coming out of the $50m-plus attack on Ethereum’s The DAO (decentralised autonomous organisation), but Ethereum’s decentralised governance model will be tested to its absolute limit.
The numbers involved are high: The DAO, which is a non-hierarchical, for-profit vehicle, raised over $150m of crowdfunding in last few weeks; the night before the attack, the value of Ethereum’s native currency, ether, reached $21 giving the fund of DAO tokens a value of over $230m; over the course of a few hours on Friday over 3.5 million ETH, about a third of the fund, was drained by an attacker exploiting a weakness in the DAO code.
There’s plenty of opinion out there right now, but some of the most insightful analysis came from Andreas M. Antonopoulos hosting a special Let’s Talk Bitcoin show , where the DAO was examined by legal experts. There was also a technical discussion of the attack and the proposed stages of forking to remedy it, and the precedents this creates for Ethereum and the execution of smart contracts more generally. We should remember that Ethereum is censorship-resistant and the terms of and conditions of The DAO state that the code constitutes contract law. So where does this leave the 25,000 DAO token holders?
Antonopoulos was joined by attorney and cryptocurrency expert Pamela Morgan who began by stating that default laws can be applied in certain situations, and that in a case like this common law, facilitated by a judge, would arrive at some sort of "equitable remedy". She went on to say the DAO could likely be interpreted as a "general partnership" and as such those within this profit-orientated organisation have a duty to behave fairly with their partners and not in his or her "adverse interest".
But this only […]
