A decentralized autonomous organization (DAO), also known as decentralized autonomous corporation (DAC), is an organization that is run through business rules encoded as computer programs (smart contracts).[1] A DAO's financial transaction record and program rules are maintained on a blockchain. There are several examples of this business model. The precise legal status of this type of business organization is unclear.[2]
Background
Decentralized autonomous organizations have been seen by some as difficult to describe.[2][3] Nevertheless, the conceptual essence of a decentralized autonomous organization has been typified as the ability of blockchain technology to provide a secure digital ledger that tracks financial interactions across the internet, hardened against forgery by trusted timestamping and by dissemination of a distributed database. This approach eliminates the need to involve bilaterally trusted third parties in a financial transaction, thus simplifying the sequence.[4] The costs of a blockchain enabled transaction and of making available the associated data may be substantially lessened by the elimination of both the trusted third party and of the need for repetitious recording of contract exchanges in different records: for example, the blockchain data could in principle, if regulatory structures permitted, replace public documents such as deeds and titles.[4]
Characteristics
Buterin has seen Bitcoin as an early example of a distributed anonymous corporation.[1] Ethereum, built on a blockchain and launched in 2015, has been described as another platform that enables DAOs.[5][6] Other examples of DAOs are The DAO and Digix.io.[7] A value token called DigixDAO finished its crowdfunding campaign and the token began trading on exchanges on 28 April 2016.[8][9]
DAOs have been described as a system for crowdfunding.[10] A specific example, in 2016 The DAO, has set a record for the largest crowdfunding campaign to date.[3][11][12] However, shareholder participation in DAOs can be problematic; for example, BitShares is suffering from a lack of voting participation, in large part because it takes time and energy to consider proposals.[13]
Issues
Legal liability
The precise legal status of this type of business organization is unclear; some similar approaches have been regarded by the U.S. Securities and Exchange Commission as illegal offers of unregistered securities.[2][14][15]
A DAO will functionally be a corporation without legal status as a corporation: a general partnership. This means potentially unlimited legal liability for participants, even if the smart contract code or the DAO's promoters say otherwise.[16]
Regulation and enforcement
Known participants, or those at the interface between the DAO and regulated financial systems, will be obvious targets for regulatory enforcement or civil actions.[16]
Technical
The code of a given DAO will be difficult to alter once the system is up and running, including bug fixes that would be trivial in centralised code. Researchers point out multiple issues in the code of The DAO, for example, a fix for any of which would require writing new code and agreement to migrate all the funds. Thus, the code is visible to all but hard to repair, leaving obvious security holes open to exploitation without a moratorium called for bug fixing.[17]
History
In 2014, Patrick Deegan identified mechanisms for using decentralized autonomous organizations to create an open platform for individuals to control their identities and their personal data.[18]
Buterin later proposed the concept that once a company is started, it can run itself as smart contracts replace people.[5]
See also
References
- ↑ a b Vitalik Buterin: Bootstrapping A Decentralized Autonomous Corporation: Part I. In: Bitcoin Magazine. 20. September 2013, abgerufen am 23. Mai 2016.
- ↑ a b c Nathaniel Popper. A Venture Fund With Plenty of Virtual Capital, but No Capitalist. New York Times. May 21, 2016 [1]
- ↑ a b Michael del Castillo: The DAO: Or How A Leaderless Ethereum-Based Organization Raised $50 Million (Even Though No One Quite Knows What It Is) In: CoinDesk, 12. Mai 2016. Abgerufen am 13. Mai 2016
- ↑ a b Hal Hodson. Bitcoin moves beyond mere money. New Scientist. 20 November 2013. [2]
- ↑ a b DJ Pangburn: The Humans Who Dream Of Companies That Won't Need Us. In: FastCompany. 19. Juni 2015, abgerufen am 15. Mai 2016.
- ↑ Evans Jon: Vapor No More: Ethereum Has Launched. In: www.techcrunch.com. Abgerufen am 25. Februar 2016.
- ↑ Roger Aitken: Digital Gold 'Done Right' With DigixDAO Crypto-Trading On OpenLedger In: Forbes, 23. April 2016. Abgerufen am 28. April 2016
- ↑ DigixDAO Token Trading to Launch on Gatecoin In: Smith and Crown, 27. April 2016. Abgerufen am 21. Mai 2016
- ↑ Andrew Quentson: Gold Backed Digix Raises Millions in Hours on Ethereum Blockchain Crowdsale In: CryptoCoinNews, 4. Mai 2016. Abgerufen am 21. Mai 2016
- ↑ David Morris: RoboCorp. In: aeon.co. Aeon (digital magazine), 26. Januar 2015, abgerufen am 17. Mai 2016.
- ↑ Paul Vigna: Chiefless Company Rakes In More Than $100 Million In: Wall Street Journal, 16. Mai 2016
- ↑ Richard Waterss: Automated company raises equivalent of $120M in digital currency In: Financial Times, 17. Mai 2016
- ↑ The DAO of accrue: A new, automated investment fund has attracted stacks of digital money In: The Economist, 21. Mai 2016. Abgerufen am 23. Mai 2016
- ↑ SEC Charges Bitcoin Entrepreneur With Offering Unregistered Securities. U.S. Securities and Exchange Commission, 3. Juni 2014, abgerufen am 25. Mai 2016.
- ↑ Andrew Hinkes for CoinDesk. May 19, 2016 The Law of The DAO
- ↑ a b Matt Levine: Blockchain Company Wants to Reinvent Companies. In: Bloomberg View: Wall Street. Bloomberg News, 17. Mai 2016, abgerufen am 19. Mai 2016.
- ↑ Morgen Peck: Ethereum’s $150-Million Blockchain-Powered Fund Opens Just as Researchers Call For a Halt. In: IEEE Spectrum. Institute of Electrical and Electronics Engineers, 28. Mai 2016, abgerufen am 28. Mai 2016.
- ↑ Patrick Deegan: From Bitcoin to Burning Man and Beyond: The Quest for Identity and Autonomy in a Digital Society. Institute for Institutional Innovation, Amherst, Massachusetts 2014, ISBN 978-1-937146-58-0, Chapter 14—The Relational Matrix: The Free and Emergent Organizations of Digital Groups and Identities, S. 160–176: creating an operational and autonomous Trust Framework [that can i]ntegrate with a secure discovery service in the form of a Decentralized Autonomous Organization asserting itself as a publicly accessible Portal Trusted Compute Cell (TCC) with APIs that provide Persona lookup CoreID verification services. ... Open Mustard Seeds is an open platform as service intended to provide a powerful new self-deploying and self-administrating infrastructure layer for the Internet, which gives individuals control over their identities and their data, and which enables the formation and self-governance of Decentralized Autonomous Organizations, Authorities and Enterprises to enable the creation and exchange of "digital assets."