D(?)A(?)O – Decentralization and Autonomy in “DAOs”(boardroom.mirror.xyz)
boardroom.mirror.xyz
D(?)A(?)O – Decentralization and Autonomy in “DAOs”
https://boardroom.mirror.xyz/N0kJ-y_5wvPR0H1MMNFb531MOKEE4LKWxepzQLj18sw
88 comments
I hope your wrong, for the sake of all the folks that invested in this.
Thank you for looking out for my financial well-being, internet stranger
Ethereum's pre-mine is worth more than half of ETH's market cap?
Yes, 70% premine. Absolutely unethical
How does one learn this information? Do you have a link?
[deleted]
"We are not blocking the US after all. Yay."
I hope you can see why many people believed the US was prohibited.
I hope you can see why many people believed the US was prohibited.
Yes, if they weren't paying attention.
There was serious concern that the Ethereum Foundation would get in trouble with the SEC if they sold in the US. They delayed the crowdsale for several months while they consulted lawyers, who finally signed off on a way to keep them out of SEC trouble. There was a lot of discussion about this in the community.
The presale was open for 42 days and very well known in the crypto community. Within the first few days it was clear that it was going to be one of the largest crowdsales to date, so it got regular media attention too.
There was serious concern that the Ethereum Foundation would get in trouble with the SEC if they sold in the US. They delayed the crowdsale for several months while they consulted lawyers, who finally signed off on a way to keep them out of SEC trouble. There was a lot of discussion about this in the community.
The presale was open for 42 days and very well known in the crypto community. Within the first few days it was clear that it was going to be one of the largest crowdsales to date, so it got regular media attention too.
Only a small portion went to the early devs, and an equal amount to the nonprofit foundation. The rest of that 70% went to the presale, which was open to anyone and well-advertised. First-year bitcoiners had a way bigger advantage than ETH presale buyers.
https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...
https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...
In all fairness, a presale effectively means it went to them and then they sold it for money at the earliest price.
The bitcoins that people paid went to the nonprofit foundation, not to individuals. The foundation paid people salaries in exchange for work, and is still funding Ethereum development today.
I.e. it was a crowdsale raising funds for development, much like projects on Indiegogo except that it was a nonprofit instead of a business.
I.e. it was a crowdsale raising funds for development, much like projects on Indiegogo except that it was a nonprofit instead of a business.
Describing a public crowdsale as a premine is unethical.
Something doesn't stop being a premine once you sell it.
Once they've finished selling their premine to the public would it be accurate to say it wasn't premined at all? Of course not. So it's not accurate to exclude the partially sold portion now.
This massive understatement of their premine is a well known example of the dishonesty of ethereums operators and advocates.
Once they've finished selling their premine to the public would it be accurate to say it wasn't premined at all? Of course not. So it's not accurate to exclude the partially sold portion now.
This massive understatement of their premine is a well known example of the dishonesty of ethereums operators and advocates.
Exactly. Selling a premine to "the public" is indistinguishable from selling only a fraction to the public, and the rest to yourself. While there is an opportunity cost to the latter, it may also serve to create an impression of large demand that further benefits the preminer.
[deleted]
No one person controls more than 1% of ETH supply. Satoshi still owns 1M BTC, or 5% of all BTC and it's said that the Winklevoss twins control about 1% of BTC supply.
We don't actually know much about who controls the eth supply. Their pre-mine recipients were mostly anonymous and with the fast majority going to a few addresses. For all you know they recycled received funds back out in their crowd sale and bought multiple times.
Participation was limited because US residents-- by far the largest population of cryptocurrency users-- were prohibited from participating (though of course some did). [Edit: A comment below claims otherwise, I don't actually see support for that in my source, and my own correspondence from the time states that it wasn't. I'm not sure if something changed around the launch, or if I'm somehow mistaken.]
I dunno anything about winklevoss speculation, people often include funds held in custody as if they're owned by the custodian and reach weird conclusions. It's easy to list ethereum accounts that hold >=1% of all ethereum: 0x281055afc982d96fab65b3a49cac8b878184cb16, 0x6f46cf5569aefa1acc1009290c8e043747172d89, 0x90e63c3d53e0ea496845b7a03ec7548b70014a91, 0x53d284357ec70ce289d6d64134dfac8e511c8a3d, 0xab7c74abc0c4d48d1bdad5dcb26153fc8780f83e, 0xfe9e8709d3215310075d67e3ed32a380ccf451c8; while the largest Bitcoin address is under 1%. (Of course, parties can have multiple addresses, and as mentioned some parties hold coins for many other people)
Moreover, regardless of the distribution Bitcoin had no premine: Everyone who has Bitcoin received it in a open process available to the whole world with no particular privilege other than knowing and caring about it when it was almost worthless before other people did. (well, I suppose except for those people who stole theirs :)).
We don't actually know how many Bitcoin Satoshi-- if he's still alive-- owns: there are guesses based on assuming various earlier miners might have been him, but they're guesses. The 1M claim specifically is flat out false: it comes from counting up every coin mined during the first year that was still on spent at the time the figure started circulating a few years ago. It includes many coins known to have been mined by other people, including likely myself.
Participation was limited because US residents-- by far the largest population of cryptocurrency users-- were prohibited from participating (though of course some did). [Edit: A comment below claims otherwise, I don't actually see support for that in my source, and my own correspondence from the time states that it wasn't. I'm not sure if something changed around the launch, or if I'm somehow mistaken.]
I dunno anything about winklevoss speculation, people often include funds held in custody as if they're owned by the custodian and reach weird conclusions. It's easy to list ethereum accounts that hold >=1% of all ethereum: 0x281055afc982d96fab65b3a49cac8b878184cb16, 0x6f46cf5569aefa1acc1009290c8e043747172d89, 0x90e63c3d53e0ea496845b7a03ec7548b70014a91, 0x53d284357ec70ce289d6d64134dfac8e511c8a3d, 0xab7c74abc0c4d48d1bdad5dcb26153fc8780f83e, 0xfe9e8709d3215310075d67e3ed32a380ccf451c8; while the largest Bitcoin address is under 1%. (Of course, parties can have multiple addresses, and as mentioned some parties hold coins for many other people)
Moreover, regardless of the distribution Bitcoin had no premine: Everyone who has Bitcoin received it in a open process available to the whole world with no particular privilege other than knowing and caring about it when it was almost worthless before other people did. (well, I suppose except for those people who stole theirs :)).
We don't actually know how many Bitcoin Satoshi-- if he's still alive-- owns: there are guesses based on assuming various earlier miners might have been him, but they're guesses. The 1M claim specifically is flat out false: it comes from counting up every coin mined during the first year that was still on spent at the time the figure started circulating a few years ago. It includes many coins known to have been mined by other people, including likely myself.
U.S. residents were not prohibited. Here's the official announcement saying so:
https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...
https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...
Hi Greg,
> For all you know they recycled received funds back out in their crowd sale and bought multiple times.
Actually we know that they didn’t and so do you, because the funds didn’t leave the multisig until the sale ended
> For all you know they recycled received funds back out in their crowd sale and bought multiple times.
Actually we know that they didn’t and so do you, because the funds didn’t leave the multisig until the sale ended
Turns out that money is fungible. The moment the crowdsale ended the CEO paid himself out a million dollars and left. ...
Do you have a source for this claim?
Wow. that puts him in the top 30 richest people on earth...according to https://www.forbes.com/real-time-billionaires/#233e45c53d78 which i randomly googled.
nocommentguy(1)
I did a thread on the evolution of cryptocurrencies today. I cover the term “premine.” Your arguments do not make sense.
https://mobile.twitter.com/moo9000/status/138957146600232551...
https://mobile.twitter.com/moo9000/status/138957146600232551...
If you want to see a graph about why many are so bullish on Ethereum - https://cdn.substack.com/image/fetch/f_auto,q_auto:good,fl_p...
Blockchain is like the early days of the internet, probably like 1998 right now. There were competitors to all the major internet protocols - TCP/IP, WWW, HTTP, but once everyone standardized the web flourished.
I believe Ethereum is like that today. There are competitors, and loud internet commenters are financially incentivized to criticize it and promote others, but if you look at where organic development and new projects are founded on, Ethereum is far and away the most popular. Others are not even close.
Other chains who criticize the fees of Ethereum are essentially saying, "That place is so crowded, nobody goes there anymore." ETH is working on scaling, bit by bit, and now with Layer-2 solutions like Optimism, Arbitrum, Matic/Polygon, zkSync, Immutable, etc. etc. it's finally allowing scale in a significant way even before ETH2 is launched and takes over. Many chains pay projects to port their dapps to their own chain just to get some sort of third-party development, while the Ethereum Foundation primarily funds fundamental research and protocol improvements - Ethereum doesn't need to pay people to build on their chain.
If an alternative blockchain's only reason to exist is "Like Ethereum - but with lower fees!" I would be leery. Some chains like Monero exist with a very defined purpose (privacy), and I see Bitcoin as something else entirely (store of value). But as the one-chain-to-rule-them-all, Ethereum would be your best bet.
Blockchain is like the early days of the internet, probably like 1998 right now. There were competitors to all the major internet protocols - TCP/IP, WWW, HTTP, but once everyone standardized the web flourished.
I believe Ethereum is like that today. There are competitors, and loud internet commenters are financially incentivized to criticize it and promote others, but if you look at where organic development and new projects are founded on, Ethereum is far and away the most popular. Others are not even close.
Other chains who criticize the fees of Ethereum are essentially saying, "That place is so crowded, nobody goes there anymore." ETH is working on scaling, bit by bit, and now with Layer-2 solutions like Optimism, Arbitrum, Matic/Polygon, zkSync, Immutable, etc. etc. it's finally allowing scale in a significant way even before ETH2 is launched and takes over. Many chains pay projects to port their dapps to their own chain just to get some sort of third-party development, while the Ethereum Foundation primarily funds fundamental research and protocol improvements - Ethereum doesn't need to pay people to build on their chain.
If an alternative blockchain's only reason to exist is "Like Ethereum - but with lower fees!" I would be leery. Some chains like Monero exist with a very defined purpose (privacy), and I see Bitcoin as something else entirely (store of value). But as the one-chain-to-rule-them-all, Ethereum would be your best bet.
The graph is a few years out of date, fwiw.
True - but as a longtime crypto pro the sentiment is still accurate IMO.
See recent article https://decrypt.co/66740/who-are-the-fastest-growing-develop...
> There are more than 8,000 monthly active developers working on various cryptocurrency projects, according to the Developer Report, produced by Electric Capital, a venture firm, with some 80% of those developers starting in the last two years.
> The current leader in terms of people actively contributing to the development of a network is Ethereum, with approximately 2,300 average monthly developers - those who were active on a monthly basis, according to the Developer Report. The number actively working on Ethereum has grown by 215% in 3 years.
See recent article https://decrypt.co/66740/who-are-the-fastest-growing-develop...
> There are more than 8,000 monthly active developers working on various cryptocurrency projects, according to the Developer Report, produced by Electric Capital, a venture firm, with some 80% of those developers starting in the last two years.
> The current leader in terms of people actively contributing to the development of a network is Ethereum, with approximately 2,300 average monthly developers - those who were active on a monthly basis, according to the Developer Report. The number actively working on Ethereum has grown by 215% in 3 years.
>If an alternative blockchain's only reason to exist is "Like Ethereum - but with lower fees!" I would be leery.
Do you think that taproot on the bitcoin chain could fill that role?
Do you think that taproot on the bitcoin chain could fill that role?
The bitcoin culture is very religious and getting even minor changes into the protocol are very difficult. Bitcoin is not trying to be like Ethereum, no one speaks for bitcoin, and everyone can have their own opinion on what it is. The fact it takes so long to make changes is a good thing from my perspective - the risk to the entire crypto space if BTC were to have a serious problem is catastrophic, so slow-and-steady is a smart tactic.
For me, bitcoin is a store of value, like digital gold. I don't purchase BTC for the same reasons I purchase ETH.
Taproot will enable better privacy on bitcoin and more efficient transactions. It will not enable an EVM-like smart contract system.
For me, bitcoin is a store of value, like digital gold. I don't purchase BTC for the same reasons I purchase ETH.
Taproot will enable better privacy on bitcoin and more efficient transactions. It will not enable an EVM-like smart contract system.
> Taproot will enable better privacy on bitcoin and more efficient transactions. It will not enable an EVM-like smart contract system.
You can already price EVM transactions in Bcash: https://smartbch.org/
(Notably Bcash has chosen to do “Ethereum on Bitcoin” using a sidechain, rather ironic from a historical perspective)
You can already price EVM transactions in Bcash: https://smartbch.org/
(Notably Bcash has chosen to do “Ethereum on Bitcoin” using a sidechain, rather ironic from a historical perspective)
Remember that there are lots of reasons to prefer OSI over TCP/IP, it's just that TCP/IP focused on interoperability and being useful.
Not so much. OSI actually sucked. You had to pay to read the specs. Their stream protocol (CLNS) was a straight copy of TCP. There was no defined API (see: BSD Sockets). The layers were arbitrary, following Conway's Law vs the number of committees in the ISO organization. In addition as you note there was no interop and production deployment was rare.
All of those are reasons to prefer OSI! Assuming you were a high-ranking bureaucrat in a national postal-telegraph-telephone organization.
I don't see a reason to think that Ethereum is definitely like tcp/ip rather than e.g. like operating systems, social networks, browsers, programming languages etc.
Ethereum is the best bet for the leader in the space (it already is) but some of the competitors bet on having different paradigms with different advantages rather than just lower fees e.g. ADA or SOL, and I don't see a reason for certainty that there'd be only 1 big success even if it's possible.
Ethereum is the best bet for the leader in the space (it already is) but some of the competitors bet on having different paradigms with different advantages rather than just lower fees e.g. ADA or SOL, and I don't see a reason for certainty that there'd be only 1 big success even if it's possible.
> Blockchain is like the early days of the internet, probably like 1998 right now. There were competitors to all the major internet protocols - TCP/IP, WWW, HTTP, but once everyone standardized the web flourished.
This just hurts to read. I get the point you are trying to make, but spewing non-factual comparisons isn't helping. 1998 is not "early Internet", more like 1970. By 1998, TCP/IP was entirely established; it was standardized in the 1980s. "WWW" is not a separate protocol, if you already list it with HTTP.
As to the overall comparison of Blockchain with "the Internet" that is so popular: I don't see it. Up until the recent modern age, the Internet was always something where demand--and desired applications--were vastly over capacity and capability. From the moment computers were networked, more people wanted to do more things over those networks, and both infrastructure and underlying technology had to grow to barely keep up (or, in fact, could not keep up--many long desired applications only became feasible in the 2000s or so). This does not resemble the history of Blockchains.
Equating something with the technology that completely changed the shape of the world is a very tall order. Electricity qualifies, probably the printing press does.
This just hurts to read. I get the point you are trying to make, but spewing non-factual comparisons isn't helping. 1998 is not "early Internet", more like 1970. By 1998, TCP/IP was entirely established; it was standardized in the 1980s. "WWW" is not a separate protocol, if you already list it with HTTP.
As to the overall comparison of Blockchain with "the Internet" that is so popular: I don't see it. Up until the recent modern age, the Internet was always something where demand--and desired applications--were vastly over capacity and capability. From the moment computers were networked, more people wanted to do more things over those networks, and both infrastructure and underlying technology had to grow to barely keep up (or, in fact, could not keep up--many long desired applications only became feasible in the 2000s or so). This does not resemble the history of Blockchains.
Equating something with the technology that completely changed the shape of the world is a very tall order. Electricity qualifies, probably the printing press does.
> From the moment computers were networked, more people wanted to do more things over those networks, and both infrastructure and underlying technology had to grow to barely keep up
It's not exactly the same, but this rings at least somewhat similar to what Ethereum is going through - the demand is pretty clearly there (people are willing to pay very hefty transaction fees to use it), and scaling solutions are just starting to launch that are enabling entirely new features, which I imagine will unlock another wave of demand.
It's not exactly the same, but this rings at least somewhat similar to what Ethereum is going through - the demand is pretty clearly there (people are willing to pay very hefty transaction fees to use it), and scaling solutions are just starting to launch that are enabling entirely new features, which I imagine will unlock another wave of demand.
> It's not exactly the same, but this rings at least somewhat similar to what Ethereum is going through - the demand is pretty clearly there (people are willing to pay very hefty transaction fees to use it), and scaling solutions are just starting to launch that are enabling entirely new features, which I imagine will unlock another wave of demand.
This is notable for confusing “demand” with speculation-fueled investment.
This is notable for confusing “demand” with speculation-fueled investment.
> and scaling solutions are just starting to launch that are enabling entirely new features, which I imagine will unlock another wave of demand.
That seems to me to be the opposite of what I wrote about the evolution of the Internet.
That seems to me to be the opposite of what I wrote about the evolution of the Internet.
This article is a good overview of DAOs but spends a lot of time on terminology and taxonomy, without necessarily painting a clear picture to someone not familiar with DAOs as to how they operate in the wild today and perhaps how they will in the future. I continue to believe that DAOs are one of the most disruptive technologies of the 21st century. The ability to coordinate humans and capital in a decentralized way is powerful and will be used for everything from for-profit initiatives to non-profit foundations. The pluggable, open-source nature of these systems means that DAO treasury management and governance will become more and more sophisticated with time. Eventually, many of us are going to end up taking jobs working for DAOs.
If the DAO has to plug back into existing legal/technical infrastructure (which includes almost everything outside of a few narrow cases like token market makers), there's not really any meaningful improvement from using a DAO over a traditional legal structure.
Of course there is. First of all, these systems will cause legal systems to change over time to adapt to their existence. Second of all, they're borderless, open, permissionless, pluggable systems for the coordination of human creativity and capital. There are thousands of ways to take advantage of that that far exceed what you can do with a Delaware C-Corp.
> borderless, open, permissionless
None of this matters if the actual real-world resources of a DAO are under the legislative power of a government. The DAO is no better off than a normal corporation with a charter.
None of this matters if the actual real-world resources of a DAO are under the legislative power of a government. The DAO is no better off than a normal corporation with a charter.
Sure it would. For one, you can have the capital and funding controlled by the DAO. Right? This model obviously works better for software or more abstract mostly-digital businesses such as banks or exchanges or insurance but it could still fundamentally improve the accountability of a physical-asset backed business. Look at Uber as an example of how a taxi company is managed despite the fact that Uber doesn't own any cars. All that was needed for Uber to exist was smartphones with GPS and the right incentive structure in place to keep people honest.
But it's clearly better than Uber, for example, if a decentralized ridesharing organization were to exist. Because in a DAO situation, the early drivers and customers of this DAO-Uber could have been rewarded with governance tokens that helped guide the development of the protocol. Maybe Uber would have been a less toxic corporation if it was basically owned by its drivers and customers. The DAO would have the treasury, the community, etc. It would have managed incentives based on on-chain voting.
This is how Uniswap works today. This is how MakerDAO works today. This is how Aave works today. We're already disrupting exchanges and banks. A lot of other business models will be disrupted in similar ways.
But it's clearly better than Uber, for example, if a decentralized ridesharing organization were to exist. Because in a DAO situation, the early drivers and customers of this DAO-Uber could have been rewarded with governance tokens that helped guide the development of the protocol. Maybe Uber would have been a less toxic corporation if it was basically owned by its drivers and customers. The DAO would have the treasury, the community, etc. It would have managed incentives based on on-chain voting.
This is how Uniswap works today. This is how MakerDAO works today. This is how Aave works today. We're already disrupting exchanges and banks. A lot of other business models will be disrupted in similar ways.
> you can have the capital and funding controlled by the DAO
Only the capital tied up in crypto tokens, which is probably very small compared to the capital tied up in offices or machines or whatever, which a government has control over.
> The DAO would have the treasury, the community, etc.
As far as I can see, none of this is easier to do on a DAO than with some more traditional method of organization.
Only the capital tied up in crypto tokens, which is probably very small compared to the capital tied up in offices or machines or whatever, which a government has control over.
> The DAO would have the treasury, the community, etc.
As far as I can see, none of this is easier to do on a DAO than with some more traditional method of organization.
> most disruptive technologies of the 21st century.
I couldn't agree more.
Though, as far as this article goes, I was looking for more of a playbook than high-level market analysis.
I couldn't agree more.
Though, as far as this article goes, I was looking for more of a playbook than high-level market analysis.
What is the argument? Why would we expect a version of Apple with decentralized governance to outperform the current Apple?
Because the governance structures of DAOs will be open source smart contracts they will be, in theory, easier to iterate upon and improve.
The DAO Apple would vote to make iPhones with replaceable batteries, which as we all know, is what the market actually wants.
It is an interesting question, but what would outperforming Apple look like? and on what timescale?
Is it being more profitable? Having happier workers? Making the sleekest shiny things? And are we thinking for the next year or the next hundred years?
Decentralized organisations seem (to me) to be prioritising resilience over efficiency. This seems like a long game. But perhaps shared ownership and pseudonymous employment will appeal to people. And perhaps sourcing workers anywhere in the world will lead to quick contacts building and fast deployment too. Or it could get caught up in bureaucracy, but then we can just fork the daos and vampire attack them!
There is a lot a vague murkyness in national law as to who is responsible/where is tax payed/what is it, but the idea of being able to click a button and i have a borderless organisation with voting systems and memberships all ready to go to anyone who wants to join in is pretty exciting. Think of the crazy possibilities of collisions happening, people to meet, ideas to be generated. If we increase the speed at which people, ideas, and capital can come together that can be explosive (and that could be good or bad). We can have groups of strangers round the world seeding startups of anonymous teenagers writing code after school, before the university lecturers and vcs ever get to them. Thats radical and revolutionary. DAOs are the most exciting thing going in crypto imo.
Is it being more profitable? Having happier workers? Making the sleekest shiny things? And are we thinking for the next year or the next hundred years?
Decentralized organisations seem (to me) to be prioritising resilience over efficiency. This seems like a long game. But perhaps shared ownership and pseudonymous employment will appeal to people. And perhaps sourcing workers anywhere in the world will lead to quick contacts building and fast deployment too. Or it could get caught up in bureaucracy, but then we can just fork the daos and vampire attack them!
There is a lot a vague murkyness in national law as to who is responsible/where is tax payed/what is it, but the idea of being able to click a button and i have a borderless organisation with voting systems and memberships all ready to go to anyone who wants to join in is pretty exciting. Think of the crazy possibilities of collisions happening, people to meet, ideas to be generated. If we increase the speed at which people, ideas, and capital can come together that can be explosive (and that could be good or bad). We can have groups of strangers round the world seeding startups of anonymous teenagers writing code after school, before the university lecturers and vcs ever get to them. Thats radical and revolutionary. DAOs are the most exciting thing going in crypto imo.
I'd say you could gain some efficiencies. I think the same governance structure that Apple has can be implemented for the most part in a DOA (e.g. shareholder voting, board assignments, CEO hiring, dividend distributions). The hard part is interfacing with physical world legal system. But even then the DAO can agree to accept jurisdiction X. Then we can do taxation and accounting in the clear. Obviously far out. But not impossible.
So, the company would have the same governance structure, only more efficient? How exactly it would be more efficient, you don't say.
Voting, and dividend distribution today requires intermediaries (e.g. broker). Those can be direct.
> Voting, and dividend distribution today requires intermediaries (e.g. broker). Those can be direct.
Issuing dividends in a cryptocurrency would disintermediate brokers and doesn’t require a DAO. Nor does “let’s upgrade our voting systems” require a DAO.
Issuing dividends in a cryptocurrency would disintermediate brokers and doesn’t require a DAO. Nor does “let’s upgrade our voting systems” require a DAO.
It does require a DAO. You need to know that no one party has control over the funds. Or they can screw the community. If the community is distributed the token in a fair way (and they'll know, since this is all blockchain and it's all visible), they can also inspect the code that protects the funds from being spent. So you can encode the mechanisms that protect the disbursements, and you can do this in a provable way. It's not some SQL database that's controlled by an admin key. It's not a bank account that the CEO has control over. All the funds are on-chain, in a smart contract, protected by code and cryptography. That aligns incentives in a powerful way that you can't replicate with stock ownership. You can't replicate it with a voting button on the Robinhood app. It is a fundamental shift in capital management and human coordination.
GP asked how a company like Apple would be made more efficient by becoming a “DAO”. A DAO acolyte — miketery is assuredly invested in a closely linked cryptocurrency — then opined Apple would save money on dividend distributions by becoming a DAO. And that shareholder voting would become more efficient. Yet neither thing requires having a DAO, assuming efficiencies are even possible to obtain that way.
I’m sorry, but I don’t see how what you posted is relevant to this discussion.
I’m sorry, but I don’t see how what you posted is relevant to this discussion.
I'm confused... what do you mean no one party has control over the funds? Surely the whole point of investing in a company is to transfer control of the invested funds to the company so that the company can do what it intends to do. Otherwise what are we talking about here?
The funds are in a smart contract on the blockchain. They are protected by code which ties the result of on-chain votes to the release or emission of funds. DAOs mean the users, the token holders, get to participate in the company governance directly. They get to post in forums, create campaigns for changes to protocols, and vote on whether to implement new proposals and how much funding to allocate to those proposals. Maybe that's hiring a new developer. Maybe that's launching a new feature. Maybe it's incentivizing growth through marketing or other grassroots strategies. It's incredibly flexible.
I see... so a DAO is corporation where shareholders are in charge of managing the company. It has no professional management, instead it's all managed by the shareholders democratically. If this is it, DAOs are probably a bad idea in most circumstances. There are good reasons why management is separated from ownership in modern corporations.
The only efficiency is fleecing suckers faster.
DAOs are just unincorporated partnerships with anonymous partners.
DAOs are just unincorporated partnerships with anonymous partners.
[deleted]
I don't know why you would pick Apple. They are a hardware company. I'm not saying that the introduction of DAOs will be the death of all corporations. I could make a much stronger argument for a decentralized social network coordinated by a DAO, so I would make the case for a DAO-controlled Twitter, Reddit, or Facebook (which are software businesses). That's not to say that DAOs couldn't be used for a more physical business but software is certainly a more natural fit. Uniswap, for example, which is a decentralized version of Coinbase or NYSE, has something like 7 or 8 employees, is trading $2B a day in value, and has $8.5B in liquidity available for exchange. This is for a young startup less than 2 years old run entirely on smart contracts. Not bad.
https://info.uniswap.org/home https://cryptofees.info/
https://info.uniswap.org/home https://cryptofees.info/
Is there anything provided by DAO that makes Uniswap runnable by fewer people? How many people would they need if they didn’t run like you say?
It's just regulatory arbitrage.
What uniswap is doing is quite likely illegal under current laws.
Please note: This is an opinion of some legal scholars on their situation. I am not making any moral or ethical judgements here, couldn't care less.
What uniswap is doing is quite likely illegal under current laws.
Please note: This is an opinion of some legal scholars on their situation. I am not making any moral or ethical judgements here, couldn't care less.
Yes, the DAO has aligned the community around Uniswap. By distributing governance over the protocol to their early users and community, they've grown to the size that they have. The liquidity providers and the traders have ownership of Uniswap. They now have a $7.5 billion treasury at their disposal, that they get to vote on how to spend based on their percentage of UNI token holdings.
So.. they capitalized on the hype around the technology and crowdfunded? From the past comment, I was hoping there’s any benefit to DAO itself that’d make an enterprise this size easier to run - you could technically achieve the same with a kickstarter campaign or a gofundme?
Of course, the obvious orders-of-magnitude in value would be different, but that’s inherent to crypto’s inflation, not really due to any virtue of DAO?
No, they didn't crowdfund their token. They gave away their token to the early adopters, the users, and the liquidity providers on their platform: https://acceptingcrypto.net/uniswap-token-launch-uni/
They were already live for 2 years by the time they gave away their governance token. Even if you had just done one transaction with Uniswap, you received some UNI.
Now, those customers and those liquidity providers are aligned with the future success of Uniswap. They also get to vote on how to spend the $7.5B treasury. Pretty cool model. It's fundamentally different than anything that's come before it. Pay attention to DAOs.
They were already live for 2 years by the time they gave away their governance token. Even if you had just done one transaction with Uniswap, you received some UNI.
Now, those customers and those liquidity providers are aligned with the future success of Uniswap. They also get to vote on how to spend the $7.5B treasury. Pretty cool model. It's fundamentally different than anything that's come before it. Pay attention to DAOs.
How is this any different from a corporation?
At least with corporations you have legal recourse, minority shareholder protections, well developed body of law, and so on.
At least with corporations you have legal recourse, minority shareholder protections, well developed body of law, and so on.
It also so happens that the early users just so happen to be developers themselves, and hold a
Yes, you can achieve the same with crowdfunding/crowdsale - but then you have a corporation and regulations, and the pesky anti-dilutive and other protections of minority shareholders and so on.
Governance token should be just called what it is - equity.
Yes, you can achieve the same with crowdfunding/crowdsale - but then you have a corporation and regulations, and the pesky anti-dilutive and other protections of minority shareholders and so on.
Governance token should be just called what it is - equity.
Uniswap is a pretty amazing story about how much operational efficiency can be gained with this technology. I'd say they're doing WAY better than "not bad" :).
It's easy to do great when you can skirt any and all regulations.
That's the story of this entire space.
What legal protections exist there for minority shareholders in the so-called DAO?
That's the story of this entire space.
What legal protections exist there for minority shareholders in the so-called DAO?
I did a thread on the history of cryptocurrencies today. It explains the history of DAOs, their benefits and some future aspects we are likely to see:
https://mobile.twitter.com/moo9000/status/138957146600232551...
https://mobile.twitter.com/moo9000/status/138957146600232551...
DAOs that will be incorporated and so on.
Assuming personal liability by engaging into a DAO in personal capacity is just dumb.
Assuming personal liability by engaging into a DAO in personal capacity is just dumb.
I really enjoyed DaoHaus who make it easy to spin up a moloch dao in a few clicks -> https://app.daohaus.club/summon
and cheap to run on xdai (until rollups arrive then we can move there and get eth security too!)
Also would recommend this article on dao relations too: https://medium.com/primedao/conceptual-models-for-dao2dao-re...
and cheap to run on xdai (until rollups arrive then we can move there and get eth security too!)
Also would recommend this article on dao relations too: https://medium.com/primedao/conceptual-models-for-dao2dao-re...
The worst part about reading these articles is how you can immediately tell they’re an advertorial for Ethereum. You’re one sentence into it, and you can already tell the target market is your disposable income. It makes you feel hustled. Like the internet equivalent of a one-room shop in a third world country.
I lost a lot of faith in DAO and the whole code as contract when the proponents abandoned it as soon as they lost substantial money. When someone found a way to make a lot of money from the DAO contract, instead of congratulating them for using the letter of the contract to make money, the owners of the DAO suddenly started calling it theft and hacking and changed the protocol to make recover their money.
Basically, DAOs are just a way of trading a well established legal system to settle disputes for one where whoever controls the protocols settles disputes in their favor.
Basically, DAOs are just a way of trading a well established legal system to settle disputes for one where whoever controls the protocols settles disputes in their favor.
The blockchain always runs under social consensus. It is here for people not machines. Code isnt law, never has been, never will be. Because it would be insane to live in that world.
When bitcoin accidentally overflowed and created 184billion bitcoin, it was forked away a few hours later because that isn't what the majority agreed upon. Same with ethereum, the majority decided something and it becomes the agreed state, as it does with every block. Its strange we still have to explain this 5 years later.
When bitcoin accidentally overflowed and created 184billion bitcoin, it was forked away a few hours later because that isn't what the majority agreed upon. Same with ethereum, the majority decided something and it becomes the agreed state, as it does with every block. Its strange we still have to explain this 5 years later.
A fairer comparison would be to that of MtGox, three years earlier, in which approximately 10X as much money was stolen from early Bitcoiners, but which did not result in any clawback of funds.
Conversely, in the “billion bitcoin bug” situation, no funds were stolen from anyone — 51% of mining power merely chainforked to a non-buggy version of the network. FWIW an identical situation could happen today on Bitcoin via a 51% attack, but it probably would be rejected in exactly the same way and for exactly the same reasons.
In both the MtGox and Ethereum DAO incident, the underlying network was functioning normally; but only one resulted in a clawback of funds from a sovereign entity. Notably, Ethereum had been advertising itself under the banner of “unstoppable applications” up to that point. Seemingly it’s a case of “unstoppable applications, not unstoppable applications”.
Conversely, in the “billion bitcoin bug” situation, no funds were stolen from anyone — 51% of mining power merely chainforked to a non-buggy version of the network. FWIW an identical situation could happen today on Bitcoin via a 51% attack, but it probably would be rejected in exactly the same way and for exactly the same reasons.
In both the MtGox and Ethereum DAO incident, the underlying network was functioning normally; but only one resulted in a clawback of funds from a sovereign entity. Notably, Ethereum had been advertising itself under the banner of “unstoppable applications” up to that point. Seemingly it’s a case of “unstoppable applications, not unstoppable applications”.
The DAO hack was "corrected" because it was big & loud, but countless others (esp small-time players) have been wronged without resolution. That seems to be a problem with the DAO... there's no mechanism to resolve small-time disputes if it doesn't rise to the consciousness of the masses (even if they would agree with such resolutions if pressed). By way of analogy: It's kind of like escalating Google customer service tickets through HN frontpage exposure.
Our existing legal system "solves" this through the Judicial branch of government. The social consensus (Constitution) created a decentralized (but hierarchical) way to remediate wrongs both big & small. What is the DAO equivalent?
Our existing legal system "solves" this through the Judicial branch of government. The social consensus (Constitution) created a decentralized (but hierarchical) way to remediate wrongs both big & small. What is the DAO equivalent?
An Ethereum user makes up a bunch of terminology about DAOs and tries to assign the "DAO" label to things that are not really DAOs, all in a bid to "prove" an unsubstantiated belief that Bitcoin is "culturally centralized" and Ethereum is "culturally decentralized," whatever that means. Saved you a click.
I'm surprised to see the comments (at least at time of reading) are actually pretty positive, given the general distaste for cryptocurrency on hacker news. This reaffirms my view that the average HN commenter doesn't actually understand the innovations that are happening in the world of crypto, and merely parrots simple negative memes to get upvotes and reaffirm their belief in how it's a ponzi, or killing the environment, or enabling drug dealing and terrorism, or whatever flavor of the week thing it is. Thus when a post about a cool crypto use case (DAOs) pops up, people don't go for the immediate crypto = bad memes.
It kinda reminds me of that time period where the media was perpetuating the meme that Bitcoin = bad, blockchain = good. Which missed the entire point, because there is simply no way to separate the two. I think a lot of it comes from the moral dilemmas in the world of finance and it making people uncomfortable and prone to virtue signaling via negative comments. Like it or not, the financial system is what allows the efficient allocation of capital for all the innovations people around here love so much. It may be a slimy immoral world, but it's currently the best engine we have to power the world. The dream with crypto is to build a better financial engine to power global trade and innovation.
It's a lot harder to understand a fundamental global revolution than it is to bash it. I'd encourage everyone here to get more familiar with the world of crypto, because it's not going away and you're going to look back and feel very silly if you keep calling it tulip mania.
It kinda reminds me of that time period where the media was perpetuating the meme that Bitcoin = bad, blockchain = good. Which missed the entire point, because there is simply no way to separate the two. I think a lot of it comes from the moral dilemmas in the world of finance and it making people uncomfortable and prone to virtue signaling via negative comments. Like it or not, the financial system is what allows the efficient allocation of capital for all the innovations people around here love so much. It may be a slimy immoral world, but it's currently the best engine we have to power the world. The dream with crypto is to build a better financial engine to power global trade and innovation.
It's a lot harder to understand a fundamental global revolution than it is to bash it. I'd encourage everyone here to get more familiar with the world of crypto, because it's not going away and you're going to look back and feel very silly if you keep calling it tulip mania.
Okay please share what made it click to you as a "fundamental global revolution"
For me it was when I finally understood that Ethereum is a decentralized, globally accessible API, that anyone can extend, nobody can take down, and it's all driven by its builtin currency that incentivizes good behavior.
Honestly, with all of the complaints on HN about companies revoking API access, and any other of the multitude of complaints about centralized solutions, you would think the HN crowd would be onboard.
Honestly, with all of the complaints on HN about companies revoking API access, and any other of the multitude of complaints about centralized solutions, you would think the HN crowd would be onboard.
How decentralised and democratic is the steering and decision making in reality?
Nobody elects the mining pool operators, nobody elects the people owning the mining hardware and not enough people elect the people who are steering the various crypto foundation.
If a crypto blows up and becomes essential to a countrys economy the vast ordinary citizens will only participate in it by earning money and spending it for their needs.
For those people you just replaced a somewhat accountable government, with somewhat predictable financial policies and transparency processes with one nobody knows anything about which is perhaps operating far away and in a different culture/country.
For many people in the world that'll mean less influence on the decision making process.
In other words: There is no fundamental reason to trust the Ethereum Foundation more than the ECB or the Fed.
Nobody elects the mining pool operators, nobody elects the people owning the mining hardware and not enough people elect the people who are steering the various crypto foundation.
If a crypto blows up and becomes essential to a countrys economy the vast ordinary citizens will only participate in it by earning money and spending it for their needs.
For those people you just replaced a somewhat accountable government, with somewhat predictable financial policies and transparency processes with one nobody knows anything about which is perhaps operating far away and in a different culture/country.
For many people in the world that'll mean less influence on the decision making process.
In other words: There is no fundamental reason to trust the Ethereum Foundation more than the ECB or the Fed.
> Okay please share what made it click to you as a "fundamental global revolution"
There's a lot going on right now in the decentralised finance space. A couple of things that interest me:
1. Payments. Stable coins (backed by collaterals) like DAI (by MakerDAO), USDC (by CENTRE aka Coinbase, CirclePay et al), Libra (by Facebook, Shopify, Uber et al) have a potential to replace the current payments system and those rent-seeking middle-men. In DAI's case, the currency is truly autonomous and decentralised, so there's a good chance it ends up uncensorable and unregulatable. USDC and Libra offer a great way for folks not in high inflation countries with weak currencies to lock up cash-in-hand in USD. Libra is poised to see a broad adoption once Facebook makes it common place on Instagram and WhatsApp, where most of the commerce is moving to. It remains to be seen how Stellar ends up doing in response to Libra.
2. Banking. Banks, like eco, dharma, and onjuno, built on top of Ethereum altcoins can offer higher interest rates than traditional banks.
Other things I'm excited about and looking forward to:
1. Anonymous assets. Monero enables truly anonymous transactions. It isn't a stable coin, so that's a bummer. MobileCoin, which I believe is built on Stellar, is private but I don't think its anonymous or stable.
2. Web3. Storage (FileCoin, Sia), Compute (Golem, ElastOS), Network (Orchid, Mysterium), Content (IPFS)... may yet emerge as a credible distributed alternative to the current centralised cloud computing model.
3. Inter-chains. Today, a lot of innovation is concentrated on Ethereum, because of its versatility. Upcoming entrants like Polygon, Polkadot, and Cosmos would make inter-chain interactions much smoother. This has potential to upend the current status-quo and probably give rise to many more applications previously not possible.
Read also: https://blog.coinbase.com/what-will-happen-to-cryptocurrency...
There's a lot going on right now in the decentralised finance space. A couple of things that interest me:
1. Payments. Stable coins (backed by collaterals) like DAI (by MakerDAO), USDC (by CENTRE aka Coinbase, CirclePay et al), Libra (by Facebook, Shopify, Uber et al) have a potential to replace the current payments system and those rent-seeking middle-men. In DAI's case, the currency is truly autonomous and decentralised, so there's a good chance it ends up uncensorable and unregulatable. USDC and Libra offer a great way for folks not in high inflation countries with weak currencies to lock up cash-in-hand in USD. Libra is poised to see a broad adoption once Facebook makes it common place on Instagram and WhatsApp, where most of the commerce is moving to. It remains to be seen how Stellar ends up doing in response to Libra.
2. Banking. Banks, like eco, dharma, and onjuno, built on top of Ethereum altcoins can offer higher interest rates than traditional banks.
Other things I'm excited about and looking forward to:
1. Anonymous assets. Monero enables truly anonymous transactions. It isn't a stable coin, so that's a bummer. MobileCoin, which I believe is built on Stellar, is private but I don't think its anonymous or stable.
2. Web3. Storage (FileCoin, Sia), Compute (Golem, ElastOS), Network (Orchid, Mysterium), Content (IPFS)... may yet emerge as a credible distributed alternative to the current centralised cloud computing model.
3. Inter-chains. Today, a lot of innovation is concentrated on Ethereum, because of its versatility. Upcoming entrants like Polygon, Polkadot, and Cosmos would make inter-chain interactions much smoother. This has potential to upend the current status-quo and probably give rise to many more applications previously not possible.
Read also: https://blog.coinbase.com/what-will-happen-to-cryptocurrency...
Have you SEEN the bitcoin price? I'm making so much money!
It just has to help bring in enough new suckers to allow the recipients of ethereum's huge pre-mine (now valued at about one quarter trillion dollars) to exit more of their positions without collapsing the price.