This is definitely getting some attention. I am very interested to see the first DAO running be worth more than the company (slock.it) that built it:)
This is surely going to be an amazing experiment to watch and, for me, participate in. SAFE projects can only benefit from this advance. @19eddyjohn75 I can’t agree more. The world is ready for decentralization…even more I think than DAOhub.org even anticipated.
I missed most of the DAO hype while being on vacation, but the above article convinced me I shouldn’t have any FOMO on this one.
Some very great points in this article. I couldn’t agree more.
My opinion is that The DAO will be DAO (Dead on Arrival). The theory of jointly deciding to fund efforts will face the reality of individual self interest, politics, and economics. There will be rapid defecting (splitting) as people realize there is little to be gained by banding together under the structure of The DAO and much to be lost.
It might not happen at first, but over time the Etheruem community will learn the hard way what the BitShares community has already discovered. Creating social systems to jointly fund development of projects and investments is challenging. Ultimately, technology can only aid in communication, it cannot fix the fundamental incompatibilities between individual self interest and community decision making.
I agree. I only read the basics but see little in this project that is actually different.
The headlines are incorrect about it receiving $120m investment too. It didn’t get a cent in USD, it was all in ETH, and that’s a big difference. ETH itself was largely funded with bitcoin. This makes it two volatile commodities away from USD and the actual amount of USD available at this stage far far less. It might be realised, or it might not.
I think it was attractive to ETH holders, and that doesn’t necessarily bode well for ETH. I can’t help but remember Mastercoin and the MaidSafe crowdfunding. It’s different, but also has some similarities, and these are being ignored entirely so far.
I had the same idea as well. I asked myself, why the need for a separate coin? Why not just use ETH in a contract the moment a project does a funding. I wrote this on reddit this morning:
I like the idea and experiment, but what I think is that it’s overvalued as a whole and that the DAO is way to complicated. I used to vote on a counterparty project and it was awful, consuming more time than most people wanted. Maybe it was the interface. So I think this whole experiment with democratically owned projects will fail, but that’s why we need an experiment. So if slock.it created their own simple DAO without the need for a new coin that would’ve been a great experiment. But in this case, we see a lot of confusing terms about who is what and doing what, and 100 million in a contract. I would say slock.it could do great with something like 5 million for the coming years, which means that over 95% of the money in The DAO is just dead speculative money. And when people start to feel this, and the DAO tokens are on several exchanges, we might see people taking out their money crashing the coin. I hope it won’t happen for them, but I think it will (I won’t take a position on this, not short or long).
Now I might be wrong if this project goes to something like 600 million when it’s on exchanges 
but this is how I see it.
That might happen, but I see a somewhat different trajectory. Let’s say DAO raises $200 million in current Ethereum value. Good for them, it would make a huge budget for future development. Lots of champagne will be popped, and developers hired, office rooms rented, etc. Then Ethereum returns to the downtrend it was in, which I projected before the DAO crowdsale hit the market, at roughly $3 per Ethereum in a few months. 75% of the budget will then be gone, only leaving $50 million in budget. Stress and disbelief will hit the DAO board rooms, and the price of DAO will go much lower, instead of higher. Besides the use cases that I don’t see, or see fail (“it cannot fix the fundamental incompatibilities between individual self interest and community decision making” is a really nice summary), also the connection to a bearish Ethereum price is holding me back to do any investment in DAO.
Of course I wish them all the luck of the world, but I’m just not joining the party…
I think exchanges won’t peg the DAO coin to ETH on their markets. I guess it’s gonna be a DAO/BTC pair, just like with MAID. The only thing is, the creation of new coins is pegged right now to ETH, but what happens when we have 200 million in that contract and people are able to take some out?
The last two points relate to the DAO Token Holder using the Ethereum Wallet to ‘burn’ their DAO tokens while retrieving their portion of unspent ETH as part of a process called 'a split.’ This offers both security and a deflationary model.
Looks like you burn DAO coins when you get ETH out.
I agree
or the opposite happens and they figure out a way to make a dollar out of 15 cents…
that’s a dime and nickel
maidsafe also didn’t get 1 US cent … what’s that verse in the christian Bible about casting stones?
you might be wrong, but probably you will be right and i will have more reason to lament about selling my 10000 eth when i need some US dollars for about a month… and not buying back in before the big pump lol
c’est la vie
Sure, several trading pairs for DAO will be implemented on many exchanges I’m sure, but that’s not what I meant. All deposits done now are in Ethereum, and in Ethereum only. And the Ethereum value, making up 100% of the Daohub budgets for future development, will drop dramatically in the upcoming months I’m quite sure. It’s certainly not the end of the world for them, but it will limit them nevertheless.
maidsafe also didn’t get 1 US cent … what’s that verse in the christian Bible about casting stones?
True, but what’s your point? My point still stands.
I’m more interested in how the successful proposals handle the reward tokens. I learned that that successful ventures that return a profit will not only replenish the coffers of the DAO but also yield rewards to the holders of the reward token specific to that proposal. Also very interested in learning how the DAO 2.0 with ‘liquid democracy’ will function.
I think this thing is going to fail hard.
Leadership can be a expensive problem for organizations, but lack of leadership even more so.
You can see how well decentralized leadership works right now with the Bitcoin civil war.
I also find it funny that the top 1% owns 70 percent or so of the tokens so far. Idealism and wishful thinking can take you so far, but reality is reality and math is math. DAO’s will not likely be the utopia folks have been promoting them as.
It will be fun to watch how it unfolds. I am a big skeptic.
DAO is still not really understand by a lot of people
It’s simply because it’s so new, potential users have to imagine the possibilities (what the apps will do, and how each will contribute to the DAO ecosystem), as opposed to seeing what it is.
Having said that, I think you hit the nail on the head being a mix of accounting, Blockchain and voting.
It’s honestly getting to the point where there’s so much diversity in this space, anyone can just decide on what project speaks to them whether by morals or business needs and just engage, not worrying too much about missing out on another project.
Very interesting article. Thank you for sharing. I think we will learn a lot from where the DAOHub ends up. The idea of a pool of democratically controlled capital doesn’t sit well with me. I can’t put my finger on why, I just know it doesn’t sit well with me at the moment. What I would rather see (and what I’m proposing with The Crowd Found Hub ecosystem) is each backer being able to personally drive the direction of projects they want to back. Perhaps the DAOHub will figure things out and perhaps they will not. I’m none-the-less excited to learn from what happens. Here’s to the future… 
@chadrickm Maybe because it is oligarchic rather than democratic? It’s a very odd structure, and I can’t see any reason to think it will work. Amazing that it is getting so much ETH unless people are desperate to diversify. I don’t follow Ethereum enough to comment on that so I find it inexplicable.
I don’t like ethereum approach, direct democracy platform. DAO supports the philosophy of direct democracy as well. Chadrickm, I’m with you. It doesn’t sit well with me. It contains voting system. That itself I do not like.
I am building a system that does NOT entails voting. I think we’re on the same page. Money talks.
Another criticaster.
All in all I think we as a decentralized community will benefit from this experiment no matter the outcome. I am definitely taking notes and learning from our fellow like minded friends.