
Call for a Temporary Moratorium on “The DAO” - jackgavigan
https://docs.google.com/document/d/10kTyCmGPhvZy94F7VWyS-dQ4lsBacR2dUgGTtV98C40/mobilebasic
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ChuckMcM
Oddly enough, this has been the single most useful piece for me in
understanding what the folks who created the DAO sought to achieve. It also
points out some problems that, no doubt, can be rectified in a future
instance.

~~~
street
The folks who created it (slock.it) are planning to be the first proposal
voted on. Now you might understand why the incentives are so incredibly
slanted towards yes votes (and even more so on the first vote, given the
extraPremium or whatever the pyramid aspect of the initial price is called).

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drivingmenuts
If the people behind a DAO elect to commit some illegal act, who's
responsible?

The DAO itself is a dumb object, incapable of moral or ethical reasoning,
while the people behind it are not.

However, the people behind the DAO are effectively anonymized, are they not?
The entity which commits the act is culpable, but the law usually goes after
accomplices or enablers as well.

Unless I'm thinking about this all wrongly, this opens up a really messy can
of worms and we now live in a world where you have to watch your back at every
turn.

Which isn't to say it wasn't already like that, but it's been turned up to
eleven now.

As an example:

DAO[A] is created by individuals for the purpose of doxxing one of the
founders of slock.it. DAO[B] answer the call and gather the information
providing it to DAO[A] who contracts with DAO[C1] to publish the information
on a server paid for by DAO[C2], who then does so.

The founder and/or his family (all the founders of slock.it are male,
apparently) are now potentially exposed to harm.

Is this a likely scenario? Do we now have to have a Rule 35 that says if
there's a thing that can be done, a DAO will exist for it?

~~~
street
The people in the DAO partnership are responsible. Just like they would be in
a partnership that doesn't have a DAO managing their money.

~~~
chii
when you're a shareholder of a company which commits an illegal act, you're
not responsible (limited liability or something?) - why would it be any
different with DAO?

~~~
street
First: if you vote to do something illegal as a shareholder, then you can be
held responsible. Even in a limited liability corporation. [0]

Second: it's not a company: it's a partnership, by my interpretation. By law
(in all countries I know of) partnerships by default do not have limited
liability. If you want limited liability, you're going to need to set up a
proper corporation/LLP, file the proper paperwork, adhere to various laws,
keep books, etc. Otherwise, in the US you are probably jointly and severally
liable.[1]

The defense "The DAO did it" wouldn't work, since people are voluntary members
of the DAO, and presumably voted/stayed in when it got to the point of
criminal acts.

The legal system is not a machine you can bypass with magical internet code.
(As opposed to a legal system as a Smart Contract running on Ethereum,
perhaps.)

[0]
[https://en.wikipedia.org/wiki/Piercing_the_corporate_veil](https://en.wikipedia.org/wiki/Piercing_the_corporate_veil)

[1]
[https://en.wikipedia.org/wiki/Uniform_Partnership_Act](https://en.wikipedia.org/wiki/Uniform_Partnership_Act)

------
will_brown
Maybe the first two investment proposals of the DAO will be:

1\. A company comprised of lawyers and coders to review the legitimacy,
legality, enforceability of DAO smart contracts; and

2\. An insurance company to insure all DAO contracts for the instances the
contracts are faulty and breached.

~~~
wmf
Pretty close; there's already a $1.5M proposal around securing The DAO:
[https://blog.slock.it/dao-security-a-proposal-to-
guarantee-t...](https://blog.slock.it/dao-security-a-proposal-to-guarantee-
the-integrity-of-the-dao-3473899ace9d)

~~~
will_brown
It seems as though some of the principles involved with the creation of the
DAO are asking for investment to build a security framework on top of the DAO
to secure it from some types of known potential attacks.

Clearly I don't understand the scope of the proposal but my gut thinks either
this group should have built security into the system from these known
potential attacks before raising $150M.

Alternatively, what I envisioned with my proposals, the security measures
should simply be included within the individual contracts. For example: This
very security proposal is asking for 125,000 ETH, the contract should provide
for a identifiable review team (say 1 well know coder and 1 well known lawyer)
and an insurer for the contract their fees will be built into the contract. If
the contract meets its investment goal, before the funds are released the
reviewers must approve the contract and provide the investors a summary of the
terms. If approved the insurance company will guarantee the investors money is
not lost due to either fraud or some bug/error in the code causing a loss.

Edit: Submitted a DAO proposal to fund an insurance company to review and
insure smart contracts on the DAO in the instance of bug/error in the code.

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jamespitts
This is game theoretics at its best: A new game with rules that are executed
reliably, huge amounts of money, huge numbers of voting participants.

I think that the most reasonable thing will happen over the long run, but in
the meantime there will be some drama. Thankfully the community and leaders
are well-prepared and well-equipped.

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reddytowns
The DAO should allow the owners more control of funding. Instead of a single
"creation period" with arbitrary fixed rules to fund The DAO, new funding
rounds should be possible, that can be voted on as any other proposal.

This would prevent The DAO from running out of funds to support a long term
but seemingly viable project midway, either due to splits/withdrawals or
because of unexpected additional costs.

It also would allow a group of investors to split from The DAO and form a more
private organization. They could decide not to have an initial "creation
period", thereby preventing outside investors from getting in and upsetting
their shared vision. They could also then have a funding round which
guarantees they still own more than 50% of their DAO.

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onetwotree
I'll just be here with my popcorn as this plays out :-D

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sethammons
Here I was, expecting a criticism on Data Access Objects.

~~~
codeulike
Data Access Objects really have gone too far when you think about it.

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newobj
I'm sorry. Can someone ELI5 how I buy into the DAO in the first place? I know
if I can't figure out how to buy in I shouldn't own any, but humor me.

~~~
um_ya
Not worth it. Most people are splitting their shares to get out now.

~~~
mst
I, er, have not successfully found anything about that on google. My
apologies, but may I dear lazyweb you for a link or three to that effect?

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planetjones
Thank you - this paper is the clearest introduction to what the DAO is and
what it is trying to achieve that I have read. I found the official website
for the DAO confusing and information light.

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mikek
Can someone ELI5 the DAO for me? This is the first I've heard of it and it
sounds important.

~~~
gjm11
No. The DAO that can be explained like you're five is not the true DAO.

~~~
bfuller
Is this the first verse of the DAO te Ching?

~~~
gjm11
That was the idea, yes.

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homero
I'll be here holding my bitcoin with no worries

