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Ethereum Dao

Funds Stolen From The Dao One Year Ago Would Be Worth $1.35bn Today

Funds Stolen From The Dao One Year Ago Would Be Worth $1.35bn Today

An important milestone has occurred over the past 24 hours. It is the one-year anniversary of the infamous implosion of The DAO. As most people will recall, this project raised over $125m via crowdfunding and promptly saw funds being drained due to a smart contract bug. This event is now one year behind us, and it is important to look back at this defining moment in Ethereum history. One year ago, things were looking rather problematic for the Ethereum ecosystem. Its powerful technology allows for some innovative business models, including decentralized autonomous organizations. One project, known as The DAO , decided to use this business model to change the world as we know it. The DAO hosted a massive ICO, and raised quite a lot of money in the process. In fact, it became the worlds largest crowdfunding project to date. Unfortunately, The DAO also attracted a lot of negative attention. It did not take all that long for assailants to discover a major flaw in the projects smart contract code. As a result, individuals were able to drain money from The DAO, which became a rather pressing problem. Several attempts to drain funds were successful, and it became evident The DAO was no longer sustainable. In fact, the project ceased to exist some time ago. All native DAO tokens were ultimately converted back into Ethereum. During these hacking attempts, around $60m worth of Ether was eventually stolen from The DAO. Such a high amount posed a major problem for investors, and a lot of people wanted to find a solution. Eventually, that solution materialized in the Ethereum hard fork, which also spawned Ethereum Classic . Not everyone agreed with invalidating transactions associated with The DAO funds being drained, and a part of the network split itself off from the rest. Fast f Continue reading >>

Democracy Dao | Ethereum Frontier Guide

Democracy Dao | Ethereum Frontier Guide

So far you have created a tradeable token and you successfully distributed it among all those who were willing to help fundraise a 100 ethers. That's all very interesting but what exactly are those tokens for? Why would anyone want to own or trade it for anything else valuable? If you can convince your new token is the next big money maybe others will want it, but so far your token offers no value per se. We are going to change that, by creating your first decentralized autonomous organization, or DAO. Think of the DAO as the constitution of a country, the executive branch of a government or maybe like a robotic manager for an organization. The DAO receives the money that your organization raises, keeps it safe and uses it to fund whatever its members want. The robot is incorruptible, will never defraud the bank, never create secret plans, never use the money for anything other than what its constituents voted on. The DAO will never disappear, never run away and cannot be controlled by anyone other than its own citizens. The token we distributed using the crowdsale is the only citizen document needed. Anyone who holds any token is able to create and vote on proposals. Similar to being a shareholder in a company, the token can be traded on the open market and the vote is proportional to amounts of tokens the voter holds. Take a moment to dream about the revolutionary possibilities this would allow, and now you can do it yourself, in under a 100 lines of code: contract token { mapping (address => uint) public coinBalanceOf; function token() { } function sendCoin(address receiver, uint amount) returns(bool sufficient) { } }contract Democracy { uint public minimumQuorum; uint public debatingPeriod; token public voterShare; address public founder; Proposal[] public proposal Continue reading >>

Secs Verdict On The Dao: What It Means For Token Sales

Secs Verdict On The Dao: What It Means For Token Sales

SECs Verdict On the DAO: What It Means for Token Sales It is clear that sales into the US must be conducted pursuant to US securities laws.Keywords: SEC, ICO, the DAO, Bitcoin. The SEC published a report into its analysis of the ICO The DAO and whether it contravened US securities law. The DAO was a virtual organization functioning like an investment fund, built on the Ethereum Blockchain. The DAO ICO was one of the first and largest in the industry and received widespread criticism. To compound, or perhaps to simplify, matters, before it was able to fund any projects a major hack on the DAO occurred with many millions of dollars worth of digital currency stolen. The SECs report provides important guidance for anyone involved in, or considering, a token sale as a funding mechanism. Perhaps the most important sentence in the document reads: Based on the investigation, and under the facts presented, the Commission has determined that DAO Tokens are securities under the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act). At issue here is whether the DAO tokens meet the requirements of the Howey test as a formal security, and in this case yes the SEC deemed they did. This is likely due to the nature of the DAO, which was always intended to be a profit generating entity that rewarded token holders with a share of profits generated from the projects in which it would invest. The DAO was also promoted as a for profit entity. As Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act, makes clear - a security includes an investment contract. An investment contract is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the entrepreneurial or managerial effort Continue reading >>

Why The Dao Ethereum Is Revolutionary

Why The Dao Ethereum Is Revolutionary

By Adam Hayes, CFA | May 16, 2016 2:02 PM EDT On April 30, 2016, a brand new organizational structure was created: the decentralized autonomous organization, or DAO. This organization, built entirely of smart contracts encoded into the ethereum blockchain has already raised over $41 million, making it the second most successful crowd-funded project to date. What is the DAO and why is it revolutionary? The blockchain is a shared, decentralized, digital ledger that cryptologically seals and stores a permanent record of all transactions that occur on it. Bitcoin , the digital currency, is perhaps the most well-known and widely used application of blockchain technology. Ethereum is a different blockchain from Bitcoinand was created with the intention to allowself-executing smart contracts to be coded directly into it, permitting trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. (See also: Is Ethereum More Important Than Bitcoin? ) The organizational theorist Arthur Stinchcombe once wrote that contracts are merely organizations in miniature, and by extension all organizations are just complexes of contracts. Firms are created using a series of contractual agreements, ranging from employment contracts and employee benefits, to deals with vendors and suppliers and obligations to its customers, to building leases and sales & purchases of equipment. Traditionally, these contractual obligations are quite costly because they need to be enforced externally by society in the form of a trusted legal system and through legal enforcement. Courts, lawyers, judges and investigators all form this system of contract enforcement. With a blockchain-based smart co Continue reading >>

The Story Of The Daoits History And Consequences

The Story Of The Daoits History And Consequences

I am driven, curious and proactive member of the blockchain & crypto community. Love to write about Technology, Art, History & Atheism The Story of the DAO Its History and Consequences One of the most incredible concepts to be successfully implemented through blockchain technology is the DAO, a decentralized autonomous organization. Decentralized autonomous organizations are entities that operate through smart contracts. Its financial transactions and rules are encoded on a blockchain, effectively removing the need for a central governing authority hence the descriptors decentralized and autonomous. The Decentralized Autonomous Organization (known as The DAO) was meant to operate like a venture capital fund for the crypto and decentralized space. The lack of a centralized authority reduced costs and in theory provides more control and access to the investors. At the beginning of May 2016, a few members of the Ethereum community announced the inception of The DAO, which was also known as Genesis DAO. It was built as a smart contract on the Ethereum blockchain. The coding framework was developed open source by the Slock.It team but it was deployed under The DAO name by members of the Ethereum community. The DAO had a creation period during which anyone was allowed to send Ether to a unique wallet address in exchange for DAO tokens on a 1100 scale. The creation period was an unexpected success as it managed to gather 12.7 Ether (worth around $150M at the time), making it the biggest crowdfund ever. At some point, when Ether was trading at $20, the total Ether from The DAO was worth over $250 million. In essence, the platform would allow anyone with a project to pitch their idea to the community and potentially receive funding from The DAO. Anyone with DAO tokens could vot Continue reading >>

The Dao, The Hack, The Soft Fork And The Hard Fork

The Dao, The Hack, The Soft Fork And The Hard Fork

The DAO, The Hack, The Soft Fork and The Hard Fork We'll try to briefly cover: how and why The DAO was created, how The DAO was exploited, how the soft fork failed miserably, and why everyone was relievedit did so, and how the hard fork lead to a split community and the creation of Ethereum Classic . Part 1 - The DAO - Venture fund evolution The Decentralized Autonomous Organization (known as The DAO)wasmeant to operate like a venture capital fund for the crypto anddecentralizedspace. The lack of a centralized authority reduced costs and in theory provides morecontroland accessto the investors. At the beginning of May 2016, a few members of theEthereum community announced the inception of The DAO , which was also known as Genesis DAO.It was built as a smart contracton the Ethereumblockchain. Thecodingframework was developed open sourceby the Slock.it team butitwas deployed under "The DAO" name by members of the Ethereum community. The DAO had a creation period during which anyone was allowed to send Ether to a special wallet address in exchange for DAO tokens on a 1-100 scale. The creation period was an unforeseen success as it managed to gather 12.7 Ether (worth around $150M at the time), making it thebiggest crowdfund ever. At some point, when Ether was trading at $20, the total Ether from The DAO was worth over $250 million. The DAO wasa complex Smart Contract with many featuresand it should have allowed companiesto make proposals for funding. Once a proposal waswhite-listedbyone of the curators , the DAO token holders (aka DAO investors)would then need to vote on the proposal. If the proposal got a 20% quorum the requested funds would bereleasedintothewhite-listedcontractor's wallet address.Theteam of curators that couldwhite-listaddresses was put in place in order Continue reading >>

Create A Democracy Contract In Ethereum

Create A Democracy Contract In Ethereum

"On the Blockchain, no one knows you're a fridge" So far, all contracts we listed were owned and executed by other accounts probably held by humans. But there is no discrimination against robots or humans in the Ethereum ecosystem and contracts can create arbitrary actions like any other account would. Contracts can own tokens, participate in crowdsales, and even be voting members of other contracts. In this section we are going to build a decentralized and democratic organization that exists solely on the blockchain, but that can do anything that a simple account would be able to. The organization has a central manager that decides who are the members and the voting rules, but as we'll see, this can also be changed. The way this particular democracy works is that it has an Owner which works like an administrator, CEO or a President. The Owner can add (or remove) voting members to the organization. Any member can make a proposal, which is in the form of an ethereum transaction to either send ether or execute some contract, and other members can vote in support or against the proposal. Once a predetermined amount of time and a certain number of members has voted, the proposal can be executed: the contract counts the votes and if there are enough votes it will execute the given transaction. pragma solidity ^0.4.16;contract owned { address public owner; function owned() public { owner = msg.sender; } modifier onlyOwner { require(msg.sender == owner); _; } function transferOwnership(address newOwner) onlyOwner public { owner = newOwner; }}contract tokenRecipient { event receivedEther(address sender, uint amount); event receivedTokens(address _from, uint256 _value, address _token, bytes _extraData); function receiveApproval(address _from, uint256 _value, address _token, byt Continue reading >>

Op Ed: Why Ethereums Hard Fork Will Cause Problems In The Coming Year

Op Ed: Why Ethereums Hard Fork Will Cause Problems In The Coming Year

Op Ed: Why Ethereums Hard Fork Will Cause Problems in the Coming Year After the embarrassing failure of the DAO in 2016, the Ethereum Foundation moved quickly to address the problem by implementing a hard fork. On July 20, 2016, the new code went into effect, reversing transactions that allowed a hacker to bleed $50 million out of the $150 million venture fund in the wee hours of June 17. That DAO hard fork was not popular, but it was effective. The majority of miners moved over to the new chain, and the DAO funds went into a new smart contract, so the original investors could safely withdraw their funds. To be clear, the Ethereum network itself was not hacked, just the DAO smart contract. The hacker took advantage of a loophole in the contract code, written in the JavaScript-like language Solidity. But while the hard fork was an expedient solution to a pressing problem, how the decision-making was handled has long-term consequences for Ethereum. When the hacker drained the account, she/he put the funds in a child DAO. To extend the mandatory hold on those funds before the hacker could cash out, on June 24, the Ethereum Foundation incented miners to soft fork by releasing Geth version 1.4.8, code-named DAO Wars. However, the soft fork was abandoned because of the risk of a denial-of-service attack . The Foundation then began work on a hard fork to reverse the DOA transactions. Unlike a soft fork, a hard fork is a radical change in the protocol that all stakeholders in a blockchain need to agree upon to implement. Not everyone agreed with reversing the DAO funds. Many vehemently opposed it. Yet, as events unfolded, it became clear that Ethereum had no structure in place for settling these differences no official forum for discussing the events, and no official voting me Continue reading >>

Understanding The Dao Attack - Coindesk

Understanding The Dao Attack - Coindesk

David Siegel is a blockchain strategist and speaker, founder of Kryptodesign.com and curator of DecentralStation.com, a place to learn about blockchain. In this piece, Siegalattempts tohelp journalists understand what happened when The DAO collapsed and whyhe believes it'simportant for the press to get the story right. The article will be updated on Medium as the situation develops. Disclaimer:Siegal owns a small number of DAO tokens. The ethereum network is a network of computers all running the ethereum blockchain. The blockchain allows people to exchange tokens of value, called ether, which is currently the second most popular cryptocurrency behind bitcoin. ethereum also allows people to write and put on the network smart contracts general-purpose code that executes on every computer in the network (currently over 6,000 computers). People then execute these programs by sending ether to them. A DAO is a Decentralized Autonomous Organization. Its goal is to codify the rules and decisionmaking apparatus of an organization, eliminating the need for documents and people in governing, creating a structure with decentralized control. A group of people writes the smart contracts (programs) that will run the organization There is an initial funding period, in which people add funds to the DAO by purchasing tokens that represent ownership this is called a crowdsale, or an initial coin offering (ICO) to give it the resources it needs. When the funding period is over, the DAO begins to operate. People then can make proposals to the DAO on how to spend the money, and the members who have bought in can vote to approve these proposals. Its important to understand that great care has been taken not to make these tokens into equity shares they are more like contributions that give p Continue reading >>

Article On The Dao Ethereum Hack

Article On The Dao Ethereum Hack

It's a good article, if you consider the whitewashing of a $150 million theft "good". The program in question is called a "smart contract". The code is completely open for all participants to examine. Sending money to the contract is the equivalent of signing and agreeing to the terms of the contract. This particular contract, TheDAO, just so happened to have a clause that essentially read "Anyone who executes this clause gets all the money held by this contract". Let's call it the "Exit Clause". Either no one noticed, or no one cared, but in any case, the Exit Clause was there. Then people sent over $150 million worth of ether to this smart contract, thus agreeing to the terms, including the Exit Clause. One of these people who actually read the contract and understood what they were signing up for decided to execute the Exit Clause. Everyone else who sent money to the contract was shocked that someone would actually execute a clause that gives them all the money. So what did these shocked participants do? They reneged on the contract in the most damaging way possible. These contract participants colluded with a group called the "Ethereum Foundation" to release a version of the Ethereum software that essentially wiped TheDAO from the history of Ethereum's blockchain, taking the money that the Exit Clause executor earned from their participation in TheDAO with it. (This is after Ethereum marketed their blockchain as "immutable smart contracts with no possibility for third party interference" - can you say false advertising??) The resulting fallout from this rewrite of the blockchain's history included a severe drop in the price of ether and a permanent chain split that has created two versions of Ethereum: Ethereum Classic (the original chain that did not rewrite histo Continue reading >>

The Dao Refunds - The Ethereum Wiki

The Dao Refunds - The Ethereum Wiki

There are 3 main types of The DAO refunds: All The DAO token holder with a non-zero token balance are entitled to this refund. There is no time limit to this refund, but execute your refunds as soon as possible. Only The DAO token holders who purchased The DAO tokens in the last 2 weeks of the crowdfunding phase are entitled to this refund. There is no stated time limit to this refund, but execute your refunds as soon as possible. The curators can clawback the amount remaining in the contract at any time but have not announced any intentions to do so. All The DAO token holders with a non-zero token balance at block 1,919,999 on the Ethereum Classic (ETC) chain are entitled to this refund. Note that there is a time limit of Apr 15 2017 to execute your The DAO To ETC refunds Note that the time limit to withdraw your DAO to ETC refund has been extended to Jan 2018 - reference WHG withdraw contract extended Check the refunds for your accounts at . The DAO contract raised about USD 150 million worth of ethers (ETH) during the 28 day crowdfunding creation period starting Apr 30 2016. A hacker exploited a vulnerability in The DAO's code on Jun 17 2016 to drain ~ USD 50 million worth of ETH. The Ethereum blockchain was hard-forked at block 1,920,000 to transfer all ETH from The DAO contracts and it's child contracts into a curator's account. The Ethereum Classic blockchain was formed when some miners decided to keep running the old Ethereum client node program without the hard-fork code changes. The curators on the ETH chain created two contracts to provide refunds to The DAO Token Holders (DTH) via: The DAO to ETH Refund WithdrawDAO Contract The DAO to ETH ExtraBalance Refund ExtraBalDaoWithdraw Contract The Robin Hood Group and the Whitehat Group retrieved the ethers (ETC) o Continue reading >>

The Dao (organization)

The Dao (organization)

The DAO was a digital decentralized autonomous organization , [5] and a form of investor-directed venture capital fund . [6] The DAO had an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises. [7] [8] It was instantiated on the Ethereum blockchain , and had no conventional management structure or board of directors. [7] The code of the DAO is open-source . [9] The DAO was stateless , and not tied to any particular nation state . As a result, many questions of how government regulators would deal with a stateless fund were yet to be dealt with. [10] The DAO was crowdfunded via a token sale in May 2016. It set the record for the largest crowdfunding campaign in history. [6] In June 2016, users exploited a vulnerability in the DAO code to enable them to siphon off one third of The DAO's funds to a subsidiary account. On 20 July 2016, the Ethereum community decided to hard- fork the Ethereum blockchain to restore virtually all funds to the original contract. [11] This was controversial, and led to a fork in Ethereum, where the original unforked blockchain was maintained as Ethereum Classic , thus breaking Ethereum into two separate active blockchains, each with its own cryptocurrency. [12] [13] The DAO was delisted from trading on major exchanges such as Poloniex and Kraken in late 2016. The computer code behind the organization was written by Christoph Jentzsch, and released publicly on GitHub . [6] Simon Jentzsch, Christoph Jentzsch's brother, is also involved in the venture. [6] The DAO was launched on 30 April 2016, with a website and a 28-day crowdsale to fund the organization. [14] [15] The token sale had raised more than US$34 million by 10 May 2016, [16] and more than US$50 million-worth of Ether (ETH)th Continue reading >>

Ethereum & The Tao Of Thedao

Ethereum & The Tao Of Thedao

Frontier/Blockchain/Macro/Data ScienceCo-Founder & Product Manager at iComply Investor Services Inc. DAO the Decentralized Autonomous Organization An organization autonomously run by its members to pool resources and achieve a common goal. What an exciting concept! While this might seem like a new idea, a very similar organization already exists its called the coop, or cooperative, check out this definition Official definition from the International Co-op Alliance (ica.coop) However, coops often tend to be local and often carry significant burden for administration and governance, now what if the coop could be structured globally, with programmatic governance and administration? For those that have heard of Ethereum, I want to give a frame of reference for existing capital markets to grasp the true potential and raw power the world now has at its hands, and you better believe its more than just cryptocurrency, tokens, and coins! Fedwire is a system used by the Central Bank in the United States (the Fed). This serves as bottom level infrastructure to facilitate transactions among financial entities and the central bank, as well as within each other. All banks in the states are built on top of this layer, adding services to consumers or consumer facing tech on top. Pretty powerful stuff. Swift is another 'network' or protocol enabling interbank transfers across the world, each bank is essentially a node. Its how wire payments work, and the banks take a cut on the sender and receiver end of every transaction. We, the people, dont have direct access to systems like this, but instead interact on top of these systems, through a third party, like a bank. Does this mean intermediaries are the big bad wolf? Not at all, they serve an immensely useful function to help money move Continue reading >>

The Sec Is Throwing A Damper On Ethereum Madness

The Sec Is Throwing A Damper On Ethereum Madness

The SEC is throwing a damper on ethereum madness The Securities and Exchange Commission is taking an interest in the hottest craze in cryptocurrency, the initial coin offering (ICO), and apparently the SEC is not into the hype. The commission published a report on Tuesday advising that ICOs, or token sales, are subject to securities laws. It concluded that a certain multimillion-dollar ICO last year the first of its kind violated securities law. An ICO an acronym that intentionally mirrors IPO is a new way to raise money for a startup, using the cryptocurrency Ethereum . Like Bitcoin, Ethereum runs on blockchain technology. But one of the many differences between Bitcoin and Ethereum is that the latter offers smart contracts automatically executed code that can take the form of a financial transaction that are built right into the technology. One result is that Ethereum can be a platform to raise ether (a crypto asset that can be traded for state-issued currency like dollars) in exchange for tokens that might offer the token holder voting rights, or a financial stake in an enterprise. ICOs have been catching on like wildfire, with one joke ICO raising tens of thousands of dollars in minutes . In June, a messaging app raised $44 million despite not yet offering an actual app . ICOs have been compared to crowdfunding, which is exempt from the registration requirement for securities. On Tuesday, the SEC waved aside that comparison, instead concluding that tokens in some cases at least were securities. According to the SEC, the DAO violated section 5 of the Securities Act The 18-page investigative report specifically analyzes the Decentralized Autonomous Organizations (DAO) ICO in 2016, and concludes that DAO tokens are securities. The DAO has been described as a new sort Continue reading >>

Was The Dao The Best Thing To Happen To Ethereum? And, Can We Have It Back?

Was The Dao The Best Thing To Happen To Ethereum? And, Can We Have It Back?

Was the DAO the Best Thing to Happen to Ethereum? And, Can We Have It Back? Join our community of 10 000 traders on Hacked.com for just $39 per month. For the first time in human history, around $250 million was stolen last summer, then, by just a code upgrade, the theft was prevented and the money was given back to the rightful owners. Back then, some said that if ethereum collectively decides to save its own people, the currency is doomed. Now, not even a year later, the market says the currency and platform is in fact worth some five times more than even at its peak before the DAO. While, on the other hand, the so called immutable ETC chain is valued by the market just above the bottom reached by ETH after the fork. So, were the critics very wrong? Was the DAO fork actually the best thing to have happened to ethereum so far? The market seems to think so. They probably consider a mature community which was able to quickly reach a pragmatic decision on a very important matter where some $250 million was at stake as something they can work with and trust. The market clearly values a fail-safe mechanism, employed only in the most exceptional circumstances and only when its employment is a no-brainer. Mistakes happen. The market probably thinks one such mistake should not cost $250 million. The critics say but my immutability, as if something either is or isnt immutable. In this black and white world, somehow bitcoin is immutable, even though they have rolled back their chain a number of times, but ethereum isnt, even though it has had no roll back. An easy response to any argument that ethereum is not immutable is by asking them to go and mutate or reverse a transaction. Very good luck with that, because, as always, exceptions prove the rule. So, in one such exception, Continue reading >>

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