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Dare I say... let& #39;s get DAO to it
An intro thread on Decentralized Autonomous Organizations:
(will add this to my master DeFi thread)
An intro thread on Decentralized Autonomous Organizations:
(will add this to my master DeFi thread)
1/ At their core, organizations are made up of 2 things: people & contracts. Parties within an org have formal & social contracts amongst themselves, w/ stakeholders, & w/ the org. itself. Individuals work together to accomplish a common goal(s) within a hierarchical framework
2/ Major choices are made from the top down & certain members maintain oversight to ensure everyone& #39;s doing what they should be. Contracts, rules & other decisions within the biz may take a long time to agree upon/execute, & are susceptible to human error, behavioral biases, etc.
3/ But just because this is the way that things have always been, doesn& #39;t mean it’s the way things always have to be… what if I told you that there was a way to automate organizational functions? Ladies and gentlemen, I present to you: the DAO.
4/ Inspired by the format of decentralized digital currencies, a group of devs came up w/ the idea in 2016. A DAO is an open source protocol residing on the blockchain. The org is governed by rules embedded in smart contracts (aka protocols). These rules execute automatically...
5/ ..depending on specific conditions. The often complex rules included within protocols are created in advance by the elected members that formed the org, & are set out in code (code can be changed after the DAO begins operating if needed, just more difficult to do.. I think
https://abs.twimg.com/emoji/v2/... draggable="false" alt="😂" title="Gesicht mit Freudentränen" aria-label="Emoji: Gesicht mit Freudentränen">)
6/ Why& #39;s this a thing? Ourhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🌍" title="Europa-Afrika auf dem Globus" aria-label="Emoji: Europa-Afrika auf dem Globus">has experienced an overarching shift towards automation. It was only a matter of time before org functions had the ability to be automated; our reliance on tech as a society continues to climb as advances are made. Creation of the DAO was...
7/ ..a natural next step of institutional evolution. Eliminating human error & influence of behavioral biases that may lead them to suboptimal decision making, lower mgmt costs, optimization of governance practices, removal of influence from outside parties & added transparency..
8/ ..are just a few advantages of DAOs
BUT I& #39;d be remiss if I didn& #39;t acknowledge that where there are upsides, there are downsides
Case & point? The first DAO created. It was aptly named "The DAO" & was set up as a venture fund
In short, a hacker stole over 3.5 million ETH.
BUT I& #39;d be remiss if I didn& #39;t acknowledge that where there are upsides, there are downsides
Case & point? The first DAO created. It was aptly named "The DAO" & was set up as a venture fund
In short, a hacker stole over 3.5 million ETH.
9/ While The DAO& #39;s smart contracts were built on top of the Ethereum blockchain, the hack WASN& #39;T due to issues w/ the blockchain itself. To this day the Ethereum blockchain remains unhacked.The hack was caused by a security flaw in code written for The DAO& #39;s protocol specifically
10/ Like anything new, the 1st DAO had bugs.. ultimately leading to its downfall.That said, there& #39;s much to learn from this to promote creation of more secure & efficient social systems in the future.
For curious ppl..the stolen ETH was retrieved (can tell full story another day)
For curious ppl..the stolen ETH was retrieved (can tell full story another day)
