Above: “The Heist” by brennan.v licensed under CC BY-ND 2.0
Modified by Luke Whyte
By Virginia Valenzuela, Arts Editor
We all know the storyline of the stereotypical heist. A plan is hatched, a team is assembled, cool or comically bad costumes are put on, and one way or another, the robbers break in, grab the money, and run. Some culprits are caught, and others go on to try other schemes, hungry for the rush that only Vin Diesel and angsty teens using the five-finger discount know the taste of.
But in the age of blockchain, where there are no physical safes to crack, no galleries or galas to descend into via rope, heists become loftier, the robbers smarter, and their traces even harder to track. Add to this the fact that the blockchain is global, and therefore outside of any one government’s jurisdiction, that there is no court to enforce a lawsuit and no customer service rep to call when your digital vault is found empty, and you’ve got the best damn version of Ocean’s 11 ever written.
Like so many stories with a heist at the center of the plot, the history of the famous DAO project, the DAO, features greed, ambition, success, and a deadly blindspot that leads to an inevitable end. But did the founders of the DAO learn their lesson?
What is a DAO?
A decentralized autonomous organization, or DAO, is defined by Omid Malekan in his book The Story of the Blockchain as “a programmed entity that exists in the jurisdiction of a blockchain, issues tokens to stakeholders, and fulfills functions governed by smart contracts.” They are like corporations in that they represent a group of people and their interests, but they differ in three key ways.
1. Corporations are organized under bylaws that outline the group’s rules and regulations. These rules are carried out by officers and employees, and are meant to smooth out the day-to-day needs of the organization. Notably, these bylaws constitute a legal document and are thus enforceable by law. DAOs, on the other hand, are structured by smart contracts that carry out tasks in real time. Their rules are programmed into the contract’s code and, in turn, are not susceptible to human error or misconduct.
2. Instead of distributing shares that dictate ownership and voting rights to investors, DAOs distribute tokens.
3. DAOs exist on a blockchain, and thus are governed by the laws of code, rather than the laws of the land, unlike a corporation that has to follow the rules of the country it is registered in.
Another big difference is the leadership structure that governs each entity. The standard structure for a corporation is as follows: shareholders, board of directors, officers, employees. Shareholders rarely get involved in…
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