That's the story of this entire space.
What legal protections exist there for minority shareholders in the so-called DAO?
What uniswap is doing is quite likely illegal under current laws.
Please note: This is an opinion of some legal scholars on their situation. I am not making any moral or ethical judgements here, couldn't care less.
They were already live for 2 years by the time they gave away their governance token. Even if you had just done one transaction with Uniswap, you received some UNI.
Now, those customers and those liquidity providers are aligned with the future success of Uniswap. They also get to vote on how to spend the $7.5B treasury. Pretty cool model. It's fundamentally different than anything that's come before it. Pay attention to DAOs.
At least with corporations you have legal recourse, minority shareholder protections, well developed body of law, and so on.
Yes, you can achieve the same with crowdfunding/crowdsale - but then you have a corporation and regulations, and the pesky anti-dilutive and other protections of minority shareholders and so on.
Governance token should be just called what it is - equity.
Is it being more profitable? Having happier workers? Making the sleekest shiny things? And are we thinking for the next year or the next hundred years?
Decentralized organisations seem (to me) to be prioritising resilience over efficiency. This seems like a long game.
But perhaps shared ownership and pseudonymous employment will appeal to people. And perhaps sourcing workers anywhere in the world will lead to quick contacts building and fast deployment too. Or it could get caught up in bureaucracy, but then we can just fork the daos and vampire attack them!
There is a lot a vague murkyness in national law as to who is responsible/where is tax payed/what is it, but the idea of being able to click a button and i have a borderless organisation with voting systems and memberships all ready to go to anyone who wants to join in is pretty exciting. Think of the crazy possibilities of collisions happening, people to meet, ideas to be generated. If we increase the speed at which people, ideas, and capital can come together that can be explosive (and that could be good or bad). We can have groups of strangers round the world seeding startups of anonymous teenagers writing code after school, before the university lecturers and vcs ever get to them. Thats radical and revolutionary.
DAOs are the most exciting thing going in crypto imo.
Issuing dividends in a cryptocurrency would disintermediate brokers and doesn’t require a DAO. Nor does “let’s upgrade our voting systems” require a DAO.
I’m sorry, but I don’t see how what you posted is relevant to this discussion.
DAOs are just unincorporated partnerships with anonymous partners.
I couldn't agree more.
Though, as far as this article goes, I was looking for more of a playbook than high-level market analysis.
None of this matters if the actual real-world resources of a DAO are under the legislative power of a government. The DAO is no better off than a normal corporation with a charter.
But it's clearly better than Uber, for example, if a decentralized ridesharing organization were to exist. Because in a DAO situation, the early drivers and customers of this DAO-Uber could have been rewarded with governance tokens that helped guide the development of the protocol. Maybe Uber would have been a less toxic corporation if it was basically owned by its drivers and customers. The DAO would have the treasury, the community, etc. It would have managed incentives based on on-chain voting.
This is how Uniswap works today. This is how MakerDAO works today. This is how Aave works today. We're already disrupting exchanges and banks. A lot of other business models will be disrupted in similar ways.
Only the capital tied up in crypto tokens, which is probably very small compared to the capital tied up in offices or machines or whatever, which a government has control over.
> The DAO would have the treasury, the community, etc.
As far as I can see, none of this is easier to do on a DAO than with some more traditional method of organization.
Assuming personal liability by engaging into a DAO in personal capacity is just dumb.
Basically, DAOs are just a way of trading a well established legal system to settle disputes for one where whoever controls the protocols settles disputes in their favor.
When bitcoin accidentally overflowed and created 184billion bitcoin, it was forked away a few hours later because that isn't what the majority agreed upon. Same with ethereum, the majority decided something and it becomes the agreed state, as it does with every block. Its strange we still have to explain this 5 years later.
Conversely, in the “billion bitcoin bug” situation, no funds were stolen from anyone — 51% of mining power merely chainforked to a non-buggy version of the network. FWIW an identical situation could happen today on Bitcoin via a 51% attack, but it probably would be rejected in exactly the same way and for exactly the same reasons.
In both the MtGox and Ethereum DAO incident, the underlying network was functioning normally; but only one resulted in a clawback of funds from a sovereign entity. Notably, Ethereum had been advertising itself under the banner of “unstoppable applications” up to that point. Seemingly it’s a case of “unstoppable applications, not unstoppable applications”.
Our existing legal system "solves" this through the Judicial branch of government. The social consensus (Constitution) created a decentralized (but hierarchical) way to remediate wrongs both big & small. What is the DAO equivalent?
It kinda reminds me of that time period where the media was perpetuating the meme that Bitcoin = bad, blockchain = good. Which missed the entire point, because there is simply no way to separate the two. I think a lot of it comes from the moral dilemmas in the world of finance and it making people uncomfortable and prone to virtue signaling via negative comments. Like it or not, the financial system is what allows the efficient allocation of capital for all the innovations people around here love so much. It may be a slimy immoral world, but it's currently the best engine we have to power the world. The dream with crypto is to build a better financial engine to power global trade and innovation.
It's a lot harder to understand a fundamental global revolution than it is to bash it. I'd encourage everyone here to get more familiar with the world of crypto, because it's not going away and you're going to look back and feel very silly if you keep calling it tulip mania.
Honestly, with all of the complaints on HN about companies revoking API access, and any other of the multitude of complaints about centralized solutions, you would think the HN crowd would be onboard.
Nobody elects the mining pool operators, nobody elects the people owning the mining hardware and not enough people elect the people who are steering the various crypto foundation.
If a crypto blows up and becomes essential to a countrys economy the vast ordinary citizens will only participate in it by earning money and spending it for their needs.
For those people you just replaced a somewhat accountable government, with somewhat predictable financial policies and transparency processes with one nobody knows anything about which is perhaps operating far away and in a different culture/country.
For many people in the world that'll mean less influence on the decision making process.
In other words: There is no fundamental reason to trust the Ethereum Foundation more than the ECB or the Fed.
There's a lot going on right now in the decentralised finance space. A couple of things that interest me:
1. Payments. Stable coins (backed by collaterals) like DAI (by MakerDAO), USDC (by CENTRE aka Coinbase, CirclePay et al), Libra (by Facebook, Shopify, Uber et al) have a potential to replace the current payments system and those rent-seeking middle-men. In DAI's case, the currency is truly autonomous and decentralised, so there's a good chance it ends up uncensorable and unregulatable. USDC and Libra offer a great way for folks not in high inflation countries with weak currencies to lock up cash-in-hand in USD. Libra is poised to see a broad adoption once Facebook makes it common place on Instagram and WhatsApp, where most of the commerce is moving to. It remains to be seen how Stellar ends up doing in response to Libra.
2. Banking. Banks, like eco, dharma, and onjuno, built on top of Ethereum altcoins can offer higher interest rates than traditional banks.
Other things I'm excited about and looking forward to:
1. Anonymous assets. Monero enables truly anonymous transactions. It isn't a stable coin, so that's a bummer. MobileCoin, which I believe is built on Stellar, is private but I don't think its anonymous or stable.
2. Web3. Storage (FileCoin, Sia), Compute (Golem, ElastOS), Network (Orchid, Mysterium), Content (IPFS)... may yet emerge as a credible distributed alternative to the current centralised cloud computing model.
3. Inter-chains. Today, a lot of innovation is concentrated on Ethereum, because of its versatility. Upcoming entrants like Polygon, Polkadot, and Cosmos would make inter-chain interactions much smoother. This has potential to upend the current status-quo and probably give rise to many more applications previously not possible.
Read also: https://blog.coinbase.com/what-will-happen-to-cryptocurrency...
and cheap to run on xdai (until rollups arrive then we can move there and get eth security too!)
Also would recommend this article on dao relations too: https://medium.com/primedao/conceptual-models-for-dao2dao-re...
It just has to help bring in enough new suckers to allow the recipients of ethereum's huge pre-mine (now valued at about one quarter trillion dollars) to exit more of their positions without collapsing the price.
Participation was limited because US residents-- by far the largest population of cryptocurrency users-- were prohibited from participating (though of course some did). [Edit: A comment below claims otherwise, I don't actually see support for that in my source, and my own correspondence from the time states that it wasn't. I'm not sure if something changed around the launch, or if I'm somehow mistaken.]
I dunno anything about winklevoss speculation, people often include funds held in custody as if they're owned by the custodian and reach weird conclusions. It's easy to list ethereum accounts that hold >=1% of all ethereum: 0x281055afc982d96fab65b3a49cac8b878184cb16, 0x6f46cf5569aefa1acc1009290c8e043747172d89, 0x90e63c3d53e0ea496845b7a03ec7548b70014a91, 0x53d284357ec70ce289d6d64134dfac8e511c8a3d, 0xab7c74abc0c4d48d1bdad5dcb26153fc8780f83e, 0xfe9e8709d3215310075d67e3ed32a380ccf451c8; while the largest Bitcoin address is under 1%. (Of course, parties can have multiple addresses, and as mentioned some parties hold coins for many other people)
Moreover, regardless of the distribution Bitcoin had no premine: Everyone who has Bitcoin received it in a open process available to the whole world with no particular privilege other than knowing and caring about it when it was almost worthless before other people did. (well, I suppose except for those people who stole theirs :)).
We don't actually know how many Bitcoin Satoshi-- if he's still alive-- owns: there are guesses based on assuming various earlier miners might have been him, but they're guesses. The 1M claim specifically is flat out false: it comes from counting up every coin mined during the first year that was still on spent at the time the figure started circulating a few years ago. It includes many coins known to have been mined by other people, including likely myself.
> For all you know they recycled received funds back out in their crowd sale and bought multiple times.
Actually we know that they didn’t and so do you, because the funds didn’t leave the multisig until the sale ended
I.e. it was a crowdsale raising funds for development, much like projects on Indiegogo except that it was a nonprofit instead of a business.
I hope you can see why many people believed the US was prohibited.
There was serious concern that the Ethereum Foundation would get in trouble with the SEC if they sold in the US. They delayed the crowdsale for several months while they consulted lawyers, who finally signed off on a way to keep them out of SEC trouble. There was a lot of discussion about this in the community.
The presale was open for 42 days and very well known in the crypto community. Within the first few days it was clear that it was going to be one of the largest crowdsales to date, so it got regular media attention too.
Once they've finished selling their premine to the public would it be accurate to say it wasn't premined at all? Of course not. So it's not accurate to exclude the partially sold portion now.
This massive understatement of their premine is a well known example of the dishonesty of ethereums operators and advocates.
Blockchain is like the early days of the internet, probably like 1998 right now. There were competitors to all the major internet protocols - TCP/IP, WWW, HTTP, but once everyone standardized the web flourished.
I believe Ethereum is like that today. There are competitors, and loud internet commenters are financially incentivized to criticize it and promote others, but if you look at where organic development and new projects are founded on, Ethereum is far and away the most popular. Others are not even close.
Other chains who criticize the fees of Ethereum are essentially saying, "That place is so crowded, nobody goes there anymore." ETH is working on scaling, bit by bit, and now with Layer-2 solutions like Optimism, Arbitrum, Matic/Polygon, zkSync, Immutable, etc. etc. it's finally allowing scale in a significant way even before ETH2 is launched and takes over. Many chains pay projects to port their dapps to their own chain just to get some sort of third-party development, while the Ethereum Foundation primarily funds fundamental research and protocol improvements - Ethereum doesn't need to pay people to build on their chain.
If an alternative blockchain's only reason to exist is "Like Ethereum - but with lower fees!" I would be leery. Some chains like Monero exist with a very defined purpose (privacy), and I see Bitcoin as something else entirely (store of value). But as the one-chain-to-rule-them-all, Ethereum would be your best bet.
This just hurts to read. I get the point you are trying to make, but spewing non-factual comparisons isn't helping. 1998 is not "early Internet", more like 1970. By 1998, TCP/IP was entirely established; it was standardized in the 1980s. "WWW" is not a separate protocol, if you already list it with HTTP.
As to the overall comparison of Blockchain with "the Internet" that is so popular: I don't see it. Up until the recent modern age, the Internet was always something where demand--and desired applications--were vastly over capacity and capability. From the moment computers were networked, more people wanted to do more things over those networks, and both infrastructure and underlying technology had to grow to barely keep up (or, in fact, could not keep up--many long desired applications only became feasible in the 2000s or so). This does not resemble the history of Blockchains.
Equating something with the technology that completely changed the shape of the world is a very tall order. Electricity qualifies, probably the printing press does.
It's not exactly the same, but this rings at least somewhat similar to what Ethereum is going through - the demand is pretty clearly there (people are willing to pay very hefty transaction fees to use it), and scaling solutions are just starting to launch that are enabling entirely new features, which I imagine will unlock another wave of demand.
This is notable for confusing “demand” with speculation-fueled investment.
That seems to me to be the opposite of what I wrote about the evolution of the Internet.
Ethereum is the best bet for the leader in the space (it already is) but some of the competitors bet on having different paradigms with different advantages rather than just lower fees e.g. ADA or SOL, and I don't see a reason for certainty that there'd be only 1 big success even if it's possible.
See recent article https://decrypt.co/66740/who-are-the-fastest-growing-develop...
> There are more than 8,000 monthly active developers working on various cryptocurrency projects, according to the Developer Report, produced by Electric Capital, a venture firm, with some 80% of those developers starting in the last two years.
> The current leader in terms of people actively contributing to the development of a network is Ethereum, with approximately 2,300 average monthly developers - those who were active on a monthly basis, according to the Developer Report. The number actively working on Ethereum has grown by 215% in 3 years.
Do you think that taproot on the bitcoin chain could fill that role?
For me, bitcoin is a store of value, like digital gold. I don't purchase BTC for the same reasons I purchase ETH.
Taproot will enable better privacy on bitcoin and more efficient transactions. It will not enable an EVM-like smart contract system.
You can already price EVM transactions in Bcash: https://smartbch.org/
(Notably Bcash has chosen to do “Ethereum on Bitcoin” using a sidechain, rather ironic from a historical perspective)