After raising approximately $150 million in a span of a month, no one is underestimating the power of the DAO side anymore. In what was easily the biggest crowdfunded project in history (excluding political campaigns), the aptly named Decentralized Autonomous Organization has attracted about 11,000 anonymous stakeholders. And like a tidal wave, the value of Ether continues to rise.
Back in December, Ether was trading at $0.90. Six months later at its peak it was changing hands at nearly $15. The value of Ether has been steadily climbing for some time now, and the DAO has given it a little binary boost. It is important to note, however, that Ether was already trending up well before the DAO.
Just like the Ethereum platform it is promoting, the DAO is decentralized and runs on the blockchain. There are no executive committees here. No boardroom decisions being made behind closed doors. No hidden agendas or fees.
It is venture capitalism according to the wisdom of the crowd. It is democratic fundraising, and the people have spoken. It is boldly going where no crowdsale has gone before. And apparently it is also able to elicit references to Star Wars and “Star Trek.” Wonders never cease!
Consider this: the largest amount Kickstarter has ever raised in a crowdsale was $20 million with Pebble Time’s smartwatch. Stephan Tual, the chief executive of Slockit, whose company was instrumental in the creation of the DAO, was impressed with the results of the experimental fundraiser, to say the least.
“This is an incredible evolution over the Kickstarter model,” said Tual. “The amounts raised now are making people think this is no longer a toy. This is going to make a very big difference. It’s paving the way for a billion-dollar project.”
Given the way things have rapidly progressed with the DAO, Tual may not be far from the mark. The crowdsale is essentially its own reward, providing a return on the investment in the form of new business models that have yet to be conceived and, of course, Ether as its value appreciates over time.
How it works is anyone holding a single DAO token is able to submit proposals for business ventures, whereupon the DAO’s community then decides if they want to invest in the project by moving tokens into it or not. Innovation is ultimately what fuels and sustains the DAO, making it self-sufficient and negating the need for a central host. It is Ethereum’s way of allocating Ether into research and development.
However, the DAO is not without its share of controversy. In its mission statement, it reads: “To blaze a new path in business organization for the betterment of its members, existing simultaneously nowhere and everywhere and operating solely with the steadfast iron will of unstoppable code.”
That’s all well and good, but “existing simultaneously nowhere and everywhere” could present a legal quandary. To combat this, the DAO developers created a Swiss-based company called DAOLink to serve as a bridge between DAOs on the blockchain and the real world. DAOLink provides a legal entity if a project requires taxation or has regulatory mandates it can’t circumvent.
If you think the DAO is an isolated event or a fad, think again. The developers had this to say: “DAOs will be at the center of many economies going forward and intend to be at the forefront of supporting innovative and promising projects, products and services in order to become ‘The DAO’: A flexible decentralized autonomous organization leveraging the wisdom of the crowds to benefit the DAO Token Holders.”
Perhaps one of the biggest selling points of the crowdsale is the market deciding how many tokens can exist. Theoretically, there is no limit to how many tokens can be generated. This makes for an attractive feature to anyone looking to invest. As of right now and in the foreseeable future, Ether is a hot commodity. If you’re looking to jump on a crypto bandwagon, you could certainly do a lot worse than the Ethereum bandwagon. May the DAOs be with you.