The DAO Failure
19 Jun 2016I’ve been keeping up with the explosive news this week about the DAO failure and one comment really put things in persepctive
What strikes me as even more off-putting is the fact that Ethereum developers had money invested in the DAO. Imagine if a Bitcoin company went bankrupt, and then the developers planned a hard fork to get their money back – because they are personally invested in the company! Even though the code was fine and everything executed as it should, they lost out – and it seems odd to permit a hard fork because of it. It’s a dangerous precedent.
To those who are not up to date, DAO or Decentralized Anonymous Organization is a smart contract running on the Ethereum network. It’s a piece of code that enables the partners, i.e. the DAO token holders, to vote on investment decisions on where to apply the 150M+ dollars fund raised during the buy-in and democratically decide the fate of the funds. The attacker exploited a bug in the ethereum contract and drained 50M+ usd from the fund. This made some DAO owners call for a hard or soft fork in the ethereum blockchain.
Now the decision faced by the community is to face the consequences of the code in the ledger and it’s execution or leverage the collective weight of the community to steer the network where they believe is morally acceptable.