ViaBTC｜Proposed 8 Years Ago, DAO Shows Unique Appeal, Tempting Even Sequoia Capital to Ride on its Wave
The concept of DAO (Decentralized Autonomous Organization) was first proposed by Daniel Larimer, EOS’s founder, in an article published in September 2013. The concept went viral when The DAO was launched in 2016. As the most anticipated and the largest DAO crowdfunding project at the time, The DAO was initiated by Slock.it, a company focusing on blockchain technology and the Internet of Things. Having issued a token called DAO, the project raised about 12.7 million ETH ($150 million, according to ETH price at the time) in 28 days. This was almost 14% of ETH’s total supply, while the number of participants reached 11,000.
At the time, as they listed the token, the leading exchanges were also promoting programs about The DAO. However, the momentum didn’t last. On June 17, 2016, Vitalik Buterin posted an urgent message on Reddit, stating that The DAO is under attack. Ethereum’s founder asked exchanges to suspend the transaction, deposit, and withdrawal the ETH/DAO trading pair. This message started an immediate outcry in the communities.
For hackers, the less-than-rigorous coding of The DAO was a great opportunity. Using the loopholes, they conducted around two hundred attacks and hacked 3.6 million ETH. Consequently, Ethereum had to begin a hard fork to make up for the losses. Despite its failure, The DAO, the first project to practice this new concept, brought considerable exposure to the term DAO in the blockchain space. Also, it was a great experiment in the history of blockchain. The DAO showed the world the possibility to create organizations governed by codes and run autonomously, without human intervention and management.
The DAO sector is now growing at an incredible speed. In the United States, areas like the state of Wyoming have allowed companies to get registered as DAOs. Recently, even Sequoia Capital, an investment big-shot, has changed its Twitter profile to DAO-related content. Although the content was deleted on December 9, Sequoia Capital’s move has surely sent DAO into the spotlight.
Amidst the current DAO boom, two trending projects have stood out — Aragon and BadgerDAO.
As a Ethereum-based platform that allows any individual or institution across the globe to create DAOs, Aragon offers DAO template and could even transform a centralized organization directly into a DAO, without the need of building a DAO from scratch. Of course, it is also easy to create a new DAO, which can be done in four simple steps:
Adopt a Ethereum wallet, e.g. MetaMask;
Set up all the parameters, and define the DAO to be created;
Click on “Create an organization”, and wait for confirmation of the deal;
Develop your organization by creating a new token, adding new members, and building the voting mechanism.
However, Aragon has had a tough year in 2021. At the beginning of the year, 12 core members of Aragon One, Aragon’s parent, had resigned, including the company’s CEO Jorge Izquierdo, according to the media. After the news came out, the ANT price dropped by over 11% within 7 days. Despite this, the incident had little impact on Aragon as the token quickly rebounded in less than two weeks. In April, the ANT price even exceeded $12, setting a new record.
As of December 9, there are 1,892 DAOs on Aragon, 50 of which have been active within the last 30 days.
BadgerDAO, a DAO jointly run by BADGER holders, focuses on introducing Bitcoin into DeFi. At the moment, most of the “bridges” built for the introduction of Bitcoin into DeFi are centralized. As such, in the absence of a legal entity, BadgerDAO members work together to fund and build a product called DIGG, which can be anchored with BTC through smart contracts.
It is noteworthy that BadgerDAO has learned a lesson from the failure of The DAO and developed a five-part strategy to ensure the security of user funds, covering audits, guarded launch, council of white hats, bug bounties, and insurance. In particular, BadgerDAO maintains bug bounty programs through Immunefi and Armor Alliance that pay up to $750,000 for the discovery of critical vulnerabilities, which shows how much BadgerDAO values security.
During the history of centralized organizations, we have seen apparent flaws and constant conflicts. As conventional organizations seek advancements, the advent of DAO is natural. DAO investments by Sequoia Capital or other eager institutions would significantly expand DAO’s influence and market recognition.
* The above content may not be relied on as any investment advice.