Two weeks ago, I wrote that #THEDAO was
- “irredeemably broken;” and
- as a result, likely to wind up being a crap sandwich for everyone involved.
I called for the token sale to be abandoned, for users to be returned their funds, and for all persons involved in this enterprise to start from scratch. Because if you’re building software that manages someone else’s money, it’s important to do it right. The first time.
Instead, the sale was not halted and #THEDAO’s membership tokens are now being traded on Poloniex and Kraken, as well as a couple of sketchy unregulated operations run out of China.
The last 72 hours are not encouraging. The last 24 hours, in particular, have seen the value of DAO tokens fall precipitously – on the basis, we might presume, that some investors are seeking to get out:
An investment which, it should be noted, was originally priced at a rate of 1 ETH per DAO token. As can be seen, the value of these two “commodities” has now decoupled.
Possibly because, as #THEDAO is now actively considering proposals, it’s extremely difficult to get your ETH out at par:
This has led to rather a bit of disquiet on the part of DAO token purchasers, who appear to have been under the distinct impression that exit would be more straightforward:
The most ridiculous thing about all of this, of course, is that none of this had to happen if the promoters just did things right the first time and decided to run a legally compliant business instead of a decidedly poorly structured “crypto-economic” one.
Call me old-fashioned. Say I lack vision. But don’t tell me I’m wrong.
In any case, it should be interesting to watch how things play out over the next couple of weeks – especially following Vlad Zamfir and Emin Gün Sirer’s compelling paper calling for a moratorium on all DAO activity until certain critical security and governance holes are patched.
All this has happened before. In the absence of any meaningful regulatory intervention it will very likely happen again. What remains to be seen is whether rather a lot of (decentralized) brainpower can fix an impasse in a purportedly leaderless system, or whether – as with Bitcoin – years of ideological squabbling and infighting await.