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Autonomous corporation “The DAO” has become the biggest crowdfunded project

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Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#81

Post by will_brown »

zardo wrote: post #63
dragonwriter wrote: post #30

Earlier quoted context omitted.

> No, a corporation is a legal entity that must have directors and officers, aka people. OR, a corporation is a legal entity formed by a corporate charter that is treated as a person under the law. In any case, whatever these ethereum-based things are, they aren't corporations.

>In any case, whatever these ethereum-based things are, they aren't corporations. They may end up creating and operating corporations, but DAOs are their own thing.

To expand on Dragonwriter's point just a little.

Lets pretend DAO somehow autonomously filed Articles of Incorporation in DE. What is required by DE? A DE physical address for the corp.; a registered agent located in DE; and a incorporator (doesn't need to be shareholder, but must be an individual). Already we see it is an impossibility for DAO to do this autonomously.

But lets pretend it wasn't impossible, DAO autonomously entered into a Lease, contacted with a registered agent, contracted with a corporate lawyer too be the incorporator and file the Articles. Whats the next step? A bank account, well DAO doesn't have a social security, and doesn't qualify for TIN. The Corp. can't get an EIN, which means it can't open a bank account, which effectively means it can't do business. Well again, lets pretend the DAO C-Corp doesn't need a bank account because well Bitcoin is perfect right? DAO autonomously creates a Bitcoin wallet for the corp and does all business through that, well the company still doesn't have an EIN, which means it won't be able to pay taxes.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#82

Post by j1vms »

tonyswish wrote: post #66
will_brown wrote: post #60

Earlier quoted context omitted.

I think as a lawyer who practices a great deal of corporate transactions, I have a much better idea than most on the legal structure and compliance issue with corporations on a state by state basis. But instead of telling me my question shows I don't understand, please answer any of the following: -Are the token holders shareholders? -If shareholders do the token holders also get to vote for the board, or are their t…

Viewing this as a corporate attorney is the wrong approach as it's not a "corporation" and there is not really any legal framework as the idea is too new (CFTC commissioner just mentioned to "do no harm" to blockchain tech). 1. no, but they have a vote and can transfer a token which also represents their vote 2. there is no board 3. there is no board

I think the key thing to emphasize as well is that "The DAO" is just a program which now has clearly defined rules for managing its assets in the form of cryptocurrency. When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors). Whether those contracts with outside parties are enforceable, and how they will be enforced is within the realm of "to be determined" at this point. That does not at all mean the prospects for this type of setup/idea (DAO) are negative going forward.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#83

Post by irq-1 »

dragonwriter wrote: post #38
street wrote: post #31

Earlier quoted context omitted.

And in fact, in many countries, the DAO actually is a legal company/association, just not officially incorporated. But incorporating is not required everywhere for the normal laws to apply. Just the fact that people put their money together and are acting as a group gives them various legal requirements. The fact that the DAO limits what they can do might interfere with their ability to follow the laws; that does not…

Right. In fact, an business entity that doesn't go through the formalities of becoming a legal corporation, LLC, etc., may expose its members to unexpected legal responsibilities. E.g., if the agreement were seen as forming a general partnership, each member would be jointly and severally liable for all legal liabilities of the partnership.

Two of the big advantages of a modern joint-stock company are: limited financial liability and professional management. Management limits the need for input and activity of the investor. (You don't even need to vote your shares.) Do the members of the DAO want to vote on every little thing?

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#84

Post by Mindless2112 »

CharlesMerriam2 wrote: post #61
noonespecial wrote: post #15

Charlie Stross is smiling somewhere. https://en.wikipedia.org/wiki/Accelerando

Closer to Daniel Suarez, Daemon & Freedom. http://www.amazon.com/DAEMON-Daniel-Suarez/dp/0451228731 This fiction starts the autonomous corporation from a vide game. The second book shows society's evolution to cope with the new corporation.

Daemon and Freedom™ are excellent books – a frightening but plausible view into the not-so-distant future.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#85

Post by Freak_NL »

kuschku wrote: post #72
Bjorkbat wrote: post #44

An interesting concept, but I'm not buying the hype. At the end of the day a bunch of people bought shares in a company (or did they? Legality is weird) with the special condition that in addition to owning a share of said company they also get to vote on what the company actually does, and even submit proposals for what it should do. Oh, and they also bought said shares with cryptocurrency. Magic internet money guys…

> Admittedly I think enabling this kind of democracy in a company is a bad idea. It might actually wind up being less nimble than an actual corporation because of the extra consensus required. This stuff is also known as a cooperative, and is a very common concept for democratic companies – almost all housing in europe is owned like this.

> […] almost all housing in europe is owned like this.

Did you mean social housing rather than housing in general? Because home ownership exceeds 50% in most European countries, just like the US.

Social housing is often managed by cooperatives, but decades of neoliberalist thinking caused a lot of the larger of these cooperatives to invest in boondoggles and grandiose development projects completely unrelated to their core task rather than build more affordable housing. Coupled with the immoral self enrichment of upper management, mentioning European social housing cooperatives may not exactly support the point you are making.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#86

Post by dragonwriter »

j1vms wrote: post #82
tonyswish wrote: post #66

Earlier quoted context omitted.

Viewing this as a corporate attorney is the wrong approach as it's not a "corporation" and there is not really any legal framework as the idea is too new (CFTC commissioner just mentioned to "do no harm" to blockchain tech). 1. no, but they have a vote and can transfer a token which also represents their vote 2. there is no board 3. there is no board

I think the key thing to emphasize as well is that "The DAO" is just a program which now has clearly defined rules for managing its assets in the form of cryptocurrency. When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors). Whether those contracts with outside parties are enforceable, and how they wil…

> When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors).

Is the DAO a legal entity with recognized agents with authority to enter into contracts on its behalf? If not, how can this possibly work?

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#87

Post by darawk »

Bjorkbat wrote: post #44

An interesting concept, but I'm not buying the hype. At the end of the day a bunch of people bought shares in a company (or did they? Legality is weird) with the special condition that in addition to owning a share of said company they also get to vote on what the company actually does, and even submit proposals for what it should do. Oh, and they also bought said shares with cryptocurrency. Magic internet money guys…

The DAO will probably end up being more like a hedge fund / VC firm than a normal corporation. It will more likely invest in other companies than try to execute its own ideas. At least, that is my hope for it, and I think that is the path that makes the most sense.

We will see what the crowd decides.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#88

Post by drcode »

c3534l wrote: post #78

There's a reason corporations developed as they did. With a large number of owners, it becomes very difficult to tell what is actually going on in a company and making consistent, sensical decisions is difficult. The result is that we developed a board of directors who are elected by the owners to oversee the performance of the top employees at that company, and a complex of system of accounting to communicate the fi…

> There's a reason corporations developed as they did.

Well, the counterargument would be "Because they didn't have computers back then and therefore couldn't develop alternative systems that are better but are impractical to implement manually."

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#89

Post by drcode »

street wrote: post #71
drcode wrote: post #46

Earlier quoted context omitted.

> The DAO isn't actually worth 120 million. I you tried to sell all Apple stock in a single day it would also sell at well below market rate- Does that mean Apple is worth less than its market cap? That said, I personally have not invested/speculated in the DAO because I just don't see it as a good opportunity.

I just sold one of my hairs to myself for $10. Is my head now worth a million? With Apple, there's intrinsic value to consider. And frankly, if you sold enough Apple stock for it to go down 50%, I'd personally start buying. I doubt that's the case for ETH, where there's only early adopters buying it hoping to strike it rich.

So you're saying the intrinsic value is certain to be lower than it's current market value? I have good news for you: You can become rich by simply shorting ether on Kraken and Poloniex!

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#90

Post by j1vms »

dragonwriter wrote: post #86
j1vms wrote: post #82

Earlier quoted context omitted.

I think the key thing to emphasize as well is that "The DAO" is just a program which now has clearly defined rules for managing its assets in the form of cryptocurrency. When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors). Whether those contracts with outside parties are enforceable, and how they wil…

> When it interacts with the real world, it will do so by transferring or receiving digital assets and entering into real-world contracts with outside parties (Contractors). Is the DAO a legal entity with recognized agents with authority to enter into contracts on its behalf? If not, how can this possibly work?

Like I said "to be determined" is what I understand, however they appear initially to be employing a real-world company avatar: DAO.Link, based in Switzerland. [0]

[0] http://www.coindesk.com/the-dao-just-raised-50-million-but-w...

Edit: Also, do keep in mind that the Contractor would be able to see the contract is in effect by viewing it in the "blockchain". The question is only a matter of real-world enforcement in the specific case of the smart contract criteria not being satisfied at contract completion, due to incorrect/false data inputs to it by people in The DAO.

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