A decentralized autonomous organization (DAO), sometimes labeled a decentralized autonomous corporation (DAC), is an organization that is run through rules encoded as computer programs called smart contracts. A DAO’s financial transaction record and program rules are maintained on a blockchain. Examples of this business model are Dash governance, The DAO, and Digix.io. The precise legal status of this type of business organization is unclear.
One well-known example was The DAO, a DAO for venture capital funding, which was launched with $150 million in crowdfunding in June 2016, implementing its smart contracts through Ethereum, and was immediately hacked and drained of US$50 million in cryptocurrency. This hack was reversed in the following weeks, and the money restored, via a hard fork of the Ethereum blockchain. This decentralized bailout was made possible by a majority vote of the blockchain’s hash rate.
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