The first large-scale experiment with a leaderless distributed autonomous organization (DAO) is winding down, according to at least one prominent member of the decentralized project.
Following at attack earlier today that resulted in the siphoning of over $60m worth of ether from The DAO into a new DAO set up by an unknown individual or entity, the company that wrote the original code is now saying the "experiment" is over.
But, it remains unclear if anyone in a leaderless organization, one meant to be driven by the votes of tens of thousands of stakeholders, actually has the authority or ability to end the organization.
In conversation with CoinDesk, the co-founder of Slock.it, which had previously been working to fix the bugs in the DAO’s open-source code, said the roughly $150m in funds are in the process of being moved to a separate account designed specifically to help bring the operation to a close.
But due to The DAO's governance model, encoded into a series of smart contracts, Tual said the money won’t be accessible for withdrawal for at least a week. Further, it could be as long as 27 days before investors are returned any funds, giving them at least a little breathing room to determine a course of action.
In the meantime, other possible solutions that would require changes to ethereum’s underlying code are being discussed, though it remains to be seen if developers will seek to intervene in helping to resolve the situation.
Deus ex machina
It further remains unclear if any single member of The DAO, even Tual and his fellow Slock.it founders, have the authority to stop its continued open-source development, even if they think they're acting in its best interest.
Academic Emin Gün Sirer, who called for a moratorium on DAO activity when he co-discovered issues with its code last month, told CoinDesk he's not sure if Tual is correct that The DAO is certainly closing.
Sirer, who has been in discussions with many involved in troubleshooting the vulnerability, told CoinDesk that the workflow The DAO was designed to follow is so complicated that it will be "very difficult" for anyone to say what will happen next.
The Cornell professor said that one possible way for The DAO to close down would be for Slock.it or another group to propose a measure to the DAO's voters that, if approved, would move all the funds to an account from which they could be withdrawn after a 14-day waiting period.
Andrew Miller, co-author of a detailed report about The DAO's vulnerabilities published yesterday, agreed with Sirer in conversation with CoinDesk.
"It’s possible to me that the DAO could do that," he said "The way I think they might be able to do this is to get everyone to accept the proposal."
As the code is currently written though, according to Sirer, there is "no way" to immediately refund the value contributed to those involved.
Any effort to change the fabric of the code would undermine future faith in smart contracts which need to be "incontrovertible and self-policing" in order to provide any value at all.
The cost vs the benefit
For Tual’s part, he remains optimistic that an effort would be made to ensure consumers whose funds were stolen are able to see relief.
Miners of most blockchains, for instance, have the ability to “turn back time” collectively in what is called a 51% attack, but the suggestion that they do so in this instance remains controversial, as are implications that more advanced changes could be made to ethereum's code to provide relief for project donors.
But, turning back the clock on the Etherum blockchain, according to Tual, would amount to a white hat 51% attack for the good of the community.
Tual advocated that action was needed due to the fact that perception of the platform has already been negatively impacted.
Tual told CoinDesk:
Surge protector image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish, a cryptocurrency exchange, which in turn is owned by Block.one, a firm with interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets including bitcoin and EOS. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.