Decentralized autonomous organizations

Just like DOs, a Decentralized autonomous organization (DAO) is also a computer program than runs on top of a blockchain and embedded within it are governance and business logic rules. DAO and DO are basically the same thing, but the main difference is that DAOs are autonomous, which means that they are fully automated and contain artificially intelligent logic, whereas DOs lack this feature and rely on human input in order to execute business logic.

Ethereum blockchain led the way with the introduction of DAOs for the first time. In DAO, the code is considered the governing entity rather than humans or paper contracts. A Curator, however, is a human entity that participates as someone who maintains this code and acts as a proposal evaluator for the community. DAOs are capable of hiring external Contractors if enough input is received from the token holders (participants). The most famous DAO project is The DAO (https://daohub.org) as it raised 168 million US dollars in its crowd-funding phase. The DAO project was designed to be a venture capital fund which was aimed at providing a decentralized business model with no single entity as an owner. Unfortunately, this was hacked due to a bug in the DAO code and millions of dollars' worth of Ether currency (ETH) were siphoned out of the DAO into a child DAO created by the hackers. It required a hard fork on the Ethereum blockchain to reverse the impact of the hack and initiate the recovery of the funds. This incident opened up a debate on the security, quality, and the need for thorough testing of the code in smart contracts in order to ensure integrity and adequate control. There are projects underway, especially in Academia, that are looking to formalize smart contract coding.

Currently, DAOs do not have any legal status even though they may contain some intelligent code that enforces some protocols and conditions, but these rules have no value in the current real-world legal system. One day, perhaps an autonomous  agent that is commissioned and permissioned by a law enforcement agency or a regulator containing rules and regulations could be embedded in a DAO, to ensure the integrity of the DAO from a legal and compliance perspective. An Autonomous Agent (AA) is a piece of code that runs without human intervention. The fact that DAOs are purely decentralized entities makes it possible to run them in any physical jurisdiction. Therefore, they raise a big question as to how a current legal system would work with such a varied mix of different jurisdictions and geographies.