Recently, I wrote about DAOs, you know, the decentralized code that could replace corporations and venture capital companies? We also learned about Slock.it, the developers behind the first fully operational decentralized autonomous organization’s code as well as their nifty addition to the sharing economy. Now, it’s finally happening. The DAO* (a very recognizable name for a DAO I might add) has finally launched. Since this one is separate from Slock.it, the potential is much larger. Its funds can be used to invest in any organization its shareholders choose. Since its the first to market, it’s likely to have an advantage over future DAOs. Already, over 13 million dollars has been pledged, and the investment period will continue until May 28, 2016.
So what exactly can The DAO do? What kind of returns should you expect to make on your investment? The truth is, no one knows for certain. Luckily, you can cash out to Ether > USD at any time and still reap most of the rewards from your initial investment, as per the terms of the sale. Still, we can imagine what it might do. It could replace all those venture capital companies which, though mostly benevolent, still serve the interests of a much smaller pool of people than a widely held DAO can. Remember, we’re democratizing money and investment here.
The way The DAO’s funding works is that companies or developers will make proposals to it, and token holders will be able to vote on how their investment is used. If you look at Ether, the fuel for all of this, and its price so far, you can get an idea of how huge The DAO could end up being when fully operational. Ether sold for around $0.25 during its crowdsale and 2 years later it’s sold for upwards of $15. If the first real Ether-specific app is finally available, what do you think that will do to the Ether economy? Of course, there is never any certainty in investing**. You must do your own research before committing any money to a project.
Investing in The DAO can be as tricky or as simple as you make it. If you have one set up, you can use your Ethereum Mist wallet and can control your private keys/tokens directly. If you’re primarily in this for speculation, you can store your DAO tokens on an exchange like Gatecoin (not currently the greatest for US residents) or Bittrex (pretty simple sign up and available to US residents). Both exchanges are easily accessible through The DAO’s crowdsale wizard. There are a couple other options there as well.
This has been a Hot Tip, provided by Millennial Investor. Please read the linked articles and discuss in the comments below.
Sidenote: If you’re interested in the benefits of setting up your own Ethereum Mist wallet and node, check out the video below.
*We tried something new in this article by linking to the main subject through Credhot. Instead of having advertisements directly on the site, for the time being we are trialing Credhot’s link sharing platform. It pays out in Bitcoin per click and has a slick interface. If you have any thoughts regarding this choice, we’d be more than happy to hear them.
**Disclaimer: Please read the terms and conditions of any and all crowdsales before you participate. Millennial Investor is not affiliated with nor can guarantee the future performance of any asset or token discussed within this article.