One week after the launch of the DAO, how has it fared?
DAO continues to trade below its intrinsic value of 0.01 ETH. The central flaw of the DAO is improper incentives to deal with voter apathy.
A proposal must receive a quorum of at least 20% of DAO holders voting yes before it can be invested in. The graph shows 9 live DAO projects. None of which are even halfway to the 20% threshold.
The DAO is certainly a revolutionary way to raise capital. However, at the outset, the rigidity of the code and democracy is DAO’s achilles heel. Investors entrust money managers to make tough decisions for them that they are unwilling or unable to make. Humans are lazy beings, but the DAO does not have the proper incentives to overcome this fact.
US$150 million is now trapped in DAO. It will not be liberated by innovative new projects, but by opportunistic traders. 1172.52 million DAO were created, which at current market value are worth US$152.26 million. If you can form a syndicate that controls US$30.65 million of the DAO float or 20%, you can effectively vote yourself free money.
Submit a proposal that your syndicate votes on guaranteeing quorum of 20% is met. While some holders will vote against your phoney proposal and op-out, the vast majority of lazy holders will not notice how they have been hoodwinked. Once the ETH has been received for your proposal, sell it for USD and invite me and the US secret service on your coke and hooker Cartagena beach party.
If Slock.it cannot achieve quorum, then I declare DAO officially DOA. Slock.it built DAO as a way to finance themselves without prostrating to the VC cartel. DAO will have successors that improve upon the model, but taking a 6% loss on your investment today is better than being swindled out of everything.