Is DAO still valid? | Author: Dwayne D’cunha | The Capital | July 2021
The DAO has been severely criticized since its establishment because it has many security risks, and since no one is in charge of the organization, it has not been resolved.
By May 2016, DAO was able to obtain approximately 14% of the ETH tokens issued at that time, which is a lot considering that it was launched only a month ago. This did not last long. Just one month later, the DAO was attacked by hackers, who received 3.6 million ETH tokens worth 50 million U.S. dollars at the time. This caused great confusion, because no one knew what to do, and no one went to implement a specific decision to decide whether they should solve the problem or dissolve the organization. People are also worried about the value of Ethereum, which may be affected by investors liquidating their Ethereum.
Subsequently, the exchange delisted the DAO token in September 2016. DAO was also vague about whether to sell securities. Later, in July 2017, the SEC (Securities and Exchange Commission) confirmed that DAO was indeed selling securities in the form of tokens on the securities Ethereum blockchain, which violated parts of the US Securities Law. content. Not to mention the violation of the trust of the investors who funded the entire project.
The obvious problem is the lack of supervision, the inability to ensure that appropriate safety measures are taken, and the lack of confidence in the project. Accountability is also very important, especially when starting a new company. Although decentralization is great, it is essential that people are equally committed to and working to improve the organization. In this sense, some level of supervision is required.