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Crypto Terms:  Letter T

What is The DAO?

Meaning:
The DAO - the first decentralized autonomous organization in the history of blockchain.
medium
2 minutes

Let's find out The DAO meaning, definition in crypto, what is The DAO, and all other detailed facts.

The DAO was the first decentralized autonomous organization (DAO) in blockchain history. It was launched in April 2016. The project was developed as a self-governed, decentralized venture capital fund and earned $150 million after the initial token crowdsale. The DAO worked on mitigating the human error factor in fund management processes.

At one point in its existence, the DAO held roughly 14% of the total Ether (ETH) supply, its primary capital focus. The organization used an open-source code to allow for community contributions.

The DAO followed a decentralized model, meaning that there was no central authority interfering with the governance. Its goal was to create a decentralized self-governing organization that would allow its members to participate in the activities from anywhere in the world. This led to the DAO becoming the first venture capital fund that was completely decentralized.

In June 2016, barely two months after its launch, the DAO was compromised when an anonymous paper revealing the vulnerabilities of the code was released. The investors received a warning to avoid voting on any of the DAO projects until the issues have been fixed.

Hackers soon got hold of the paper and took advantage of the vulnerabilities detailed by the anonymous source, leading to one of the biggest hacks in crypto history. The hackers acquired over 3.6 million ETH from the DAO which then accounted for roughly $50 million. Today, it would be worth over $1.2 trillion.

Since the DAO held a significant amount of the overall ETH funds, Ethereum was forced into a hard fork. The scandal led to several large-scale cryptocurrency exchange platforms delisting the DAO token from the trade. The DAO’s lifespan was cut short.

Although the initial DAO experienced a significant failure, the mechanism of a decentralized autonomous organization has remained popular. Many blockchain-based projects rely on the principles of self-governance and work on avoiding the same code vulnerabilities experienced by the DAO.

memecoins such as Dogecoin, Dogelon Mars, and Shiba Inu. The overwhelming success of the coin holders continues to draw in many desperate investors who believe they can become the next multi-millionaire.&nbsp;<\/p>\n<p>Desperation for success can make people purchase coins that are obvious scams. For instance, the &ldquo;Squid Game&rdquo; coin that was derived from a popular South Korean TV series. In this case, the value of the coin sunk from over $2000 dollars per coin to zero.<\/p>\n<p>In essence, <strong>the person referred to as the &ldquo;greater fool&rdquo; is the one person that will buy the overvalued asset<\/strong>.<\/p>","definition":"states that no matter how overvalued an asset is, there will always be someone to buy it.","status":"published","meta_title":"What is The Greater Fool Theory? Definition & Meaning | Crypto Wiki","meta_description":"The Greater Fool Theory meaning: The Greater Fool Theory - states that no matter how overvalued an asset is, there will always be someone to buy it.","meta_keywords":null}" :prev-section="{"id":916,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Hyperinflation#Effects","level":"easy","author_id":1,"created_at":"2023-06-19T06:59:01.000000Z","updated_at":"2023-10-30T04:51:48.000000Z","slug":"what-is-the-cantillon-effect","title":"What is The Cantillon Effect?","section":"T","keyword":"The Cantillon Effect","content":"<p><strong>The Cantillon Effect<\/strong>, which was developed by Richard Cantillon, happens when a shift in relative prices occurs due to the shift in the money supply. It defines the speed with which money moves through the economy, as well as <strong>the uneven impact it has on prices<\/strong>, wages, and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-inflation/">inflation. While the effect concerns changes in the money supply, it is more focused on the impact of uneven access to that increased money supply.<\/p>\n<p>In today's <strong>US economy<\/strong>, the Cantillon Effect is most obvious. During the pandemic, stimulus packages intended at promoting economic activity by raising the money supply (Quantitative Easing) handed firms <strong>enormous quantities of additional money<\/strong>. As a result, businesses that organized their finances were able to pay off previous debt, purchase inventory, and generally accomplish what Richard Cantillon said they would do with their money.<\/p>\n<p>As an example of the Cantillon Effect on <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-digital-asset/">digital assets<\/strong><\/a>, we could take an instance when the price of <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-bitcoin-btc/">Bitcoin (BTC)<\/strong><\/a> passed $60,000 for the first time in March 2020, just after the House provided the stimulus package. However, the perception of BTC as <strong>digital gold<\/strong> and an inflation-proof asset that cannot be quantitatively eased or fractionally banked&nbsp;also contributed to this.<\/p>","definition":"a shift in relative prices caused by a shift in the money supply.","status":"published","meta_title":"What is The Cantillon Effect? Definition & Meaning | Crypto Wiki","meta_description":"The Cantillon Effect meaning: The Cantillon Effect - a shift in relative prices caused by a shift in the money supply.","meta_keywords":null}" :model="{"id":892,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/The_DAO_(organization)","level":"medium","author_id":1,"created_at":"2023-06-19T06:59:01.000000Z","updated_at":"2023-10-30T04:52:31.000000Z","slug":"what-is-the-dao","title":"What is The DAO?","section":"T","keyword":"The DAO","content":"<p><strong>The DAO<\/strong> was the first <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-decentralized-autonomous-organizations-dao/">decentralized autonomous organization (DAO)<\/strong><\/a> in blockchain history. It was launched in April 2016. The project was developed as a self-governed, decentralized venture capital fund and earned $150 million after the initial <strong>token crowdsale<\/strong>. The DAO worked on mitigating the human error factor in fund management processes.<\/p>\n<p>At one point in its existence, the DAO held roughly 14% of the total <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-ether/">Ether (ETH)<\/strong><\/a> supply, its primary capital focus. The organization used an open-source code to allow for community contributions.<\/p>\n<p>The DAO followed a decentralized model, meaning that there was no central authority interfering with the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-governance/">governance. Its goal was to <strong>create a decentralized self-governing organization<\/strong> that would allow its members to participate in the activities from anywhere in the world. This led to the DAO becoming the first venture capital fund that was completely decentralized.<\/p>\n<p>In June 2016, barely two months after its launch, the DAO was compromised when an anonymous paper revealing the vulnerabilities of the code was released. The investors received a warning to avoid voting on any of the DAO projects until the issues have been fixed.<\/p>\n<p><strong>Hackers<\/strong> soon got hold of the paper and took advantage of the vulnerabilities detailed by the anonymous source, leading to one of the biggest hacks in crypto history. The hackers acquired over 3.6 million ETH from the DAO which then accounted for roughly $50 million. Today, it would be worth <strong>over $1.2 trillion<\/strong>.<\/p>\n<p>Since the DAO held a significant amount of the overall ETH funds, Ethereum was forced into a <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-hard-fork-blockchain/">hard fork<\/strong><\/a>. The scandal led to several large-scale cryptocurrency exchange platforms delisting the DAO token from the trade. The DAO&rsquo;s lifespan was cut short.<\/p>\n<p>Although the initial DAO experienced a significant failure, the mechanism of a decentralized autonomous organization has <strong>remained popular<\/strong>. Many blockchain-based projects rely on the principles of self-governance and work on avoiding the same code vulnerabilities experienced by the DAO.<\/p>","definition":"the first decentralized autonomous organization in the history of blockchain.","status":"published","meta_title":"What is The DAO? Definition & Meaning | Crypto Wiki","meta_description":"The DAO meaning: The DAO - the first decentralized autonomous organization in the history of blockchain.","meta_keywords":null,"author":{"id":1,"user_id":1,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2023-05-11T07:18:20.000000Z","title":"Editor-In-Chief","slug":"aaron-s-editor-in-chief","description":"<p>Having completed a Master&rsquo;s degree on Economics, Politics &amp; Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US&rsquo; Western and Japan&rsquo;s Collective forms of capitalism, 1945-2020.<\/p>\n<p>With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He&rsquo;s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain &amp; Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2641,"referral_token":"05TMu2NysXOCn525","referred_by":null,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-01-09T15:22:21.000000Z","full_name":"Aaron S."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin 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Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: 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(NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart 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