THE STORY OF DAO
‘The DAO’ is the name of one particular DAO, which was created by a team behind a German startup slock. it which specialized in ‘smart locks’ that let people share their property in a decentralized version of Airbnb. The DAO was deployed in May 2016, when it was funded via a token sale. Somehow, the project managed to become the most successful crowdfunding campaign in history, having raised over $150 mln.
The DAO’s code wasn’t perfect, and as it was open-source and available to view for everyone, someone found a bug to exploit. So, on June 17th an anonymous hacker or a group of hackers, started siphoning money from The DAO into a ‘child DAO,’ which copied The DAO’s structure. Before the draining of funds was stopped, the hacker managed to steal more than $50 mln worth of Ether.
Despite the fact that a bug in The DAO’s code was exploited to steal the funds, the hack seriously undermined both Ethereum’s reputation as a hosting platform and the very concept of DAOs. Moreover, it caused the Ethereum network to split in two. However, it is important to realize that all of this could’ve been avoided by additionally testing the code. Perhaps, this hack was an important milestone in the developing history of DAOs which showed the potential weaknesses and, undoubtedly, such weaknesses will be taken into consideration by future DAOs.
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