The DAO Token Holders Need to Evaluate and Criticize Every Proposal They Receive.

The above statement may seem obvious, but The DAO has formally received two proposals by UG, Token holders must carefully analyze every proposal they receive, and evaluate the financial viability of these, failure to do so may result in mismanagement of funds and the ultimate failure of the biggest crowdfund sale in the history. 

The German startup UG carried out the development of a standard framework for Decentralized Autonomous Organizations, this framework was used as a foundation for what is now the most successful crowdfund campaign in history, with more than $140 million collected, however, this doesn’t mean that The DAO owns anything or that it should immediately accept proposals made by the German company.

Granted, has assumed a role of leadership, but they have their own set of economic interests -after all, is a for profit organization-, TheDAO token holders must be vigilant, they need to carefully assess every proposal, and make decisions that will bring value to the shareholders.

The new proposal accounts for 125,000 ETH to be spent on a ‘dedicated team of security experts’, many people immediately raised their eyebrows on this proposal, open source projects with little to no funding whatsoever have been going on for decades, TheDAO will not be different, especially when $150 million are on the line.

A member of the Ethereum community replied to proposal with the following:

There is a danger of poor expenditure reminding me of the Bitcoin Foundation and the original Ethereum.

In the cost breakdown of’s proposal we can find:

  • The update of the DAO general framework to version 1.1, accounting for 10,000 ETH -let’s remember that released version 1.0 for free-.
  • Deployment of 2-3 ‘security experts’, including DAO Framework Author Christoph Jentzsch at any given time, for the next 2 years, with an ‘on call’ schedule 24/7 for 60,000 ETH.
  • External audits to the code for  25,000 ETH.
  • Bug Bounty program for 30,000 ETH.

Having room to negotiate is always good, and nothing is forcing The DAO token holders to accept any proposal they receive, so it’s only natural to have a set of negotiations to take place between any service providers and the shareholders. has clearly stated that the DAO will not hold any equity in them, so we must try to seek independence from the German company.

The competition will also benefit the token holders, having multiple companies fighting for the funding will be beneficial as it lower costs. Several of the tasks outlined in proposal can be easily carried out by the own investors, due diligence they call it.

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