ICO Review – DAOstack

Premise

4.5/5 Excellent

One of the main use cases for Ethereum  was originally Decentralized Autonomous Organizations(DAOs). Rather than an organization defined through paperwork and legal structures, DAOs use smart contracts to enforce organizational rules.

The promise of DAOs is the ability to have powerful contracts created quickly, easily and cheaply. This can reduce legal and administrative costs and also promises to produce more agile organizations.

DAOstack is a framework for creating DAOs. Rather than having a single DAO model, it is a modular framework allowing companies or organizations to use the pieces they want to create their own DAO.

Within the DAO, users can create proposals and vote on them. Proposals can be boosted through a staking mechanism. If the proposal wins, the user gets their token back and if it fails, the tokens are lost.  To address corruption and bad actors, there is a reputation system.

Compared to creating their own DAO by developing their own smart contracts, DAOstack is a much quicker, safer and easier way to develop DAOs, as the pieces are pre-designed and already developed, have presumably been thoroughly tested, and will can be implemented with a user-friendly interface.

Besides Alchemy – the main dapp used to interact with the DAOstack to create and manage DAOs, DAOstack also exposes art.js, the API for the DAOstack. This allows developers to create Dapps which interact with the DAOstack framework.

We like this premise very much. DAOs are a very good use of blockchain and a toolkit for creating them is much needed.

Team

3.5/5 Pretty Good

The team behind DAOstack is fairly good. The CEO/Founder has a background in physics, and has been researching and working on DAOs for years. The ideas for DAOstack have been developed over that time.

The rest of the team has some decent blockchain and development experience. The advisors include the CEO of Gnosis, a prediction market project.

Token

3.5/5 Decent

The GEN token is used to promote proposals in DAOs via a staking mechanism.

40% of all tokens are being sold for $30 million USD.

Risks

3/5 OK

There are a number of risks to the project. Security wise, the DAOstack is a relatively complex blockchain project which will itself hold funds as well as be used to build projects which will also hold significant funds on the DAOstack protocol. As seen with the original DAO hack, this presents an incredibly enticing target for hackers. We would like to see a thorough security audit of the DAOstack code before their ICO and we would like to see them design some kind of ongoing mechanism to deal with this issue.

DAOs are still a relatively new and experimental concept so whether they will work in the real world and how they will work is still unclear. While DAOstack seems to have taken a well thought out approach to governance on the blockchain, this is an incredibly challenging topic to tackle which deals with economics, game theory, organizational behavior, and other fields which we’re not sure the team has a total grasp of, so it’s unclear how successful their approach will be in the real world.

The risks to the project are great, but they are mitigated to some extent by the fact that development is backed by years of research in this field, and that the team already has produced a working MVP.

Summary

DAOstack is trying to tackle one of the biggest challenges in the blockchain space – DAOs. By creating a framework and easy to use Dapp to create DAOs, they aim to make it as easy to create a DAO as it is to build a blog using WordPress. While the team is more tilted towards academia than we would like, overall we like this project and think it will do well, as it is addressing a core blockchain use case.

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