The DAO: Code Meets Consensus
June 2016
An exploited contract forced Ethereum to confront a question code could not settle alone.
Origins
The DAO attempted to pool funds for projects selected by token holders. Its structure embodied early optimism about organizations administered through smart contracts, while concentrating substantial value in a new system.
The moment
In June 2016, an attacker exploited The DAO’s contract and diverted ether. The response involved debate over intervention, ultimately followed by a hard fork. The SEC’s later investigative report also examined the offering and its treatment under securities law.
The aftermath
The episode exposed the limits of describing software rules as the whole of governance. Ethereum and Ethereum Classic continued along different chains. The legal and technical responses remain distinct: a contract exploit, a community decision and a regulatory assessment are related but separate events.