Christoph Jentzsch announced a new project called the Charity DAO.
Most cryptocurrency enthusiasts will remember The DAO, a failed Ethereum-based experiment creating a major crowdfunding effort to deliver nothing in the end. Even though that concept was a disaster, the original team is trying their hand at a new venture. The team that created the now-infamous ethereum-based funding vehicle known as The DAO have regrouped, and in a blog post published today, Slock.it CTO Christoph Jentzsch announced a new open-source initiative called Charity DAO. $373.25 billion was given to charitable organizations in 2015 (2.1% of the world’s GDP). What if they could make charitable giving more efficient? Or better yet, what if we could increase the amount donated even a fraction of a percent?
That seems to be the main question for the time being. It is difficult not to be critical about projects that build further upon flawed foundations. The DAO was a disaster, due to its code vulnerabilities, and the inability by project developers to address key flaws they were aware of before the crowdfunding even began.
The Charity DAO will give donors control and transparency towards donations by allowing voting towards certain charities. The new DAO effort will be a nonprofit entity that is very similar to the original DAOHub. However, this time Jentzsch says security will be tighter by utilizing the knowledge gained from the last experiment.
Jentzsch said that with the Charity DAO, the platform can provide decentralized governance with “full transparency and accountability on giving.” The Charity DAO will be strictly nonprofit said Jentzsch, and a set of trusted curators will commit themselves to the project.
“The donors stay in full control of the funds and vote on which projects will get funded, either directly or via a nominated delegate.” “These projects — approved by a set of trusted curators — will commit themselves to a payment schedule laid out in smart contracts (e.g., monthly disbursement with the ability for the charity DAO to halt payments in the case of missed deliverables).” Jentzsch explained.
Unlike the for-profit DAO, which was intended to pay dividends to investors based on the success of its investments, this effort is intended as a nonprofit. But to prevent even the potential of such high-stakes losses like with The DAO, Jentzsch says this time around he’ll temporarily cap the amount raised and a so-called “security hatch” will be written into the code. Conducted in partnership with a group identified as “Giveth” in the blog, Charity DAO will let donors control their funds and vote on which projects they want to fund.
Charities have a public image problem, reflected in increasingly critical media stories. Who can forget the Red Cross scandal, where dozens of trucks were driven around empty — “just to be seen” — during the aftermath of Superstorm Sandy and Hurricane Isaac. With Ethereum, we have the ability to create a decentralized governance structure while providing full transparency and accountability on giving. Undoubtedly, many cryptocurrency enthusiasts will be very skeptical towards this project. However, Jentzsch and others believe they have learned from previous mistakes.
“By using tools such as the blockchain, Ethereum, and DAOs, we are able to remove the requirements of putting one’s trust into a centralized, opaque organization — anyone can submit a Proposal for a Cause – after being selected by Curators these become automatically public and Donors can opt to vote on them,” says the Charity DAO’s website.
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