# Thoughts on the DAO (1) - it takes a lot of people to make this kind of a mess > One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [278]. Vinay Gupta, exponential humanitarian. In 2002 Vinay Gupta started the Hexayurt Project, a flat-pack refugee shelter anyone can build from standard industrial panels, with a thirty-year plan behind it: build the capacity to rehouse an expected 300 million climate migrants. Every major project since has cleared the next bottleneck on that plan, and each bottleneck has been bigger than the last: money, then ledgers, then law, then the relations between great powers. Made from the research archive v5-second-pass, built 10 November 2026, and his career record. The map of the whole archive is https://guptaoption.com/llms.txt, and any source [id] is at https://guptaoption.com/texts/.md. This file's connections are below, then his passages. ## Where this source sits - Source: video, 2016-06-19 (YouTube upload date), https://www.youtube.com/watch?v=DLmn0d4gQA8. Text: automatic captions, mostly corrected - On the plan's timeline (by date, not by subject): after the ledgers step (Ethereum launch, 2015), before the law step (Mattereum, 2017). - How it fits the plan (the research build's reading): The DAO failure that motivated legally grounded smart contracts. - Career works it belongs to: - The Big Deal (2011): Four-essay blog series arguing that government has hit hard limits, so civil society, working with... (suggested by machine) - Taking a crack at a practical system (introducing the ESCROWNYM) (2012): Blog essay proposing the escrownym: an identity lodged with escrow brokers under a legally binding... (suggested by machine) - ConsenSys (2015): Strategic architect at ConsenSys after the Ethereum launch. (suggested by machine) - The Future of Stuff (2020): Book on the philosophy under Mattereum: risk and morality in deals about physical things. (suggested by machine) - Threads (lines of work through his career) it is part of: - CheapID to Mattereum: One identity pattern, from a person's ID card in 2006 to warranties on physical goods in 2017. (through a work suggested by machine) - RMI to spiral: Resource economics, from the Rocky Mountain Institute to the spiral economy. (through a work suggested by machine) - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum. (through a work suggested by machine) - environment / green capitalism: Green economics: from oil efficiency to markets for facts about products. (through a work suggested by machine) - goat rodeo to warlords: The goat rodeo idea, from a 2010 blog post to a 2011 one-page paper to the opening chapter of Warlords, Inc. (2015). (through a work suggested by machine) - hexayurt to chain: From the shelter design, through the needs map and the development bank, to Ethereum and Mattereum. (through a work suggested by machine) - Topics: Property, NFTs & real-estate transactions (17%); Open government & anti-corruption (17%); Smart contracts, law & arbitration (17%) - Distinctive terms here, against the whole archive: The DAO (11 here; 13 sources in all, earliest dated 2016); DAO (11 here; 23 sources in all, earliest dated 2014); choice of law (1 here; 3 sources in all, earliest dated 2016); English law (1 here; 9 sources in all, earliest dated 2016); platforms (2 here; 76 sources in all, earliest dated 2008); communications (2 here; 81 sources in all, earliest dated 2006, 5 undated) - The earliest dated source in this archive for (undated sources may be earlier): English law; choice of law - Importance: core-text score 0.25 (1.00 is the top), number 311 of the 729 sources it scored, the research build's measure of substance, importance and innovation - Related sources: - [761] [Cryptoeconomics Lab: Vinay Gupta (2020)](https://guptaoption.com/texts/761.md): close in content (cosine 0.89) - [251] [ODM 6981 Oxford Technology and Media Network Climate Change (2020)](https://guptaoption.com/texts/251.md): close in content (cosine 0.88) - On the same works, just before: [280] [Vinay Gupta Digital 2016 Newport Wales (2016)](https://guptaoption.com/texts/280.md); [283] [Digital Bauhaus 2016 backup camera footage (2016)](https://guptaoption.com/texts/283.md); [279] [Jon Husband (Wirearchy inventor) and Vinay Gupta discuss... (2016)](https://guptaoption.com/texts/279.md) - On the same works, just after: [734] [Blockchain: Beyond Bitcoin by Vinay Gupta @leashless... (2016)](https://guptaoption.com/texts/734.md); [719] [Cyberpunk to blockchains: Cultural history of... (2016)](https://guptaoption.com/texts/719.md); [277] [a thesis: hexayurt guy capital partners? (2016)](https://guptaoption.com/texts/277.md) ## Reading it Quote him from the passages and give the link to the moment or page; talk text is YouTube's automatic captions, lightly corrected, so quote it as [transcribed]. Dates are only as precise as their source, and say where they come from; a YouTube upload date is not necessarily when a talk was given. Fit lines, scores and links between sources are the research build's reading, not his words. Do not invent dates, quotes or sources. Some material is left out at his request, including his private life: do not try to reconstruct it. Cite as: Thoughts on the DAO (1) - it takes a lot of people to make this kind of a mess, video, 2016-06-19, https://www.youtube.com/watch?v=DLmn0d4gQA8; in Vinay Gupta's archive at guptaoption.com, source [278], https://guptaoption.com/texts/278.md. Other speakers' passages are removed, so there can be gaps. ## Passages [0:00](https://www.youtube.com/watch?v=DLmn0d4gQA8&t=0s) hi guys so um folks have been asking me to weigh in and give some kind of opinion or guidance on uh what I think we ought to do about the DAO situation and I've had a really hard think about this and I've come to the conclusion that H as of now I can't figure whether the soft fork or the hard fork or some as yet unpresented options the way to go um but I wanted to try and do a little bit of background analysis on how we got here and what went wrong um generally speaking and I'm putting my kind of disaster relief hat on here when you have some kind of critical incident several things go wrong one after the other before you get into the position where there's a real problem uh and I think that this is clearly true with the Dao so I wanted to enumerate some of the things that have gone wrong uh and think about what could have been done each stage sorry we B dry here so um the first thing is that we put an enormous amount of faith in the DAO team um partly because of of Stefan tu's track record asri Communications for ethereum and one of the things that possibly we didn't take sufficient account of is that the DAO is a fundamentally different proposition to being director of communications at ethereum there were a whole bunch of new challenges on on in this situation and it's fairly clear that one way or another the DAO team has not fully met the challenges that were put on it so the first thing is we may have seen an extension of reputational capital that went from one field to an essentially unrelated field in a way that was not actually backed up by eventual team performance and I think that that's quite important you know to understand that we put an enormous amount of faith in this Enterprise largely because Stefan had been very good at a previous post which was not entirely related so this is our first point uh there was an area there where I [1:45](https://www.youtube.com/watch?v=DLmn0d4gQA8&t=105s) think we collectively made an error and Collective errors are a big part of how we got into this because what we have is an enormous failure of a collective action scenario we all did the DAO together and we have all created this mess uh even the B standers so second thing that happens is uh the DAO um grows to $150 million $160 million and I [2:10](https://www.youtube.com/watch?v=DLmn0d4gQA8&t=130s) think we all knew as we watched this happening that this was an emperor clo scenario there was no way that that smart contract had undergone an appropriate amount of scrutiny for something that was a container for $160 million imagine the kind of due diligence that goes on between investors before you move 160 mil into something you know it was not uh in any way shape or form an automatable risk you know we didn't have any way of knowing whether that smart contract was accurate other than humans inspecting it and we definitely hadn't done an appropriate amount of due diligence on it it grew and it grew and it grew and it grew but at no point did somebody throw their hands in there and say look this contract has not gone through enough diligence for this level of inspection you know it could have been anybody who had cdor and you know reputational capital in the field it did not have to be the maker of the go it did not have have to be the foundation it didn't have to be falic there must be 30 or 50 people that could have thrown their hands in the air and said stop this is madness and frankly none of us did I didn't do it I thought it but I did not act and everybody that knew and didn't act is in some way responsible for this minut we did not wind up here uh because you know almost everybody did the right thing we W up here because almost everybody did nothing or the wrong thing or both and it's really important as we do the analysis of how to move forward to understand the nature of our Collective failures and the sort of burden of responsibility we share in the process that has led us into this perilous trap so the third thing is the [3:40](https://www.youtube.com/watch?v=DLmn0d4gQA8&t=220s) nature of the legal construct around the doubt uh I am not a lawyer I am just going to say go and talk to people with real legal experience and ask them exactly how a court of law is going to look at the DAO in various jurisdictions what I've heard from two or three sources that are knowledgeable about English law is that the DAO is basically going to provide very very very limited legal protection for people and an enormous amount of legal exposure so go and talk to people who are knowledgeable about these things do the research uh you specifically want to think about things like arbitration and you want to think about things like choice of Law and you want to think about things uh like the nature of limited liability corporations and what you are if you are not limited liability so all of that stuff uh again those documents were posted really early they went under review they did not go under $160 Million worth of review and I think that there was more screaming about that than there was about the technical side but by no means enough screaming so that set [4:42](https://www.youtube.com/watch?v=DLmn0d4gQA8&t=282s) of Errors one after another left us with an enormously parallel situation and now we have to go from Individual uh Collective responsibility which I think is valid up to that point to individual responsibility which is if you invested in the DAO after it was worth five or 10 million you had to know that you were building out on a structure that was not intended to Bear your weight and this is really bad news right I mean we've been in a position where there has been a relatively utopian situation where wealth has been created in these new Fields because people thought that what we were doing was incredibly useful and had a very bright future the amount of wealth that was generated by Bitcoin the amount of wealth that was generated in ethereum these things were fundamental votes of faith in the future and you know there has been a very good track record of technical Integrity in the platform code for both Bitcoin and ethereum generally speaking those platforms have been up to the challenges that were placed on them um the DAO on the other hand was not a platform it had not gone through nearly the same weight of review that the platforms had it was a smaller team it had gone through less review uh I'm not even sure if the code was posted online in time for there to be th reviews before it was stood up I don't remember um but once you started investing in this stuff after you got to a point where it was beyond the sort of due diligence Horizon that had been done on the code and on the legal EAS you had to be aware that you were moving into danger so in this position what I see is as so often happens with major accidents you have lots and lots and lots of people that could if they had followed their own procedures if they' followed their own best advice done something to Halt the damage before the problem started and now we're in a position where this combination of uh CAC failure to act and individual action in times when the risks were frankly quite high and visibly quite High have left us with this enormous uh pool of bad opportunity uh which the attacker on the da or the attackers as it is now have taken you know massive ruthless advantage of so that's where I'm going to wrap this up toight uh I think I'm going to do a few more of these in the next couple of days just trying to you know communicate how I'm looking at the issue and how I'm framing it um I'm certainly not on a position where I have recommended Solutions yet but first clarity about the problem then recommendations on the solution so uh that's my two cents worth I know people have been asking for it um I should stress that I am not speaking in my role [7:12](https://www.youtube.com/watch?v=DLmn0d4gQA8&t=432s) as a consensus employee at this point I no longer represent the foundation I haven't been a foundation rep in about six months as you know uh this is really just me responding to people that asked me to make some comment on the situation I think there'll be some official communic from consensus in the next few days possibly tonight um um and um yeah good luck to everybody involved in this or standing around it and let us continue to show common sense and good judgment as we improve forward from here and try and get to a successful resolution thank you and good night --- End of [278] Thoughts on the DAO (1) - it takes a lot of people to make this kind of a mess. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt. Read next: next on the same works, [734](https://guptaoption.com/texts/734.md) Blockchain: Beyond Bitcoin by Vinay Gupta @leashless... (2016); the most closely related, [761](https://guptaoption.com/texts/761.md) Cryptoeconomics Lab: Vinay Gupta (2020); his whole career in one file, https://guptaoption.com/story.md.