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FAQ
That is actually a very tricky question that cannot be answered in a short way. Basically DAO stands for decentralized, autonomous organisation. It is decentralized in two ways:
- The DAO isn't owned by anyone and it is not on a central server somewhere in the world. Instead it lives on the Ethereum Blockchain.
- Again, the DAO isn't owned by anyone. Yet, everyone owning a stake of tokens (the DAOs own 'currency') will have a right to make proposals what its founds are used for, a right to vote on these proposals based on the stake on has, and finally a revenue stream based on the stake.
The word autonomous is quite tricky as well. Firstly, a synonym for autonomous would be self-determined. It is not perfectly stated yet what that exactly means for the DAO. But what you can say is that the DAO does not need any persons involved. The revenue stream it gets from its Service Providers (SPs, more on those later) will be provided to its stake holders by a smart contract. There is no person behind it controlling the founds.
At last, the word organization might be the easiest one to explain. In the DAO as an organization people will be working together to achieve certain goals that they will identify together. Of course one goal will be to gain a revenue, yet it could be that other DAOs will be formed to found social projects, research, etc.
Vitalik Buterin tried to explain a DAO in the following post DAO terminology
The DAO contract is developed by the Ethereum fundation and the guys from slock.it. Yet they will not be in any part the people running the DAO. The DAO itself is - again - not owned by anyone. Everyone participating in the DAO token sale will be a person that is allowed to interact with the DAO.
A SP is a person, company, group etc. That provides a service for the DAO. In case of this DAO the first SP will probably be slock.it. They are going to make a proposal in which they ask for a certain money amount (a certain sum to start and then a fixed monthly supply) to build up their company. The Ethereum Computer they are going to develop is then paying a fee to the DAO which is then paid to the stakeholders. A further explanation can be found on their homepage Slock.it
Yet the stakeholders have to decide whether they will accept slock.it as a SP or not.
As stated in point three, it is not even 100% sure if slock.it will be a SP. But to refer to the cap on the token sale: There will be none, since there is no reason for a cap. Let's assume the DAO will have 20times the amount of money that is needed to found slock.it. Stakeholders can then decide if they are willing to
- Invest in other projects. These can be any projects that accept Ether.
- Burn a part of their shares. Stakeholders have the possibility to give tokens back to the DAO. Therefore, they will get a part of the Ether back that the DAO still holds. So lets say 1/20 of the Ether amount was used to found slock.it, a stakeholder burning his or her coins will get 19/20 of the invested Ether back.
The DAO can split.
6. What happens if people hold their tokens on exchanges. Might it happen that exchanges will have a voting right for DAO proposals?
If I remember right, it will be possible to mark tokens as active/inactive.
At this point, the DAO is not a legal entity, which results in a few disadvantages that still have to be solved. One is contracting and the resulting liability.
Some further reading on the legal status:
How to sue a DAO
Fixing the legal Problem
At this moment, there is no date on which the token sale will happen. In their slack the developers only information is that it is going to be very soon, yet they want to leave themselves the option to take the time they need if someone e.g. discovers a major bug.