The DAO could become the largest crowdfunded project in history this week

The Ethereum-based decentralized organization, The DAO, is very close to breaking the all-time crowdfunding record. The completely decentralized funding campaign isn’t using a service like Kickstarter to organize the effort, yet it’s already the second highest earning project ever, excluding political campaigns.

"The DAO is about to hit $100m raised in two weeks. This will very soon be largest crowdfunding in human history."

• Erik Voorhees

The term Decentralized Autonomous Organization (DAO) simply refers to a code-run company, think of a corporation with a software algorithm instead of executives. Bitcoin’s mining network is arguably the very first functional DAO, as the Bitcoin protocol makes all of the decisions behind Bitcoin’s day to day operations.

Many more DAOs have been theorized since bitcoin came along, such as a simple snack vending machine whose shareholders decide what to sell in it, to Mike Hearn’s awe-inspiring autonomous vehicle DAO, that promises to create a new form of life. The Ethereum platform, with its advanced blockchain, offers the technology to start creating these truly decentralized organizations.

The DAO has an internal mission statement that is as authoritative as its name; becoming a global marketplace for permissionless, free-market ventures. Anyone holding a single DAO token can offer their own proposal for a profitable enterprise of some kind, and The DAO’s community will decide if they want to invest in or not, by moving their tokens into the project.

Leveraging full decentralization, the wisdom of the crowds, the Internet of Things, and the sharing economy all at the same time, The DAO promises to enable new business models that have yet to be conceived. With over US$105 million invested in The DAO tokens so far, it’s clear that there is plenty of demand for the project.

There is some controversy over how governments will feel about such an organization existing, both everywhere and nowhere at the same time. To help fight the problem, the developers created a Swiss-based company, DAOLink, as the bridge between blockchain-based DAOs and the real world.

If a project has contractors that need to pay taxes and adhere to regulations in their own jurisdiction, DAOLink gives them a legal entity they can name as their employer, or at least that there’s an point of reference.

"The DAO’s Mission: To blaze a new path in business organization for the betterment of its members, existing simultaneously nowhere and everywhere and operating solely with the steadfast iron will of unstoppable code."
— – The DAO

The project’s developers are an open collective of programmers from all over the world, and are led by a small, experienced, nonprofit team, mostly comprised of the staff of a company called Slock.it.

Slockit plans to manufacture the first “smart” locks, using smart contracts on the Ethereum blockchain to open and close. The startup will use a tiny ‘Ethereum computer‘ to control them, and it’s using The DAO to fund development.

While Slock.it has no control, no supporting role, nor even an official relationship with The DAO, one of the companies three founders, Christoph Jentzsch, has created of a large amount of The DAO’s code.

Viktor Tron and Andy Tudhope also contribute to the coding team, and have rare, first-hand knowledge about decentralized crowdfunding as the developers of the SWARM project. SWARM is no longer with us, but once had a very successful crowdsale of it’s own, and was a well known portal for Venture Capitalists to fund Blockchain projects.

The DAO crowdsale raised US$34 million within 2 weeks, after launching in mid-April, and broke $100m within the month. It has until May 28th to raise just a few million more before breaking the world record.

A videogame called Star Citizen is the current record holder for largest crowdfunding campaign in history if you discount political campaigns, which are heavily funded by banks and corporations.

Although the beautiful videogame only raised US$2.1 million for its original Kickstarter campaign in 2012, the mammoth space combat simulator followed up with a record-breaking second-round three years later, raising a total of US$102,483,347 as of Christmas day 2015. Some tallies put the game’s total at just over $113 million today, although it took them over four years to raise that amount.

Ethereum itself is also ranked on the top crowdfunding record list, currently down at spot number six, with US$18.4m raised in exchange for Ether, the token that powers the platform.

Since DAO Tokens are a type of Ethereum token, they can only be bought with ether. To get some of your own, simply download and install an Ethereum wallet like Etherwall or Ethereum Wallet and use the wizard on the DAOHub website before May 28th.

"DAOs will be at the center of many economies going forward and intend to be at the forefront of supporting innovative and promising projects, products and services in order to become ‘The DAO’: A flexible decentralized autonomous organization leveraging the wisdom of the crowds to benefit the DAO Token Holders."
— – The DAO

For the next week, the price will rise slightly each day, as the price for 100 DAO tokens increases from one ether up to 1.5 ether by the 25th. The price will remain unchanged for the last four days of the sale.

One of the most interesting things about the crowdsale is that the developers let the market decide how many DAO tokens would exist in total. “There is not a fixed number,” the DAOhub website states. “There is no upper limit on how many tokens can be created during the Creation Phase,” which ends on the 28th.

The primary market for tokens is anyone who wants to profit from the new platform, but cryptocurrency collectors, Ethereum fans, free market lovers, altcoin traders, and decentralized technology enthusiasts may all be interested as well.

Then there are the people who want to submit a proposal to The DAO, who need to be holding onto DAO tokens for a submission. With two different exchanges, Bittrex and Gatecoin, ready to start trading DAO tokens as soon as the sale is over, it’s anyone’s guess where the price will be at the end of this month.