I am getting my head around DAO in Ethereum. In a magazine I read:

In principle you could programme a taxi company that bought cars and paid drivers to run the cars to make a profit in order to buy more cars. [...] The point is that the management, what would normally be the brains of a corporation, the control structures of a corporation, can now exist autonomously in the cloud, so to speak.

So, if I understand correctly, someone with some level of capital can set up a private, for-profit company in the DAO, use that capital to buy taxis, hire drivers, and, if the business is good, make profits? The benefit of this being that contracts are run automatically, fully transparent? If so, how is this related to descentralisation? What if, for instance, Uber is set up in Ethereum, but still owned by a few people? Does it matter? Perhaps more deeply, are DAOs fully compatible with the standard firms in capitalism (for-profit PLC)?

1 Answer 1


You can definitely write a smart contract with a designated address as the "owner" (usually implemented as owner = msg.sender in the constructor). The contract can then implement certain privileges for the owner, e.g., the right to take a 10% fee off of every transaction in the contract. The benefit compared to the centralized company is twofold:

  1. Users interacting with the contract can see the rules in advance and are sure that they won't change (i.e., decentralized Uber, if correctly implemented, can not opportunistically refuse to pay a driver);
  2. A third party, such as law enforcement, can not shut the whole enterprise down.

The question whether DAOs are fully compatible with standard firms requires the definition of compatible. I suppose it depends on the jurisdiction.

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