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Ethereum-Based Augur Enhancement App Veil Closes Up Shop

Veil, an Ethereum-based predictions platform using the Augur marketplace, has shut down.

The Ethereum-based predictions platform Veil is shutting down, according to an official Medium post on July 11.

As of July 11, no new markets will be added to the platform. Trading will be disabled entirely on July 24. Veil co-founder Paul Fletcher-Hill recommended that users redeem open positions, withdraw positions from active markets, and withdraw Veil Ether and convert it to Ether. 

Veil was a type of extension to the Ethereum-based predictions market Augur. Augur is a predictions market — that still exists — that uses smart contracts to let users create and bet on the outcome of any event with the cryptocurrency Ether. 

For instance, the top three bets listed on the Augur market, at press time, are “Will Novak Djokovic be the 2019 Wimbledon Men’s Singles winner?,” “Who will Win the The First Democratic Primary Debate?,” and “Will Serena Williams be the 2019 Wimbledon Women’s Singles winner?”

In April, Augur also added the option to use the stablecoin by MakerDAO, DAI, on its platform.

According to its website, Veil was intended to “bring Augur mainstream” and improve user experience by speeding up its transaction processes. Veil purportedly let users trade on the Augur marketplace faster via the 0x protocol, and provided instant settlement by allowing users to sell their shares to Veil before native finalization of Augur transactions on the blockchain.

In discussing the reasons Veil did not meet its success goals,  Fletcher-Hill noted a number of issues, including that the platform may not have been friendly enough to crypto novices:

“We didn’t offer a good onboarding experience. Crypto as a user base is still early, and we didn’t make it easy enough for users without crypto or a wallet to get started.”

Some other areas of concern he noted include not being decentralized, not being regulated, and perhaps trying to offer too many options as a broad-scale predictions market. Fletcher-Hill wrote:

“… ultimately we failed to find a good fit between what we were building and the market as it exists today. … But today the community of users is small, and we think there are higher impact products and services we can build for the immediate future.”

As previously reported by Cointelegraph, Augur came under fire from Reddit and major crypto exchange Binance due to having an apparent design flaw. The flaw apparently allows users to run scams, of sorts, by issuing predictions with unclear or contradictory conditions for resolution.

Binance also said that low liquidity, barebones functionality, complex mechanics, and an unclear approach to governance were additional issues it saw with Augur.

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Discovering Atlantis: Ethereum Classic Hard Fork and What Will Change

Ethereum Classic is set to undergo an Atlantis hard fork in September 2019, which will bring interoperability between sibling blockchains

On June 19, the Ethereum Classic (ETC) community announced that the Atlantis hard fork is now in its testing stage. As Cointelegraph previously reported, the update is scheduled for Sept. and will take place on the block 8.75 million. 

Also, as Cointelegraph reported, ETC Labs, which actively contributed to the Atlantis project, will soon introduce another solution for Ether (ETH)/ETC interoperability being part of Metronome Validator Network. This move brings transparency on certain aspects of the upcoming upgrade. 

ETC itself was introduced after the DAO attack back in 2016, when 3.6 million ETH had been stolen within the first few hours. At the time, it was equal to $70 million. To reverse the malicious transactions, Ethereum hard forked and thus gave birth to Ethereum Classic. At present, ETC is the 19th-biggest cryptocurrency, as its market capitalization of over $883 million, according to coin360.com. However, let’s take a deeper look at the motivations, technicalities and potential consequences of the hard fork. 

Why the hard forking?

A hard fork is a radical change to a protocol of a blockchain, which can be carried out to reverse transactions, add new functionality or fix security risks. Unlike the previous time when the DAO was attacked, the hard fork is more of a beneficial renewal rather than a necessary measure. According to the blog post of Ethereum Classic Labs, the upcoming hard fork is aimed at presenting secure high-quality blockchain software while taking into account the community’s concerns. 

Atlantis is a consistent, no-rush update that would ensure compatibility of ETC with Ethereum, leading to an easier collaboration of sibling blockchains. The team also intends to improve the functionality and stability of ETC. The last point is especially relevant, as the network had experienced a “51% attack” last January. 

Who is involved? 

In order to complete the technical development of the main client, Classic Geth (which 68% of the network uses), ETC Labs has collaborated with ChainSafe Systems and cooperated with ECC, Parity and IOHK. A team of developers, ETC Labs Core, who are believed to be among the most skillful, has actively contributed to Multi-Geth preparation. As for ETC Labs’ blog post, “The ETC community has shown great attention to and support” for the hard fork. “All stakeholders have fully participated in the discussions on the details, scope, and timing of the hard fork,” the developers said.

ETC Labs and Metronome will issue a cryptocurrency named MET, which will be transferable between the blockchains. This is possible because “chainhopping” is a property of the blockchain asset and can be transferred from one chain to another. According to the blog post, “ETC Labs will support Metronome’s Validator Network to ensure reliable and secure transaction verification that guards against double-spend attacks and provides fluid cross-chain transactions.”

Reaching consensus on schedule 

On June 11, after an intermediate scheduling call, stakeholders from North America, Europe, and Asia agreed upon the hard fork’s timetable: It was decided that ETC Kotti and ETC Morden testnets would be activated at blocks number 716,617 and 4,729,274 respectively, and finally the hard fork would be implemented at block 8,500,000.

Ethereum Classic

However, bearing in mind that the chosen block would run on a Sunday, ETC Labs adjusted the schedule during Ethereum Classic Improvement Protocol (ECIP) finalization call on June 20. ETC Labs announced that the hard fork would then be set to occur on block height number 8,772,000 (which will be hit on Tuesday, Sept. 17, around noon UCT) to have more parties involved in implementation. 

The decision was unanimous, and the deadline of the release seems rock-solid, according to a statement form ETC Labs to Cointelegraph: 

“The community has had a number of meetings to discuss timing, scope and involvement, and we have decided on the direction and timing of the Atlantis release. So, the decision was made and the community and stakeholders are all moving forward.” 

What do we know about Atlantis?

Atlantis is there to incorporate multiple Ethereum Improvement Proposals (EIPs) that have been around on Ethereum for some years already. The mission of the hard fork is to pull ETC up to ETH’s latest protocol enabling easier interoperability between them. 

ETC Labs Core described some of the features of ECIP-1054 (Atlantis) in their blog post, explaining what exactly the community should be expecting. 

Overall, the update consists of 10 improvement proposals including improvements to stability, op-code upgrades, precompiled contracts to improve zkSNARKs, performance-related improvements and enhanced security. 

Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zkSNARK) is the core of ECIP-1054. What hides behind the spooky title is a familiar zero-knowledge proof. It implies that no interaction between prover and verifier is needed, which “allows one to prove x without having to convey any information to the verifier other than they know x.” 

Сustomary encryption schemes efficiently secure data but need to be decrypted before computation. To change that, zkSNARK uses the Homomorphic Encryption technology that allows computations on encrypted data requiring no special access: The prover and verifier only share a dataset or parameters of the encryption. 

Further, by updating to zkSNARK, users obtain increased privacy necessary for data such as identity or location, which is now totally transparent on the blockchain. This feature is based on EIP-196. As for its description, zkSNARKs could in theory be implemented by Ethereum Virtual Machine, yet they would not fit the block gas limit due to the cost. 

EIP-196, for its part, suggests to adjust certain parameters of znSNARK so that the technology would perform effectively at a reduced gas cost. Meanwhile, EIP-197 ensures the verification of zkSNARK contracts on the Ethereum Classic blockchain. The EIPs make the technology flexible enough to be further improved and advanced without another hard fork.

Among the benefits that the update poses, there will be a more predictable ETC issuance rate. The current formula lacks the “uncle rate,” which will be fixed by EIP-100 (“Change difficulty adjustment to target mean block time including uncles”). Furthermore, deployment of a decentralized application (DApp) after the hard fork, as well as migration of DApps between Ethereum and Ethereum Classic, will become easier and more efficient. 

The community can also expect a better performance of Ethereum Classic, as EIP-161 will optimize it by removing empty accounts. This will “debloat” the network and speed up sync times. Another improvement proposal is to change the contract-code size limit to 24,576 bytes. 

The last proposal happened to be the stumbling block within the ETC community: Initially, co-founder of Ethereum Vitalik Buterin introduced EIP-170 to prevent an attack scenario. But, if implemented in ETC, it would put a fixed cap on the size of smart contract code that could be run in a single transaction, and this creates a point of contention among the Ethereum Classic community. Some of the developers hesitated whether it was right to include the EIP in the upgrade, as it can be applied to a transaction validation instead of a block validation, which makes it a soft fork. According to ETC developer Anthony Lusardi:

“These rules can simply be applied to transaction validation rather than block validation, making it a soft fork rather than a hard fork. […] It’s vitally important to stick to pre-agreed rules when they’re defined.” 

Chasing interoperability between two blockchains 

The Atlantis hard fork proposal on GitHub points out that “establishing and maintaining interoperable behavior between Ethereum clients is essential for developers and end-user adoption, yielding benefits for all participating chains (e.g., ETH and ETC, Ropsten and Morden, Görli and Kotti).”

Atlantis should provide wider capabilities for interoperability between the blockchains and off-chain scaling protocols. The faster interoperability is implemented, the sooner the traditional methods of payment and banking will be disrupted, and this is where cooperation matters. 

Stevan Lohja, technology coordinator at ETC Labs Core, explained in a Discord discussion why compatibility matters, while calling Ethereum Classic a “sanctuary”: 

“EF has publicly stated the intention to deprecate ETH and ETH 2.0 is not actually a 2.0. It is a separate project and EF has legal privileges to force their brand. So everything that has been invested into ETH will be deprecated or forced to move to this entirely separate network at the cost of all the users. If ETC is compatible with ETH while respecting ETC value proposition, then ETC is a sanctuary for ETH refugees.”

The teams contributing to Atlantis and Metronome are chasing a mutual goal: to enable “cross-chain transactions to quickly, easily, and securely occur between ETH and ETC.” 

To split or not to split 

Taking into consideration all of the changes that the Atlantis hard fork will bring to the ecosystem, a rather successful adoption of the update can be expected. It’s been positively accepted by the stakeholders, as the calls demonstrate. “The community found consensus, this will not split the chain,” a user named BabySocrates claimed in the Discord chat. 

Commenting on the origin of the proposed features, executive director at ETCC, Bob Summerwill, stressed that “all of the Atlantis changes are from ETH, […] rather than being anything new specific to ETC.” He also confirmed the proposed date of hard fork, Sept. 17: “Yes, the deadline is realistic.”

Ethereum Classic is on the verge of a new stage of technological advancement, and the community has big expectations regarding changes proposed by the Atlantis hard fork.

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Atlantis Hard Fork for Ethereum Scheduled for September 17 Launch

Ethereum Classic developers and contributors recently decided that the Atlantis hard fork will occur on block 8,772,000, estimated for September 17.

The Atlantis hard fork for Ethereum Classic (ETC) has been officially set to occur at block 8,772,000 on the blockchain, according to the Ethereum Classic Improvement Protocol (ECIP) finalization call via Discord on June 20.

As per the discussions in the call, the developers and contributors had previously considered putting the hard fork at block number 8.75 million, which is predicted to run on September 15.

However, since the 15th is a Sunday, ETC Labs moved to increase the block number in order to have the projected update during the week, when more involved parties, such as exchanges and developers, are more likely be present to discover and deal with any issues that may arise.

Since the release is still several months away, the block number is an imperfect estimate of date; nonetheless, the number has been moved up with the aim of the hardfork arriving on Tuesday, September 17, around noon UST.

The decision appeared to be unanimous.

An official ETC blog post proposed this shift on June 19, which noted block 8.772 million for an intended fork date of approximately September 17. Today’s discussion further solidifies that number.

The post also notes that Atlantis is currently undergoing testing to weed out any bugs or other unwelcome consequences from introducing the new hard fork code to ETC’s original scheme.

The post also notes the following as main priorities of the upcoming hardfork:

“(1) develop high-quality blockchain software that preserves the security of the network

(2) consider the opinions and concerns of the community.”

ETC itself is the original Ethereum blockchain, which is named Classic in response to Ethereum carrying out a hard fork in 2016. This happened amid the collapse of Ethereum-based project “The DAO” after a major hack exploited its security flaws.

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Internal Power Struggle at MakerDAO: When Coding and Personal Interests Collide

Chaos at the headquarters of MakerDAO: Why have some key members left the company, while others hired a lawyer?

In the crypto industry, there are many examples of how a conflict of interest has led to a company split. Perhaps, the largest ones are the forks of bitcoin (BTC), bitcoin cash (BCH) and the Ethereum (ETH) network. As a rule, the reason lies in disagreements related to the philosophy of the project, its development or financial components.

Various views on how the platform should be managed led to the conflict of interest at the headquarters of MakerDAO. It all started with the fact that Andy Milenius, the company’s chief technology officer, left the project, as reported by Cointelegraph on April 28. Internal conflicts have been aggravated by the recently found vulnerability and trials between the key members. How far can it go and will we witness another fundamental split in the blockchain company?

Chapter 1: Vulnerability

MakerDAO is the preeminent lending platform for the DAI stablecoin — which is dollar-pegged, no less. The MakerDAO project is also a decentralized governance platform. It is through the MakerDAO platform that MKR token holders vote for the execution of changes in the DAI lending protocol. In essence, the platform’s governance system works on the principle of granting several proposals encoded in the form of Ethereum addresses. Users vote for the proposals of their choice by freezing MKR tokens in the voting contract as pledges.

Between April 22 and 26, a critical vulnerability was discovered and analyzed on the MakerDAO platform by the security audit firm Zeppelin. The vulnerability impacted the very functioning of MakerDAO by making user funds irretrievable. By exploiting the system’s vulnerable coding, attackers could gain access to the system and freely move the tokens staked in favor of one MakerDAO governance proposal to another — perhaps even a competing proposal — and lock them in place forever. On May 6, the MakerDAO team released an appeal to its community on Reddit:

“In partnership with Coinbase and Zeppelin, the Maker Foundation has been participating in a second round of audits of the Maker Voting Contract. During this process, we discovered the need to make a critical update. […] You are advised to move your MKR out of the old contract and back into your personal wallet immediately.”

Chapter 2: Andy Milenius’s departure

What could have seemed as a routine error in code at the inception of MakerDAO turned out to be much more as the plot thickened with the sudden departure of Andy Milenius, the project’s CTO, in early April. His departure was preceded by a voluminous 24 page-long letter published on April 3, which begins with the words, “Currently, the Maker development team is going through its most difficult challenge that I have witnessed during my 3.5 years with the project.”

In his letter Milenius outlined his long-standing conflict with MakerDAO CEO Rune Christensen and the former’s attempts to usurp the platform, which began back to January 2017:

“He [Christensen] told me it was necessary that he have full unilateral control over the Dev Fund from that point forward.”

As stated by Milenius, though later Rune abandoned this idea, the whole situation led to the creation of the opposition, aimed at preventing Rune from ruining the project and at protecting the community’s funds.

Another event that affected the professional relations inside the company, according to Milenius, was the appearance of Matt Richards, who, in the spring of 2017, assumed the responsibility of the chief operating officer. According to Milenius, Richards was not only not familiar with the technical side of the project, but did not support the very idea of DappHub, the separate project led by the MakerDAO developers and initiated by Christensen to better manage the company’s processes. In addition, his invasion of the project interfered with the work of designers and developers, which soon led to internal conflicts and affected the platform’s development:

“Matt especially hated the concept of DappHub. He thought it was an unprofessional arrangement and also seemed to feel personally insulted that they wanted to remain an entity separate from the organization he was trying to create. He would ask me countless times to explain to him why they felt culturally distinct from him and why couldn’t they just be a part of the “family” he so desperately wanted us to be. […] I had told the DappHub developers to let me handle the business of dealing with Maker because I knew they would only get stressed out by Matt. This advice ended up being a huge mistake, as the core dev team was not around to object to the organizational decisions he was making until it was far too late.”

As the situation got worse, Milenius requested Christensen to fire Richards:

“I told him that Matt was consistently a distraction and wasted my time by proposing stupid ideas that needed constant rebuttal. I told him Matt’s opinion that the core developers were ‘my developers’ was preposterous and that I refused to control them and get them to ‘report’ to me like he wanted. I told him that Matt had done a lot of good for the project but that it was time for him to go.”

However, even with Richards’s departure, the atmosphere inside the company did not improve. According to Milenius, Christensen was dissatisfied with the work of key developers — and they, in turn, tried to resist his attempts to monopolize the developers fund and spend all the money on his strategic initiatives.

“They [the developers] said it was unfair that Rune gets to spend the entire Dev fund on his strategic initiatives. […] They said Rune shouldn’t be able to monopolize access to the Dev fund like that because he isn’t a god and other people might have differing points of view or priorities.”

As the conflict inside the company smouldered further and involved new people, more and more people began to disagree with the way Christensen tried to take control of the decentralized autonomous organization (DAO), with the result that the main project developers from DappHub stopped cooperating. As stated by Milenius, his ideas of equal working space and democratization inherent in DAO, and the desire of his fellow executives to traditional corporate efficiency hadn’t been accepted by Christensen. Later, Milenius confirmed to the media that he is no longer the technical director of MakerDAO.

“The purpose of the Maker Foundation was to formalize existing social relations in the Maker community. It is currently failing at this purpose and needs to be corrected at the fundamental level.”

Chapter 3: The opposition

The charade of departures from the company’s board has so far been focused on preventing the consolidation of power in the hands of Christensen. When the company’s infrastructure expanded and disagreements began to arise, Christensen offered the developers two options for cooperation: the Red Pill and the Blue Pill.

Those who chose Red Pill were supposed to work for him inside the Maker Ecosystem Growth Group (MEGG) on the initiatives that “he was going to eventually document in the much-promised Strategic Plan.” The tasks were aimed at delivering government compliance and integrating Maker into the existing global financial system. The Blue Pill was prepared for those who didn’t want to work on those initiatives. Their primary duty was the implementation of Multi-Collateral DAI (MCD) core contracts needed to launch a fully autonomous system, after which their relationships with the company would cease.

According to Milenius, nobody accepted those binary options since they conflicted with the main idea of the decentralized company. General discontent led to the creation of an opposition group that called itself the Purple Pill in March 2018. Members include former MakerDAO business development executive Ashleigh Schap, who proclaimed that they aimed to make the company more decentralized. Schap, who has allegedly created the group, is now suing MakerDAO in a $1 million lawsuit.

The real aim of the pseudo-Matrix saga, Blue and Red Pill amalgamation in the form of the Purple Pill faction was to dethorne Christensen and take control of the $200 million fund. So far, Purple Pill has been brewing its plots and accusations in the Signal chat with former members of the team:

“The name Purple Pill was chosen because the hope was that there was a third way available to break up this binary choice. They thought this was an earnest attempt to add resiliency to the overall Strategic Plan.”

In his letter, Milenius claims that many people, including board members, were added in the group after they agreed that the third way was desirable. At the same time, the creators and participants of the group pursued exclusively positive goals, wishing to save the organization and prevent the consolidation of funds in the hands of one person:

“No one thought about the fact that they were board members, they just wanted to talk because these were some of the most senior and respected contributors in the project.”

As the Purple Pill group was growing, tension was also rising on the Foundation Board. Christensen requested a large amount of MKR tokens from the Foundation Board for allegedly funding and expanding operations. When the members asked for more transparency and requested documents that could confirm his demands, he was surprised. This event could also become the reason why he later accused board members of conspiracy, when he found out there was a Signal group:

“He couldn’t believe that people would treat him this way when he had broken his back working day and night for this project, sacrificing his own personal happiness and health like so many other entrepreneurs do. He had been under so much pressure for so long trying so hard to make this work that when he discovered the group, he snapped. Conspiracy. Corruption.”

As a result, some board members who participated in the Purple Pill group were fired.

Chapter 4: Here comes Campbells

MakerDAO has seen its fair share of woes, and they were only aggravated when five of the nine board members requested the Campbells law firm for assistance after they had been forced by Christensen to leave the company.

David Currin, Denis Erfurt, Thomas Pulber, James Reidy and Kenny Rowe wrote a collective letter in an effort to contest the accusation made by Christensen and to prove their innocence. The expansive letter contains their collective confession that all five had been doing their jobs, a denial of conspiracy against the foundation’s management and statements about sullied reputations.

The letter also refers to the Purple Pill affair. All five claim that the discussions were neither conspiratorial nor clandestine, and involved a large group of people engaged in the project in various capacities, exploring ideas with a shared goal of protecting and advancing the project.

The letter reveals that on March 22, 2019, the general counsel at MakerDAO, Brian Avello, contacted the five former board members via email with a request to attend a meeting regarding “urgent things on the regulatory front.” The meeting was a pretext for the CEO to confront the five regarding the Purple Pill group and demand that they either resign voluntarily or be removed as directors of the foundation.

The accusations thrown at the five by Christensen were quite weighty, ranging from conspiracy to corruption, placing the project at risk and scheming to breach their duties.

While none of the five case participants replied to a request for a comment, it remains to be seen how the drama with legal action will unfold.

Chapter 5: Matt Richards replies to Andy Milenius’s letter

On April 27, Richards published an answer to Milenius’s accusations in a Reddit thread — thus, providing a chance to address the story from a different angle. In particular, he acknowledged the mistakes he made while working as the MakerDAO COO and noted that, relying on the fact that all members of the company were acting out of good intentions, he did not take into account the growing disagreements of the staff of MakerDAO, instead of working under a single aegis.

Richards also referred to Milenius as the person who was mainly interested in technical nuances and coding, rather than in the project’s development:

“According to Andy, no amount of accountability was acceptable, the efficiency that came with explicit hierarchy did not outweigh how uncool or unfair it was, MKR investors interests were of little consequence, the dev fund was for “hacker aesthetics, development tools, Free Software, grassroots empowerment, memetics, the Unix Design philosophy and especially the political implications of decentralized technology. […] And if Maker’s vision was built as a by-product, cool.”

Being less eloquent than Milenius, Richards ended his post with optimistic forecasts about the future of MakerDAO:

“I am hopeful about the future of this project and believe it will likely be better off without Andy.”

The scheme of the relationships inside MakerDAO based on its members' stories

Community’s reaction

The situation may look intriguing if viewed from the point of those truly affected by the scandal and the system vulnerabilities — the MakerDAO community, namely because it is their money at stake. The multiple comments left by Reddit users under Richard’s letter are examples of irony and emotional upheaval. The community’s reaction is best described by a comment left by a user nicknamed “ShiIl,” who stated:

“Like the Greek dramas of old, there is no real bad guy here, just people doing their best with varying motivations.”

Other users referred to the idea of decentralization and pointed out that, in such corporations, the control shouldn’t be accessed by only one person:

“The whole point of this thing is to avoid trusting one individual! Even if Rune is a saint, the whole point is can’t be evil not don’t be evil.”

Meanwhile, there are some users who found nothing unusual in the situation:

“This seems like a rather typical situation of a CEO trying to run a business and deliver value to investors while the CTO constantly gets distracted by ‘cool’ features which don’t drive revenue. It’s a common issue in many companies and generally the result of having a CTO who is technically skilled but lacks business acumen. Such people should not be given leadership positions in a technical team. The goal of the CTO is to build the tech the company needs, not the tech they want.”

Consequences

The biggest risk thus far is the vulnerability found in the system, since it could be only a matter of time before someone, somewhere tries to take advantage of it. The company has already announced that it has developed a fix together with Zeppelin and the implementation of it was underway. But the internal power struggle within the company remains the most worrying aspect of the entire conundrum surrounding MakerDAO. If the team continues the conflict, then these issues may soon eclipse any of the technical difficulties the company has — and the community may have the last say on the matter.

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Ethfinex Launches DAO as Executives Consider Regulatory Landscape

The exchange’s co-founder called the move a regulatory play following the turmoil at affiliated platform Bitfinex.

Cryptocurrency exchange Ethfinex, the sister exchange of Bitfinex, has launched a test decentralized autonomous organization (DAO), the company confirmed in a blog post on June 12.

Ethfinex — which earlier this month launched a decentralized over-the-counter (OTC) trading platform — said it wants to decentralize control of its operations.

The DAO was built by DAOstack and is known as efxDAO, with an initial funding budget of $5,000.

“Today we reach an important milestone in our path to decentralised governance of Ethfinex,” the exchange’s community lead, Ben Wilson, wrote in the blog post. Wilson added:

“We have collaborated with decentralisation protocol experts DAOstack to create an experimental funding Decentralised Autonomous Organisation (DAO), efxDAO.”

EfxDAO has a preliminary membership of 23 people, with plans to expand rapidly in the future. Those members have the power to decide how exchange funds are used in a decentralized manner.

Speaking to cryptocurrency industry news outlet Decrypt, however, Ethfinex’s co-founder, Will Harborne, said that the decision to reimagine governance went beyond ideology.

As Cointelegraph reported, upcoming regulatory hurdles are tipped to drastically impact how exchanges of all varieties operate. For its part, Ethfinex wishes to distance itself from potential repercussions.

“It’s a regulatory play,” Harborne stated. He added that previous legal issues involving Bitfinex also contributed to the move away from centralized responsibility.

Beginning late April, United States regulators singled out Bitfinex and the operator of stablecoin Tether (USDT) — which shares its CEO — for potential fraud after funds worth $850 million fell out of the control of executives.

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DOrg LLC Purports to be First Legally Valid DAO Under US Law

DAO collective dOrg has created dOrg LLC, an Ethereum-based DAO with legal status in the United States.

Decentralized Autonomous Organization (DAO) developer cooperative dOrg has created a limited liability company (LLC) to grant its native DAO legal status, according to a report by independent law firm Gravel & Shea on June 11.

As its name implies, a DAO is a firm with no centralization or hierarchy, and is instead governed by open source digital rules on a blockchain — a smart contract — and operated publicly by users via a consensus voting mechanism.

According to Gravel & Shea, the native DAO of dOrg, underpinned by the DAOstack framework, is now the first legally established entity of its kind in the United States. The DAO rules and implementation are available on the Ethereum blockchain, and the DAO is licensed as a Blockchain-Based LLC firm in Vermont called dOrg LLC.

The upshot is that this DAO can now participate in contractual agreements and provide liability protection, as per the report.

DOrg reportedly contracted Gravel & Shea to provide a “legal wrapper” for DAOs. Oliver Goodenough, special counsel to Gravel & Shea, commented on the dOrg DAO’s legal status, saying:

“We believe that dOrg is now the first legal entity that directly references blockchain code as its source of governance. Its material operations and ownership interests are managed entirely on-chain.”

Per a statement ratified by dOrg’s proposal engine, the collective hopes to make it easy for other DAOs to obtain legal status in the future:

“We want to make what we just did accessible to anyone in the world. Ultimately, the process of configuring and deploying a legally registered DAO will be as easy as creating a social media account.”

As previously reported by Cointelegraph, the U.S. Securities and Exchange Commission (SEC) ruled in 2017 that tokens issued by the now-defunct “The DAO” project were to be classified as securities. Despite being a crowdfunded firm, the SEC ruled that The DAO could not be included under its Regulation Crowdfunding exemption since it was not registered as a broker-dealer/funding portal.

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Blockchains Acquires Development Firm Behind ‘The DAO’ Project

Blockchains, LLC, has acquired slock.it, a small blockchain development team that created The DAO.

United States-based blockchain incubator and investment firm Blockchains, LLC, has acquired the German Ethereum dev team slock.it, according to a press release on June 3.

Slock.it’s team is reportedly around three dozen large, and is known for its creation of the now-defunct decentralized autonomous organization (DAO) project “The DAO.” Co-founders and brothers Christoph and Simon Jentzsch will reportedly join Blockchains as VP of technology and director of blockchain development, respectively.

During the first few months of the acquisition, the newly-linked organizations will reportedly ship a line of open-source tools for Ethereum developers. As per the organizations’ acquisition agreement, teams will reportedly work together on existing projects, such as Blockchains’ digital asset custody product and slock.it’s “Incubed,” which purports to connect Internet of Things (IoT) devices with the Ethereum blockchain. The organizations will continue to stay in their separate offices inside the U.S. and Germany.

In 2018 slock.it deployed ‘The DAO,’ which was a decentralized property-sharing application similar to Airbnb following a $150 million crowdfunding. However, The DAO’s code contained flaws which hackers exploited to funnel $50 million in ether (ETH) from the project.  

The subsequent fallout from the hack undermined confidence in both the Ethereum network as a hosting platform and the concept of DAO’s in general.

As previously reported on Cointelegraph, the Ethereum Foundation announced a re-release of its website in May, aimed at promoting the development and dissemination of community resources.

As per their official blog post, the website is intended to curate community-created content for developers as its core documentation, not to replace them with official write-ups:

“Ethereum.org’s purpose is to be a portal to those resources, not a substitute for them. Ethereum.org will prioritize linking to content created by the community, as opposed to hosting native content on every topic. Through community contributions, the website will evolve over time to always surface the best relevant material about Ethereum.”

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Coinbase Now Supports Cryptocurrency Token EOS

Major cryptocurrency EOS is now being offered on Coinbase for trading and storage.

Major United States-based cryptocurrency exchange and wallet service Coinbase has added support for EOS, according to a press release on May 30.

The new addition is reportedly available for trading and storage in most areas covered by Coinbase, with the exception of the United Kingdom and New York at press time.

The announcement also notes that there are no transaction fees associated with EOS; the cost is instead paid in computing resources, such as a tax on RAM, CPUs, or network bandwidth. Users that run the network also earn EOS by contributing to the computational power needed to run transactions.

EOS is one of the largest cryptocurrencies recently added to the exchange — with a market cap of over $8 billion — since Ripple’s token XRP was added in February. Coinbase also recently added support for two more tokens, stablecoins dai and USD Coin (USDC).

Earlier in May, Coinbase also expanded its global offerings, with announced trading support for over 50 new jurisdictions and an educational program with small crypto payments, Coinbase Earn, that is available in over 100 countries.

More recently, Coinbase Vice President of Business, Data and International, Emilie Choi, confirmed that decentralized trading is not on the agenda for the exchange right now. Choi commented on issues of compliance being a deterrent to Coinbase launching a decentralized exchange (DEX), saying:

“We have to make sure that if we offer a dex that we’re doing it in a way that is safe and secure and compliant. I think that there’s not a lot of clarity right now on how that would work. We think this space is interesting but we’re not actively investing in it right at this moment.”