**Would love fact checking corrections because I am not clear myself**
**Half way through the following I turned it into a press release so apologies for the change of tone** **Dan Larimer's quotes are made up by me and await his approval/changes. Which I am sure there will be**
<headline>Is this another first for Crypto? Coin Merges.
A proposal has been made to merge 3 Decentralized Autonomous Companies (DAC’s). This is a very exciting possibility and a first in the Crypto world all thanks to the pioneering flexibility of DPOS chains. If accepted by stakeholders, this merger will demonstrate yet another way that DACs built on blockchain technology can do anything normal companies can do only better.
A Decentralized Autonomous Company or DAC is a phrase first coined by BistSharesX lead developer Dan Larimer in an October 2013 White paper of the same name. A DAC is essentially a company where the business plan is in code and product delivery is provided through blockchain technology.
If that sounds like a foreign concept it might not be as much as you thought. Consider that Bitcoin is in fact a payment services DAC.
Those who have been watching with keen interest the decentralization revolution taking place will no doubt be familiar with BitSharesX, ProtoShares and AngelShares.
BitSharesX is an open source decentralized asset trading platform which launched in July of 2014 with a market cap of $40 Million dollars.
ProtoShares and AngelShares are 2 venture capital development funds held on a blockchain with a combined market cap of $10 million. ProtoShares and AngelShares development funds totaling $X million are intended create a number of new and useful DAC’s. Two examples already under development include: 1)DNS - A record keeping DAC that allowed blockchain stored domain name ownership and 2)Vote - A blockchain based voting solution to provide a more fair and open voting solution.
Larimer has suggested to all 3 communities that they could benefit from a corporate merger similar to what is seen in the traditional world of business.
When any 2 or more companies are considering merging the deal only takes place when stakeholders of both companies perceive a positive outcome. In short when the value of the new merged company has greater value than the sum of the parts then it is possible for win-win scenarios to be created.
An example of this is when Disney (An 80+ year old brand much loved by children) merged with Pixar (A hi-tech animation company known for producing films kids love) merged. Disney's distribution and merchandizing channels allowed Pixars high quality children's movies to explode in viewership and merchandizing sales. The Disney-Pixar merger was indeed more valuable than the sum of its parts and all shareholders were rewarded handsomely.
The proposed merger would see all 3 DACs merge into an entirely new DAC called BitShares.
Larimer said, “The merger will allow many benefits to all 3 DAC’s”
Proponants of the merger argue the benefits include
- More rapid and focused development because of a pooling of development funds.
- Efficiencies provided by the fact that these 3 DAC’s needed to develop much of the same infrastructure.
- Cross promotion. eg: A Vote user will be immediately exposed to the BitSharesX decentralized exchange and vice versa as it will all take place on the same client.
- An acceleration of network effect as the client is the same for customers of all DAC’s
- Increased visibility in the market place as the market cap of the merged company will be expected to be at least the sum of the 3 individual companies.
As with mergers in the real world the outcome is that stake holders will own a smaller percentage but of a much bigger company that is poised for faster growth.
The developers plan to introduce a voting mechanism that allow each stake holder to vote on the proposal.
Larimer said “The proposed voting mechanism is an important innovation in the world of DAC’s because it allows blockchain based projects a formal mechanism to arrive at a consensus for this and all future proposals.”
Larimer first floated the idea on the BitSharesTalk but was initially met with community outrage and 20% drop in share price of BitSharesX in the first 24 hours.
“The ad hoc fashion in which I made the suggestion was a mistake in hindsight” said Larimer. “I forget that most BitSharesX investors are used to Bitcoin and other altcoins where the lead developers and miners have tremendous power and owners of the coins have very little. One of the benefits of Delegated Proof of Stake (the consensus algorithm BitsharesX is built on) is that its the coin holders have all the power and neither I or anyone else can make any changes without their permission.”
“I was simply throwing an idea out there for discussion and the community thought I was radically changing the business without proper debate or their approval. I think once the community is reminded that nothing will happen without their consensus and that the deal is very good for them they will most likely get behind it.”
Should that happen a world first for crypto could take place with our first corporate merger and the creation of a new company with a $50 million market cap…. how quickly the world of Crypto advances.
Edit: Spelled Larimar as Larimer - I think it looks better that way... Stan