Former Ethereum CEO: 'Greedy and Arrogant' Ethereum Foundation Should Not Get Involved in The DAO Crisis

"I think they're like patching up the Titanic, and it's not helping."

Charles Hoskinson, former CEO of the Ethereum project, said this when asked about the crisis The DAO is facing.

Hoskinson was one of a handful of Ethereum trustees before The DAO, an Ethereum-based fund investment vehicle that was hacked last week due to a code vulnerability, although he left in mid-2014 over disagreements over Ethereum’s structure and has since moved on to a new project.

According to Hoskinson, he had hoped that Ethereum would form a venture-backed entity to develop the protocol and then conduct a crowdsale through a non-profit organization. However, project participants chose to establish the Ethereum Foundation in Switzerland, so he soon left.

Now, he has again disagreed with the approach being taken by the foundation and German startup Slock.it, which wrote the code for TheDAO, to save the project. Hoskinson called the decision made by both groups "greedy and arrogant," and said the Ethereum Foundation should not have been involved in the matter in the first place.

Since The DAO hack, members of the Ethereum Foundation have begun developments that could eventually lead to a fork of the Ethereum network, or a change to the protocol rules, though that has yet to be determined.

Hoskinson said:

“The Ethereum Foundation or its personnel should not be involved at all. This is clearly a conflict of interest.”

He also said:

“They pick the winners and then they profit from it themselves.”

Hope that comes at a great price

Hoskinson also believes that Slock.it failed to properly conduct its audit, which jeopardized both the project’s already-raised investment funds and other members of the Ethereum community.

He added that he thought the situation could eventually lead to a class-action lawsuit.

He said:

“They rushed into an unproven model, dragged everyone into it, and then tried to hype up unaudited code from the experiment. Now the Ethereum Foundation has to try to pick up the pieces with some price tag that will avoid legal problems.”

The DAO was launched earlier this year as a way for people to vote on how to spend the collective resources raised by The DAO by purchasing voting tokens using ether.

As a result, due to the huge enthusiasm for the idea, TheDAO received more than $150 million in funds from more than 23,000 people. However, in less than a month, a large amount of funds were lost due to a code vulnerability.

Knee-jerk reaction

Hoskinson said he believes the ethereum development community should have been more restrained in its response to TheDAO vulnerability in the face of this sudden disaster.

“[Ethereum founder Vitalik Buterin] made a rookie mistake. The first thing you do is effectively procrastinate. You know there’s a problem, set a date to provide more information, and then procrastinate for 48 hours.”

He said there could have been a better way to maintain stakeholder engagement, and that exchange operators and the rest of the ethereum community could work together to figure out a solution.

Hoskinson said:

“It’s not a good idea to just say ‘we’re going to fork’. Even if you do fork, you need community consensus to do it.”

To give a brief overview of Hoskinson's current situation, his new company is called IOHK, which specializes in building cryptocurrencies and blockchains for academia, government and business. He said the company currently has 27 employees and 12 cryptographers.