Most people have heard, or know, about decentralized autonomous organizations (DAOs). But, what about “legally recognized” DAOs? Yes, they are now a reality. Recently, the Republic of the Marshall Islands (RMI) passed legislation enabling DAOs to register as legal entities. That followed Wyoming, which passed similar legislation last year. This article explains the legislation and legal principles that apply (or might apply) to DAOs, and practical issues that should be considered when creating, joining, and dealing with, DAOs.
Centralization of DAOs and New Legislation
A pressing contemporary issue for DAOs is how they can retain their decentralized business structures, while obtaining benefits of legal recognition such as limited liability. DAOs are now looking to become more centralized. That is where the RMI and Wyoming legislation comes into play.