The Decentralised Autonomous Organization: Legal personality and the problem governance

Abstract

<p>On July 1, 2021, the Wyoming "Decentralised Autonomous Organizations Act" entered into force. This act followed pioneering 2018 Vermont legislation that allows for the establishment of Blockchain-based Limited Liability Companies.1 The legislation extends Wyoming’s earlier legislative innovations involving the recognition and use of cryptocurrencies.2 It is the first legislation fully recognising a "Decentralised Autonomous Organization" (DAO) as a legal entity as a distinct DAO Limited Liability Company (LLC).3 It establishes a procedure whereby DAO members, managers and business organizations, which have previously functioned outside the usual legal rules that govern business forms and governance can avail themselves to the benefits of limited liability and legal entity status. Building on the Wyoming LLC Law,4 the Act also sets forth minimal obligations for managers, underlying governance arrangements for governance tokens and protections for DAO members.</p>