DAOs could be incorporated into the State as limited liability companies. These organizations seek to decentralize and distribute control among their members.
The Committee on Blockchain, Financial Technology, and Digital Innovation Technology of Wyoming, United States, introduced a bill nearly a month ago. The purpose of the document is to allow decentralized autonomous organizations (DAO) to officially join the State.
The Wyoming legislature must pass this draft law for state authorities to recognize DAOs. With this, they could be incorporated as limited liability companies (LLC), and official registries would recognize them as DAO, LAO, and DAO LLC.
The abovementioned committee introduced Bill No. 38 in the Wyoming Senate on January 12th. These regulations provide for the formation and management of decentralized autonomous organizations, provide definitions and establish a possible date of entry into force.
However, a draft of such regulations seems to have been available to the public since December last year. According to the public record, the Senate sent the legislative proposal to the relevant Committee on February 3rd, 2021.
Other Aspects that Bill No. 38 Includes
On page 8 of the document, there is a chapter on organizational matters that define the organizational structure of registered DAOs. There are the rights of the participants and the ways to make changes to smart contracts. In the event of a smart contract reform, the articles of the organization would have to undergo modifications or updates.
The text on page 11 deals with the operating agreements of a contract that do not provide for another matter described above at the legal level. In that case, an operating agreement can complement the operation of a DAO.
The project also addresses the administration of a DAO. The management of a decentralized autonomous organization is conferred on its members. This occurs when articles of organization or operation provide for another way of conducting.
Finally, page 16 explains that there may be adjustments to the articles and agreements of a DAO if they conflict. This indicates that the smart contract itself can make any provision to resolve this situation, even if it goes against the articles.
What is the Definition of a DAO
A DAO is an organization managed through rules encoded through smart contracts. The statutes of the decentralized organization and its governance rules appear in the code.
Smart contracts, that is, self-executing codes on a distributed network using consensus technology, are necessary for a DAO to materialize. This will ensure compliance with the conditions, which seeks to reduce significant time and costs.
The Number of DAO and Related Innovations Grows
There is an increasing number of DAOs and innovations, which contributes to their development. For example, startup Aragon created software that allows these decentralized organizations to connect to the main Ethereum network.
Alba, the 0.6 update of this software, helped more than 15,000 DAOs from the Aragon platform that ran on the testnet. Thanks to it, they were able to reach the Ethereum mainnet “with real implications”.
By Alexander Salazar
