The usefulness of decentralized autonomous organizations (DAOs) in the world of cryptos is well established. These are platforms that offer a way to make relevant decisions and collaborate in a decentralized way. Only, they have a weakness: they have no legal existence. Which can be a serious legal challenge
DAOs face significant legal challenges
In recent years, Decentralized Autonomous Organizations (DAOs) have cemented their place as a fundamental pillar of Web3. A situation that is linked to the profound changes that this sector is experiencing.
Thus, we insisted on an exponential development of DAOs. According to data compiled by Snapshot.org, there are some 22,000 active decentralized organizations. An exceptional growth which does not hide the complex legal considerations that their establishment presents.
In this context, the University of Lisbon supports a program focused on multi-jurisdictional research on DAOs. It is in fact, through the latter, to highlight the imperative role of the choice of a relevant legal framework for DAOs.
Because, it should be remembered, this step appears to be a crucial phase in the process of creating a DAO. This is in any case one of the conclusions of the initiative of the University of Lisbon.
The work of its researchers also demonstrates a growing recognition of the importance of DAOs in several jurisdictions.
The importance of a legal framework for a DAO
Implementing a legal framework offers multiple benefits to DAOs. The first is that it gives them the status of a legal person. This legal qualification gives them the legal right to enter into contracts and generally agreements with other entities.
The second is that it guarantees them a certain limitation of liability. This reduces the exposure of contributors to legal liability in the event of litigation. This, while also facilitating compliant employment practices and optimized tax strategies.
There is a third advantage which is not the least. By setting a legal framework for a DAO, it can surf on local and international regulations. All this while minimizing the risk of penalties and legal entanglements.
In the crypto world, where trust is often tested by short-lived projects and scams, a DAO with a strong legal footing will stand out not only for its reputation, but also for its ability to build lasting trust among its customers. members and partners.
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