DAO bill in Wyoming
The Wyoming DAO bill passed the Wyoming Senate committee and would soon begin to vote on a bill that allows the formation and operation of legally recognized decentralized autonomous organizations (DAOs).
Aaron Wright, the founder of blockchain-backed legal agreement enabler Openlaw and professor of law at Cardozo School of Law, who pushed for the DAO bill, confirmed the development in a tweet.
â€śDAOs took a HUGE step forward today. The Wyoming DAO bill passed the Wyoming Senate committeeâ€¦This bill is significantďż˝?, he said.
Wright noted that such a bill would allow developers to create a legal entity that is referred to as a â€śDAOďż˝?, and users to be able to transact with any organization called â€śXYZ, DAOďż˝? without fears of legal repercussions.
What is DAO?
For the uninitiated, DAOs are organizations represented by rules encoded as a computer program that is transparent and controlled by the organization members instead of being influenced by a central government.
Bitcoin, DASH, and Ethereum are attributed by some to some of the first DAOs, but newer projects likeÂ SushiSwap,Â Badger DAO, andÂ Yearn FinanceÂ are more straightforward DAOs that allow token holders to vote on a variety of protocol upgrades, topics, and changes.
And unlike traditional companies, DAOs are much more flexible. â€śDAOâ€™s can take any shape developers want. It can be flat and democratically managed or algorithmically managed.Â You even can explore more hierarchical structures (but, imho thatâ€™s less exciting)ďż˝?, explained Wright in his tweet.
Benefits of legal recognition
Wright said that the bill, if passed, would mean well-intentioned DAO creators will have the freedom to structure their affairs a mix of statutory filings, legal agreements, or smart contracts to organize affairs.
â€śThis flexibility will give folks the ability to productively play with governance and DAO structuringďż˝?, he said in a tweet, adding:
â€śDAOs can operate with the ‘real worldâ€™ and manage real work risks.Â They now donâ€™t need to be toys; they can be playersďż˝?.
This process need not be very expensive either. The bill proposes that setting up a legally recognized DAO could cost merelyÂ hundreds of dollarsÂ instead of tens of thousands of dollars (at least in the US)â€”which should, in turn, let millions (if not billions) of DAOs bloom.
Wright said that such a move could see individuals running and managing their organizations onÂ EthereumÂ while representing all assets related to these organizations on the blockchain.
The bill was made possible via the efforts of Wright and the students of Cardozo Law, and the overall forward-thinking vision of Wyoming authorities.