Legal Wrappers and DAOs
31 Pages Posted: 2 Jun 2022 Last revised: 7 Jul 2022
Date Written: May 30, 2022
This white paper offers the first comprehensive overview and explanation of legal wrappers available to DAOs. It observes how the qualitative features of DAOs—including their dispersed and fluid memberships, and blockchain-based governance—are unanticipated by legal wrappers modeled after 20th century corporations, nonprofits and partnerships. It then surveys a diverse range of wrappers available to DAOs, and highlights how thoughtful legal engineering can help mitigate frictions that arise when attempting to wrap established legal forms around DAOs and DAO operations. To demonstrate, the white paper proceeds through a variety of fact scenarios spanning protocol, media, collector, social, and philanthropic DAOs to illustrate how wrappers might be employed to protect DAO participants from unlimited liability, optimize tax treatment, engage in contractual off-chain transactions, and enable compliance with key regulatory expectations.
Keywords: DAOs, Web3, corporate governance, blockchains
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