Founders

Wyoming’s DUNA legal structure for DAOs goes live on July 1, 2024. 

Companies that (1) have a U.S. nexus and (2) are using tokens to decentralize the governance of an asset (a treasury, autonomous software, etc) should consider it.

Here are 10 benefits of the DUNA 👇

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1️⃣  Lets DAOs be DAOs – DUNAs enable DAOs to continue to be governed by smart contracts. That means they can continue to be decentralized, autonomous and permissionless.

2️⃣  Provide Legal Existence – DUNAs enable DAOs to contract with third parties. This is critical as it enables them to hire lawyers and defend themselves in court. DAOs that don’t show up face the most severe consequences.

3️⃣  Preserve Privacy – DUNAs preserve DAO-member privacy. The Corporate Transparency Act isn’t applicable to DUNAs and they aren’t required to KYC users to ensure they meet the 100 member threshold requirement.

4️⃣  Limit Liability – DUNAs provide for limited liability among DAO members. This will only become more important as web3 progresses.

5️⃣  Enforce Arbitration – DUNAs can require all members to consent to arbitration, further insulating members from spurious litigation.

6️⃣  Mitigate Consumer Risk – The foregoing protections for DAO members don’t need to put consumers at risk. 

Consumer-facing apps built on top of blockchain networks, like a social media apps, should continue to use traditional entity forms. DUNAs aren't for trad businesses!

7️⃣  Promote Decentralization – Protections for DAO members means the risks of participation are reduced, which should promote decentralization. The inherent decentralization of the structure could also help mitigate risks of securities laws.

8️⃣  Prepare Tax Strategies – DUNAs enable DAOs to pay taxes to the extent any are owed and creates a legal entity capable of strategic tax planning. 

There’s still a lot of uncertainty here, but having a legal entity is an effective first step towards resolving that uncertainty.

9️⃣  Preserve Flexibility – The WY DUNA is designed to be incredibly flexible. Organizations can morph between a DUNA and an UNA easily, and the DUNA can be dissolved with little effort. 

That reduces the risk of adopting it.

🔟  Bipartisan – The WY DUNA law was a bi-partisan effort. 

Smart regulation around innovation and blockchain technology should not be a partisan issue, and this law should get broader support as a result of its bi-partisan creation.

For more information, see: https://a16zcrypto.com/posts/article/duna-for-daos/

None of the above should be taken as investment or legal advice. See https://a16z.com/disclosures/ for more info.