If your clients, neighbors, and friends are not yet talking to you about Decentralized Autonomous Organizations (“DAOs”), they soon will.
Harris Bricken attorneys Jonathan Bench and Robert Lamb sat down to discuss Decentralized Autonomous Organizations (DAOs) and the legal issues that come with them. A transcription of this talk can be found below.
A DAO is an online community using a blockchain to pool resources and transact for a specific purpose. DAOs have no hierarchy, central control, corporate form, or traditional entity contracts. The rules of investing and participating are on the blockchain’s “smart contracts.” DAOs achieve an “organization” that is “autonomous” to the group and “decentralized” in operation. Robert Lamb previously blogged about it on the HB Blog, The Paradox of the DAO and the Corporate Form.
But in most jurisdictions, an organization of two or more people for a purpose, without corporate formalities, is a general partnership. A general partnership has no liability protection, and organization liabilities flow “jointly and severally” to each of the participants. This is an ominous legal reality for DAOs and their members.
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