Thread by @mahadevanarj

1/ Today, July 1st, 2021 is DAO Day 🎉

Wyoming's law is live which lets DAOs (Decentralized Autonomous Organizations) register as LLCs (Limited Liability Companies)...

...and @StartPackHQ is supporting DAO LLC registration startpack.io/dao-llc-wyoming 🚀

Why is this law a big deal?

https://twitter.com/balajis/status/1410305256639004674

2/ Each new era of innovation has created new way to coordinate human activity 🤝

The age of exploration birthed chartered corporations

The industrial era in the US heralded the joint stock company

The railroad boom created preferred shares

3/ DAOs could be the next major organizational structure 🔮

DAOs help people organize their affairs using software (potentially accompanied by associated legal agreements) to build organizations that are highly automated and Internet-native.

4/ This shift feels like a matter of "when" not "if" ⏳ and some pretty smart people agree...

@brian_armstrong believes DAOs are the Delaware-C Corp of the cloud which is where the future is being built

https://twitter.com/squads_dapp/status/1404349449258868739

5/ @balajis believes on-chain incorporation via DAOs will turn corporate charters into code and that all incorporation will eventually go on-chain.

Fiat company
- paper incorporation

Crypto company
- on-chain incorporation

https://twitter.com/balajis/status/1171158043364478976

6/ So if DAOs are the future, why register a DAO as an LLC? Why not do away with LLCs entirely? 🤔

It comes down to liability protection

By signing this bill in to law @GovernorGordon made Wyoming the first state to clarify the legal status of DAOs

7/ Wyoming Senator @rothfuss explains this liability concern:

“Digital asset stakeholders made it clear to us they were concerned about facing general partnership liability in the absence of a well-defined corporate structure. Our DAO LLC legislation should dispel that concern”

8/ In April 2021, Wyoming Governor Mark Gordon signed Bill 38.

This bill allows Wyoming to recognize DAOs as LLCs

This effectively gives a DAO the legal protections an LLC offers

9/ Without the protection of an LLC, an investor in a DAO may face having their personal assets seized or subject to a lawsuit if the DAO were to be sued.

An LLC will insulate any stakeholder from personal risk, and so only the DAO itself will be liable in a legal case.

10/ You can think of a DAO LLC also known as a LAO, as a hybrid entity, partly backed by existing legal regimes and operating primarily via software.

They are also identifiable by state regulators and other officials.

11/ So how do you actually register your DAO as an LLC in Wyoming? What's required?

3 key things...

12/

1. DAO LLCs must maintain a presence in the state through a registered agent

This is required of all LLCs who register in a state other than their own across the country.

13/

2. DAO LLCs will be required to include a designation in their name

This could be “DAO”, “DAO LLC”, or “LAO”

14/

3. A DAO can be member-managed, like an LLC, or algorithmically managed where contract must be editable, upgradable, updatable, & modifiable

DAO articles must contain information about how the DAO will govern members, their rights and duties, distributions, and amendments

15/ The legislation in Wyoming is still in its infancy, and there are still many open-ended questions...

As Wyoming senator @rothfuss says:

“Maybe we need a DAO C Corp next to address other challenges. We’re certainly not done yet.”

16/ To learn more about DAOs check out this mega thread

https://twitter.com/mahadevanarj/status/1405664279873740805?s=20

18/ You can also check out this complete guide to DAO LLCs blog post startpack.io/blog/what-is-a…

19/ And if you're looking to register your DAO as an LLC in Wyoming follow @mahadevanarj and check out startpack.io/dao-llc-wyoming

20/ Lastly, here are some accounts to follow to learn more about DAOs (will update this as I learn of more accounts as I'm definitely missing a ton):

@balajis
@rothfuss
@GovernorGordon
@CaitlinLong_
@awrigh01
@ChristopherA
@pet3rpan_
@banklessDAO
@Cooopahtroopa

21/ more accounts to follow to learn about DAOs:

@jmonegro
@mlphresearch
@MartaBelcher
@ammori
@boironattorney
@danboneh
@rleshner
@derek_hsue
@_kinjalbshah
@Matthew_Graham_
@HelloShreyas
@itsamyjung
@lsukernik
@rafaelsolari
@JulzRoze
@kevinknielsen
@notscottmoore

22/ here's another thread with a guide on forming and operating a DAO LLC in Wyoming

https://twitter.com/mahadevanarj/status/1410689595545632769?s=20