The Legal Guide for
Autonomous Organizations

DAO Legal Guide

At the forefront of innovation, Decentralized Autonomous Organizations (DAOs) are reshaping traditional organizational paradigms. Defined as decentralized networks of autonomous entities that optimize production functions, DAOs harness the power of the network effect to foster open collaboration and resource sharing. At their core, DAOs are envisioned as entities governed solely by intelligent algorithms or autonomous agents, ensuring both information autonomy and tamper detection. 

DAOs have emerged as disruptive structures that offer numerous advantages over traditional organizational models. These benefits range from increased transparency and accountability to decentralized governance and cost-effectiveness. 

However, these benefits should not obscure the fact that the majority of DAOs operate without a formal legal entity or any form of regulatory oversight. The fact that a DAO does not have a legal wrapper is initially questionable for liability reasons. Token holders are personally liable for material and immaterial damages caused by the DAO. This weakens trust in decentralization. In addition, unregulated DAOs pose an incalculable risk to investors. The inability to raise capital directly affects the likelihood of the DAO's success and survival, as well as trust in the DAO.  

This is the motivation for the team at Pontinova to create the Pontinova Global Top 100 DAO Report and this Legal Guide covering the top 7 jurisdiction for DAO legal wrappers:

• Switzerland - Foundation and Association
• Liechtenstein - Foundation
• Lithuania - Private Limited Liability Company
• Marshall Islands - DAO (Non-Profit) Limited Liability Company
• Cayman Islands - Foundation
• British Virgin Islands - Limited Liability Company
• Abu Dhabi ADGM - Distributed Ledger Technology Foundation

This DAO legal guide covers for each jurisdiction a regulatory compliance framework and analyzed in terms of DAO type, token, and legal wrapper. But before you delf in the jurisdiction reports, take a moment to make yourself familiar with the methodology of DAO type, token, and legal wrapper.

Download the Pontinova DAO Report