The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
History is unfolding before us with BLOCKS DAO LLC paving the way as the first legally registered DAO LLC coming out of the groundbreaking new blockchain law in Wyoming.
Perhaps the biggest beauty of the blockchain industry is that it is constantly pushing the boundary of what is valid and accepted in society. Cryptocurrency has forced us to question what we even consider a currency and DeFi has proven that financial ecosystems can exist outside of traditional structures.
Now Decentralized Autonomous Organizations (DAOs) are on track to change the way organizations work moving forward. In light of this, the US state of Wyoming recently passed a law that, for the first time in US history, formally recognizes DAOs and gives them the same legal power as limited liability companies.
What are DAOs?
A DAO is a Decentralized Autonomous Organization and essentially, one that is governed by a set of rules. Naturally, all organizations are governed by a set of rules but what makes DAOs different is that these rules are embedded into the computer program used by the organization. These computer programs are also decentralized, meaning that they are not governed by a single source (person, computer, etc).
Because these rules are embedded into a computer system, they are enforced automatically and this ensures greater efficiency. For example, if the rules of the organization state that a certain system upgrade is to take place at a certain time or certain payments should be made at certain times, this is automatically carried out by the computer system
Being decentralized, the predetermined rules cannot be circumvented and changes to organizational procedure and structure can only be made through the process of voting. Organizations that are built on DAO are ones that are working towards a common goal or have certain core values they want to espouse.
By using DAO software, these processes and values are protected, not subject to human error and are carried out automatically. The DAO was first launched in 2016 and was able to raise over $150 million in funding in what was the largest crowdfunding effort at the time with a vision of taking its possibilities to the world.
Now, years later, it seems that this vision is bearing fruit as Wyoming has become the first US state to legally recognize DAOs and grant them the same rights as limited liability companies in a law that went into effect on July 1, 2021. This law is a groundbreaking one and one that has far-reaching benefits for the rest of the blockchain and crypto sectors.
Why is this Important
This new law being passed is more than just DAOs being recognized in Wyoming but is a granting of legitimacy to an entire industry that could change the way that organizations operate. In the past, organizations struggled with coordinating values and laws while scaling their operations.
With DAOs, this process is automated and streamlined while also democratizing control and influence within organizations. In the past, laws and values could only be implemented if those at the top allowed it to happen. Now, DAOs are removing this issue by automating the processes and democratizing control. Should the growth of DAOs continue, it could become a standard within the wider world, putting an end to age-old problems and creating a more efficient and equitable corporate structure.
DAOs of the Future
While this law has only been in operation for a few months, a new company, BLOCKS, has made history as the first Wyoming DAO LLC with plans to roll out its services in the state and throughout the world.
The company specializes in creating decentralized solutions and automation for organizations that are newer to such technology. In addition to this, BLOCKS works to help remove barriers to entry for companies looking to get into blockchain like regulatory compliance. Having been one of the first companies to build on a new blockchain-based law, BLOCKS knows firsthand the complexities of blockchain regulation. BLOCKS DAO customers are able to access its services through its mobile app, web platform, and plethora of tools.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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