DAO Organization: A New Form of Decentralization Autonomy

DAO( Decentralized Autonomous Organization), as an emerging form of organization, is sparking a wave of innovation in the Web3 world. It not only reshapes people's understanding of traditional organizations but also incubates star projects like Compound and MakerDAO. From project parties to investors to ordinary players, there is a high level of attention given to DAOs. However, the definition and connotation of DAO vary greatly depending on the context, making it difficult to grasp its essence.

The core features of DAO can be summarized as "Decentralization" and "Autonomy":

1. Decentralization organization structure

The DAO does not have a centralized decision-making management institution like a traditional company; instead, management decision-making power is shared among all members. The operational rules of the organization are written into smart contracts and made public on the blockchain, eliminating the possibility of human intervention. This structure effectively avoids the moral hazard issues associated with traditional companies.

2. Governance model of member autonomy

DAOs typically achieve autonomy through voting by token holders. Members can propose initiatives and participate in voting, with the entire process executed automatically by smart contracts. This model breaks the hierarchical structure of traditional companies, promotes equal communication among members, and enhances participation enthusiasm.

Compared to traditional companies, DAOs have significant advantages in decision-making execution, information transmission, and other aspects. It returns to individual needs and subverts the traditional paradigm of "organization versus individual," reflecting more humanistic colors.

However, DAOs also have some limitations:

• Smart contract vulnerabilities can pose security risks
• The decision-making efficiency is relatively low.
• There is a lack of a comprehensive regulatory framework in most countries.

Currently, only a few countries and regions have established specific laws and regulations for DAO:

• The UAE's "DAO Association Regulations" grant independent legal status to DAOs.
• A bill in Wyoming, USA allows DAOs to register as limited liability companies.
• Tennessee Code amended to allow LLCs to register as "Decentralized Organizations"

For RWA projects, if the DAO is registered locally as a legal entity, it can, in principle, serve as the issuer of the token. However, a DAO that exists solely on-chain needs to undergo legal wrapping by establishing a legal entity to issue the token.

Overall, DAOs as a new form of organization have developed成熟 on the blockchain, but to further connect with the real world, relevant laws and regulations still need to be improved. Project parties should also pay more attention to compliance requirements to avoid unnecessary legal risks in innovation.