A working group in the Wyoming legislature dedicated to blockchain technology and innovation has put forward a bill that, if approved, would allow decentralized autonomous organizations, or DAOs, to officially incorporate in the state.
The bill was originally submitted in mid-January, though a publicly available draft of the measure appears to have existed online since December. Public records indicate that the bill was sent to the Wyoming Senate's Joint Corporations, Elections & Political Subdivisions Committee on February 3.
A DAO is an organization that is governed by the terms of a smart contract. Such governance may take the form of token-based preference setting or voting, with decision outcomes based on the degree of participation and the preferences expressed in the vote.
At its heart, the Wyoming bill aims to allow DAOs to be chartered in and recognized by state authorities. They would be enabled to form as limited liability companies or LLCs, with the term DAO, LAO or DAO LLC appearing in their official registry. It appears that existing LLCs in the state can become DAOs under the terms of the measure.
What's more, the measure covers DAOs that are "member managed" or "algorithmically managed." For that latter category, "[a]n algorithmically managed decentralized autonomous organization may only form under this chapter if the underlying smart contracts are able to be updated, modified or otherwise upgraded."
Under the terms of the bill, the articles of organization would define the characteristics of the registered DAO's organizational structure, including the rights of participants and how the smart contract component would be subject to change. Should a smart contract change be conducted, the articles of organization would need to be amended or updated.
In a sense, the proposed bill serves as a kind of bridge between real-world business operations and the general ethos of DAOs, which strive to decentralize the organs of control and distribute them across participating stakeholders. It's not entirely clear what demand there is for a Wyoming-registered DAO, but the state, in general, has pursued a positive policy stance toward the crypto space. For example, a growing number of crypto industry firms are setting up banking services in the state.
The full text can be found here.