The DAO revolution

As the concept of Web3 continues to evolve, so do the structures that are created natively in the blockchain. The evolution of technology has brought parallelly the evolution of the psychological conception as to what decentralization entails, and what does autonomy as a right mean. In this sense, the Decentralized Autonomous Organizations or DAOs started becoming a reality, where its participants are considered as equals, combined under a similar vision and all connected via a token, and a digitized form of communication.

One of the main aspects of these new forms of organizations is their ability to exist away from a structurized company format as it is established that they have characteristics that go against their founding pillars, such as the ability to perform haste transactions, lean operations, providing a full digital governance participation to its stakeholders, among others, pillars which in fact come from a digital experience, not from the structure itself. While the essence of DAOs is to consider them shapeless or structureless, they do entail legal implications which are not always considered.

Companies have different shapes and names, which correspond to the jurisdiction in which they are incorporated. For the purpose of this explanation, let’s consider for the time being the companies which are incorporated under a limited liability structure. The main reason for incorporating a limited liability company is to provide funds to the new organism being created by its shareholders, who want to limit their liability and protect the rest of their personal assets. The concept behind it is very simple; once a limited liability company is incorporated, it is considered a new legal entity denominated legal person, which becomes unique and separated from all other legal or natural persons, even from the ones acting as its shareholders.

While the DAO movement seeks to empower its stakeholders by providing them leaner mechanisms of participation, it does so at the legal expense of making them participate in structures that in many cases do not comply with applicable legislations, or puts them at risk of having to answer with their personal assets as their liability is not limited. Furthermore, characteristics that enable the economic agents to operate and interact, such as having VAT numbers or be registered before a Social Security administration in order to hire employees, are not available to DAOs, limiting their ability of interaction and operation.

While the DAOs are destined to become a reality, and more assets become managed by this type of organizations, Brickken will be providing infrastructure to them via its dApp, in order to mix the ecosystem of tokenized companies operating in Web3, and organizations natively being created on-chain.