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Wyoming DAO Law: Emergence of ‘Automated’ and ‘Autonomous’ Organizations

The stardom of blockchain lies in its ability to push boundaries – expanding its avenues and generating revolutionary concepts solving traditional problems plaguing societies globally. News has it that decentralized asset organizations or DAO have been legalized as per a law passed in the Wyoming state of the US. Thus, giving rise to an era of fully automated and autonomous organizations the operations of which are code-driven and free from human intervention.

Now Decentralized Autonomous Organizations (DAOs) are on the way to changing how organizations move forward. In light of this, we focus on the US state of Wyoming, for the first time in US history, formally recognizing DAOs and granting them the same legal status as limited liability companies.

Understanding DAOs

DAOs are an evolving breed of organizations prevalent especially in the Ethereum blockchain ecosystem. The system combines ideas regarding organizational forms, coordination, network effects, blockchain, and smart contract technology. Thus DAOs allow a group to assimilate around a specific goal and operate through smart contracts, enforced immutably and autonomously on the blockchain. DAOs represent an emergence in the way people coordinate with one another. This is due to the fact that the organization itself is autonomous from an intermediary’s influence and goals.

Simply stated, DAOs allow groups of participants to structure organizational forms different from the hierarchical, top-down corporate format, which must cater to the needs of a board and shareholders. DAOs, in essence, eliminate or considerably reduce the roles of executives and managers in the organization. Instead, they now rely on transparent rules that apply to all members and participants. Being an evolving technology, DAOs are rapidly gaining traction in the Ethereum blockchain ecosystem. They are being worked on, designed, used, built, and iterated on in real-time. 

There are a number of unattended, unexplored issues surrounding  DAOs, particularly around issues relating to legal compliance, benefits, recruiting, talent retainment, income volatility, and governance. Irrespective of the current problems, DAOs reserve the potential to enable groups to resolve problems, interact, and execute ideas in a way that may be essential to solving entrenched 21st-century problems. 

Also Read: DAO: Understanding Their Rise and Popularity

Why is the Wyoming DAO Law Important?

The new law being passed is not just that DAOs are being acknowledged in Wyoming but is a grant of legal status to an entire industry that is capable of changing the way that organizations work. In general, organizations struggle coordinating values and laws within the system while scaling their operations. With DAOs, this execution is automated and streamlined while also democratizing governance within organizations. In the corporate systems, decisions could only be implemented if the top management allowed it to happen. DAOs are redefining the concept by automating the processes and democratizing control. Should the growth of DAOs be encouraged, the outcome could lead to being a norm within the wider world, putting an end to age-old problems and creating a more efficient and equitable corporate structure.

Also Read: The Top 5 Crypto Trends for 2022


It may be debated that an organization driven by lines of codes may not be considered an organization in most parts of the world. Or that people may not bestow their confidence in an organization without human leadership. In that case, a more complete definition of autonomy and automation with respect to the organization may have to be laid down.

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