# Dao legal design `kaal:entity:dao-legal-design` **Status.** derived This node is assembled mechanically from the 14 claims that carry the concept tag `dao-legal-design`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 14 claims across 1 works, 2020 to 2020. **2020** - [3652481-001](https://wulfkaal.github.io/claims/3652481-001) [failure/argued] *(failure mode)* -- Tying a DAO's legal existence to an existing legal and jurisdictional framework typically forces the DAO to appoint a representative in that jurisdiction, and that representative centralizes the DAO, which causes the DAO concept itself to fail. > Tying the legal existence of a DAO to any forms of existing legal and jurisdictional frameworks typically results in the need for a representative in the chosen legal framework and jurisdiction, which, in turn, centralizes the DAO and results in the failure of the DAO concept. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-002](https://wulfkaal.github.io/claims/3652481-002) [condition/argued] -- A jurisdiction is only truly favorable to DAOs if it grants the DAO limited liability as an entity and accepts its independent status without requiring any representative in that jurisdiction. > Only a jurisdiction that gives the DAO limited liability as an entity and accepts its independent status without the need for representation may truly be favorable for DAO concepts. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-003](https://wulfkaal.github.io/claims/3652481-003) [definitional/asserted] -- Third generation DAOs are defined by taking an association or organization that already holds a legal construct with completed administrative paperwork and adding the DAO to that existing legal construct. > The third generation of DAOs considered an actual association or organization that already has a legal construct with completed administrative paperwork. The DAO itself was then added to the existing legal construct. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-013](https://wulfkaal.github.io/claims/3652481-013) [failure/evidenced] *(failure mode)* -- If DAO members do not formalize a structure for their human created entity, courts are very likely to impose one on them, which is a serious risk of DAO membership. > However, a very serious risk is associated with DAO membership in the sense that if the DAO members do not formalize a structure for their human-created entity, courts are very likely to impose one for the members of the DAO. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-014](https://wulfkaal.github.io/claims/3652481-014) [condition/evidenced] *(failure mode)* -- Where no legal entity is involved, partnership rules operate as the default rules that apply to all interactions between parties trying to achieve a common goal. > If no legal entity is involved, partnership rules are default rule that apply to all interactions between parties trying to achieve a common goal. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-015](https://wulfkaal.github.io/claims/3652481-015) [failure/evidenced] *(failure mode)* -- Parties may try to limit remedies to DAO assets through private agreements, but if the DAO faces a tort suit such an agreement is unlikely to be upheld. > Parties may be able to limit remedies to DAO assets through private agreements. But, if the DAO should face a tort suit such an agreement is unlikely to be upheld. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-016](https://wulfkaal.github.io/claims/3652481-016) [failure/argued] *(failure mode)* -- Applying a common legal anchor and traditional jurisdictional principles to cybernetic systems is near impossible, because the status of a cybernetic system is constantly changing. > Applying a common legal anchor and traditional jurisdictional principles to cybernetic systems is near impossible because the status of the cybernetic system is constantly changing. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-022](https://wulfkaal.github.io/claims/3652481-022) [condition/asserted] -- Lasting legal solutions for DAOs must increase and maintain the decentralization already achieved inside the DAO, because DAOs cannot exist and persist without ever increasing degrees of decentralization. > Lasting legal solutions for DAOs have to increase and maintain the internal and external decentralization accomplished in the DAO. DAOs cannot exist and persist without ever increasing degrees of decentralization. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-023](https://wulfkaal.github.io/claims/3652481-023) [failure/argued] *(failure mode)* -- Existing legal solutions for DAOs typically require some form of legal representation in the relevant jurisdiction, and jurisdictional requirements pertaining to legal representation are always a point of centralization. > Existing legal solutions for DAOs typically require forms of legal representation in the respective jurisdiction. Jurisdictional requirements pertaining to legal representation are always a point of centralization. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-024](https://wulfkaal.github.io/claims/3652481-024) [predictive/argued] *(failure mode)* -- Because consumer protection is a core mandate of any legislature, legislatures are unlikely to surrender control and jurisdiction over a DAO, which would mean no legal recourse and no ability to sue in national courts, while at the same time granting the DAO limited liability. > Because consumer protection is a core mandate for any legislature, it seems less likely that they will surrender control and jurisdiction over the DAO which includes no legal recourse, inability to sue in national courts etc, while also giving the DAO limited liability in that jurisdiction. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-025](https://wulfkaal.github.io/claims/3652481-025) [design/evidenced] -- A DAO needs a legal wrapper to represent it because a DAO on its own cannot rent an office or sign a contract that can only be executed on paper. > First, a DAO with a legal wrapper enables the DAO's operations in the real world and beyond. A DAO needs a legal wrapper representing the DAO in the sense that a DAO cannot rent an office or sign a contract that can only happen on paper. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-034](https://wulfkaal.github.io/claims/3652481-034) [failure/argued] *(failure mode)* -- Where a DAO's internal voting mechanism is centralized and burdened with legacy voting problems, any higher degree of decentralization achieved in its external legal design will typically be cancelled out over the long run. > For many attempts to create legal solutions, if the internal voting mechanism of a DAO is more centralized and afflicted with existing legacy voting issues, a higher degree of decentralization in the external legal design will typically be cancelled out in the long run. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-035](https://wulfkaal.github.io/claims/3652481-035) [failure/argued] *(failure mode)* -- When the degrees of internal and external governance decentralization cancel each other out, the DAO is less likely to succeed in its decentralization attempt and correspondingly more likely to fail. > If the degrees of internal and external governance decentralization cancel each other out, the respective DAO is less likely to succeed in its decentralization attempt, which in turn makes it more likely for the DAO to fail. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 - [3652481-040](https://wulfkaal.github.io/claims/3652481-040) [failure/argued] *(failure mode)* -- Without a legal wrapper, DAOs face potential regulatory enforcement actions and civil liability not only at the organization level but against individual participants. > Without a legal wrapper, DAOs face potential regulatory enforcement actions and civil liability, not only at the organization level but against individual participants. Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/dao-legal-design.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.