DAOs and LAOs; Governance in the Next Iteration of Technology

2019 was dubbed the year of the DAO (Decentralized Autonomous Organization). A DAO is an organized group governed by a smart contract or set of smart contracts, and these organizations are designed with a purpose; to facilitate some process or another. Entrance and the ability participate in these organizations is governed by the allocation of some fund (usually Ethereum, but it could be some other cryptotoken) giving the entrant the ability to vote on and design the protocols governing the DAO.

The legal standing of DAOs has been questionable, so a new group of DAOs have popped up that are looking to operate specifically within the governing protocols of Land-Based Governments (henceforth LBGs). These Legal Autonomous Organizations (LAOs) seek to profit and do business in a legal way and may be the next iteration of government as we know it.

LAOs want to abide by the laws that LBGs are setting forth for crypto, and in doing so may be setting the stage for what LBGs themselves can evolve into. LAOs are transparent, and LGBs will likely come to appreciate and understand them as the world of cryptofinance grows. LBGs will likely adopt some LAO protocols to grow technologically into the new digital age. LAO protocols fit very well into the framework that LBGs already operate within; contracts with very specific sets of rules that are either followed or not followed, where the ability to negotiate terms is governed by the stake of any party that is already invested in the outcome. These systems are already well known to the lawyers, actors, and operators within LGBs. Likewise, smart contracts and LGBs can find suitable compromises that work for all parties involved, whether it is another LBG, LAO, DAO or some as yet unknown or uncreated organization.

It is likely that the protocols being designed for LAOs will come under the operational umbrella of LGBs and how this affects LGBs is something that the citizens of the countries in question will have to contend with. It is likely that all organizational systems of LGBs will come in time to be governed by the deployment of smart contracts in some way, shape or form. How this will affect democracy, authority, and the distribution of power itself will remain to be seen.

Image source public domain at https://www.pexels.com/photo/dem-deutschen-volke-building-959256/



Jae Subramoney
08 Apr

Fascinating! There's lots to think about here. I don't see how LAOs and by extension LGBs could exist because there are different legal systems for different nations. If LAO's were to comly with any one set of laws I think it would lose its distributed nature.

"The legal standing of DAOs has been questionable" - can you expand more on this please.


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