What is happening? Wyoming’s SF0038 (2021 | WY) created the legal framework for a new corporate structure known as decentralized autonomous organizations (DAO). Vermont and Tennessee are making similar rules.
Why is this important? DAOS are now worth $21 Billion. The company functions like this:
- it is web based
- any investor has voting rights based on the number of shares the investor buys
- normal business decisions are taken by automated digital execution
- enforced by smart contracts
How will this be important? The summarized principle behind DAOs: “Shareholders vote on everyday executive decisions made by the company, sometimes even bringing certain issues up for vote themselves. It’s a more direct form of corporatized democracy”
Governing | Can We Turn Shareholders into Public Decision-Makers?