Marshall Islands Officially Recognises DAOs, Aims to Become Global DAO Hub

By Jody McDonald February 17, 2022 In Crypto News

The Marshall Islands has formally recognised decentralised autonomous organisations (DAOs) as legal entities in a bid to establish the small central Pacific island republic as a hub for blockchain innovation.

A DAO is a decentralised blockchain organisation which is represented by rules encoded in a public, transparent smart-contract. DAOs are member-based organisations that do not have centralised leadership: decisions are made through a democratic voting process. 

They’ve been used extensively in blockchain-based projects, including DAOs to crowdfund the purchase of a Caribbean island and the Blockbuster Video brand. Despite these examples, the legal status of many DAOs has remained murky, often requiring the parallel establishment of a limited liability corporation (LLC), which can undermine their decentralised nature.

The Marshall Islands has clarified the legal status of DAOs by modifying its Non-Profit Entity Act and essentially granting them the same legal status as LLCs, including corporate personhood and the ability to hold real estate.


Under the republic’s new legal framework, DAOs would no longer need to register seperate LLCs, and would therefore be fully decentralised, fully blockchain-based and fully regulatory-compliant organisations. 

This new legal clarity could set the stage for a boom in DAO activity in the small island nation and lead to innovative, large-scale use cases.

First DAO Anticipates Bright Future

The first DAO to take advantage of this new legal clarity in the Marshall Islands is registered to decentralised exchange software provider Shipyard Software:

Mark Lurie, CEO and co-founder of Shipyard Software, expects the regulatory clarity provided by these new laws to mark the start of a new phase of human organisation, stating:

DAOs are the next major iteration of human organisational structure. As mass adoption of blockchain technology takes off, it is critical that DAOs be explicitly recognised as a new corporate entity on the international stage. We are honoured to form the first DAO in the RMI and take the first step in legal formalisation of the DAO revolution.

Mark Lurie, CEO, Shipyard Software

With this new, well-defined legal framework, the future looks bright for blockchain innovation in the Marshall Islands – but we’ll have to wait and see if it leads to the kind of organisational revolution some are predicting.

Jody McDonald

Jody McDonald

Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.

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