Emerging Tech
DAOs & Web3: Navigating the Intersection of Code and Corporate Law
Nov 2, 2025
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8 MIN
Can a decentralized protocol be a legal entity? As DAOs move from experimental groups to billion-dollar treasuries, the friction between immutable code and jurisdictional law has reached a breaking point.
The Liability of Decentralization
Without a formal legal wrapper, DAO members risk being classified as a general partnership, exposing every token holder to unlimited personal liability for the protocol's actions.
Strategic Key Takeaways
Wrappers are non-negotiable for DAOs with significant treasuries.
Jurisdictional selection is the first line of defense for Web3 builders.
Smart contract audits must now include a legal compliance audit.
