The crypto-friendly state of Wyoming has approved the first legally recognized decentralized autonomous organizations (DAO) in the United States.
BLOCKS was the first DAO Limited Liability Company (LLC) approved by Wyoming's blockchain legislation following an initial filing on June 17. BLOCKS aims to onboard businesses and industry onto the blockchain so that they can benefit from a DAO structured environment. It also has its own governance token of the same name.
The American CryptoFed DAO also received notice from the Wyoming Secretary of State’s office on Tuesday recognizing it as a legal entity after it filed on July 1, according to a Sunday announcement.
Marian Orr, CEO of the American CryptoFed DAO, stated:
“Wyoming is the leading digital assets jurisdiction in the USA, and now with this DAO law, Wyoming is arguably the top blockchain jurisdiction in the world. What this means is that creating a true digital currency with mass acceptance is now possible.”
The Merchant Advisory Group (MAG), which represents 165 of the largest merchants in the U.S., expressed its support of the filing. John Drechny, CEO of the MAG, stated that the group has always advocated for more competition in the payment-acceptance space.
The American CryptoFed DAO was established by mobile banking solutions provider mSHIFT on July 1, 2021. The project describes its mission as promoting a two-token economy that is immune from inflationary or deflationary influences.
Orr emphasized that the DAO’s native algorithmic stable token, the Ducat, facilitates fee-free transactions. The Ducat is based on EOS, which uses a delegated-proof-of-stake (DPoS) consensus to achieve high-speed transactions at the expense of decentralization.
New tokens are issued through interest that is paid to Ducat holders and rewards issued to the network’s users. Ducat rewards and interest rates are adjusted dynamically by machine learning, with the Ducat intended to appreciate against the U.S. dollar by the amount of inflation the dollar experiences.
The DAO also issues its governance token, Locke, which is used to stabilize Ducat.
The governance token is issued in compliance with the Token Safe Harbor Proposal 2.0 outlined by Securities and Exchange Commission Commissioner Hester Peirce in April.
Related: Wyoming Passes Bill to Recognize Cryptocurrencies as Money
Wyoming has been at the forefront of pioneering permissive crypto regulations in the U.S. in recent years, with state regulators working alongside Avanti Bank & Trust’s Caitlin Long to develop a banking charter framework for crypto firms.
In September 2020, Kraken received a Wyoming bank charter, making it the first crypto business allowed to operate as a bank in the United States. Avanti followed suit in October.
In March of this year, Wyoming became the first state in the nation to pass legislation into law recognizing DAOs as a distinct form of limited liability companies.
This article has been updated to reflect the fact that BLOCKS was approved before American CryptoFed.