Lawyers and specialists that focus on decentralized finance systems want the creation of a new kind of separate legal entity to represent Australian DAOs (decentralized autonomous organizations).
The Digital Law Association of Australia and Herbert Smith Freehills, a global law firm, are lobbying the country’s Senate committee to recognize decentralized autonomous models for corporate governance legally. According to a recent Australian Financial Review report, these new decentralized autonomous models would use an internet community instead of the board of directors.
Purpose of initiative
This initiative explicitly seeks to allow legal entities to contract with DAO Limited project governors via a decentralized finance tool. It wants to replace traditional intermediaries like foreign exchanges and banks with blockchain technology. Limited liability tags will also prevent Australian DAO members from the liabilities for losses accrued because of a community member’s decision-making. According to the law professional involved, legalizing decentralized autonomous organizations in the country could help make Australia more appealing to worldwide digital asset companies. Many local DeFi professionals and entrepreneurs look to offshore solutions like Germany and Singapore.
These decentralized organizations have specific rules and regulations in the form of a computer program that is often blockchain-based technology. The first most significant attempt to develop a functioning DAO was a 2016 machine-operating venture organization dubbed “The DAO.”
Do decentralized finance systems work?
This promising news comes as some crypto exchanges shift to more decentralized systems. For example, ShapeShift cryptocurrency exchange recently announced its plans to have an open-source platform set up. In a move to show how committed it is to DeFi, it wants to dissolve the company’s whole corporate structure. The company’s CEO and founder, Erik Voorhees, said that the inspiration they’ve gotten from the wider DeFi community will now help them develop new economic coordination models for this century. No borders, no banks, no corporate entities. He further confirmed that all the tools are ready.
The CEO firmly believes that immutable, open finance needs immutable, open organizations. Therefore, as part of ShapeShift’s decentralized pledge, it intends to have a 340 million FOX token airdrop to more than one million active users who traded at least a dollar of ETH.