a protocol for the creation of DAOs

The XDAO protocol, developed on The Open Network (TON) blockchain, has enabled more than 367,000 decentralized autonomous organizations (DAO) to gain legal recognition.

This initiative aims to simplify the creation of DAO, granting them an automated legal status.  

TON and XDAO: a protocol for the creation and legal recognition of DAOs

XDAO has announced that it has made the process easier for the legal recognition of DAOs, establishing a standardized framework for the so-called “sub-entities”. 

These sub-entities can exist both independently and in relation to other entities that recognize their existence through certain articles established by the Constitution of XDAO Labs.  

Furthermore, the protocol indicated that Singapore, the legal headquarters of XDAO Labs, will serve as the primary jurisdiction for resolving any legal disputes. 

This aspect highlights the importance of a clear regulatory environment for the proper functioning of DAOs under the aegis of the XDAO protocol.  

A key innovation introduced by XDAO concerns the possibility of signing legally binding documents using Web3 wallets. The DAOs will be able to record and store transactions via bots on Telegram.  

However, XDAO warns that, although this method is recognized in many jurisdictions, it has some limitations. 

It is not suitable, for example, for transactions related to the real estate sector, financial securities, or other areas where a specific contractual procedure is required.  

A spokesperson for XDAO clarified that the accurate recording of details in transactions carried out via bots is essential to facilitate the resolution of any disputes. 

This approach can also be used to perform basic checks on participants in DAOs, implementing Know Your Customer (KYC) functionalities.  

Compliance based on smart contract and arbitration  

XDAO has also developed a model for compliance based on smart contract, particularly useful in arbitration scenarios. 

The parties involved can enter into valid arbitration agreements through electronic messages or signatures, utilizing tools like Docusign and Ethsign.   

In order for such contracts to be valid, it is essential that the identity of the parties is well defined and that the intention to resolve any disputes is clearly expressed. 

Arbitration, in fact, is recognized internationally as a method of dispute resolution and is governed by importanti convenzioni globali.  

An additional interesting aspect concerns the possibility of integrating an arbitrator directly into the DAO. In case of a lack of agreement between the parties, the arbitrator will have the right to cast a key vote and will be able to approve a transaction through their own digital signature. 

This mechanism allows unlocking complex situations without compromising the decentralized structure of the DAO.

The expansion of XDAO represents a significant step towards the legal recognition of decentralized autonomous organizations. 

Thanks to innovative tools such as the use of bots for document signing, compliance based on smart contracts, and the possibility of integrating arbitrators into decision-making processes, the protocol presents itself as a reference model for the blockchain sector.

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It remains to be seen how these solutions will be adopted globally and what future developments will be in terms of regulation of DAOs. However, the initiative by XDAO confirms the growing interest in creating a clear and functional legal framework for the world of decentralization.

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