Decentralised autonomous organisations (DAOs) are a new way for people to organise and manage themselves using blockchain technology. A DAO operates through smart contracts, [1]i.e., programmes on a blockchain that run automatically when certain conditions are met. Unlike traditional organisations with a central leader, DAOs use a decentralised system where decisions are made by members who hold tokens. These tokens give members the right to propose and vote on projects, budgets and rules. This system allows communities to work together on shared goals, whether in finance, art, social causes or other areas, without a need for intermediaries. DAOs enable a transparent, democratic and efficient way of governing organisations by paving the way for innovative ways of working together.

In a family office (FO) and private client context, DAOs offer families owning digital assets exciting possibilities for philanthropy, charity, investment, co-funding, family governance and cultural projects.

DAOs v legal entities

A DAO is not a legal entity and can be established between any number of individuals pursuing a common purpose by employing blockchain technology. Instead of having articles of association, undergoing registration with a commercial register and issuing shares, a DAO has a whitepaper, writes or organises the writing of a smart contract stipulating and automatically implementing the rules of the DAO, and issues tokens to interact with the smart contract and allow DAO members to own different types of rights or assets.