XDAO Labs has facilitated legal recognition for more than 367,000 decentralized autonomous organizations (DAOs) through its protocol built on The Open Network (TON).
Streamlining DAO Legal Recognition
XDAO, a TON-based protocol, announced that it has enabled over 367,000 DAOs to obtain legal status by automating the legal recognition process. According to an XDAO spokesperson, the protocol establishes a framework that allows “sub-entities” within the ecosystem to operate under a unified legal structure.
XDAO also confirmed that Singapore, where XDAO Labs is incorporated, will serve as the primary jurisdiction for resolving disputes involving the protocol.
Legally Binding Agreements via Telegram Bots
XDAO’s protocol allows DAOs to sign legally binding documents using Web3 wallets and a Telegram-based bot. This bot can store and archive DAO transactions and agreements.
When questioned about the reliability and security of using a Telegram bot for legal agreements, the XDAO spokesperson stated that such agreements are enforceable in “most jurisdictions.” However, the spokesperson noted that the framework may face limitations in areas like real estate and securities, which require specific legal procedures for contract formation.
The bot can also store key information significant to DAO participants and conduct basic Know Your Customer (KYC) checks when necessary.
Smart Contract-Based Compliance and Arbitration
Regarding dispute resolution, XDAO explained that smart contract compliance would function through arbitration agreements made via messaging platforms or e-signature tools like DocuSign and EthSign. For an arbitration agreement to be valid, the parties involved must establish their identities and clearly express their intent to resolve disputes through arbitration.
“Arbitration is a widely recognized dispute resolution method under influential international conventions, which require agreements to be in writing but don’t mandate a specific format,” the spokesperson said.
In cases where a payment is necessary, XDAO noted that an arbitrator could be added to the DAO as a key voter. This would enable the arbitrator to sign a transaction using their digital signature if the parties involved cannot reach a consensus.