[ad_1]
By Adam Miller, CEO & Founder of MIDAO, and Jawna Standish Head of Business Development at MIDAO.
Over the past decade, the integration of new tech tools into the American justice system has reshaped the country’s legal industry, making it more accessible, efficient, and effective. Legal chatbots, video tools like Zoom Court and advancements in distributed ledger tech have streamlined clerking and increased access, but this barely scratches the surface.
Legal Tech, as it’s known, has begun to change how we think about justice and the law, and with any luck will someday put an end to endless court cases and impenetrable legalese. As technology continues to evolve, we can expect further advancements in the legal realm, as well as invaluable innovation and progress far beyond it.
One key impact area could be decentralized autonomous organizations (DAOs), which enable groups to collaborate and make joint decisions more efficiently. Unlike in a centralized entity, all DAO members are able to express their view on all key decisions, with instantaneous voting regardless of location. DAOs also empower people by giving everybody a real stake in project success.
Start with smart contracts, which are self-executing agreements built on the blockchain and a key component of DAOs. Smart contracts help automate and record an array of decisions and binding transactions, including membership tracking (rather than a paper record), governance (rather than voting in a meeting or by email), and treasury management (rather than a bank account controlled by executives). All in all, the need for any sort of traditional executive, middle manager, or anything in between is abstracted away.
As a result, DAOs are able to build and scale at the speed of the internet. This is fantastic, yet it also presents real risks when it comes to legal and regulatory compliance. This is where Legal Tech innovations come into play, by ensuring DAOs operate within legal boundaries.
Take for instance the common tech developer assertion that “code is law”. In reality, code only has meaning in the context of the legal system or framework in which it operates. Consider the case of Ooki DAO, in which the key figures are being sued for failing to register as a Futures Commission Merchant (FCM). Despite not violating the code on which this platform is based, many DAO members are culpable in this lawsuit. Advances in Legal Tech, such as automated registration for FCM licensing, could have prevented this, as well as new software that enables DAOs to become compliant legal entities, like an LLC.
DAOs that have been set up as LLCs can use an operating agreement, a common guidance document for LLCs, to detail how smart contracts help run the organization. The operating agreement might say, for instance, that the DAO’s token tracks membership and that each token represents one vote in governance decisions. This type of recognition would give DAO members more legal protection.
Another area of innovation in legal tech involves the rapidly evolving AI tools that are entering the marketplace. You’ve probably heard of ChatGPT and have maybe even tested it out for yourself. For legal folk, it’s just one of a handful of emerging AI tools that are remaking how legal arguments are crafted and refined. With the thousands of terabytes of legal discourse that exists on the internet, AI is already writing legal arguments and operating agreements. Tech engineers are developing software tools able to embed smart contracts into legal agreements and enforce them via the blockchain.
There is also low-hanging fruit for builders looking to integrate Legal Tech into DAOs. The members of any DAO that forms a legal entity, for instance, need to be able to sign agreements. But many people who are engaging with DAOs and the blockchain cherish their anonymity. Thus, a tool that enables DAOs to collect and manage legally-enforceable signatures from blockchain wallets would be a major win.
As people learn the benefits of this innovative organizational structure, we can expect to see a lot more innovation in this space. Legal Tech will play a key role in ensuring that DAOs operate within the bounds of the law while continuing their supersonic scaling.
Since time immemorial, legislators and regulators have slowed down innovation with copious objections, especially early on.
Take credit cards. They weren’t originally designed to be used on the Internet, neither technically nor legislatively. The magnetic stripe and use of RFID were technologies implemented with credit cards to enable the explosive growth and advancement of credit card usage, both IRL and on the web. The laws originally written didn’t have reference to the Internet, RFID or magnetic stripes. None of that was in place. It all had to be established, bills had to be passed into legislation and today we click twice on our iPhones to pay.
Simple. A lot has changed since then.
Then there’s Uber. Uber was originally banned in most places because local laws in most states in the US (and in other countries) did not allow competition with the local taxi transportation industry. In most cases, taxi licenses are issued by local governments, so Uber was competing with a tired, government industry that could not keep pace with modern society.
Uber changed the way we think, move, order food and how we can help aging family members living in different cities get to Doctor’s appointments with our help from another city. Today Uber is operating in most countries. New legislative bills had to be passed in the US to allow all of this, state by state, country by country.
The next question is not is it possible, but how do we update global laws to ensure legal tech tools help DAOs and decentralized blockchains deliver on their great promise.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
[ad_2]
Image and article originally from www.nasdaq.com. Read the original article here.