DAOs have a ‘liability problem’. In fact, they have a number of liability problems. And these problems have serious repercussions on how a DAO can compliantly provide legal and fair employment and compensation. DAOs should be free to design any contributor compensation structure which fits the mission but shouldn’t need to solve the regulatory and legal hurdles associated with those choices.

I believe two things to be fundamentally true in relation to DAOs and the wider Web3 ecosystem:

Gm,

The Bank Secrecy Act is US legislation that requires financial institutions to provide documentation to regulators whenever their clients deal with suspicious cash transactions involving sums over $10,000 in value.\*\* \*\*It’s part of the wider anti-money laundering (AML) and know-your-customer (KYC) programs that the US government instated to ensure there was transparency and accountability in financial transactions.

Web3 might be the new kid on the block but the leaps it has made in changing the way the world works are immense. And this transformation isn’t expected to slow any time soon with the Web3 ecosystem predicted to be valued at over $87B (USD) by 2030.‍

One of the fundamental promises of Web3 is trustless and transparent transactions through the blockchain. Contributors expect compensation structures that reflect this.