XDAO, a protocol utilizing The Open Network (TON), has successfully enabled more than 367,000 decentralized autonomous organizations (DAOs) to gain legal recognition through its initiative that automates this process for such entities.
In a recent announcement, XDAO revealed that it has simplified the procedure for establishing DAOs, allowing them to attain legal status. A representative from XDAO stated that the protocol provides a framework for various “sub-entities” under its legal umbrella.
“Essentially, these sub-entities coexist in relation to one another and in connection with external entities that acknowledge their existence and consent to certain provisions of XDAO Labs’ Constitution,” the representative explained.
XDAO also noted that parties involved recognize Singapore, where XDAO Labs is registered, as the main jurisdiction for resolving any disputes that may arise.
### Signing Legally Binding Documents via Telegram Bots
The protocol also mentioned its ability to facilitate the signing of legally binding documents through Web3 wallets. XDAO indicated that DAOs could keep a record of their transactions using a Telegram bot.
When questioned about the security and practicality of its Telegram bot-driven legal framework, the spokesperson affirmed that agreements made via the instant messaging platform are valid in “most jurisdictions.” However, they pointed out some limitations, particularly regarding “real estate, securities, and other issues that require specific procedures for contract formation.” The representative advised:
“Nevertheless, when entering agreements through a Telegram bot, it is crucial to document all particulars thoroughly, as this can aid in resolving disputes later on.”
The spokesperson further mentioned that the bot can retain information deemed important by DAO participants and can even be employed for conducting basic Know Your Customer (KYC) checks.
### Implementing Smart Contract-Based Compliance Practically
When asked about how their smart contract compliance models would function in arbitration cases, XDAO explained that valid arbitration agreements could be established via messenger or electronic signature services like Docusign and Ethsign. It’s necessary for identities to be clearly outlined and the “intention to resolve the dispute should be distinctly stated.”
“Arbitration is a well-recognized method for dispute resolution, governed by significant international conventions. These conventions don’t specify the exact way to form an arbitration agreement, aside from the requirement that it be in writing,” the spokesperson elaborated.
They added that if a payment is needed, an arbitrator could be introduced to the DAO with the authority to cast a key vote. This would enable the arbitrator to authorize a transaction using their digital signature in the event the parties cannot reach an agreement.