Uniswap DAO Gains Legal Identity Without Losing Its Decentralized Soul

Uniswap governance has initiated a vote to adopt a legal structure known as a Decentralized Unincorporated Nonprofit Association (DUNA), registered under the state of Wyoming. This move aims to grant the DAO formal legal standing without altering the core components of the Uniswap protocol, including its token (UNI) and governance process. The proposed entity, named DUNI, would act as a legal representative of the DAO, enabling it to engage in contracts, retain vendors, and manage tax obligations while shielding individual participants from personal liability [1].

The Uniswap Foundation (UF), which is leading the initiative, has described the DUNA structure as a “credibly neutral legal interface” that allows the DAO to operate with greater clarity and legal protection. Under the proposal, the UF would serve as DUNI’s Ministerial Agent, responsible for executing governance decisions but not making independent decisions. Cowrie, a Wyoming-based firm co-founded by David Kerr—one of the principal architects of the DUNA statute—has been proposed as Administrator, tasked with tax filings, EIN registration, and compliance reporting [1].

The transition to a DUNA involves both on-chain and off-chain components. Smart contracts and off-chain agreements are being synchronized using Ethereum Attestation Service (EAS) anchors, a framework developed in collaboration with ScopeLift. The Foundation is also seeking $16.5 million in UNI tokens—based on a 30-day TWAP of $10.42—to fund a legal defense reserve and settle past tax liabilities, estimated at under $10 million, including penalties and interest. An additional $75,000 in UNI would be allocated to Cowrie as a one-time administrative fee [1].

The DUNA model, which became effective on July 1, 2024, is a first-of-its-kind legal structure tailored for decentralized autonomous organizations. It allows DAOs to own property and enter contracts while maintaining a nonprofit status, prohibiting direct distributions. This model provides legal personality without corporate formalities, aligning with the decentralized ethos of the crypto community [1].

Early feedback from Uniswap delegates has been cautiously supportive. Many see DUNI as a necessary step toward implementing long-discussed proposals such as the protocol fee mechanism, often referred to as the “fee switch.” Delegates like CalBlockchain have explicitly connected the legal structure to the potential activation of this mechanism, stating that DUNI provides the necessary legal infrastructure to proceed with such actions. Kpk, a prominent delegate, has also endorsed the proposal, calling it a “framework that safeguards individual participants and enhances the DAO’s ability to engage with off-chain entities” [1].

The governance model ensures that DUNI remains a subordinate entity to the DAO. While administrators like the Uniswap Foundation and Cowrie are responsible for executing decisions, they do not hold unilateral authority. Governance can revoke roles, reassign duties, or amend the framework through future votes. If a proposal is deemed unlawful, administrators are expected to flag it but cannot override the DAO’s decision [1].

Beyond Uniswap, DUNA structures are gaining traction in the broader crypto ecosystem. On August 26, Syndicate launched the Syndicate Network Collective, one of the first DUNAs to go live in the U.S. The initiative was supported by legal and compliance partners including Cowrie, Cooley, and a16z crypto. U.S. Senator Cynthia Lummis highlighted Wyoming’s role in fostering financial innovation by reposting the announcement [1].

The Uniswap vote follows the standard DAO procedure, with a one-week voting period and a 40 million UNI quorum required for approval. If passed, the DUNA structure will not immediately change Uniswap’s economic model but will provide a legal framework that could facilitate future developments such as fee capture and formal partnerships. By establishing legal clarity, the proposal aims to enhance the DAO’s resilience and ability to operate within regulatory boundaries [1].

Source: [1] Uniswap vote opens on Wyoming DUNA (https://blockworks.co/news/uniswap-vote-wyoming-duna)