What is a Wyoming DUNA and why are some crypto startups using it?
This week’s question: What is a Wyoming DUNA and why are some crypto startups using it?
Our answer: A Wyoming Decentralized Unincorporated Nonprofit Association (DUNA) is a new type of legal structure recognized under Wyoming’s 2024 Digital Asset Amendments Act, tailored for decentralized non-profit projects such as Decentralized Autonomous Organizations (DAOs). Importantly, a DUNA gives blockchain communities a simple and legally recognized structure for their projects that combines the flexibility of an unincorporated association with the limited liability and legal personhood normally reserved for traditional entity structures such as corporations or LLCs.
Key Considerations:
Legal Personhood. A major development is that DUNAs treat decentralized projects as legal persons similar to traditional entities and structures, thereby providing DUNAs with benefits such as limited liability protection for participants so that they are not personally liable for the organization’s debts and liabilities, the ability to enter into contracts, to sue and be sued, etc.
Blockchain Governance. Unlike traditional entities and structures, Wyoming law expressly allows DUNAs to govern themselves via smart contracts and other blockchain-based governance tools rather than traditional bylaws and other organizational documents.
Non-Profit. A DUNA is legally a non-profit organization meaning it can spend funds for the community’s mission and upkeep but cannot distribute profits to members. This fits perfectly with decentralized infrastructure projects that are not profit seeking businesses.
Simplicity. Unlike other entity structures such as an LLC, a DUNA doesn’t need an operating agreement or traditional filings and reports beyond registering its public records and designated agent. This makes DUNAs much easier and cheaper to set up.
Why It Matters
For founders of decentralized projects (especially those seeking liability protection and a fully blockchain governance structure), a Wyoming DUNA provides a fresh and intriguing path. It provides legal protection and many of the benefits of legal personhood without sacrificing decentralization or needing to reclassify the project as for-profit. Additionally, if a DUNA proves workable in practice, you can expect other states and jurisdictions to adopt or modify their existing statutes accordingly. As a result, a Wyoming DUNA today can position your project on a potential legal standard, thereby further reducing future friction as comparable frameworks roll out elsewhere.
