Nevertheless, using such a “bridge entity” is inefficient, cumbersome and sacrifices many of the key benefits that make DAOs special. Instead, DAOs should, like other types of business associations, be free to enter into a contract directly, either through delegated authority or by passing a formal proposal. To the extent applicable state law would not permit a DAO to enter a traditional commercial arrangement without sacrificing its members’ personal liability, the law should be updated.
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