Most people still think of decentralized autonomous organizations (DAOs) as online groups that exist only on blockchains. Now, in Alabama, they officially exist on paper, too.
The state has passed the Decentralized Unincorporated Nonprofit Association Act, known as DUNA, making it the second U.S. state, after Wyoming, to grant DAOs formal legal status. The bill, Senate Bill 277, was introduced by State Senator Lance Bell and signed into law by Governor Kay Ivey, giving these blockchain-based communities a clear legal identity.
With that step, Alabama hasn’t just recognized DAOs in theory; it has connected their online governance model to real-world law, allowing them to operate with clearer protections and responsibilities.
Jemi Motesho
What the DUNA Act Actually Changes
For years, DAOs have operated in a gray area. They manage funds, vote on proposals, and govern blockchain projects, yet legally they often look like informal partnerships. That meant members could face personal liability for actions taken by the group.
The DUNA framework changes that. DUNA, which stands for Decentralized Unincorporated Nonprofit Association, is a legal structure designed to recognize blockchain-based groups as formal nonprofit entities. Under the new law, qualifying DAOs can receive legal entity status and limited liability protection. That means the organization itself can enter contracts, own property, sue or be sued, while individual members are shielded from personal responsibility for the group’s obligations.
To qualify, a DAO must have at least 100 members working toward a nonprofit purpose, such as maintaining a blockchain protocol or smart contract system. Governance can take place fully on-chain, with voting and decision-making recorded through blockchain technology.
Alabama is giving DAOs a legal wrapper that matches how they already operate online.
The Role of Miles Jennings and a16z
Behind the scenes, policy advocates have been pushing for clearer DAO laws across the country. One of the most visible voices has been Miles Jennings, head of policy and general counsel at Andreessen Horowitz’s crypto arm.
Jennings has argued that decentralized governance is central to crypto’s future. Reacting to Alabama’s move, he said, “Decentralized governance is essential to crypto’s future—it’s one of the core constructs in market structure legislation.” He added that the new framework gives decentralized communities “the certainty to build, govern, contract, and scale in the real world.”
His involvement reflects a broader push by major crypto investors to create legal clarity in the United States, especially as federal lawmakers debate national crypto market structure rules.
From Wyoming to Alabama: How We Got Here
The path did not start in Alabama. Wyoming has been at the forefront of crypto-friendly legislation for several years. In 2021, it approved the first legally recognized DAO in the United States. Then in 2024, Governor Mark Gordon signed Wyoming’s own DUNA Act into law, formalizing protections for decentralized groups.
Alabama’s adoption of a similar framework shows that the idea is spreading beyond early adopter states. It also suggests that lawmakers are beginning to understand that DAOs are not just online experiments. They control significant assets and coordinate thousands of participants globally.
Alabama’s law acknowledges that these organizations need legal clarity if they are going to operate within U.S. borders. As more states consider similar legislation, the question is no longer whether DAOs can organize online. It is whether the legal system will continue adapting to meet them where they are. Alabama just made its answer clear.
David Adubiina
