Project Insight: BLOCKS DAO - World's First DAO LLC

BLOCKS DAO will support the rising need for an enterprise blockchain solution for various types of organizations around the world.

By
Abhinav Tewari
on
April 28, 2022
Category:
DeFi

Introducing BLOCKS

BLOCKS DAO LLC is the world's first DAO-based LLC, formed in Wyoming, USA. It was designed to bring enterprise-level blockchain technology to businesses the world over. The decentralized adoption approach aims to tackle several challenges that organizations face when attempting to leverage technology by utilizing a democratic structure that is easy to deploy. 

The blockchain adoption platform aims to provide businesses with the means to utilize the technology without requiring them to become involved in development, integration, and implementation. The concept's creators accomplish this by producing a product that is a hybrid Web3 enterprise blockchain network capable of addressing the trilemma of speed, security, and scalability. 

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Blocks DAO aims to cater to all types of businesses. At the same time, because the platform is network agnostic–clients can use any blockchain ecosystem of their choosing. Block’s Decentralized Autonomous Organization (DAO) structure allows all participants to select what direction they want to go by engaging in a democratic voting mechanism, assuring the inclusion of all essential stakeholders.

Understanding DAOs

DAOs are internet-native organizations collectively owned and managed by their members, with no centralized authority. Decisions are made from the bottom up and are governed by a community organized around a specific set of rules. DAOs enable people to form organizations with no central leaders in control, run on top of a cryptocurrency network, to achieve a collective goal. 

They are often described as a way for people to avoid the hierarchical, centralized systems of traditional corporations and other large organizations. They also offer transparency through the recording of transactions on a blockchain and are often run through rules enforced by a smart contract. They can be designed to be more loosely organized and easier to join than companies. Through this structure, DAOs, like Blocks DAO, are attempting to revolutionize organizational decision-making and the capabilities of business. 

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DAOs are distinguished by their use of blockchain technology to provide a secure digital ledger for online organizations to govern and use a shared corporate treasury effectively. The DAO’s transaction record and operating rules are maintained on a blockchain.  This assures both transparency and security.  

The Case For DAO LLCs

The State of Wyoming passed legislation allowing DAOs to operate as Limited Liability Companies (LLCs). Key aspects of the bill, as mentioned on the government website, can be summarized as follows:

  • A decentralized autonomous organization (DAO) is a limited liability company with special provisions allowing the company to be algorithmically run or managed (in whole or in part) through smart contracts executed by computers.
  • This bill creates a supplement to the Wyoming Limited Liability Company Act to provide law controlling the creation and management of a DAO.  The provisions of the LLC Act apply to a DAO except as specifically modified by the supplement.
  • This bill establishes baseline requirements for member-managed or algorithmically managed DAOs and provides definitions and regulations for DAO formation, articles of organization, operating agreements, smart contracts, management, standards of conduct, membership interests, voting rights, and the withdrawal of members, and dissolution.

Legally-compliant DAOs are limited-liability companies that have limited stakeholder liability. Regardless of how it pays taxes, the organization is considered its own legal entity. While a single person or business may form the DAO, that party does not retain sole control over the DAO, as governance is distributed among its members. 

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Forming a DAO LLC necessitates a few extra steps above those required for a traditional LLC. Before the DAO can be legally established, the founders must specify its regulations through an Operating Agreement. As the DAO evolves, those rules are integrated into the code over time. The founders must also determine how the LLC will be supported before establishment. Furthermore, the DAO's code (including any potential defects and security vulnerabilities) must be verified before the system can be implemented.

The primary reason to form a DAO as an LLC is to benefit from the legal protections that an LLC provides. There are no legal safeguards in place to protect investors and stakeholders if a business chooses to build the DAO first before structuring it as a DAO LLC. Failure to form an LLC around the DAO may be problematic in financial affairs, especially when dealing with cutting-edge technology like blockchain. Identifying the accountable parties in a large DAO may be tough, but it still exposes DAO investors and stakeholders to legal repercussions for accountability.  

As the LLC protects members from personal liability, only the DAO will be held liable in the event of a lawsuit–only the DAO's assets are vulnerable in such an event. As a result, incorporating an LLC is a significant move for any DAO. The move ensures compliance and legal protection, which gives the DAO substantially greater credibility. 

BLOCKS DAO LLC

BLOCKS DAO describes itself as a Social and Services DAO hybrid. The DAO's mission is to onboard industries onto the blockchain using industry and blockchain agnostic solutions. BLOCKS aims to pioneer the blockchain technology ecosystem by offering creative solutions to enterprises seeking blockchain-based solutions to their business difficulties. Initially, it intends to target real estate, financial services, agriculture technology, and ticketing sectors. 

Through the LLC structure, BLOCKS DAO aspires to be a leader in demonstrating a commitment to compliance and security. It comprises a library of governance protocols as well as user-friendly interfaces for building and administering DAOs. Additionally, BLOCKS assists with multi-signature wallets to provide additional protection when onboarding company treasuries.

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Progressive Decentralization

All members are able to submit proposals to establish initiatives and projects that are jointly owned and managed by the user community. The critical processes are run totally decentralized. It means that each member has access to everything going on in the community. New data can only be contributed with the agreement/consensus of all involved participants. No single individual owns or controls the data inside the community. 

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This novel concept allows all participants to make non-hierarchical decisions about shared resources, such as money distribution. BLOCKS can potentially make collaborations and partnerships more direct and accessible. It aims to support the entire process of building DAOs. The system encompasses everything from basic peer-to-peer decision-making modules to a fully functional user interface.

Building on BLOCKS

To further the effective integration of traditional companies/industries on the blockchains, BLOCKS offers a decentralized space to develop the world’s most sophisticated blockchain grid called the 'BLOCKS Lab.’ Builders can use this space for pilot programs and test sandbox modules. BLOCKS offers the following tools and modules on its platforms for companies to leverage and build on. 

Novel Asset Tokenization: BLOCKS has a unique mechanism to tokenize assets. The BLOCKS Contract Engine generates Reactive Smart Contracts (RaCs). These RaCs can optionally participate within the Block’s network as Operators. They can record, track, trade, transfer payments, and registries. 

Reactive Smart Contracts: BLOCKS employs a unique Reactive Smart Contract (RaCs) mechanism that provides improvements over existing solutions by facilitating transactions on behalf of BLOCKS users.

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Global Assets Validation and Transfer Module: This module assists consumers, corporations, and governments in the digital registry, verification, trade, transfer, and settlement of new and existing asset grids. 

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Digital Catalogue NFTs and Tickets Module: This module is designed for industries such as arts, music, sports, entertainment, and ticketing to migrate analog catalogs into registered, digital formats that empower creators and consumers.

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Low-Cost Minting, Payments, and Settlements Module: BLOCKS intended to help develop the world's first smart grid network for blockchain. This will route certain actions via bridges and sidechains, similar to what Cisco developed with routers and switches in Web 1. This will enable users to mint NFTs at 98% lower gas fees. It also offers an improved synthesis of payments, settlement, and asset verification registries.

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Ownership Verification and Assurance Module: This module enables ease of transfer, verification, and authentication across both public and private-side registries. This has implications for some of the top UN 2030 Agenda initiatives, including land and title clarity in the emerging markets and an easy-to-understand global registry for blockchain verification. 

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The ‘Verified by Blocks’ mechanism is a key part of the DAOs future plans. The group sees their unique verification as an important development in the ability of businesses and institutions to verify all manner of documents and tasks using blockchain technology. From high school diplomas to job applications to much more, the ‘Verified by Blocks’ technology will be a lynchpin in the DAOs future development and will be key to growing partnerships and involvement. 

$BLOCKS Token

$BLOCKS is a multi-utility token created for the BLOCKS DAO. The total supply is limited to 10,000,000,000—of which the Corporate Treasury and the BLOCKS team were allocated 25% and 23% of the token, respectively. Followed by Yield Staking, DAO builder, and Liquidity Pools which were allocated 18%, 10%, and 8% of the token supply, respectively. 

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$BLOCKS token can be used for the following purposes: 

  • Tokenized Community Participation: Token holders can collaborate on initiatives that bridge established industries to blockchain technologies with the DAO community through exclusive access to chat groups on Discord servers. It’s a pay-to-play system where members must hold a certain amount of tokens in their MetaMask wallets in order to join the conversation. 

    There are two membership tiers, each with its unique set of benefits. A Silver Membership requires 300,000 tokens. It provides access to basic DAO functions such as voting on nominated ambassadors and winning free airdrops. The Gold Membership requires 1 million tokens. It includes the additional privileges of being elected as an ambassador. With additional access to the BLOCKS’ Management Team as an ambassador to discuss various proposals and adjustments. Gold Members also receive airdrops and can obtain discounted partner tokens. 
  • Governance: Holders can make suggestions and vote on collaborative decisions that affect the organization's growth. They can also examine, submit, and vote on governance proposals. 
  • Platforms: Participating in the DAO provides access to benefits from strategic partners. 
  • Software Development Kits (SDKs): The community can use these kits to develop software and decentralized apps on top of the BLOCKS network. 
  • Network Participation: BLOCKS token can be perceived as a unit of measurement throughout a network of platforms and collaborations.

Additionally, the $BLOCKS token can be staked to earn yield and rewards. 

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MultiSig Wallet

A key feature of the BLOCKS DAO is the multi-signature wallet. It is a crypto digital wallet that requires the use of two or more private keys in order to validate and send transactions. One of BLOCKS' distinguishing features is the development of a fully operating multi-sig treasury. The following are some of the benefits of multi-sig wallets: 

  • It mitigates the risks of dealing with digital bearer assets when transactions cannot be reversed. 
  • Multi-sig reduces reliance on a single entity. 
  • It eliminates all of the security risks associated with the single private key technique. 
  • Multi-signature validation has a lot of useful applications that make cryptocurrencies more viable, functional, and secure.

Recent Developments

BLOCKS partnered with Revest Finance in October 2021 to lock and distribute seed round tokens to participants. The partnership will leverage Revest's innovative vesting mechanics to provide time-locked Financial Non-Fungible Tokens (FNFTs) with an early unlock triggered by the legal declaration that the DAO has achieved full decentralization. Revest intends to use BLOCKS in the creation of gas-efficient on-chain storage systems.

BLOCKS also partnered with BizSecure in November 2021 to initiate government partnerships and Digital Identity Verification. BizSecure will use BLOCKS to implement verifiable credentials within the DAO to improve transportable, encrypted, and highly confidential identity verification for members of the DAO. BizSecure IDS–powered by BLOCKS, is actively being proposed to the United States Air Force and the Defense Information Systems Agency (DISA) to empower powerful decentralized, scalable, and immutable data solutions. The LLC recently verified its Twitter handle by crossing over 10,000 followers. It used aggressive marketing strategies, which involved the March Madness Airdrop Campaign. It also successfully established a Community Moderator to drive engagement in the community. 

Concluding Thoughts

The BLOCKS token, the asset which is at the core of the protocol, has seen better times than it is currently valued. It currently trades at $0.009616, and has a fully diluted market capitalization of $93.35 million, as per data from CoinMarketCap. Although, the token is not one that can be viewed strictly from an investment point of view strictly. Since the DAO LLC has a grander vision for the use case, the token’s utility is where the value would lie for holders in the future.

Source: CoinMarketCap

The idea of bringing traditional industries onto the blockchain is certainly in its infancy.  However, BLOCKS has broken ground by registering itself as an LLC, which will make it easy for companies to explore the idea of embracing the blockchain ethos because of the legitimization and the legal protection the new legislation provides. 

Find more about BLOCKS DAO here:

Website | Twitter | Gitbook | Discord | Blog

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Abhinav Tewari

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