Alabama has become the second US state to grant decentralised autonomous organisations legal status, after Governor Kay Ivey signed the DUNA Act into law.
The legislation gives DAOs formal recognition as legal entities, allowing them to own property, enter contracts and operate within a defined legal framework while protecting members from personal liability.
“Decentralised governance is essential to crypto’s future—it’s one of the core constructs in market structure legislation,”
Said a16z Crypto head of policy and general counsel, Miles Jennings.
The law applies to nonprofit DAOs with at least 100 members working toward a shared purpose, with governance processes conducted onchain through smart contracts and blockchain systems.
The move addresses longstanding uncertainty around how DAOs function legally, providing clarity for developers and communities building decentralised applications.
A similar bill has passed in West Virginia and awaits the governor’s approval, while Wyoming previously established the first DAO legal framework in 2024.
More than 13,000 DAOs now exist globally, managing over $24.5 billion in treasury assets, with the majority operating on Ethereum and its layer-2 networks.