DAOs May Need To Ditch Decentralization To Court Institutions

Decentralized autonomous organizations (DAOs) are facing structural limitations when trying to engage with institutions and secure real-world assets, as these entities require clear legal counterparties for contracts and due diligence, which decentralized collectives struggle to provide. This conflict is highlighted by the controversial proposal from DAO Across Protocol to transition into a US C-corporation via a token-to-equity exchange, a move criticized by some as a "huge failure of crypto" but defended by others as necessary for commercial viability, especially in stablecoin infrastructure where offchain agreements are crucial. Experts suggest this trend may lead to a split in the industry: one segment embracing corporate structures where tokens act like shares, and another maintaining genuine decentralization despite operational friction. While ShapeShift previously dissolved its corporate entity to become a DAO, its product lead noted that many teams quietly operate like companies already, suggesting the DAO experiment may be collapsing back into the corporate model it sought to challenge.

(Source：Cointelegraph)