Ignite DAO is the first DAO in the Netherlands and is a prominent example how the most recent Blockchain technology developments have been united with the Dutch Civil and Tax legislation to make the DAO work properly.
Blockchain technologies have sparked a significant interest across the globe. Blockchain technologies such as DAO have the potential to create an immutable, open and transparent financial infrastructure. By using blockchain technologies for corporate purposes, the growth and innovation of organizations can increase. This also means that organizations can quickly adapt to significant changes and stay on top of their business.
Ignite DAO is the first DAO in the Netherlands and is a prominent example how the most recent Blockchain technology developments have been united with the Dutch Civil and Tax legislation to make the DAO work properly. In this blog we will inform you about our official partnership with Ignite DAO, background information of Blockchain and decentralized autonomous organizations (DAO) and the specific application of the Ignite DAO in the Netherlands.
A DAO is a blockchain-based organization without a central management body. The rules within such organizations are enforced and defined in the form of smart contracts. So, the community within a DAO participates in the decision making through various voting mechanisms that are previously encoded inside smart contracts. The decisions that are supported by the majority of the voters are executed. This eliminates hierarchy within an organization and creates democratic decision making within the organization.
DAO: the possibilities
A DAO has breathed new life into the world of business models. A DAO has the potential to change the way corporate governance works within new companies and already existing companies. Think of investment funds. One of the advantages of a DAO is that it does not require trust between the parties, just the codes are sufficient to make the system work. Any action taken after the DAO is launched is subject to community approval and is fully transparent and verifiable. This is not only good for the system, but also very attractive to investors because the code is accessible to the public.
Not only just investment funds, but all types of organizations can implement a DAO. There is no hierarchical structure within a DAO and that in itself stimulates innovation. Depending on the organization, stakeholders, investors, participants can come forward with all kinds of ideas on which the entire group can decide. With the approval of the majority, the idea will be continued.
Nowadays, DAOs can used within a variety of organizations because it is an accessible business model that does not involve third-party intervention, where everyone is equal and where the system is publicly accessible.
Ignite DAO in the Netherlands
In order to operate on a tax efficient basis and in a corporately viable way, it is important that Ignite DAO is set up in an efficient manner. Setting up an efficient company structure for the Ignite DAO is done by starting off with a hybrid of centralized and decentralized management. Participants would still have equal rights with regard to the profits and they can have control over the DAO as well.
After the incorporation of a DAO there are possibilities to shift to a more or fully decentralized management, for example by phasing into a decentralized management structure according to the DAO is ready for this step. Alternatively, it is also possible to set up a DAO with a decentralized management structure from the beginning or shift directly from a hybrid management structure to a decentralized management structure. Regardless of the management structure, participants will hold their profit rights and investments by new participants are also still possible. Therefore, there are plenty of ways to organize the management structure of the DAO, tailored to the desires of the DAO community.
DTS Duijn’s Tax Solutions B.V. and Watson Law B.V. assisted efficiently setting up the Ignite DAO in the Netherlands. This DAO has been set up in accordance with Dutch Civil Law, will be able to operate all over the world and the structure will be tax efficient and corporately viable. The Netherlands is known for its friendly business climate. The Dutch DAO structure is very easy and accessible as it allows the DAO to operate easily and efficiently on a global scale, due to the high number of tax treaties the Netherlands has with other countries.
If you are interested in the working of the Ignite DAO, we can provide you with more information. For questions about Ignite DAO or setting up a DAO, do not hesitate to contact us and ask for Jimmy Cox.
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