THE UK IS NOW BORGPILLED

The highest independent Law Commission in the UK has just published a milestone scoping paper on how the law of the financial center of the world can adapt to the cybernetic world of DAOs, BORGs, and other Hybrid Arrangements

Digital Legal Entities, aka BORGs have landed into UK law.

👇 Here’s our analysis of the report and how it changes everything:

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The mammoth report has four important points we think will revolutionize the nature of both law and crypto in the UK (and globally)

1️⃣ Recognizing “DAO-Adjacent BORGs”
2️⃣ Recognizing non-DAO-adjacent BORGs (aka“Digital Legal Entities”)

3️⃣ Clarifying “Pure DAO” Classification and Liabilities 

4️⃣ BORG & DLE Compatibility with British Law

1️⃣Recognizing “DAO-Adjacent BORGs” 

The report distinguishes “Pure DAOs” (using only smart contracts, without incorporated legal entities) from “hybrid arrangements” (combining smart contracts with one or more incorporated legal entities), and breaks hybrids into three types: 

• a DAO fully wrapped in a legal entity (e.g., a Wyoming DAO LLC)

• a DAO partially wrapped in a legal entity (many DAO + DAO Foundation structures)

• an unwrapped DAO + BORGs

As noted by the Commission, BORGs achieve many of the benefits of limited liability “while preserving the conceptual integrity of the DAO”:

The report also provides a schematic of how an unwrapped DAO clustered by modular BORGs might be configured: 

Needless to say, the UK Law Commission’s recognition of the MetaLeX approach represents a massive validation that the unwrapped DAO + DAO-adjacent BORGs architecture pioneered by MetaLeX’s founders is being taken seriously all over the world! 

2️⃣ The Birth of Digital Legal Entities

A new term for a new world.

The report uses the term “Digital Legal Entities” (DLEs) to refer to non-DAO-adjacent BORGs–i.e., legal entities who fuse cybernetic technology with their governance and operation, outside the context of a DAO. This is a huge recognition that our new genre of digital-legal hybrid organization could exist under English law.

The report outlines how cybernetic orgs, by cutting out the corruptible middle men, make legal entities more transparent and resilient by using impossible-to-corrupt mechanisms to organize, transfer funds, and cut down on bureaucratic horrors.

This can be implemented into both small and massive corporations, agreements, and legal structures right now to fix the problems that have plagued the business world for centuries.

3️⃣ Clarifying “Pure DAO” Classification and Liabilities 

The boogeyman of “DAOs as partnerships” may soon be over.

The report adds considerable nuance to the issues of whether and when DAOs may be “general partnerships” or “unincorporated associations” and argues that DAOs may not always fit under these structures. For example, the report contrasts a general partnership in which “members….must be carrying on a single business together for their common benefit” to a DAO in which participants are “individually interacting with code solely for their own personal financial gain rather than for a common benefit.” The report notes many other differences between partnerships and DAOs, including details of admission and withdrawal from the partnership versus joining a DAO just by anonymously buying a token. Accordingly, the report adds hope that in the UK, DAOs will not automatically be classified as partnerships and participants in DAOs will not automatically be jointly/severally liable for legal issues. 

Part of the MetaLeX philosophy is that removing business activities from “the DAO” and into DAO-adjacent BORGs makes partnership classification of the DAO itself even less likely. At the same time, creating BORGs makes the rights and responsibilities between DAOs, contributors, and token holders extremely clear, making faults/liabilities attributable to specific limited-liability entities and highly reducing the risk of individual liability to contributors and DAO participants. 

The largest friction between the digital world of DAOs and the legal world of paper and ink is crumbling, being replaced with cooperation rather than hostility and strife.

4️⃣ BORGs work with British Law right now

Assimilation is possible.

The report authoritatively states that, under English law, Hybrid Arrangements and BORGs/DLEs are perfectly compatible solutions that could augment existing and theoretical DAOs and corporations. 

No new laws or legislation needed. No bills need to passed.

You can get BORGed now. 

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The Age of Augmentation is upon us.

Join the BORG.

Assimilate Today.

site: metalex.tech

X: MetaLeX_Labs

Telegram: https://t.me/metalexlabs

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