The US state of Alabama has become the second US jurisdiction, after Wyoming, to grant decentralized autonomous organizations (DAOs) legal status under the Decentralized Unincorporated Nonprofit Association (DUNA) Act.
Senate Bill 277, introduced in February by Republican Senator Lance Bell, passed the House 82-7 with 16 abstentions on March 17 and was signed by Governor Kay Ivey, according to a16z Crypto. Miles Jennings, a16z Crypto’s head of policy and general counsel, said that “decentralized governance is essential to crypto’s future — it’s one of the core constructs in market structure legislation.”
The DUNA Act provides DAOs with legal status and limited liability protections, addressing a long-standing legal uncertainty about how DAOs exist in the real world. The law allows decentralized communities “the certainty to build, govern, contract, and scale in the real world,” Jennings added.
To qualify as a DUNA, an organization must have at least 100 members joined for a common nonprofit purpose, such as governing a blockchain network or smart contract system. Governance can operate entirely via blockchain technology and smart contracts, with voting, proposals and consensus mechanisms stored on-chain. Recognized DAUNA entities will have full legal entity status: they can own property, sue and be sued, and enter into contracts, while individual members and administrators are generally shielded from personal liability.
A similar DUNA bill in West Virginia (HB 5060), introduced by Representative Tristan Leavitt, passed the House on March 4 and is awaiting the governor’s signature. Wyoming’s DUNA Act was signed into law in March 2024, and the state approved the first legally recognized DAO in the United States in July 2021.
There are over 13,000 DAOs worldwide, with collective treasury assets exceeding $24.5 billion as of 2025, according to CoinLaw. The average DAO treasury is around $1.2 million, and Ethereum and its layer-2 networks host more than 85% of DAOs, per PatentPC.
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