The US state of Alabama has become the second jurisdiction after Wyoming to grant decentralized autonomous organizations (DAOs) formal legal status under the DUNA Act.
The Decentralized Unincorporated Nonprofit Association (DUNA) Act, introduced in February by Republican Senator Lance Bell, passed the House in a 82–7 vote with 16 abstentions on March 17 and has now been signed into law by Governor Kay Ivey, according to a16z Crypto.
Commenting on the development, Miles Jennings said decentralized governance is a cornerstone of the crypto ecosystem and increasingly central to broader market structure legislation.
The law gives DAOs formal legal recognition and limited liability protections, addressing longstanding uncertainty around how these organizations function within traditional legal frameworks. It allows decentralized communities to operate with greater clarity — enabling them to build, govern, contract and scale in the real world.
To qualify, a DAO must have at least 100 members united by a nonprofit purpose, such as overseeing a blockchain network or smart contract system. Governance can be conducted entirely onchain, with voting, proposals and consensus mechanisms recorded via blockchain technology.
Under the law, DAOs gain full legal entity status — meaning they can own property, enter contracts, and initiate or face legal action — while shielding individual members and administrators from personal liability.
Elsewhere, a similar DUNA bill is progressing in West Virginia, where legislation introduced by Tristan Leavitt has passed the House and now awaits the governor’s signature.
Wyoming previously enacted its own DUNA framework in March 2024 under Governor Mark Gordon, after becoming the first state to legally recognize a DAO back in July 2021.
Globally, more than 13,000 DAOs are currently in operation, collectively managing over $24.5 billion in treasury assets as of 2025. The average DAO treasury stands at roughly $1.2 million, with over 85% of DAOs operating on Ethereum and its layer-2 ecosystems.
