Two emerging approaches — the DUNA and BORGs — offer a streamlined path to implementing these solutions while eliminating the overhead and opacity of foundation structures.
The Decentralized Unincorporated Nonprofit Association (DUNA) legitimizes DAOs as legal entities and enables them to enter into contracts, hold property, and enforce legal rights — functions traditionally offloaded to foundations. But unlike foundations, the DUNA does not require contortions like headquartering in foreign domiciles, discretionary oversight boards, or complex tax structuring.
The DUNA creates legal capacity without legal hierarchy — serving purely as neutral execution agents for the DAO. This structural minimalism reduces administrative overhead and centralizing friction while enhancing legal clarity and decentralization. Further, the DUNA can provide effective limited liability protection to tokenholders, a growing area of concern.
All told, the DUNA provides a powerful mechanism for enforcing incentive alignment around a network, enabling DAOs to contract with a developer company to deliver services. And it enables DAOs to enforce those rights through clawbacks, performance-based payments, and protections against exploitative behavior — all while preserving the DAO’s role as the ultimate authority.
Cybernetic organization (BORG) tooling, technologies developed for autonomous governance and operation, enable DAOs to migrate many of the “governance conveniences” currently handled by foundations — grant programs, security councils, upgrade committees — so that they function onchain. By coming onchain, these substructures can operate transparently under the rules of the smart contract: with permissioned access where necessary, but with accountability mechanisms hardcoded in. Collectively, BORG tooling can minimize trust assumptions, enhance liability protection, and support tax-efficient structuring.
Together, DUNAs and BORGs shift power from informal offchain bodies like foundations to much more accountable onchain systems. This isn’t just a philosophical preference — it’s a regulatory advantage. Proposed market structure legislation requires that “functional, administrative, clerical, or ministerial actions” be handled through decentralized, rules-based systems rather than opaque, centrally-controlled entities. By embracing DUNA and BORG structuring, crypto projects and developer companies can meet those standards without compromise.
***
Foundations shepherded the crypto industry through tough regulatory times. They also enabled some incredible technological breakthroughs and unprecedented levels of coordination. In many cases, foundations filled critical gaps when no other structures could. And many foundations will likely continue to thrive. But for most projects, their usefulness has been limited — a temporary solution to regulatory hostility.
That era is ending.
Emerging policy, shifting incentive structures, and industry maturation all point in the same direction: toward real governance, real alignment, and real systems. Foundations are ill-equipped to meet these needs. They distort incentives, hinder scaling, and entrench centralized power.
Systems endure not by trusting good actors, but by ensuring that every actor’s self-interest is meaningfully tethered to the success of the whole. That’s why corporate structures have thrived for centuries. We need similar structures in crypto, where public benefit and private enterprise coexist, where accountability is embedded, and where control is minimized by design.
The next era of crypto won’t be built on workarounds. It will be built on systems that scale — systems with real incentives, real accountability, and real decentralization.
***
Miles Jennings is Head of Policy & General Counsel for a16z crypto, where he advises the firm and its portfolio companies on decentralization, DAOs, governance, NFTs, and state and federal securities laws.
***
The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.
The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.