Les Amis d’Ethereum France #19 — Les DAOs en pratique : Aborder les questions juridiques et fiscales

So, delighted to see you all today for this fascinating topic of DAOs, or decentralized autonomous organizations. We've all more or less discovered DAOs through the decentralized finance sector, and it's true that they're a little less well-known in the corporate world and also in the world of political organizations. Today, we're fortunate to have a very diverse panel with a variety of experiences to share, so we'll be able to talk about DAOs in practice. I 'll now let our speakers introduce themselves. Hello everyone, I'm Alison Benichou Corchia, a partner at dn Partners, a firm dedicated to tech and blockchain.

I work exclusively in employment law, and today I'll share some practical questions I've encountered in this area, depending on the topics we'll be discussing. Hello everyone, and welcome. I'm Jérôme Labrou, a tax partner at Mazar, a law firm. I took the elevator to come and see you. This evening, it wasn't very complicated.

I head the banking and finance department at the law firm, and in particular, I work on crypto topics, in addition to the major banking issues you can also understand. And you see that the subject is becoming increasingly, uh, banking-like, I tend to say, since we see a whole bunch of banks becoming more and more interested in the crypto ecosystem. So, hello everyone, Pierre. In a previous life, I'm now retired from politics. I was a French member of parliament, so I was responsible for representing you, uh, those of you who lived in the 11th district of Paris.

uh, I worked specifically on crypto issues, particularly French regulation, between 2018 and 2022. And now I have the opportunity to participate in a rather entrepreneurial venture with some members here today. I've co-founded a startup; we've raised funds and we're going to release a decentralized protocol at the end of the first half of this year. Good evening everyone, I'm Marc Zeller. I'm the founder of LACI.

We're a C&O provider for a DAO, so we're a company whose boss is... it's a DAO, so it's a little bit new. And C&O is AV, it's the main protocol for decentralized finance, a liquidity protocol, and it allows anyone to deposit and borrow assets in a decentralized way with smart contracts. So, probably towards the end of the year, we'll be working with Pierre more specifically on this project. Thank you very much for these presentations.

Now, I'm going to ask you some questions, and you can answer spontaneously to give your opinion, since these questions are addressed to each of you. The first question I'd like to ask you is specific: what are the advantages and disadvantages for a company or a startup to implement a DAO that's just starting out? Go ahead, can I talk about the disadvantages? Well, I don't have an employment contract. My employer isn't a recognized legal entity; its corporate name...

well, where is it incorporated? Vedaoah is available somewhere on the internet for anyone running a Noe Ethereum server, a little bit of Vedao at home, so it's pretty cool. It allows Mazar to work, and friends can put CL on this unbr. There's also the concept that we can be removed overnight since we 're funded by governance votes, but these budgets can stop at any time if there's a governance vote to remove the CI. So there are disadvantages, but the advantage is also resilience.

That is to say, there's no off switch on Vdaoah, there's no possibility of bypassing or circumventing a decision made by the people who participate in AV's governance, and the rules are clear and auditable. We know every euro that's in the system. The CI budget is public; it was voted on a certain period. We know Exactly what is the budget of the C, what is the budget of the people who work for the DAOAV, and all of this is auditable and predictable over time, and that's a bit of a novelty since this degree of transparency, auditability, and permissionless system has no equivalent in the traditional world. Yeah, if I can start with the positive and negative points, on the negative points, well, there is indeed the difficulty today of putting a legal framework on what is a DAO, so that's the most nebulous point to date: how do we structure a DAO, how do we give it real power, how do we bring it into the legal framework, or not, by the way, in place, a SIRET number, does it have a...

well, can it sue, can it contract, and so on? So these are all the points that lawyers are asking themselves right now, both in French law but also internationally, comparative law, there are many... There's a lot written about it, it's quite fascinating. A DAO (Digital Asset Order) is simply a community with rights, notably through the ownership of the token. This allows for the decentralization of governance within an entity that could otherwise be centralized, as you said, Marc, by providing much more transparency in decision-making.

This applies to budgetary aspects, resource allocation, and general decisions made in life. It could be a company or a non-profit organization. It's more of a method for executing, controlling, and administering an entity that is decentralized, rather than something that truly has its own legal structure. The beauty of it is that it allows for many things that are, in a sense, more democratic today, because it gives everyone a voice. But it also requires...

Well, to build new modes of governance that are not yet fully up-to-date, or rather, that are very experimental and not yet extremely efficient, and so the question for those who are currently working with or creating DAOs is how, through a completely decentralized system (because not everyone truly decentralizes their governance), can we envision rules that allow everyone to make decisions at the right level of efficiency and transparency, which is what is desired? So, in this organization, today there are DAOs, and in fact, there are so many DAOs that no two DAOs are alike. What I mean is that we need to look at the governance of each DAO, how it is controlled, and what its purpose and activities are. And that is a current legal challenge. So, it's very interesting what we...

I just heard that, since it's already correct, and now we need to try to analyze this from a legal perspective. I think my neighbor and I can discuss this now from a legal point of view. What's very interesting is the transparency; that's interesting, and it's the collective decision-making. That's what stands out when we look at the laws. Now, the advantage of Roman law is that there are no legal vacuums; they don't exist.

We always find a legal principle to which we can refer. This legal principle is either written—that's the law— or it's an interpretation—that's case law. And today, let's look at France. We'll do a bit of comparative law, but today we can refer to a number of existing legal principles, and these are legal principles that we find in various industries. That's why I'm telling you there are no legal vacuums, since we have doctors practicing in communities today, and ultimately, they have this...

What we call de facto companies, companies created in practice, as we say in legal jargon, are ways of organizing that are somewhat decentralized, but not with such a high number of shareholders, if I may put it that way. So, there's no legal vacuum; we have many international proposals ranging from trusts to associations to companies. We must keep in mind the concept of decentralization, and a company, by its very nature, centralizes decisions and power. Whereas here, the goal, as mentioned earlier, is decentralization. So, once we've established all that, we can find a legal framework.

We're not in a legal gray area between Switzerland and France, or between the Netherlands and Luxembourg. We can technically, from a legal standpoint, identify the de facto company and categorize it, if it hasn't already been done, and then consider the tax implications. So, that's what we need to keep in mind if we have the impression that it's A bit like the early days of crypto, a bit like the Wild West, I wouldn't go that far. Today we have a set of rules, both in France and internationally, that we can use as a basis to start thinking, and to think effectively. Well said.

So yes, indeed, regarding the disadvantages, and I would say the major disadvantage—because I'll start with the disadvantages— is the lack of rules, the lack of legal rules. It's true that we have nothing, so everything has to be created. So, to create, we lawyers will start with the legal principles we know to try to structure the DAO. And the advantages? There are many, and ultimately, that's why there's a strong interest in this concept of DAO.

And I'll start with the very definition of a DAO: it's an organization, a group of people—the DAO participants—working towards a common goal, a common interest. It's decentralized; we can have people everywhere. In the world, being an ordinary person and being a participating member of this DAO (Digital Opportunity Organization) is possible, and you're autonomous; you don't need anything else. The DAO is self-sufficient. So, ultimately, the very concept of a DAO identifies, for me, the main advantages of the DAO.

Thank you for your answers. It's very interesting; we've already had quite a few points raised. What 's interesting about DAOs is that they are attractive precisely because there's disintermediation and transparency. But we can still see that DAOs are starting to become structured, and that total decentralization is not desirable and may not even be possible since a legal framework is necessary, and it has to function in a certain way, if only for cash management or voting rights. So, from a legal point of view, for example, if we have to pay the members of a DAO, what are the challenges and what legal responsibilities will be linked to the remuneration of members?

So, this is more for you, maybe AB, to continue. Indeed, the key topic is the structuring of the DAO. Today, we mainly identify three types of DAO structuring: either we have a standalone DAO, which therefore cannot open a bank account, sign an employment contract; or we have a DAO with a separate legal entity for commercial purposes, such as a social security company; or—and this is the last case I see—a DAO with a non-profit association (under the 1901 law) or a foundation. We can even imagine combining the two with a commercial company and a non-profit entity. Depending on how the DAO is structured, we will be able to sign contracts and, consequently, pay people directly.

So, for example, if we have a DAO without any legal entity, which is my first case, we don't have legal personality. If we don't have legal personality, we can... Not contracting, so we'll still find ourselves in difficulty, so we'll fall back, as my friend said, on the framework of the de facto company. Essentially, either we're in the second case, the second case, we have this commercial company which will allow us to contract, and in particular to sign employment contracts and to be able to pay an employee, for example, in cryptocurrency. On this subject, not entirely, it will be partly in cryptocurrency.

I've written a lot on this subject, so it's a subject I know quite well, without any pretension. In any case, we can allocate part of their remuneration in cryptocurrency. And then we have the last case where we can also contract and pay employees or, indeed, service providers, because the question can also be broader in cryptocurrency. Marc, you want to respond? I'll give you my experience.

I'm not a lawyer, so I'm talking about my concrete experience. Today, in the world of DAOs, the most developed DAO on this planet is Maker Deo, which is... One of the main players in STs, the main player in decentralized stablecoins, is AV, which is our structure. Then there are some slightly smaller ones that exist, but if we take MakerDAO and AV, we have the main decentralized autonomous organizations. What's very important is that DAO, in these three terms, in these three letters, represents three axes, and they are actually sliders: the slider of decentralization, the slider of autonomy, and the slider of organization.

What Alison just said is extremely concrete and very interesting because there are different ways of expressing it, where we're going to position ourselves, and also, as you said, the rules aren't written down, there's an interpretation of what a DAO is in my view. And if we consider the core of AOs and AVs, we can't have a DAO and a company or a non-profit organization alongside it, since the DAO must be decentralized. So it must Being smart contracts on the blockchain is unstoppable. If it's a company, well, we 'll grab the bosses, throw them in jail, and that's it, end of story. Thanks for playing.

Uh, if it's an association, we can freeze the bank accounts, and so on, end of story. Thanks, it's over. The principle of blockchain is to have resilience, to have resistance to censorship, and so on. So, naturally, the treasury and economic activity have to take place on the blockchain. But that means, well, how do we incorporate it?

As I said, everyone who has an Eerium node has a little bit of DAO Maker or DAO AV at home. We can't have a company, we can't have a VAT number, we can't have contracts, so we have trouble fitting into the boxes. On the other hand, LACI, my company, is a classic ACAL. I have 7 employees. These employees have employment contracts; some are on fixed-term contracts.

Some people have permanent contracts. I pay corporate tax and VAT when I issue an invoice, not to DAO, since I can't invoice DAO directly, but to other service providers. My status is that of a service provider to DAO, but I'm a regular company that pays taxes and has employees who pay their social security contributions, and so on. In fact, we're operating within this mechanism. For DAO to be truly decentralized, decentralization lies in governance.

So, if someone with governance rights can't fire someone working for DAO, then they're not the boss. The very principle of a boss is that they can fire you. But if we're in DAO and people have governance rights, but there's also a limited liability company (SARL) or a simplified joint-stock company (SAS), and we can't fire the CEO, how is that a decentralized organization? Decentralization is just a charade. It's like we're just having fun making decisions on the blockchain and then not being able to implement those decisions outside of it.

Because the organization listens to what's on the blockchain, it does what it wants; it's in the real world. And it's not the smart contract that's going to chase people and grab them by the collar. Decentralization is average in reality, and that doesn't mean that models with associated companies or associations are bad. It's just that we're at a different point on the decentralization spectrum. And for me, it's important to emphasize that there are different forms of DAO expression, and they're all valid.

They're just different and fundamentally different, and there isn't a single answer. Sorry, this is a bit long. No, no, but it's also from an empirical point of view that this is exactly what's happening: there isn't just one DAO, there are frameworks. Legal frameworks and structures, which are prevalent in France today, but there are many ways to conceive of this. And the point you very rightly raised is what's the point of having a DAO if it's embedded in a centralized entity.

If the centralized entity's sole purpose is to transcribe what happens in the DAO, that's one thing. But if, in practice, we're constrained by the organization of a centralized structure that is itself governed by a legal system, well, that actually creates much more friction than it offers freedom through this organization. So what DAOs do is embed a part of their activities or a part of their governance, and therefore they structure themselves differently depending on where they are, because legal regimes vary. You're not going to structure yourself the same way in Switzerland as in France. And then it also structures itself according to their activity: a non-profit organization or an organization that, like yours, actually generates revenue within the protocol.

It's not the same logic, so the major difficulty for an entrepreneur who creates Dao is right from the very first moment of creation, because, as you said, the essential point is governance, and there isn't a governance model that's established today. Governance of all DAOs, meaning that there are many people experimenting with governance, but you could actually transcribe institutional rules as we see, for example, I don't know, with a parliament, an executive, an administration, and so on. You could recreate this type of governance model on the blockchain, but governance actually says a lot about the organization because there are many DAOs that call themselves DAOs, but the governance is centralized; the token ownership is entirely in the hands of Condate; it's a multi-source system, and so on. So, in fact, it's just branding to say it's a DAO, and on the other hand, there are companies. Yes, they are companies; it's an organized mode, indeed, it's the economic life of the company.

And on the other hand, when you really have the vocation to decentralize the tool, and in that case, that's where we'll see the lawyers and... So, in that case, what do we do? What kind of organization do we establish? Do we take a step back and, for example, review the governance? Do we open a trust to hold the DAO's funds?

Is there a Lab, which will be an entity not part of the DAO but paid by it, as Marc explained? Or can we separate from the Lab overnight if the DAO considers it's not doing its job, so we 'll stop paying the Lab? The Lab is there to develop the protocol that supports the DAO. So, this whole organization means that from a decentralized protocol that exists in cyberspace, we recreate entities with multiple functions that correspond to the underlying economic logic. And that's roughly it.

The difficulty lies in adapting the structure of a DAO today, and in saying that a single structure is impossible. It really depends on what you want to do. So, to be the last speaker on this topic, I'll say that in taxation, we have the advantage—I don't know if it's a chance—of having what we call the realism of tax law. The realism of tax law means we are able to tax an illegal activity, for example. So, the power to levy taxes applies to activities that are even illegal.

This shows you the power of taxation; taxation is practically irresistible. What's interesting in everything that's been said is that there are multiple forms of DAOs and the ways in which they can be organized: non-profit trusts, and so on. We realize that the draft systems that have been documented from a certain point of view... From a legal standpoint, in the United States, they haven't attracted many DAOs. We've noticed that those who think about it in the Channel Islands, for example, haven't attracted crowds either.

So today, we're still figuring things out regarding the VRAP he mentioned. So we're still figuring things out. This is to say that there will be many different solutions: there will be non-profits, there will be the SAS (simplified joint-stock company), there will be companies in Switzerland, there will be companies in Europe—all of this will coexist. But there will be one imperative: taxation. And taxation will be either in the SAS or the SARL (limited liability company), yes, exactly.

And when you hire an employee, you pay tax because there are social security contributions. Social security contributions are revenue not allocated to public expenses, so it's a tax. So, all of this comes back to the initial question. Ultimately, we can indeed ask ourselves who hires whom, but from the moment—and this will be my comment to conclude on taxation— There's the realism of tax law that applies, and at some point, taxes will have to be paid. So, we'll have to see in which country, whether there are withholding taxes, and whether there are any other components.

I'm long on crypto, I'm sticking with crypto. Anyway, there will be many issues that will arise, but a company is actually quite simple to tax. A de facto company (DAO) will be taxed using the principles I mentioned earlier. We'll look at a trust, which isn't something we naturally understand in French law, but we know how to approach it from a tax perspective. So, for us tax specialists, understanding a trust isn't complicated at all.

That's what you need to know. Thank you very much for these answers. It's true, what's interesting about DAOs is that when we talk about decentralization, it's very good that from a legal and political point of view, we don't deny decentralization because what we like is traceability, especially... Traceability of economic flows, that's why the question of regulation is interesting because today in the crypto ecosystem, when we talk about DAOs, there are still a lot of misconceptions surrounding the management and implementation of a DAO. It turns out that it's much more complex from a legal and practical point of view.

So what also interests me is knowing, from a legal, political, and economic perspective, how the subject of DAOs and the decentralization of power and decentralized governance is viewed by the political class. Is it a danger? Can the development of DAOs be a danger from an economic and political point of view, or does it, on the contrary, demonstrate a certain autonomy, a certain revolution in the way organizations, whether for- profit or non- profit, are managed? Pierre, there's the word "political," I think that's for you, for all of you. I don't know if it works, it works.

Well, politicians are already very far removed from this. I think if you were to conduct a poll outside the chamber on what an UNDAO is, I 'm not sure that... there are perhaps two members of parliament in the majority who would know what it is, for example, there's Eric, and then there must be one or two others. The probability is low, but anyway, the DAO has never really been a subject that has been studied from a legislative point of view. When I myself became interested in the whole crypto-asset aspect in 2017-2028, DAOs didn't really exist.

There were some organizations starting, but the subject was n't on the table. So, from a political point of view, it would be giving too much importance to the DAO to say that the subject interests politicians, which is a shame because I think it's very interesting. From a research perspective, it's still a way of organizing our societies and institutions that is quite interesting. Then, the real question behind DAOs is indeed traceability, but beyond that, we're in a world that is increasingly centralized in terms of data. Personally, I find this increasingly repressive, but we're always striving to trace flows more and more, whether it's people, goods, or capital, for moral reasons, public interest, and so on.

But it's a fact that since the 1980s, compliance has exploded everywhere, and so, an organization handling billions and run by anonymous shareholders... well, that's causing a bit of a stir. So, what's really problematic today is that the underlying decentralization is anonymous; the register is... It's held transparently, but we can't fully know who's behind the shares, and that's what can disrupt public order today—well, there you have it, the institutions, let's say, and in any case, the traditional legal framework. So beyond that, I think that blockchains need to mature to be able to enter the political arena.

I think that as long as there aren't real organizations that have demonstrated their efficiency—an efficiency that goes beyond that of a centralized organization—well, I think we'll have difficulty seeing other models emerge. Within the blockchain framework, it's inherent because we're already on the information system that allows us to do this. The question then becomes: how do we decentralize today? Or would it be in our interest to decentralize? I'm not entirely sure about that.

So that's the challenge. The point is that we'll no longer be talking about DAOs or even other things, but about decentralized entities with decentralized governance if there truly is an economic stake behind them. After all, I think our institutions have generally aged; they would be well advised, in my opinion, to investigate and see what's happening with these decentralized organizations to regain some efficiency and a bit of democracy. But that's another subject that, in my opinion, should be considered over the long term, not simply from an economic point of view. It was truly brilliant, so I'm going to have some difficulty...

I'll add a couple of things, though. First, we need to be concrete. I'm very attached to the reality of things, and if a DAO is just a snapshot where we vote a little, but in fact there's a company alongside it, it's an association, so it exists. There's a system that exists for companies in France, there's a tax system that exists, so it's a DAO. It's really a marketing argument; it's a company.

A company exists, and it should be considered a company if it's a disguised non-profit organization (under the 1901 law) because there's no economic value. People buy a token, but that token has no speculative value. It's like joining Ethereum France; you could buy a token to join Ethereum France in the form of an NFT. Well, non-profit organizations under the 1901 law also exist today. If all the protocol's revenue goes to all the token holders just because they bought shares—you see, you used the word " share," and it's somewhat important—well, it's a public limited company.

They exist too, you know. There are shares, there are dividends, there are concepts linked to that, and you have to accept it. If that's the case, you have to accept that you 're in those situations, and then the regulator doesn't have to worry about it. I think that from a tax perspective, it will also be reclassified, and then we'll put things in place. It's going to cause some friction because, well, there are some project leaders who would like to skirt the lines, but reality often catches up.

However, if we're truly in a decentralized organization where the token is a governance token, and we're in a system that isn't a company, not an association, not a public limited company, we're in something that's truly new where there's intrinsic added value to being a DAO. That deserves to be examined, and it perhaps deserves to have an ad hoc status and for the legislator and regulators to look into the matter and grant a status. Except, from my point of view, why would they do that now? Today, there are two DAOs that are at this level of maturity: MakerDAO, which has a budget and revenue of $90 million. I have the figure because we are...

we are... and Deauditability, so we know every dollar that Mur d'O earns, we know every dollar that AV earns. It had its $35 million per year with budgets on MakerDAO of $55 million and on AV of $20 million. That's a lot of money, a lot of millions, but it's not enough, I think, to make the regulators budge. If tomorrow we're not talking about millions anymore, but billions, and not just two players, but 20, 200, 500, then it's worth looking into.

And I think the regulator, well, there's still an intrinsic advantage for these players. I'm in favor of it, and personally, as president of the Laadan Challenge Committee, we work very closely with the government to achieve clarity because I think clarity allows, at the regulatory level, for entrepreneurs to develop and... It's flourishing, but we're not there yet, and uh, maybe it's not on the radar, uh, and at the top of the priority list simply because it's too small a sector. It's still very interesting, though. I would say two things.

I would say DAC, so this might not necessarily mean anything to everyone, it's a tax thing, it's a European directive on the transparency of crypto platforms. Well, there's this desire for transparency, so who knows, there were DACs before, directives before that applied to something else. You see, when you declared your accounts before the PSAN in France, and so on, if you held accounts abroad, you had to declare them. There's this whole desire for transparency, and that's the will of the legislator. It comes after the 2008 crisis, the 2008 financial crisis.

There was this need for transparency at the global level, automatic exchange of information, and so on, for tax purposes. That's the first thing. So, will we manage to escape it? I don't know, I'm quite doubtful because, as you so rightly said, it's a movement that started, and once the momentum was there, there's this need for transparency. It's present in the public sphere, and to some extent in governments of all kinds, not necessarily just French, Italian, German, American, and so on.

Now, the second point I want to make is a much more positive one. Today, if we're a company, for example, operating within a DAO (Digital Activity Organization), if we're providing services, we're entitled to many things. We're entitled to a research tax credit, we're entitled to newly created companies, we're entitled to a whole host of very interesting advantages. So, we shouldn't see regulation as something inherently bad because it can be a huge support for developing one's own business, with BPI (Public Investment Bank) and other organizations. So, it's very enriching.

In fact, regulation is good; it's good to think, "Okay, this is going to complicate my business," but... It might slightly increase my reporting obligations, my tax obligations, and so on, but there are a whole host of other benefits that come with it, and we mustn't forget them. And these benefits aren't just a gift; they're part of a legislative process to develop an industry. We mustn't forget that they exist. Thank you very much.

We understand that there are as many DAOs as there are uses and objectives. Ultimately, we can have all types of governance and all kinds of ways of operating. So, we have a few minutes left, and I'm going to ask you in the room if you have any questions for our speakers. Do you have any questions? Take advantage of it.

Perfect. So, I'll start again. Good evening, gentlemen. So, I had a question that applies generally and will surely be a more specific case for Marc Auel. I'll speak louder: Has it ever happened that the COR, which manages the DA and therefore has a main role, let's say, in the allocations and therefore the fund management, created a conflict with its User, imagine you're aware of some information.

A user with a certain proportion of the funds creates a proposal. You realize that this proposal might conflict with the information you already have. How would this work within Laadro with this kind of case? If it's clear, don't hesitate. So, your question is very precise, and I'll try to break it down a little.

For example, today on AV, Coram, which was the company that developed AV1 and did other things before, is not a VDAO service provider. Today, they are not employed by VDAO, and they don't work for VDAO. So today, we're in a protocol that has reached a stage of maturity where the original developers do n't work, don't contribute directly to, or at least aren't paid to contribute to the protocol. Perhaps they will come back later. They have had several paid service contracts in the past, for example, the development of version 3 of the protocol, and the management of events.

Actions and so on, but currently they aren't paid, there's no resource flow, so that's the first thing in the question: are the original developers necessarily tied to a DAO? The answer is no. The second question is: can the people who hold the token tell the original developer, "No, I don't want to," because otherwise it wouldn't be a DAO? So there have been many ways it works here; it's what we call APs (Proposed Improvements), proposals to improve the LAV protocol. And there have been 400 of them, we're at 400 over 4 years, so that's one every 3 days on average.

There's a lot to do, it's very dynamic, and there are many that have failed. There are many proposals that I've made where I got rejected. The community said, "Marc, you're nice, but I'm not interested." There are many things that The original team didn't do a lot, but there are some things the original team did, and now we're doing, yeah, maybe, but we're not going to do it like that. We're going to change parameters, and so on.

And it would be very worrying if the opposite existed. In fact, I hope that was clear. So we can take two more questions, so take advantage of it. Good evening, and thank you to [name] for the invitation. I would have liked to honor it on time, but there are obligations.

We're talking about protocols, so we use the same term in law and in technology. When we refer to distributed ledgers, in the long term—so a somewhat naive vision perhaps, but a long-term vision —do you have confidence in the ability of these distributed ledgers, these distributed networks, to incorporate rules natively, right from the start, in good understanding with institutions in their current form, and not in reaction? That is to say, basically, the law thinks it will bend the technology, whereas often the technology incorporates legal mechanisms, or not. That was kind of my introductory point; there you go, so there isn't really a void as such. Okay, so there are always new technologies, and we...

well, it's part of the life of a consulting firm to be faced with new technologies every day. Every day, our clients bring a lot of added value, so they are the ones creating the world of tomorrow and the technologies of tomorrow. So every day, whether it's with artificial intelligence, for example, we are confronted with new situations, but that doesn't mean, once again, we are... we are based on the Napoleonic Code of 1802; we use the same rules. A contract was defined under Napoleon.

Well, today we ask ourselves the question: can we contract with a company, according to which rules, and so on. We should n't start from the idea that we 're in the Wild West, but we already have a set of rules that will certainly be supplemented over time, but which exist today and which allow CAD to exist and ultimately to provide the services for which it was created. So I don't think we're in a legal vacuum. We shouldn't think That's it, neither at the French nor the international level. I would add that, indeed, we as lawyers must adapt to the New World we are constantly facing.

Yesterday we discovered blockchain, tomorrow it's LIA. We must adapt to the new questions each technology raises. So I share my colleague's opinion that ultimately, we will be offered things and then we will try to do our best with the rules we know to create legal content and create the rules of tomorrow. So, in fact, a legal vacuum doesn't exist because, as lawyers, we know the basic rules and we must constantly create. Is there a final question from the audience?

Last point, excuse me, because I know this gentleman's background, and from a tax perspective, what we can say is that most certainly not. I'm not just referring to taxation; I know you've moved towards... Others are now, but what we can say is that, in my opinion, some normative texts or legal frameworks for contracts and so on could find a transposition onto the blockchain tomorrow. There are many things that can be included in a smart contract, and we can optimize many processes thanks to it. The question is, do we have the necessary tools to do this?

I think that if tomorrow the blockchain, in this skeleton—that is to say, a system for transferring information, storing value, or anything else—is generalized, yes, there will be many contracts in the form of smart contracts. There will certainly be interactions with the state for paying taxes, which will be in this form, perhaps automatically. I think that the collection of VAT or any type of tax would be much simpler if all of this were done transparently and efficiently through the blockchain. So I think that eventually we will get there. The problem is that we are at a level of maturity that is still too weak even though we've known about Bitcoin since 2010.

Well, we're not quite ready yet. So we have one last question over there, and sir, I'll give you the floor after that. Is that alright with you? Uh, good evening. I had a question, especially about the legal representation of the DAO.

From a legal structure point of view, how do you invoice a DAO? Technically, what do you charge for what you do? For example, I know that for mining, people used to invoice the "chicken" in a somewhat imaginary way, but each time they mined, a proof of work, they invoiced the "chicken." So, this is the " chicken" that paid me X tokens. Is it a bit the same with the DAO, or is it completely different?

The precise process, because what I'm wondering about is the one who connects... Well, that's a very thorny question, a million-dollar question, very concretely. So the answer is that Indao doesn't have a SIRET number, it doesn't have a VAT number, and when you're a company—and I am a company—you normally have to have a minimum amount of information on your invoice to declare your turnover, pay your corporate tax, and so on, like any other company. So what do we do when it's a Dao, which isn't a legal entity, when we don't easily fit into a category, and if we want to avoid any problems, well, we sacrifice financially and tell the Dao we'll take the least convenient system, thinking that if we get reclassified and get hassled later, we'll say it's always better to have paid too much tax than not enough. And we say a Dao is a group of people, and a group of people exists, and so we pay our VAT, we make an invoice to the group of people, to the Dao, and we set an amount, and we Pay the VAT on that turnover, and then once we've paid our VAT, well, we use our money, and so on, like any other company.

But with this model, it's very under-optimized because a significant portion of the turnover disappears. Normally, when a company invoices another company, we don't charge the VAT, but we reclaim it. Here, we won't be able to reclaim it, and that makes a big financial difference. But with this system—this is what we chose at CI—we have less risk in the future. Now, if there were recognition of DAOs as legal entities and we could give them a SIRET number, that would make a huge financial difference.

Indeed, there's one last question here, unless you want to respond. I'll perhaps just add that, as we've seen, there are several forms of DAOs, several ways to organize the DAO. So, this will just be my small additional comment: the tax treatment will depend on the DAO, which will indeed be, and we've seen and said it several times already, under which capsule we'll put it. There you go, thank you. Now, before closing, I have a quick question that just came to me: for each of you, what do you think is the biggest misconception about DAOs?

To keep it short, a misconception you often hear about DAOs is the most common one: that they're decentralized. Sorry, in 95% of cases, that's unfortunately true, but it's a question of maturity. That is to say, we ca n't expect very young organizations to have the maturity of other structures that have existed for decades, even centuries. Very well, that's all. No, okay, very good, and perfect.

Thank you very much. Thank you all for coming. Thank you to our speakers; it was very enriching. We learned a lot. Thank you to Etherium France for helping us organize this event.

Thank you to Mazar for hosting us. Thank you to all of you for coming. And now I think that... There's a little cocktail reception so we can chat and continue the discussions, thank you all. [Applause] [Music]