Why Shipyard Incorporated Its DAO in the Marshall Islands
A decentralized exchange filed its governing DAO as a Marshall Islands DAO LLC, solving a structural problem most token-governed organizations eventually hit.
The decentralized exchange Clipper incorporated its governing DAO in the Republic of the Marshall Islands, filing it as Admiralty LLC. It was the first RMI DAO LLC. This article covers the structural question behind that decision: what an organization governed by token holders actually needs from a legal entity, and why a sovereign DAO framework answers it. The original account of the decision was written by Mark Lurie, Co-Founder and CEO of Shipyard Software, the company that created Clipper, and it is linked at the end of this piece.
Key takeaways
- A protocol governed by token holders still needs a legal entity to hold assets, sign agreements, and limit member liability.
- Members of an unincorporated DAO can be treated as general partners, which exposes personal assets to the organization’s obligations.
- A protocol whose members sit in dozens of countries has no home jurisdiction to default to.
- Clipper’s governing DAO was incorporated in the Marshall Islands and filed as Admiralty LLC.
What a Governing DAO Needs From a Legal Entity
A decentralized exchange is software, but the organization around it is not. Someone has to hold the intellectual property, pay auditors and contributors, sign agreements with infrastructure vendors and data providers, and take responsibility for the treasury. Token-holder governance can decide all of those things. It cannot, on its own, be a party to any of them.
Liability is the sharpest consequence. A group of people acting together toward a common purpose without a registered entity can be characterized as a general partnership in many jurisdictions, and general partners are personally liable for the obligations of the group. For an organization with a large and open membership, that is an exposure nobody agreed to and no vote can waive.
Then there is counterparty access. Custodians, market makers, audit firms, service providers, and banks all need a counterparty that exists in law, with a name, a jurisdiction, and someone authorized to sign. Without one, a protocol either routes everything through a founder’s personal company or does without.
Continuity is easier to overlook. Contributors change, keys rotate, and delegates come and go. A registered entity gives the organization an identity that survives its current participants, which matters for any commitment that runs longer than a single governance cycle.
Why the Marshall Islands DAO LLC Fits That Shape
The Marshall Islands DAO LLC is a limited liability company written to accommodate how these organizations actually operate. The members are token holders rather than a named board, governance can happen onchain, and the framework recognizes those records instead of requiring a parallel set of paper minutes. Liability is limited at the entity, which is the part that matters most to a distributed membership.
Jurisdiction is the other half of the answer. A protocol whose members sit in dozens of countries has no natural home, and choosing one member’s country means adopting that country’s rules for everyone. The Marshall Islands framework was the first DAO framework adopted by a sovereign nation, which gives a global membership a neutral place to stand rather than a borrowed one.
What Registering One Involves
Formation runs through a registered agent. MIDAO is the sole registered agent for DAO LLCs in the Marshall Islands under an exclusive public-private partnership with the RMI government, so the filing, the compliance workflow, and the ongoing annual requirements run through one place.
The compliance side is the part teams tend to underestimate. Organizers go through identity verification, beneficial ownership is reported, and sanctions screening applies, the same as for any other registered entity. That is the trade that makes the rest work. A DAO LLC is accepted by counterparties precisely because it is a real entity carrying real obligations.
The process has also become faster since this filing. The DAO Regulations of 2024 introduced sub-30-day filings.
Where the Filing Sits in the Framework
Clipper’s filing came early, and the Marshall Islands has extended the framework more than once since. The DAO Act of 2022 added a for-profit DAO LLC alongside the non-profit structure, and the DAO Act Amendment of 2023 created a securities carve-out for non-profit governance tokens. The filing process in use today comes from the DAO Regulations of 2024.
The Same Structure Without the DAO Label
Clipper is a trading protocol, and its governing DAO exists to steward that protocol. That is the common case. Protocol teams, NFT projects, DePIN networks, AI agent builders, and tokenized funds reach the same structural question once a treasury or a token exists, and most of them never describe themselves as DAOs. DAO LLC is a legal designation, not an identity requirement.
The Source Account
Read Why We Incorporated Shipyard’s DAO in The Marshall Islands here.
A note on the companies named here as of 2026. Shipyard Software was acquired by Sushi Labs in 2025 and no longer operates as an independent company. Clipper is still running, and the governance brand associated with it today is AdmiralDAO. The account linked above reflects the position at the time it was written.
For the mechanics of forming one of these entities, start with DAO incorporation basics, or read our breakdown of the key components of the Marshall Islands DAO law.