© Reuters. Elon Musk’s Delaware Setback Opens Door For Srinivasan’s Ethereum, Solana DAO Proposal
Benzinga – Balaji Srinivasan has suggested Decentralized Autonomous Organizations (DAOs) on the Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) blockchains as viable alternatives for companies considering incorporation, following Elon Musk’s legal challenges in Delaware.
What Happened: This comes as Musk shared an opinion post published in the Wall Street Journal titled: ‘Delaware Is Trying Hard To Drive Away Corporations’.
Now, Srinivasan has a potential solution for alternatives to Delaware. Among the three options he listed, he brought up the potential use of blockchain platforms, mentioning Ethereum and Solana as possibilities.
There are three alternatives to Delaware.
1) Red states like Texas & Florida
2) Foreign states like Singapore & UAE
3) Blockchains like Ethereum & Solana
All three should develop tools for corporate refugees exiting Delaware. Port over charter, bylaws, cap table — everything. https://t.co/EAXjdq5Lbh
— Balaji (@balajis) January 31, 2024
He explained, “DAO laws have now been passed both inside the US (Wyoming and Tennessee) and outside (in the Marshall Islands). It’s a new kind of fiat/crypto bridge. Not for cryptocurrencies but for crypto companies.”
Srinivasan advocates for leveraging DAOs (Decentralized Autonomous Organizations) as they represent a modern approach to corporate structure, utilizing blockchain technology for governance. DAOs offer a transparent and democratic business model that could serve as an alternative to traditional incorporation methods, avoiding complexities like those encountered in states like Delaware. Recent legislation in Wyoming, Tennessee, and the Marshall Islands has recognized DAOs.
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Why It Matters: A Delaware judge invalidated a pay package worth $55.8 billion awarded to Elon Musk in 2018 by Tesla, the electric vehicle manufacturer. He said on X, “Never incorporate your company in the state of Delaware.”
Musk’s discontent stems from a court decision in Delaware that overturned his $55 billion compensation agreement with Tesla.
Never incorporate your company in the state of Delaware
— Elon Musk (@elonmusk) January 30, 2024
The ruling on Tuesday put Musk’s 2018 compensation agreement under scrutiny, as it was challenged by an investor on grounds of conflict of interest and misleading information by the automaker.
In Delaware, which holds the title of the second smallest state in the US, Musk conceded defeat in his attempt to back out of his $44 billion bid to purchase the social media company Twitter, a platform he rebranded as X. Following a year with Musk at the helm, the company’s valuation dropped by $25 billion.
Photo Courtesy: Shutterstock.com
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