How Can a Decentralized Autonomous Organization (DAO) Issue Tokens While Managing Regulatory Risk?

A DAO manages regulatory risk by maximizing decentralization, aiming to fail the "efforts of others" prong of the Howey Test. They must ensure the token holders genuinely control the protocol's development and funds, rather than a central team.

The token should primarily grant governance rights or utility access, not just an expectation of profit from the core team's work. Legal wrappers in favorable jurisdictions are also utilized.