How Does a DAO’s Legal Wrapper (E.g. Foundation) Address Regulatory Risk?

A legal wrapper, such as a foundation (e.g. in Switzerland or Cayman Islands) or a limited liability company (LLC), provides a legal entity that can enter into contracts, hold assets, and interface with the traditional financial system. This structure helps manage regulatory risk by giving the DAO a recognized legal representative to handle compliance, tax obligations, and contractual agreements, offering a shield to the core decentralized protocol.