The United Arab Emirates (UAE) is a country that is always at the forefront of technological progress. Artificial intelligence, blockchain and other advanced technologies are being actively developed here. By 2025, the UAE plans to become one of the world’s major centers for decentralized autonomous organizations (DAOs).

What are DAOs?

DAOs are organizations that operate using blockchain. Instead of the usual leadership (director or board), decisions are made collectively through voting. All processes are automated through smart contracts – programs that run themselves if conditions are met.

Why does the UAE rely on DAOs?

The UAE has been actively implementing blockchain into government processes for several years. For example, Dubai’s Smart City program uses blockchain to simplify bureaucracy, increase transparency and drive innovation. According to PwC forecasts, thanks to blockchain, the GDP of Middle Eastern countries will grow by 32 billion dollars by 2025. Therefore, UAE authorities are creating a favorable environment for blockchain projects, including DAO.

Why are DAOs important?

DAOs are changing the approach to governance. Whereas in conventional companies, management makes decisions, in a DAO, all members make decisions together. Any member can propose an idea, and if they vote for it, it will be implemented. This gives more transparency and eliminates the need for intermediaries.

The UAE supports the idea of decentralization because it attracts international investment and talent. Plus, the country aims to pioneer a new era of governance.

Important steps towards the development of DAO in the UAE include

2021 – Abu Dhabi launches a legal framework for dealing with digital assets. This became the basis for legal recognition of DAOs.

2023 – Dubai announces the integration of DAOs into the Smart Dubai initiative. This allows DAOs to participate in government projects.

2025 – UAE becomes a global hub for DAOs through clear regulations and developed infrastructure.

These steps show that the country is serious about creating an ecosystem where DAOs can not only exist, but thrive.

Where in the UAE is the UAE already implementing DAOs?

1. Finance and investment

Dubai is home to the MENA DeFi Alliance, a DAO that brings together investors to fund startups. They have already invested over 100 million dollars in new projects since 2024. The UAE, with its developed financial system, is an ideal place for such initiatives that connect traditional finance with blockchain.

2. Environmental sustainability

Sharjah has launched GreenEnergyDAO, a project that raises funds for environmental initiatives. For example, participants invest in solar and wind farms. Six major projects have already been funded, reducing carbon dioxide emissions by 500,000 tons per year. Such DAOs are helping the UAE achieve the goal of “net zero” by 2050.

3. Public services

Dubai tested the CitizenVoice platform, a DAO where citizens can suggest ideas for city development, vote for them and monitor implementation. As a result, citizen engagement increased by 40% compared to traditional methods.

What are the challenges facing DAOs in the UAE?

Despite the prospects, there are challenges:

Uncertainty in laws – DAO laws differ from emirate to emirate and this creates confusion. It is important to create uniform rules that are in line with international standards.
Technical difficulties – not all people understand how DAOs work. Educational programs are needed to make the system accessible to all.
Cyber risks – DAOs are vulnerable to hacker attacks and bugs in the code. It is important to implement robust security measures.

Opportunities for the UAE

1. Global leadership – UAE can attract top talent and blockchain companies by becoming a global hub for DAOs.

2. Economic Diversity – DAOs will help reduce dependence on oil by creating new businesses and jobs.

3. Social impact – DAOs can support social projects and help vulnerable communities.

Conclusion

By 2025, the UAE is poised to become a world leader in DAOs. Their progressive policies and technological development are setting the stage for a decentralized future. DAOs in the UAE are already helping to change the financial system, solve environmental problems, and improve public services.

We at SBSB Fintech Lawyers see great potential in the development of DAOs. However, for them to succeed, it is important not only to implement the technology, but also to address the legal and technical issues. If you are interested in how to capitalize on the opportunities of DAOs, we are ready to help you understand all the nuances and choose the best path.