Cayman Islands: New Global Epicenter for Web3 Foundations and DAOs
The Cayman Islands are rapidly solidifying their position as a global hub for decentralized autonomous organizations (DAO) and Web3 projects.
This phenomenon is driven by an impressive increase in legal entity registrations in recent years. According to data from the General Registry of the Cayman Islands, there has been an annual increase of 70% in the registrations of foundation companies, legal structures often used as legal “wrappers” for DAOs or as administrators of Web3 ecosystems.
By the end of 2024, the register recorded over 1,300 foundation companies, compared to 790 the previous year. In just the first few months of 2025, more than 400 new foundation companies have already been registered.
This trend highlights how the Cayman Islands have become the preferred choice for those operating in the blockchain and decentralized technologies sector.
Foundation Company: The Legal Heart of DAOs
DAOs are blockchain-based organizations that operate through smart contracts, without a central authority. Developers define governance rules, raise funds through token issuance, and grant token holders voting rights.
Decisions are made collectively, with changes requiring community consensus. DAOs are primarily applied in DeFi protocols and decentralized social platforms.
For many DAOs, the Cayman Islands foundation company represents the ideal solution for interacting with the real world. This structure offers a balance between the operational flexibility required by DAOs and formal legal protection, safeguarding token holders from personal liability for obligations or legal disputes involving the DAO.
Even for Web3 projects without a DAO, the Cayman foundation company has become the preferred choice as the legal entity responsible for managing the ecosystem and interacting with external parties.
The Push of U.S. Legislation
The rise in popularity of foundation companies to “wrap” DAOs has been bolstered by recent developments in U.S. legislation. Specifically, the Samuels v. Lido DAO ruling had a significant impact: a federal judge in California determined that Lido DAO, lacking a legal wrapper, should be considered a general partnership under California law.
This exposed the DAO members to joint and unlimited liability, according to traditional partnership rules.
This precedent has led many DAOs and Web3 projects to choose the Cayman Islands as their jurisdiction of choice, adopting the foundation company to protect participants and ensure secure governance.
The Major Web3 Foundations: Staggering Figures
Currently, among the most significant Web3 entities worldwide, at least 17 foundation companies registered in the Cayman Islands boast a treasury exceeding $100 million each. Collectively, these foundations manage assets worth approximately $10 billion.
These figures highlight the centrality of the Cayman Islands in the global landscape of decentralized technologies and digital finance.
The Competitive Advantages of the Cayman Islands
The appeal of the Cayman Islands is not limited to liability protection.
The jurisdiction offers tax neutrality, a sophisticated legal infrastructure well-known to institutional investors, regulatory clarity for digital assets, and a well-established ecosystem of professionals skilled in blockchain technologies.
According to Haymond Rankin, Associate Director for the Fintech and Virtual Asset sector at Cayman Finance, “the growth of foundation companies registered in the Cayman Islands reflects the combination of modern legislation, robust professional services, and regulatory clarity. Cayman foundation companies provide DAO communities and Web3 projects with the operational flexibility and legal certainty that global participants expect. This is crucial for transitioning from experimentation to the long-term management of significant treasuries.”
Melissa Lim, partner and co-head of the global Fintech group at Walkers, also highlights how “the rise in popularity of foundation companies registered in the Cayman Islands is not surprising. More and more companies are seeking a jurisdiction that combines legal clarity and operational flexibility, allowing them to grow responsibly and attract a broader audience of stakeholders. In this sense, the Cayman Islands are setting the standard for secure and innovative governance.”
An Evolving Ecosystem
The Cayman Islands ecosystem is also distinguished by the presence of a vast network of professional service providers, including legal advisors, tax experts, and blockchain specialists. This environment fosters responsible innovation and the growth of Web3 projects on a global scale.
Cayman Finance, the industry association representing over 150 companies and 16 professional associations in the Cayman financial sector, plays a key role in promoting the growth and international reputation of the jurisdiction.
Cayman Islands: The Future of DAOs and Web3
The rise of the Cayman Islands as a global hub for DAOs and Web3 foundations is the result of a targeted strategy that combines regulatory innovation, high-level services, and an international vision.
With a steady growth in registrations and the presence of foundations managing billions of dollars in assets, the Caymans confirm themselves as the ideal platform for the new generation of decentralized projects.
In a context where legal certainty and operational flexibility are crucial for attracting investments and talent, the Cayman Islands today stand as the benchmark for those looking to build the future of blockchain and digital finance.
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