Abstract
This Article argues that recently enacted DAO LLC statutes-particularly those adopted in Wyoming and Tennessee-present an underappreciated constitutional challenge under the Supremacy Clause. By authorizing decentralized autonomous organizations (DAOs) as legal entities with limited liability, these laws enable algorithmically governed structures that resist centralized oversight, frustrate federal enforcement, and interfere with uniform national standards in securities, bankruptcy, and anti-money laundering (AML) law. The Article applies preemption doctrine-express, field, and conflict-to demonstrate that these statutes functionally undermine core federal regulatory schemes. Drawing on recent enforcement actions such as CFTC v. Ooki DAO and SEC v. Terraform Labs, the Article shows that the constitutional issues are no longer hypothetical. DAOs, once considered peripheral, are now central to financial innovation and systemic risk-necessitating legal alignment, not exceptionalism. To resolve the growing federalism crisis, the Article proposes a model Uniform DAO Entity Act grounded in institutional design theory, administrative coordination, and Pigouvian smart contract architecture. Key features include a "compliance interface," legal responsiveness modules, and structural tax mechanisms that internalize DAO externalities without sacrificing decentralized governance principles. DAO entity law is not just a question of business innovation-it is a test of constitutional structure. This Article provides a framework for harmonizing digital governance with the demands of federal supremacy, regulatory clarity, and legal accountability. Keywords: DAO LLC, Supremacy Clause, Preemption Doctrine, Smart Contracts, Wyoming DAO Law, Federalism, Pigouvian Regulation, Digital Entities, Blockchain Law