Utah Code 48-5-403. Contentious forks in the underlying blockchain
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(1) Except as provided in this section, in the event of a hard fork in the underlying permissionless blockchain:
Terms Used In Utah Code 48-5-403
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Decentralized: means that decision-making is distributed among multiple persons. See Utah Code 48-5-101
- Decentralized autonomous organization: means an organization:(6)(a) created by one or more smart contracts;(6)(b) that implements rules enabling individuals to coordinate for decentralized governance of an organization; and(6)(c) that is an entity formed under this chapter. See Utah Code 48-5-101
- Hard fork: means a blockchain software upgrade that is not compatible with previous versions of the blockchain software and requires all users to upgrade to the latest version of the blockchain software. See Utah Code 48-5-101
- Majority chain: means the version of the blockchain accepted by more than half of the blockchain's validators following a hard fork. See Utah Code 48-5-101
- Minority chain: means the version of the chain that is not the majority chain following a hard fork. See Utah Code 48-5-101
- Off-chain: means any action that is not on-chain. See Utah Code 48-5-101
- On-chain: means any action that is recorded and verified on a blockchain. See Utah Code 48-5-101
- Permissionless blockchain: means a publicly distributed ledger that allows a person to transact and produce blocks in accordance with the blockchain protocol, in which the validity of the block is independent of the identity of the user. See Utah Code 48-5-101
- Public signal: means a declaration authorized by the decentralized autonomous organization in a public forum. See Utah Code 48-5-101
(1)(a) the legal representation of the decentralized autonomous organization remains on the majority chain; and(1)(b) any off-chain assets shall belong to the decentralized autonomous organization on the majority chain.
(2)
(2)(a) A decentralized autonomous organization may choose to maintain legal presence on a minority chain if the decentralized autonomous organization expresses an intent to do so by public signal.
(2)(b) If the decentralized autonomous organization expresses an intent by public signal to maintain legal presence on a minority chain, any off-chain assets shall belong to the decentralized autonomous organization on the selected minority chain.
(3) The decentralized autonomous organization may liquidate the decentralized autonomous organization’s on-chain assets after a hard fork to move those assets to the chosen chain.
(4) The decentralized autonomous organization may split into multiple legal entities after a hard fork, each on a separate chain, after public signal of an intent to do so, provided there is a definitive distribution of off-chain assets between the majority and minority chain.