What is a Parallel Entity?

Parallel Entity Diagram

Introduction

A Parallel Entity is an umbrella term for an entity that exists simultaneously in two distinct realms: the real world (legal entity) and the onchain world (blockchain-based presence).

In essence, it represents a legal entity with a real-world presence, while also operating as an onchain entity governed by blockchain-based rules and smart contracts to leverage the best of both worlds.

For example: A DAO LLC is a Parallel Entity where the LLC (Limited Liability Company) exists in the legal world, while the DAO (Decentralized Autonomous Organization) operates on the blockchain.

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How it works?

1.Set up a digital twin🌏🔀🌐

2.Sync it for parallel execution🔁

Parallel entity is now active☯️

Let’s break it down further:

1

Legal Entity as the Base Layer (L1):

Think of your Legal Entity as the foundational base layer (L1) of your business operations, ensuring stability, compliance, and clarity within the traditional legal framework. This includes traditional components like:

- Articles of incorporation - Bylaws - Internal regulations

2

Onchain Entity as Layer 2 (L2):

The Onchain Entity is your business operations' scaling layer (L2), unlocking scalability, efficiency, and transparency through onchain-native processes. It mirrors the legal structure but operates digitally, governed by smart contracts, and streamline+open:

- Fundraising - Ownership and rights distribution - Corporate governance - Decision-making process - Dividends - Asset management

Example: DAO LLC

A DAO LLC is a perfect example of a Parallel Entity.

- The LLC represents the legal, real-world layer.

- The DAO operates as the onchain layer, where rules and operations are executed transparently using blockchain technology.