[dcolkitt]

Said judge would be overturning 50 years of American corporate law, which gives LLCs extremely wide leeway in determining their bylaws.

Could some two bit local judge try it? Sure, but it would ultimately get taken to the Supreme Court. And given the current composition of SCOTUS it’s very unlikely they’d vote to weaken corporate property rights.

If you’re worried about legally recognized LLC DAOs losing their rights to residential property, than you should also be worried about private equity firms who are buying residential SFHs also having their property appropriated. Seems like a pretty big long shot to me. This is America, property rights are pretty sacrosanct.

[Imnimo]

Sure, but if I'm worried about a "corrupt Louisiana rural parish", it doesn't seem like an NFT shields me much. I can get relief by taking my case to a higher court, but that's the same thing I can do with a regular mortgage. That corrupt judge isn't going to be like "oh, you have an NFT, my hands are tied" - if he wants to mistreat you, an entry in a distributed ledger isn't going to stop him.

[dcolkitt]

A judge is a lot more likely to twist the language in a legal contract than he is to outright appropriate property that's not even being legally transferred. The latter would be immediately reversed by an injunction in a higher court, and the lower judge would be remanded, possibly removed from office.

I can't find a single instance in American history of real property being outright appropriated by a court outside eminent domain.

[Imnimo]

But won't there also be a legal contract in the NFT case, defining who is allowed to live in the house, what their obligations are, and under what circumstances they can be evicted?

[dcolkitt]

No. There's only an LLC who's bylaws state that the managing member is whoever the holder of record on the blockchain is. Effective transfer of the property is affected purely in crypto space through transfer of the NFT, possibly within a smart contract.

(Of course the smart contract can be coded with the option to defer to a human arbitrator in the case of dispute, but that doesn't even have to be a duly appointed judge. It's just an address on the blockchain that we point to. Almost certainly we'd pick an arbitrator that respects crypto title.)

The only way for the fiat legal system to pierce this scheme is to either invalidate the LLC in the Wyoming court system or to directly appropriate title to the real property from the LLC in the local county. Both are pretty unlikely.

[HWR_14]

> it would ultimately get taken to the Supreme Court

If the SCOTUS takes your case. Which it doesn't do often.