⚡

The twelfth meeting

Last Edited Time

Dec 2, 2022

Created time

Dec 2, 2022

Participants

Created By

Type

Roundtable

Created

Dec 2, 2022

Zoom Recording

https://stanford.zoom.us/rec/share/_g-5C4FYo1bIqKCyolgvYetPWo_v58w90FV7EanRRVGT6O6utkr6cmPqxjEfWclL.qJLmbnOESnxGXBaU

Property

Property 1

Attendees: Cent, Josh Tan, David Ehrlichman, Daniel Kronovet (Colony), Andrei (dOrg), Apoorv Nandan (DaoLens), Balazs Nemethi (kycDAO), Connor Spelliscy, Dennison Bertain (Tally.xyz), Drea (RnDAO), Eugene (SCRF), Hazel, Isaac Patka, Ivan Fartunov, Kathleen (Karma), Lance David, Manboy (dOrg), Spencer (DAOhaus), Tucker McLachlan (Metagov), Vikram Aditya (DaoLens) Marc Dangeard

Agenda

Poll 1

How has regulation (or threat of regulation) affected your business or DAO’s practices?

Top three: 

We decided not to release a token, or even experiment with one, because of the uncertain legal status of tokens.

Distracted the leadership from shipping to bureaucracy

DAOs on our site have been received letters from the SEC and while we can't give legal advice we do speak to folks creating daos and who already have daos about what we think to be best practices currently. It certainly has driven more DAOs on-chain as off-chain daos feel more dangerous.

Some notes:

Smart contracts function somewhat like operational units. This helps remove some liability from individuals.

Updates

Working on the frontend of DAOstar API. 

New working group:

Funding grant mechanism

Communities tends to have capital at their disposal

Way grants are managed tend not to be on-chain and transparent

Working on guidelines for running grants programs

Safe for DAOs working group

Taking yc contract and abstracting it to game theory clauses

Bringing on to smart contracts

Investor to feel safe and that their investment is secure

Setting equity financing date

DAOstart standard update

Approaching Aave

Factory contract deployed on all EVM chains except arbitrum

Added concept of contract registry to spec

Updated smart contract access control pattern for managing contract updates

API service is updated to support gnosis safes using safes transaction service API

Latest safe API is worth checking out

Talking with dOrg folks with support for subgraphs

Discussion: Regulation and DAOs

DAOs have not seen a lot of discussion with SEC. Is there a way to support better regulation and self-regulation in DAOs. The picture is: how can a DAO run a restaurant. There are a lot of things a restaurant needs to do, rent a place, comply with laws, hire and pay staff. The vision is to have a single deployment button to have all the scaffolding for something like a restaurant.

 There are jurisdictions that are trying to figure out how to cope with new creatures that are DAOs. Most legislative pieces on DAOs associate them to existing corporate entities. What we are trying to do with DAO Model Law is to recognize that DAOs are a new creature and that they can’t necessarily fulfil the same functions and formalities expected from a traditional corporation or organization. 

the problem today is that is a DAO is nothing then it is by default an unincorporated associating and all members are liable. 

There are two reasons we might want a legal interface between DAOs and the rest of the world. 

DAOs want to run restaurants, i.e. they want to be able to contractualize with existing entities

if you want to empoly people it is difficult to do so

the idea is to play with functional equivalence

when there is a new technology that comes about functionally equivalent with previous technology (e.g. electronic contracts), the question is if we need to make new law provisions or adopt already established provisions?

the dao model law takes a regulatory equivalence approach

you recognize that the reason a particular policy exists it to serve the same regulatory objective

there may be other means to achieve the same regulatory objects using other mechanisms

when we move into daos, many daos are incapacitated to fulfil these requirements

instead of creating a pretense of equivalence between technical and legal, the idea if that the technology can make guarantees that allow regulatory equivalence

This is relevant to DAOstar because as we make standards it is important to keep in mind the regulatory constraints in place and design mechanisms that allow for regulatory equivalence and open conversations and legal compliant standards. 

Discussion

Regulatory equivalence feels like something we specifically don’t want. The restaurant example is interesting, but slightly flawed. Daos do and don’t want this type of LLC structure. Being able to fuilfil regulatory equivalents is letting the state exercise control over a DAO in an indirect way. The state can compel an organization to do something. By definition, to meet regulatory equivalence, would be de-dao’ing. Daos are trying to build new ideas that are counter the state. Building DAOs so they are the highest authority. For some daos this could be useful, but for others, like ultra-sound daos this is less likely to work. There may be a mismatch here between what we are doing here and how governments come to understand DAOs. 

This characterization above is a reaction to existing attempts to make daos conform to already existing legal formations, such as LLC. The proposal here is different. The proposal is saying that the DAO doesn’t have a legal personality an/or is an unincorporated entity; there is still no escape here from the state. Here what’s being provided is not that the government has control over how the organization operates, but that if we want to change the status quo - where everyone is liable - daos can choose to implement specific technical designs, and te government can grant the daos rights to contractualize, etc. The only thing the government can do is remove privileges (bringing us back to ground zero), they do not have power over the DAO. 

there is some agreement that regulatory equivalence is the way to go. Want to ask what the missing technical components would be to get the regulatory equivalence?

Technical components are not the only factor. Having conversations with regulators is also key. We have identified some basic design principles, but still missing discussions with DAO leaders and regulators. We now need to see if DAOs are willing, and if the design makes any sense. We also need to hear from regulators if there is regulatory equivalence. 

The twelfth meeting

Attendees: Cent, Josh Tan, David Ehrlichman, Daniel Kronovet (Colony), Andrei (dOrg), Apoorv Nandan (DaoLens), Balazs Nemethi (kycDAO), Connor Spelliscy, Dennison Bertain (Tally.xyz), Drea (RnDAO), Eugene (SCRF), Hazel, Isaac Patka, Ivan Fartunov, Kathleen (Karma), Lance David, Manboy (dOrg), Spencer (DAOhaus), Tucker McLachlan (Metagov), Vikram Aditya (DaoLens) Marc Dangeard

Agenda

Poll 1

How has regulation (or threat of regulation) affected your business or DAO’s practices?

Top three: 

We decided not to release a token, or even experiment with one, because of the uncertain legal status of tokens.

Distracted the leadership from shipping to bureaucracy

DAOs on our site have been received letters from the SEC and while we can't give legal advice we do speak to folks creating daos and who already have daos about what we think to be best practices currently. It certainly has driven more DAOs on-chain as off-chain daos feel more dangerous.

Some notes:

Smart contracts function somewhat like operational units. This helps remove some liability from individuals.

Updates

Working on the frontend of DAOstar API. 

New working group:

Funding grant mechanism

Communities tends to have capital at their disposal

Way grants are managed tend not to be on-chain and transparent

Working on guidelines for running grants programs

Safe for DAOs working group

Taking yc contract and abstracting it to game theory clauses

Bringing on to smart contracts

Investor to feel safe and that their investment is secure

Setting equity financing date

DAOstart standard update

Approaching Aave

Factory contract deployed on all EVM chains except arbitrum

Added concept of contract registry to spec

Updated smart contract access control pattern for managing contract updates

API service is updated to support gnosis safes using safes transaction service API

Latest safe API is worth checking out

Talking with dOrg folks with support for subgraphs

Discussion: Regulation and DAOs

DAOs have not seen a lot of discussion with SEC. Is there a way to support better regulation and self-regulation in DAOs. The picture is: how can a DAO run a restaurant. There are a lot of things a restaurant needs to do, rent a place, comply with laws, hire and pay staff. The vision is to have a single deployment button to have all the scaffolding for something like a restaurant.

 There are jurisdictions that are trying to figure out how to cope with new creatures that are DAOs. Most legislative pieces on DAOs associate them to existing corporate entities. What we are trying to do with DAO Model Law is to recognize that DAOs are a new creature and that they can’t necessarily fulfil the same functions and formalities expected from a traditional corporation or organization. 

the problem today is that is a DAO is nothing then it is by default an unincorporated associating and all members are liable. 

There are two reasons we might want a legal interface between DAOs and the rest of the world. 

DAOs want to run restaurants, i.e. they want to be able to contractualize with existing entities

if you want to empoly people it is difficult to do so

the idea is to play with functional equivalence

the dao model law takes a regulatory equivalence approach

you recognize that the reason a particular policy exists it to serve the same regulatory objective

there may be other means to achieve the same regulatory objects using other mechanisms

when we move into daos, many daos are incapacitated to fulfil these requirements

instead of creating a pretense of equivalence between technical and legal, the idea if that the technology can make guarantees that allow regulatory equivalence

This is relevant to DAOstar because as we make standards it is important to keep in mind the regulatory constraints in place and design mechanisms that allow for regulatory equivalence and open conversations and legal compliant standards. 

Discussion

Regulatory equivalence feels like something we specifically don’t want. The restaurant example is interesting, but slightly flawed. Daos do and don’t want this type of LLC structure. Being able to fuilfil regulatory equivalents is letting the state exercise control over a DAO in an indirect way. The state can compel an organization to do something. By definition, to meet regulatory equivalence, would be de-dao’ing. Daos are trying to build new ideas that are counter the state. Building DAOs so they are the highest authority. For some daos this could be useful, but for others, like ultra-sound daos this is less likely to work. There may be a mismatch here between what we are doing here and how governments come to understand DAOs. 

This characterization above is a reaction to existing attempts to make daos conform to already existing legal formations, such as LLC. The proposal here is different. The proposal is saying that the DAO doesn’t have a legal personality an/or is an unincorporated entity; there is still no escape here from the state. Here what’s being provided is not that the government has control over how the organization operates, but that if we want to change the status quo - where everyone is liable - daos can choose to implement specific technical designs, and te government can grant the daos rights to contractualize, etc. The only thing the government can do is remove privileges (bringing us back to ground zero), they do not have power over the DAO. 

there is some agreement that regulatory equivalence is the way to go. Want to ask what the missing technical components would be to get the regulatory equivalence?

Technical components are not the only factor. Having conversations with regulators is also key. We have identified some basic design principles, but still missing discussions with DAO leaders and regulators. We now need to see if DAOs are willing, and if the design makes any sense. We also need to hear from regulators if there is regulatory equivalence. 