Proposal to Form an Unincorporated DAO

We are committed to expediting further development and reinstating moon distributions, as voted on by the community (https://snapshot.org/#/cryptomods.eth/proposal/0xe0023693d8c263b40378866be5b21f00d89c0c6f3cabb31228475706c8e99c09). After further debate and discussion, the mod team proposes that the best approach is to proceed as an unincorporated DAO for at least the first year and thus defer the plan presented by legal advisors to incorporate a DAO in the Marshall Islands. The community initially authorized payment for legal advice to explore our options here: https://snapshot.org/#/cryptomods.eth/proposal/0xa85cfd6f37e42cdd306d1f0c9cd14b2abf4ed78c755ceabdd422e0fcf814be70. To proceed with Marshall Islands will likely cost an additional ~$15,000 immediately and incur ongoing costs of $5,000 + 3% annual “revenue” tax. It would also lock us into that entity to some extent.

Why not Marshall Islands?

First, it is useful to review the context of the different legal frameworks that DAOs can operate under: https://daos.paradigm.xyz/Ultimately there are limits to the legal protection that a Marshall Islands approach can offer and many DAOs operating today are not incorporated: https://www.winheller.com/en/business-law/company-law/dao/offshore-dao.html.As we endeavor to further decentralize this project, it may be wise to at least begin in an unincorporated state and give ourselves more time to evaluate the best path forward - as a community and without the mod team paying legal fees at the outset to lock us into one legal wrapper over another.

How would this work?

In short: Setup a multisig and for the first year at least and continue to burn everything (AMAs/banner/membership/etc) rather than operate as a ‘for profit’ DAO (e.g. flywheel model of accepting rental payments into a treasury and redistributing funds to users). Move TMD (u/TheMoonDistributor) holdings to a multisig wallet. Any custodial tipbot or additional community funds would be at least primarily stored in a multisig cold wallet. Restart distribution with TMD holdings. More details below:

Multisig implementation

The multisig wallet used will be (Gnosis) SAFE. We would suggest a minimum of 5 multisig key holders and a maximum of 11. This wallet would hold all current assets listed in https://nova.arbiscan.io/address/0xda9338361d1cfab5813a92697c3f0c0c42368fb3 and would entail bridging the MOON balance from Arbitrum Nova to One. It would also custody the cold storage portion of the tipbot and any other custodial services the DAO may provide users, which we propose to set at 95% of the total holdings for any similar service. Multisig would require a threshold of at least 66% of key holders’ signatures to execute a vote.

Multisig member election

Candidates to be multisig key holders may nominate themselves or be nominated by others. The requirements for candidacy are having earned at least 5,000 MOON via Reddit distributions and having held at least that balance for a period of six months, or have contributed to the MOON ecosystem in some clear and documented fashion. This proposal would allow for a period of three weeks for candidates to nominate themselves, followed by a one week voting period. A candidate must reach 66% approval to be elected. If there are more than eleven candidates with greater than 66% approval then the eleven with the most yes votes will be chosen. If there are fewer than five candidates with greater than 66% approval then we start over. There is no requirement to undergo KYC to be a key holder. If you are interested in being a candidate or nominating someone else please create a post in r/CryptoCurrencyMeta with the title formatted as “[Multisig Candidate] u/UserName - 0xETHaddress”

DAO Constitution, Officer Elections, and compensation

The mod team is currently drafting a DAO Constitution, which is a formal document outlining the structure and ‘rules of the road’ for decentralized organizations and their members (see more here: https://legalnodes.com/template/dao-constitution-token-foundation). We plan to share a draft of this document for comment and to seek input from the community. Part of this documentation entails defining set roles and responsibilities. We probably need to fill at least a secretary and treasurer role, and these roles should likely be compensated. It is less clear at this point if we need an executive role or formal roles for banner/AMA coordinators immediately.Any terms and amounts for potential compensation of formal DAO roles will be put to a future vote for ratification by the community before implementing.

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https://preview.redd.it/4kiyvxp0thxc1.png?601&format=png&auto=webp&s=5ae8d62712ddf9b9f95cd47ee51bd17ecfbe29f5

Why continue burning everything for the first year?

This is the legally safest path - we are not accepting any funds from third parties, so it is harder to construe that the collective activities constitute a ‘for profit’ business enterprise. It will also simplify bookkeeping and logistics to some extent.

Wen distro?

We will use 399996 MOON from u/TMD to fund a distribution of 33333 MOON per cycle for the first twelve cycles or 336 days (following the same 28 day cycle of previous distributions). This will take us into early 2025, and give us some time to evaluate if we are comfortable redirecting AMA/banner revenue for the purposes of distribution and the legal requirements for doing so. The mod team will honor the community's intent to not inherit the prior rewards formula from former CCIPs: https://snapshot.org/#/cryptomods.eth/proposal/0xa1e976987bbe708872df698c274083df69d60f7cca4049c793f38e4e3ba35b8d. The mod team proposes that - before distributions can be reinstated - the community will vote on which rules should be deprecated and which should be retained.

Voting

For the purposes of multisig key holder elections as well as all future elections moving forward (until modified by a DAO Constitution amendment/referendum), all MOONs are equal for voting purposes - there is no concept of earned or unearned MOON. All proposals require a ⅔ majority to pass. All amendments to the constitution will require a ¾ majority. All votes will be conducted on https://snapshot.org/#/cryptomods.eth with the goal of moving proposals to the more trustless, programmatic process in the future by combining SAFE multsig with the existing Snapshot governance setup (e.g., oSnap or SafeSnap module: https://docs.snapshot.org/user-guides/plugins/safesnap-osnap) .

Snapshot poll link: https://snapshot.org/#/cryptomods.eth/proposal/0x1228fab4ca7e5774540711e499f7c8794b7dac2fd618dcd268d822abb84b6f87

Poll by u/jwinterm