Library of open source, standard legal templates and wrappers for MakerDAO’s actors and adjacent entities (“SubDAOs” and “Ecosystem Actors”)
- Defining operational roles, authority lines and permissions of individual signers
- Defining ground rules, principles and commitments of involved participants
- Providing basic liability protection for multisig signers and related actors
- Excluding broad legal duties, liabilities and legal recourse
The Operational Multisig Wallet will be used to receive funds from an unincorporated DAO once a project or grant is approved and distribute it to teams or Contributors based on the work they execute. It will also be used to cover basic business costs associated with the operations.
@layerzero (MakerDAO / Powerhouse)
- Design of a standard, open source, multisig legal & operational agreement for Maker SubDAOs and Ecosystem Actors
- 10k DAI
As part of this restructuring process, current operational units (“Core Units”) are transitioning to external semi-independent actors (“SubDAOs”) or independent actors (“Ecosystem Actors”). These actors will be independent businesses and closely resemble the concept of Cybernetic Organizations (“BORGs”) recently published by Delphi Labs.
Powerhouse is a spin -off of the former Sustainable Ecosystem Scaling (SES) Core Unit of MakerDAO. Powerhouse will build open source operational platforms for DAOs and specifically for MakerDAO the DAO Universal toolkit, a unified software system that formalizes all governance processes and interactions between actors in the Maker Ecosystem.
The DAO toolkit will also encode Ecosystem Agreements, which will formalize and standardize all terms and commitments between actors involved in the Maker ecosystem.
These terms and commitments will be primarily enforced through gamified economic incentives and a reputation system to be developed by Powerhouse. Technological guarantees and game-theoretical incentives will replace traditional legal or corporate enforcement mechanisms.
Powerhouse, as many emerging SubDAOs and Ecosystem Actors, will be structured as an open collaboration network that enables permissionless contributions of pseudonym actors for the production of OSS.
Contributors will assume a specific, pre-defined role (e.g. budget manager, software development, business development). Each role will require a template that defines the purpose of his role, accountabilities and decision authorities. Some functions may additionally require a legal wrapper for the purpose of holding IP assets, issuing or distributing tokens, entering into agreements with Contributors or third parties, etc.
Powerhouse intent is to subcontract the design of these templates and wrappers to experts of the crypto legal community, “dog food” and iterate them. They will be later implemented as standard agreements for the wider Maker ecosystem through the DAO Toolkit.
The first agreement /wrapper to be designed is a Multisig Participation Agreement / wrapper for Operational Multisig Wallets.
The long term objective of this project is to build the necessary legal, operational and technological infrastructure for Contributors to start providing value in decentralized ecosystems, in a fast and secure way. Such as Airbnb, Uber and other companies of the sharing economy opened the gates for new participants or created new markets themselves, an easy to use, open source legal template and wrapper library will facilitate self organization of pseudonym contributors in web3 economies.
The legal templates will define team roles, commitments, accountabilities and decision authorities. They will also be used to structure relationships between different roles, defining terms for providing services (e.g. business or software development) or acquiring them (e.g. legal, operations, payroll).
On the other hand, legal entities will be required to “wrap” specific functions that require a separate legal personhood for purposes such as holding specific assets, managing tax liabilities, signing contracts with third parties or providing liability protection for its members.
Agreements and templates will be web3 compatible, mapping off chain decision authorities with onchain multisig permissions, and integrating these with incentive and reputation systems.
By defining ground rules and commitments and structuring the interaction of Contributors with DAOs, personal liability exposure and legal risks are drastically reduced. It reduces the risk of potential disputes in the future. It facilitates trust - minimized engagement with unknown, anon actors. All in all, it enables permissionless contribution, with high degrees of freedom and accountability.
The deliverable for this RFP is::
a) Design of a Multisig Participation Agreement for the Operational Budget Multisig Wallet
This deliverable must be accompanied with a description sufficient for external third parties with no background knowledge of this Request for Proposal to be able to understand the instrument, execute and terminate it.
Define roles, authority lines and permissions of individual signers
Manager role (“Budget owner”)
- Executive power to add or remove multisig signers
- Instructs “Administrators” to execute or block payments (offchain)
- Can veto transactions or streams
Administrator role (Multisig signer)
- Has signing authority on multisigs
- Follow instructions from the Manager / Budget Owner.
- If the Administrator deviates from instructions, there is no legal recourse from the Manager / Client. Adherence to policies will be enforced through incentives and reputation.
- Deliver work
- May or may not have a manager or administrative role
- Legal recourses between Contributor and Customer are excluded
- Accountability of Contributors mainly incentivized through gamification rewards and reputation
- Contributors will build reputation that will give access to benefits ( e.g. higher tiers of project budgets)
- Clients can “ slash” reputation of Contributor to penalize bad behavior
- Once payment is sent, Client or Manager has no legal recourse to get funds back
- If payments withheld because of unsatisfactory work, Contributor has no legal recourse
- Work produced will be open source licensed and assigned to a given entity
- Ability to receive funds from an unincorporated DAO
- Funds can be in stablecoin (DAI) or later in own token
- Ability to make direct payment to:
- Contributors (without invoice)
- Other actors in the DAO ecosystem (without invoice)
- Contributors or other actors through a payment processor (with invoice generated to the payment processor)
Qualified code deference principle (or a variation thereof):
- Results of the operations of smart contracts / blockchain transactions are legally binding
- Accept prioritization of technological guarantees and game theoretical incentives to legal remedies
- Exclude legal recourse between and against multisig signers
“Ownership of Funds”
- The customer (e.g. MakerDAO) has no control over the funds in multisig nor is beneficiary
- Once funds are received, the Customer has no legal recourse to recover the funds
Exclude broad encompassing duties and liabilities such as:
- fiduciary duties
- partnership status
- right to represent one another
- product liability risk from work provided by external contractors
- waive legal claims between multisig signers and contributors
- Multisigs don’t build capital
Appropriate Jurisdictional choice
A lightweight legal wrapper might be additionally needed for (not part of this RFP):
- Managing potential tax obligations incurred by multisig transactions
- Providing additional liability protection for its members
- Enter into agreement with Contributors and pay them in crypto or fiat
- Enter into agreements with service providers and pay in fiat