Attached is the working Draft of the By-Laws for comment. Please cite the particular Article you seek to comment on via separate postings for the particular Article, so as to avoid conclusion.
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BY LAWS OF ETHEREUM NAME SERVICE DECENTRALIZED AUTONOMOUS ORGANIZATION
Adopted: ___________________, 2022
TABLE OF CONTENTS
[To be created]
BY LAWS OF ETHEREUM NAME SERVICE DECENTRALIZED AUTONOMOUS ORGANIZATION
ARTICLE I - DEFINITIONS
“Acts” means the Foundation Companies Act of 2017 of the Cayman Islands (as amended) and the law applicable to Exempt Companies.
"Articles" shall mean the Articles of Association of The ENS Foundation
“DAO” shall mean the Ethereum Name Service Decentralized Autonomous Organization, incorporating its Constitution, as expressly set forth herein. DAO may also be referred to as the “council” when dealing with the Foundation Company.
“Foundation Company” shall mean The ENS Foundation, a Foundation Company limited by guarantee with no share capital, formed pursuant to the Foundation Companies Act of 2017 (as amended).
“MOA” shall mean the Memorandum of Association of the Foundation Company and its “Articles”, which are incorporated by reference, as if expressly set forth herein, in full force and effect, but is amended herein, as long as such amendments are not inconsistent.
ARTICLE II - DAO MEMBERS
Section 1. DAO shall consist of all those who possess at least one $ENS token (i.e., Tokenholders).
ARTICLE III - BOARD OF DIRECTORS
Section 1. Power of Board and Qualification of Directors.
The DAO shall be managed by the Foundation Company Directors, in compliance with the Acts, MOA, and Articles, and these By-Laws. Each Director shall be at least eighteen years of age; no disqualifying attributes under Cayman Islands law; no personal financial insolvency for the past 10 years; no convictions or guilty pleas for mishandling of funds or embezzlement of any organization; and have not been involuntary removed or forced to resigned from any DAO.
Section 2. Number and Composition.
a) The Board of Directors shall have at least one director. A Director shall serve for a period of three years from the date appointed and may be reappointed by a vote of the DAO, pursuant to an open election consisting of other nominees, as proposed by the DAO. Commencing in January 2024, the terms of the Directors shall rotate, so that at least one Director’s term and appointment shall be up for a vote. The Board of Directors is not required to accept the resignation of a Director for their resignation to take effect.
(b) Any or all of the Directors may be removed with or without cause by vote of a 3/5th majority of the DAO or a majority vote of the Directors in writing and noticed to the DAO. Removal for cause shall include, but is not limited to, failure of any Director to fulfill his/her fiduciary duties or a violation of the Acts, or for unlawful or illegal conduct detrimental to the best interests of the DAO. If a Director’s conduct is perceived not to be in the best interests of the DAO, but does not rise to the level to justify removal, the Director may be formally censured by a majority vote of the DAO.
Section 3. Newly Created Directorships and Vacancies
Newly created Director positions, whether from an increase in the number of Directors or vacancies for any reason, shall be filled by vote of a majority of the DAO, which shall include ranked voting, if appropriate. Directors elected to fill a directorship shall hold office until their successor have been elected and qualified. Directors may not vote for their removal, compensation, or benefits in a Board of Directors meeting or DAO election. In such cases, a Director’s votes delegated to them shall be released for the DAO vote.
Section 4. Action by the Board of Directors.
(a) Except as otherwise provided by law or in these By-laws, an Act of the Board of Directors means action taken at a meeting of the Board at which a quorum is present and by vote of a majority of the Directors present at the time of the vote.
(b) The following actions require approval by two-thirds vote of the entire Board of Directors and the DAO: the purchase of real property outside of the Cayman Islands.
(c) Any action required of, or permitted to be taken by, the Board of Directors or any committee thereof may be taken without a meeting, if all members of the Board or the committee consent to the adoption of a resolution authorizing the action. The resolution and the written consents shall be filed with the minutes of the Board or committee. Consents may be provided: (i) in a writing signed by the Director or committee member either in hard copy or by affixing a signature by any reasonable means (e.g., fax signature); (ii) by e-mail that includes information from which the recipient can reasonably determine that the transmission was authorized by the Director or committee member, or (iii) verifiable web3 transaction. The Board of Directors may retroactively approve a resolution by unanimous vote, as long as it is not prohibited by the Acts, MOA, or Articles.
(e) Any or all Directors, or any committee members, may participate in a meeting by means they deem to be appropriate. Participation by such means shall constitute presence in person at a meeting provided that all persons participating in the meeting can receive such communication at the same time and each individual may participate in all matters before the Board or committee, including, but not limited to, proposing, objecting to, and voting upon a specific action taken at the meeting.
Section 5. Annual Auditors’ Report
At the Annual Meeting, the Board of Directors shall present a report by an independently certified public accounting firm selected by the Board, showing the following in appropriate detail:
(a) the assets and liabilities, including the funds held on behalf of the DAO;
(b) the principal changes in assets and liabilities, including funds;
(c) the revenue or receipts of the DAO, both unrestricted and restricted to particular purposes; and
(d) the expenses or disbursements of the DAO for both general and restricted purposes.
The Annual Auditors’ Report must provide the above information as of the end of the calendar year period and reported to the DAO not more than 30 days thereafter. The Annual Auditors’ Report shall be filed with the records of the DAO and a copy included in the minutes of the Annual Meeting.
ARTICLE IV - COMMITTEES
Section 1. Committees
The DAO may, from time to time, establish or dissolve committees, working groups, or subgroups as is necessary to carry out the DAO’s mission and operations, which is to be accomplished by a Social Proposal vote. The following are the standing working groups: 1. Meta-Governance Working Group; 2. ENS Ecosystem Working Group; 3. Community Working Group; and 4. Public Goods Working Group. If an active proposal is put forward to dissolve a working group, all working group funds, including outgoing payments, within that working group, are to be frozen with immediate effect, pending the outcome of the vote. Upon the dissolution of a working group, any and all unspent working group funds from that working group, at the time of dissolution, must be immediately returned to the DAO treasury, without delay.
Section 2. Working Group Stewards
- Each working group shall be managed by five stewards (hereafter a ‘ Steward ’ or ‘ Stewards ’).
- Stewards will be elected, unless otherwise stated in these rules, to serve within working groups for a set period of time (hereafter known as a ‘ Term ’ or ‘ Terms ’).
- There shall be two Terms each calendar year:
a. The first Term commences at 9am UTC on January 1 each year and ends immediately prior to the commencement of the second Term (‘ First Term ’); and
b. The second Term commences at 9am UTC on July 1 each year and ends immediately prior to the commencement of the First Term of the following year (‘ Second Term ’).
- Stewards are responsible for managing the operations of each working group.
- The responsibilities of Stewards include, but are not limited to:
a. Managing operational tasks related to the administration of a working group;
b. Maintaining a description that sets forth the focus and intent of the working group;
c. Developing working group goals for the Term and providing a clear road map for achieving those goals, to be published in the ENS governance forum within the first 30 days of a Term;
d. Approving the creation and dissolution of sub-groups or workstreams within a working group to undertake work and/or carry out specific projects or tasks;
e. Requesting working group funds from the DAO; and
f. Approving and making funding available to sub-groups, workstreams, or contributors within a working group.
g. To request working group funds, Stewards of all working groups will collaborate to submit an active executable proposal, as defined by the ENS governance documentation (‘ Collective Proposal ’), to the DAO within the final 15 days (inclusive) of the months of January, March, July, and October each calendar year (each a ‘ Funding Window ’).
- In order for a working group to have a funding request included in a Collective Proposal submitted to the DAO during a Funding Window, the funding request must have passed as a Social Proposal in the same Funding Window.
- In the case of an emergency, where working group funds are needed by a working group outside of a Funding Window, an Executable Proposal may be submitted at any time by a Steward of a working group to request funds from the DAO.
Section 3. Steward Eligibility and Nominations
- Any individual is eligible to nominate themselves to be a Steward of a working group within the DAO (‘ Eligible Person ’ or ‘ Eligible Persons ’).
- To be eligible to be included in the ballot for First Term elections of a given year, Eligible Persons must nominate themselves between 9am UTC on December 6 and 9am UTC on December 9 (‘ First Term Nomination Window ’).
- To be eligible to be included in the ballot for Second Term elections of a given year, Eligible Persons must nominate themselves between 9am UTC on June 6 and 9am UTC on June 9 (‘ Second Term Nomination Window ’).
- An Eligible Person may nominate themselves to become a Steward of a working group or working groups during the First Term Nomination Window or the Second Term Nomination Window (each a ‘ Nomination Window ’), by meeting the requirements set out in a call for nominations posted in the relevant working group category of the ENS governance forum.
- An Eligible Person who completes the steps outlined above during a Nomination Window and receives 10,000 signed votes to support their nomination will be included in the ballot as a nominee in the election for Stewards that takes place following that Nomination Window (‘ Nominee ’).
Section 4. Steward Elections
- Elections for working group Stewards for the First Term of a given year will take place by a ranked-choice vote of governance token holders using signed messages and will be open for 120 hours, commencing at 9am UTC on December 10 each year (‘ First Term Election Window ’).
- Elections for working group Stewards for the Second Term of a given year will take place by a ranked-choice vote of governance token holders using signed messages and will be open for 120 hours, commencing at 9am UTC on June 10 each year ( ‘Second Term Election Window ’).
- The top-ranked Nominees from each working group vote held during a First Term Election Window or a Second Term Election Window (each an ‘ Election Window ’), will fill any available positions for the role of Steward for those working groups for the Term immediately following an Election Window, based on the order in which they are ranked in each working group vote.
- A Nominee elected to serve as a Steward may not take up the role of Steward for more than two working groups during a single Term.
Section 5. Delay of Nominations or Elections
- In the event that nominations or elections for Stewards take place after a Nomination Window or after an Election Window, the nomination process or elections shall take place, as otherwise prescribed in Section 4 above, as soon as is practicable after the missed Nomination Window or missed Election Window.
- In the event that an election takes place outside of an Election Window and after the commencement date of a new Term, outgoing Stewards from the previous Term shall stay in their positions as working group Stewards until immediately prior to 9am UTC the day following the end of the election, which, for the avoidance of doubt, is 120 hours after voting in those elections commenced.
- In the event that an election takes place outside of an Election Window and after the commencement date of a new Term, newly elected Stewards will assume the responsibilities of stewardship within working groups at 9am UTC the day following the end of the election for the remainder of that Term.
Section 6. Core Team Stewards
- For the First Term, commencing January 1 2022 at 9am UTC, each working group will include two Stewards who are core team members of True Names Limited (Singapore) (‘ TNL ’), as selected by TNL and not subject to the Steward nomination and election process outlined above.
- For the Second Term, commencing July 1 2022 at 9am UTC, each working group will include one Steward who is a core team member of TNL, as selected by TNL and not subject to the Steward nomination and election process outlined above.
- For the First Term of the following year, commencing January 1 2023, and for all Terms thereafter, all Stewards must be elected and appointed in accordance with the rules set out in above.
Section 7. Removal and Replacement of Stewards
- Stewards may be removed at any time by:
1. a Social Proposal passed by the DAO; or
2. a simple indicative majority vote among the Stewards of a given working group, with the outcome of the vote communicated in the relevant working group category of the ENS governance forum.
- Stewards may step down from their position at any time by communicating their intention to step down in the ENS governance forum.
- In the event that a Steward is removed, steps down, or is unable to continue as a Steward, for whatever reason, prior to the end of a Term, any vacant positions will be filled for the remainder of a Term by the next highest ranked Nominee(s) in a given working group from the most recent working group vote in the most recent election for Stewards.
- In the event that a Steward steps down or is removed prior to the end of a Term and is a member of the core team of TNL in accordance with the above rules in this section, the vacant position(s) will be filled by a core team member or team members of TNL, as selected by TNL.
- Any Steward selected by TNL in accordance with the above rules in this section, can be removed by TNL at any time prior to the end of a Term, for any reason, and replaced by another core team member for the remainder of that Term.
Section 8. Compensation for Stewards
- Elected Stewards are eligible to receive fair compensation for their work as a Steward.
- All requests for Steward compensation must be detailed in a Collective Proposal for working group funds submitted to the DAO in accordance with the above rules in this section.
- Stewards may not receive compensation for their role as a Steward outside of that compensation expressly provided for in a Collective Proposal submitted to the DAO in accordance with rule 10.2.
- Stewards selected by TNL are not eligible to receive compensation from the DAO or working groups for their work as a Steward.
Section 9. Grants
Section 10. Elections
ARTICLE V - CONTRACTS, CHECKS, DRAFTS AND BANK ACCOUNTS
Section 1. Execution of Documents/Contracts/Loans
The Board of Directors may authorize any officer or officers, agent or agents, in the name of and on behalf of the DAO to enter into any contract or execute and deliver any instrument. Such authority may be general or confined to specific instances, but unless so authorized by the DAO, or expressly authorized by these By-laws, no officers, agent or employee shall have any power or authority to bind the DAO to any contract or engagement or to pledge its credit or to render it liable pecuniarily in any amount for any purpose.
Section 2. Checks, Drafts, etc
All check, draft and other order, or crypto wallet payment of money out of the funds managed by the Foundation Company, and all notes or other evidences of indebtedness of the Foundation Company or DAO, shall be signed on behalf of the DAO in such manner as shall from time to time be determined by resolution or policy of the Board of Directors.
Section 3. Deposits
All funds of the DAO not otherwise employed shall be deposited from time to time to the credit of the DAO in such banks, trust companies or other depositories as shall from time to time be determined by resolution or policy of the Board of Directors.
ARTICLE VI - INDEMNIFICATION AND INSURANCE
Section 1. Authorized Indemnification
Unless clearly prohibited by law or Section 2 of this Article, the DAO shall indemnify any person (“Indemnified Person”) made, or threatened to be made, a party in any action or proceeding, whether civil, criminal, administrative, investigative or otherwise, including any action by or in the right of the DAO, by reason of the fact that he or she (or his or her testator or intestate), whether before or after adoption of this Section, (a) is or was a Director or Steward of the DAO, or (b) in addition is serving or served, in any capacity, at the request of the DAO, as a director or officer of any other entity created by or owned by the DAO. The indemnification shall be against all judgments, fines, penalties, amounts paid in settlement (provided the DAO shall have consented to such settlement) and reasonable expenses, including attorneys’ fees and costs of investigation, incurred by an Indemnified Person with respect to any such threatened or actual action or proceeding, and any appeal thereof to the fullest extent permitted by Cayman Islands law.
Section 2. Prohibited Indemnification
The DAO shall not indemnify any person, if a judgment or other final adjudication adverse to the Indemnified Person (or to the person whose actions are the basis for the action or proceeding) establishes, or the Board of Directors in good faith determines, that such person’s acts were committed in bad faith or were the result of active and deliberate dishonesty or deceit, and were material to the cause of action so adjudicated or that he or she personally gained, in fact, a financial profit or other advantage to which he or she was not legally entitled.
Section 3. Advancement of Expenses
The Foundation Company shall, on request of any Indemnified Person who is or may be entitled to be indemnified by the Foundation Company or DAO, pay or promptly reimburse the Indemnified Person’s reasonably incurred expenses in connection with a threatened or actual action or proceeding prior to its final disposition. However, no such advancement of expenses shall be made unless the Indemnified Person makes a binding, written commitment to repay the funds, with interest, for any amount advanced for which it is ultimately determined that he or she is not entitled to be indemnified under the Acts or Section 2 of this Article. An Indemnified Person shall cooperate in good faith with any request by the Foundation Company that common legal counsel be used by the parties to such action or proceeding who are similarly situated unless it would be inappropriate to do so because of actual or potential conflicts between the interests of the parties. The Indemnified Person shall execute a Common Defense Agreement with the Foundation Company.
Section 4. Indemnification of Others
Unless clearly prohibited by the Acts or Section 2 of this Article, the Board of Directors may approve indemnification as set forth in Section 1 of this Article or advancement of expenses as set forth in Section 3 of this Article, to a person (or the testator or intestate of a person) who is or was employed by the Foundation Company or who is or was a volunteer for the DAO, and who is made, or threatened to be made, a party in any action or proceeding, by reason of the fact of such employment or volunteer activity, including actions undertaken in connection with service at the request of the Foundation Company or DAO in any capacity for any related entity.
Section 5. Determination of Indemnification
Indemnification mandated by a final order of a court of competent jurisdiction will be paid by the DAO. After termination or disposition of any actual or threatened action or proceeding against an Indemnified Person, if indemnification has not been ordered by a court, the Board of Directors shall, upon written request by the Indemnified Person, determine whether and to what extent indemnification is permitted pursuant to these By-laws. Before indemnification can occur, the Board of Directors must explicitly find that such indemnification will not violate the provisions of Section 2 of this Article. No Director with a personal interest in the outcome, or who is a party to such actual or threatened action or proceeding concerning which indemnification is sought, shall participate in this determination. If a quorum of disinterested Directors is not obtainable, the Board of Directors shall act only after receiving the opinion in writing of independent legal counsel that indemnification is permissible under the Acts and these By-laws.
Section 6. Binding Effect
Any person entitled to indemnification under these By-laws has a legally enforceable right to indemnification which cannot be abridged by amendment of these By-laws with respect to any event, action or omission occurring prior to the date of such amendment.
Section 7. Insurance
The Foundation Company may purchase Directors’ and Officers’ liability insurance or Fiduciary Liability insurance, if authorized and approved by the Board of Directors. To the extent permitted by law, such insurance may insure the Foundation Company for any obligation it incurs as a result of this Article or operation of law and it may insure directly the Directors, Stewards, employees or volunteers of the DAO for liabilities against which they are not entitled to indemnification under this Article as well as for liabilities against which they are entitled or permitted to be indemnified by the Foundation Company.
Section 8. Non-exclusive Rights
The provisions of this Article shall not limit or exclude any other rights to which any person may be entitled under law or contract. The Board of Directors is authorized to enter into agreements on behalf of the DAO with any Director, officer, employee or volunteer providing them rights to indemnification or advancement of expenses in connection with potential indemnification in addition to the provisions therefore in this Article, subject in all cases to the limitations of Section 2 of this Article.
ARTICLE VII - AMENDMENTS
These By-laws may be ratified, amended, or repealed by 3/5th majority vote of the DAO.
ARTICLE VIII - CONTROLLING AUTHORITY
To the extent there are substantive inconsistencies with these By-laws and other authority, the order of controlling authority shall be: (1) Acts, (2) DAO Constitution, (3) MOA, (4) Articles, then these DAO by-laws. Nevertheless, the DAO, pursuant to its authority may seek to amend the aforementioned, if permissible, to conform to these By-laws.