I kind of agree that separate by-laws might not make sense, because decision-making authority primarily rests with the DAO but the directors also have their role, as representatives of the legal entity. Much of what has been incorporated so far can be used.
I definitely think they need to be separate. I think there is too much confusion already that the DAO and Foundation are 1-in-the-same. There needs to be clear distinction between the two.
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If theyâre going to be combined, they need to be Foundation bylaws, and in that case we should loop in Fenwick on it.
It may be simpler to have separate bylaws, though; the Foundation ones can be written by the lawyers and as straightforward as possible, while the DAO bylaws can cover day-to-day DAO operations (many of which will not involve the Foundation taking any action) and be more easily extended and amended.
Just to be clear - from a legal perspective they are one and the same. The Foundation is the legal entity for the DAO.
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If there is going to be one set of By-laws, it must recognized the DAOâs full authority. If there is going to be two sets of By-laws, then Fenwick should delete those articles that should be incorporated into and addressed in the Foundation By-laws.
I think we should pause further work until Fenwick has opined.
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I think that regardless of the issue of one or two sets, we could work on drafting the bylaws that would relate to the DAOâs day-to-day practice - extending EP4 to add rules around voting etc.
This is what is most interesting to me - and the biggest need within the DAO at the moment:
Are proposal processes outlined anywhere?
No, not as far as I can tell
@nick.eth I think it is nuanced. I would perhaps disagree that from a legal perspective they are âone and the sameâ for a number of reasons. Yes, the DAO (called the Council in the Foundation Articles) has been given significant authority to govern - based on very nuanced provisions and rules in the Articles, etc. But that nuance is important to the exact reason it was structured this way (legal ability to enter into contracts/agreements, limitation liability for DAO participants, ensuring compliance with tax requirements, etc. For example, the DAO appears to have zero authority over the Supervisor (currently DS Limited), whose job it is to make sure the Directors are doing their jobs in accordance with Cayman law, and the DAO appears to have zero influence on the provisions of General Meetings as required by the Foundation. I think this situation can be structured in a way where the DAO has significant influence/power over how the Foundation and Directors of the Foundation represents it, but I do not believe they are âone in the same.â (but as close to it as possible without diminishing those protections and risk mitigation measures that were built into the the original structure.)
I think your interpretation the first time was correct @bendi . I agree with you that they are 2 entities, and not, in fact Foundation == DAO, DAO == Foundation. The DAO (via the Council as built into the Foundation Articles of Association) has significant power over the Foundation and the Directors. But there are a significant amount of reasons why they are not the same (see my other posts in this thread for more details.)
I would strongly suggest the bylaws for the DAO and Foundation be separate, and the distinction made clear for one simple reason: if you intertwine them too closely, it creates a confusion where people assume the director(s) of the Foundation are the âdirectorsâ of the DAO, a perception Iâve seen tons of people have already.
The DAO can replace the supervisor. In general, having limited power does not mean they are not the same entity from a legal perspective; members of a Foundation also have limited power, for example.
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@nick.eth. Yes - you are correct, the Council can appoint/remove the Supervisor. That is clearly stated in Articles and I made a misstatement there. However, irrespective of that one item, I still firmly believe they are not one-in-the-same and any documentation should be very clear about the nuance.
Copy/paste from the ENS website re âWhy to have a Legal Entityâ (i.e., the Foundation): https://docs.ens.domains/v/governance/the-ens-foundation:
Why have a legal entity?
Having a legal entity that represents the DAO in the âreal worldâ is valuable for a number of reasons:
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It provides limited liability to DAO participants for the actions of the DAO. Without a legal entity, participants may be individually held liable for anything the DAO as a whole does.
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It is capable of complying with taxation requirements - without a legal entity, DAO participants may be held liable for a proportion of the DAOâs income, even if they are not able to access these funds.
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It is capable of entering into contracts with other âreal worldâ entities, of holding assets (including IP rights), and so forth.
I agree with these statements from the website - and they are extremely important.
Simply because the Foundation ârepresentsâ the DAO in the real world, however, does not mean they are the same. If the two are conflated without being extremely specific, legalistic, and focused on the facts specific to the situation to which we are referring, we risk diluting the very protections the legal entity - the Foundation - provides. This can potentially putting at risk individual tokenholders for anything the DAO does as a whole, violating tax requirements, being liable for a portion of the DAOs income, along with some other potential items I can think of. Sorry to be hammering on about this, but, it is super important to get this correct.
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@inplco and @fig, please find an outline of the proposal process in the Governance Docs: Governance Process - ENS Documentation.
I would encourage everyone working on the bylaws to familiarize themselves with the existing content in the Governance Docs.
The DAO-Governance subgroup within Meta-Governance, which is currently where the bylaws groups sits, is welcome to continue to build on the starting point created at the time the DAO launched.
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The Foundation is a legal entity, the DAO is not a legal entity; but they are two separate entities and the Foundation has established itself as the legal face of the DAO. The Foundationâs object is to develop and incentive the growth of the DAO.
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Is that the case? I would imagine the Foundationâs sole purpose is to be a legal avatar for the DAO in the physical world. It shouldnât have any initiatives on its own that werenât directed to it explicitly by the DAO.
I thought @fig was asking about the grant proposal process which doesnât exist, not the ENS Governance proposals. Perhaps I misunderstood. ENS Governance proposal process already exists of course
A proposal is a proposal, whether itâs for a grant or not. Presently, grants should follow the outlined proposal process unless and until something more specific to grants is voted in by the DAO.
Yeah they need to be separated for obvious reasons. There needs to be a fourth category of proposals for Grants, with their own process.
Growth of the ENS is one of the many fundamental duties of the Foundation. Such a duty doesnât need a proposal or an explicit mention. The Foundation should not act on tangible governance steps (enact proposals without vote) on its own as it doesnât have the power but it can and should act in its given capacity to grow ENS (as a fiduciary duty).
(edited)