So I’ve been thinking about this whole situation, and let’s step back for a second here and abstract away from this particular election.
In my original pitch, I mentioned that one of major points of my agenda is to apply best practices and standards utilized by public companies in order to ensure transparency and that everything is done by the book. The regulatory landscape is shifting dramatically now, and supposedly pivot towards a different governance model in the form of Foundation might address those new challenges.
Looking at the Ooki DAO precedent. The US government no longer treats unwrapped DAOs as immune decentralized software protocols, they treat them as general partnerships where everyone who participated is liable.
If you look at actual CFTC filing you can see that they operate on pretty strict standards. Regulators specifically target the idea that DAOs can do whatever they want based on informal community consensus. In their own words from official press release:
By transferring control to a DAO, bZeroX’s founders touted to bZeroX community members the operations would be enforcement-proof—allowing the Ooki DAO to violate the CEA and CFTC regulations with impunity
source
Now, just hypothetically, if any kind of external regulator approaches ENS today assessing whether we are doing things the “right way”, what kind of conclusions can they draw from this election?
They will see an organization that claims to be a decentralized protocol governed by onchain voting. But in reality, when a definitive 2 to 1 (928k to 516k) token majority voters literary expressed onchain, the stewards use an uncodified “average support” metric, which was not included in the proposal and not included in the calculation mechanism of snapshot, to manually override the outcome.
I appreciate that fact that this metric was used in the past and considered to be sort of informal public knowledge, but regulators don’t care about informal knowledge. To an auditor, relying on unwritten rules and offchain dashboards to overturn a 64% token-weighted majority looks exactly like a centrally managed general partnership where a few insiders dictate the outcomes. It completely destroys the legal defense of decentralization.
I’ve been advocating for clear policies, management of conflict of interests and doing things by the book for years now. If this broad shift toward Foundation model would happen, to allow for better defense against regulatory bodies and general better interaction with web2 world, then starting this transition with this kind of precedent doesn’t seem like the best idea. It’s like handling the regulators the exact evidence they need to apply similar arguments to what happened in Ooki case.