Second Draft of the ENS DAO By-laws for comment

berrios.eth · March 15, 2022, 5:25pm

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

In these Bylaws, the terms have the same meaning as defined in Article 1 of the Articles of Association of the ENS Foundation.

“Acts” means the Foundation Companies Act of 2017 of the Cayman Islands (as amended) and the Cayman Islands’ law applicable to Exempt Companies (as amended).

"Articles" shall mean the Articles of Association of Foundation Company, 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.

“Bylaws” shall mean these Bylaws herein.

"Council" means ENS Tokeholders.

“ENS DAO” shall mean the Ethereum Name Service Decentralized Autonomous Organization, incorporating its Constitution, as if expressly set forth herein. The ENS DAO may also be referred to as the “DAO” or “council”. Membership in the DAO consist of ENS Tokenholders who possess one ENS token, as evidenced by the ethereum blockchain.

"ENS Tokenholder" shall mean ERC-20 tokens that designates the weight of a holder’s voting rights.

“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 attached Articles, which is incorporated by reference, as if expressly set forth herein, in full force and effect, but is elaborated further herein, as long as such elaboration does not substantively diminished the intended effects of such Article.

ARTICLE II – ENS DAO

Section 1. Relationship between the ENS DAO and the Foundation Company*
The DAO is represented by the Foundation Company, which represents the DAO’s interests in connection with contractual and legal processes, including regulatory compliance, as well as those stipulated in the MOA. As specified in the Articles and adopted resolutions, the Foundation Company has delegated to the council certain rights and privileges, including the right to appoint or remove directors as well as the power to alter the Articles. Nothing herein obligates the Foundation Company to act contrary to or inconsistent with its rights and obligations, as set forth in its MOA…

Section 2. Controlling Authority
These bylaws are subject to the provisions set forth in other authority. In the event of any conflict between these By-laws and such authority enumerated herein, such authority shall supersede these By-laws and be controlling in the following order: (1) Acts, (2) MOA and Articles, and (3) DAO Constitution. Nevertheless, the DAO, pursuant to its authority may seek to amend or alter the aforementioned, if permissible.

ARTICLE III – FOUNDATION COMPANY DIRECTORS (This Article III is only an advisory to the Foundation Company)

Section 1. Power of Board and Qualification of Directors
The Foundation Company Directors, in their capacity to manage the affairs of the Foundation Company, is to help develop, incentivize, and support the growth of the protocol, decentralized network, and ecosystem – including the DAO, in accordance with the Acts, MOA, and Articles, and these Bylaws. Pursuant to the powers vested in the Council to appoint or remove one or more Directors of the Foundation Company by Article 15, these By-laws further detail the criteria and requirements of the DAO for being appointed to a Director position of the Foundation Company: (i) be at least 18 years of age, (ii) no disqualifying attributes under Cayman Islands law, (iii) no personal financial insolvency for the past 10 years, (iv) no convictions or guilty pleas for mishandling or embezzlement of funds of any organization, and (v) have not been involuntarily removed or forced to resign from any directorship, or similar executive or high-level position, within any organization.

Section 2. Number and Composition
The Foundation Company 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, with a 1% quorum and by a plurality of the votes cast. Commencing in January 2025, the terms of the Directors shall rotate, so that at least one Director’s term and appointment shall be up for a vote. Nevertheless, if a Director resigns prior to the expiration of his or her term, the Foundation Company Directors are not required to accept the resignation for the resignation to take effect.

Section 3. Removal of a Director
Any or all of the Foundation Company Directors may be removed with or without cause by either (i) a 1% quorum and a 3/5th majority of votes cast by the DAO (not including abstentions); or (ii) when a majority of the Foundation Company’s Directors recommend removal of a particular Director, they may provide notice to the DAO for the reasons thereof, in which case such Director may be removed with a 1% quorum and a simple majority of votes cast by the DAO (not including abstentions). The removal vote by the DAO shall be done after a 14-day cool down period from the date of an incident that gives rise to a removal action, but such period begins only after another director or a steward formally triggers it by notice, with a summary of supporting facts, to the DAO, so that the director to be removed has an opportunity to respond (such official notice thread is to contain only the notice and response, if any). The 14-day cool down period does not apply to the directors’ vote to remove another director. Removal for cause shall include, but is not limited to, failure of any Foundation Company 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 Foundation Company 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 by 3/5ths majority of the votes cast (not including abstentions), a Foundation Company Director shall be formally censured, if the majority votes casted by the DAO (not including abstentions) exceeds 50% but falls short of the 3/5ths required for removal. Two successful censure votes within five years shall result in the removal of the Foundation Company Director at issue.

Section 4. Newly Created Directorships and Vacancies
Newly created Foundation Company Director positions, whether from an increase in the number of Foundation Company Directors or vacancies for any reason, shall be filled by vote of a majority of the votes acts by the DAO, which shall include ranked voting, if appropriate. A Foundation Company Director elected to fill a directorship shall hold office until their successor have been elected and qualified. Foundation Company Directors may not vote for their removal, compensation, or benefits in a Foundation Company Directors meeting or DAO election. In such cases, any delegator that has delegated votes to the Foundation Company Director in question, is not prohibited from voting their votes on a proposal relating to the same.

Section 5. Annual Auditors’ Report
At the Annual Meeting, the Foundation Company Directors shall present a report by an independently certified public accounting firm selected by the Foundation Company Directors, 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 of the Foundation Company.

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 are 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] (Governance Process - ENS 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 in this Section 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, 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 Section 4.
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 in Section 4.
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 Section 4.

Section 7. Removal and Replacement of Stewards

Stewards may be removed, after a 14-day cool down period from the date of an incident that gives rise to a removal action, but such period begins only after another steward formally triggers it by notice, with a summary of supporting facts, to the DAO, so that the steward to be removed has an opportunity to respond (such official notice thread is to contain only the notice and response, if any), by:
a. a Social Proposal passed by the DAO; or
b. 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 of DAO assets [To be developed]

Application process.
Eligibility criteria
How to determine when a grant is handled by a WG or the whole DAO.
WG steward involvement and responsibilities for DAO-wide grants.

Section 10. Elections

There are three Types of Governance Proposals:

1. Executable Proposal: This is a proposal for a series of smart contract operations to be executed by accounts the DAO controls. These can include transfers of tokens as well as arbitrary smart contract calls. Examples of this include allocating funding to a workstream multisig wallet, or upgrading an ENS core contract. Executable proposals have a quorum requirement of 1% and require a minimum approval of 50% to pass.

2. Social Proposal: This is a proposal that asks for the agreement of the DAO on something that cannot be enforced onchain. Examples of this include a proposal to change the royalty percentage for the ENS secondary market on OpenSea, or a petition to the root keyholders. SocialS proposals have a quorum requirement of 1% and require a minimum approval of 50% to pass.

3. Constitutional Amendment: This is a social proposal that asks the DAO to amend the constitution. Your draft proposal should include a diff showing the exact changes you propose to make to the constitution. Rules for amending the constitution are set in the constitution itself, and currently require a quorum of 1% and a minimum approval of 2/3 of the votes cast to pass.

Minimum criteria to submit a Proposal:

ENS holders cannot vote or create proposals until they delegate their voting rights to an address. Delegation can be given to one address at a time, including the holder’s own address. Note that delegation does not lock tokens; it simply adds votes to the chosen delegation address. To enact an Executable Proposal you must have at least 100k ENS delegated to your address to submit the proposal, or find a delegate who has enough delegated ENS to meet the proposal threshold to propose on your behalf.

In order for a Proposal to pass, unless otherwise stated, a majority or plurality, depending on the number of choices provided, of votes cast of ENS tokens must vote in the affirmative. The current quorum requirements are:

Executable Proposals: 1%

Social Proposals: 1%

Constitutional Amendments: 1%

The purpose of this quorum is to ensure that the only measures that pass have adequate voter participation.

Voting on Proposals: Users can vote for or against single proposals once they have voting rights delegated to their address. Votes can be cast while a proposal is in the “Active” state. Votes can be submitted immediately using “castVote” or submitted later with “castVoteBySig” (For more info on castVoteBySig and offline signatures, see EIP-712). If sufficient affirmative votes are cast, then the proposal may be queued in the Timelock.

Proposals on Snapshot have a 5 day voting period. Once an executable proposal has been put forward, ENS community members will have a seven day period (the Voting Period) to cast their votes.

All governance actions are delayed for a minimum of 2 days by the timelock contract before they can be executed.

ARTICLE V - CONTRACTS, CHECKS, DRAFTS AND BANK ACCOUNTS

Section 1. Execution of Documents/Contracts/Loans
The Foundation Company Directors may delegate the authority to 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 delegated authority may be general or confined to specific instances, but unless so authorized by the Foundation Company Directors or its delegated authority to the DAO, or expressly authorized by these By-laws, no person, officer, 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 checks, drafts, other orders, or crypto wallet payments of funds or currencies 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 Foundation Company 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 Foundation Company 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 Foundation Company 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 Foundation Company 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 Foundation Company 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 Foundation Company 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 Foundation Company 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 Foundation Company 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 Foundation Company Directors are 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 - RATIFICATION AND AMENDMENTS
Each Article from Article II through Article VI must be ratified by 3/5th majority of the votes cast of the DAO to have effect and may be amended, altered, or repealed by 3/5th majority of the votes cast of the DAO. Where a particular Article fails to obtain the required 3/5ths majority of the votes cast, such Article may be redrafted and put up for another vote or deleted from the By-laws. Directors should abstain on the ratification vote of Article 2, as it would be a perceived conflict of interest.

carlosdp · March 15, 2022, 6:13pm

Yea, still conflating DAO Bylaws and Foundation Bylaws (which as I understand, TNL has retained a law firm to draft some already).

I’ll re-link my comment from the last thread here, still think it applies:

inplco · March 15, 2022, 6:38pm

I don’t see the relevance of your comment, my apologies. TNL can hire whoever they want for recommendations, yet ENS delegates and community are free to discuss the by-laws at their own discretion here in the forum. Your comment is in bad taste; you have dismissed the credentials and work of your fellow contributors with this line:

Then you dismissed yourself from the discussion with these words –

by admitting to having no clue about what is being discussed. I’ll suggest giving the comments a good read again since the issue of DAO =/= Foundation is contentious and important.

Probably about as irrelevant as the ‘lawyers claiming to lawyers’ here in your own words? Shall we treat your credentials at equal footing? Don’t be surprised if your comment gets overlooked again.

(Code of Conduct. We need it yesterday. I myself have breached it many times)

carlosdp · March 15, 2022, 7:01pm

“I gotta be honest, a lot of what I’m reading doesn’t make sense to me” wasn’t meant to mean “I don’t understand what is being said”, it was meant to mean “a lot of what is being said doesn’t seem to make sense / be accurate.” I’m not dismissing anyone’s credentials, I’m questioning whether the discussion is going to be fruitful with what seem to be stabs in the dark without concrete professional advice.

If this were a discussion on just DAO governance bylaws, this wouldn’t be an issue. But since the Foundation is being brought into this, an actual Caymans entity that exists in a country’s legal system, it’s probably smarter to actually have professional advice from people that know 1) how the actual Foundation was legally setup, 2) what the laws in the Caymans actually are and 3) case law that would affect how the relationship between the DAO and Foundation would be treated by those courts.

I would never guess at this stuff at a company I’m running, idk why the DAO should guess at this either.

Well that’s kinda my point, it may not even actually be a point of contention if it turns out that the way the Foundation was actually legally setup means that it is literally separate. I’m not talking about philosophy here, and I feel like law/philosophy was being conflated.

I don’t see how anything I’ve said would violate any reasonable Code of Conduct.

inplco · March 15, 2022, 7:11pm

In my personal opinion, DAOs will see a lot of friction in terms of their legal status because of inherent lack of hierarchy; this lack of hierarchy acts as a catalyst in offloading the liability back to the delegates; this is highly unusual and seen nowhere in traditional corporate law. To circumvent this, ENSF was created. It’ll be shortsighted to assume that the circumvention will be easy to achieve as we are finding out now. Off-loading liability to end users is not a sufficiently good legal state to be in and there are no precedents for such corporate structures so far. I am afraid there is no way but to get your hands dirty in the gory details when trying to establish a functioning legal framework for an entirely new species of corporate entities. I am not convinced that the TNL counsels will have a lot of new ideas on this since it is all very novel.

berrios.eth · March 15, 2022, 7:24pm

The Foundation Company and DAO are separate bodies and can speak for themselves.

Please familiarize yourself with Article 78 under the Alteration of Articles section of Articles of Association, which states, “these Articles may be altered by the Council (i.e., DAO) by notice to the Foundation Company . . . .” Having such authority, the DAO’s By-laws not only pertain to its operations but also can advise the Foundation Company of its position on certain issues.

I need not spell out my credentials or that of others who assisted in drafting these By-laws.

carlosdp · March 15, 2022, 7:35pm

I’m not arguing that these bylaws don’t say that, I’m arguing that they don’t practice that.

For example:

This part (and probably all of Article III actually) doesn’t seem to me to make sense to put into the DAO bylaws, because these are almost certainly governed by the Foundation’s bylaws (which if the Cayman’s is anything like Delaware, are registered with the relevant governing agency). So, if this came to court, the judge isn’t going to go by what is voted on in here, it’s going to go by what bylaws the Foundation has officially registered.

Generally speaking, you don’t want novel ideas in actual legal documents, you want as little novelty as possible in order to maximize for predictability against existing case law. This is literally the reason all US tech startups are established in the state of Delaware and use the same incorporation documents (to the point this process is now automated).

This is what I’m saying, I don’t understand why there’s so much legal discussion in these forums when there need not be. The DAO is governed by smart contracts and internal governance, I’m trying to recommend we concentrate on that and not keep discussing Foundation bylaws for when (as far as I know) none of us are practicing corporate lawyers.

Not trying to denigrate anybody, I’m simply trying to be a voice of reason and bring us back to earth here a bit

inplco · March 15, 2022, 7:39pm

The delegates voting on proposals and contributors writing the codes however are not above law and can be prosecuted. I am sorry but not having a legal discussion is not an option, not for a > $1b DAO. Code is not law, not yet.

berrios.eth · March 15, 2022, 7:42pm

You ignored the heading: ARTICLE III – FOUNDATION COMPANY DIRECTORS (This Article III is only an advisory to the Foundation Company)

In addition, the council (i.e., DAO), under Article 15, has the power to appoint or remove one or more directors of the Foundation Company, so the DAO advising the Foundation Company, in Section 2, is appropriate.

carlosdp · March 15, 2022, 8:08pm

You’re right, I did miss the heading. I’m still confused why this is inside DAO bylaws instead of a separate recommendation for the Foundation bylaws.

Again, not advocating for not having a discussion, just advocating that the discussion really has to include legal counsel, precisely because it’s a billion dollar DAO. Not starting with recommendations from retained counsel seems ludicrous to me, especially since it seems (based on @nick.eth’s comment) that some counsel has already been retained. (And again, if it were just the DAO bylaws we were talking about here, this wouldn’t be necessary, which is why I keep advising to separate the two discussions)

I don’t want to go back and forth and derail your thread further, doesn’t seem productive. I’ll bow out here for now to leave room for others comment their thoughts on the original post.

berrios.eth · March 15, 2022, 8:15pm

To make one last point, as each substantive Article must be ratified separately, the DAO is free to include it or reject it, so let’s give them that option.

nick.eth · March 16, 2022, 12:12am

This isn’t possible under the foundation’s AOI.

This is included twice.

ENSPunks.eth · March 16, 2022, 12:16am

Bylaws are not “registered”, or recorded, with any “governing agency”, not in Cayman Islands nor in Delaware.

There is significant discussion in the First Draft thread, where you initially commented, related to the pros/cons of having a singular set of Bylaws for the Foundation only or one set of Bylaws for the Foundation and another set of Bylaws for the DAO/Council. Most importantly, there is nothing wrong with either approach.

You are not wrong, by using 2 sets of Bylaws it is possible we have some overlap, this is an example of an issue that was previously raised and discussed in the First Draft thread. Please note, in response to those discussions @berrios.eth drafted a section on point, specifically (Article II. Section 2) enumerating the controlling authorities in the instance there are any conflicts between any documentation.

I would encourage you to try to look at it from the view point that this traditionally closed off process being discussed and completed transparently, and also being opened up to input from an entire community. Essentially you, and many other non-lawyers, are for the first time seeing how the sausage is made, naturally this is going to result in a lot of confusion, questions and discussion. A phrase I often hear in tech comes to mind, it’s a feature not a bug.

@berrios.eth has contributed a non-trivial amount of time and effort, and produced quality work product. @berrios.eth has also been open-minded and thoughtful with his responses to suggestions, requests for revisions, questions, and concerns on the merits (also a requiring a non-trivial amount of time). Finally keep in mind, the draft DAO Bylaws are just that at this time, a non-final 2nd draft open to possible additional revisions.

berrios.eth · March 16, 2022, 12:32am

I did not realize the directors did not have the power to remove another director, which seems at odds from their fiduciary duty, but I’ll reword it. I reworded it, because I think the directors’ input is important in certain cases, in the exercise of their fiduciary duties.

As to Executable Proposals, I see. Not sure how it was done, but I’ll fix it.

nick.eth · March 16, 2022, 12:48am

I still think it’s odd to have article III, personally. Why would the DAO “advise” the Foundation, when they can instruct the Foundation to adopt certain bylaws (and will have to do so, once they’ve been written up anyway)?

berrios.eth · March 16, 2022, 12:58am

That is certainly true and I gave it a lot of thought, but thought it better if the Foundation Company would take Article III into account when drafting its own and work with the DAO, after consultation with its counsel, on the issues addressed.

alisha.eth · March 16, 2022, 9:52am

@berrios.eth is there a call associated with this post?

Based on this thread and the previous one, it looks like there are fundamental disagreements that are likely best resolved in a voice conversation before progress can be made on the by-laws.

Can you please suggest two times (at least a few hours apart) that suit you for a call over the coming days and we can start coordinating from there.

berrios.eth · March 16, 2022, 2:33pm

I’m not sure what you mean when you say, “it looks like there are fundamental disagreements.” It’s an ambiguous term, but if it is fundamental, an important point, please let the community know the full context of the points you want to raise, so they can be addressed.

Unfortunately, I don’t see a need for a telephone call, as it has its limitations. Having participated in over a thousand settlement conferences and mediations, I found phone calls (or face-to-face meetings) are only effective when decisionmakers with full authority actively participate. I am not a leader in the DAO or a decisionmaker; I do not speak for the DAO.

I have no agenda and have sought compromise and cooperation on all issues while trying to be reasonable and keep the roles of the DAO and the Directors in mind, so as not to undermine either. I have defended both when appropriate.

I have kept discussions in the open on all substantive issues. Members of our community have the right to participate, to make their voices heard, and to have issues explained and questions answered. I have included language that the community felt was important, even though I disagreed. It’s important that discussions be in a medium that is open and that all can readily access and comment on. Doing so in writing allows people to contemplate what they want to say and how to say it, to research, read referenced documents, make suggestions, or just let us know how they feel.

Recently, I and others have spent time a lot of time and effort shepherding the [EP6] process in the midst of a fractured community. Many of those people have also spent time on the By-laws. Both times, I was asked to assist, to coordinate, to draft something. I did not do it myself; it was a partnership of the willing. I have reached out to some for assistance, some responded and some have not, but that was there choice.

I welcome your contribution.

berrios.eth · March 16, 2022, 2:38pm

Please note that I edited my comment:

ENSPunks.eth · March 16, 2022, 4:26pm

I suggested coordinating a chat in the First Draft Thread because of the volume of participation/long form comments, and suggested we start with a list of topics. Nick responded with the following (some of which has definitely been incorporated into this 2nd draft, which I haven’t finished reviewing in its entirety) :

Proposal process
a. Format of a proposal
b. Proposal lifecycle states: Draft, Active, etc. See Governance Process - ENS Documentation
c. Criteria for advancing to each stage in the process.
d. Who posts votes on Snapshot and how
e. Acceptable voting strategies (simple voting, ranked choice, etc) and how they are selected
f. If and how successful snapshot votes can be combined for onchain voting
g. Handling Snapshot proposals put forward outside this process
Grants
a. Application process.
b. Eligibility criteria
c. How to determine when a grant is handled by a WG or the whole DAO.
d. WG steward involvement and responsibilities for DAO-wide grants.