[Temp Check] Reimbursement of eth.limo's ongoing legal fees

DAO-Wide Temp Check
1

Summary

This proposal aims to reimburse eth.limo for ongoing legal fees related to the operation of the eth.limo/eth.link gateway services.

Background

The Human Costs of Public Goods

At eth.limo we continuously strive to deliver a high quality ENS gateway experience. We understand the critical utility that our service provides and we have dedicated countless hours to developing and maintaining the gateway infrastructure that powers thousands of dApps and dWebsites alike.

Speaking beyond purely technical requirements, one aspect of operating eth.limo that is often overlooked is the human cost. We are a small team with limited resources who are dedicated 24/7 to ensure that we respond to support requests in a timely fashion, work with other cutting edge ecosystem projects for integrations, and provide on-call availability for any server-side issues that might arise. In addition, we are constantly handling abuse complaints and other matters that often go unmentioned.

We believe in public goods and the utility they provide, which is why we have sacrificed time with friends and family in order to fulfil our obligations to the ENS and broader Web3 communities by constantly working to ensure a stable and available user experience.

The Legal Costs of Public Goods

Operating public infrastructure comes with a unique set of challenges, many of which we were not expecting, such as enforcement and dispute-related legal fees. Being on the frontlines of bridging Web2 → Web3 means that we are often the first point of contact for law enforcement, abuse complaints, and legal and regulatory requests. As one can imagine, this quickly begins to take a toll on our financial resources and mental health.

At present, eth.limo has been labouring under US federal requests, as a third-party, that has dragged on for months and will likely continue to do so well into 2025. We are currently unable to provide further details regarding the nature of this matter, but rest assured, as soon as we are permitted to, we will provide a more fulsome summary to the Web3 community.

As a US company, we are legally required to cooperate with the US Federal Government in response to certain types of lawful requests. Such required compliance has proven to be an extreme financial burden in the form of fees and expenses from our lawyers and emotional distress not just on us individually, but to our families as well. We negotiated significant discounts from our counsel, who are well-versed in Web3, and who recognize the importance of eth.limo and the significant public good service it provides.

At present, we have no way to anticipate expected future legal costs associated with this specific set of legal requests, nor are we able to forecast any additional legal matters or proceedings that may arise as a result of maintaining eth.limo as a public good. This has the indirect effect of limiting our ability to grow and scale the eth.limo service, as well as to pursue future plans relating to additional integrations and roadmap efforts.

To put this into perspective, we have already spent close to $250k USD in legal fees over the past few months. Without additional funding, this very likely could consume our remaining financial resources, leaving us without the ability to continue to operate eth.limo as a public good.

Funding Request

Total amount: $240,632.38 USDC

Conclusion

By approving this compensation, ENS DAO acknowledges the importance of providing eth.limo with reimbursement of its legal fees so it can continue to operate a free and public ENS gateway that enables users to access Ethereum-native dApps and content.

14 Likes
2

I support this reimbursement and will be voting for. Thank you for all that you do.

6 Likes
3

I 100% support this reimbursement, as well reimbursing them for future legal costs.

As they correctly point out, the money is an issue (that we should quickly remedy), but there’s also a real human cost. I salute the EthLimo team for their sacrifices and all they have done for ENS.

EthLimo is an amazing group of people who have served the ENS community extremely well for years. They’re so consistent in their quality of service it’s something we don’t have to think about. (Side note: On the topic of service providers graduating or having a higher service provider tier, EthLimo is a great candidate for that.)

Do we need a DAO legal fund?
Both ENS Labs and now EthLimo have requested reimbursement for legal costs related to their ENS work. Often, there are constraints on what people can say publicly about an ongoing case, which makes making public requests to the DAO tricky, not to mention time consuming for the requesters and the delegates trying to assess the request on more limited information.

This makes me wonder if the ENS DAO should create a legal fund with a small group of people who can hear more details in private, more easily negotiate amounts, and then approve legal reimbursements below a certain amount. Such a fund could have annual limits, reimbursement limits, quarterly reporting, etc. Maybe even an existing working group (Metagov?) could take on the task.

7 Likes
4

I support this proposal too.

But I am a bit concerned about a few things.

You mentioned:

have already spent close to $250k USD in legal fees over the past few months.

And you are now asking for less than that.

How will you guys manage if just few months is over $250k USD in legal fees? This does not seem to scale and the requested help seems inadequate.

Am I missing something?

As a US company, we are legally required to cooperate with the US Federal Government in response to certain types of lawful requests

I guess I am stating something you must have already considered, but why do you run this as a US company? Runnign such a service as a US company seems to put an unecessary and possibly unbearable pyschological and financial stress on you.

Isn’t there a better solution?

P.S. I mostly agree with what @brantlymillegan says. Having a DAO legal fund may be helpful. But IANAL.

1 Like
5

And you are now asking for less than that.

How will you guys manage if just few months is over $250k USD in legal fees? This does not seem to scale and the requested help seems inadequate.

The requested funding is the exact amount of money that we’ve spent over the last few months which is $240,632.38. We’re trying to be respectful and transparent so that we’re not over-reaching, under the assumption that we may produce future proposals to cover additional legal expenses. However, there’s no way for us to expect or anticipate what our future legal expenses may be. Reimbursement of this will allow us to continue to operate the eth.limo/eth.link service until we can budget for next years planned service provider stream.

I guess I am stating something you must have already considered, but why do you run this as a US company? Runnign such a service as a US company seems to put an unecessary and possibly unbearable pyschological and financial stress on you.

The entire team is located in the US which is why we have a US entity. To my understanding regardless of the company’s location we’d still be be legally required to cooperate with the US Federal Government in response to certain types of requests.

2 Likes
6

Thanks for the honest response. Appreciate it.

You may not be able to explain why those legal costs rumped up but can you at least explain a bit more about their nature? is it something that can recur and will keep on gathering in the future?

To my understanding regardless of the company’s location we’d still be be legally required to cooperate with the US Federal Government in response to certain types of requests.

Again IANAL. So definitely not qualified to give any advice here. But if you can suddenly ramp up such scary legal costs perhaps the structure/location/something can be optimised to protect both your mental state but also your, and if the DAO helps you, the DAO’s wallet.

2 Likes
7

We’ve provided all of the information that we can at this time. Once we can freely speak about this we’ll give a lengthy “post-mortem”.

We welcome any sound advice and guidance on reincorporation in a new legal jurisdiction, if it makes sense and offers tangible benefits.

8

I see. I guess I can understand that you are not able to provide information at this point, but this is not ideal for the DAO’s ability to judge if this is gonna be a recurring expense or not.

I would really like to be able to get an answer to at least that so that we can plan ahead.

In any case, ethlimo is a fantastic service and a public good that has never given us a reason to doubt your integrity or the impact of your work so in case it was not clear from my first response and the back and forth I am also supportive of this temp check.

4 Likes
9

Thanks for sharing this, not sure if I’m the only one but I was completely unaware of this situation.

Easy decision - I support this request! And at the same time - sorry you had to go through all of this.

2 Likes
10

This is a completely fair point, which is partly what inspired my proposal above, that maybe going forward we need a small ENS DAO legal fund committee who can get more information privately and make the decision (within limits provided by the DAO).

3 Likes
11

Really sorry the Limo team is dealing with this.

I sympathize and empathize with the human cost of the legal side.

Law is stressful! From duration, to outcome, to total cost, there are so many unknowns & uncertainties that can add to the human cost. Worse all of that is often weaponized in adversarial legal systems such as the US common law system.

It must have been very difficult just to get to the point of posting this, but I think it’s very important you shared a little of the very real human component.

4 Likes
12

eth.limo has always been a shining example of an ENS ecosystem project that deserves to be supported. I’m fully in support of reimbursing their legal fees.

Thank you for sharing as much as you can and your services so far.

4 Likes
13

Fully supportive of this.

4 Likes
14

Temperature check has passed, will be moving this to an executable proposal.

6 Likes