Iām very supportive of this proposal especially as it relates to protecting liability for DAO participants / GTC holders and will be voting to approve it.
3 Likes
I support this proposal. Thank you for the details Kyle. I think establishing this foundation will lead to unexpected gains or bonuses from unknown factors. From things not even invented yet. The Gitcoin Dao certainly can use all the protection it can get. I understand this foundation will serve as a sort of protective armour to the ecosystem and participants. Awesome. Schelling Point '23 in Cayman Islands perhaps?
This is looking great overall and certainly an important step forward! I think for transparency and echoing a few of the points raised by @lefterisjp and @maerg among others - thereās a set of items I think we want to clarify before moving to Snapshot:
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Is there a current draft of the articles that can be shared with this forum just for full transparency? I know we say that the DAO will nearly have full control of the foundation, but what kind of decisions would be controlled by the DAO compared to the Foundation itself in 30 days? 90 days? etc. This is likely a first for many of us in dealing with this kind of thing so examples would help a lot here for better context.
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I definitely agree CSDO should help revise the terms but itād be worth ensuring that the Steward Council is also involved in this process. Can we amend the proposed flow to include them in discussions alongside CSDO since stewards should and will need to play a key role in relation to the Foundation?
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Thanks for questions, @Pop.
Attached is the current M&A and the Articles of Association (AoA). These articles are the boilerplate articles, that are then superseded by the foundation bylaws. I am working with a few other folks on the bylaws, but not all of these details are public from DAO to DAO.
The goal of our Bylaws is to spell out what actions (from the AoA) Directors can take with or without a vote (and in a āno vote requiredā scenario, it would still require unanimous support from the Directors). Almost all of these actions would be actions only taken based on DAO votes (on-chain voting per our governance process). Some examples are below:
- All structural changes to the Foundation will require a vote
- Change in Directorship (my position, and others) will be changeable through a DAO vote
- The directors will have the ability to ārunā the foundation (accounting requirements, KYC requirements, reporting requirements) without a DAO vote, but will be required to present financials and transparency into the operations. This ensures we are in good standing with the relevant governments.
- Assets may not be transferred out of the foundation without a DAO vote
There are some structural pieces that are in place today to help us ease setting up bank accounts, subsidiaries, negotiations with Gitcoin Holdings, etc. that should not exist in ~150 days from now (assuming all of that infrastructure is set up). So it is my suggestion to offer more flexibility to me and the directors for the next 150 days to ensure we āget it right.ā There is however always an escape hatch if we feel we need to exit me or another director.
I would love for CSDO to review the bylaws before they are ratified, and also ensure Stewards review and weigh in as it would certainly require an onchain vote to legitimately adopt those new bylaws per our governance process. Let me know if you have any other specific questions, and I will be sharing the bylaws soon.
3 Likes
Iām actually ok with, and prefer having you in this role. I do think there is a need for DAO representation in the negotiation of assets. It isnāt a deal breaker at this point, but I am concerned about fair representation for the interests of the DAO. Mostly because we should be a shining light of legitimacy in how we operate.
2 Likes
I can now share the draft bylaws we are working on. These are the bylaws we will have CSDO and stewards review, and then Gitcoin Holdings would also have their counsel do a once over to confirm there are no legally questionable sections.
Bylaws Draft can be found here.
This draft will continue to take shape over the next week, and may be entirely replaced if CSDO and/or others have a different template they would like us to use. Many folks will be reviewing this weekend and offering thoughts.
I would like to move this to a vote on Snapshot next week, so please share any objections to make sure we are covering any blindspots you still see. As part of that snapshot proposal, I will be very explicit on the intention and next steps we plan to follow so folks understand what they are actually approving. We will have more than one vote. One to ratify the intention of the community to take possession of assets, and a second to formalize the details of the negotiation, adopt the new bylaws, etc. Gitcoin Holdings will not transfer assets until both votes pass, ensuring we have a legitimate approval from the community.
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Hey all - Given we have met the 5 steward comments and 5 day requirement of our governance process (and sentiment is positive), I went ahead and posted this to snapshot. I would love support for the proposal, and please let me know if you have any more questions. 
4 Likes
I appreciate the trust and the desire from the community to continue to advance our mission and separate more and more from the Company that started so much of this journey.
We will have our first Stewards Council meeting on Thursday, and I can report back on progress, as well as kick off discussions with Gitcoin Holdings soon.
Thanks, all.
2 Likes
The Gitcoin Foundation Update - June 2 2022
Itās been a while since I offered an update on the gov forums about our Foundation set-up and work to take possession of our collective assets. Here is how things are shaping up - there are three primary buckets to think about in this update:
- Foundation updates
- DAO updates
- Asset Transfer updates
Foundation Updates:
We have prepared a new set of proposed governing documents for the Foundation that would memorialize the Foundationās operating rules. These include a new Memorandum of Association and Bylaws. These docs have been reviewed by community members (including friends at LexDAO, and our own legal counsel) without any objections, and at this time we believe they are ready to be submitted for approval and ratification. These documents generally direct the Foundation to carry out DAO governance decisions (per our governance process - see update below), subject to statutory or other legal limits. They also allow the Foundation or its subsidiaries to spend capital within its control (ie assets transferred, not the treasury) to advance protocol development until Grants 2.0 is operational and comply with legal and other core requirements (like establishing AML processes, hiring accounting firms, etc).
As part of the ratification of the updated governing documents for the Foundation, it will also become āownerlessā, meaning it will have no shareholders to whom fiduciary duties or other obligations are owed (one shareholder was initially required to be able to form it under Cayman law) and instead will be able to act in accordance with DAO governance without any obligations to any equity holders.
Operating as an ownerless foundation will, however, increase the complexity for KYC purposes, including anti-money laundering and sanctions laws compliance, and also for certain other diligence purposes and interactions with the real world. But we believe that any such inconvenience is a worthwhile trade-off to establish a structure and environment where the DAO can truly direct the development of the Foundation long term.
In addition to the Foundation, we have formed 3 subsidiaries to help protect the Foundationās assets and structure its interactions with the real world. One of these subsidiaries will be a holding company for Gitcoin trademarks and certain other intellectual property (such as our monorepo). The second subsidiary will serve as our primary operating entity and will be responsible for activities such as paying for our domain names, safeguarding and allocating our treasury per DAO governance, engaging and paying ordinary vendors (such as Google and AWS), and serving as the counterparty to DAO contributor agreements. For those contributing to the DAO, this also means you will have a contributor agreement that we hope will help offer more structure, clarity and protection to both you and the Foundation when you perform work on behalf of the DAO); and (iii) a third entity that was created to custody the Gitcoin Grants Multisig (mostly to handle KYC and AML).
We are in the process of formalizing a few external service providers, such as a KYC/AML compliance officer and an accounting firm and we will continue to retain external legal counsel for any legal needs and questions that arise. As with starting any new entity, there are legal reporting requirements and business functions that will need care and feeding. For now, I am taking care of those things but we may want to consider hiring an operations person to manage much of the day to day.
DAO Updates:
A new v3 of our governance process has been posted for commentary and we seek to ratify this as part of our upcoming vote. This ratification process will enable us to memorialize the adoption of a process we are largely already following.
We also have a newly proposed DAO Purpose and Essential Intents to align and focus our efforts. These will serve as our guiding framework when evaluating budget requests, workstream focus and overall direction into which to move the DAO.
Asset Transfer Updates:
Gitcoin Holdings is aligned with our interest in taking formal legal ownership of the various assets mentioned above (e.g. our Treasury, smart contracts, trademarks, SaaS contracts we need to operate) we as a community have created/maintained or advanced or need to grow so that they can then focus on revenue and delivering the best hackathon experience possible for those partners who entrust them to grow their communities (for simplicity, I refer to these as our Assets). This means that Gitcoin Holdings will be transferring these Assets to us, as well as some additional capital to ensure the Foundation and subsidiaries can pay their operating costs for some time and run as an independent and decentralized enterprise (which also solves certain legal capitalization requirements).
Since Hackathons is built on the Gitcoin brand, Gitcoin Holdings will be granted a temporary license to use Gitcoin trademarks until they reestablish operations under a new name, and I imagine we will continue to share a community for some time.
Next steps
I am proposing we vote (in 5 days per our process) to ratify these changes, accept the transfer terms and start the life of the DAO as an independent legal organization (i.e., within the structure of the Foundation) in earnest.
I will also work to build a reporting cadence for the Foundationās operations to ensure there is a pattern of transparency and sustainability long term.
4 Likes
just wanted to chime in and confirm this fact that subject to the DAO being approving of these terms, so is Gitcoin Holdings.
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So I am a bit confused on the status of this proposal.
It seems it went to snapshot but @krrisis wrote in discord the snapshot proposal is wrong and needs to be redone.
Is this true? If so we should either remove it or have all vote no to it.
Hey all, so just to let you know thereās been some misunderstanding here and weāll be tweaking this proposal slightly, new one will be coming up. Most important one is that purpose & intents wasnāt supposed to be in this proposal plus there are some other minor tweaks to be made to the gov proposal as well. So consider this proposal to be cancelled, changed my vote to no, just to be sure.
It looks like there was some misalignment on where the Purpose and Essential Intent should live (ie, in CSDO versus gov process). I took down the original vote at the request of @krrisis and @Pop and have now posted a new version that they feel better represents our final decision on where the purpose and Essential Intent should live.
Thanks for flagging and I hope to get support on the new snapshot vote. Here is the latest vote: Snapshot
3 Likes
Hey all - I want to close the loop that this has now successfully closed! 
This means, the DAO now formally owns a vast number of gitcoin assets, and we are continuing to unplug from Gitcoin Holdings (whom is now rebranding as the Web3 Events company).
There are no immediate impacts for the DAO, but now that assets, the brand name, and other items are transferred, it means we can start to formalize the relationship between the DAO contributors and the newly created operating company within the foundation.
Thank you all so much for the support and enabling the DAO to move forward. This is a huge step for us, and for other DAOs who are looking to us for guidance on how to navigate the real world legal entity status for DAOs.
5 Likes