Dopewars

A PROPOSAL TO REGISTER THE DAO AS A LEGAL ENTITY

PART 2

As discussed in Part 1 DOPE DAO currently has no structure as a legal entity and therefore no limit on liability for its members. The prevailing wisdom amongst many current DAO ventures suggests that this issue should be addressed to create a legitimate platform from which to conduct activities. This has been confirmed by our consultation with Mr Thomas Plunkett. We cannot properly expect to have a flourishing ecosystem and DAO if members are concerned about varying levels of unfettered legal liability.

We can solve this by registering the DAO as a Not for Profit Limited Liability Company with MIDAO in the Marshall Islands. This would mean that any legal challenge seeking redress in the future would be limited to obtaining redress from assets owned by the DAO. Individual DAO members’ personal assets would be protected. This is a good thing. This will allow us to navigate our way through the uncertain territory applying best practice and due diligence as we determine, while still having a backstop of limited liability to protect us in case the situation changes on us. This will allow us freedom of action without having to worry whether we are exposing any of our members to undue risk. I can hear the cry’s already! I don’t want DOPEWARS to be not for profit! Don’t be alarmed — a Not for Profit LLC can still makes tonnes of money, all its assets can raise in value we just have to ensure that DOPEWARS never pays ‘dividends’ to DOPE Holders. This has never been part of this vision for DOPEWARS anyway so it’s no trouble. Furthermore, the DAO once registered as a Legal Entity will not be taxed by the Marshall Islands Government. This is not to say that individual members will not be responsible for fulfilling their own unique tax obligations separate from the DAO, of course they still will. But with a bit of luck and some sound development we might all be able to fly jets to a DOPEWARS convention at a beautiful tropical island like this:

The background for MIDAO in the Marshall Islands is an interesting story. The Marshall Islands is home to many shipping companies because they have laws that are favourable. DAO’s and Ships have similarities; they don’t necessarily belong to any nation floating out in international waters. The Marshall Islands is a sovereign nation but is a protectorate of the USA. The benefit of independent law while having the security of protection of the US. The nimble government of Marshal Islands have seized the opportunity to create legislation that specifically enables DAO’s to become LLC’s. Purpose built law that references Smart Contracts as governance mechanisms and Token Holders as members. MIDAO is a registered agent in the Marshall Islands. Some of their members actually helped the Marshall Islands Government pass the abovementioned laws. To give an indication of timeframe, all this was put into action last year. So as you can see it is frontier type stuff, which we love here at DOPEWARS. However it is important to note that 40+ NYSE and NASDAQ companies and 20% of the world’s shipping capacity are registered in the Marshall Islands, so it’s not an uncommon place to base our business. Bleeding edge shizzle as usual, but not without a bit of street smart hustle.

Part of the beauty of specifically created legislation is that members are allowed to be described as wallet addresses that hold a particular token. For example in our scenario, a wallet address that holds a DOPE token can be recognised. This means that we bypass the requirement for registration of personal information of DAO members. Provided that the individual in question does not own 10% or more of the DOPE tokens, there is no requirement for them to KYC. No one person in DOPEDAO owns 10% or more of the governance token so we are enabled to preserve our anonymity whilst still being a protected member of the DAO and LLC. Pretty neat huh! Let’s turn our DAO into a Ship!! A pirate ship of course…

The process would require the creation of an Operating Agreement which describes how we operate and govern ourselves as a DAO. I can write this Operating Agreement up in conjunction with the MIDAO Staff who have a Lawyer heavy team. Our DAO is then registered as a LLC turning it into a legal entity. There is the requirement that one DAO member is DOXED and KYC’s. The mighty Don Cyberbitz has presented a solution for this and I salute him for his efforts.

There is a cost, the details are as below: One time Registration Fee: $9,500.00 USD (payable in Crypto). Annual Administration Fee: 1% of DAO Revenue ($3,000.00 minimum & $15,000.00 maximum), payable each calendar year due in the following January. In the first year the amount payable would only be representative of Revenue after we received our charter of registration. So for example if we registered later this year then the Revenue calculation would only apply from then until January 2023. This annual administration fee will mean we have to submit a proposal to pay the fee when it is due in January. This administration fee pays for

1. Government fees
2. Registered agent service (address in Marshall Islands, maintenance of documents.)
3. Annual filing facilitation.
4. Compliance costs (MIDAO do on-chain analysis to make sure there is no money laundering or support to nefarious organisation action going on, which is another added layer of protection for us).

In closing I would comment that, here at DOPE WARS, we are not your average run of the mill generic NFT Project. We have elements of our project that give it a certain edge. This is part of what attracts many to the scene making it cool and interesting.

Of course it goes without saying that we, here at DOPE DAO, are well intentioned and collectively desire to create a fun and engaging project and community. This does not, or at least should not, preclude us from being well prepared and protected in case the unexpected happens.

I hope poor Mr Hika was similarly sensible and took up the DOPE WARS Actors Union Medical Coverage Offer…

So without further ado, I propose that we vote to determine whether we take to the HIGH SEAS with MIDAO in the Marshall Islands. This is an important vote DOPEFAM, if we do think this is a good idea then the higher the voter turn-out the better. The more widespread the voting then the more legit the result is.

Shall we register DOPEDAO as a Not for Profit Limited Liability Company with MIDAO in the Marshall Islands and authorise the release of $9500 USD worth of ETH to be paid to MIDAO?

Taniela.Taki