LiqwidDAO Association Temperature Check
Contents
1. LiqwidDAO Association Overview. 2
1.2 Description of the Association. 2
1.3 Summary of the different stakeholders. 3
1.4 Organs of the Association. 4
1.4.1 The Directors and the Board. 4
2.3 Membership of the Association: 5
2.5 Directors and the Board. 7
2.5.3 Votes and majority for decision making: 7
2.5.7 Removal and resignation: 8
2.7 Grants and Protocol Owned Liquidity. 8
LiqwidDAO Association Overview
Introduction
The Liqwid protocol needs to create an Association in order to provide legal clarity for protocol users, developers and LQ Governance Token Holders. The creation of an Association would also create a legal entity which could interact contractually with third parties.
This legal clarity would also guarantee rights of the LQ Governance Tokens Holders and provide control mechanisms to oversee the legal representants of the LiqwidDAO Association.
Legal framework
The Association would be organized under the Swiss law regulating association (Code of obligations, articles 60 to 79) and have its own Bylaws. For further details, see: Fedlex
Description of the Association
Every LQ holders is legally a member of the LiqwidDAO Association. This would offer legal clarity also for any institutional investors investing in LQ tokens.
The DAO (synonym for the Association members using AGORA as voting module) would elect some members in the LiqwidDAO Association (hereafter the “Association” or “Liqwid” or the “DAO”). These persons (Named “Directors”) would be responsible to represent legally the Association and perform some tasks that cannot be only done on-chain. The execution of the tasks performed by the Directors should be performed within the scope of the DAO (or as defined in a proposal voted by the DAO).
By doing so, the Association is able to link the “DAO decision” with legal consequences for the Directors in order to instill a control mechanism.
Finally, linking the DAO decisions with the treasury, held by the Association gives also a legal framework for the assets of the protocol, which are owned by the Association and belongs collectively to all the LQ holders.
Further products developments would (as an example) have a budget voted by the DAO, then the assets are transferred to the Association which ensure the development company is executing the IT work.
Usually a member would be voted for 2 year as Director, and can be removed by any subsequent DAO vote. Any sub-group can be organized at the DAO-level to perform the vote, or even at the Association level to execute/implement the votes.
Finally, from the reporting point, a yearly report is produced by the Directors
Summary of the different stakeholders
Organs of the Association
The Organs of the Association are:
- The General Assembly
- The Board
- Sub-committee (if any created)
- The External auditors (if required)
The Directors and the Board
Directors are elected every year to represent the Association to third parties and are able to engage the Association. They should respect the decision of the Associations and work to implement them in good faith.
They are elected for a period of 1-year and receive an appropriate compensation for their tasks. The period of office begins when the Association is electing them and ends when they are not elected.
Directors can be replaced immediately through a governance vote. They can also resign with a 1 month notice period. The Directors are collectively forming together the Board and they must organize themselves. Tasks and roles can be defined within the Board.
They are authorized to represent the Association. Their others tasks and responsibilities are:
- Execute the decisions of the DAO
- Manage the Treasury of the DAO (have access to multi-sig wallet) → only the money “approved by the DAO” is unlocked for the Directors to be used. Usage should be consistent with the DAO vote.
- Open bank account(s)
- Create sub-Committee if needed, and organize the internal governance/operations related to the Sub-Committee, following the decisions of the DAO
- Instruct the development company about further IT spendings and control the spend of money
- Prepare the yearly financial statement and the budget
- Prepare the yearly activity report and the yearly Association assembly
- Any other tasks voted by the Association or required by the Swiss law
Bylaws Draft
The LiqwidDAO Association would create its own bylaws, according to the Swiss law for the association. Therefore we are presenting here below some of the main articles. Please note that these are not the final wording and it may be changed.
Name and Domicile:
LiqwidDAO Association, to be incorporated in the Canton of Zug, Switzerland.
Purpose:
Liqwid aims to deploy secure DeFi and governance products and tooling that enforces financial contract parameters and human coordination rules with code as opposed to trust. We seek to introduce novel deterministic tools with open participation and sustainable growth models that don’t rely on trusted parties on a cooperative and non-profit basis. The Association is coordinating to innovate on the existing DeFi model and bring more traditional finance and corporate governance products on-chain using Plutus smart contracts as coded agreements accessible by anyone with a Cardano wallet.
The purpose of the association is the promotion and provision of services in the field of information technology, in particular in the areas of fintech, crypto technology and assets as well as blockchain. The association can use its funds for the development of software and the construction of platforms in the above-mentioned areas - for this purpose it can also commission third parties. The association promotes the development and dissemination of blockchain and Internet of Things technology and researches blockchain technology or other similar or analog protocols and their applications. The association cooperates with other companies, associations or foundations with similar or related activities.
The association does not pursue any commercial purposes and is not aimed at profit.
The association can participate directly or indirectly in all business and activities, carry out transactions and conclude contracts to promote the purpose of the association. The association may develop, acquire, hold and sell rights in the field of intellectual or industrial property as well as acquire or grant licenses to such rights.
Membership of the Association:
Eligibility for membership: Membership shall be voluntary and application open to any individual whose purpose or presumed intent is to contribute, to build, and to use the products of Liqwid and is willing to accept the responsibilities and terms of membership.
Admission: A member of the LiqwidDAO Association is anyone who possesses a Cardano wallet and hold Liqwid token holders (hereafter “LQ holders”). The admission ceases once the LQ tokens are sold, the membership is stopped.
LQ Governance Token Policy ID : da8c30857834c6ae7203935b89278c532b3995245295456f993e1d24 LQ Mint Transaction Hash: 344c26673b9256b10e215d86095d9eb3c63def4b5a31cf50f12d4a133024eabc
Rights. LQ holders shall utilize the “Designated Smart Contract” (an Agora smart contract deployed to the Cardano Blockchain at the Designated Blockchain Address as the exclusive method of proposal submission and voting, holding, distributing tokens to LQ holders, and spending of any tokens that are Liqwid property. Liqwid protocol may also utilize the Designated Smart Contract to administer and facilitate certain other operational processes and transactions involving LiqwidDAO Association, the LQ holders and/or third party contributors.
Association members’ rights and responsibilities are enforced by the use of the Designated Smart Contact which serves to facilitate the community governance and other organizational activities. Liqwid’s Agora instance will be deployed at the time of the v1 protocol launch. This document shall be amended to include the Designated Smart Contract’s address.
This Designated Smart Contract shall contain the human coordination rules (e.g. for the Board and its Directors) to act on behalf of the Association, and to contract on behalf of the Association through membership vote.
Association Members will submit votes and implement the decisions made on the Designated Smart Contract as well as any associated Smart Contracts that are initiated by the Designated Smart Contract.
Responsibilities. By accepting and retaining membership each applicant shall agree to use the products or services of Liqwid on at least an occasional basis. Each member shall keep reasonably current on the state of the DAO by reviewing correspondence from the Liqwid social media channels or connecting with other Liqwid members in the designated collaboration platforms.
LQ holders are responsible for deciding the priorities of the DAO through the proposal voting process. No assets may be moved out of the DAO treasury without a vote of Governance by the LQ Holders and all program coordination is formalized through on-chain votes on proposals.
Membership limitations. Status as a LiqwidDAO Association member does not (and shall not be deemed to) create or include, any authority, right or power on the part of a LiqwidDAO Association Member to act as the agent, representative or attorney of or otherwise act on behalf of Liqwid or any other Member, to bind Liqwid or any other Member to any Contract or Liability or to convey any Liqwid property or any asset, right or property owned or held by or on behalf of Liqwid or any Member.
Without limiting the generality of the foregoing, no Member shall be deemed to be the partner of LiqwidDAO Association or any other Member. No Member shall state, purport, imply, hold out or represent to any person that such Member or any other Member has any such authority, right or power.
Access to information. Members shall have open access to information concerning the operational and financial affairs of Liqwid through the Agora treasury smart contract. The Liqwid treasury will be viewable by exploring the Designated Smart Contract on a Cardano block explorer.
Settlement of disputes. To the extent allowable by law, all disputes may be settled by on-chain membership voting. All Membership agree that there is a preference to settle disputes amongst members or between members and Liqwid via on-chain voting via Agora smart contracts.
Transferability of Membership. Membership rights and interests may be transferred by LQ Governance Token exchange. A member may increase their voting power by obtaining more LQ tokens but must meet all the regular requirements for Membership in order to exercise these rights.
Meetings: Meetings of Members shall be described on a basis at the discretion of its membership on the Designated Communication Platform.
The purpose of meetings will be for the Association members to discuss governance proposals that may be voted upon and other DAO matters as may be appropriate.
Special meetings of members may be called by the Association members depending on votes to be performed.
Time and Place: The date, time and place of all meetings of the Association are done online using the Designated Communication Platform
Voting:
All the votes are performed using the Agora module only, where every LQ tokens is accounted for 1 vote.
Quorum to create a vote are 1% of the circulating supply, and decisions are taken at majority (at least 50.01%) of participants in the vote and a statutory quorum of at least 10% of total token supply.
Circulating supply is determined as the “Amount of LQ tokens issued, minus the amount of LQ tokens held by the Treasury). The treasury is not voting.
Once a vote is initiated, LQ holders have 5 days to vote.
Directors and the Board
The Board is the executive body of the Association. It has the right and the duty to manage the affairs of the Association and to represent it in accordance with the Statutes (art. 69 Civil Code). In particular, the Board shall take all necessary measures to achieve the purposes of the Association, ensure the correct application of the present Statutes and any other internal regulations, administer the property, assets and resources of the Association, manage the accounts, engage and supervise a Director, if necessary, and convene and organise the General Assembly.
Directors are elected every year to represent the Association to third parties and are able to engage the Association. They should respect the decision of the Associations and work to implement them in good faith.
They are elected for a period of 2-year and receive an appropriate compensation for their tasks. The period of office begins when the Association is electing them and ends when they are not elected.
Directors can be replaced immediately through a governance vote. They can also resign with a 1 month notice period. The Directors are collectively forming together the Board and they must organize themselves. Tasks and roles can be defined within the Board.
They are authorized to represent the Association. Their others tasks and responsibilities are:
- Execute the decisions of the DAO
- Manage the Treasury of the DAO (have access to multi-sig wallet). Only the money “approved by the DAO” is unlocked for the Directors to be used. Usage should be consistent with the DAO vote.
- Open bank account(s)
- Create sub-Committee if needed, and organize the internal governance/operations related to the Sub-Committee, following the decisions of the DAO
- Instruct the development company about further IT spendings and control the use of money
- Prepare the yearly financial statement and the budget
- Prepare the yearly activity report and the yearly association assembly
- Any other tasks voted by the Association or required by the Swiss law
Initial appointment:
The initial Board members and the Chairman are appointed by the Core Team.
The Board shall be composed of at least three and at most seven members.
The Board designates amongst its members, a Deputy Chair as well as any other function as it may deem necessary.
At least one member of the Board with signatory powers must be a Swiss citizen or a citizen of a member State of the EU or EFTA and have his/her domicile in Switzerland.
Term:
The Board members are appointed for a two-year term.
Votes and majority for decision making:
Each Board member shall have one vote. Decisions are taken by a simple majority of all votes expressed, as long as the present Statutes or other internal regulations of the Association do not provide for a different majority. In case of a tie, the Chair shall have a casting vote.
Delegation:
The Board is entitled to delegate certain of its tasks to one or more of the Board members, including to Board sub-committees, to third parties, or to hired employees.
Representation:
The Association is validly represented and bound by the collective signature of two Board members and/or any other officer or representative designated for this purpose by the Board by a power of attorney.
Meetings:
The Board shall meet as often as required, but at least [twice] per year. Board members may validly participate in a meeting of the Board by video or telephone conference or any other form of communications equipment. The Chair of the Board shall convene Board meetings at least [fifteen] days in advance. The Chair may convene the Board with [three] days’ advance notice, where justified by urgent circumstances.
Removal and resignation:
Board members may be removed by the General Assembly for just cause, in particular if the Board member has violated his/her obligations towards the Association or if the Board member is not in a position to exercise his/her functions correctly.
Board members may resign at any time by submitting a written declaration to the Chair, specifying when the resignation shall take effect.
In the event of dismissal or resignation during the term of office, the Board may appoint a replacement member by co-optation, until the next meeting of the General Assembly.
Fiscal Matters:
Fiscal year of Association shall be the calendar year beginning January 1st and ending December 31st.
Grants and Protocol Owned Liquidity.
Assets will be distributed from the treasury for only two purposes, for funding grants, which are:
- an agreed upon sum of tokens offered to do work furthering the mission of the organization. The Directors are responsible to oversee the spending of this money.
- funding for Associated Contracts that shall support work furthering the mission of the organization.
- payments for services rendered by persons designated by the organization.
and for Protocol Owned Liquidity (POL), which:
- allows Liqwid to own its liquidity by acquiring LP tokens from market participants on Cardano decentralized exchanges.
- empowers the DAO with complete autonomy over the LP tokens & thus underlying liquidity that it accounts for.
The Association may give grants to charitable donations or other forms of support meant to carry out the Mission Statement.
General Assembly
The General Assembly delegates to the Directors (together forming the Board) the power to administer and represent the Association.
The General Assembly remains with the following inalienable powers:
- Adoption and amendment of the present Statutes;
- Nomination, surveillance and revocation of the External Auditors;
- Approval of annual reports and audited accounts;
- Nomination, surveillance, discharge and revocation of Board members (the Directors);
- Decision on the dissolution or merger of the Association; and
- Management of all matters that are not the responsibility of other bodies.
A General Assembly is at least organized every year and at the latest 6 months after the end of a fiscal year.
Next steps
The Core Team is requesting USD 15’000 from the Liqwid Treasury to be transferred to Florian Volery for creating the Association and its legal documents.
Budget includes also:
- Finalizing the bylaws in English with a local lawyer. We want to work with Dr. Sothy Kol-Men , he is a Genius Yield Co-Founder and a Swiss lawyer. He already created a similar Swiss association set-up for Genius Yield.
- Translating them in German (official language of the Canton of Zug)
- Paying a notary for the legal creation of the Association
- Signing an office rent in Zug for the Association’s domicile (incl. a 3-month caution for the rent)
- Registering the Association at the Commercial register
- Opening a bank account for the Association
The rest of the money not used for the legal and foundation costs will be added to this bank account. All the expenses will be documented and registered. Florian Volery will perform the accounting at the creation of the Association.
The first Directors of the Board will be:
Core Team members
- Dewayne Cameron (American citizen), Chairman
- Florian Volery (Swiss citizen),
- Emily Martins (Portuguese citizen)
We are excited to present you this proposal and we believe that only such a transparent structure will allow DeFi protocols to reach their next level.
Do you support the creation of the LiqwidDAO Association?
- YAE
- NAY
0 voters
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