Should we ask Cartan Group to scope setting up the DAO to accept funds?

Sub-DAOs/working groups funded by the DAO are a win in my book. I’m super stoked for any structure that protects the decentralization of the core entity while allowing for interaction with legacy business structure. But what’s essential to me is to maintain the integrity of the “d” in the DAO as much as possible. And I do think it’s very possible, not just pie in the sky idealism.

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I’m definitely in favor of this proposal. Let’s get it done.

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Yeah, I believe we’ll have to look on the structure and specifics with lawyers for the best way to make this happen, if we chose to go with the idea.

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gm @zheerwagen,

Great write-up. Just a thought: now that you’ve set out the pathway, couldn’t we just ask Ape Foundation (@bc) to have their legal team sort this out?

If I’m missing something, never mind me and carry on :laughing:

SSP

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Thank you all for the early feedback! Batching a few responses here :slight_smile:

@Mantis / @ssp1111 - I think your push on who does this work here is an important one, but also think we can augment whoever project manages this process with a small subcommittee to help guide the workstream. @Amplify would love to include you on this!

First a clarification: Cartan would not be administering any discussion or making legal decisions, only project managing across legal, auditors, and other experts.

The reason I thought Cartan makes sense on this is because it will likely fall on them to execute anything that touches the Ape Foundation (legal entity) and therefore it makes most sense that they scope this.

Any thoughts on other ways we can augment their efforts, or any other team that would be well set up to take this on?

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Hello Zach, thank you for including me in this!

Sorry, this response isn’t totally directed at you it just inspired a rather large write up so bear with me. :stuck_out_tongue_winking_eye:

Currently every AIP falls under 1 of 4 categories: Core: Ecosystem Fund Allocation, Core: Brand Decision, Informational, or Process.

Instead of creating subcommittees and fractured working groups, I’m starting to think about what a “Core Team” within the ApeCoin DAO might look like. I want us to start thinking about creating at least 2 “Core Units” or committees within the DAO.

1. “Core: Ecosystem Fund Allocation: Proposals for how DAO funds should be utilized”

A working group committee led by one council member which would be responsible for aiding proposals that fall under this category.

So when a bug bounty is proposed and we need a group of dedicated individuals to scope severity of submissions and liason with whitehats these DAO members are the first choice. Or if we’re paying Cartan to scope out sending funds back into the DAO and we need some community members along for transparency and reporting, this is the committee the team would go to in order to fulfill these duties. In the future, and if within scope, this would also be the team responsible for allocating the initial funding to any potential “Treasury Management” or “revenue earning arm” / committee of the DAO.

2. “Core: Brand Decision: Proposals for aything the DAO attaches its name to, included projects and collaborations”

This committee, also led by one Special Council member, would be responsible for aiding proposals in this category.

So when ETH SF is happening and we need people to go and create promotional materials for the booth and present prizes to the hackathon winners, this is the group the AIP Author leverages for this need. Or whenever we need any ApeCoin representation in person at events, we should have a dedicated team of individuals for this.

A big problem with all of this is finding raw volunteers. It’s my opinion that community members should be paid for what would essentially be full-time work obligations. Starting the conversation around these two working groups first, I think, is a good first step towards having more active contributors and more meaningful DAO initiatives.

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Yes, this is critical infrastructure that is needed to mitigate risks to DAO and participants that also drives a utility feedback loop.

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Thanks so much for this proposal! This is something I’m really interested in and would love to volunteer to help however I can if you still need help.

I had a chance to ask @bc a little bit about this. If I understood him correctly, there’s multiple problems that need to be solved and would be very costly to figure out. What he told me is very similar to what you’ve outlined.

If money comes into the DAO, you have to figure out where it is coming from. Revenue would be generated from different countries so taxes would needed to be filed in each place it comes from. The DAO would have to register in every country it does business. Right now regulations are not clear across the globe, so figuring out how to be legally compliant in each country will differ and won’t be cheap or easy.

For example, in the US alone, someone would have to figure out how to do tax returns for the IRS and how to comply with the laws. That would cost a lot of money to do. If the DAO starts taking in money, it starts to look like an investment DAO instead of a grant DAO and then may be considered a security. If it’s considered a security, then it must comply with SEC’s rules for registration and reporting. The issue of whether or not someone needs to be an accredited investor to trade $ape starts to come into play as well. Also, would KYC be needed in order to be compliant?

There may be other considerations as well. Thanks again for taking the initiative on this, and if I can help out in any way, please let me know!

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After thinking on this, I have to change my opinion a bit. Much of my new perspective comes from a desire to protect the DAO’s “d” and “a”.

I also want to challenge others to consider: Does the desire to allow the DAO to accept profits come from an assumption that changing the DAO’s structure to resemble a VC will improve its sophistication in the global marketplace or connectivity to legacy investors?

And is this necessary?

What new choices are created from this? What new, better financial structure? What alternative to the shortcomings of the current financial system?

First, in its current state, can the DAO pass through what would be profits as fees to platform administrators or roll that value immediately over into other projects? If so, I would argue the DAO fulfills its basic tenets without a need to hold profits. With no profit motive but an ever-growing, stable economy, the DAO becomes a job and value creator of a higher efficiency. It is literally forced to find talent to pay and projects to back instead of trying to enrich itself, and encourage policy to that end.

And yes, if the DAO is allowed to enrich itself, policy will creep slowly to prioritize that end. This is the inevitable path of all governance structures wherein a store of value may be held in escrow to a group of core administrators. It seems the DAO is moving towards setting in stone this core administration group as final policy arbiter. A value store is all that is necessary to create a slippery slope back to a centralized power, and one that also seeks compliance with legacy finance. There will be no difference between this DAO and legacy finance in 3 years in this case.

The alternative: Set the DAO on a path to freedom from legacy regulatory compliance, that it may become the unassailable centerpiece to a consistently growing multitude of freedom-based financially sustainable technology, that creates opportunities for job-seekers around the world. Funding projects from yield rather than capital greatly reduces the possibility of capital drain. Directing “profits” into people or ancillary yield pools creates growth in mindshare and utility with no need to drown the DAO’s “d” and “a” in legacy legalese for the sake of compliance.

For instance, is it too late to propose a decentralized node structure for all ApeDAO projects to move the DAO away from being subject to any single nation’s regulatory tidal shifts? The sustainability of Gala Games bodes well for this idea, but would people even care to do this, or is it not the real purpose of this DAO? Thoughts here would be welcome.

I know this ideal may be impossible because the DAO is already too twined up in legacy finance to escape to the ideal degree. However. If we start from this position, the tug-of-war creates the opportunity for a fairer compromise. Start from the center for no reason, and you lose all leverage.

Remember crypto’s promise. I personally did not experience the miracle of bitcoin, in all of its decentralized and autonomous wonder, to find the fastest path I can possibly find back to the status quo — if this is what the passage of this proposal implies. We are in fertile new ground, and I challenge everyone reading this to scour your minds for the fertile ideas that provide brand new opportunities only available in web3!

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This is quite interesting! I’m in the boat of not wanting to focus on setting up the DAO to receive funds because of 1) what you laid out above of how it would change the structure and ethos of the DAO and 2) it would complicate the regulatory and tax situation even more than it already is for every member of the DAO.

I have seen a few people question what happens to the DAO when the grant money runs out and say things like the DAO would no longer be able to function in that case. I actually disagree there. First, there are A TON of tokens in the ecosystem fund. And when the time eventually comes around and it runs out, we should hopefully have a full ecosystem built out by then that includes many different projects. What if at that point it’s a self-sustainable ecosystem without the need for more grants? Maybe I’m being short-sighted, but that’s what I envision someday. I would like to see the DAO trailblaze a path and build a world that does not currently exist, not follow in the steps of what others have already done.

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Glad to see you (and hopefully others) come around to the idea that this is an opportunity unlike any other for the community to help create “something”.

There is a definite tension between letting things grow organically through an individual’s creativity/ideas and the need to create more structure - KPIs, reports, hierarchy, timecards/min wage, etc.

I think the latter could be solved through Working Groups, Squads, and/or Guilds and the former should be the default of the DAO at this early stage.

As you infer – do we want to go the way of a VC-backed entity or move directionally towards a DAO, even if progressively.

I believe that YugaLabs has the former covered – it’s on us to work on the latter.

Peace, :v:t4:
SSP - Vote for Me

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Hi @zheerwagen,

Your topic will be automatically closing in less than 24 hours. Are you content with the feedback received, or do you wish to extend community discussion for a further 7 days?

If we do not hear from you within 48 hours after your topic closes, your topic will be moved straight to the AIP Draft process.

We look forward to hearing from you.

-Escape

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This - and your whole post - is very thought provoking. Buffering on thoughts…

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This topic was automatically closed after 7 days. New replies are no longer allowed.

Thank you @zheerwagen for your ideas and the ApeCoin DAO community for the thoughtful discussions. A moderator will get in touch with the author to draft the AIP in the appropriate template. Once the AIP is drafted and meets all the DAO-approved guidelines, the proposal will be posted on Snapshot for live official voting at: Snapshot

Follow this Topic as further updates will be posted here in the comments. @zheerwagen please see your messages for the next steps.

-Escape

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Is holding ETH on the balance sheet impossible for the dAO or can it happen?

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This is truly awesome Mantis!! Love the post, and I’m largely aligned with the shared sentiment here that this decision could open up ‘scary’ ideological questions around the purpose of the DAO.

At the same time, the motivation for drafting this was largely to get an answer to a question that’s been asked by many DAO members.

To be clear, this is not a request to set up the DAO to accept funds, only to fund a feasibility analysis.

Candidly I’m a bit torn on whether to push forward on this given the feedback.

@Mantis @0xSword @ssp1111 @Amplify @adventurousape @Vulkan (and all) - what do you think?

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I’m torn as well. While I don’t think the DAO should accept funds for reasons laid out above and do think it can succeed without doing so, it might still be a good idea to see what the process involves.

My main question is what if we look into it and don’t really get any clarity about it? Regulations around crypto, NFTs and DAOs are very limited as of now and it’s hard to figure out exactly how to best proceed.

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Nothing is impossible :wink: but it does come down to “Is it worth the risk for the DAO?”

The balance sheet lies in the legal entity, which is a Foundation. In theory of course it is possible that the DAO could vote to convert APE into ETH - the Foundation entity could hold other assets than APE (again, in theory). However, there is a clear preference at this time for the direction of the DAO to be only granting out APE, therefore, I doubt it would hold up to Special Council review.

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@Amplify had a workaround for this, which is to use the old original $OHM setup to allow ETH holders to buy APE at a discount (without the 825973% APY of course). If this were done in a siloed account that is set up specifically to participate in yield farming, this lets the Foundation get its hands on ETH without earning a profit.

Why I want to do this: If we have ETH, we can get into UniswapV3 APE-ETH pool, which is paying like 100% APR right now. That yield could be used to fund things rather than principal. It takes the DAO to a new level of financial sophistication using defi instead of legacy finance.

That yield gets rolled over immediately into projects to keep it from being classified as profit.

If we asked Cartan these questions all at once, giving the DAO a choice about where to go, and WHY it’s going there (just asking Cartan to set up accpeting profits with no direction automatically puts the DAO into more centralized territory), then that’s a much better ask for clarification.

I’m just going to do a proposal for the APE-ETH thing, though; that’s my way of asking. Just waiting weeks for an answer on something theoretical seems wildly inefficient to me.

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