Hi @yunze7373
Timeline here:
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lets drop all on the moon <3
Thank you for this. 
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Hello everyone,
This is Sergey from Daobox (daobox.io). We stumbled upon this thread as we learned about the ongoing set-up of the Arbitrum DAO legal wrapper.
(1) After reviewing the draft articles of association for the proposed foundation, we noticed a few aspects that could potentially pose risks or not fulfil the intended purpose of the DAO legal wrapper. Based on our experience in this field (see the justification in item (2) below), we’d like to offer several friendly suggestions to the Arbitrum DAO in this respect:
(a) The foundation does not seem to be adequately subordinated to the DAO, as evidenced by the following:
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The appointment and removal of directors and supervisors can be executed without DAO consent. This allows directors to replace supervisors (who are meant to oversee the board, creating a [directors > supervisor] situation) and change the board composition at their discretion, even if it contradicts the DAO’s intentions. Given that the change of directors/supervisors does not take place every day, a more suitable approach would be to make an appointment and removal of directors and supervisors subject to DAO consent, except for certain emergency situations where temporary appointments can be made.
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The articles do not define a list of “restricted matters” that require prior DAO consent, such as disposition of significant property or IP, major transactions, entity dissolution, transactions with related persons, loans, acting as guarantor, and more. Special resolutions of the foundation (on the most important matters) haven’t been made subject to DAO consent either. These safeguards should be implemented to prevent managers from entering into transactions with significant impact on the foundation and DAO without first consulting the DAO and obtaining their approval, as well as from abusing their position.
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The current setup does not clearly outline how the DAO can protect itself if the management acts in bad faith or against the DAO’s best interests. Next, corporate procedures do not take into account the actual [DAO>foundation] situation and hardly address the DAO <> foundation relations.
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The foundation does not directly recognize DAO resolutions and, therefore, the DAO’s authority. While the DAO can appoint/remove directors/supervisors through its resolutions, its influence stops there. The management is not obligated to consult with the DAO or obtain its consent for significant transactions, among other important decisions. If the foundation is intended to be subordinate to the DAO, the DAO should be in a position to have greater influence over decision-making processes.
(b) The definition of the “Arbitrum DAO” says that the DAO is a community of “individuals” holding ARB tokens. The word “individuals” could be interpreted literally, to exclude entities or corporations owning tokens from being recognized as token holders and DAO participants by the foundation.
(c) The definition of the “Token” is unclear. For instance, the token contract addresses are not included in the definition, which might lead to confusion with another token using the “ARB” ticker for governance purposes. Additionally, potential network hard forks are not addressed, which could create uncertainty about which token to consider as ARB after such a fork, etc.
(d) The Arbitrum constitution is defined via a link to a web forum. Given the technical aspects, it might be more appropriate to define it by referring to a DAO resolution adopting the constitution, even if it is yet to be taken, using IPFS or analogue as a storage mechanism, etc.
(e) We, therefore, believe it’s crucial for the ARB DAO to address these matters and conduct a thorough revision of the procedures and rules incorporated in the articles.
(2) Justification for our opinion: At Daobox, we offer services and solutions tailored to DAOs, including the setup and management of DAO legal wrappers as a service. Our team worked with multiple DAOs and blockchain projects, including on the structuring of DAO legal wrappers and DAO transitions. As a result, Daobox is well-positioned to share its experience and opinion on the matters addressed in this post. Perhaps we missed something, as we didn’t closely follow the conversations here and the development of this matter.
(3) This post represents our opinion and is not intended to offend or criticize anyone involved in the foundation’s structuring. The sole purpose of this message is to provide the ARB DAO with supplementary information and insights on structuring issues, allowing them to better align the corporate structure with their needs and intended objectives.
(4) If you have any questions or require additional information, feel free to tag me or send an email to hello@daobox.io. I’ll make an effort to check back on this periodically and respond as needed.
Cheers!
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I was having a look through the documents and noticed a number of areas for improvement. Unfortunately, the deadline doesn’t leave enough time to do a deep dive (although these documents could do with a decent scrub as there is a lot of subtlety involved when “converting” standard corp docs into forms that are suitable for DAOs). I’ve been drafting documents in the technology and Web3 space for a very, very long time so there were also some obvious things that jumped out at me which I’ve flagged in the comments, particularly in relation to the inconsistencies across the documents and lack of important definitions.
The DAO won’t have many chances to get the Foundation documents adjusted once they are approved by the board and given that the documents are already being updated, I thought it might be helpful to address several governance concerns raised by the community. I think there is some benefit in looking at how Maker DAO went about their Foundation corporate documents as they were expertly handled at the time.
My updated versions were converted to Word and have been uploaded to Github. It’s not great for collaboration but I’ll let the team take back document control from here.
There would be a bit of work to get these into a state I’d accept for a DAO and some open questions to answer regarding the legal status of Security Council members who, to my mind, take on greater exposure than the board of the Foundation and receive no protection whatsoever from the Foundation or the DAO.
As I’m a lawyer practising in this space, I have to mention that my comments and edits are subject to the usual legal disclaimers.
I’m sure the Arbitrum team has capable lawyers to make the necessary changes but feel free to contact me if further clarification is required.
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way to go. nice to be heard
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Blockworks Research will vote in favor of AIP-1.2
We strongly approve of the changes that make the DAO’s power over the Foundation much more clear. These include:
- The ability for the DAO to make any Non-Constitutional Funding AIP with respect to the Administrative Budget Wallet.
- Changes to the Bylaws that specify the DAO’s ability to replace or change the number of directors.
- The ability for the DAO to require the Foundation to take certain actions.
Though the process to get an AIP approved is long (~1 month), this will help ensure proposals have thoughtful contributions and discussions. We are also fans of the processes outlined in Section 1 that allow the permissionless creation of L3s and the prerequisite of DAO approval to create governed or non-governed chains using Arbitrum technology.
The decrease in required votable tokens to propose an AIP onchain from 5 million to 1 million, as suggested by @limes, allows 31 delegates to propose AIPs in place of 4. A very favorable change for governance decentralization.
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For a delegator I think this is rather reasonable. 1,000,000 tokens of 1,000,000,000 token supply assumes, (if all tokens are delegated) only 1,000 proposers max.
This adds power to the DAO’s we all know and love on chain. I am oddly behind this one.
ChainLinkGod will vote in favor of AIP-1.2.
This is a relatively straight forward proposal, for which I am aligned with its contents. Specifically the change from 5M ARB to 1M ARB for the minimum threshold to post an AIP on-chain would empower nearly an order of magnitude more delegates to create AIPs on-chain. This could have become a large issue down the line, so it’s good to see it being addressed now. @Sergey_daobox and @Pablo raise interesting points, though I am not a lawyer so my insight is limited there. Future votes can take place for additional modifications.
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arbitum is very good The proposed amendments are satisfactory.
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thank you to listen to the community, that’s what gonna lead Arbitrum to the moon
Thanks for bringing these facts and checks out. Indeed this will go a long way in strengthing the values and purpose of Arbitrum as a DAO. The AIP-1 didn’t go all that well. Thanks ones again. #Leadman1467
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The vote on proposals made engagement
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The proposed amendments are satisfactory, would like to proceed with it.
I’ll be voting in favor AIP-1.2
I think the changes made here improve the governance system as a whole.
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Blockworks Research has put AIP-1.2 live on Snapshot:
https://snapshot.org/#/arbitrumfoundation.eth/proposal/0x373dfa89fc9c5ccba8ed83fa3fa4f233edd270075b5f8f4f3902b408318d9d17
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(Posting on behalf of TreasureDAO as a member of its DAO council - Karel Vuong, Co-Founder.)
TreasureDAO will vote in favour of AIP-1.2.
We approve of the amendments proposed in AIP-1.2. While the changes are largely administrative in nature, they provide greater clarity into the DAO’s powers to govern over the Foundation with notable points raised by the great team at @BlockworksResearch.
Importantly, we agree with the lowering of the threshold for proposing AIPs on-chain from 5M to 1M. This is a positive change that will greatly empower more delegates to participate in on-chain governance and strengthen the degree of decentralization for the Arbitrum ecosystem.
The points raised by @Sergey_daobox and @Pablo are interesting and, while we cannot meaningfully comment on the legal structuring matters as non-legal experts, we believe AIP-1.2 as it stands is a meaningful first step to codifying important, initial foundational elements. This will pave the way for any future amendments that may be necessary to better align the DAO legal wrapper and corporate structure to satisfy the objectives of the broader DAO.
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It’s just cool that the team listened to the opinion of the community. Decentralization and openness can change this world for the better!
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At L2BEAT, we haven’t made our decision yet about how we are going to vote on AIP-1.2. We are leaning towards voting FOR, but we’d like to have more discussion around it. We’ll be having a community call on Wednesday, 12.04 at 12 PM ET, 16:00 UTC. We encourage all interested parties, especially those who have delegated their tokens to L2BEAT, to join the discussion; we’ll go through each AIP currently being discussed and will explain how we are going to vote and the reasoning behind our decisions.
We will post the link to the discussion later in this thread (we’re still considering which platform to use), and we will also post a short summary of the discussion here afterwards.
As for this proposal, we generally like the presented approach of adapting the Constitution, Bylaws, and A&R M&A following the heated discussion during the AIP-1 vote.
We’re still analyzing and consulting the details of those changes; we’ll reflect on them during our community call and summarize our thoughts here afterwards.
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