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Noun 40
@noun40
discourse around DUNA seems to be focused around the downsides (added KYC requirement to grantees) imo DUNA's massive upsides are: - reducing tax risk - providing limited legal liability to members while still allowing: - members to remain anonymous (privacy) - explicit voting rights to members if there are other avenues to achieve the above without any compromises then that would be wonderful, but as far as i know at the moment DUNA is unique in offering the above properties with limited compromises (paying taxes in the US, KYC req for grantees). more thoughts continued 👇
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Noun 40
@noun40
right now our tax position is that we're based in cayman. the nft auctions are permissionless and global but we tie the tax jurisdiction to the cayman islands via the foundation through the IP that it holds and its veto rights to the treasury. it's not a bad position. it's a position we built through good tax and legal counsel. but it has become increasingly tenuous in the 3 year history of nouns as one could attempt to argue that a good portion of the economic substance of the dao occurs in the US (esports, nouns movie, nouns fest, etc; plus many nouns buyers). i would much rather have a clear jurisdiction where we pay taxes (and in a tax year where treasury spend matches or exceeds auction revenue, the tax bill would be minimal) and it would be natural for that jurisdiction to be where the most amount of economic substance (nouns buying, treasury spending) occurs.
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Noun 40
@noun40
also on legal liability, currently it's very unclear what would happen if someone sued a dao member for legal damages (let's say something went wrong with a prop) or gov bring enforcement action for non-compliance with local regulations. the dao member argue that they are the wrong target. they have no responsibility here. the foundation is the one with control over the treasury and conducting the business activity. but this claim is also tenuous. we like to have explicit token voting rights (token votes aren't some signaling vote that is a recommendation to the foundation). if the claim that the dao = foundation isn't accepted then the court might assume the dao to be a general partnership in the local jurisdiction and it could lead to individual members being liable (such claims have been made in the california court in recent years).
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Noun 40
@noun40
this is a hard nut to crack b/c what entity structure allows for explicit voting rights (members make decisions) but limits liability? the typical answer is a c-crop or an LLC (limited liability company) but two problems with that is that we don't want the nfts to be securities (b/c issuing securities is a whole another realm of legal issues plus we don't see the nfts as securities but rather art with certain voting rights). the other problem is that corporate structures typically require the corporation to keep record of the shareholder identities. this would preclude the ability to have anon nouners. DUNA is quite unique here. it's a Unincorporated Nonprofit Association adapted for DAOs. so it's explicitly not a company (thus the token not a security). but still members are afforded privacy, limited liability, and explicit voting rights. quite a unique combination. you can read more about it here: https://a16zcrypto.com/posts/article/duna-for-daos/
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Bixbite 👽
@bixbite
Are the bylaws of the Foundation available for DAO members to view? Could even be through token gated access? A Cayman Foundation is defined as a legal person, which means the DAO can be a contracting entity and it can: - interact and form contracts with third parties; - file and pay taxes; - open bank accounts and make cash transactions; - hold and protect off-chain assets; - limit the liabilities of its members (if it has members); - protect intellectual property; - serve as a vehicle for airdrops and grants; and - act as a parent or holding entity with subsidiaries to carry out functions for a project. So does the Foundations bylaws limit the liability of its members aka Nouns DAO token holders?
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