This proposal is a logical and viable option considering the present condition of the protocol.
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Have you considered potential legal ramifications of this type of action? Do you believe that this would not violate securities law or that if it were in violation, that it’d be unlikely for action to be taken against ROOK tokenholders?
I’m not a lawyer so don’t know the legal specifics but I’ve definitely gotten the sense that that’s the strongest argument against this type of action, regardless of all of the other points (which I do not entirely agree with). Specifically as a tokenholder, I wouldn’t want to put myself in legal jeopardy.
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I am in support of this proposal - I resonate with all points stated above
I’m not a lawyer so don’t know the legal specifics but I’ve definitely gotten the sense that that’s the strongest argument against this type of action, regardless of all of the other points (which I do not entirely agree with). Specifically as a tokenholder, I wouldn’t want to put myself in legal jeopardy.
This is my feeling as well.
Have you considered potential legal ramifications of this type of action?
I recommend that @Wismerhill do some legal homework on this proposal idea and come back with an update. Sophons and voters would be crazy to knowingly put people in legal jeopardy.
I think it preposterous to believe that an american securities law would be enforced upon thousand of worldwide, anonymous, smaller holders, on a tiny semi-abandoned project of > $10m market cap.
DAO dissolution has been practiced several time and not once has it been prosecuted, specially not to tiny projects as rook, and, eventhough I’m not a lawyer, the past year of leeching from the treasury could also be considered against the law, as the Rook team held tokens and built up governance with the sole purpose to profit off of it.
I support this proposal wholeheartedly, profit aside, is the right thing to do.
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DAO dissolution has been practiced several time and not once has it been prosecuted
When other people do something, it does not suddenly become equivalent to something else or legal. It’s possible those other scenarios are not relevant, not equivalent, and/or also illegal.
eventhough I’m not a lawyer
…
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That’s fine for you to believe but acknowledges the crux of the point - there is legal risk that some might not be willing to take. Tokenholders can collectively vote to commit this action but need to know the risks that it entails and I believe that that background is lacking from this proposal in its current state (note that I’ve also requested more legal info for the other proposal as well).
If you want to make a legal claim as to how the past year is “considered against the law,” please provide legal evidence as to what laws have been broken. Not being a lawyer, I can’t say firmly one way or another but throwing out accusations without grounds to back them up is unproductive.
The Rook Quarterly reports cover updates from all branches of contributors. The objectives of of the project is clear, secure as much volume as possible. The last product launch fell short as you mentioned, the next two product launches aim to fix the lack of volume.
Using the DAO Treasury to advance the Rook Protocol is a perfectly fine use to me. Do you have any specific ways you would like to see the Treasury used in its current state?
A few observations that seem important:
- Team doesnt want to operate in a DAO anymore (or at least a large enough fraction counting the CTO)
- A large component of holders do not trust the team to operate in holders best interests and want out.
- Another subset of holders want to stay on and try to be a part of this
- Guard has devised a complaint way for people to leave (JZ prop)
Therefore, I think there are two pieces that can come together. We do the spinout DAO at a reasonable price so people can exit. Reasonable is cash value plus modest premium for losing governance control of the tech. People who want to stay and team then keeps the rest of the treasury and also the tech. Stayors and team independently determine next steps for Rook token and project after split. Leavors determine their next steps for spinDAO after split as well. I’d estimate that this will end up being roughly 40/60 on leave vs go (based on other votes) so team will have like 3 yrs of runway plus all the tech that should print. Win-win folks
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I feel like everytime we talk about distributing treasury, the core team talks about legal risk while they are siphoning $7m/year.
Lol the legal risk is theft right now
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If the bottleneck is the legal risk taken by token holders who decide to redeem then:
- redemption is not mandatory (i.e some token holder can stay, other can leave)
- redemptors sign a disclaimer that this is their choice and only choice and they acknowledge the legal risk associated
If a DAO is classified as a general partnership, every token holder takes on legal liability for other token holders’ actions so the scope of legal action isn’t limited to JZ, the team or even sophons. Maybe you can write some legal disclaimer (I’m not a lawyer, etc.) but it’s not as simple as it might seem. Offering the option for potentially illegal activity might be questionable enough.
I’d recommend taking a listen to a call Guard did a couple days ago: Craig Recording. He points out there may be some legal avenues to take but also talks about why there are legal concerns.
I can’t speak to all of his intentions but I think JZ’s proposal was very much focused on keeping things legal. Perhaps a compromise can be worked out (such as tedward’s) that does not venture into potential securities issues.
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One of the main purposes of the treasury is to advance the protocol. People have to be paid to do work on groundbreaking stuff, their time is not free. This is just a very short sighted KIP in my opinion from people who are just looking to make a quick buck.
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@Stile @j_z Have you considered the potential legal ramifications of this type of action?
There are multiple ways to address this issue. One of them would be the one proposed in @j_z proposal with the creation of a new DAO, and the agreement of the current DAO to transfer the ROOK-governed treasury to this new DAO, in order to explore potential new options with a higher degree of flexibility.
Eventually, if it makes sense for the current management team to go private but keep the current DAO structure, they could decide not to opt-in to this newly formed and funded DAO, and negotiate to keep some part of the treasury and to separate the ROOK token from the current DAO.
This would end up being a dissolution of the ROOK-governed DAO, but would allow the current DAO structure to keep its organization and team in place.
We understand the legal risks. But frankly a lot of other DAO have done similar things, and when $40m treasury is in the balance, the r/r for the token holders is clear.
You can’t have a zero-risk approach in crypto, and trying to minimize the risk shouldn’t a good reason to assfuck token holders.
Again I think that with the following proposal legal risk is already highly minimized
- redemption is not mandatory (i.e some token holder can stay, other can leave)
- redemptors sign a disclaimer that this is their choice and only choice and they acknowledge the legal risk associated
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How do you propose we go about finding a premium that satisfices all parties involved?
What you’re describing sounds very similar to the Incubator DAO proposal. Spinout DAO, Incubator DAO, Ragequit DAO, etc, it’s all the same thing. It’s basically the new DAO plus a proposal. Then whoever’s left can do what they want with it.
I would like to detail how this implementation could happen:
Create Equitable DAO to govern the received totality of treasury assets from ROOK DAO treasury, governed by pROOK, a governance token created by burning ROOK for pROOK.
Equitable DAO Inception
At launch, the Equitable DAO will inherit the governance of the current DAO. It will require at least 4 multisig signers and 4 sophons. At least 2 sophons should not be multisig signers. Sophons and multisig signers can’t be contributors or former contributors of ROOK DAO. Sophons and multisig signers can only be eligible if they sign an agreement to the governing principle of Equitable DAO.
Nominations for signers and sophons will be by open solicitation, and people will be able to self-nominate. There will be a public vote to elect signers and sophons from among the nominated candidates.
A multisig wallet must be created to serve as the treasury for the Migration DAO. The elected signers will be added to the multisig, and any non-elected signers (including the creator of the multisig) must be removed.
Multisig, signer, and sophon addresses must be listed on this proposal before it goes to vote.
The Equitable DAO will be governed by one key principle:
- Equitable DAO sole mission is to distribute value equally and use its treasury only to allow a ragequit process
The Equitable DAO will be governed by pROOK.
No Double DAO Rule
Current ROOK DAO team members won’t be allowed to participate in Equitable DAO governance. Therefore, they won’t be allowed to become multisig signers or sophons.
ROOK tokens currently owned by the DAO in the DAO treasury and Strategic Reserve won’t be allowed to migrate to pROOK, as they are currently owned by all ROOK governance tokenholders.
Migration
It is envisioned that there will be a 3 month period during which a smart contract will allow ROOK holders to burn their ROOK tokens for pROOK tokens. This 3 months migration window could be extended for another 3 months, to be decided by the pROOK governance. At the end of the migration window, no ROOK can be burnt for pROOK.
During the 3 months of migration window, there will be no expenditure or use of the treasury, in order to allow the migration to be conducted properly. At the end of this 3 months window, Equitable DAO will create a smart contract to allow all pROOK holders to claim their pro-rata ownership of the treasury assets.
Thanks for the proposal and offering a viable alternative of a strategic overhaul of the DAO.
What would be the voting and path election be?
For example, I’d guess there would be active holders who may want to rage quit, others (team members) who would stay on one other path - and then there may be those who simply don’t vote or elect at all?
What would be the voting and path election be?
For example, I’d guess there would be active holders who may want to rage quit, others (team members) who would stay on one other path - and then there may be those who simply don’t vote or elect at all?
The community is reaching a consensus around the creation of Incubator DAO, which would give an opportunity to holders to unlock value in the treasury. This could be complemented by the implementation of the rage quit process detailed here: KIPX Draft: Implement the rage quit process at Incubator DAO.
If the full dissolution was reaching community consensus, the answer to your question would be that the DAO would completely be dissolved and would cease to exist. Therefore, the ROOK governance token would no longer serve any purpose, apart from being used to be exchanged for its pro-rata share of the treasury, so there would be only one path.