Florian Spychiger, Una Wang, Romedi Ganzoni - How to design a successful DAO

Transcript

so good morning also from my side um very happy to be here um so today we will have this workshop together how to design a successful da we will I will give you a short introduction uh what is the Swiss also because um we will use this as an example for in in especially una's part on how to decentralize a dow because that's what we're also working on currently and then I will also give you a short overview on organizational design of a DA red will give you an overview on the legal side and as said una will talk a bit about how to

decentralize Dows and then in the second part we would like to open up first for your questions but then also have an open discussion uh also hearing your experiences your opinions uh what makes a DA successful what are some Challen es how should we all go about uh designing those good as said I start shortly with uh Dow Swiss so Dow Swiss is uh the industry Association for Dows in Switzerland the aim of Dow WIS is to make Switzerland the go-to place for Dows globally so for this we want to create a platform for knowledge exchange

bring interested people together expert together um to tackle several challenges that um people are facing currently be it legal challenges be it challenges on the organizational design the technological challenges and so on so D WIS was created out of this need because we had many talks with different people that were always around this um ideas or challenges um when setting up a DA maybe to give you a bit a background so da Swiss is a legally a Swiss Association as such it has a a council

and a general assembly as any association what's a bit special in our statute we also have the da so which is a third body in Dow SSS um currently I have to say uh that Swiss is working rather like a standard uh Association Swiss Association um and we are now um we're now trying to decentralize more and more especially this uh Dow body because as of now the DA has uh this rights to improve H to propose some improvements uh of any kind besides that we also have working

groups I will tell you a bit about this and we have also a business manager mement uh position that is doing mostly the operational part just quickly this is the council currently uh three of them are here so Redi una and me but there is also Malik and Isa um part of the council that was founded uh a little bit in June last year um before this we were discussing about almost two years how to set up a dow Swiss which also show shows that it can be quite a long process to uh design a DA uh as also mentioned before in the talk from uh Anthony at Oregon who said

setting up a large Dow not not that Dow Swiss is extremely large Dow but in general setting up a dow can take uh several years we have many members uh several organizations um mostly from Switzerland and also many individual members that are quite uh in D with as I said we have four working groups at the moment so one group uh led by Red is mostly working on the legal and tax side then we have the organizational structures we have the tech and tooling side and we also have a dow Launchpad um the first cohort uh was just finalized now where we um help

young teams to set up St um and give them also an opportunity or prepare them for a pitch for funding uh this is in collaboration with the Ino booster uh blockchain Ino booster founded by inos Swiss then also just this is what the first presentation this morning uh there will be a dow Raider ecosystem you have seen a sneak peek this morning if you attended the presentation this will come out in uh I think May or June and you will have the full report on all the Dao activities in Switzerland good this was just a short intro to give you some background on da

Swiss now for the workshop I'm going to start to give you a short overview um it's an outcome of a research project that we did at the surich University of applied sciences where we triy to come up with a design framework from an organizational perspective for Dow I will also have a talk tomorrow in the morning uh at 10:00 it's not the best slot but still for the early birds if you're interested uh to know more about this uh Dow framework uh you can attend this uh lecture tomorrow and there we will really deep dive into this framework good so for those what we found uh so in

collaboration with many uh dsts in Switzerland land but also legal experts uh also organizational experts we came up with three major constituent elements of dows that play an important role when you think about the organizational design or on how to design dos the first that is often mentioned is the the purpose of a dow so first you should think about what do you want to achieve with your da because this is also an important thing to align than for example for your community and all your cont contributors what we also think is very important is the use case the business

case so how do you make sure that your Dow is sustainably finance for example that you can reward contributors that you have a business model that allows you to run uh your operations and then there is also legislation legislation uh um can be or can influence your organizational design so for example in our case with da Swiss we have uh we need to have a council we need to have the the general assembly so two organizational bodies that we need to have but vice versa maybe also your organizational design can then decide or determine uh your legal form but ramidi

will certainly talk more about this then besides this constituent elements of a DA four other structural elements that one can or should think about when setting up a dow that we identified is the decision making aspect so how do you reach decisions in a DA there are several ways do you want to include everyone in uh in the decisions do you want to include only a few what kind of mechanisms you want to use token based voting um some kind of more fancy voting mechanisms quadratic voting reputation based voting uh there are many

possibilities then tokens usually those have tokens um and use them to incentivize members to maybe issue membership rights to give governance rights and so on so there are also different ways how you can uh design this uh these token models then Treasury that's also one important part because often in a DA the members collectively somehow administer uh a treasury and decide on how this treasury is used or allocated and then another factor which is also quite important somehow

sometimes underestimated uh is the communication part so we can think about what should be communicated in a DA or do you want to communicate everything so this is a very following the transparency rules however there might be also an overload of information what kind of channels to want to use um in your Dow and so on and then the last but very important element um I think it also fits nicely with uh what again Anthony uh introduced before uh with the modular uh Aragon governance framework that you think about

organizational bodies in the sense that not only the you have the community which is an organizational body but there can also be other organizational bodies such as guilds that you define there might be a a core team that has a special role um some project teams that are maybe temporary organization bodies and they are quite Central because Within These organizational bodies you could have different decision- making mechanisms uh different communication channels they might have different ways on how uh to decide on part of the treasury um so this is seems quite a central part and it's there in many those even though sometimes it's not uh

explicit if you look at those many of them has some have some implicit structures might it just be the core team but maybe it's not an implicit body so it's quite important also to think about this so with this very short overview now let's focus on this part with uh R's input great thanks also from my side and welcome um I know the topic is how to design a successful da I'm the legal guy so I cannot tell you how you design your successful da but I can tell you how you should not design it because then you will fail and when it comes to Dow usually have two

topics that are the most crucial ones uh the most crucial ones are the qualification of the token of the Dow and the second one the structure of your Dow and when it comes to token qualifications you see these circles you have payment tokens asset tokens and utility tokens so the payment tokens ones are the ones that are used to make payments to buy stuff so eth usdc Bitcoin would be payment tokens then you have the asset tokens they're the ones that give you a claim against someone so be membership be a share um be it uh Revenue share of some protocol they all most likely fall into the asset

uh as a token category and then you have the utility tokens they're the ones that give you access to a to a application or a service on chain and as you can see these circles they overlap so Tok tokens can be both best example is eth so eth has been issued as a pure utility token you can use e to use the etherum network um but over time it developed also to a payment token because you can use eth to buy nfts and that's why you will be there somewhere in between in the overlap of payment and utility token and the same is true for utility and asset payment

and asset so hybrid tokens are possible and my question is why do we even make these categories do does any of you have an idea legal re legal reasons exactly so you see the same again payment token asset token utility token with description and typical regulations that's the important one on this slide so you have with payment tokens usually AML so anti-money laundering laws are applicable that's important for you if you issue a token for your Dow and that token can also buy be used to buy stuff then you have to comply with AML so you

have to kyc the contributors you have to kyc people that you give an airdrop can be quite complex um aset token you heard Securities regulations probably all over the place so as to tokens usually security regulations apply means if you issue a token uh your Dow token that is also considered the security then you have to comply with these laws you have to potentially issue a prospectus key information document secondary Market is highly regulated so they shouldn't even be on dexes but usually they are and then utility token That's The Sweet Spot that's where you want to go so utility

tokens are not regulated uh that's why you should triy to remain in that realm then the legal structures of D um here we have to make the first distinction the most important one is actually is it an unrep Dow or a rep Dow and a a repti would be a DA that is part of a uh of of an entity of a legal entity and an unwrap da is simply you distribute tokens but you don't have a legal entity around that Dow and we will see that the unwrapped out they have this problem that sometimes they qualifies as simple Partnerships and we'll we look at what that means for you as an issuer but also if you hold

one of these tokens and the last one yeah we'll look at two different unwrapped Dow structures so I took these are I mean you can make really you can play around with it you can make so many different structures mostly it comes down to these three structures that we have so the first one is a principal agent Dow on the left side that Circle that's the Dow with the different people that hold the Dow tokens and you see the dollar sign that means that the da owns a treasury the da owns IP whatever you have in your

project and The Black Arrow there that would be the contract so usually in these Dows that do not have an entity around it um they have contracts directly between the Dow and counterparties and that brings about these blue arrows there so liability and that can be a big big issue as you see third parties or the members of the Dow may become liable towards third parties now in the second one we have the social signaling Dow it's also unre you see it the Dow is again on the left side as opposed to the first option we see that the arrows are a bit different

so and the treasury so you see the project entity in the middle has the treasury so the project entity owns uh the treasury the project entity owns the IP project entity enters into contracts with third parties and the Dow actually only has an advisory role that's why we call it social signaling so if the project entity wants to do thing something or uh Implement a new feature it can ask the doubt you want us to give a grant to developer XYZ to develop this new feature and the Dow can then also vote on it and um but the difference is that the

project entity can still decide no we're not going to do what the Dow set so that's one of the critics of this structure and the last one the rep da you see we don't have a DA on the left side but the da is really wrapped into a legal entity um that's usually Foundation or Association in Switzerland depends a bit on your needs and um the project entity enters into the contracts the project entity is liable towards third parties and the Dow is simply an organ of that entity and that's actually how we set up Dow wi in Dow WI as Flor mentioned before we have the council we have the general assembly

and we have the da as an organ of our association and now for you maybe important because there isn't one perfect form for every Dow um it always depends where if you have risk if there are risks involved what exactly you want to do with your Dow based on that you have to choose the structure and this here should give you a brief overview of the differences between especially the principal agent so that first one where the Dow is really up on the left um and the other twos and as I said the liability risk we see it already here if the Dow on the left side qualifies as a simple

partnership single members holding tokens could become liable for whatever happens in the Dow that's not really an issue for you me I assume for you also not but for big VCS for for example they don't want to be in a dow where they have this liability risk applicable laws and regulations um also here because if you have an unwrap Dow people are scattered all around the world you don't really know which law is applicable which regulations and if you have a project entity that actually runs the whole project like in the in the social signaling Dow and the rep Dow then usually it's a jurisdiction of that project entity and the laws of where

that project entity uh has its registered seat that apply and that can be an advantage because you have Clarity sometimes especially in the old days projects outsourced critical regulated parts of their project to a dow so that the regulator couldn't catch them um acquisition assertion enforcement of rights that means if you want to raise a claim in front of the court also there if you have an unwrap Dow it's very hard because who would go to court um who is the plaintiff um and that's different if you if you sorry if you have the project entity that enters

into all the contracts then it's clear who will file any claims the opening of Fiat accounts I don't know if you have experienced with that most crypto projects at some point they need a Fiat account uh um also that I have never seen an open Fiat account with a Swiss bank for a DA pure da um with the others when you have an entity that runs a project it's possible we were actually always able to help our clients to open a bank account but it's always a bit trickier than if you it's trickier to open a bank account for a crypto project than uh for a normal or web two

company risk of unfriendly takeovers also here if you have the principal agent Dow the one that has the treasury with itself they make decisions on how to use the treasury then um depending a bit on the qu if you have a majority qu that's required if somebody has the majority of the tokens he could actually decide O Let's transfer the treasury to my wallet um and that is something that cannot happen in the other two setups taxation with the principal agent Dow also here again they're scattered all around the world you don't even know which tax laws that are applicable um so

taxation is not so likely that you get taxed if you're in an unwrap Dow this principal agent Dow um but if um tax authorities think that you are liable for these taxes then the potential tax that you have to pay is much higher because you're liable again for the taxes of the whole Dow may be liable and not only for your taxes and that's definitely a an advantage of the other two structures and the level of decentralization in the first one the decentralization is really high because um the Dow has its Treasury under its control can decide whatever he wants to

do can distribute treasury um and in the other to it's less decentralized and I've have seen many projects at the beginning they comment say hey we want to be as decentralized as possible and over time they simply realize okay it's going to be such a pain let's be a bit more centralized and um usually it also depends how you live it I mean if you anytime every time when a DA makes a decision you overrule it then probably after a while your Dow token holders will not be happy um but if one but uh if if you usually follow the advice of the Dow then it shouldn't be an issue to

be a bit more centralized yes please you mean the repti at the bottom yes yeah I mean because in there the Dow is only an organ of that entity so it will always be the entity that that uh that is the owner the legal owner of the treasury however what you maybe mean is that the da can decide how to use it and that you can actually choose in the Articles of Association or okay maybe on exactly yeah you can do it you yeah

that's that's possible but it will still be owned by the legal entity yeah yeah but control and ownership is two things but thanks yeah yeah I mean registered um you can register but you don't have to if you're for example in association yeah I mean usually usually we see Association or foundation and it depends a bit if you have a foundation

you take it if you if you for example are a Bas layer you people that build applications on your Bas layer they need to have trust that the funds that are in your entity are also used for that base layer and that your base layer will be there in 5 years time then they want they will prefer you prefer you to be an Foundation because in the foundation the funds they stay in there they they only belong to the foundation the foundation has to use it for that purpose and if you have an a company or an association then you can choose you can change your purpose and do something else by Lambos yeah yeah but it can hold

crypto yeah but yeah otherwise I that's why bank account and exchange centralized Exchange accounts are hard for those that would be then rather option one where you have the principal agent you know the it is owned by the da but the project entity would then enter into agreements do whatever but on behalf of the Dow yeah

yeah um sorry I'm not sure if I understood the question yeah I mean in theory even if you're not registered in the commercial registry you have an address finma will write send you a pre- enforcement letter uh you will have to answer questions uh they will knock on your door if you don't answer them correctly uh they will freeze your assets it's it's not really tied to the registration

that's what yeah and also the the association even if it's not registered has an address somewhere yeah but also um you mean in the first one or last one no in the association you have the association that is liable if it gives you protection yes that's I mean the example you're talking about the association is actually the last one and you can choose project entity can be a foundation Association or whatever

usually it's one of the two no that was I mean the law was changed if two 3 years ago to make sure that that doesn't happen it was clear already before but now they also wrote it down into the code and that's actually nice thing about the association because the costs to set one up uh are very low and it goes very quickly and you have protection I the technically yeah yeah we set up many

Association TS yeah think yeah I will not be able to answer

you the question nobody will um I can only tell you that the Swiss tax authorities they are of the opinion that there is no property on chain that is not owned by anyone unless it's lost but that they they take a bit position that they say okay but if it's owned by a dow and you are token holder then a part of it should be reflected in your tax returns but I'm not a tax lawyer just m yeah sure

exactly asso no it's an organ in the legal entity so it's not a separate legal entity no no of the the stat yeah okay like the general assembly is also not a separate legal entity and that wouldn't be either okay yeah you're very flexible if you have a foundation and want to have a dow organ in there then you're more a bit more limited because in the foundation you have to make sure that the funds are used according to the purpose of the foundation so you would not be allowed

to simply put all the the the funds into the Dow and they decide then to do something else with the money than spending it on the purpose of the foundation um well you mean like an A or so Association is just the easier thing to set up um and yeah I we looked at it we never took it it you also have the minimum Capital you have more requirements from the law that you have to adhere to either you go with the foundation or the association we are also set up once a Cooperative but the thing is a bit you usually if

you have a company limit by shares Cooperative with dividend rights then usually you fall into the category of asset token and most projects they really want to avoid that because otherwise your tokal will not be tradable yeah maybe we should go to the next part and that will be here afterwards thank you Roman so legal advice later um but I think um we open up for a really good um um now questions and a lot of people are asking like what about technical enforcement and legal enforcement what are the differences and

why are we choosing for example this uh rapper and more importantly I think after um one year of running our D Swiss and we also figured people have different opinion about what is decentralization and how it is actually measured and we found out there's not really a um um a good answer to what is actually the Matrix of decentralization um so that's what we're working on at the moment in dswiss and trying to form a matrix of decentralization to evaluate actually what um the L the stage of decentralization We Are are and also where we want to be in the future because for example in our statuten we wrote how we want to be more

decentralized as Association and we want to show our members clearly where we want to go next um first I throw this question also back to you please take out your phone not swipe but uh participate in my questionnaire and we go to the questionnaire page um first question is that huh oh okay no that you can use the code to like you can go to man.com and then use a code on top like the

6919 okay no problem yeah does it work are you done okay cool wait a little bit for the it is is like the normal demography right like at the two end always the least all right I guess the answer more

or less settled in if you have one or two more votes um I think it wouldn't change really um our result how it more looks um so one of question we figured that actually people don't agree on is are Dow actually decentralized and not just because like this it's called decentralized autonomous organization it will be decentralized it's up for design as we also discussed before so um according to this I think your opinion is very much similar to also what we learned in the past year that they are decentralized to various degrees so here uh we also want to have a framework to see uh what are the degrees of and what are basically this Matrix of decentralization and how do we measure it what are the degree that we were

really talking about and next also we brainstorm a little bit about what come to your mind when we talk about decentralization in DS does it come up to you is it Community is it decision making um is it um some um voting is it token what's your word that come to your mind when you talk about the centralization huh oh you don't have the uh I think how do we uh does it go to the I think it should

automatically go to the next one yeah okay perfect you're not answering my question yeah optim H chaos interesting you can put multiple words so like if you have um top three words can just re-enter in name only wow someone's

quite cynical about Styles okay wow so very little repetitive word democracy is getting a little bit larger okay we have chaos in the center great uh yeah which is true to some degree I think uh we're trying to sort this chaos that's do yeah and people like chaos it seems like since you keep uh repeating it so yeah yeah yeah transparency democracy

consensus yeah scam okay wow all right risks we getting more all right so as you can see we have a lot of aspect to think about and people have different understanding of what decentralization in Dow really relates to right some people related to transparency some people relate to democracy voting um some people related to scam um so we trying to I try to start to break it down in the um so the results basically like

dolls are not necessarily decentralized app for design and it's all not decentralized in all aspects not on all levels so one of the example aspects that I took here to brainstorm with everyone one is uh taken from um the organizational structure that Floren presented before like there are four aspects he presented as decentral uh decision making tokens uh communities and Treasury and as for a full decentralization for example let's set um goals goals on the bottom for decision making we want to have Collective and plsm decision making which means we have not only one Authority but possibly multiple authorities and multiple groups and or completely like usw Association so I

have literally one person one votes and everyone has equal votes and second for example for tokens we want to Fair token distribution for communications we want transparency sensorship resistency I think privacy has always been one of the major drive for web three communities and um for treasury for example we want a complete transparency on how the treasury spent and even possibly more rights on how to decide it and in the middle are perhaps certain mechan Ms or tools you can use to facilitate this decentralization which are voting and design of autonomics uh pom and possibly of report and so besides these four aspects

that we want to decentralize there's also degrees into a different decentralization um aspect so here I put in for example for decision- making there are operational decision making which are day-to-day business and you probably has ability to propose um for example what we want to do next as an organization but then the next level will be more managerial then probably relate to Treasury and lastly it's more strategy like the vision of the organization and really the highest level of decision and this normally are the the deeper you go the more centralized they are in a normal organization and for example for tokens we have also a different Spectrum from private sale to completely equal opportunity a fair launch of token and

for communications obviously there are um two different aspect because one you can go for privacy one you can go for like complete transparency for communications for cons uh for transparency for communication that means all your communication are public and you are public to all your members um that's the highest degree but obviously that's our for debate and I will come up with some risk of that in the next page too um for for like obviously for um um privacy then there's for example ZK proofed um privacy Anonymous channels you can set up and also Anonymous um forms tables that you give out to your members that they can um make their decisions more Anonymous and not linkable um I mean having an

address doesn't mean you're not uh linkable right so this is are we're talking about reading measures that to protect our um members opinion and be safe to speak about their opinion and lastly is the organization level of transparency um or private private that means you all working still like everyone probably don't review their identity um and then for treasury there's also different levels that the members can influence from proposal to a complete open treasury that's for example only on certain mechanism and automatically execution this can be also um possible and when we talk about this ideology that obviously we want to be

fully um decentralized or maybe that's our goal but there are obviously some risk to consider it um because when we for example I talk about when we talk when we saying uh maybe we want our communication to be completely public but when the communication are completely public then members are probably exposed to information overloads and then there's reputation complications on a lot of debate and that can also lead to uh policy hurdles and that can lead to um for example um um like uh also if you transparently open everything it could also make you competitive disadvantage against other organizations um and also people the sentiment sensitive sentiment means that

I don't know whoever buildt a dow here before but for example in in a Dows because member is at the center of dows so it's Community sentiments are quite important and this can be very sensitive and if you have all the information transparent it's also could be that then the community sentiment become very sensitive and shifting all the time and it will become harder to make decisions um and obviously for the others I think people probably um more known the risk to for example tokens there's Market manipulation um also when you um have a completely Fair launch you also have to consider how do you reward the existing contributors for example for us we have people that's contributed on different

levels I think it's also only fair to reward it in different tiers um um also for decision making also like I mean this is a known I guess risk tool for any low hierarchy and massive participatory governance that is uh policy paralysis which means that you can lead to a slow and long process of deciding um and this could make it make every decision a bit longer and make it hard to move forward as an organization and then talk about um the tools and the enforcement of decentralization like how um besides this risks that we have to consider for decentralization what are the really

means that we can help or what do we do to make your organization more decentralized so I see legal as enforcement since I'm from the tech and tooling group so I actually also agree I do think um in Dow one of the um well probably you've heard already the Cod this law um like um phrases where in da a lot of people also um believes that in uh in Dows we have technical enforc abilities that things can automatic happen when you have a treasury that is um self-coded and you basically vote into split this treasure and that's done like whether you have legal protection or not so I do think legal and Technical are two different ways of enforceability

and Technical enforceability are more on the operational side and the legal obviously deal with liability and accountability on a different level and when when dispute happens that's the tool probably want to go like really large disput um so I mean I don't want to um actually go through all of it it's quite a lot um but basically these are the legal and Technical um toolings you can um do for uh each enforceability of decentralization for different aspects and then lastly I want to share with everyone like where we are as St Swiss as example using this framework for example and then like where we want to be so the the the um dark uh solid

one is where we are now and uh the empty ones are where we want to be in the future um and you can see that next to each aspect and in different degrees we put uh where we are at the moment um and as you know we actually spent one and a half years largely Was preparing for the legal legal documents for setting up our association so we have previously already a lot of legal effort into which is actually different from a lot of dolls I don't know each if any of you are a dow founder a lot of dows actually start as just an online group and they don't they don't seek legal um um entities until they figure that they probably need some protections and it's

uh it's getting more serious but we actually started we were very serious in the beginning um and then so we we started with the legal entity so we have already our legal um uh setup that with our decision making because as Association you have one person one vot so and in our statuten at the moment we have all the we have we give Dow The Proposal rights but probably not the decision right at the moment but in the end Our member could come at the end to our um Gathering and still vote on all the major issues that that's that's happening but that's through kind of a formalized um fine U Gathering and on on chain voting at the moment doesn't count

that much yet um and then we have for example token um that that's where we want to be we don't we're still in the process of getting consensus from our community um for communication um we have um um we have a lot of um Anonymous um voting and form set up um but we don't have the we don't have at the moment for example more Channel and more consideration on how to protect people's opinion um because also because we set up as a fine and a lot of people we know each other in person this is also a difference when you are only a purely online community and physical community and lastly um so for treasury um at the moment we have um proposal right for uh for our me for our DS uh Dow members um

but in the future also we write in statuten we want to be completely decentralized so that's our that's where we want to be in the future and hopefully um this give you a lot of thinkings and give you a framework to think about decentralization in D and we can open up um for questions uh yeah and [Applause] that's I want to Max what maybe maybe I can give you the microphone thanks guys I I am actually

creating an association right now with Michael coun from your law firm and he talked me out of doing a DA because of the difficulty and we're going to start using snapshot to administer the votes for the association I was just wondering what you guys are doing right now if it's just amongst yourselves voting in the association or if you actually set up Snapshot or do anything like that and wanted to know well you kind of explained the difficulties and I've been you know I'm going my other question is when you started the association did you write into the everything that you could do a DI later that you were going to do a DI or can you start the association and later just incorporate that things that I'm working on right now thanks yeah I'll leave the technical

part to you but um regarding the decentralization yeah we are very centralized at the moment uh in the Articles of Association you write down which body has which competencies and we already took in that we want to decentralize over time those aspects that make sense to have decentralized um but still I mean we could decide not to do it and that the da would be uh would not have a a right to appeal question you had another question about snapshot yeahor SN yeah yeah we we actually have a a

snapshot but obviously there's split opinion on like on and often I really like snapshot uh we have a snapshot account and that's super easy to set up uh but it's offchain and also actually our our organization also set into multidisciplinary as you can see we have different aspect want to consider and we have a lot of people that's actually not really on chain U so even for Communication channel I was talking about like a lot of people are in slack and you know like our more official are not really in telegram or Discord so because of this like we're always a little bit hotate on like can our people like um able to like there are people with no wallet in our association so um yeah like I from my perspective I think

we totally should go for it and more maybe even Beyond like do on chain buting and we're also trying to set up the token so with the token everything will be uh the governance part will come in more serious yeah yep maybe I can jump in so with the

association it's not such a big issue because the association is not allowed to distribute revenues to and that's why even if it's a membership rights I mean it's a bit short it was a bit short I didn't list all the membership rights that fall under it otherwise the presentation would have been not so nice um so yeah with the association you don't have an issue because you're anyways not allowed to distribute revenues yeah I don't know if I can say that out loud

but uh yeah yeah yeah FWB uh no not really I don't know where they registered um they're more in the US operating but they still started also more in the US but it they started online um isues H they didn't run any legal issues uh I think they're quite okay they're more like a party um you know artist community and then they have a lot of offline um events that's also why the revenue stream is quite working quite well for them because they have token gated tickets for a lot of their events yeah and I mean legal issues I often have it that clients come to me they want to do

something I tell them then you're regulated they tell me yeah but other projects are also doing it my answer is always look if you want to be successful and if you plan to be successful then at some point you will be on the radar of the regulator if you're not successful the regulator will not care yeah you you don't want to be a security token because other then you can also not be traded on exchanges I mean there are several

setups how you can do it either do it completely decentralized or have the revenues not from the token but later on that you can put it into a liquidity pool or however but you always have to watch out so maybe do we have to who is who was yeah sorry I didn't understand how do you what was I mean you can be an anonymous in our Dow you cannot be

anonymous in our association so being part of general assembly would not be possible because you will be a member and we will have to know who you are the hold the Dow token you can always do and the second part was we don't yeah but in the Dow you would not have one person one vote y yeah middle what what was a VC Dow that

M yes we have yeah we um actually one of our member Isa like also been there they were co-founders of um for the wind which is a VC da and uh we can take the conversation outside if you're interested in VC I think we we have to go I'm really sorry I didn't understand

your question I'm I'm not very good at hearing I will come a bit closer think um so the question is um what are the legal risks that we cannot um that one party maybe in Switzerland or maybe abroad uh do don't recognize the legal Whopper as the Whopper of the Dow but uh um do some justice um procedures against D members um so you mean if you have a dow wrapped into a legal entity then I don't

see the risk I mean if it's an organ of an association nobody will come up with the idea to sue that organ it will always be the association if the board member yeah I mean you you have the same risks as in traditional companies if a board member doesn't behave well he can be sued yeah but he has to act uh not in line with the business judgment Rule and not

in line with the statutes of the company so the threshold is much higher [Applause]