Background
This sample DAO Operating Agreement outlines the operating structure of a Decentralized Autonomous Organization (DAO) governed by the laws of the state of Wyoming that is algorithmically managed in accordance with the Wyoming Digital Assets Supplement. The agreement covers essential topics, including the organization’s purpose, governance, and financing structure.
The agreement defines the DAO’s governance structure, which includes Members and the DAO Council. Members can participate in the DAO’s activities, assert governance rights, and hold economic interests in the DAO. The DAO Council has broad powers to manage the DAO’s activities, including the ability to create and execute proposals, set budgets, and manage the DAO’s assets.
The agreement also covers financing and capitalization. Members can make contributions to the DAO’s capital by purchasing a membership non-fungible token (NFT). The DAO Council can use the capital to fund proposals, operations, or distribute profits to Members. The agreement sets rules for how the DAO handles capital and how Members can withdraw their contributions.
Other notable sections include those covering Transferability and Membership Withdrawal. Members can transfer their membership interests to another person by transferring the NFT ownership. However, they forfeit all rights and benefits associated with their membership. Members can also withdraw from the DAO by dissociating from it, which forfeits all interests in the DAO, including governance and economic rights.
The agreement concludes with Miscellaneous Provisions, including the Entire Agreement section, which makes this agreement binding and enforceable, superseding all prior contracts or agreements with respect to the DAO. The Effect of Waiver or Consent section clarifies that any waiver or consent to a breach or default in the performance of obligations with respect to the DAO shall not constitute a waiver of the rights with respect to that default until the applicable statute-of-limitations period has run. The agreement also designates the law that governs the DAO and states that the DAO has elected to be taxed as a C-Corporation.
Overall, the DAO Agreement provides a framework for creating and operating a DAO under Wyoming law, providing clarity and legal protection to the DAO’s members and contributors.
The DAO Agreement outlines the operating structure of a Decentralized Autonomous Organization (DAO) governed by the laws of the state of Wyoming. The agreement covers essential topics, including the organization’s purpose, governance, and financing structure. Below you will find a brief table of contents that sets forth the structure of the Agreement:
Table of Contents:
- Article I: Definitions (Section 1.01)
- Article II: Consent, Notices, Regulatory Information (Sections 2.01-2.06)
- Article III: Establishment and Organization听(Sections 3.01-3.09)
- Article IV: Membership (Sections 4.01-4.02)
- Article V: Activities of the DAO (Sections 5.01-5.02)
- Article VI: Integrations & Utilization of Smart Contracts (Sections 6.01-6.05)
- Article VII: Management Structure and Authority (Sections 7.01-7.05)
- Article VIII: Rights and Duties (Sections 8.01-8.06)
- Article IX: Voting and Governance Procedure (Sections 9.01-9.07)
- Article X: Relinquishment of Membership/Membership (Sections 10.01-10.04)
- Article XI: Miscellaneous Provisions (Sections 11.01-11.04)
Sample Operating Agreement
A word document version can be found with proper formatting. Please feel free to download. A complete copy is provided below:
Algorithmically Managed Decentralized Autonomous Organization Operating Agreement of [DAO], LLC听
An Algorithmically-Managed DAO
Published _________ (the 鈥�Published Date鈥�)
听This Algorithmically Managed Operating Agreement (鈥�Agreement鈥�) by [DAO], LLC, a Wyoming based decentralized autonomous organization limited liability company (referred to herein as 鈥�[DAO]鈥� or the 鈥�DAO鈥�) is by and among [DAO] and its Members (defined below), which will be approved, amended, ratified, and/or revoked in accordance with (i) the terms of this Agreement; (ii) the Smart Contact of [____________] (the 鈥�DAO Gnosis Smart Contract鈥�) on the Ethereum Network (defined below); (iii) [DAO]鈥檚 Decentralized Autonomous Organization Limited Liability Company Articles of Organization, filed on [INSERT DATE] with the Wyoming Secretary of State.
Whereas, [DAO] was formed in accordance with the Wyoming Limited Liability Company Act (the 鈥�Act鈥�) and the Wyoming Decentralized Autonomous Organization Supplement (the 鈥�DAO Supplement鈥�);
Whereas, on April 21, 2021 Governor Mark Gordon of Wyoming signed into law Wyoming Senate Bill 38 (Wy. Stat. 搂 17-31-101-115), addressing decentralized autonomous organizations (鈥�DAOs鈥�), and outlining that DAOs will be organized, managed, and governed by the DAO members, Smart Contracts (defined below), and/or distributed ledger technology;
Whereas, the DAO was formed on [DATE] (鈥�Organization Date鈥�) in accordance with the DAO鈥檚 Articles of Organization (the 鈥�Articles of Organization鈥�), with the ENS [INSERT] as the 鈥減ublic identifier鈥� for the [INSERT] Gnosis Smart Contract, which was and is directly used to manage, facilitate or operate the DAO;
Whereas, Members have minted and/or purchased [Insert ERC-20 ERC-1151 standard] Non-Fungible Tokens representing membership and Governance Rights in the DAO after the Organization Date;
Whereas, Members consented and hereby do consent to be algorithmically managed in accordance with DAO鈥檚 Gnosis Smart Contract, the Articles of Organization, and hereby acknowledge and understand that the DAO has been managed and operated by the Gnosis Smart Contract as of the date herein, with certain matters that have been taken to a Member vote pursuant to Snapshot located at [INSERT] (鈥�Prior Member Snapshot Elections鈥�);
听Whereas, the address of the DAO鈥檚 Gnosis Smart Contract is [_________] (the 鈥�DAO Gnosis Smart Contract鈥�);
Whereas, in order for this Agreement to become effective and a binding agreement between [DAO] and its Members, there must be a Quorum of at least [Insert number] Members, with a Majority [Insert] approving this Agreement via Snapshot;
听Whereas, the DAO and the Members desire to grant and formalize the Governance Rights held by Members in accordance with the Act, the DAO Supplement, the Charter, and this Agreement beyond those matters previously taken to Prior Member Snapshot Elections; and
NOW, THEREFORE, in consideration of the Governance Rights granted to Members herein, to be algorithmically executed and managed by the underlying DAO Gnosis Smart Contract and in accordance with this Agreement and the Charter, the Members hereby agree to be bound, when applicable, to the following terms of this Agreement:
听
Article I
Definitions
Section 1.01听 听 Definitions. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in this Section 1.01 and when not otherwise defined herein, shall have the meanings set forth in the DAO Supplement.
鈥�Act鈥� means the Wyoming Limited Liability Company Act and any successor statute, as amended from time to time. The Act is applicable to the DAO to the extent (i) not inconsistent with the DAO Supplement, (ii) otherwise provided for in this Agreement, (iii) or pursuant to the governance structure pursuant to the DAO Gnosis Smart Contract.
鈥�Authorized Member鈥� has the meaning set forth in Section 7.05 contained herein.
鈥�Agreement鈥� means this decentralized autonomous organization algorithmically managed operating agreement of the DAO, which may be approved, adopted, and/or amended pursuant to this Agreement or the DAO鈥檚 Articles of Organization.
鈥淎rticles of Organization鈥� means the documents registering [INSERT], LLC as a decentralized autonomous organization limited liability company, originally filed with the Secretary of State of Wyoming on [____________].
鈥�Airdrop鈥� means having an NFT or other Digital Asset transferred from one unique Ethereum Account (which pays the Gas fees) to another unique Ethereum Account usually in an unsolicited manner or because the receiving Ethereum Account has completed some form of pre-requisite qualifications.
鈥�Algorithmically Managed鈥� means an entity established so that it is controlled or otherwise managed by a decision-making protocol and/or Smart Contract featuring an updateable, modifiable, or otherwise upgradeable protocol automated on the DAO Gnosis Smart Contract or other related Smart Contracts owned or controlled by the DAO Gnosis Smart Contract.
鈥淎utomated Transaction鈥� means a transaction conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one (1) or both parties are not reviewed by an individual in the ordinary course in forming a contract, performing under an existing contract or fulfilling an obligation required by the transaction, as defined in Wy. Stat. 搂 40-21-102(a)(ii).
鈥�Bounty鈥� means a reward users receive for performing tasks assigned by the DAO.
鈥�Charter鈥� means the internal governance document for the Members with such policies and procedures contained therein.
鈥凄滨笔鈥� means “DAO Improvement Proposal.” DIPs are [INSERT] proposals which Members publish to the Forum, and upon community discussion, may be formally voted on in Snapshot Elections in accordance with this Agreement and the Charter.
鈥淢别尘产别谤鈥� means any member of the DAO who is afforded all rights and benefits, including Governance Rights, as provided for by the Act, the DAO Supplement, and this Agreement. A Member must hold an [Insert ERC-20 ERC-1151 standard] Membership NFT pursuant to the underlying Membership Smart Contract and consent to this Agreement by executing a transaction via such Member鈥檚 wallet (via a Snapshot Election or another governance tool) or consent to this Agreement in accordance with Section 2.01 contained herein.
听鈥�Members NFT鈥� means specifically any one of the [Ten Thousand (10,000) ERC-___ NFTs] minted by the Members which are algorithmically governed by the Membership Smart Contract [Insert Membership/NFT Smart Contract].
听鈥淸Insert Name]鈥� means the algorithmically managed DAO created and governed by the Gnosis Safe Contract [Insert]; created pursuant to the transaction hash: [Insert].
鈥淒AO Gnosis Smart Contract鈥� means the Smart Contract [Insert].
鈥�[Membership NFT Smart Contract鈥� 听means the Smart Contract on the Ethereum Network of [Insert Smart Contract], which is the initial 鈥渕int contract鈥� of all Membership NFTs.
鈥淸INSERT DAO NAME] Website鈥� means the website located at [Insert URL]
鈥�Membership鈥� refers to a Person or Holder having Control of at least one Membership NFT, representing a membership in the DAO.
鈥�Membership NFT鈥� means generally any one of the [Insert Number] Member NFTs鈥�Contribution鈥� means any Virtual Currency contributed by a Member to the DAO in accordance with the Act or the DAO Supplement.
鈥淐辞苍迟谤辞濒鈥� means lawful possession of any Membership NFT, as provided for in the Act, DAO Supplement, or this Agreement.
鈥�Consent鈥� means 鈥�Consent鈥� as defined in Section 2.01 herein.
鈥�DAO鈥� or 鈥�DAO鈥� refers to [Insert] LLC, a Wyoming based legal entity established pursuant to (i) the Act, (ii) DAO Supplement, and (iii) the DAO Gnosis Smart Contract.
鈥淒AO Supplement鈥� means the Wyoming Decentralized Autonomous Organization Supplement to the Act, effective July 1, 2021 (as amended).
鈥�Digital Asset鈥� means representations of economic, proprietary or access rights that are stored in a computer readable format, as defined in Wy. Stat. 搂 34-29-101(a)(i).
鈥�Digital Consumer Asset鈥� are digital assets that are used or bought primarily for 鈥渃onsumptive, personal or household purposes鈥� (as defined in Wy. Stat. 搂 34-29-101), which include 鈥渁n open blockchain token constituting intangible personal property as otherwise provided by law鈥� (as defined in Wy. Stat. 搂 34-29-101(a)(ii)(A)).
鈥�Digital Securities鈥� means Digital Assets which constitute securities, as defined in Wy. Stat. 搂 17-4-102(a)(xxviii), but shall exclude Digital Consumer Assets and Virtual Currencies, as defined by Wy. Stat. 搂 34-29-101(a)(ii,)(iv).
鈥淒iscord Server鈥� means the external third-party application in which the DAO hosts a unique server with certain communication channels open to the Members (with some channels of communication open to the public) and serves primarily as a mechanism for communication between parties interested in the activities of the DAO and as a medium for the DAO to publish and update official links to material information, as well as to help assist the communication of any governance protocol.
鈥�ENS鈥� means Ethereum Name Service: The DAO鈥檚 ENS, [INSERT], is the public identifier of the owner of the DAO Gnosis Smart Contract: [[INSERT]]; the ENS is itself a separate and independent Smart Contract, as the term is defined by the DAO Supplement in Wy. Stat 搂 17-31-102(a)(ix).
鈥�ERC-____鈥� means the multi-token standard in which the same token Smart Contract may include any combination of fungible tokens, non-fungible tokens, or semi-fungible tokens.
鈥�贰迟丑别谤鈥� or 鈥淓罢贬鈥�听 means the digital asset native to the Ethereum Blockchain which is used to pay for 鈥淕as鈥� (defined below) on the Ethereum Network.
鈥�Ethereum Contract Account(s)鈥� or 鈥�Ethereum Contract(s)鈥� is a type of Ethereum Account that is a Smart Contract, each having a unique Ethereum Address, which is conducted on the Ethereum Network, but there is no single private key used to verify transactions; furthermore, Contract Accounts run on the Ethereum Network and execute when certain conditions are met, particularly when transactions or messages are received from other Smart Contracts or Wallets.
鈥�Ethereum Account鈥� or 鈥�Ethereum Address鈥� means an account consisting of a public and Private Key pair which may store Digital Assets (such as ERC-______ NFTs) that are dependent upon the Ethereum Blockchain and Ethereum Network for functionality.
鈥�Ethereum Blockchain鈥� means the 鈥淥pen Blockchain,鈥� as the term is defined in Wy. Stat. 搂 34-29-106(g)(i), consisting of the underlying software, Ethereum Network, and protocols all necessary for the successful creation, functionality, and immutable transactional record of all Smart Contracts and NFTs.
鈥淓迟丑别谤别耻尘鈥� or the 鈥�Ethereum Network鈥� means the decentralized collective of nodes which verify, record, and publish transactions and data on the Ethereum Blockchain. The Ethereum Network continues to make the necessary updates in its core Smart Contracts as it begins to strategically overhaul and update the underlying protocol鈥檚 governing consensus mechanism.
鈥�Forum鈥� means the publicly available web application which provides for an official community discussion and commentary regarding the proposals made in the DIPs which are currently accessible at [INSERT].
鈥�Founding Member NFT鈥� means any one of the [Insert number] ERC-____ NFTs minted by the Members, having a token identification number of [Insert token identification number] and are algorithmically governed by the DAO Gnosis Smart Contract.
鈥�Gas鈥� means the unit and measurement for the computing power that is needed to execute certain operations on the Ethereum Network. This computing power is provided by the minters in the system, and since they use resources to produce it, they are rewarded with gas.
听鈥�Github鈥� means the open-source repository web platform allowing for the decentralized collaboration of the Public on nonbinding software or coding projects related to the DAO, currently accessible at [INSERT].
“Gnosis Safe鈥� is the Smart Contract Ethereum Account used by the DAO for its Treasury, requiring a Multi-Signature Smart Contract in order to access the Digital Assets held by the DAO, effectuate transaction, and/or interact with the Ethereum Network.
鈥�Governance Rights鈥� means the voting procedures established by [INSERT] pursuant to this Agreement, the Act, the DAO Supplement, with such Governance Rights being held by the Holders鈥� Membership NFTs as established and upgraded by the DAO Gnosis Safe.
“Guild” means any organization of Members tasked with carrying out specific functions related to DAO activities, governed and established by the Charter and the [__________] Gnosis Smart Contract.
鈥�Holder(s)鈥� means the Person and/or Persons in lawful Possession or Control of the private keys of any Digital Asset.
鈥�Majority of Membership Approval鈥� means that, after the establishment of Quorum, the Holders of at least [Insert Percentage] of the Total Voting Membership NFTs, vote to approve such proposed Membership action, measure, or proposal; for the purposes of clarity: any given Holder of Membership NFTs may elect to 鈥渧ote鈥� with multiple Membership NFTs.
鈥�Member鈥� means any Person in lawful Possession or Control of a Membership NFT with the DAO, who is afforded all rights under this Agreement, specifically Governance Rights and Membership Interest, as per Wy. Stat. 搂 17-29-401 (d)(i).
鈥�Metaverse鈥� means any virtual-reality or augmented reality space hosted on a Web3 platform in which users can interact on one or more platforms using Digital Assets.
鈥�Mint鈥� or 鈥�Minting鈥� means the act of the DAO utilizing one or more Smart Contracts to publish a Membership NFT or other category of NFT in Possession or Control of a the DAO the Ethereum Blockchain.
鈥�Multi-Signature Smart Contract鈥� means a system of access and/or controls relating to a Digital Asset for the purposes of preventing unauthorized transactions relating to the asset, in which two (2) or more Private Keys are required to conduct a transaction, or any substantially similar analogue, as defined in Wy. Stat. 搂 34-29-103 (e)(ii).
鈥�NFT鈥� means any non-fungible token on the Ethereum Network.
鈥�NFT Marketplace鈥� means an external web3 application allowing for purchase and/or sale of NFTs.
鈥�OA Approval and Ratification鈥� refers to [INSERT DAO]鈥檚 initial request to Members for approval of this Agreement via Snapshot, requiring a Quorum of at least [number] and a Majority of Membership Approval to ratify this Agreement.
鈥�Official Action鈥� means any action by a Person authorized by the DAO Gnosis Smart Contract or any other Multi-Signature Smart Contract that is funded by a DAO Snapshot vote in accordance with this Agreement and the Charter.
鈥�Open Blockchain鈥� means a blockchain as defined in Wy. Stat. 搂 34-29-106(g)(i) that is publicly accessible, and its ledger of transactions is transparent.
鈥�Organizer鈥� means a Person that acts under Wy. Stat. 搂 17-29-201 to form a decentralized autonomous limited liability company.
鈥�Person(s)鈥� means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; decentralized autonomous organization; or any other legal or commercial entity.
鈥�Principal Office鈥� means the principal executive office of a limited liability company or foreign limited liability, whether or not the office is located in the state of Wyoming, as defined by 17-29-102(a)(xvii).
鈥�Private Key鈥� means a unique element of cryptographic data, or any substantially similar analogue, which is (i) held by a Person; (ii) paired with a unique, publicly available element of cryptographic data; and (iii) associated with an algorithm that is necessary to carry out an encryption or decryption required to execute a transaction, as defined in Wy. Stat. 搂 听34-29-103 (e)(iii).
鈥�Possession鈥� means the ability to exclude others from the use of property, and includes use of a Private Key, a Multi-Signature Smart Contract exclusive to the secured party, a Smart Contract, or any similar analogue, as the term is defined by Wy. Stat. 搂 听34-29-103 (e)(iv). Possession shall also include delivery of certificated Digital Securities, consistent with Wy. Stat. 搂 34.1-8-301(a).
鈥�Public鈥� means any person who is not a Member of the DAO.
鈥净耻辞谤耻尘(蝉)鈥� means the number of Members that are needed to participate in a vote for such a vote to be valid.
鈥�Ranked Choice Voting鈥� means a Member participating in a Snapshot Election may rank any number of choices. If a candidate has more than half of the vote based on first-choices, that choice wins. If not, then the choice with the fewest votes is eliminated. The Members who selected the defeated choice as a first choice then have their votes added to the totals of their next choice. This process continues until a choice has more than half of the votes. When the field is reduced to two, it has become an 鈥渋nstant runoff鈥� that allows a comparison of the top two choices head-to-head.
鈥�Royalties鈥� means the percentage of fees automatically distributed to the Treasury upon any sales of NFTs originally minted by the DAO.
鈥淪econdary Market鈥� means any secondary market for the buying, selling or trading of NFTs in which a Membership NFT may be reasonably acquired (for example, OpenSea.io).
鈥�Single Choice Voting鈥� means each Member will select only one option to ascribe his/her/its voting/governance right pursuant to the DAO Membership NFT.
鈥�Sign鈥� or 鈥�Signature鈥� means any manual, facsimile, confirmed or electronic signature, as defined in Wy. Stat. 搂 17-29-102(a)(xix).
鈥�Smart Contract鈥� means an automated transaction, as defined in听, or any substantially similar analogue, which is comprised of code, script, or programming language that is stored on-chain and executes the terms of an agreement, and which may include taking custody of and transferring ownership of both digital assets and/or real world physical assets represented by the corresponding NFT, as defined by the DAO Supplement in Wy. Stat 搂 17-31-102(a)(ix): (i) the DAO鈥檚 Smart Contracts may administer Membership votes or issue executable instructions for certain actions, such as Minting NFTs, based on the occurrence or nonoccurrence of specified conditions and (ii) with respect to the nascent legal definitions, the term 鈥淪mart Contract鈥� will be used when describing the intended decentralized functionality, regardless of the exact technical implementation.
鈥淪napshot Election鈥� means the act of Members connecting the open-sourced Snapshot Application with a web3 enabled Ethereum Account in Possession and Control of a Membership NFT in order to cast a vote on any DIP which is stored in the IPFS decentralized storage system. Voting power is calculated at the 鈥渟napshot鈥� of the DIP which occurs on a specific block number of the Ethereum Blockchain which is predetermined, accessible at [INSERT].
鈥�Stablecoin鈥� means a type of Digital Asset which may use collateralization or an algorithmic mechanism to 鈥減eg鈥� its price or market value to some external reference, such as a unit of fiat currency like the United States Dollar.
鈥�Subsequent Mint鈥� means [DAO] making one or more Smart Contracts available for the Minting by Members (or other parties) after the Publication Date of this Agreement.
鈥�Token鈥� refers to any Digital Asset using blockchain technology. For clarity purposes, tokens are distinct from the term 鈥淣FT鈥�.
鈥�Total Voting Membership NFTs鈥� means the Total Membership NFTs participating in any vote of Members on a DIP.
鈥�Treasury鈥� means the Ethereum Account/Ethereum Address that is a Gnosis Safe and requires a Multi-Signature Smart Contract, with the DAO in Control and Possession of such Treasury; any Contributions or Royalties are automatically deposited into this Ethereum Account/Address, identifiable as: [INSERT]
鈥�Virtual Currency鈥� means a Digital Asset that is used as a medium of exchange and unit of account or store of value while also being unrecognized as legal tender by the United States government, as per Wy. Stat. 搂 34-17-101(a)(iv)(A)(B).
鈥淲补濒濒别迟蝉鈥�听 are identified unique electronic 鈥渁ddresses鈥� beginning with 0x that are run verified, recorded, and self-executed through a decentralized system using cryptography on the Ethereum Network.
鈥�Web 3鈥� means the decentralized internet, which may encompass both Digital Assets and decentralized applications such as Metaverse platforms.
ARTICLE II
Consent, Notices, Regulatory Information
Section 2.01听听 Consent. In accordance with Wy. Stat. 搂 17-29-401(d)(i), Membership in [INSERT] only requires a Person to have Control or Possession of a Membership NFT. Any person, entity, decentralized autonomous organization, or other legally recognized person is deemed by [INSERT] to have consented to this agreement upon (i) Signing and approving this Agreement in accordance with the OA Approval and Ratification (set forth above) from his/her/its Wallet; (ii) acquiring a Membership NFT via a Secondary Market, Transfer or other means to hold in his/her/its Wallet after the Publication Date of this Agreement; (iii) otherwise Signing for this Agreement with his/her/its Wallet after the Publication Date; (iv) or participating in a Subsequent Mint.
Section 2.02听听 Notice of Restriction on Duties and Transfers. The rights of members in a decentralized autonomous organization may differ materially from the rights of members in other limited liability companies. The Wyoming Decentralized Autonomous Organization Supplement, underlying smart contracts, articles of organization and operating agreement, if applicable, of a decentralized autonomous organization may define, reduce or eliminate fiduciary duties and may restrict transfer of ownership interests, withdrawal or resignation from the decentralized autonomous organization, return of capital contributions and dissolution of the decentralized autonomous organization.
Section 2.03听听听 Not Registered with Securities Regulators. Neither this Agreement, nor any Membership in [INSERT] are intended by the Organizer or the Members to constitute an investment of any kind, nor are they meant to represent an offer and sale of any form of an investment instrument as understood within the context of the Securities Acts. Nothing referred to in this Agreement, nor the Agreement itself, has been registered, approved, or disapproved by the U.S. Securities and Exchange Commission, as is the requirement for any form of securities classified as such under Section 2(a)(1) of the Securities Act; nor with the Wyoming Securities Commission as per the Wyoming Uniform Securities Act; nor with any other state securities commissions located within the United States. Membership NFTs (including but not limited to any Membership Interest in the DAO) do not represent an interest of any kind of any property or assets, both digital and physical, which are held by [INSERT] other than the Governance Rights.
Section 2.04听听听 Application of Wyoming Law. As a Wyoming based entity, the DAO, when applicable, shall adhere to the terminology as defined by the Wyoming State Legislature. It is the Members鈥� intention and understanding that any Membership NFT is classified as a 鈥淒igital Consumer Asset,鈥� rather than a 鈥淒igital Security鈥� or 鈥淰irtual Currency鈥� pursuant to Wy. Stat. 搂 34-29-101. It is the view of the DAO that Membership NFTs are classified as intangible property under the Wyoming Utility Token Act, as codified in Wy. Stat. 搂 34-29-106. Subject to other jurisdictional limits placed on specific courts by Wyoming law, the courts of Wyoming shall have jurisdiction to hear claims in both law and equity relating to any Digital Assets that are in Control and Possession of the DAO or its Members, as stated in Wy. Stat. 搂 34-29-105.
Section 2.05听听 Members Bear Risks. The Members referred to in this Agreement should be aware that they bear any risks involved in becoming a Member of the DAO. Members also bear the risks involved with holding any Membership NFT, if any, for as long as they hold a Membership NFT. In no circumstance shall a Member be deemed to be personally liable for any damages which may stem from their involvement in DAO related activities, unless such liability arises from the gross negligence or willful misconduct of the Member, as described below in greater detail in Section 7.05 and Section 8.03.
Section 2.06 Know Your Customer. As may be reasonably determined by [INSERT DAO], [DAO] may require (in its discretion) [DAO] Members to provide certain information to establish Membership identity, as may be required in accordance with the Act, the DAO Supplement, and/or any other federal, international, and/or state law/treatises.
ARTICLE III
Establishment and Organization of [INSERT], LLC
Section 3.01听听听 Formation.听
(a) 听听听听听 The DAO was formed on July 28, 2021, pursuant to the Act, DAO Supplement, and all applicable laws of Wyoming.
(b) 听听听听听 This Agreement shall constitute the “Operating Agreement” (as that term is used in the Act and DAO Supplement) of the DAO. The rights, powers, duties, obligations, and liabilities of Members shall be determined pursuant to the Act, DAO Supplement, and this Agreement. This Agreement is intended to set forth and define the rights, powers, duties, obligations, and liabilities of Members to the extent not set forth in the Act or the DAO Supplement. In the event of any conflict or ambiguity between this Agreement and any other document, including without limitation, the Charter, this Agreement shall control (except where such conflict or ambiguity arises between this Agreement and the [INSERT] Gnosis Smart Contract, Act, or the DAO supplement, all of which expressly control over this Agreement).
Section 3.02听听听 Name. The name of the DAO shall be 鈥淸INSERT] LLC.鈥� All DAO activities and DAO affairs shall be conducted in such name or such other names that comply with applicable law as the Members may select from time to time or are otherwise outlined in this Agreement.
听Section 3.03听听 Principal Office. The principal office of the DAO is [ADDRESS].
Section 3.04听听 Registered Office; Registered Agent. The DAO鈥檚 registered agent and office shall be [Inert Registered Agent]. The DAO may change its registered agent or registered office to any other in the State of Wyoming as may be determined from time to time by the Members in accordance with the Act and DAO Supplement.
Section 3.05 听听听Purpose; Powers.听 [DAO] was established for the purpose and mission of exploring decentralized governance mechanisms as well as establishing verification of physical asset ownership, such as real property, on the Ethereum Blockchain. The purpose and character of the business of [DAO] shall be to engage in any business or activity which may facilitate these goals, which includes (but is not limited to) those activities described below in ARTICLE V.
Section 3.06听听 Term of Duration. [DAO] shall continue in existence for perpetuity, unless the DAO is earlier dissolved in accordance with the provisions of the Act, the DAO Supplement, or this Agreement.
Section 3.07听听 Dissolution. A decentralized autonomous organization organized pursuant to the DAO Supplement shall be dissolved (in accordance with Wy. St. 17-31-114) upon the occurrence of any of the following events:
(i) The period fixed for the duration of the organization expires;
(ii) By vote of the majority of the members of a decentralized autonomous organization;
(iii) At the time or upon the occurrence of events specified in the underlying smart contracts or as specified in the articles of organization or operating agreement;
(iv) The decentralized autonomous organization has failed to approve any proposals or take any actions for a period of one (1) year;
(v) The decentralized autonomous organization no longer performs a lawful purpose or is no longer under the control of at least one (1) natural person;
(vi) Where all members of the decentralized autonomous organization have withdrawn in accordance with Wy. St. 17-31-114.
Section 3.08听听听 Amending Articles of Organization. Per Wy. Stat. 搂 17-31-107, the Articles of Organization shall be amended when: (i) there is a change in the name of the DAO; (ii) there is a false or erroneous statement in the Articles of Organization; or (iii) the [INSERT] Gnosis Smart Contract has been updated or changed.
Section 3.09 听听Amendment or Modification of Agreement.听 This Agreement may be amended or terminated only in accordance with the following events: (i) a DIP proposing an amendment must be passed (the 鈥�Amendment Proposal鈥�); and (ii) a Majority of Membership Approval with the Quorums set forth below:
(a) ____ months following the date of the OA Approval and Ratification, a Quorum of at least ____ Members amend, rescind or restate this Agreement;
(b) _____ months following the OA Approval and Ratification, at least _____Members are required to amend, rescind or restate this Agreement;
(c) ______ months following the OA Approval and Ratification, at least _____ Members are required to amend, rescind, or restate this Agreement.
听
ARTICLE IV
Membership
Section 4.01 听听听Citizenship is Membership in the DAO. Any Person in legal Possession and Control of the Ethereum Account or Wallet containing any Membership NFT is considered to be a Member of the DAO, as determined by the Act and Supplement. That Member is therefore afforded the rights and benefits of Membership/Membership and is deemed to have consented to be bound by the terms of this Agreement, per Section 2.01.
Section 4.02听听听 Future Levels of Membership. Future levels of Membership may be established by the DAO, provided any such establishment adheres to and is governed by the mechanism and procedures provided for by the Act, the Supplement, and this Agreement.
ARTICLE V
Activities of the DAO
Section 5.01听 听DAO Activities. [INSERT DESCRIPTION]
Section 5.02 听 Other Activities The DAO may conduct such other activities as decided by Snapshot Elections or by its Guilds as authorized by the Charter.
ARTICLE VI
Integration & Utilization of Smart Contracts
Section 6.01听听 Smart Contract Transactions. All transactions involving the DAO鈥檚 Smart Contracts will be verified by the Ethereum Network and recorded on the Ethereum Blockchain.
Section 6.02听听 听Membership NFT Mints. All Membership NFTs have been minted from the Smart Contract address: [INSERT].
Section 6.03 听听听Treasury. The DAO shall maintain a publicly viewable Treasury where all deposits, withdrawals, holdings, and other types of transactions involving the DAO鈥檚 Digital Assets will be recorded on the Ethereum Blockchain.
Section 6.04 听听听Gnosis Safe and Multi-Signature Agreement. The DAO shall require, throughout its existence, that a specific number of Members hold the Private Keys of a Multi-Signature Smart Contract Ethereum Account, in order to ensure that any transactions of Digital Assets held in the Treasury made by the DAO will require the approval of multiple Members. The Digital Assets that are in the Control and Possession of the DAO are currently stored using the Gnosis Safe platform.
Section 6.05听听 听Ethereum Name Service. The DAO will keep the registration of its ENS which resolves to its Gnosis Safe Smart Contract up to date and current and may choose to amend its ENS in accordance with the governance procedures outlined in this Agreement. In the case that the DAO allows for the expiration of its current ENS or changes its ENS resolving to its Gnosis Safe Smart Contract, it will file an amendment to the Articles of Organization (as its original filing stated 鈥淸INSERT]鈥� as the public identifier of the [INSERT] Gnosis Smart Contract).
ARTICLE VII
Management structure and authority
听Section 7.01听 听Algorithmically Managed.听 Except for situations in which the approval of Members is expressly required by this Agreement or by nonwaivable provisions of applicable law, the DAO will be managed in accordance with the Multi-Signature Smart Contract within or in connection with the Gnosis Safe Smart Contract, described above in Section 6.04, which may include any additional Smart Contracts or underlying protocols approved by the DAO. In addition, the Multi-Signature Smart Contract shall have the power to delegate tasks to any officer, employee, Member or agent of the DAO; furthermore, the Multi-Signature Smart Contract shall have ability to make clerical, non-substantive amendment or amendments, any waiver, repeal, amendment, restatement or correction to the Certificate of Formation of the Company and/or this Agreement.
听Section 7.02听 听Charter.听 The DAO may enact a Charter which will govern, amongst other things, the establishment of its various Guilds, to be managed by the DAO Gnosis Smart Contract, this Agreement, and the Charter. In any event there is a discrepancy between the Charter, this Agreement, and the DAO Gnosis Smart Contract, the DAO Gnosis Smart Contract and this Agreement will control and take precedence over the Charter.
Section 7.03听 听Guilds. The DAO will authorize the establishment of Guilds through its Charter.
听Section 7.04听 听Bounties. The DAO will periodically authorize or solicit its Members to perform bounties as necessary.
Section 7.05 听听听Indemnity For Acting in Official Capacities. So long as any Member(s) is acting solely within the scope of authority as granted by Official Action of [INSERT DAO] (each a “Authorized Member” and collectively the 鈥�Authorized Members鈥�), [INSERT DAO] shall indemnify such Authorized Member(s) from and against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise by reason of the fact that such Authorized Member is acting pursuant to an Official Action of the DAO, which relates to or arises out of the DAO, its assets, commercial activities, or affairs, if in each of the foregoing cases. Notwithstanding the forgoing set forth in this Section 7.05 indemnity will be limited to the extent not caused by the gross negligence or willful misconduct of such Authorized Member(s), for which, such Authorized Member(s) remain solely liable and will expressly indemnify [INSERT DAO] in the event of such gross negligence or willful misconduct, in addition to any action outside the scope of the Official Action granted by [INSERT DAO].
听
ARTICLE VIII
Rights and duties under this chapter of Membership NFT holders听 in their capacity as a members
Section 8.01听 Authority and Lack of Agency of Members. Except as otherwise provided in this Agreement, no individual Members shall have the authority or power to solely act for or on behalf of the DAO or otherwise operate in an agency capacity 鈥� either explicitly or implicitly. This includes, but is not limited to, conducting any acts that would be binding on the DAO or would result in the DAO incurring any expenditures, debts, liabilities or obligations not already approved by the DAO.
Section 8.02听听听 Standards of Conduct for Members. As per Wy. Stat. 搂17-31-110, no Member shall have any fiduciary duty to the DAO or any other Member except that of the implied contractual covenant of good faith and fair dealing.
Section 8.03听听听 No Personal Liability. No Member will be obligated personally for any debt, obligation, or liability of the DAO or other Members, whether arising in contract, tort, or otherwise, solely by reason of being or acting as a Member.
Section 8.04听 听Governance Rights. Any Person or Ethereum Account having Possession or Control of any Membership NFT has the right to partake in community discussions, propose independent DIPs, vote in Snapshot elections, and join in all other reasonable governance activities essential to the functioning of the DAO as a decentralized and democratic legal entity.
Section 8.05听听 Reimbursement. The DAO is not liable for reimbursing Members for any and all direct out-of-pocket expenses reasonably incurred when conducting operations connected with DAO activities of any sort. This includes any transactional charges incurred while interacting in any manner with the Ethereum Network, notably, for fees related to Gas or failed transactions, or any loss stemming from an outside attack or hack. Notwithstanding the forgoing set forth in this Section 8.05, any Member(s) acting pursuant to DAO Official Action shall be entitled to reimbursement of reasonable expenses incurred in connection with Member(s)鈥� Official Action(s) in accordance with this Agreement (upon providing written documentation of such reasonably incurred expenses).
Section 8.06听听 Future Rights or Duties. As the DAO evolves and refines its activities, any new services or projects will be assigned as future Governance Rights as appropriate, either in this Agreement or the Charter. Furthermore, any reasonable governance standards or procedures may be established by the DAO through a Snapshot Election (or other future DAO approved governance protocol) which may impose or confer rights and/or duties on Members, provided implementation is executed in accordance with the Act, the Supplement, and this Agreement.
ARTICLE IX
Voting and Governance Procedure
听Section 9.01 Public Transparency. As a decentralized autonomous organization limited liability company operating upon the Ethereum Blockchain, all of the DAO鈥檚 financial holdings are viewable by the Public at large.
Section 9.02听听 听听Community Discussion. Every Member will have the ability to access and participate in community discussions. The DAO will operate a Discord Server (or some other platform with equivalent features and/or functionality) which allows both Members and the Public to interact and engage with one another regarding the activities of the DAO. The DAO will always maintain a private communications channel accessible solely to Members.
Section 9.03听听听听 Information Accessibility and Records. The DAO will publish information relating to governance matters and material activities undertaken by the DAO either on its website, its Github, its Discord Server, or any other similar and effective platform. Members have no rights to separately inspect or copy records of the DAO, and the DAO shall have no obligation to furnish any information concerning the DAO鈥檚 activities, financial condition, or other circumstances to the extent the information is publicly available and viewable on the Ethereum Blockchain, as per Wy. Stat. 搂 17-29-410.
Section 9.04听听听 Meetings. All scheduled community meetings will be conducted virtually unless otherwise provided for. Any records of such meetings, including (but not limited to) voice recordings or minutes, will be posted to either the DAO鈥檚 website, its Github, its Discord Server, or any other similar and effective platform and therefore will be accessible by the Public at large.
Section 9.05听听 Forum and DIPs. All matters and DIPs which require a formal vote will be uploaded to the DAO鈥檚 Forum for a commentary period.
Section 9.06听听 Voting Choice. 听Single Choice Voting or Rank Choice Voting may be used during formal votes regarding the matters of the various DIPs. The DAO may choose to elect to change this to other mechanisms in accordance with the procedures set forth in this Agreement or the Charter, provided any such mechanisms also adhere to the Act and Supplement.
Section 9.07听听 Voting Quorums.听 The DAO may amend or establish its Quorum (for formal votes or otherwise) to any reasonable number of Members, so long the Quorum set is in accordance with this Agreement and/or the Charter; provided, however, that any actions involving Quorum are consistent with the Act, the DAO Supplement, and Section 3.09 contained herein.
听ARTICLE X
Relinquishment of Membership/Membership
Section 10.01听听 Transferability. All interests provided for within this Agreement and afforded to Members of the DAO under Wyoming law, including the ability to participate in the activities of the DAO and assert Governance Rights, are transferred to the subsequent Person in Control and Possession of the Private Keys of an Ethereum Account who purchases or otherwise obtains a Membership NFT. The previous Ethereum Account in possession of the Membership NFT, provided the Ethereum Account holds no other Membership NFT, forfeits all rights and benefits upon transfer, and will no longer be able to interact with the connected Web 3 applications used by the DAO for governance purposes.
Section 10.02听听 Membership Withdrawal or Dissociation. Any Member has the power to dissociate as a member of the DAO at any time, rightfully or wrongfully, by withdrawing as a Member/Member of the DAO by express will under Wy. Stat. 搂17-31-113 (a)(i). Members may not have the DAO dissolved for a failure to return any contribution of any Member/Member, if applicable. Upon withdrawal, that Member/Member forfeits all interests in the DAO, including any governance or economic rights.
Section 10.03听听听 Wrongful Dissociation. A Member鈥檚 dissociation is wrongful only if the dissociation: (i) is in breach of an express provision of this Agreement; or (ii) occurs in accordance with the Act, DAO Supplement, or otherwise set forth in accordance with the [INSERT] Gnosis Smart Contract.
Section 10.04. The Members intend that the DAO shall not be a partnership or joint venture, and that no Member shall be a partner or joint venturer of any other Membership with respect to the activities of the DAO, for any purposes other than federal, state and local tax purposes, and this Agreement shall not be construed to suggest otherwise.
ARTICLE XI
Miscellaneous Provisions
Section 11.01听 听听听Entire Agreement. This Agreement supersedes all prior contracts or agreements with respect to the DAO, whether oral or written. In the event of a conflict between this Agreement and any other agreement which may govern DAO activities or otherwise (including but not limited to the Charter), this Agreement shall be binding and enforceable, when applicable.
Section 11.02听听听 Effect of Waiver or Consent.听 A waiver or consent, express or implied, to or of any breach or default by any Person in the performance by such Person of its obligations with respect to the DAO shall not be a consent or waiver to or of any other breach or default in the performance by such Person of the same or any other obligations of such Person with respect to the DAO. Failure on the part of a Person to complain of any act or omission of any Person or to declare any person in default with respect to the DAO, irrespective of how long that failure continues, shall not constitute a waiver by such Person of its rights with respect to that default until the applicable statute-of-limitations period has run.
Section 11.03 听听Governing Law. 听This Agreement shall be governed by and shall be construed in accordance with the laws of the State of Wyoming, as described in greater detail above in Section 2.04, excluding any conflict-of-laws rule or principle that might refer the governance or the construction of this Agreement to the laws of another jurisdiction.
Section 11.04听听听 Taxation Status听听 The DAO has elected to be taxed as a [INSERT] 听pursuant to the Internal Revenue Code.
[End of Document]
