[DRAFT] DAOstar: DAO regulatory interface and tax standards

ARCHIVED & OLD Missions
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S4 Intent: Governance Accessibility (Intent 4)

Proposed Mission: DAO regulatory interface and tax standards

Proposal Tier: Ember

Please verify that you meet the qualifications for your Tier:

I am a new community member that has not worked with or for the Optimism Collective before.

Baseline grant amount: 90,000 OP

% of total available Intent budget: 9%

Alliance name: DAOstar Millennium Falcon (Millenium Falcon is the name of this WG.)

Alliance Lead: Joni Pirovich

Contact info: joni@badasl.com, info@badasl.com

L2 recipient address: 0xd39D6d3F7433A0caBD90c0Ea74d76dA29b718314

Please list the members of your Alliance and link to any previous work:

  • Joni Pirovich: an advocate for responsible web3 innovation, founding LawFi DAO in July 2022 to further her contribution to web3 education and responsible policy development. BADAS*L was opened in early 2021 to operate as a distributed law practice where Joni provides legal and non-legal services to a range of clients including law firms in various web3 matters spanning tax, securities and financial services, IP, labor, litigation and AML/CTF compliance. The learnings from Joni’s distributed law practice filter through in the thousands of hours spent on policy contributions since 2018, available at Policy. Joni has recently contributed to the 2023 World Economic Forum DAO Policy Toolkit and sits on the DAO Panel for the UK Law Commission. Since early 2023 Joni has led the Regulatory Interoperability Working Group of DAOstar, the standards body for DAO, focussing on a DAO registration standard based on the COALA DAO Model Law and a DAO tax amnesty program. https://badasl.com/ https://www.linkedin.com/in/jonipirovich/
  • Joshua Tan: mathematician, computer scientist and executive director at Metagov and standards lead at DAOstar. His academic journey, which includes fellowships at Stanford, Princeton, and MIT, and a master’s degree in pure math from NYU, has equipped him with a unique blend of theoretical knowledge and practical skills. His research on collective intelligence and online community governance directly applies to the mission of developing governance standards for the Optimism ecosystem. His work on online governance and technical interoperability between DAOs underscores his commitment to advancing solutions that enhance the DAO landscape on Optimism. Research – Joshua Tan https://www.linkedin.com/in/joshuaztan/
  • Hazel Devjani: runs operations at DAOstar, the standards body for the DAO ecosystem. She leads DAOstar’s effort to connect with Asia-Pacific research communities. She actively contributes to and participates in the Metagovernance Project, while concurrently contributing to developing the d20-governance project, an innovative governance primer game. Hazel’s research centers around self-governing communities, both in physical and digital spaces. She has collaborated with Princeton’s Center for Information Technology Policy (CITP) on the Loud Voice Challenge initiated by the Wikimedia Foundation. As a co-founder of LaborDAO, Hazel has led a report on DAO Compensation. Her academic background includes study of Political Theory at Duke University, mentored by Prof. Fredric Jameson, and the study of AI applications in warfare at Deep Springs College, guided by Prof. Anna Feuer.
  • Primavera De Filippi (Advisor): Researcher at CNRS and Berkman-Klein Center at Harvard; Alchemist at DAOstack; Director at COALA Global https://www.linkedin.com/in/primavera-de-filippi-07558536/, Primavera De Filippi | Berkman Klein Center
  • Dominika Stobiecka (Advisor): Dominika is the cofounder of Toku (prev. WorkDAO), a company working on building solutions for token compensation and token tax compliance. She previously worked at the European Central Bank as a Researcher.

Please explain how this Mission will help accomplish the above Intent:

  • Making Governance Understandable and Legible: This project will make it easier for DAOs to understand and navigate these complex areas of regulatory compliance and taxes. It will also facilitate the first-of-its-kind interaction between regulators and the DAO ecosystem, enabling them to gain insights, monitor activities, and ensure compliance within the DAO ecosystem.
  • Building a Resilient Future for DAO governance: This project enhances transparency, accountability, and compliance within the DAO ecosystem. This contributes to the overall accessibility and inclusivity of governance processes, empowering participants and promoting the sustainable growth of DAOs.
  • Facilitating Knowledge Sharing: The standardized framework provided by the interface will enable DAOs to learn from each other’s experiences and best practices, contributing to the development of a resilient DAO ecosystem.
  • Educating the Broader Community: Our mission includes an educational component, where we plan to conduct community outreach and educate the broader community about governance best practices.

What makes your Alliance well-suited to execute this Mission?

  • DAOstar’s Expertise and Support: DAOstar is a public goods project that specializes in developing interoperable standards and critical public infrastructure for DAOs. It is supported by the Ethereum Foundation, Gnosis, Aragon, Radicle, MolochDAO, MetaCartel Ventures, The Graph, and many other members of DAOstar One.

  • DAOstar’s Role and Membership: DAOstar is the standards body of the DAO ecosystem. We build interoperable standards for DAOs and DAO tooling. Our members include 80+ key organizations across the DAO ecosystem, including every major DAO framework, a large number of DAO tooling developers, and many major DAOs. Over 150+ people actively participate in DAOstar. You can find the full list of members here.

  • Regulatory Alignment: DAOstar’s technologists and working groups work closely with legislators, regulators, and legal groups in many jurisdictions (US, UK, Australia, Singapore, UAE, Utah, Vermont, New Hampshire, etc.) to make sure that the industry’s technical standards both align with and inform emerging regulations.

  • Standards and Impact: In its first year of operation, DAOstar has published three standards, with three additional standards planned for release in Q2 2023. See the DAOstar Impact Report (13.06.2023) for complete details.

  • In this last year, notable governance frameworks such as Aragon V3, Moloch V2/V3, DAOstack, Superdao, DAODAO, KaliDAO, and others have embraced the EIP-4824 framework.

  • Aave recently passed a proposal to adopt the standard.

  • We are actively collaborating with ENS and Gitcoin to facilitate the same.

  • The working group, led by Joni Pirovich, founder of LawFi DAO and research fellow at Metagov, and includes Primavera De Filippi of Harvard/CNRS, Jake Hartnell of DAODAO/Juno, Ori Shimony of dOrg, Silke Elfirai formerly of Gnosis, and many other prominent figures in the DAO legal space. They recently showcased a prototype of the interface at DAO Harvard, a three-day conference that brought together practitioners, policy-makers, and academics to engage in insightful discussions on DAO research, legal frameworks, and policy responses.

  • Combined Experiences of the Alliance: Our Alliance’s combined experiences make us well-prepared to execute this Mission.

    • Joni’s Expertise: As the leader of the DAOstar Regulatory Interoperability working group and the principal of Blockchain & Digital Assets - Services + Law, Joni brings a wealth of experience in web3 projects. Her six-year journey in blockchain and DAO-related legal cases, coupled with her mentorship at RMIT on Blockchain Business Strategy and work with LawFI DAO, equips her with the necessary skills to navigate the complex legal landscape of DAOs.
    • Josh’s Research and Development Prowess: Josh’s academic and professional background in computer science, mathematics, and artificial intelligence positions him as a key player in developing Metagov, DAOstar, and various emerging standards. His research on collective intelligence and the governance of online communities, along with his collaborations with the DAO Research Collective and other DAO legal advisory groups, further strengthens our Alliance’s capacity to execute this mission.
    • Primavera’s Leadership and Research: Primavera, a Director of Research at the National Center of Scientific Research (CNRS) in Paris and a Faculty Associate at the Berkman Klein Center for Internet & Society at Harvard University, brings a unique perspective to our Alliance. Her work on legal questions related to blockchain since 2015 and her leadership in BlockchainGov, a project aimed at promoting better distributed governance practices, underscores our Alliance’s commitment to restoring trust in institutions at both community and global levels.

Please list a critical milestone. The critical milestone should be a measure of whether you’ve made best efforts to execute what is outlined in this proposal or not. If you fail to achieve your critical milestone, your grant may be clawed back.

The critical milestone for this mission is the successful deployment of a working regulatory interface with at least one DAO onboarded (intended completion in Q4 2023), along with version one of a tax standard for DAOs (intended completion in Q1 2024).

This milestone will involve the completion of the following sub-goals:

  • Community Engagement and Requirements Gathering (1 month): Engage with the DAO community, including OP Labs, delegates, and other community members, to understand their needs and preferences regarding regulatory compliance and tax standards. This will involve discussions, surveys, and feedback sessions. DAOstar will also contact other major DAOs, DAO researchers and stakeholders in the ecosystem to collect feedback.
  • Design and Feedback Incorporation (1 month): Create the architecture for the DAO regulatory interface based on the requirements.
  • Implementation of the Regulatory Interface (3 months): This will involve building a working prototype of the interface and the necessary frameworks and implementations to make it easier for DAOs to achieve compliance
  • Testing and Feedback (2 months): Conduct comprehensive testing of the interface and integrate feedback
  • Deployment and DAO Onboarding (2 months): DAOs will be onboarded to the platform in perpetuity. In the timeline mentioned, we plan to onboard several EIP-4824 compliant DAOs to the platform.
  • Authoring of the DAO tax standard (6 months from the start of the project)

How should Token House delegates measure progress towards this Mission: These should focus on progress towards completion. Including expected completion dates for each is recommended.

  • Interface Launch: The unveiling of our user-friendly, intuitive interface, projected for completion by Q4 2023, will be a significant milestone. This interface will provide a centralized platform for DAOs to navigate regulatory compliance and tax issues.
  • Tax Standard Draft: The finalization of the V1 tax standard for DAOs, expected by Q1 2024, will be a crucial step. This standard will provide a comprehensive guide for DAOs to handle their tax obligations effectively and efficiently.
  • Onboarding Rate: The number of DAOs live on the regulatory interface and within the first year of launch. Our goal is to have at least 10 DAOs.
  • User Satisfaction: Feedback from the DAO community collected through surveys. We aim to achieve a satisfaction rate of over 65%.

How should badgeholders measure impact upon completion of this Mission? These should be focused on performance and may be used by badgeholders to assess your Misson’s impact in the next round of RetroPGF.

Upon mission completion, the impact can be measured by the following KPIs:

  • Adoption Rate: The number of DAOs publishing information through the regulatory interface/adopting the tax standards. Our target is to have at least 5 DAOs adopt these within the first year of launch, indicating the practical value and usability of our solutions.
  • User Satisfaction: Feedback from the DAO community collected through surveys. We aim to achieve a satisfaction rate of over 75%, reflecting the effectiveness of our interface and standards in addressing the needs of DAOs.
  • Influence on Policy: The extent to which our standards and interface are referenced or used in shaping DAO-related policies and regulations. This would underscore our impact in informing and influencing policy-making processes.

Breakdown of Mission budget request:

The budget for this mission would be allocated as follows:

  • Research and development of DAO regulatory API: 40% of the budget
  • Development and implementation of tax standards: 30% of the budget
  • Testing, debugging, and refinement of API and standards: 20% of the budget
  • Community outreach, education, and support: 10% of the budget

Operating costs: Included within each role’s budget allocation are the associated operating costs. This includes any necessary software subscriptions, website hosting fees, communication tools, and other miscellaneous expenses.

This allocation ensures that sufficient resources are dedicated to each critical aspect of the mission, from development to implementation and community support.

I confirm that my grant will be subject to clawback for failure to execute on critical milestones: Yes

I confirm that I have read and understand the grant policies: Yes

I understand that I will be required to provide additional KYC information to the Optimism Foundation to receive this grant: Yes

I understand that I will be expected to following the public grant reporting requirements outlined here: Yes

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Hi @Dr.Suga - thank you for submitting this Mission proposal. This work is really important to the industry at large, and we’re excited to see that a team like DAOstar is interested in contributing to the Collective.

The Optimism Foundation employs a Legal and Finance team to make sure the Optimism Collective is operating with very high standards for regulatory and tax compliance.

While this proposal may provide helpful guidance to other DAOs built on Optimism, the Foundation will need to continue to keep its own counsel on our approach to regulatory and tax issues. The Foundation can’t make any commitments about contributing to or incorporating pieces of this Mission.

Since this framework would primarily be useful to other builders in the space, rather than used directly by the Collective, this Mission proposal may make better sense as a grant proposal submitted to the Grant Council under the “builders” category.

Thank you again for the thoughtful proposal and for pushing the space forward.

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Thank you, @bobby ! Does your comment suggest we can resubmit this proposal to the Grant Council at this time, post-deadline? Thanks again for your feedback and clarification.

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That is up to the Grants Council! You can pop in to grants in Discord to reach out. They have another cycle starting mid-July if this one doesn’t work.

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Thank you @bobby. Alternatively, could we refine our proposal to make it fit accordingly here in intent 4?

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Yes, that’s an option! Ultimately up to the delegates & token house community to vote on and approve this proposal. I mostly wanted to clarify that the Foundation is not at a point yet where it’s ready to accept outside tax, legal, or regulatory advice.

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Would love to see a revised version of this proposal but definitely agree with @bobby on the fact that there may be duplicate work / complexity involved in making this practically useful for Optimism given that all legal / regulatory advice needs to come from in-house counsel.

I do think this work could be a fit for the Grants Council.

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