Legal toolkit for Cardano ecosystem: Set of standard DAO governance documents

[GENERAL] Name and surname of main applicant

Andrej Solar on behalf of Sparring

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Co proposers and Additional applicants

Martin Repka

Tomas Richter Urban

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

4

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Crafting a set of DAO governance docs, increasing predictability and transparency, preventing governance issues, enabling DAOs to get a legal wrapper (if necessary) without significant legal costs.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

Yes, docs will be publicly accessible, downloadable and editable.

[METADATA] SDG rating

This proposal is not related to SDGs.

[SOLUTION] Please describe your proposed solution.

Many new DAOs are emerging. Trying new ideas, forming communities, and reshaping traditional models of governance in the pursuit of decentralized and collaborative innovation.

The projects often lack basic internal documentation making it impossible for DAO members to hold the acting bodies accountable. The vision, mission and operations principles change upon the mood of the founders or most active members and no checks & balances are set in place.

We will create a set of baseline standardized legal documents to be adopted by DAOs on Cardano. These documents will be:

1. DAO Charter - document outlining the mission, vision, purpose, and basic governance principles of the DAO,
2. Community proposal matrix - framework document for consultation, presentation and governance voting on specific proposal,
3. Multisig approval matrix - framework document allowing transparent and performance of duties of multisignature key holders.

We will add a thorough HowTo along with holding Q&A to explain particularities of the DAO documentation. Also will prepare a summary of best practices for DAO legal wrapper (entity formation).

[IMPACT] Please define the positive impact your project will have on the wider Cardano community.

Creation of the documents will empower Cardano users to demand adoption of such documents which will become a golden standard. This will bring more transparency, predictability to the DAOs of Cardano ecosystem and will empower the members of the community by getting better oversight and ability to hold the DAOs’ acting bodies accountable. It will also help the DAOs’ bodies by setting out clear rules and rights they can consult to minimize risks when taking actions. 

1. More transparency, predictability, and oversight -> increased project longevity -> more projects -> more revenue for the Cardano ecosystem.
2. Free and accessible golden standard for DAO documentation -> easier to start a project (and cheaper) -> more projects -> more revenue for the Cardano ecosystem.

The key metrics will be the number of DAOs downloading the templates and the number of total downloads.

The insights and results will be disseminated through our Sparring website and Catalyst’s reporting channels, and other Cardano & Sparring social media channels.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Sparring is an international law firm operating in the EU, US and UK, with a dedicated crypto focused practice. We have a long history of providing legal support to a number of projects active on Cardano, such as Vacuumlabs, NuFi, etc. We are servicing crypto clients globally. Our client portfolio includes crypto hedge fund, DEX, DeFi financial center, wealth management platform, digital marketplace and other crypto projects, several of which operate on Cardano. See more at https://sparring.io/crypto/

[Project Milestones] What are the key milestones you need to achieve in order to complete your project successfully?

• Creation of DAO Charter & Community proposal matrix

• Creation of Multisig approval matrix

• Write a detailed how-to and add explanation of the main parts and clauses of the DAO documentation
• Prepare a summary of best practices for DAO legal wrapper (entity formation)

• Publishing the documents and holding 2 times 1 hour Q&A sessions.

[RESOURCES] Who is in the project team and what are their roles?

Tomas Richter Urban

Head of Crypto desk of Sparring

Coming from the world of banking, finance and capital markets law, Tomas has become an expert in crypto and fintech. He gained some first hand experience serving as a chief legal officer in a prominent crypto hedge fund. Tomas leads Sparring’s Crypto and Web3 practice.

Martin Repka

Legal Mind

Raised in startups, Martin focuses on IT law, intellectual property and corporate governance. He also assisted various blockchain & crypto businesses, including the governance setup of a complex DAO.

Andrej Solar

Senior Crypto Legal Mind

Andrej is a crypto enthusiast, and a seasoned blockchain attorney. He regularly advises high-profile crypto & fintech companies. He serves as a CLO of a crypto wealth management platform on Cardano.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources.

• Milestone 1: ₳ 42,714 ($ 14,950)
• 11.5 work-days of legal work

• Milestone 2: ₳ 13,000 ($ 4,550)
• 3.5 work-days of legal work

• Milestone 3: ₳ 18,571 ($ 6,500)
• 5 work-days of legal work

• Final Milestone: ₳ 10,771 ($ 3,770)
• 0.5 work-day - prep for publishing
• 2 hours - Q&A calls
• 2 work-days project and product management

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The project is able to save the entire Cardano ecosystem a significant sum on legal costs, by providing a free documentation for each DAO there is, or will be. We have been helping build and incorporate DAOs in the past. The costs for lawyers are usually high. We want to give back to the community by giving a wide range of DAOs access to general documentation baseline.

The whole ecosystem will gain access to Cardano tailored DAO governance documents which would otherwise be drafted for a similar or higher price paid by each project individually.

Further reducing costs of each player of the ecosystem not only through having access to the governance documents, but also by establishing a standardized baseline of documents that lowers the entry level costs for any DAO.

The whole project is budgeted at ₳ 85,056. The standard price for (i) DAO Charter, (ii) Community proposal matrix and (iii) Multisig approval matrix is somewhere around ₳ 60,000 - 80,000. Utilizing our DAO documentation in just two projects already saves a tremendous amount of money for the whole ecosystem. More money = more projects = more revenue for the Cardano ecosystem.

[IMPORTANT NOTE] The Applicant agrees to Fund Rules and also that data in the submission form and other data provided by the project team during the course of the project will be publicly available.

I Accept