Title: Adopt DAO Council By-Laws
- Author: Emilio Cazares | Chief Legal Officer of SuperRare Labs
- Status: Draft | Temperature Check
- Type: Governance
- Implementer: Governance Council | the RareDAO Foundation
- Sponsor(s): TBD
- Link to Temperature Check Poll: TBD
- Created Date: 04/26/22
The RareDAO Foundation (the “Foundation”), the non-profit foundation established for the benefit of the SuperRare DAO (the “DAO”), should adopt official By-Laws to more clearly establish the powers and procedures of the DAO Council. This Proposal is a Draft intended for robust Community discussion and debate. Comments encouraged
Adopting an Official Charter and By-Laws for the DAO Council serves to provide clarity to the community as to the level of the authority, privilege, and responsibilities that accompany Council membership. While the DAO may (and should) experiment with other potential Council models or governance structures in the future, By-Laws should be put in place to afford the community clarity on the powers of the Council, the specific governance procedures and responsibilities the Council must adhere to to in furthering a community-controlled DAO, and to further operationalize the DAO. The By-Laws should be drafted to afford the Community the strongest level of control on decisions affecting the DAO while balancing the need for flexibility at the Council and Foundation level to effectively and efficiently operate the DAO.
This Proposal specification sets forth a working draft of example Council By-Laws that the DAO may choose to adopt. The text below is intended to be modified and improved after robust community discusion. The Author will publish all subsequent revision, including redlines, to ensure transparency and consistency with Community’s feedback. Comments encouraged!
Relationship Between the RareDAO Foundation & the SuperRare DAO
The RareDAO Foundation (the “Foundation”) is a non-profit Cayman Island Foundation Company established for the benefit of the SuperRare DAO (the “DAO”). The Foundation represents the DAO’s interests in connection with the DAO’s contractual and legal processes, regulatory compliance, and decentralized governance.
The Foundation Director(s) manage the day-to-day affairs of the Foundation in accordance with the Foundation Companies Act of 2017 of the Cayman Islands (the “Acts”), the Foundation’s Memorandum of Association, the Foundation’s Articles of Association, and these By-Laws. The Foundation shall have at least one (1) Director appointed and confirmed by a super-majority decision of the Council. Directors may be terminated at any time by a super-majority decision of the Council. A Director shall serve for a period of three (3) years from the date appointed and may be reappointed by a majority vote of the Council. The SuperRare DAO Community, with authority preempting that of the Council, may vote to nominate, confirm, and terminate one or more Director(s) through the SuperRare Improvement Proposal (“SIP”) procedures.
- Director Qualifications. Foundation Directors must be at least 18 years of age, (ii) no disqualifying attributes under Cayman Islands law, (iii) no personal financial insolvency for the past 10 years, (iv) no convictions or guilty pleas for mishandling or embezzlement of funds of any organization, and (v) have not been involuntarily removed or forced to resign from any directorship, or similar executive or high-level position, within any organization.
The Council is the primary governing body of the Foundation elected by the Foundation’s independent Director and accountable to the SuperRare DAO Community. The Council is granted with the authority to adopt by-laws, appoint or remove Directors, amend the Foundation’s Articles of Association, and to otherwise authorize the Foundation’s Director to take actions for the benefit of the DAO. The Council’s primary purpose is to safeguard the DAO Community Treasury and to effectuate the intent of the DAO Community members. The Council also plays a strategic operations, governance, oversight, and coordination role for the SuperRare DAO. The Council must ensure that it and the Foundation has sufficient authority, resources, operational capacity, competitiveness, and funding to effectively grow the SuperRare DAO, meet the Foundation’s obligations under Applicable Law, and fulfill the Foundation’s mission of improving and decentralizing the SuperRare DAO. Although Council members should act in the best interest of the SuperRare DAO, Council members are not corporate fiduciaries of SuperRare DAO Community.
The Council’s Authority
Council members may engage in any activity necessary to influence the DAO through participation in the SuperRare Improvement Procedures or any other activity expressly or impliedly approved by the Community, including authority expressly granted in these By-Laws. The Council’s decision making may be expressed through the DAO multi-signature smart contract (“the DAO Multi-Sig”), which is controlled by individual authenticated Council members to ratify or effectuate certain decisions affecting the SuperRare DAO.
The DAO’s Multisig wallet is a 4-of-6 multi-signature smart contract controlling the DAO Community Treasury currently located at Ethereum address: 0x860a80d33E85e97888F1f0C75c6e5BBD60b48DA9
The Council may establish responsibilities and delegate its authority to committees, working groups, and subDAOS, and services companies as determined and approved by a majority of the Council. Council members may delegate their individual or collective authority to other Community members, upon a majority decision approval by other Council members. Any authority not expressly or impliedly granted to the Council is expressly reserved by the SuperRare DAO Community.
Responsibility of Individual Council Members
Council members are expected to actively pursue any measure within their authority to further decentralize and improve the SuperRare DAO. Nominated for their unique abilities and perspectives, Council members are expected to advocate for their individual interests and the interests of the Community members that they may respectively choose to represent. As part of their service to the DAO, each Council member agrees to at least:
- Monitor, consider, or otherwise stay apprised of Community discussions and proposals within official DAO governance forums;
- Develop, publish, monitor, incentivize, and consider for sponsorship SuperRare Improvement Proposals (“SIP”), Requests for Comments (“RFC”), or Requests for Proposals (“RFP”) published by SuperRare DAO Community members in accordance with the SIP Procedures;
- Attend and participate in monthly Council meetings;
- Sign approved and authorized transactions from the DAO Multi-Sig as required or requested by other Council members, the Foundation, or the Community;
- Remain an active an involved Council member responsive to needs, demands, and ideas of the Community;
- Exercise no less than reasonable security measures over the Multi-Sig private keys in accordance with industry security standards;
Major DAO Actions Requiring a Proposal and Vote
In the absence of a compelling or urgent reason, and unless otherwise approved by the Council or Community, Major DAO Actions within the Council’s authority may only occur at after:
- The presentation by a Council member or Community member in writing of a SIP for the Council’s action (a “Proposal”); and either
- If the Proposal is presented by a Council member, an affirmative public endorsement of the Proposal by at least one (1) other Council member who is not recused; or
- If the Proposal is not presented by a Council member, an affirmative public endorsement by at least one Council member who is not recused from such vote.
- The Council receives written notice from at least one (1) Council member endorsing the Proposal and stating their intent to publish a final Proposal for a community Consensus vote no sooner than fourteen (14) days after a public endorsement by the endorsing Council member;
- The absence of a dissenting majority of Council members rejecting the Proposal anytime earlier than seven (7) days before the Proposal’s final Community Consensus vote;
- The satisfaction of all other SIP voting and procedural requirements, as determined by a majority Council approval before the final Community Consensus vote.
Major DAO Actions include Proposals relating to following categories: (i) modifying the core Protocol; (ii) authenticating artists, curation nodes, and other protocol-level participants; (iii) major Foundation transactions; (iv) deploying assets from the DAO treasury; and generally (v) performing transactions from the Council multi-sig to effectuate changes to the DAO. Nothing in this section shall prohibit the Council to authorize, without fulfilling the ordinary Major DAO Action requirements, any emergency action or activity necessary to preserve the safety, security, or ongoing operation of the DAO.
The following non-limiting list of actions would ordinarily be considered a Major DAO Action:
- Make official contributions, modifications, or deployments of the SuperRare Protocol (the “Protocol”);
- Modification of economic parameters within the Protocol;
- Release, transfer, promise, dedicate, or sell funds or assets from the DAO Treasury;
- Authorizing whitelisting or other permissions relating to a DAO participant’s minting or curation privileges; and
- Approve of and fund large transactions by the Foundation (in excess of $250,000 USD per annum) to support the DAO, the Community, or Protocol development and the operations of the Foundation
Minor DAO Actions
In the absence of a compelling reason, Minor DAO Actions within the Council’s authority, unless otherwise determined by the Council or Community, may only occur at after:
- The presentation by a Council member in writing of a proposal for the Council’s action (a “Council Proposal”); and either
- If the Council Proposal is discussed at a meeting, an affirmative vote at the meeting by a majority of Council members who are not recused from such vote (Council members who are absent from a meeting of the Council will be deemed to vote “no” in such a vote); or
- If the Proposal is made in writing (an “Async Council Proposal”), an affirmative vote by a majority of Council members who are not recused from such vote, within fourteen (14) business days of the Async Council Proposal being made, by a majority of Council members who are not recused from such vote, but only if a Quorum of 3-of-6 (a “Quorum”) is met.
All Minor DAO Actions within the Council’s authority shall not require any other procedures, but the Council should consider memorializing and convey its decision-making process to the Community or otherwise involve the Community to the extent that it serves a substantial DAO interest to do so. Without limitation, the Council may perform or delegate any of the following actions or related ancillary actions in its sole and absolute discretion subject to the requirements of this Section:
- Performing or authorizing ongoing network maintenance, administrative or procedural aspects of DAO governance, or other ancillary tasks related to the ongoing operations of the DAO;
- Approve of and fund transactions, ongoing overhead expenses, and miscellaneous operational expenses by the Foundation or DAO less than $100,000 USD per annum in value to benefit the the DAO, the Community, the Protocol, and the operations of the Foundation;
- Determine and execute implementation details for approved Proposals to the extent not materially inconsistent with the community approved Proposal;
- Distributing funds to the Community for the limited purpose of incentivizing participation in DAO governance;
- Delegating the individual or collective authorities and responsibilities of Council member(s);
- Establish and fund DAO working groups, sub-committees, subDAOs, and other groups for the benefit of the DAO and to the extent not inconsistent with these By-Laws.
The SuperRare Improvement Proposal (“SIP”) Procedures
Community members, including Council members, have been granted the right to create and publish SuperRare Improvement Proposals (“SIPs”), Requests for Comment, Requests for Proposals, or other related requests for consideration by the Community and the Council. All SIPs, comments, requests, or other forms of participation in governance are purely advisory and non-binding upon the Council, Foundation, or DAO, unless and only to the extent: (i) the SIP has satisfied all required governance procedures, formalities, and voting requirements for a final Community-approved Proposal; and (ii) the executable details of the SIP are published in a SIP Implementation Plan by the Council.
Council’s Participation in the SIP Procedures
The Council, as extensions of the Community, may participate in the SIP Process just like any other Community member, but also have certain additional responsibilities and privileges to ensure effective governance and the Community’s trust:
- The Council must deliberate on and consider for endorsement all formally compliant SIPs within a reasonable time frame after initial publication;
- All Council member’s may formally endorse any proposal, upon written notice to the Council and public, that has undergone a community “Temperature Check” and that is otherwise is condition for a final Community Vote. Council members may express conditions to their public endorsement. Council members may not endorse their own proposals, or proposals to which a Council member has a conflict of interest;
- Endorsing Council members must attend at least one community town hall meeting to discuss the endorsed Proposal before it can be put up for a final Community Consensus vote; and
- The Council shall not exercise undue or international delay in advancing Proposals along the proposal life cycle.
Approval of Certain Foundation Transactions
- The following Transactions by the Foundation require majority approval by the Council:
- Any Transaction that includes a payment by the Foundation or the Council of at least $250,000 USD on an annual basis must be approved by a super-majority of Council members;
- Any Transaction that includes a payment by the Foundation or the Council of at least $500,000 USD (“Major Transaction”) on an annual basis must be approved by a majority of Council members in addition to the requirements for Major DAO Actions; and
- Any Conflicted Transaction.
- Any transaction described in this section must be the subject of a Proposal or an Async Proposal (in each case, a “Transaction Proposal”). A Foundation representative or a Council Member may make a Transaction Proposal.
- Approval of Conflicted Transactions. With respect to a proposed Conflicted Transaction:
- A sub-committee of the Council must be convened to review the proposed transaction (a “Conflict Sub-Committee”). The Council will delegate its Transaction approval authority described in this section to the Conflict Sub-Committee, such that the Conflict Sub-Committee will have the sole authority to approve or deny the proposed transaction.
- The Conflict Sub-Committee must have at least two Council members who are not conflicted with respect to the proposed transaction.
- In reviewing the proposed Conflicted Transaction, the committee must consider whether:
- The potential Transaction is fair, reasonable and in the Foundation’s best interests; and
- There are any suitable alternatives to the potential Conflicted Transaction.
- The Conflict Sub-Committee may review the transaction in any format it wishes, including in a live meeting or through a group message app.
- A Conflicted Transaction is approved if it receives a simple majority vote of the Conflict Sub-Committee.
- The outcome of the Conflict Sub-Committee’s review of a Conflicted Transaction will be published and shared with the Community, though the sub-committee’s deliberations may be kept confidential.
Member Code of Conduct
- Compliance with the Law.
- Acting ethically and obeying the law, both in letter and spirit, are among the SuperRare DAO Foundation’s and the Council’s core values. Council members should understand the legal and regulatory requirements applicable to their area of responsibility, including federal, state, and foreign laws, as well as the relevant regulatory schemes (collectively, “Applicable Law”).
- Council members should ask the Foundation’s Director and/or their own legal counsel for advice when they are uncertain about Applicable Law or their duties or obligations as a Council member.
- Diversity, Inclusion and Equity.
- The Council strives to create a safe and welcoming environment for all would-be community members, regardless of age, gender, ethnicity, religion, disability, sexual orientation, education, national origin, or any other differentiating factors. The Council is committed to maintaining an environment in which all individuals are treated with respect and dignity. The Council expects that all relationships among Council members will be free of unlawful bias, prejudice and harassment.
- Council members are strictly forbidden from engaging in any type of discrimination, social harassment, demonstrations of hateful or offensive ideologies, or sexual harassment during Council business or in any Community-related setting outside of the Council.
- Critique Ideas, Not People. In evaluating Proposals and other issues affecting SuperRare, Council members should focus on the substance of such discussions without criticizing individual members or engaging in personal attacks.
- Mission-Alignment. Council members should not use their role in a way that conflicts with the Council governing principles and SuperRare’s mission.
- No Misleading Representations on Behalf of the Council. As a body, the Council only publishes views on Proposals through Meeting Notes and Proposals that have been published and signed using the Council Multisig. No Council member should speak on behalf of the whole Council, unless explicitly authorized by other Council members to do so. This provision does not in any way restrict a Council member from publicly discussing their personal opinion about a Proposal.
Each Council member’s Term shall last no more than one (1) calendar year after the date of initial appointment. The Council must schedule and effectuate a DAO Community election, in accordance with the SIP procedures, for one or more new Council member(s) to be completed at least fifteen (15) days before the expiration of any given Council members’ respective Term. There is no limit on the number of Terms an individual Council member may serve.
Accountability and Removal
- Any Council member that does not fulfill their duties or otherwise violates these By-Laws may be removed by any Community member in accordance with the SIP Procedures, a unanimous Council decision, or any other subsequently adopted removal procedure;
- Council members may initiate a removal of other Council members.
- An action to remove a Council member (such member, a “Breaching Member”) for violation of this Charter or for any other reason as determined by all of the other Council members must be presented as a Proposal by a non-Breaching Member (a “Removal Proposal”) at a Council Meeting.
- A Removal Proposal will pass if it receives a unanimous vote of the non-Breaching Members.
- If the Removal Proposal passes, the Council may nominate or request the community to nominate a replacement for the Breaching Member. An action to add a new Council member must be presented as a proposal at a Regular Meeting (a “Replacement Proposal”).
- A Replacement Proposal will pass if it receives at least two-thirds majority of votes of active Council members.
- Given that participation in the Council is public, a Breaching Member should also expect reputational damage.
- The interim absence of a Council member shall not preclude the satisfaction of any Quorum, voting, or multi-sig requirements. Vacant Council seats shall be treated as an vote consistent with the present majority of voting Council members until the vacancy is relieved.
These bylaws are subject to the provisions set forth in other sources of authority binding on the Foundation. In the event of any conflict between these By-laws and such authority enumerated herein, such authority shall supersede these By-laws and be controlling in the following order: (1) Acts, and (2) The Foundation MOA and Articles.
These By-Laws may be amended or modified (i) through the regular SIP Procedures; (ii) upon a majority decision of the Council to publish an updated version of these By-Laws and a description of the changes for a modified Consensus vote; or (iii) upon unanimous approval of the Council. In the modified Consensus vote, the Council may directly publish a proposal for a final Consensus vote, ignoring all other preliminary requirements of the SIP procedures.
Adherence to any specific or rigid rule set with authority granted at the Council level risks inflexible structure and tendencies towards centralization. The adoption of these Council By Laws & Charter must be understood to be a temporary measure designed to incentivize the initial development of the Network.