On its governance forum, the Uniswap Foundation has published a proposal to create a legal entity dedicated to its DAO. What would this change?
The Uniswap Foundation could create a legal entity in Wyoming
On Monday, the Uniswap Foundation published a proposal on the decentralized exchange’s governance forum to survey its community on the creation of a legal entity in Wyoming. The idea is to create a Decentralized Unincorporated Nonprofit Association (DUNA), a regime that came into effect on July 1, 2024, in Wyoming, specifically designed for decentralized autonomous organizations (DAOs).
In short, this provides DAOs with a clear legal status through the creation of a legal entity that is distinct from a company, while also helping to protect its members by establishing responsibilities.
In its proposal, the Uniswap Foundation provided more details on the ins and outs of such a possibility:
This new legal entity, called “DUNI,” will be specifically designed to preserve Uniswap’s decentralized governance structure while enabling interaction with the offchain world (e.g., entering into contracts, retaining service providers, and exercising any regulatory and tax responsibilities). If adopted, DUNI will become a legal entity for the governance of Uniswap, recognizing the binding validity of on-chain governance proposals, in order to ensure legal certainty for its members and guarantee their accountability.
If the vote is favorable, $16.5 million worth of UNI tokens would be transferred to a wallet owned by DUNI “to pre-fund a legal defense budget and a tax compliance budget.” In addition, $75,000 worth of UNI would also be transferred to the consulting firm Cowrie, which would act as administrator of this new entity and whose co-founder David Kerr played a role in the creation of the DUNA regime.
For its part, the Uniswap Foundation would act as executive agent within DUNI and would be empowered to perform the following functions, among others:
- Executing documents or filing documents on behalf of DUNI as directed by governance;
- Appointing and coordinating with third-party service providers approved by governance (e.g., lawyers, auditors and tax administrators, banks, etc.);
- Transmitting funding, payments, or grants approved by governance;
- Communicating and publishing updates related to administrative operations.
To find out more about whether or not this idea will come to fruition, we will have to wait until August 18, when the first vote will be held.
In the meantime, the Uniswap DEX has approximately $6.2 billion in total value locked (TVL), while the price of the UNI token is $12 at the time of writing, up 8.7% over 24 hours.
