SANDDAO podcast 60 was 6 hours long...a readthrough of TSB DAO Foundation documents

đź’¬ General
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I didn’t mean it…honest. I ONLY THOUGHT IT WOULD BE 2 HOURS LONG!

But not only was it NOT 2 hours, nor 4, it just kept going all the way to 6.

In any case, I present to you the most ridiculously long and very thorough readthrough + analysis of our DAO’s founding documents: The Memo, Articles, and Bylaws, and how it weaves together with all 4 parts of my mini-series into the Sandbox Foundation.

I took into account everything from parts 1 to 3…our Cayman Island lawyer guests, the Cayman Island law, and our American lawyer guest.

I also broke it up into 3 parts if that’s better for you:

I had 36 remaining questions after all was said and done. I’ll prioritize them in order of priority and see how many Cyril + Kunta feel okay answering. Once I get through that, I can safely put this topic to rest and feeling fully satisfied. :slightly_smiling_face:

The remaining 38 questions from the episode

Memo of Association questions

    1. Are MoAs equiv to Articles of Incorporation/Organization?
    1. Pg.2, Section 3(a): does the VASP Act apply to TSB DAO Foundation? Ref: “digital assets” word. Ref: TSB DAO website prohibited SIPs
    1. Pg.2, Section 3(b): Is our director a licensed director under the DRLL?
    1. Pg.2, Section 3(b): does the SIBA apply to the TSB DAO Foundation?
    1. Pg.2, Section 3(c): Who are the beneficiaries? Is it SandFam?
    1. Pg.3, Section 6: Is this protecting the DAO’s assets (LAND & SAND & NFT collection) from being unreasonably given/gifted to Foundation staff?
    1. Pg.3, Section 8: Does this relate to the “memberless” part that removes the profit incentive for maximization of shareholder value required by fiduciary duty of the Director
    1. Pg.4, Section 11: Why is the Founder role only mentioned here? It’s not clear who or what this is?
    1. Pg.4, Section 11: Who is the Founder? Ref MoA Sect 10: “shall be applied or distributed under the Articles of Association”. Ref: Sect 15.1: “The surplus assets shall be distributed to the Founder or as the Founder directs.” Ref: AoA, pg.9, Sect 7.1(c)

Articles of Association questions

    1. Pg 2, Sect 1.1, Does the mention of “(Revised)” mean that it always references the latest revision of FCA of 2017 & CA of 2003
    1. Pg. 2, Sect 2.1, Please explain the nature of the sentence “The Foundation Company’s general nature of business is holding company (securities)” Ref: see question 4.
    1. Pg.3, Sect 3.1: Is the company IP&A led by Michael Robinson (the Director?), if not, who is? The Key Principal for ICSL is Michael Alberga partner of TTA
    1. Pg 3, Sect 3.3: Does “free of any duty” mean Fiduciary Duty? If not, what else?
    1. Pg 3, Sect 3.3: Does “and may be exercised for the Founder’s own benefit” mean they get to disregard MoA pg.4 Sect 9? Ref: 3.3 where Members don’t have this
    1. Pg 4, Sect 3.4: Is there a contradiction here? The Founder may irrevocably revoke his/her own powers, but has the power under Sect 3.2(i) to change MoA & AoA however they want & Sect 3.6 & 3.7 says the Founder’s power only terminates upon winding up
    1. Pg.4, Sect 3.7: Does this mean that if a Founder makes a decision and then their power terminates, the decision must be upheld after they leave? Example: Appointing a new Supervisor and then the Founder leaves before the Supervisor is appointed & decision getting reversed
    1. Pg. 4, Sect 4.1: Did the initial Subscriber become the Founder or Director? Ref 5.2: first Director may be appointed by the initial subscriber
    1. Pg.4, Sect 4.2: Is the SC or AB considered Members? If not, what are they?
    1. Pg.4, Sect 4.3: Can the Founder overturn this irrevocable prohibition?
    1. Pg.4, Sect 4.3: “may restrict or prohibit…members” → How do all the positions interact day-to-day?
    1. Pg.5, Sect 5.6: Does “may exercise all the powers of the FC” mean the Director can exercise the Founder’s powers?
    1. Pg.5, Sect 5.7: Is this extra to the Fiduciary Duty or does it only reinforce it?
    1. Pg.7, Sect 5.15: Is the Code of Conduct (CoC) for the TSB DAO’s approved Delegates considered a committee? Is SC & AB? Ref: SIP-2 Director compensation
    1. Pg.8, Sect 6.6: “have at least one supervisor who is not a director…” where did we read the Supervisor COULD BE the Director Ref: Cannot remember where it was stated?
    1. Pg.8, Sect 6.7(b): “may…call for such reports, accounts…” ??? Ref: SANDDAO 56, slide 88, PART 5 of FCL (Grand Court’s Function). Ref: SANDDAO 59, slide 53, Eyes & ears question
    1. Pg.9, Sect 7.1(d): “beneficiary shall have an enforceable right…” What enforceable right? Ref: SANDDAO 56, slide 88, PART 5 of FCL (Grand Court’s Function). Ref: SANDDAO 59, not discussed
    1. General Question: Need more clarity on the “restrictions notice” power. Ref: CA Sect 265: Right to issue restrictions notice. Ref: CA Sect 266: Effect of restrictions notice
    1. Pg.10, Sect 8.2: Is the Assistant Secretary required to be a qualified person? Ref: SANDDAO 56, slide 85, FCL Part 1 Sect 2: means a person licensed or permitted by CMA. The Key Principal for ICSL is Michael Alberga partner of TTA
    1. Pg.11, Sect 9.4: Why does the accidental omission Supervisor not invalidate the proceedings? Loophole 1: Meeting notice was “forgotten”, Supervisor was not notified of meeting where Supervisor was voted out. Loophole 2: A Sect 9.6 activity (vote) is held, but the Founder was “accidentally omitted” from the invite
    1. Pg.11, Sect 9.5: “No business shall be transacted at a general meeting…” → What is “business”? Ref: 2.1.: “general nature of business is holding company (securities)”. Ref: 9.5.: “quorum is a majority of the persons entitled to attend and shall include the Founder”
    1. Pg.12, Sect 10.2: Who is the Chairman? They aren’t mentioned before
    1. Pg.13, Sect 13.1: What does “and the matters” mean?
    1. Pg.14, Sect 14.1: Who is the auditor? They aren’t mentioned before
    1. Pg.14, Sect 15.2: How enforceable is “Members, director and supervisors as such have no power or authority to wind up” … “or petition the Court” when Founders are optional roles
    1. Pg.16, Sect 16.3(e): Who are the indemnified parties? This section grants broad liability waiver if legal was involved in the action. Seems like it could be used to indemnify anything
    1. Pg.17, Sect 17.2: This (Bylaws) seems to encompass everything about the TSB DAO Foundation, does this section exclude anything? As in, is there something the Bylaws can’t touch?

Bylaws questions

    1. Pg.6, Sect 4: Why 3 consecutive terms for SC? Ref: “The compensation for the initial Special Council members will be 110,000 $SAND per year per member”
    1. Pg.7, Sect 5: Why is the AB able to be removed by SC and not other AB? Advisory Board members are not compensated.

Episode guide for Foundation Company mini-series

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4 Likes
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hits the summarize button frantically
:rolling_on_the_floor_laughing:

Jokes aside, this a heck lot of digging. Pretty cool man. You are deep down in that rabbit hole now huh.

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Yeah I’m as deep as it goes just about :face_with_tears_of_joy::rolling_on_the_floor_laughing: I really enjoyed this though. I honestly did this mostly for me, I just hit the record button so everyone else could see it too.

I had lots of fun doing this mini series and it felt very rewarding :slightly_smiling_face:

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:index_pointing_up:t4: this!

must have tl;dr, please! : )

@Lanzer, c-span correspondent

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I think @Cyril may be able to address the last two questions in that list, @Lanzer.

The rest we’ll have to send the lawyers to make sure they’re addressed as accurately as possible.

That means, we’ll have to ask for your patience as we pass along this set of inquiries and await a reply. I know there a few other priorities right now, so I don’t imagine this will be addressed promptly. (Note: the podcast I’ve been planning about DAO structure is still with legal, as an example of possible wait).

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Okay, thanks. I was going to order them by priority, some are really, really important that I think all of us could benefit from knowing. Others are minor geewhiz questions that would be cool to know.

I’ll try to prioritize them later in the week.

1 Like
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Hello @Lanzer, I commend you for your commitment to the topic! This must have taken a lot of research too, judging by the 6h of content you were able to produce!

Here is a short answer to the last 2 questions:

  • 37: It’s an arbitrary number. It felt right at the time.
  • 38: We meant the special council (SC) as opposed to the advisory board, as the SC has the very limited oversight functions for compliance (they can veto). The advisory board doesn’t have that role

As for the other 36 questions, I’m afraid we won’t be able to help. Our lawyers charge a significant amount per hours (depending on the seniority of who you are talking to: standard in Cayman) so getting through it will cost us. With the donation being delayed, it’s not a reasonable usage of fund at this stage (this will be taken from the OPS wallet). We will also have to do a follow up on every single items with them, which will take a toll on the team.

To illustrate, allow me to share our current priorities with the lawyers at the moment:

  • Contract with Wakeups Labs (winner of SIP 19: needed because of the element of revenue sharing)
  • Contract with NZC (SIP4):
    • necessary because we are buying from a new token with them
    • Also, verify that when creating a token pair, this will not qualify us as a financial service provider, which might trigger additional regulatory scrutiny
  • Review of onboarding documents for a secondary crypto broker that we would use
  • Study for Panama vs “Cayman substance”: This was flagged in case we want to do some Intellectual Property business with our NFTs (basically license them)
  • review of script of Episode 6 of “Diggin in the SAND”: wrapped vs unwrapped DAO
  • Contract for Fawne’s replacement
  • Ratification of Past SIP from Mike (foundation director)

Cheers

2 Likes
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Knowing the priorities of the lawyers is really helpful.

I can live with most of the questions not being answered anytime soon. There are some questions that I want to press to answer, and to keep costs down, we can request that TTA use junior legal associates or analysts. I’ll prioritize the ones that really stuck out to me and we can go from there.