DIP-6: The DIMO Foundation
Headline: Establishing the role of the DIMO Foundation legal entity
Author: The DIMO Foundation
Submitter(s): The DIMO Foundation [0xCED3c922200559128930180d3f0bfFd4d9f4F123]
Status: Deployed
Voting URL: Snapshot
Discussion Forum: Discord #🗳️governance forum
Vote Type: Level 2
Abstract
This DIP makes explicit the powers, process, and expectations of the DIMO Foundation. Notably, it acknowledges the Foundation's role as an administrator on smart contracts and intellectual property rights; explains their role as a bridge to the legacy business world on behalf of the DIMO community; and enables the foundation to use a portion of the treasury to fund operational costs, sell tokens to third parties, and/or make tokens available to market makers.
Motivation
Forming and delegating rights to a legal entity is necessary for DIMO to interact in today's world among business and governments. This proposal aims to maximize transparency and the capabilities of the DIMO protocol while minimizing the liability for participants.
Specification
Team Name
The DIMO Foundation
Purpose & Mission
The DIMO Foundation has been formed to help DIMO navigate the challenges of operating in a world with legacy businesses and regulations. It exists to help DIMO grow to the become the world's best and biggest network, while remaining compliant. Having an entity in a defined jurisdiction is helpful for the purposes of minimizing community liability, clarifying tax requirements, establishing intellectual property rights, entering into traditional contracts, and more.
The power and importance of the DIMO Foundation should shrink over time as DIMO matures and regulations evolve.
Execution Plan & Team Operating Structure
Notably, Digital Infrastructure Inc., the corporation that initially developed DIMO, continues to contribute under a services agreement. The DIMO Foundation and community will continue to engage various contributors across many companies and geographies to build a distributed network of teams helping to build DIMO.
Financial Plan & Ask
Resources
As of the July 5th 2024, the DIMO Treasury contains $10,276,785.64 in USD and stablecoins, as well as 472,045,031 $DIMO tokens (141,513,446 of which are not yet earmarked for any purpose). Except for the $2,348,070.45 in cash held in a legacy bank account, balances can be found in the DIMO Foundation wallets posted here.
A breakdown of $DIMO token treasury allocations is shown below.
Starting $DIMO treasury & rewards | 700,000,000 | |
Spent | Reserved | |
Airdrop | 41,336,260 | 0 |
Baseline (DIP-2) | 83,542,040 | 299,726,463 |
Loaned (DIP-6) | 13,000,000 | 0 |
Sold (DIP-6) | 57,809,672 | 0 |
Operations (DIP-6) | 572,119 | 0 |
Referrals (DIP-7) | 518,400 | 1,981,600 |
Grants (DIP-8) | 1,176,478 | 14,823,522 |
Marketing (DIP-9) | 30,000,000 | 14,000,000 |
Total | 227,954,969 | 330,531,585 |
Remaining $DIMO in treasury | 472,045,031 | |
Remaining unreserved $DIMO | 141,513,446 |
Budget
The DIMO Foundation is authorized to spend a maximum of $4,000,000 USD equivalent on operations and development in the calendar year 2024. This includes roughly $1,308,729.40 in expenses incurred January through May 2024, but not yet paid. All intellectual property produced for hire must either be owned by the DIMO Foundation, perpetually licensed to the DIMO Foundation, or open sourced. All spending from this budget of any sort must be primarily for the benefit of the DIMO protocol.
Any payments to Digital Infrastructure Inc., a labs entity that originally created the DIMO protocol and continues to contribute to its development, must not exceed a 10% markup on the fully loaded cost of personnel who are actively working on intellectual property for the protocol or open source software that significantly benefits the protocol.
Furthermore, following the expiration of marketing payments to Digital Infrastructure Inc. in DIP-9, the DIMO Foundation may, at its discretion, also pay Digital Infrastructure Inc. for half of the fully loaded cost of any marketing personnel who are primarily promoting the DIMO protocol and the extended ecosystem, and not those promoting Digital Infrastructure Inc. products specifically.
This budget pool is distinct from those authorized in other DIPs such as Baseline Issuance, Grants, Marketing, and Referrals. The DIMO Foundation is responsible for coordinating with all subdaos to ensure that no third party is paid twice for the same work.
Treasury Initiatives
This proposal authorizes the DIMO Foundation to loan up to 40,000,000 $DIMO tokens to market makers. As of the date this DIP was last amended, a total of 30,500,000 $DIMO have been loaned to market makers, of which 17,500,000 was purchased for 5,922,025 USDT and 13,000,000 remains outstanding.
Per the original DIP-6 and subsequent amendments, the DIMO Foundation has sold a total of 57,809,672 $DIMO from the treasury including the amount purchased from market makers.
Additionally, this DIP authorizes the DIMO Foundation to move up to 70% of its cash and stable token reserve to Superstate.co to earn interest on non-$DIMO assets; as well as change $DIMO into cash or stable tokens for subdaos such as those formed in DIP-8 and DIP-9 should those teams need to pay an expense or issue a grant to a vendor that doesn't accept $DIMO.
Authority & Domain
Smart contract admin
The DIMO Foundation may only utilize this administrative privilege as authorized by governance votes. Eventually, all administrative privileges should be transitioned to on-chain governance contracts.
In order to maximize the speed of new feature deployment, this DIP authorizes the Foundation to deploy upgrades that grant new functionality without taking away previous rights and functionality to smart contracts. E.g., adding roles to the Vehicle ID contract that allow users to delegate access to their car.
Treasury
The DIMO Foundation will allocate the treasury as specified by approved valid DIMO governance votes (including this one), but may veto allocations if it makes a good faith determination that such a distribution would violate applicable law. Accordingly, the DIMO Foundation may require KYC for distributions. Note that KYC is not required for issuance as described in other DIPs, but wallets flagged by Chainalysis' AML tools as risky or fraudulent may be denied issuance.
Entering into contracts
The DIMO Foundation may execute binding legal contracts as appropriate to carry out its duties described within this proposal. Transparency must be emphasized wherever possible. There may be contracts or legal disputes that cannot be shared or which may require redaction.
Utilize intellectual property and represent the brand
The DIMO Foundation may utilize it's IP, including code, trademarks, web domains, and more. The DIMO Foundation may unilaterally authorize the use of the brand by third parties for the promotion of DIMO (e.g., to announce a partnership or promote the project). Digital Infrastructure Inc., the corporation that initially created DIMO and contributed this intellectual property to the DIMO Foundation currently has a license to utilize that IP. Licensing intellectual property for other reasons must be approved by token holder vote.
License revocation
For DIPs where licenses can be revoked for negligence or malice that harms users or the protocol generally, only the DIMO Foundation or a Cayman court of law may determine if that negligence or malice is demonstrable and material.
Commitments to DIMO
The DIMO Foundation commits to always:
Act honorably and in the best interest of the protocol;
Honor governance votes wherever safe and possible;
Strive to maximize transparency where possible; and
Avoid conflicts of interest.
Key Risks
Due to the lack of regulatory clarity, all blockchain projects have risk. No structure, including this one, has been rigorously tested in court. That said, the DIMO Foundation and its contributors have worked with top Cayman and offshore legal counsel, tax firms, and advisors to deploy the best possible entity structure and operating plan. The DIMO Foundation is constructed very similarly to many of the most reputable and successful blockchain communities.
Implementation
If passed, this DIP will be in effect immediately after the four day timelock concludes.
Copyright
Copyright and related rights waived via CC0
Citation
Please cite this document as:
The DIMO Foundation, "DIP-6: The DIMO Foundation", no. 6, January 2023. [Online serial]. Available: [https://github.com/DIMO-Network/DIP]
Changelog
Jan 9, 2023: added financial ask section and combined execution plan and team operating structure sections
Mar 29, 2023: passed DIP-6: Amendment 1
Aug 31, 2023: passed DIP-6: Amendment 2 and DIP-6: Amendment 3
July 6, 2024: disclaimer adjusted and updated per DIP-6: Amendment 4
Disclaimer
The contract addresses for $DIMO are 0x5fab9761d60419c9eeebe3915a8fa1ed7e8d2e1b on Ethereum and 0xE261D618a959aFfFd53168Cd07D12E37B26761db on Polygon. Please always confirm that you are interacting with these contract addresses and not those of a fraudulent imitator. This proposal may not be enacted if it violates Cayman Islands law. Please triple check that any communications are authentic as it’s common for scammers to try to trick you into sending them crypto or into revealing your private keys.
Certain statements in this document constitute forward-looking statements. The words “may,” “will,” “should,” “project,” “anticipate,” “believe,” “estimate,” “intend,” “expect,” “continue,” and similar expressions or the negatives thereof are generally intended to identify forward-looking statements. Such forward-looking statements, including the intended actions and performance objectives, involve known and unknown risks, uncertainties, and other important factors that could cause the actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and nothing in this document represents a promise of specific work to be completed in the future.
Last updated