Draft Vote Text For AN DAO Transfer of Funds

I agree here. Most people say yes instinctively but don’t actually know how they would benefit or actually avoid risk. The very nature of a decentralized organization means there’s no need for officers and directors: i.e. risk mitigation with a legal wrapper would impact/protect some ANT holders very differently than others. Specifically, ANT holders wishing to remain pseudonymous - would not meet any of the (current) requirements for being ‘protected’ under such an LLC - which should be made very clear.

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I’m not sure any lawyers agree on a precise answer to this tbh. Depends on the jurisdiction of the individual, type of activities they might be doing and motives etc But I’d say there is a general consensus amongst most lawyers I’ve spoken with that in the absent of any legal wrapper, many/most? jurisdictions would consider a DAO a general partnership. Number of law suits appears to be on the up (more recently; Pool together (Crypto-Savings Lawsuit Puts Principles of DeFi to the Test - WSJ), Fucrum (DAO members may be jointly and severally liable for $55 million crypto theft | Eversheds Sutherland (US) LLP - JDSupra). Think it’s only fair that we do our part to inform ANT holders of the potential risks.

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I obviously agree. But given that ANT is a permissionless token, and creating a single legal wrapper for ANT holders as a whole has a wide range of implications which the question leaves unspecified, it’s not clear what actionable interpretation the AA can apply to this answer. If it’s meant to reference the legal wrapper option in Question 1, it’s redundant; but if it’s suggesting something different, I think the question should make it explicit. Alternatively, the question could be whether ANT holders want the AA / AN DAO to conduct research on this topic and develop a risk mitigation strategy, which may of course include using the AA as a legal wrapper (for delegates who can’t or don’t want to operate from under a legal entity in their own respective jurisdictions, for example).

Abstain can be ambiguous interpreted as either, neither, recuse or majority. Potenitally, other meanings dependent on context.

Can we include the option “further discussion required” This will help highlight priorities for building shared understanding, collective consesus and the legitamcy of our governance process.

Given our historically low voter turnout and the gravity of these decisions, we should at least be open to the idea that key stakeholders may not yet have the awareness, let alone time, information or options presented to vote for/against/abstain.

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Anyone who thinks the decision should be postponed (incl. because further discussion is required), should vote Abstain. Since different people may have different reasons for choosing Abstain, I would recommend against specifying this option any further. In my opinion, it should be open for anyone who doesn’t support the other choices, whatever their reasoning.

I would also note that the initial voting requirements (see here) were specified under the assumption that there will be a single Yes/No question + Abstain. Absolute majority is less suitable in situations where voters are given more options to choose from. With that in mind, I would actually recommend cutting one of the options from the final question and have three options to choose from under each question. What does everyone else think?

Hi everyone

Due to the wrong forum post linking, I am adding our forum post here for completeness.

The following response represents the views of the core team members of the Aragon Association and Aragon Labs:

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I’ll clarify my reasons for the request to specify.

  1. “discussion required” signals areas where we need to build shared understanding and further consensus to support this transition. So unlike abstain, it provides the AA and AN DAO teams with information we can act upon.

  2. @ronald_k Compliance Committee confirmed the ESD S1 proposals passed, although the great majority of ANT (84%) abstained. Therefore we have a precedent already, whereby to abstain can be considered a vote only to support quorum.

  3. You speak of an absolute majority but this is not what is in the Charter. While I understand the quroum is different, compare the requirements to pass a vote. Neither qualified nor absolute therefore both simple majority.

Aragon Governance Proposals 5 (f) (iii)
2. Support: The vote shall be deemed as “passed” with a simple majority (>50%) of the
participating ANT having voted in favour.

The Aragon Network DAO Agreement 2 (f) i 2
a. Majority (more than 50% in favour) vote, with a minimum quorum of 0.5% of ANT

I’d be disappointed to see voters led to believe a vote to abstain would count for more than quorum @ronald_k I’d appreciate your advice as to why/how we could legitimately say the precedent set during the S1 proposals would not apply in the case for the transfer of funds.

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“Abstain” winning would mean that neither of the two options found sufficient support and would thus automatically result in re-opening the discussion phase.

In a multiple choice vote, a threshold of 50% of ANT participating is by definition absolute majority.

To clarify: a “simple majority” means that the option with most votes wins (which is equivalent to saying more than 50% of ANT participating in a dual choice vote); an “absolute majority” means that the winning option has to have more than 50% of ANT participating (which becomes increasingly difficult to achieve as you add more options to the vote). That’s why I recommend having three options for each vote, and using “Abstain” as a catch all for any voter who is not happy with the other two options.

I appreciate your reasons for choosing “abstain” and understand the definitions

What I am highlighting for all readers is that 1) I sought legal advice when 84% abstained and that 2) recent precedent concerning a simple majority did NOT agree with the above common understanding @mlphresearch shares and that 3) the responsibility for legal interpretation of the Charter sits with the compliance committee @eaglelex @Tayy @ronald_k

As I shared #21 here dGov was established not to determine the route but to raise awareness and safeguard the legitimacy of the choices ANT holders make. imo the legitimacy of our governance process relies on the consistent application or clear reasoning as to why established precedent would not apply. Would you agree @mlphresearch that sans clear reason, it undermines governance legitimacy to change the applied interpretation for “abstain” between votes?

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The DAO should abide by whatever the Charter prescribes. My current understanding is that this means the winning option must attract more than 50% of ANT participating which, in a multiple choice vote, qualifies as an absolute majority. @joeycharlesworth @AlexClay and/or members of the compliance committee, perhaps you can clarify for everyone involved how the AN DAO establishes the winning option. Also, if the DAO wants to apply a very narrow interpretation to “Abstain” which doesn’t include rejecting all other options, then how about just adding a “None of the above” option to each question? Assuming that one of the options is dropped from questions 3 and 6, this would result in each question offering four options: Option A, Option B, “None of the above”, “Abstain”. How does that sound?

This is a great team effort. Thanks to all of you, especially to @AlexClay @lee0007 and @mlphresearch

I am not a great fan of the three options vote. In my opinion, the Aragon Charter is drafted with a dual choice vote (yes/no) in mind.

@mlphresearch writes:

To clarify: a “simple majority” means that the option with most votes wins (which is equivalent to saying more than 50% of ANT participating in a dual choice vote); an “absolute majority” means that the winning option has to have more than 50% of ANT participating (which becomes increasingly difficult to achieve as you add more options to the vote).”

I think that these sentences are a bit problematic in the light of the contents of the Charter.

The charter states simple majority of >50% (not the option with more votes).

The charter considers “absolute majority”, the majority of the ANT holders having a right to vote (not the winning option having >50% votes).

If the abstain option is included we have two different potential interpretations (given that the Charter is silent on the issue):

  1. Abstention votes have just a signaling effect. They don’t count for the outcome of the vote, nor for the quorum.

  2. Abstention counts as “no”. It counts for the quorum, but it is an additional way of stating no. In this case, I agree with @mlphresearch. We need >50% of yes.

In my opinion, the abstain option should not be included in the vote. If included we have to decide between one of the two interpretations above.

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Thank you for this clarification! To ensure full compliance with the existing Charter and make it easier to interpret the answers, I suggest making all questions dual choice:

Question 1 - Do you agree to transferring the Treasury and control of the ANT token contract from the Aragon Association to the AN DAO and implementing a delegative ANT voting system, as described here?

  • Yes
  • No

Question 2 - If you answered Yes to Question 1, do you support November 30th, 2022 as the soft deadline for transferring the Treasury and control of the ANT token contract to the AN DAO and implementing a delegative ANT voting system?

  • Yes
  • No

(Side note: If the voting system doesn’t allow submitting answers after skipping a few questions, I would recommend adding a third option to these “If you answered Yes…” type of questions that says “Didn’t answer Yes to Question X” and then not counting this option when deciding between Yes/No. @AlexClay Can you confirm whether the system allows skipping questions or not? Note that I’m assuming it is possible to answer multiple questions within a single vote.)

Question 3 - If you answered Yes to Question 1, do you support February 28th, 2022 as the soft deadline for transferring the Treasury and control of the ANT token contract to the AN DAO and implementing a delegative ANT voting system?

  • Yes
  • No

Question 4 - If you answered Yes to Question 1, do you agree extending the AA and AL runway to February 28th, 2023 (after said date, funding would be allocated through a delegative ANT voting system, as described here)?

  • Yes
  • No

Question 5 - If you answered Yes to Question 1, do you agree extending the AA and AL runway to May 31st, 2023 (after said date, funding would be allocated through a delegative ANT voting system, as described here)?

  • Yes
  • No

Question 6 - Do you agree to using the Aragon Association as a legal wrapper for the AN DAO, thereby providing limited liability protection to those ANT holders that are accepted as members of the Aragon Association, as described here?

  • Yes
  • No

(Side note: @joeycharlesworth Perhaps you’d like to split this question into two separate questions to provide an option to signal support for risk mitigation through the AA while still implementing the proposal referenced in Question 1?

Question 7 - Do you agree to changing the quorum for ANT governance votes from 0.5% to 0.3%?

  • Yes
  • No

Question 8 - Do you agree to changing the quorum for ANT governance votes from 0.5% to 0.1%?


All suggestions to improve the phrasing welcome! Note that the questions are essentially the same as before except that all now have a dual choice answer format. @AlexClay Once folks have reacted to the questions above, can you please update the OP accordingly?

In the hypothetical scenario where Q1 = Yes, but this Q6 is also = Yes, this could be problematic as it would effectively be saying ANT holders want to transfer the funds from the AA and also use the AA as a legal wrapper (with funds still legally held by the AA).

We can switch back to the original formulation but make it dual choice:

Question 1 - What structure would you like to see govern the Treasury and the ANT token contract?

  • Option 1: Delegative ANT Voting (as described here)
  • Option 2: Aragon Association as a legal wrapper for the AN DAO (as described here)

The following questions can then be rephrased to start with “If you chose Option 1 in Question 1, do you…”

Question 6 can be rephrased to “If you chose Option 1 in Question 1, do you support exploring ways to provide limited liability protection to ANT holders via the Aragon Association?” (Alternative suggestions welcome!)

Splitting it would make sense, yes. Would suggest the following:

Question 6 - If you answered No to Question 1, do you agree to keeping the treasury and control of the ANT contract within the Aragon Association but having the entity controlled by ANT holders? (AA becomes a legal wrapper for AN DAO as described here**

Question X - If you answered Yes to Question 1, do you also agree to make the Aragon Association controlled by ANT holders, thereby providing limited liability protection to those ANT holders that join as members of the Aragon Association? (In other words, the AA would not control the treasury but ANT holders could still have limited liability protection and vote on transactions with “real world” entities that cannot be transacted with through AN DAO)

Yes will update it this evening. On the question does everyone need to respond to each question the answer I believe is yes.

Got it. I’m now seeing two paths to finalizing the questions. First option looks like this:

Question 1 - What structure would you prefer govern the Treasury and the ANT token contract?

  • Option 1: Delegative ANT Voting (as described here)
  • Option 2: Aragon Association (AA) as a legal wrapper for the Aragon Network (AN) DAO (as described here)

Question 2 - If you chose Option 1 in Question 1, do you also agree to allowing ANT holders to become voting members of the AA? (Under such an arrangement, the AA would not control the Treasury and the ANT token contract but ANT holders who become members of the AA would have limited liability protection and could vote on decisions to use the AA as a legal proxy for the AN DAO, where necessary.)

  • Yes
  • No
  • Did not choose Option 1 in Question 1

Question 3 - If you chose Option 2 in Question 1, do you agree to keeping the Treasury and control of the ANT token contract within the AA while also allowing ANT holders to become voting members of the AA?

  • Yes
  • No
  • Did not choose Option 2 in Question 1

Question 4 - If you chose Option 1 in Question 1, which date do you support as the soft deadline for transferring the Treasury and control of the ANT token contract to the AN DAO and implementing a delegative ANT voting system?

  • November 30th, 2022
  • February 28th, 2023
  • Did not choose Option 1 in Question 1

Question 5 - If you chose Option 1 in Question 1, do you agree to extending the AA and AL runway beyond November 30th, 2022?

  • Yes
  • No
  • Did not choose Option 1 in Question 1

Question 6 - If you answered Yes to Question 5, how long should the runway be extended (beyond the chosen date, funding would be allocated through a delegative ANT voting system, as described here)?

  • Until February 28th, 2023
  • Until May 31st, 2023
  • Did not answer Yes to Question 5

Question 7 - Do you agree to changing the quorum for ANT governance votes from 0.5% to 0.3%?

  • Yes
  • No

Question 8 - Do you agree to changing the quorum for ANT governance votes from 0.5% to 0.1%?

  • Yes
  • No

The reason to consider adding the “Did not answer…” option to some of the questions is (1) to ensure that all voters can answer all questions (as @AlexClay mentioned, this is a hard requirement to be able to submit answers), and (2) to avoid a situation where, for example, someone who chose Option 2 in Question 1 affects the outcome of Question 2. However, this would result in not getting everyone’s views on all questions, which I would personally consider a shortcoming. To get everyone’s views on each and every question, regardless of their answers to other questions, the questions could be phrased as follows (@eaglelex, please confirm that all this is consistent with the existing Charter):

Question 1 - What structure would you prefer govern the Treasury and the ANT token contract?

  • Option 1: Delegative ANT Voting (as described here)
  • Option 2: Aragon Association (AA) as a legal wrapper for the Aragon Network (AN) DAO (as described here)

Question 2 - If Option 1 in Question 1 were to be implemented, would you agree to allowing ANT holders to become voting members of the AA? (Under such an arrangement, the AA would not control the Treasury and the ANT token contract but ANT holders who become members of the AA would have limited liability protection and could vote on decisions to use the AA as a legal proxy for the AN DAO, where necessary.)

  • Yes
  • No

Question 3 - If Option 2 in Question 1 were to be implemented, would you agree to keeping the Treasury and control of the ANT token contract within the AA while also allowing ANT holders to become voting members of the AA?

  • Yes
  • No

Question 4 - If Option 1 in Question 1 were to be implemented, which date would you support as the soft deadline for transferring the Treasury and control of the ANT token contract to the AN DAO and implementing a delegative ANT voting system?

  • November 30th, 2022
  • February 28th, 2023

Question 5 - If Option 1 in Question 1 were to be implemented, would you agree to extending the AA and AL runway beyond November 30th, 2022?

  • Yes
  • No

Question 6 - If Yes was the winning option in Question 5, how long should the runway be extended (beyond the chosen date, funding would be allocated through a delegative ANT voting system, as described here)?

  • Until February 28th, 2023
  • Until May 31st, 2023

Question 7 - Do you agree to changing the quorum for ANT governance votes from 0.5% to 0.3%?

  • Yes
  • No

Question 8 - Do you agree to changing the quorum for ANT governance votes from 0.5% to 0.1%?

  • Yes
  • No
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Sorry for the delay Mario, I have to disagree with both of these vote structures. We need to make the vote as simple as possible for members to be able to make an informed decision, using Chains makes it difficult to follow for uninformed users. It sets a bad precedence for the DAO as a whole as you could essentially end up with votes being webs and double negatives. As we know if is often how the vote is asked rather than the question behind which drives the decision.

We should be able to make a decision here on Multiple choice votes being the best option. The Majority should clearly be taken as the favourite. Using the current charter “Support: The vote shall be deemed as “passed” with a simple majority (>50%) of the participating ANT having voted in favour”. For the votes it will simply be the one with simple majority.

If we have multiple options and no, as long as over 50% vote in favour can this not be seen as a simple majority in favour of the decision.

Question 1 is Ok

Question 2 I would change to: Would you like the Aragon Network DAO to have a legal entity to protect contributors and interact with Web2 entities, this could be the Aragon Association or a new entity.

Yes
No

Question 3 - I think this needs removed, this should be answered after the vote

Question 4 - we can keep

Question 5 - What date would you like to extend the core team runway past the date of the transfer of the fund transfer ( I have tweaked this as setting hard deadlines on when the change will have happened may effect teams, eg there is a issue with delegate voting that takes 30 days to resolve, does this mean no pay for that period)

0 months
6 months
9 months

Question 7 and 8 I honestly think we merge - What quorum shall we set for the changing of quorum for Charter changes
0.1
0.3
0.5

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@AlexClay adding 0 months to question 5 feels like making the whole situation even worse no (including the fact that contracts have 2 month notice period)? Why not 6, 9 and 12?