https://etherscan.io/tx/0x8c3bf17a30578fcc844a4177ad26b6a4c9c53da3638c2738ff1b619b330ba67c
gm or gn.
It has been interesting to see the discussions around the DAO and individuals trying to understand what the DAO is from a jurisdictional legal perspective. We cannot offer legal advice as to what any particular individuals' personal responsibility or liability is. X7 is a global project and any holder's particular legal position is subject to their jurisdictions laws.
However, we think it is useful to dwell for a second on what a DAO is and isn't.
X7's DAO will, at its core, be a smart contract. This smart contract will have the exclusive ability to call functions on X7's other smart contracts. This smart contract will be able to do everything, from changing token fees, redirecting splitter outputs, adding new lending terms, and even controlling the ecosystem X7D and LP (locked and controlled by the X7 Token Timelock).
In every sense, control of the DAO smart contract will be control of X7.
How do you control the DAO smart contract?
You will stake your X7DAO tokens which will enable you to register proportional votes that lead to the execution of functions on the DAO smart contract.
Additionally, Magister NFT token holder votes may increase the threshold that must be surpassed to pass a proposal.
That is what the DAO is. In the context of X7, the DAO is not an ephemeral concept, a conspiracy, a partnership. It is a protocol for making changes to the set of X7 smart contracts.
But COULD the DAO become tied to a jurisdictional entity?
We think this could happen in a couple of ways:
- Custody of DAO tokens and Magister tokens
- Migration
If a jurisdictional corporate entity became a custodian of DAO tokens, it would be reasonable to say that entity was engaged in DAO activities. Within that entity, use of the tokens could be bound by corporate bylaws and incorporation articles and jurisdictional regulations.
If the entity ever became the custodian of more than 50% of the DAO tokens and a sufficient number of magister NFTs or more than 75% of DAO tokens, the entity would now be able to propose any vote and guarantee its passage. For all practical purposes, that corporate custodian would be "the DAO".
In the case of migration, technically the DAO could vote to hand the underlying assets of X7 into the custody of a corporate entity. This would require configuration of the X7 Token Timelock (and waiting for the lock times to expire. These locks will be set to multiple years in the future prior to DAO handoff so this would be something that could be anticipated and orchestrated with plenty of advance warning). It would also require users participating in Xchange liquidity providing or X7D backed lending pool reserves to choose to migrate those assets as well. It would be hard and would require at least a one time vote of the DAO to do so. But, technically, the DAO can be fully incorporated in this manner as well.
