- The SushiSwap community initiated the proposal “Sushi Legal Structure”, planning to establish an association or foundation to reduce future risks.
- SushiDAO will provide legal clarity regarding the rights and obligations of token holders and contributors.
The SushiSwap decentralized exchange community has proposed that the decentralized autonomous organization SushiDAO create an association or fund to mitigate future risks.
The SushiSwap ecosystem, like most DeFi initiatives, is now run by the DAO, which ensures that it is decentralized to a certain level. A foundation or association would provide the organization with a formal legal element, which could include some centralization.
SushiSwap participants were asked to vote for the creation of a non-profit organization. Its purpose is to provide legal certainty and reduce risks for token holders and developers.
The SushiSwap community initiated the proposal “Sushi Legal Structure”, planning to establish an association or foundation to reduce future risks. SushiDAO will provide legal clarity regarding the rights and obligations of token holders and contributors. https://t.co/J5oycLKhBH
— Wu Blockchain (@WuBlockchain) March 21, 2022
The entity will also create a body to deal with administrative issues within SushiDAO.
The proposal was posted March 20 on the SushiSwap forum under the title ” Sushi Legal Structure.” It aims to add a legal layer to the current DAO for current token holders and participants.
The author of the initiative, nicknamed Tangle, suggested Switzerland as the organization’s registration country.
Switzerland was chosen because of its favorable Swiss association law.
He estimates that the implementation involves a one-time cost of $85,000-$100,000 and a recurring cost of $10,000. That amount includes legal counsel, structuring the deal, registration and launch.
If approved, the organization would need to identify members, distribute tokens to them and draft a charter.
Additional advisory bodies would need to form agreements for their interaction with the nonprofit.
As of this writing, 32 community members have voted. All supported the proposal.
A user nicknamed pegbit noted that creating a nonprofit organization would allow SushiSwap to stay “on track” while limiting liability for its members.
“Sushi is currently at a crossroads, and the path we follow from here will determine whether we become a top-tier project or not.”
As user GoldenNaim stressed, it is increasingly difficult for residents of the United States to take part in the development of the project as much as they can.
Recall that in December SushiSwap left CTO Joseph DeLong amid disagreements in the team.
The conflict arose after the unexpected resign of the project manager under the nickname 0xMaki, which could have been initiated by DeLong. Several other developers left with him, bringing the disagreement into the public arena.
Related: SushiSwap CTO Joseph Delong resigns following internal dispute
Earlier, the Bank for International Settlements called the decentralization of DeFi-protocols an illusion. Experts expressed confidence that there will be cases where projects will require reorganization or evaluation.
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