SushiSwap (SUSHI), a community-driven Decentralized Finance (DeFi) toolkit, plans to implement a legal framework aimed at reducing risks for token holders and participants in the Sushi protocol.
The new legal structure for Sushi would be based on a proposal approved by the community on March 20, which indicated the need for an association or foundation to provide legal clarity and administrative support for Sushi Dao.
According to Tangle, the proposal creator and a member of the SushiSwap community, the proposed fund will play a key role in limiting participants’ responsibilities and as a result will contribute to the future growth of Sushi.
Sushi contributor KartelCrypto (veRSK) told Cointelegraph that the proposal addresses functional issues such as the daily payment of operating expenses and assets.
Given the opportunity to reduce risk and limit liability through legal clarity for shareholders and depositors, the proposal received 100% of the votes to introduce a legal framework.
The results of the vote on the proposal for the legal structure of sushi. Source: sushi forum
According to veRSK, if the community decides to submit it for a snapshot, it will be completed and officially voted for implementation. “This process will take two to four weeks,” he added.
In addition to addressing functional issues, veRSK said the proposal would also provide “a framework for adaptation and provide a layer of protection for our shareholders in the future.” Tangle estimates a start-up cost of $100,000 and an ongoing cost of $10,000 to set up the fund:
“There are many jurisdictions that could be considered for the formation of a DAO legal entity, but the Swiss Associations Act is currently the leading decision.”
Estimated budget of the institution. Source: sushi forum
To create an institution, the sushi community implements a four-step process that includes member identification and incorporation, token distribution and transfer, along with draft founding articles.
The proposal also includes a need for service organizations, including “the DevCo Service Organization and any other major participating organizations”. Individuals who live in crypto-friendly jurisdictions will be considered ideal candidates for membership in the fund.
In addition to the discussion, members of the community emphasized the importance of determining the use and holding of the fund:
“This is definitely necessary, it is really time for Sushi to renew itself and prepare a legal shield for everyone involved.”
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