Primary Proposal: Should a HOPR Community Trust be established in the BVI to manage HOPR Community assets using governance processes established via the eighth HOPR governance experiment?
Voting yes on this proposal would signal token holder support for the HOPR Association’s plan to establish a trust in the BVI to provide a legal wrapper for managing HOPR community assets. These include the HOPR tokens and DAI raised at the launch of the HOPR token and subsequently used to provide liquidity on various decentralized exchanges, the equity in HOPR RiSe received as a result of the seventh HOPR governance experiment, and any other assets acquired going forward as a result of future governance decisions.
The short answer is that we’ve received a lot of legal advice the Switzerland is a great jurisdiction for the HOPR Association and HOPR’s various for-profit entities, but it’s not suitable for any entity which would oversee the community assets. This is partly for tax reasons: Switzerland has quite a traditional view on financial transactions, which means that a lot of fairly standard DeFi actions the community would need to take (e.g., moving liquidity between pools, or even rebalancing a single pool) could lead to taxable events taxed at upwards of 20%.
This isn’t about trying to avoid tax, but the BVI takes a much more progressive attitude to DeFi and crypto transactions, rather than trying to squeeze them into an outdated model.
How will the BVI trust setup handle potential conflicts of interest, especially considering that the directors of the trust will be members of the HOPR Association, a separate entity with its own objectives and interests? Would there be any mechanisms in place to ensure the trust always acts in the best interests of the token holders and not influenced by other external pressures or interests?
What specifically would you like to see here? I think it’s impossible to fully expound the risks and liabilities. Literally no-one knows all we can do is take legal advice.
Not trying to dodge the question: we’ll certainly get into this next week and in our Twitter Space and there’s a lot of legal opinion to share here. But it’s hard to know how to answer with out a sense of what might be satisfactory.
But the other reasonable question is: what’s your alternative? This isn’t a risk neutral position. Doing nothing is almost certainly higher risk with greater liability exposure than taking action. Obviously you can’t pull an answer out of thin air, but this is always something that needs considering when weighing the risks and negatives here.
Will paste my answer to @AlexFOX from the other thread:
We’re currently talking with our lawyers in the BVI about possibilities for the director roles to be filled by externals or people from the community.
There are also other roles like protector. This will also be discussed later in the month, but in short the protector’s role is to keep the trustees in check.
One point of law seems to be what the trustee company is allowed to do / pay for before it exceeds the threshold for registration under BVI’s VASP Act. We’re discussing this with our lawyers currently. This could limit whether the director / protector roles are allowed to be paid. HOPR Association members would fulfil this role unpaid, but it will be harder to put this out to externals without remuneration.
thank you for taking the time to draft this proposal. I have 2 questions :
1- Could you provide some examples of other projects or initiatives that have successfully utilized a similar trust and governance structure for managing community assets?
2- What are the key advantages and potential drawbacks of establishing a trust in the BVI for managing HOPR Community assets, compared to alternative locations or structures?
I support this proposal. Given the increasing scrutiny of crypto by governments, providing additional layer of legal buffer is a smart idea, especially for a privacy-focused project like HOPR.
I trust the members of the HOPR Association, but I would like to see members of the community be among the directors of the HOPR Community Trust as a step towards decentralization and increased transparency.
These are both good questions and I look forward to seeing how the team responds. To make an informed vote, we should realistically consider both the advantages and disadvantages.
I’d like to understand how the other candidates were stacked up and considered if at all.
What I’m asking for are defined risks that expose Hopr Rise to negative influence or exposure through or by BVI. The proposal itself is extremely one sided, giving the inclination of “why bother voting” if its going to be done anyway.
There is no neutral risk or lesser exposure route, only two foggy paths in this proposal with what appear to be hazards known but not seen.
I do support this proposal. For the interim having the HOPR association as members of the trust make sense, as the HOPR protocol is not yet generating significant revenue to pay for external qualified individuals/organizations to be trustees. As soon as the HOPR protocol generates continuous significant revenue in the future, HOPR association should cease acting as trustees/other roles and employ qualified external individuals/organization.