I read this after your post on the other thread, and I think that actually it’s likely there’s a misunderstanding here.
This setup is ONLY for the management of the community funds which were raised at launch and the other things which have resulted from that (various liquidity pools, the HOPR RiSe equity, etc.)
The protocol itself will have totally separate governance. It won’t have a registered legal entity, it will be fully controlled by node runners (not even all token holders), and it will be fully anonymous.
This is obviously vital for HOPR to function as a decentralizaed good, and we haven’t given up on that. In fact, we believe that separating out the different governance of different parts of the HOPR ecosystem is what allows us to do that. Trying to have a single catch-all governance process for everything just won’t work. Instead we want to build focused, censorship-resistant governance for the most important parts of HOPR, while accepting some trade-offs elsewhere.
Here’s an extremely high level overview of how the different setups could work:
One impression we’ve been getting from legal advisors is that this strategy isn’t working in crypto right now. Crypto just isn’t being given the leniency that other industries are, especially in the US, but increasingly in Europe. Attempting to hedge your bets legally seems to be leading to regulators overruling projects’ assertions about their legal setup. Basically “we don’t agree that IS your legal setup, we’ll assign you the one we think you actually operate under”. Obviously this is almost always the most unfavourable option possible.
Having said that, it does seem that many projects have been attempting to create legal wiggle room by simply not picking an option or keeping setups deliberately vague. It seems that perhaps you’re advocating for a very concrete kind of multi-jurisdictional approach?
Thank you for the clarifications I think that clears up quite a few thing that I misunderstood indeed.
Wrt multi-jurisdictional approach, yes I think that having multiple separate legal entities in multiple different jurisdictions would be a more resilient approach. I don’t think vagueness necessarily needs to be part of the equation, for the reasons you mention: the vagueness can give a sense of false security. Splitting the trust (or access to the smart contract holding the funds to it) across multiple judicial entities (BVI, British Columbia LLP, Hong Kong LC, Panama IBC…) I think would make the set up more robust.
Ah great. Glad to clarify things a bit there. We’re certainly on the same page with regards the overall aims of the governance project as a whole: by splitting the governance into sub-units, each with their own processes and legal set up, we feel that we can achieve better robustness and decentralization.
With regards the community trust itself, we hadn’t seriously considered a multi-jurisdictional approach because a) it was so hard to find even one jurisdiction that meets our needs and b) engaging with lawyers is long, complicated and expensive
I think it would certainly be worth looking at in future though. Nothing about the current proposed setup would exclude evolving to a multi-jurisdictional approach (technically, I mean; of course there’s the risk of it being obstructed while in the single jurisdiction state, but personally I don’t assess that risk as high, especially not compared with other risks we face)
That might be asking for trouble. This is the kind of thing I need to clarify with lawyers. We have a call scheduled this week
I think it’s inevitable that this setup will mean some token holders will have to give up some ability to interact with the system in some places. The hope is that the majority are unaffected and this also frees up the protocol itself to be governed in the full crypto anon trustless way
At the moment I don’t think so. But mostly because I haven’t specifically heard anything to suggest it would be. (I do a lot of lawyer adjacent things and talk to a lot of them, but I’m not one myself)
A trust organization in the British Virgin Islands will have a registered goal in its act - to follow the instructions deduced by the smart contract based on the results of the voting of token holders?
And if the decisions taken do not comply with the laws and regulations adopted in the jurisdiction of the British Virgin Islands?
And the position that the proposals in the future management system should be completely unambiguous so that implementation can be achieved without any further decision-making at all seems to me impossible. Or I didn’t understand something.
Good question. I’ll try and find out some actual numbers. What follows is vague but I think correct.
So setup costs are high-ish, but those are being borne by the HOPR Association.
Ongoing costs will mostly be limited to the company that acts as trustee. These will also be borne by the HOPR Association, in a sense. The directors won’t be remunerated for their services (legally they may not be able to be, or it would need to be VASP registered), so will do this as part of their duties at HOPR. So there’s a sort of opportunity cost here: work done for the trustee company is time not spent on Association work.
Work should be minimal though: processing the proposals which pass and then doing annual accounting and other admin. It’s possible that this would be outsourced to other service providers and reimbursed from the trust (the trustee can do this as long as it’s at cost). We would need to look into the costs vs effort here.
In terms of savings, the big one, as already mentioned, is tax. Switzerland would tax DeFi interactions like the Uniswap move at 5%, I believe. So that’s already 50k+ per interaction. So that’s a huge saving by moving to BVI. I need to check if anything would be, and at what rate. (It’s hard to be exhaustive here because the proposal space is so large, but I’ll ask the lawyers about the expected kinds of proposals we expect would be made)
[quote=“marat586, post:32, topic:4571, full:true”]
A trust organization in the British Virgin Islands will have a registered goal in its act - to follow the instructions deduced by the smart contract based on the results of the voting of token holders? [/quote]
Yes that’s right
Then they would be vetoed by the trustee, along with an explanation of the reasoning. But the hope is that the combination of legal auditing plus community oversight would avoid this from happening.
Been reading the proposal and forum and my first thought was - add more legal entities. Or, at least, make sure this opportunity is open for the future.
So, are you sure that the Trust will be allowed to “interact” (aka implement decisions) from legal entities from other offshore jurisdictions? Or subDao’s, for example, that are neither token holders nor legal entities
Anyway, will be voting yes, but such kind of things are easier to implement when they are thought of before the first step taken, rather than after