At the heart of digital innovation, Decentralised Organisations (DAOs) are reshaping the landscape of collective governance and enterprise. Aurum is at the vanguard, offering pioneering legal services to this nascent industry. Our firm prides itself on blending traditional legal wisdom with cutting-edge insights into the blockchain space, ensuring your DAO navigates the complex legal terrain with confidence and clarity.
The client-centric approach we employ ensures that every DAO we partner with is fully equipped to navigate the legal intricacies of operating in a decentralised and autonomous manner, at the same time being legally protected from compliance, financial and judicial risks they may encounter.
Pioneering Legal Services for DAOs and Web3 Communities
For us, the DAOs are more than just a technological marvel; they represent a new frontier in organisational structure and community-driven initiatives. We’ve carefully designed our services and offerings not just to protect the DAO members and mitigate risks, but to unlock opportunities.
To meet our partner DAOs’ expectations and help them achieve their goals, our team at Aurum must constantly design and deliver legal frameworks previously unknown to the industry. We engage in a continuous process of legal design thinking, crafting solutions tailor-made for modern Web3 communities. This involves a collaborative effort with our clients, where their vision and our legal expertise converge to create robust, scalable, and compliant frameworks.
Innovative Legal Solutions for Decentralised Organisations
At Aurum, we understand that DAOs represent a paradigm shift in the way organisations are structured and operated. This decentralised approach introduces novel challenges and opportunities, spanning from formation and governance to regulatory compliance and dispute resolution, and our role as legal counsel necessitates the crafting of legal solutions for this new type of organisations that was previously unseen.
Given the inherent diversity among DAOs — each with its own distinct approach to governance, operational procedures, and organisational frameworks — the legal strategies we develop for each DAO are inherently unique. Our approach is deeply informed by an in-depth understanding of each DAO’s specific features and aspirations, ensuring our legal counsel is as individualised as the organisations we serve.
Creating the Future Together
Not only do we serve as advisors within this industry, but we have also emerged as its representatives and active participants. In 2023, Aurum unveiled DAObox – a Web3 project dedicated to the design, formation, and management of DAO legal wrappers. With this project, we believe that Aurum has solidified its position amongst the contributors to the Web3 community, actively fostering the sector’s growth.
Selected services
We designed our service offering keeping in mind the unique structural and operational specificities of DAOs and Web3 communities.
Advice on governance, organisational and legal aspects of the anticipated DAO and its formation.
Assistance with the development of the DAO structure, including sub-DAOs and committees. Appointment of delegates and establishment of requisite multi-signature wallets.
Advice on the sufficient decentralisation requirements, DAO governance mechanisms, protective measures, etc.
Development of the DAO constitution, governance rules, organisational procedures, and other internal documents.
Legal advice on matters relating to the token issuance.
Assessment of the token design, advising on the tokenomics, token parameters and utility, and the manner of offering.
Review of the documentation and other public materials relating to the token and its offering. Preparation of requisite legal disclaimers, risk disclosure statements, legal notices for the public materials.
Advising on the regulatory and compliance issues.
Structuring the token distribution and initial transfers.
Legal advice on token grants, allocations, and various forms of incentive programs, etc.
Legal review and assessment of the products and services developed.
Development of a comprehensive legal strategy aimed at protecting the DAO and its members from legal exposure and risks, and addressing the compliance and regulatory risks arising in connection with the product operation.
Advising on the manner, method and form of the DAO launch, legal requirements that must be complied with in order for the DAO to gain legal and compliance protection.
Development of the necessary user documentation and legal instruments that must be employed in connection with the product release.
Drafting the list of restricted jurisdictions where operating the products or services may pose substantial risks for the DAO, advising on the methods and instruments that should be employed to restrict the access, etc.
Review of the language used within the product interfaces and in the project public documentation; providing suggestions on the required amendments.
Structuring the private token sales (pre-sale) and public token offerings, development of the necessary token sale instruments.
Advising on the availability of different raising options and instruments.
Designing procedures for the AML/KYC and KYT checks, PEP and sanction screenings. Composing the list of restricted jurisdictions. Advising on the implementation of KYC software.
Advising on the applicability of securities laws and VASP regulations, exemptions available, compliance and regulatory matters.
Acting as the KYC operator for the DAO: Aurum takes over the communication with prospective token purchasers, conducts their onboarding and KYC checks, negotiates the token sale instruments and facilitates their execution, etc.
Legal assessment of the existing DAO organisational, operational and governance structure. Determination of the kinds and forms of legal wrappers that can be employed by the particular DAO.
Advice on the use of the DAO wrappers as a legal instrument for mitigating certain legal and regulatory risks and exposure.
Creating DAO legal wrappers anywhere in the world, including in the form of DAO LLCs, foundations, associations, etc. Normally, we perform DAO structuring via our portfolio company, DAObox.
Separate wrapping of sub-DAOs, including holders of a particular multi-sig wallet as a separate committee, to offer them legal protection.
Collecting, structuring and managing the DAO IP.
Assistance with the registration of the DAO project trademarks.
Advice on managing DAO technical and other infrastructure.
Review of the project GitHub repository to identify third-party elements used in the product and assess their licensing terms. Ensure compliance with open-source licences, restructure the repository if needed to avoid third-party rights issues.
Advising on the licensing of the product source code, including on the use of semi-open licensing options like BSL 1.1 to protect against potential forks.
Structuring relationships with the project contractors, service providers and advisors.
Drafting the contractor agreements and other legal documents required to formalise the relationship, advising on determination of the applicable commercial terms.
Structuring token incentive allocations, developing allocation agreements, etc.
Development of the onboarding procedures.
Other details
Our selected cases, publications, and recognition in this sector underscore our commitment to addressing the novel legal challenges presented by DAOs. We provide expert guidance on governance structures, regulatory compliance, and smart contract implementation, ensuring our clients are well-equipped to navigate the decentralized landscape.
Consulted the core contributors of a DAO governing a DeFi protocol with over $400 million in TVL on matters pertaining to legal structuring and governance. Designed and established the required legal wrappers for the DAO in the form of an ownerless Cayman foundation company.
Advised core contributors of several DAOs on the matters pertaining to protecting the DAO members, treasury management, establishing DAO legal wrappers, configuring the governance and integration between the DAOs and their legal wrappers.
Performed due diligence and KYC verification for participants of a DAO token sale, or DAO raise, event. Aurum was engaged by the DAO to develop KYC/DD procedures and jurisdictional restrictions, and directly perform the verification of the prospective purchasers.
Assisted a DAO in accumulating and managing protocol-related intellectual property, established frameworks for assigning rights in materials contributed to the DAO’s GitHub repository through pull requests, and developed a custom GitHub repository contribution agreement.
Advised DAO's core contributors on the legal structuring and DAO wrapping. Designed and established a Marshall Islands DAO LLC legal wrapper, implementing extensive control mechanisms and system of checks and balances, and facilitating decentralization.
Counselled DAO core contributors on matters concerning the licensing of protocol code, clearing third-party rights, addressing challenges associated with incorporating third-party open-source materials in the code, and reorganising the GitHub repository to permit code distribution under restrictive licences.
