1/ Your Thursday dose of #DeFi is here
Today we continue on the topic of how to classify DAOs,
and what is the future of governance and blockchain investing.


Today we continue on the topic of how to classify DAOs,
and what is the future of governance and blockchain investing.



2/ If you are interested on this topic do NOT MISS WEBINAR TODAY
at 4:00 PM - 5:00 PM CEST
With
Peter Howitt, Managing Director at @incegordondadds Gibraltar
Vice President of Finance at @gnosisPM, Steven Borg
CEO of @KR1plc, George McDonaugh
https://bit.ly/36dV3NK
at 4:00 PM - 5:00 PM CEST
With
Peter Howitt, Managing Director at @incegordondadds Gibraltar
Vice President of Finance at @gnosisPM, Steven Borg
CEO of @KR1plc, George McDonaugh
https://bit.ly/36dV3NK
3/ Today there are no funny fruits or investment advice.
Only LAW!
If you are here for the yield and chads you can skip reading this point
and go back to the merry business of @metamask_io MetaMask accept transaction pop-ups.
Only LAW!
If you are here for the yield and chads you can skip reading this point
and go back to the merry business of @metamask_io MetaMask accept transaction pop-ups.
4/ We discuss governance tokens like $UNI and $SUSHI that give you
quasi-equity and revenue share in DAOs (Digital Autonomous Organisations).
Having them not falling under securities laws would make blockchain-based innovation
much easier.







fruits and law!
quasi-equity and revenue share in DAOs (Digital Autonomous Organisations).
Having them not falling under securities laws would make blockchain-based innovation
much easier.








5/ Last week, 3 out of 3 leading crypto lawyers deemed that governance tokens are US securities https://twitter.com/moo9000/status/1307253289755586560
6/ However there are dissents - the rows of the lawyer folk are not united.
For example, Philip Liu, the Chief Legal Officer or @arca, disagrees https://twitter.com/PhilipLiu/status/1308128547819548672
For example, Philip Liu, the Chief Legal Officer or @arca, disagrees https://twitter.com/PhilipLiu/status/1308128547819548672
7/ Bear the source criticism is mind. I have not done my research, but I bet my left kidney @arca has invested many of these not-securities and having more dividend-paying and voting rights on their non-securities investment would be beneficial for the fund.
8/ Also if we frame questions differently, what is there in $ETH mining or $DOT staking, which makes them no security, whereas $SUSHI and $CRV would be securities
Where do we draw the line?
This excellent point was brought up by @theblue_panda https://twitter.com/theblue_panda/status/1307362790575943681
Where do we draw the line?
This excellent point was brought up by @theblue_panda https://twitter.com/theblue_panda/status/1307362790575943681
9/ I will leave the United States for now. Because I have some good news.
Welcome to the EU. Your guardian of privacy and the defender of the man on the street.








Welcome to the EU. Your guardian of privacy and the defender of the man on the street.









10/ As you might know, in the EU we do not have the infamous "Howey test" to tell what is a security or not. Howey test is purely a concept of Americaanos and was incidentally made into the case law in citrus yield farming.


https://www.investopedia.com/terms/h/howey-test.asp



11/ Fractional ownership does not need to be a security under the EU.
Here are some good material to read (thanks for Peter Howitt for the tips):


Here are some good material to read (thanks for Peter Howitt for the tips):




12/ FCA guidance regarding investment clubs
https://www.handbook.fca.org.uk/handbook/PERG/11.pdf
Perimeter Guidance
Chapter 11
Guidance on property investment clubs and land investment schemes
https://www.handbook.fca.org.uk/handbook/PERG/11.pdf
Perimeter Guidance
Chapter 11
Guidance on property investment clubs and land investment schemes
13/ Oxford University
Tokenisation – The Future of Real Estate Investment?
https://www.sbs.ox.ac.uk/sites/default/files/2020-01/tokenisation.pdf
Tokenisation – The Future of Real Estate Investment?
https://www.sbs.ox.ac.uk/sites/default/files/2020-01/tokenisation.pdf
14/ Maecenas Launches New Tokenisation Vehicle
https://blog.maecenas.co/maecenas-launches-new-tokenisation-vehicle/
https://blog.maecenas.co/maecenas-launches-new-tokenisation-vehicle/
15/ Fractionalized Art Ownership and Securities Law
Center for Art Law https://itsartlaw.org/2019/11/19/fractionalized-art-ownership-intersection-of-art-and-securities-law/
Center for Art Law https://itsartlaw.org/2019/11/19/fractionalized-art-ownership-intersection-of-art-and-securities-law/
16/ The one very interesting question under the EU regime is that if there is management.
If there is management it quickly becomes a fund.
If there is management it quickly becomes a fund.
17/ But as you know, mostly DAOs operate under direct democracy rules and the governance token owners change the protocol by direct voting.
18/ Setting up a foundation or paying an external agency like a law firm to manage IP rights (Copyright, trademark), like in the case of @ethereum foundation,
should not break the management rule as far as I understand
should not break the management rule as far as I understand
19/ Also the foundation can pay salaries of accountants and developers.
It is easier tax-wise.
Most software developers are not interested in solving the problem of explaining a tax agent how they were paid by a magical internet smart contract
It is easier tax-wise.
Most software developers are not interested in solving the problem of explaining a tax agent how they were paid by a magical internet smart contract
20/ So DAOs in the EU makes more sense than in the US currently.
If you are a token project the EU welcomes you.







If you are a token project the EU welcomes you.









