THE VALIDAO CONSTITUTION
Legal/Administrative Section:
This Constitution provides an overview of the governance framework for ValiDAO and VDO token holders, who govern ValiDAO.
Some rules and procedures in this Constitution will be enforced directly on a blockchain, and some will be enforced off-chain. All rules are equally binding.
Actions taken under this Constitution may be on-chain or off-chain actions.
On-chain actions are those that are actuated directly by the governance parameters of the DAO as transactions on a blockchain.
Off-chain actions are those that are actuated by other means.
ValiDAO is a decentralized protocol that operates infrastructure services for, by, and on a variety of blockchains.
Lastly, this is an initial constitution aiming at making efficient decisions in the earlier stages of this organization, with an adequate path towards progressive decentralization.
The Foundation
The Validator Foundation, a Cayman foundation company (the “Foundation”), has been formed to serve the DAO. The Foundation aims to facilitate the growth of ValiDAO.
The Foundation exists to support ValiDAO and the community members by providing a legally recognized entity to enter into contracts, own and manage assets, attract participants, limit liability to certain activities, and assist with governance and token-related activities. ValiDAO operates symbiotically with the Foundation, leveraging its decentralized community-driven nature to vote and make decisions, while the Foundation ensures compliance with legal and regulatory standards.
Additionally, the Foundation has the responsibility to ensure that all activities and proposals align with local and international legal requirements. The Foundation acts as the legal face of ValiDAO, handling compliance, legal disputes, and contractual obligations on behalf of the DAO.
Article I: Governance Utility
Section 1: General Jurisdiction
All members of the ValiDAO Governance have the authority to make proposals affecting the following aspects of ValiDAO’s operations:
- Adjust commission fees for nodes.
- Set LP tax fees.
- Propose the addition of new blockchain networks.
- Propose the removal of validating services on networks.
- Award grants.
- Distribute fees.
Section 2: The Advisory Council Jurisdiction
The Advisory Council, organized as a multisignature entity, inherits the above authorities. Additinoally, it is entrusted with the power to:
- Manage the treasury and fees generated from the ValiDAO services, including personnel hiring.
- Approve a quarterly budget and potential budget increases for contracting entities’ operational expenditures, such as salaries and infrastructure costs.
It is the duty of the council to oversee and hold accountable the LabsCo’s decisions.
Section 3: LabsCo
Initially, ValiDAO’s day-to-day operations will be managed by the ValiDAO LabsCo. The LabsCo is headed by Murakamikaze, who is the acting Chief Validating Officer (CVO). The LabsCo will handle all areas of ValiDAO’s operations, such as infrastructure management, marketing, and business development efforts. The LabsCo holds decision-making power, subject to the limitations and procedures outlined in this Constitution. The LabsCo’s decisions have to be approved by the Advisory Council.
It is possible for several LabsCos to service ValiDAO simultaneously. For example, responsibilities of certain areas of operations can be divided between contracting organizations.
The LabsCo, alongside the advisory council, has autonomy to execute vision, hiring, budgets, and partnerships within fiduciary duty.
The council will be responsible for allocating a budget for the LabsCo.
Article II: Treasury Management
The treasury of ValiDAO will be managed by a multisignature wallet controlled by the Advisory Council. The multisig approach ensures that no single individual can unilaterally access or move funds, thereby adding a layer of security and accountability. The council will oversee the allocation of funds, ensuring that they are used in alignment with the strategic goals and operational needs of ValiDAO.
Article III: Advisory Council
The Advisory Council shall comprise a minimum of five and up to seven members. At inception, all of these shall be picked by the leadership (Murakamikaze). Every one year following the ratification of this constitution, an election will be held to elect a new council. There are no restrictions on serving several terms. Measures to prevent conflicts of interest shall be established and enforced. The Advisory Council will act as delegates.
Any ValiDAO token holder, barring conflicts of interest, is able to nominate themselves as a delegate. Delegation will be through Snapshot’s Delegates system.
The Advisory Council will hold regular meetings with LabsCos to discuss current priorities, goals, and financial decisions.
For their efforts, the council will receive compensation in the form of locked VDO, based on attendance.
Article IV: Governance Structure
Section 1: Delegation
ValiDAO governance supports voting power delegations, in which tokenholders can commit their voting power to others whom they trust to execute governance in alignment with their own interests.
Section 2: Governance Forum
The Governance Forum, initially powered by Discourse at https://forum.validao.xyz , will serve as the platform for community discussion, proposal drafting, and decision-making.
Subsection 1: ValiDAO Improvement Proposals (VIPs)
ValiDAO Improvement Proposals (“VIPs”) are the primary mechanism for introducing, discussing, and implementing changes to the DAO’s governance and operations.
Subsection 2: Categories
VIP categories include Announcements, Ideas (pre-draft), Drafts (community-reviewed), and Official (moderator-approved) proposals, alongside Delegation and Operations discussions.
Article V: Governance Flow
- Drafting: Proposals refined and discussed in the VIP - Drafts category for a 7-day period.
- Official Proposal: Proposals approved by moderators are posted in the VIP - Official category for a 3-day visibility period.
- Voting: Approved proposals proceed to Snapshot voting, requiring a 8,000 VDO token minimum for submission, followed by a 5-day voting period.
Ideas are discussed under Ideas (pre-draft) on the public governance forum by the community, with the author addressing feedback, questions, and suggestions.
Upon the author’s request, a DAO moderator will confirm that an idea generally conforms to proposal guidelines and is in the benefit of ValiDAO. If confirmed and approved, the proposal can move to the drafting stage and posted on Drafts (community-reviewed) to be refined. Once refined and confirmed again, they can be posted in Official (moderator-approved) by any DAO moderator for a 7-day visibility period.
Article VI: Proposal and Voting Guidelines
Section 1: Proposal Requirements
Proposals must comply with laws and regulations, align with the Foundation’s governing principles, and respect the laws of the Cayman Islands. Non-compliance may result in rejection.
In addition, proposals must be in the best interest of ValiDAO. This constitution states that the best interest of ValiDAO is defined as:
Increasing assets under delegation and revenue sustainably, over time, without depleting resources. Any action taken by LabsCos, and any VIPs, should aim to increase ValiDAO’s market dominance in the staking industry.
They must align with the current vision and goals of the organization, taking into consideration the capital and talent resources, and should be strategically compelling enough to prioritize for the organization. If the Advisory Council or the Foundation believes that this is not the case, proposals may be rejected. The Advisory Council or the Foundation reserves the right to withdraw a proposal if it doesn’t fit the best interest of ValiDAO.
Section 2: Proposal Guidelines
Proposals must follow the following template. Non-compliance may result in rejection.
Title and Category
- Title: Ensure the proposal’s title is descriptive yet concise.
- Category: Specify the category which best describes the proposal from the following options:
- Fee Changes
- LP Changes
- Operational Changes
- Grants
Proposal Summary
- Point of Contact: Include the name and contact information of the author.
- Abstract: A summary of the proposal limited to a single paragraph.
Overview and Specification
- Overview: Provide a detailed description of the proposal including timeline, benefits to ValiDAO, and any other pertinent details.
- Specification: Offer a detailed account of the proposed changes and a well-defined plan including steps and timeline for implementation.
Motivation and Objectives
- Motivation: Explain the opportunity or challenge the partnership addresses and its significance to ValiDAO.
- Outcomes: Summarize the goals and desired outcomes from the proposal.
Partner and Legal Details
Partner Information
- Delegate Sponsor: Indicate if a ValiDAO delegate is co-authoring or sponsoring the proposal, along with their relationship to the partner.
- Conflict of Interest Declaration: Disclose any past or existing financial or contractual relationships with ValiDAO, VDO token, any direct or indirect competitors, or any other project, protocol, ecosystem, or operator in the crypto space.
Project and Engagement Details
Engagement Terms and Financing
- Itemized Budget: Provide a detailed budget for the project, including team rates, subscription costs, and other resource expenses.
- Funds Provided: Detail any payments, subsidies, or grants offered to ValiDAO.
KPIs, Success Criteria, and Risks
- KPI & Metrics: Identify the KPIs or strategic priorities this initiative targets, with a preference for on-chain, trackable metrics for growth-driven projects or completion-based metrics for strategic initiatives.
- Success Criteria: Define what success looks like for the project.
- Risk Profile: Outline potential risks and mitigation strategies.
Timeline and Milestones
Engagement Structure
- Milestones: Define clear milestones for budget disbursement, linked to KPIs or success criteria.
- Duration & Engagement Completion: State the engagement duration and criteria for its completion.
- Reevaluation: Mention the timeline for partnership reevaluation or renewal, if applicable.
Section 3: Voting Guidelines
- Voting Period: 7 days.
- Proposal Threshold: 8,000 VDO tokens.
- Voting Quorum: At least 10% of the total token supply must vote for there to be a quorum on proposals.
- Voting Power: One VDO token equals one vote, granting token holders governance power over ValiDAO components.
Ratification
This Constitution shall be considered ratified upon approval by a majority vote of the current members of the ValiDAO community and shall take effect immediately upon such ratification.