Title
LEGT - Legal Equity & Governance Tokens
Team Members
John D. Storey & Logan Finlay
Short Summary
We seek to resolve doubts and prove the viability, flexibility, and legitimize DAOs through establishing a protocol in one of the most flexible and broadly used tools: LLC business ownership and governance.
Our aim is to implement legal protocol standards for use in DAO tokens as they apply to LLC ownership transfers and governance into blockchain token workflows to enable (1) onboarding existing LLC’s onto the blockchain (including tracking membership and other LLC governance responsibilities on the blockchain); (2) increase the transferability and marketability of LLC ownership interests (and vicariously owned assets); and (3) facilitate the creation of novel and interchangeable governance structures within LLCs.
What is the existing target protocol you are hoping to improve or enhance?
DAO formation is in it’s wild west stage, while LLCs are time tested. Tokenization and streamlining established legal practices in the formations, equity transfers, and governance/management processes would be a great value add for both ecosystems as such a protocol would help to legitimize blockchain technology in the eyes of traditional investors, lenders, business owners, governments and ease the litigation risk and legal burden for DAO based ecosystems.
What is the core idea or insight about potential improvement you want to pursue?
Simplify and streamline the best practices for DAO and LLC ownership transfers, voting, distributions, notices, resolutions, and other management roles and responsibilities through (a) tokenizing equity ownership and (b) creating a blockchain standard for tracking and facilitating each. This will empower culture creation, foster innovation and reduce litigation risks and streamline conflict resolution between owners.
In upgrading legal infrastructure and processes, traditional organizations can easily upgrade to a decentralized organization and can begin to take advantage of the Wisdom of the Crowd as well as be future proofed for on-chain use. This will allow new and novel governance models to emerge, as members tinker and experiment with our modular system for their individual use cases.
What is your discovery methodology for investigating the current state of the target protocol?
Analysis of historical examples both successful and unsuccessful of group decision making. Research into which legal frameworks stand to gain the most in upgrading.
We already have an exceptionally strong background knowledge on the current state of the target protocol. Logan Finlay, as a licensed attorney, has expertise in adhering to state and federal business standards and practices, executing business transactions, and litigating and mediating business ownership disputes. This will allow us to focus the great majority of our time on implementation of a protocol rather than on discovery.
In what form will you prototype your improvement idea?
We will be inviting individuals and organizations to join our DAO community, software prototype and analog process prototype with legal structure, contracts & best practices. We will be doing user testing on our own internal DAO “dog-fooding” to:
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Onboard or convert existing real world LLCs into blockchain entities and DAOs
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Systematize formations of LLC/DAOs on the blockchain
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Systematize tracking of owners and equity and transfers thereof
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Systematize legal notices to LLC/DAO members
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Convert operating agreements into NFTs
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Convert paper membership captables into ERC20
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Upload these to IDTs system for permanent record keeping
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Create voting dashboards for LLC/DAO members
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Identify how to comply with existing real world legal requirements like having physical registered agents and domiciling entities requirements in a state
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Find which parts are best to be digitized and which to be left analog
Feedback of users, as well as analysis of “sticking points’’ will go into consideration.
How will you field-test your improvement idea?
We will use the platform to electronically create LLCs/DAOs. We have four business owners that are interested in direct implementation of these blockchain systems for their existing businesses.
- A real property holding company and airb-n-b management company located in Puerto Rico.
- A holding and management company for sale and transfer of paintings of a well known Vedic Artist (About the Artist | Bhakti Art | Spiritual Krsna Art & ISKCON Paintings & Giclee by Syamarani Dasi (Jadurani dasi) | Krishna Art)
- A management company for an Ashram in Miami (https://sacredvedicarts.org/ 2) to make group decisions on space allocation, budget allocations, responsibility delegations etc as well as a strategic part of their marketing efforts to spread information and gain involvement through collective ownership.
- A community DAO to refine ideas and fund web3 development efforts with a portion of the grant which will attract the groups and individuals with the biggest need and desire to implement this system.
We also have various ongoing conversations with other potential beta testers that have established businesses.
On a physical level the protocol will be implemented into an Ashram in Miami to make group decisions on space allocation, budget allocations, responsibility delegations etc as well as a strategic part of their marketing efforts to spread information and gain involvement through collective ownership.
Who will be able to judge the quality of your output? Ideally name a few suitable judges.
Austin Griffith - Open Source Web3 Builder Scaffold-Eth
Griff Green - GivETH
Ameen Soleimani - Moloch DAO
Thad Bachman - Federal Judge and President of the Oklahoma Judges Association
Syamarani Dasi - Ashram Founder & Coordinator
Brijesh Patel - Smart City VC
Various other business law Attorneys with the Utah State Bar
How will you publish and evangelize your improvement idea?
Through the organizations willing to implement the protocol. The protocol itself encourages promotion and buy-in from its participants so an intrinsic part of our efforts will be how to incentivize evangelization and get involved feedback to improve it from the inside.
We plan on releasing an open source package of what we learned with accompanying tools, blog posts, and educational videos in order to implement.
Logan will also have publishing and evangelizing opportunities through his leadership and membership roles in the Utah Bar Association to other attorneys and affiliate networks. He will present these to the Utah State Bar Business Section and Real Property Sections.
What is the success vision for your idea?
Implement our protocols in real world use cases:
- Onboard at least two existing LLCs through our protocol and community
- Create mainnet tokens representing real world assets
- LLC/DOA members executes a transfer/exchange of tokens and money on-chain so no broker is needed
- LLC/DOA members are able to propose resolutions and cast votes on-chain
- Reward code contributors with equity in the project they build upon code integration
- Create at least one novel new governance model (liquid/quadratic/benevolent-dictator hybrids)
Upon completion doing a full retrospective with the stakeholders involved to gauge if the outcome was satisfactory or what needs to be improved upon in order to outperform the current status quo of their existing processes and publishing our results.
In addition to reporting our findings via articles and videos along with the tools needed for others to enact the same system. We hope this to curate a community of interested individuals that will then continue developing the methodologies bringing more and more innovative products into existence.