Teia is now a legally recognized DAO. What does that mean? What's next?
We are excited to announce that Teia is now an official legal entity! We received confirmation from our registrar service MIDAO that we are now a registered non-profit DAO LLC incorporated in the Republic of Marshall Islands. This is the result of almost one year of research, building, coding, and discussions. Let's look at the details!
About RMI DAO LLCs
We're excited to launch as a non-profit DAO LLC because it means we can start to actively involve our community!
We chose to register our decentralized company in the Republic of Marshall Islands because it is one of the few legal realms that allows company ownership to be defined by blockchain addresses. This means that we can define Tezos wallets as members of the DAO in a legally binding way.
The LLC is non-profit in nature, meaning we won't be distributing any profit among members, and we commit to working in charitable ways. In the case of Teia, our LLC is defined by furthering cultural exchange, centering around the topic of arts, culture, and education.
This means that the next big milestone towards our full DAO setup has been reached: we are now a company that is defined on the Tezos blockchain! This step goes beyond simply forming a DAO - it means that there is real-life legal recognition of the DAO structure we deployed on-chain.
It took longer than expected for our legal and DAO team to make this incorporation happen as it required not only smart contract development and building on-chain governance solutions but also legal clarifications, providing KYC information, securing the needed funds, and putting our structure into a written agreement that our team of volunteers was happy to agree upon.
To our knowledge, this makes Teia the first open-sourced and community-owned marketplace.
On the legal side, the LLC establishes a legal wrapper to protect our contributors from legal liability on behalf of the company: now, individuals cannot be held responsible for Teia's actions, which is a crucial condition for volunteers to maintain and further develop Teia in a safe and easy manner. Moreover, it allows us to act as a legal entity, enabling us to sign contracts as well as pay for services and work.
Who Owns Teia DAO LLC now?
For the first phase of the launch, all Tezos addresses that are part of the Core Team Multisig (currently 19 addresses/people) are the owners of the DAO. The Multisig consists of a team of highly active and long-time contributors to Teia that agreed to take this position to guide Teia towards the full DAO setup. Decisions regarding transactions of funds, membership status, and similar fundamental decision-making will be made through votes inside this multisig wallet with at least 55% yes votes needed for a proposal to be executed.
But this is only a temporary solution to make a transition to a proper community DAO possible: once we have distributed our Governance Tokens and tested the DAO voting contracts together, we will be changing our operations agreement to make it so that every wallet that holds Teia DAO Tokens is a member of the LLC (Limited Liability Company).
What's next on the roadmap?
There is still a lot to do before we can launch the DAO smart contracts. You can read up on the planned and current DAO and governance setups on our wiki article "Governance on Teia".
Ever since Teia emerged from the discontinuation of former NFT marketplace hicetnunc, it has not collected any fees because of legal and governance concerns. But now, with a legal framework in place as a non-profit organisation, we will activate the fees so the income can be used to maintain infrastructure and make improvements to our community-driven marketplace.
Up until now, in order to keep Teia going, the team of dedicated volunteers worked hard to reduce the infra costs to a minimum and paid expenses from generous donations from the community and out of our own pockets.
We will activate the marketplace fees of 2.5% sometime next week. All trades done on Teia's marketplace contract (that is, all swaps done via Teia's UI) will then split 2.5% of the trading volume towards Teia's treasury address (which is the Core Team Multisig mentioned above). This also applies for old swaps, so no need to reswap in order to support Teia if your swaps are already on the Teia marketplace contract.
This will help create self-sustainability for Teia and pay its bills from these fees.
It might be worthwhile to note that in order to pay Teia's infra costs, improve equity representation, and fund community events, we are relying on artists and collectors swapping their tokens on Teia's UI. Swaps done on other marketplaces won't direct fees to the community treasury. So if you would like to support Teia, consider swapping on teia.art and join us in celebrating this wonderful milestone!
Of course, there is still a lot more to do. We will keep working towards our Governance Token distribution next. There will be a community vote in which the community will be asked to pick one of three token distribution/supply models for our governance token. As announced in our DAO development update article, the distribution of the tokens will take into account different factors such as contribution to Teia, interaction with Teia’s and Hic et Nunc’s smart contracts, and hDAO held.
You can find the discussion and a few (slightly outdated) distribution models and simulations on our Discord thread for the distribution.
We had to wait until now to distribute these tokens for legal reasons and are now safe to distribute them. Teians will be able to claim their tokens via a dedicated token claim page during a set timeframe (we will announce more details when we get there).
Please note that Teia will not sell these tokens, and there is no profit distribution or other return on investment attached to them, as their intended utility is being a voting token for the Teia DAO smart contracts (as described in our wiki article on Teia's governance).
There will be a second and potentially a third Token distribution event like this in the far future to distribute the full supply of Teia DAO Tokens. While the first Token drop is supposed to reward all past contributions to, and interactions with hicetnunc and Teia, the following distribution events will solely be about activity and contribution to Teia.
Attention hDAO holders: We will soon determine the hDAO snapshot block for the distribution by executing a proposal that will pick a semi-random block for the snapshot. This guarantees that the team won't know the block level of the snapshot prior. Once the block is determined, we will announce it via our social media. hDAO balances after the determined block won't be considered for any further Teia token distributions.
One Step Closer Towards the Finished DAO Setup
Of course, Teia should not be owned by only 19 team members: the goal is to make Teia a truly community-owned DAO.
Building a proper DAO takes effort. A lot of effort. We have been working on our DAO setup for more than a year; gathering input, developing the framework, running trials, and exploring best practices.
Once the Tokens have been distributed, we can use the DAO smart contract setup and vote on DAO proposals with our Teia governance tokens. In the beginning, the core team will monitor these votings and look for bugs or exploits in these contracts. After a period of testing, the core team will transfer the ownership of Teia to the DAO contracts, at which point any wallet that holds Teia DAO tokens will officially be a member of the DAO and thus partially own the DAO.
There is still work to be done, but with the registration, we have come a huge step closer to the full DAO.