The 1inch DAO Enlists Permanent Legal Counsel to Address Decentralized Nature Challenges
The decentralized autonomous organization (DAO) of 1inch, a decentralized exchange (DEX) aggregator, has made the decision to hire permanent legal counsel to help address the legal challenges posed by its decentralized nature. The DAO recently concluded a vote to acquire comprehensive legal support from Geneva-based Web3 solutions provider Storm Partners, with overwhelming support from the majority. This move comes in response to the increasing tendency of courts to apply traditional legal principles to decentralized entities. Storm Partners will provide a range of legal services, including regulatory compliance, contractual agreements, governance framework, asset protection, and defense against external claims.
Challenges Faced by Decentralized Organizations
Decentralized organizations like 1inch DAO face intricate legal challenges that require legal assistance to navigate regulatory risks, protect stakeholder interests, and maintain operational resilience. These challenges include regulatory risks, liability concerns, contractual ambiguities, lack of legal recognition, and challenges in enforcing rights. Recent cases in Europe and the United States have demonstrated the need for decentralized organizations to have proper legal support in order to address these challenges effectively.
Partnership with Storm Partners
By partnering with Storm Partners, 1inch DAO aims to enhance its governance and compliance. Storm Partners will actively contribute to the internal regulation of 1inch by drafting governance rules and policies, entering contracts, enforcing rights, and communicating with third parties in alignment with community decisions. As part of the agreement, 1inch DAO will pay a retainer fee to cover Storm Partners’ fees and related expenses. During their engagement, Storm Partners will provide quarterly reports detailing their activities and fees incurred.
A Historic Precedent for DAOs
The partnership between 1inch DAO and Storm Partners is significant as it marks the first time a DAO has directly hired a legal team. This move reflects the growing recognition of the importance of legal support in navigating the evolving regulatory landscape for decentralized autonomous organizations. While the community retains full control over the governance of 1inch DAO, the legal team’s role is to convert community decisions into a structured set of rules and legal frameworks. The decision to engage a legal team is a proactive measure to manage legal challenges and safeguard 1inch DAO and its members against unforeseen legal issues.
Hot Take: 1inch DAO Takes Proactive Steps to Address Legal Challenges
The decision by 1inch DAO to hire permanent legal counsel from Storm Partners demonstrates their commitment to addressing the legal challenges faced by decentralized organizations. By enlisting comprehensive legal support, 1inch DAO aims to navigate regulatory risks, protect stakeholder interests, and ensure compliance with legal requirements. This partnership sets a historic precedent for DAOs, highlighting the increasing recognition of the importance of legal assistance in the decentralized space. With proper legal support, 1inch DAO can establish a strong and legally sound structure that supports its growth and long-term existence.
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