SUMMARY: Builder DAO is dedicated to the creation and development of free and accessible DAO infrastructure as a public good. This proposal supports the launch of Builder DAO and its nonprofit mission by transferring seed funds to the DAO treasury to support the building of public DAO infrastructure, and establishing the DAO as an Unincorporated Nonprofit Association (“UNA”) which has the benefits of: 1) providing limited liability protection and tax clarity to DAO members, 2) allowing the DAO to interface and transact with non-crypto-native parties; 3) aligning with Builder DAO members’ common nonprofit purpose; 4) being established under US law; and 5) allowing for anonymous participation. See below for additional details.

Acceptance of Builder DAO Seed Funds

Under Proposal 167, Nouns DAO, has voted to provide seed funds in the amount of 1000 ETH to Builder DAO. The funds are currently held in an escrow account and must be claimed by the Builder DAO treasury. Approval of this proposal shall initiate the claim process. 

Transaction Details - 1000 ETH transferred from escrow account to Builder DAO Treasury.

UNA Formation & Administrator Delegation

Overview

Builder DAO is formed as an Unincorporated Nonprofit Association (“UNA”) under Wyoming law by its members joined by mutual consent for a common, nonprofit purpose on November 15, 2022. All members enacting this proposal are holders of the Builder DAO NFT and as such, are able to participate in the governance of Builder DAO as established in the UNA Association Agreement and smart contracts comprising Builder DAO.  

All holders of Builder DAO NFTs (whether acquired through auction or otherwise) are members of the Builder DAO UNA, as demonstrated through their conduct and the terms contained within the Builder DAO NFTs (included below).  

This proposal contains: 1) a summary of why Builder DAO is formed as an UNA; 2) an overview of the UNA Association Agreement; and 3) a specific authorization of administrative authority and compensation to the DAO founders Zora Labs, Inc. (“Zora”) and Nouns DAO (collectively the “Founders”) for their services to Builder DAO. 

Why UNA

An Unincorporated Nonprofit Association helps solve the three biggest challenges facing DAOs without an entity structure, namely: i) the lack of legal existence (inability to contract or hold property at the entity level); ii) inability to pay taxes; and iii) potential unlimited liability.  

Wyoming law grants UNAs a legal entity separate from its members capable of holding property. and allows UNAs to elect corporate taxation.  

By forming an UNA in Wyoming, Builder DAO can avail itself of limited liability protection, can address tax reporting and liabilities in a clear manner, and can support anonymous membership. Forming in the US adds trust, more regulatory clarity, and accessibility for US-based members and activity. 

Association Agreement

The Association Agreement (reproduced below) establishes the agreement between DAO members to abide by the Governing Principles of the Builder DAO UNA, which is a combination of the Association Agreement, the on-chain Governance Protocol (smart contracts giving rise to quorum, voting, control of the treasury and control of the Builder DAO Protocol), and any current and future validly enacted Governance Proposals.  

Specific Authorization of Administrative Authority & Compensation 

This proposal authorizes the Founders to act as administrators of the UNA to take any necessary steps for the formation and operation of the UNA, including to:

- attain an EIN;

- obtain legal and tax guidance for Builder DAO;

- elect corporate taxation and sign, file, and pay taxes;

- attain a registered agent for service of process; 

- file service of process with the Secretary of State of Wyoming; and 

- attain a bank account

Zora shall also be authorized as a service provider to host and maintain the Builder Protocol codebase on behalf of the DAO. 

As outlined in the Association Agreement, administrators are narrowly empowered to perform specific tasks and do not contain the authority to bind the DAO to contracts or utilize broad discretion in their decision making. In the event additional authorization is required beyond this Governance Proposal, an additional Governance Proposal must be made and validly executed. As the DAO membership expands, it is expected that the administrative duties will be more widely dispersed within the membership with many of the initial grants of authority having only been necessary to complete formation of the UNA.  

Compensation

As the Founders have made significant financial and creative contribution to the Builder DAO and will continue to provide services in furtherance of the DAO’s purpose (providing free technological infrastructure for the development of new models of DAOs as an organizational framework for community engagement, collective decision-making, and innovation), they will receive Builder DAO NFTs at intervals defined within the Builder DAO Protocol as compensation for their continued efforts for a period of five years after the launch of the DAO.  

Scheduled Review of this Proposal

We will revisit this proposal after Builder DAO has minted 60 NFTs to review existing administrator authorizations and evaluate whether to cease, amend, or redelegate the authorizations to the broader Builder DAO community.  

Builder DAO NFT Terms

Protocol & Entity Participation

By using this NFT to participate in the governance and operations of Builder DAO, the holder of this NFT agrees to be subject to the terms of Builder DAO's governing protocol, including as a member of its entity structure. Builder DAO was organized as a WY UNA on Nov. 15, 2022.  

Participation in the governance and operations of Builder DAO includes, but is not limited to, utilizing the NFT to: 1) vote or propose governance proposals (either directly or through delegation); 2) attend events; 3) or interact with the Builder DAO protocol.

Except as otherwise provided in Builder DAO's governing protocol, the membership interest or rights thereunder of this NFT is freely transferable to another person through its conveyance.

Except as otherwise provided in Builder DAO's governing protocol, a member shall be deemed to have resigned from Builder DAO upon the disposal of this NFT.

Association Agreement

Association Agreement

Builder DAO

Unincorporated Nonprofit Association

November 15, 2022

Builder DAO is an Unincorporated Nonprofit Association under Wyo. Stat. Title 17, Ch. 22 of the laws of the State of Wyoming. This Association Agreement is referred to in this document as the “Agreement”. Capitalized terms used in the Agreement that are not otherwise defined and words and phrases marked in bold text are defined in Exhibit A to the Agreement.

Article 1

Name

The name of this Association and the name by which it will be known is: Builder DAO (referred to below as “the Association”).  

Article 2

Purpose

The objects and purposes of the Association shall be as follows:

1. The Association is established for the common nonprofit purpose of providing free technological infrastructure for the development of new models of decentralized autonomous organizations (“DAOs”) as an organizational framework for community engagement, collective decision-making,  and innovation.  
2. The Association has the power to do all things necessary or convenient to carry on its activities or affairs as an Unincorporated Nonprofit Association under the laws of Wyoming that are in furtherance of its purposes as set forth in Paragraph 1 of this Article and otherwise as permitted by this Agreement. 

Article 3

Membership

1. A Person shall become a Member of the UNA by acquiring a Builder DAO NFT, which is referred to in this Agreement as such Member’s “Membership Interest.” Such Membership Interest shall allow a Member to participate in the governance and operations of the Association in accordance with the terms of this Agreement.
2. Members agree to abide by the established Governing Principles of the Association.
3. A Member shall be deemed to have resigned as a Member of the DAO upon the disposal (voluntary or involuntary) of all Membership Interests (e.g., the Builder DAO NFT which conveys their voting rights within the DAO).  
4. The withdrawal of a member by transfer of all or any of its Membership Interests shall not dissolve the Association and the Association shall be continued.
5. A Member’s Membership Interest or any right thereunder is freely transferable to another person through conveyance of such Membership Interest.  
6. A Member is representing themselves to be the rightful owner of their Membership Interest when engaging with the Association as a Member.  

Article 4

Rights and Duties of Members

1. Members have no ownership rights of the property of the DAO via their Membership Interest.  
2. A Member of the Association is not an agent or representative of the association solely by reason of being a Member and all fiduciary duties are waived.
3. A Member of the DAO has no authority to bind the association to a contract, sign documents, or act in any representative capacity on behalf of the DAO absent specific authorization from a validly executed Governance Proposal as set forth in this Agreement.
4. To the extent permitted by applicable law, any debts, obligations and liabilities arising from the DAO’s operations, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the DAO and no Member or Administrator shall be obligated personally for any such debt, obligation or liability solely by reason of being a Member of the DAO or participating in the governance of the DAO.  

Article 5

Voting; Governing Principles

1. As defined in Appendix A, an UNA’s Governing Principles are a culmination of all the agreements (i.e., this Agreement, the Builder DAO Protocol, or executed Governance Proposals).  As Governance Proposals are enacted, elements of the existing Builder DAO Protocol and this Agreement may be superseded by validly executed Governance Proposals.  
2. As part of its Governing Principles, the Association will provide for its governance through a Distributed Ledger Technology in the form of Smart Contracts referenced collectively as the Builder DAO Protocol.  
3. The Association will retain control of the Smart Contracts comprising the Builder DAO Protocol and the distributed ledger will be public.
4. Voting procedures through Smart Contracts deployed to Distributed Ledger Technology, referenced collectively as the Governing Protocols, provide the following:

• Proposals from Members in the Association for upgrades, modifications, or additions to software systems/protocols;
• Proposals from Members to appoint Administrators to perform designated functions on behalf of the Association; 
• Proposed changes to the Association’s Governing Principles; 
• Quorum requirements for validly executed Governance Proposals;
• Votes necessary for a Governance Proposal to be enacted;
• Distributions of the Association’s assets to facilitate transactions to support the Association’s common nonprofit purpose; and
• Any other matters of governance or activities with the purpose of the Association.  

5. In the event this Agreement conflicts with the Smart Contracts – the Smart Contracts control. 

Article 6

Administrators; Agents

1. This Association is organized for decision-making to be performed through its Smart Contracts. The Association may grant authorizations for specific delegated tasks      through a validly executed Governance Proposal and any separate contract between the Association and Administrators.  
2. An Administrator has no authority to act on behalf of Association beyond the specific authorization granted through a validly approved Governance Proposal or otherwise in accordance with the Governing Principles.  

Article 7

Compensation

1. Except as otherwise provided in subsection 2) of this Article, the Association may not pay dividends or make distributions to a Member or Administrator.
2. In accordance with the laws of Wyoming, this Association may:

• pay reasonable compensation or reimburse reasonable expenses to its Administrators, agents and Persons outside the organization for services rendered, including with respect to the administration and operation of the Association;
• confer benefits on its Members or Administrators in conformance with its common nonprofit purpose or purposes.  

Article 8

Dissolution; Wind-up

1. This Association has a perpetual duration and may only be dissolved by any of the following methods:

• Upon a validly executed Governance Proposal;
• Three years of inactivity, per Wyoming law.  
• By court order.

2. After dissolution, the Association continues in existence until its activities have been wound up and it is terminated pursuant to Paragraphs 3 and 4 of this Article. 

3. The Association continues to exist beyond dissolution only for the purpose of winding up.

4. In winding up the Association, the members:

• Shall discharge the Association’s debts, obligations and other liabilities, settle and close the Association’s business, and marshal and distribute any remaining property to another entity or person with similar nonprofit purposes, as determined by a validly executed Governance Proposal;
• May, as a result of a validly executed Governance Proposal, appoint an Administrator or Administrators to wind up the Association and:
• Preserve the association operations and property as a going concern for a reasonable time;
• Prosecute and defend actions and proceedings, whether civil, criminal, or administrative;
• Transfer the association’s property;
• Settle disputes by mediation or arbitration;
• Receive reasonable compensation for services rendered in windup the association; and 
• Perform other acts necessary or appropriate to the winding up.

Article 9

Rights of Members and Administrators to Information

1. Wyo. Stat. Title 17, Ch. 22 does not require UNAs to maintain specific Records regarding its activities, financial condition or other situations.  
2. Given the nature of the Association and its decentralized governance, only Records prepared and maintained through validly executed Governance Proposal would be information that could be requested and in practice all, or ostensibly all, of such records would be available on the blockchain.  However, in the event a situation arose where they were not – the request for Records would need to take the form of a validly executed Governance Proposal to determine the validity and authorization of the request.  

Article 10

Service of Process

1. The Association may file in the WY office of the Secretary of State, a statement appointing an agent authorized to receive service of process.
2. In the event a statement to appoint an agent authorized to receive service of process is executed, it must be reauthorized and refiled every 5 years. 

Article 11

Indemnification; Advancement of Expenses

1. The Association may reimburse a Member or Administrator for authorized expenses reasonably incurred on behalf of the Association through a validly executed Governance Proposal to the extent allowable by the laws of Wyoming.  

Article 12

Agreement to Arbitrate

1. Any dispute, claim or controversy arising out of or relating to the activities of the Association and its member, administrators, and/or agents or the breach, termination, enforcement, interpretation or validity of the Governing Principles, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by arbitration in Wyoming before one arbitrator. 

The arbitration shall be administered by AAA pursuant to its Commercial Arbitration Rules and Procedures pursuant to AAA's Expedited Procedures.  Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

Although final costs would be subject to the results of arbitration, any advance costs associated with the arbitration proceedings would be shared equally by both parties.  

Article 13

Miscellaneous

1. Separability of Provisions. Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.
2. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Wyoming (without regard to conflict of laws principles), all rights and remedies being governed by said laws.
3. Amendments. This Agreement may not be modified, altered, supplemented or amended except by a validly executed Governance Proposal.
4. Waiver of Action for Partition. Each Member irrevocably waives during the term of the Association any right that it may have to maintain any action for partition with respect to Association property.
5. A claim for relief against the Association does not abate merely because of a change in its Members or Persons authorized to administer the affairs of the Association. 
6. Notwithstanding any other provision of this Agreement, to the extent that, at law or in equity, the Administrators, Members or any other Indemnitee would have duties (including fiduciary duties) to the Association or to any Member, all such duties (including fiduciary duties) are hereby eliminated, to the fullest extent permitted by law, and replaced with the duties expressly set forth herein.

Appendix A

Definitions

1. “Administrator“ means a person authorized by the members of the organization to fulfill administrative or operational tasks at the direction of the Members.  

An administrator is distinguished from a manager filling a traditional management function because administrators only possess the power to administer those affairs authorized through a vote of the membership per its governing principles.  Absent specific authorization from a validly elected Governance Proposal, an administrator has no authority to bind the Association to legal agreements or to act on its behalf.  

An administrator may be, but is not required to be, a Member of the Association.

2. “Builder DAO Protocol” means the collection of Smart Contracts with which users interact to participate in Builder DAO.  The initial Builder DAO Protocol includes Smart Contracts for minting tokens, maintaining the Treasury, performing Builder DAO NFT auctions, and governance of the DAO.  

3. "Distributed Ledger Technology" means a distributed ledger protocol (e.g., designated regulatory model of software that governs the rules, operations, and communication between intersection and connection points in a telecommunication network) and supporting infrastructure (e.g., computer software or hardware or collections of computer software or hardware, or both, that utilize or enable a distributed ledger), including blockchain, that uses a distributed, shared, and replicated ledger, whether it be public or private, permissioned or permissionless, and that may include the use of digital assets as a medium of electronic exchange.

4. “Governing Principles” means all the agreements (Association Agreement, Governance Protocol, or validly executed Governance Proposals), whether in a record, implied from its established practices, or in any combination thereof, that govern the purpose or operation the Association and the rights and obligations of its members and administrators.  

5. “Governance Proposal” is the mechanism in which members bring forth an issue for the vote as established in the Smart Contracts, specifically the Governance Protocol.  

A governance proposal is validly executed if it meets the requirements for quorum and voting levels established in the Governance Protocol.

6. “Governance Protocol” is the collection of Smart Contracts through which members of the Association are able to put forth proposals, vote on active proposals, establish the rules regarding voting and ultimately, govern the Builder DAO Protocol.

7. “Member” means a person who may participate in the selection of persons authorized to manage the affairs of the Association or in the development of policy of the Association.

A Member may not be admitted to the Association without their consent, however – the assumption of the Membership Interest can be a clear demonstration via conduct that a person intends to be a member of the Association and abide by its Governing Principles (i.e., the purchasing of a Membership Interest, solicitation of Membership Interest, acceptance of a delivered Membership Interest, etc.).  As such, it is not a requirement that a person actually participate in voting or the administration of the affairs of the Association to be a Member.  

8. “Membership Interest” means a right of a person to participate as a Member of the Association, raise Governance Proposals and vote in the affairs and policies of the Association. 

9. “Non-Fungible Token” (“NFT”) means a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a distributed ledger, and that is used to certify authenticity and ownership (as of a specific digital asset and specific rights relating to it).  

10. “Person” means an individual, corporation, business trust, estate, trust, partnership, association, agency, joint venture, government, governmental subdivision or instrumentality, or any other legal or commercial entity;

11. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form, including information inscribed on distributed ledger technology.  

12. "Smart Contract" means an event-driven computer program used to track and tabulate votes using Builder DAO NFTs that executes on distributed ledger technology that is used to automate transactions, including, but not limited to, transactions that:

(a) Take custody over and instruct transfer of assets on that ledger;

(b) Create and transmit digital assets;

(c) Synchronize information; or

(d) Authenticate user rights and convey access to software applications.

13. “Unincorporated Nonprofit Association” means an unincorporated organization consisting of two (2) or more members joined by mutual consent for a common, nonprofit purpose. However, a joint tenancy, tenancy in common, or tenancy by the entireties does not by itself establish a nonprofit association, even if the co-owners share the use of the property for a nonprofit purpose;