- The Uniswap Foundation proposed adopting a new legal entity for the Uniswap Governance Protocol.
- The DUNI would oversee engagement with service providers, enter into contracts, and fulfill tax obligations on behalf of the UNI governance.
- The move would also make Uniswap the largest decentralized organization that incorporates a legal framework.
Uniswap Foundation (UF) recently introduced a proposal to enhance the governance protocol of the Uniswap (UNI) network. The organization supporting the UNI ecosystem pushed for adopting a Wyoming-registered Decentralized Unincorporated Nonprofit Association (DUNA) as the legal entity for the chain.
The new legal structure called “DUNI” aims to preserve Uniswap’s decentralized governance infrastructure. Additionally, the model enables the Uniswap Governance Protocol to engage with service providers, enter into contracts, and fulfill tax obligations.
The move would mark a significant milestone in Web3, as Uniswap would become the largest decentralized organization to integrate a legal framework. The introduction of the proposal led to UNI rallying by over 13% between a $10.47 low and a $11.89 high during the weekend and heading into Monday, signifying a strong stamp of approval within its community.
The Role of DUNI
According to Uniswap, it has been exploring options to incorporate a legal structure into its system for the past two years. It envisions the new protocol to offer more clarity in liability protection, maintain the primary authority of the Uniswap Governance protocol, and enable off-chain operations without compromising its decentralized control mechanism.
Following extensive research and assessment, the UF chose to activate its planned legal entity in consonance with the provisions of the Wyoming DUNA Act. The law passed in 2024 under the State of Wyoming governs corporations, partnerships, and associations, while providing the blueprint for forming and managing decentralized unincorporated nonprofit associations.
The UF chose Cowrie firm, founded by its CEO David Kerr and Justin Childres, to facilitate the transition of the DUNI legal governance entity—if approved by the Uniswap community. The organization chose the legal entity due to their past working relationship.
Moreover, it claimed that one of its founders, Kerr, was instrumental in crafting the DUNA, thus giving the firm a complete understanding of the intricacies of the law. After the transition, Cowrie will act as the administrator of DUNI. It will also oversee regulatory, tax, and reporting compliance. Likewise, it will administer operational infrastructure within the constructs of DUNI’s authorizations.
The Uniswap Foundation’s Proposal
The UF proposal seeks the ratification of the DUNA Association Agreement, laying the foundation for DUNI. Moreover, it will execute a Ministerial Agent Agreement with UF and an Administrator Agreement with Cowrie. The latter includes a separate Administrator Agreement with Kerr for specific authorizations.
Furthermore, the approval of the proposal will allocate $16.5 million worth of UNI to a DUNI wallet. It will be used to fund the entity’s “legal defense budget” and tax compliance. Lastly, it will unlock $75K worth of UNI for Cowrie’s compensation as administrator and other services tendered.
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