Simple Summary

• Approve MME Legal AG as legal counsel of 1inch DAO;

• Grant MME Legal AG power of attorney to represent 1inch DAO; and

• Approve an initial advance payment of 50’000 USDC.

Abstract

Following the adoption of 1IP-70 which, amongst others, revoked STORM Partners legal counsel status and the accompanying power of attorney, it is necessary to appoint a new legal counsel.

The Legal Communications Working Group (“LCWG”) established by the above-mentioned 1IP proposes that 1inch DAO engages MME Legal AG (“MME”) as its new legal counsel, following discussions conducted with this Swiss law firm.

Motivation

Complex Operational Environment. Despite the notable expansion and evolution of DAOs over the last years, this type of organizations is still struggling to determine the exact scope of the regulatory and compliance responsibilities across the wide range of situations triggered by their diverse activities. In particular, the constant and fast paced evolution of the regulatory environment renders complicated for DAOs to determine the level of compliance appropriate considering their protocol’s function and risk profile, the beliefs and ethos held by the community, as well as many other relevant factors. With MME’s assistance, 1inch DAO can strengthen its standing as a responsible and legally sound organization, proactively navigating the regulatory landscape, and effectively protecting the interests of its stakeholders.

Reputable Law Firm. MME has a proven track record in the blockchain industry, having guided many prominent players in the space since 2014, including the Ethereum Foundation. Its extensive team of Web3-native legal experts brings relevant expertise across a wide range of Web3 projects, enabling the firm to provide pragmatic and compliant solutions to the challenges DAOs may encounter in their operations.

Signaling A Responsible Approach. This engagement would send a clear signal to the community and potential regulators that 1inch DAO is committed to “doing the right thing.” By partnering with a reputable law firm with a strong track record, 1inch DAO demonstrates its dedication to responsibly assessing the scope of its risks and responsibilities. MME's firsthand experience in observing the industry's evolution, as well as shifting regulatory approaches, positions it uniquely to support 1inch DAO in navigating this landscape.

Comprehensive Support. DAOs, while inherently global, are connected to real-world factors that tie them to overlapping legal frameworks. Therefore, this proposal aims to engage a law firm that can provide advice considering the many foreign DAO frameworks adopted across the globe, and liaising, when necessary, with foreign lawyers. With MME, the DAO will benefit from a strong international network and comprehensive legal support for events with legal implications. Notably, MME will support with:

• Drafting Expertise: MME will provide valuable guidance in drafting and reviewing contracts and governance proposals, ensuring they align with the DAO's objectives and comply with legal standards.

• Risk Mitigation: MME will provide risk mitigation strategies, including the development of robust policies and procedures and providing guidance on mitigating legal liabilities.

• Dispute Resolution: In the event of legal disputes, MME will represent the DAO's interests, providing expert advice and advocating for fair resolutions. Having legal representation strengthens the DAO's position and protects the rights of its stakeholders.

Practicalities

This section outlines the practical aspects related to the collaboration between MME and 1inch DAO in the context of their engagement as legal counsel.

General Terms. The services provided by MME are subject to the applicable service terms of MME which were made accessible to and reviewed by the LCWG.

Communication Channel. The LCWG is responsible for coordinating communications between 1inch DAO and MME. As such, it will act as the sole point of contact with MME to ensure streamlined and consistent communication. Both the LCWG and MME will designate a dedicated point of contact to manage and forward communications within their respective teams as needed.

Confidentiality vs Transparency. To safeguard the interests of the DAO, all communications between the LCWG and MME will remain confidential. However, to ensure transparency and accountability, the LCWG will prepare quarterly reports summarizing key topics, their status, and the solutions adopted, provided such disclosure is legally permissible. These reports will also include an overview of legal fees, ensuring ongoing financial oversight and fostering trust within the DAO community.

When appropriate or necessary, and with MME's consent, the LCWG will share relevant legal documentation with the broader DAO community. This approach will keep members informed about events that affect or could potentially impact them directly, fostering transparency and proactive communication within the DAO.

Ongoing Check-In Meetings. To ensure effective oversight of all legal matters, it is proposed that the LCWG holds regular check-in calls with MME. These meetings will provide an opportunity to review ongoing matters, discuss potential legal implications, and define actionable steps. Objectives of these calls are the following:

• Given that the LCWG may not possess the expertise to independently assess all issues requiring legal intervention, these regular discussions will help ensure no critical matters are overlooked, and thus prevent actions that could lead to adverse legal consequences.

• Additionally, the meetings will serve as a platform to review legal expenses incurred on previously raised matters, enabling continuous monitoring of legal fees.

Urgent Requests. Beyond the Check In Meetings, any matter requiring legal input and which cannot wait until the following meeting will be submitted by the LCWG to MME in writing.

Conflict of interest. As legal counsel of 1inch DAO, MME represents the interest of the DAO. Accordingly, MME may and will not be able to represents individual interests of DAO members or members of the LCWG in any internal disputes.

Payment and Invoicing. The engagement process requires the DAO’s approval of advance payments, which MME will invoice against for its services. This approach ensures clear financial arrangements with MME and promoting transparent and accountable use of resources. Funds will be allocated to the 1inch DAO Operations Multisig 0x45e84e10e8E85c583C002A40007D10629EF80fAF, then transferred to MME.

• Advance Payments: An initial advance payment of 50’000 USD (in ETH or USDC) will be transferred to MME as a retainer to initiate the legal engagement and enable MME to begin providing legal support to 1inch DAO. In the event of termination of this mandate, MME will return any remaining advance payments to the blockchain address from which the initial payment was received.

• Invoicing and Billing: The services will be invoiced on an hourly fee basis. At the end of each calendar month, MME will provide invoices for its services rendered to 1inch DAO. The invoices will be detailed and itemized, clearly outlining the services provided, corresponding hourly rates fees, and any applicable taxes or disbursements. All invoices sent by MME will be reviewed and approved by the LCWG. Upon such approval, the invoiced amounts will be deducted from the advance payments.

• Replenishment and Additional Approvals: The committee will review the need to replenish the advance payment funds every three months, taking into account the progress of legal services and the remaining balance. Any decision to replenish the advance payment amounts will be subject to the internal governance process of 1inch DAO and require a separate governance proposal.

• Expense Tracking and Reporting: The LCWG will maintain accurate records of all advance payment amounts, invoices, and services rendered. The LCWG will include the utilization of the pre-payment amounts and the remaining balance in its quarterly reports to ensure full transparency. Any questions raised by DAO members regarding invoicing will be directed to the LCWG, and if necessary, the LCWG will submit them to MME for clarification.