CIP-64: Incorporation of a legal structure for CoW DAO

This CIP is shortened due to character limits. Full version pinned to IPFS, CID: bafkreiepdqfd7hblxbw6undnqon7onhvsj2ow7as5ws5fey7ucshxxsi4m

Summary

This proposal establishes a 4-entity legal structure for CoW DAO by incorporating a Cayman Islands Foundation and 3 BVI companies: CoW Core, CoW Hosting and CoW Business. With the successful passing of this CIP, the Service Providers will receive the mandate and community instructions for the incorporation of the below legal structure, on behalf of CoW DAO, with the mandates and split of activities set out below.

Legal Structure

CoW DAO (unwrapped)

• Governance + Delegation: CoW DAO sets strategic direction and approves mandates that are transmitted to the affiliated entities. The governance systems and settings, and Delegation Program remain unincorporated.
• Settlement Contract & Tokenomics: CoW DAO’s settlement contract and tokenomics framework remain out of the scope of the legal structure.
• CoW DAO’s MultiSig: CoW DAO remains exclusive owner of the COW token supply. The signer structure remains unaltered and unwrapped.

CHANGES

• Governance will remain in place, unaltered
• Through the incorporation documents, CoW DAO (unwrapped) will remain the ultimate decision maker of the legal structure - including the authority to direct, modify, or dissolve affiliated entities
• CoW DAO grants power to “Delegated Committees” that in turn will be mandated by the legal entities to perform the functions and assignments as decided through governance
• CIPs that pass through governance, will be assigned, where required, to the right entity within the structure
• All new entities operate based directly on mandates issued by CoW DAO through governance.
• MultiSignature Wallet set-ups that were done on behalf of CoW DAO, will remain as they currently are. Wallet operators will receive this mandate from the director.
• CoW DAO’s Participation Agreement (CIP-1) remains in full force.
• Delegated Committee means the committees or groups that have a mandate from CoW DAO. These committees include the existing Grants DAO Committee (CIP-63), Treasury Committee (CIP-62), and Legal Defense Committee (CIP-50), or any successor elected or newly formed committees mandated by CIP.
• Where possible, assignments and mandates will be retroactive.

CoW DAO Legal Representation – “CoW Foundation”

A Cayman Islands Company Foundation that is shareholder-less and member-less.

• May generate treasury yield and receives profit generated from subsidiaries to be included in the treasury mandate;
• Foundation allocates funding to all entities of the structure.
• Activities & Mandates:
  • Legal Interface: Acts as CoW DAO’s legal interface with the real world, formalising governance.
  • Ecosystem Promotion: Promotes the CoW ecosystem and CoW DAO’s products
  • Treasury Management: Manages financial assets on CoW DAO’s behalf through the already mandated Treasury Committee (all of CIP-62).
  • Grants: Manages grants distributions either directly or through the existing dedicated committee (CIP-63);
  • CIP-58 remains in full force and is assigned to the relevant new entities by the Foundation.
  • Unconsumed funds from CIP-58 will be assigned to the Foundation, for the Service Provider to bill quarterly.
  • Intellectual Property (“IP”) Ownership: unequivocally owns all Intellectual Property Rights originating from or related to the CoW DAO. This ownership is comprehensive and perpetual, extending to all IP Rights created or conceived at any time, including but not limited to, those IP Rights originating from the CoW DAO since its inception and pursuant to article 12 of the participation agreement, and all IP Rights created or conceived by the CoW DAO in the future.
  • Operational CoW DAO Safe: Owns the Operational CoW DAO Safe (CIP-43), mandating the Core Team, together with the Operator, on the operationalisation of the mandate.
  • Legal protection of the CoW Ecosystem: With the migration of the Defense Reserve (CIP-50), it will become the steward to the legal protection.
  • Solver Competition Rules: Contributes to the solver competition rules independently from solver team operations.
  • Tool management: The Foundation will be owner of most non-developer tooling.
  • Community Management: Community management (and the related tools)
  • Tasks allocation and coordination mandate: The allocation of the tasks resulting from an approved CIP within the legal structure will be conducted by the Foundation in coordination with the Core Team.

Additional Mandate: The Core Team will coordinate the relations between the legal structure, through the Foundation’s service providers and CoW DAO, including an ongoing communication directive that director and involved operators are kept up to date with CoW DAO’s decisions.

Core Protocol Activities – “CoW Core”

A BVI Company Limited by Guarantee.

• The Cayman Foundation is the sole member and guarantor (nominal guarantee ($1))
• Activities & Mandates:
  • Solver Operations Management: Oversees the technical and operational aspects of solver management. Overseeing participant eligibility for CoW DAO’s bonding pool. Social consensus rules enforcement.
  • Backend Infrastructure: Maintains critical functions such as the order book, autopilot features and managing the Reference Driver. Is mandated to own and update all critical development-focussed infrastructure.
  • Solver R&D: May research and develop solver-related technologies, either through internal services or outsourced, including running solvers.
  • Analytics: CoW Core will provide analytics services.

User Interface Activity – “CoW Hosting”

A BVI Company Limited by Guarantee.

• The Cayman Foundation is the sole member and guarantor (nominal guarantee ($1).
• Activities & Mandates:
  • Hosting & Maintenance of the UI: Ensure stable and secure public-facing access to the protocol’s interface including CoW Widget. Owner of the domain.
  • User Support: Provides user assistance and handles certain non-financial, user-facing tasks.
  • Token List Management: Will be the manager of the token list and token-selection related topics.

Business Entity Activities – “CoW Business”

A BVI Limited Liability Company organized as a company limited by shares, and a subsidiary of CoW Foundation.

• The Foundation is the sole shareholder of CoW Business.
• Activities & Mandates:
  • Protocol-Related Payments: Handles incoming and outgoing transactions and manages the payout Safe and protocol fee Safe. Operates MEVBlocker related payments.
    • Payout Safe & Protocol Fee Safe: Manages safes for operational payouts and protocol fees.
  • COW Token Buybacks: Executes market transactions for token buybacks (CIP-36 + CIP-48).
  • Business Relationships: Enters into commercial partnerships for swap integration and MEV Blocker integration (and other business deals, where applicable), overseeing any broader business relationship, including marketing efforts.
  • Fee Agreements: Negotiates and signs agreements on behalf of CoW DAO with partners regarding fee structures (CIP-61).
  • CEX Listings & Market Making: Manages relationships with CEXs and Market Makers.
  • Solver operations: May operate solver-related technologies, either through internal services or outsourced, including running solvers.

MANDATE CHANGE The current mandate to Defou will be hereby terminated as its functions are fully transferred to CoW BusinessCo. Accumulated funds net of tax provisions will be donated to CoW Foundation

Roles

Director: Have the duty, to the extent permitted by law, to implement CoW DAO’s will on how to conduct the affairs of CoW DAO. The director, by its signature, gives legal effect to the activities of CoW DAO as mandated by CoW DAO.

• An independent director from Leeward Management Limited, based in the Cayman Islands, is proposed to oversee CoW Foundation.

Supervisor of the Foundation: The person overseeing the activities of the directors of the Foundation. The supervisor has the authority to remove the director from their position if finds gross negligence. This supervisor can initiate investigations independently, and they are obligated to respond to concerns raised by any party. Appointed and removed through CoW DAO governance.

• Independent TTA’s supervisor firm is proposed as the Supervisor for the Foundation.

Secretary of the Foundation: Secretarial work for the Foundation including AML for the funds received by the Foundation. The secretary can be appointed and removed by the director.

• Leeward is proposed to serve as the Secretary.

Service providers. The hereby proposed Cayman-based service providers are:

• Leeward, offering the corporate services to the legal structures,
  • With the successful passing of this CIP, Leeward will be mandated to incorporate the 4 entities.
• TTA as the law firm, and
• Lemma Solutions covering the operational needs: bookkeeping, transaction initiation, agreements discussion and support to the Director; MultiSig creation.

Winding Down

CoW DAO may amend and wind-down the whole legal structure. By passing this CIP, CoW DAO authorizes the respective Director to wind down HostingCo and BusinessCo solely for the purpose of efficiently liquidating these entities in response to legal or regulatory requirements.

Costs

• Setup: $50k (+/- 10%)
• 2025 Running Costs: $130k
• Following Yearly Running Costs: $180k

Above costs are gross and an additional of around $100kUSD in cost savings is expected yearly. The cost for the setup is to be borne by the service provider (via CIP-58).

The yearly running costs will auto-renew, with the treasury committee mandated to transfer funds as needed and requested to the legal entities operating wallets (owned by the respective entity and managed by the director). The director has a discretionary scope to go over 10% of this budget as well as re-allocate between the different entities.