Approval of Legal Strategy for DeXe Protocol

Main Goal

Establish a certain legal entity within the DeXe Protocol (the “DeXe”) for the purposes of legally wrapping the Decentralized Autonomous Organization of DeXe (the “DAO”) with the following main goals:

• limitation of liability of the DAO members;
• off-chain execution of the decisions of the DAO (where necessary); and
• flexibility and legal risk mitigation.

Summary

I, in my capacity as a legal specialist and community member of DeXe, acting independently and to the best interest of DeXe community, have engaged legal counsel, Neos Legal (https://neoslegal.co/), an experienced Web3 and crypto legal consultancy firm, and Spencer West LLP (https://www.spencer-west.com/), a full service international law firm (collectively, the “Counsel”) to discuss and provide legal advice with respect to drafting of the proper legal strategy for DeXe and its further implementation.

Based on the previous discussions of a possible legal strategy for the purposes of legally wrapping the DAO, described below (the “Strategy”), taking into account the main goals, provided for above, the purposes of this proposal are to:

• discuss within the community the Strategy and approve it taking into account the comments of DeXe community members;
• discuss within the community and approve establishment of a certain legal entity in the frames of the Strategy implementation, including discussion and approval of the management of such legal entity;
• discuss within the community and approve the budget for the Strategy implementation; and
• make transfer from the Foundation pool (https://dexe.network/sale-details) of DeXe for the purposes of the relevant budget performance.

Below is the detailed description of the Strategy taking into account the advice from the Counsel.

Strategy Description, Legal Entity Establishment

It would be proper enough to establish the Swiss Association (the “Association”) within the frames of the Strategy in its capacity as the DAO legal wrapper and off-chain ministerial structure. It is suggested that its sole activity may be Reserve (as defined below) administration on the operational level and implementation of decisions of the DAO by means of off-chain instruments. The Association may have the following functions:

• its Council members may serve as the validators of the decisions of the DAO to make any transfers from the Association’s reserve, to which the assets will be transferred upon the distinct decision of the DAO from Foundation and other pools (https://dexe.network/sale-details) (as per the relevant decision of the DAO) (the “Reserve”), and perform such decisions by means of the off-chain instruments. It is proposed that the Reserve will be kept on the distinct multisig virtual assets wallet, from which any transfer can be made only at the decision of the DAO;
• it may administer and implement the grant programs, approved by the DAO, and make legally binding agreements with the grants receivers;
• it may engage service providers and utilize other off-chain means for the purposes of DeXe development and enhancement, namely, the Association may engage software development services, marketing services, legal and other services providers; organize events such as conferences or hackathons; engage certain crucial individuals, whose participation may be beneficial for DeXe, as advisors or in other capacity; and
• it may perform any other off-chain activity, which is beneficial to DeXe and its community.

It should be stressed that the constitutional documents of the Association must prescribe that any transfer of the assets from the Reserve may be made only upon and in compliance with the relevant decision of the DAO. The Council members must not have the power to make transfer from the Reserve without the decision of the DAO.

The proposed name for the Association: DeXe Association, or, in case of the mentioned earlier name is not available - DeXe Protocol Association.

The proposed candidates for the initial Council membership in the Association are the following DeXe community members, who was with DeXe from its beginning:

• Mr Vitalii Maistrenko (https://www.linkedin.com/in/vitalii-maistrenko-85685584/ 9 9); and
• Mr Eduard Arinin (https://www.linkedin.com/in/edward-arinin-66110b144/ 7 7).

It is also proposed to appoint the following independent Council member:

• Ms Irina Heaver – representative of the Counsel (https://twitter.com/IrinaHeaver).

It is proposed that the mentioned above Council members may be changed at any time by the decision of the DAO.

It is proposed to establish the monthly fee for each Council member at the amount of 200 DeXe tokens (2400 DeXe tokens per year), but no more than equivalent of USD 700 per month (equivalent of USD 8 400 per year) in case the price of DeXe token will increase.

Budget

As per the Counsel, the initial budget for the Strategy implementation, would be USD 40,000.00. It is proposed to transfer the mentioned amount directly to the following virtual assets wallet of the Counsel: 0x07BeE351e04667c56A0443A8ED2F9AD4249Ff079 by the decision of the DAO. The Counsel shall, as part of its engagement, pay all local government fees and local registration fees in local currencies, as may be required.

There might be additional charges in relations to seeking tax exemption status of the Association, depending on the initial legal analysis (will be paid by the Association from the Reserve).

Annual costs of maintaining a Swiss Association, which would be paid by the Association from the Reserve, shall be around CHF 7,500, including registered address and office in Swiss Crypto Valley, Canton Zug, accounting services and local compliance (plus fees of the Council members, mentioned above).

Timeline

This whole process to implement the Strategy summarized in this proposal should take 30 calendar days upon its approval by the DAO.