Summary

This proposal covers changes that move Fluid Protocol toward full community ownership and long-term sustainability:

1. Establish the Fluid Foundation and transfer all Fluid Protocol IP rights to it, placing them under DAO governance control.

2. Approve a $250,000/month grant from the DAO treasury to the Foundation to fund ongoing protocol operations, technical development, and growth.

Motivation

A DAO by itself is typically an unincorporated structure where decisions are made by token holders through voting. While this works well for transparent governance and on-chain execution, it exists in a legal gray area. As Fluid grows — particularly as we engage with institutional partners and navigate off-chain regulatory requirements — this needs to be addressed.

A foundation acts as a recognized legal entity that serves the protocol. It does not have traditional owners; it operates through custodians and directors who are responsible for maintaining and administering it in line with its stated purpose. Establishing the Fluid Foundation allows the protocol to meet AML, KYC, banking, and regulatory requirements when interacting with off-chain counterparties, without compromising the decentralized governance that token holders have today.

The constitution and intent of the Foundation are to serve the protocol and ensure the long-term sustainability of Fluid and the broader ecosystem. Funding and mandates will come exclusively from DAO grants, and token holders will continue to retain oversight over objectives, budgets, and major decisions as they do now.

Alongside the Foundation, the Fluid team is committing all intellectual property — frontend domains, smart contracts, and related assets — to the Foundation. Instead of these assets remaining with the team or early contributors, they will transition into a neutral, mission-aligned entity: the Fluid Foundation. This gives token holders real, enforceable control over Fluid’s IP for the first time.

Part 1: Establish the Fluid Foundation and Transfer IP Rights

What is the Foundation?
The Fluid Foundation is a purpose-built, non-profit legal entity (Cayman Islands) whose sole purpose is to hold and steward the Fluid Protocol’s intellectual property on behalf of the DAO. The Foundation has already been incorporated; this proposal authorizes the formal transfer of IP rights to it.

In legal terms, a foundation does not have traditional owners. It operates through custodians and directors who are responsible for maintaining and administering it in line with its stated purpose — which is to serve the protocol and ensure the long-term sustainability of Fluid and the broader ecosystem.

What transfers to the Foundation:

• All Fluid Protocol smart contract code
• Front-end interface code and related assets
• The Fluid brand, trademarks, and associated IP

Once transferred, these assets belong to the Foundation — not to any individual, company, or labs entity. The Foundation cannot be owned; it is governed by its constitutional documents, which give $FLUID token holders ultimate authority. Token holders can direct changes to Foundation policy and, in an extreme case, dissolve the Foundation entirely through a governance vote.

How Foundation Governance Works

The Fluid team acts as custodians of the Foundation — not owners. We hold director seats to manage day-to-day operations, but token holders hold the ultimate power. Any significant decision can be brought to a governance vote, and the Foundation’s structure ensures that no single party can capture it.

This mirrors how some other mature DeFi protocols are structured: a legal entity that provides IP protection and operational clarity, fully accountable to on-chain governance.

Operational Transfer Timeline

The IP transfer and related legal work are expected to be completed by mid-2026. We are engaging a local Cayman Islands legal counsel to ensure the transfer is executed properly. We will share updates with the community as this process progresses.

Additionally, as part of this proposal, the team will work to transfer ownership of all EVM chain deployments (currently, only Ethereum is under direct governance) to DAO governance, further cementing community control over the full protocol.

Part 2: $250,000/Month Grant to the Foundation

Rationale
The DAO treasury is funded by protocol revenue. It is appropriate for the DAO to formally allocate a portion of that revenue to fund the team responsible for maintaining and growing the protocol. Routing this through the Foundation also enables the Foundation to meet off-chain obligations — banking relationships, legal agreements, regulatory requirements — that a DAO alone cannot fulfill.

We propose a $250,000/month budget for operations and management, distributed as a grant from the DAO to the Foundation. This covers:

• Core engineering and smart contract development
• Protocol operations and infrastructure
• Business development and integrations
• Security and risk management
• General team and organizational expenses

The Foundation will use these funds to cover operational costs, including payments to the development company responsible for building and maintaining Fluid.

Implementation

Revenue is currently generated across multiple chains. We will consolidate revenue from all chains into the Ethereum treasury on a quarterly basis (or more frequently as the process matures), and the monthly grant will be disbursed from there. This grant will begin in the month following governance approval.