SUMMARY

This proposal is to ratify the Degen DAO Constitution.

DESCRIPTION

The Degen DAO Constitution sets forth the DAO’s vision, governance system, and basic rights for its members. The Constitution is necessary to set forth the mechanism for how the DAO will function and consider proposals going forward.

MOTIVATION

To function effectively and provide clarity and certainty around future operations, the DAO needs a strong Constitution in place that clearly delineates the rights of members to make proposals to the DAO and to vote on those proposals.

TECHNICAL DETAILS

The Constitution sets forth detailed guidance on how the DAO will function. A copy of the Constitution can be found below.

BUDGETARY ANALYSIS

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USEFUL LINKS

• You can find a copy of the proposed Degen DAO Constitution below.

ARGUMENTATION

FOR

• N/A

AGAINST

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DAO VOTE

• Voting Details:
  • Because this is a DAY 0 Proposal, the vote will be open for 12 hours and be approved by a majority of votes cast during the 12 hour period.
  • Any holder of a Knights of Degen NFT throughout the voting period for the Day 0 Proposals is eligible to vote.
  • Each holder of a Knights of Degen NFT is entitled to one vote per Knights of Degen NFT held.

DEGEN DAO CONSTITUTION

This constitution (the “Constitution”) establishes the Degen Decentralized Autonomous Organization (the “DAO”) and sets forth the DAO’s vision, governance system, and basic rights for its members.

Article I. Purpose

The purpose of the DAO is to empower the community to build upon the foundation laid by the creators of the non-fungible token (“NFT”) projects known as Knights of Degen and Steedz of Degen to establish the preeminent, web3 destination for sports and entertainment. To do so, the DAO will foster and support creativity, builders, and the entrepreneurial spirit within our community through the decentralized governance process set forth within this Constitution.

Article II. Establishing the DAO

Section II.01. Formation

On December 20, 2022, the DAO was legally established in the Cayman Islands. This Constitution officially ratifies and adopts that formation on the DAO’s behalf.

Section II.02. Supervisor

Pursuant to applicable law, a supervisor (the “Supervisor”) was appointed for the DAO. This Constitution officially ratifies and adopts that appointment on the DAO’s behalf. The Supervisor can be replaced pursuant to the Normal Proposal process described below.

Section II.03. Director

Pursuant to applicable law, a director (the “Director”) was appointed to legally act on behalf of the DAO. This Constitution officially ratifies and adopts that appointment on the DAO’s behalf.

The DAO may advise the Supervisor on the replacement of the Director or appointment of new or additional Directors pursuant to the Normal Proposal process described below. Regardless of the advice from the DAO, the Supervisor maintains sole discretion whether to remove the Director or appoint new Directors.

Section II.04. Membership

Initially, the DAO is made up of holders of a Knights of Degen NFT (”Knight Holder”) or a Steedz of Degen NFT (”Steedz Holder”) (collectively, “Holder” or “Holders”). Upon launching the token described below, the DAO will consist exclusively of holders of the token.

Article III. DGEN

This Constitution formally adopts the creation of an ERC-20 governance token (“DGEN”) to serve as the mechanism for empowering voting in DAO governance matters.

Token distribution will be governed by a separate proposal (the “Whitepaper”) offered at the same time as this Constitution.

Article IV. Voting

Section IV.01. Voting Rights

To be entitled to vote in the governance process described in this Constitution, an individual must hold DGEN throughout the duration of the voting period.

Once the governance application is activated token holders will have to stake their DGEN in the app in order to vote on DAO proposals. Staking DGEN will also give token holders the ability to delegate their votes to another community member who will use the delegated voting power on their behalf.

The DAO is not entitled to vote on any proposal.

Section IV.02. Voting Power

For purposes of an individual’s voting power, one DGEN will be equal to one vote. As votes cannot be divided into fractions and the total number of votes shouldn’t ever exceed the number of tokens minted, the number of votes will be rounded down if a fractional number of tokens is owned by the voter (i.e., 100.7 tokens will result in 100 votes).

The number of individual Knights of Degen or Steeds of Degen NFTs held by a Holder will not impact the voting power.

Section IV.03. Voting Margin

Except with respect to the dissolution process in Article VIII and the amendment process in Article IX, all DAO proposals will be determined by a majority of the votes cast on a specific proposal.

Section IV.04. Day 0 Proposals

This Article does not apply to the Day 0 Proposal process in Section VII.05.

Article V. Community Council

Section V.01. Formation

This Constitution hereby establishes a body of elected members (“Community Council”) to serve as the DAO’s representatives in the governance process described in Article VII.

Section V.02. Community Council Proposal

The Community Council’s processes will be set forth in a separate proposal (the “Community Council Proposal”) offered at the same time as this Constitution.

Article VI. DAO Treasury

Article VI.01. Creation

This Constitution hereby establishes a treasury made up of DAO owned assets held for the benefit, use, and enjoyment of the DAO (the “DAO Treasury”).

SectionVI.02. DAO Treasury Management

Management of the DAO Treasury will be governed by a separate proposal (the “DAO Treasury Management”) offered at the same time as this Constitution.

Article VII. Governance Process

This Constitution hereby establishes a process for bringing forth proposals (”Proposals” or “Proposal”) to the DAO to, among other things, request funding, propose an investment, request support, or the use of DAO owned IP or assets. A Proposal may also propose that the DAO appoint an individual, committee, or entity to act on the DAO’s behalf. These examples are not intended to be exclusive.

Section VII.01. Who May Bring Proposals

Any individual that holds at least one DGEN may bring forth a Proposal to the DAO.

Section VII.02. Proposal Limitations

A Proposal cannot request that the DAO or someone acting on the DAO’s behalf do anything illegal, immoral, or unethical. The Community Council may consult with a third-party, including legal counsel, to assist in this determination.

Section VII.03. Proposal Process

Except for a Day 0 Proposal discussed in Section VII.05, a Proposal may follow the normal proposal (”Normal Proposal”) process or the expedited proposal (”Expedited Proposal”) process. These processes will be governed by a separate proposal (the “DAO Proposal Process”) offered at the same time as this Constitution.

Section VII.04. Passing a Proposal

To be adopted by the DAO, a Proposal must meet the Voting requirements in Article IV. Additionally, except with respect to the dissolution process in Article XIII and the amendment process in Article IX, or the Day 0 Proposal process in Section VII.05, a Proposal must also satisfy the quorum requirements that will be set forth in a separate proposal.

Section VII.05. Day 0 Proposal Process

To facilitate the formation of the DAO and the immediate needs of the DAO, including the DAO’s governance process and the DAO’s initial day-to-day operations, the proposals (“Day 0 Proposals”) below will follow the process in this Section.

The DAO 0 Proposals consist of the following:

• Ratification of the Degen DAO Constitution;
• Whitepaper Approval;
• Community Council;
• DAO Proposal Process;
• DAO Treasury Management; and
• Operating Agreement.

1. Posting The Day 0 Proposals will be posted in a new forum channel in the Knights of Degen official Discord server for discussion on July 31st, 2023.

2. Eligibility Any Knight Holder throughout the voting period on the Day 0 Proposals is eligible to vote.

   Each Knight Holder is entitled to one vote per Knights of Degen NFT held.

3. Voting Voting on the Day 0 Proposals will begin immediately after the Day 0 Proposals are posted in the KoD Forum and be open for twelve hours.

   Day 0 Proposals will be adopted by a majority of votes cast during the twelve-hour period.

   The DAO is not entitled to vote on Day 0 Proposals.

Article VIII. Dissolution

The DAO may only be dissolved through a proposal brought before the Community Council, which must be approved by a unanimous vote of the Community Council, and only upon a vote of at least two-thirds of the number of votes cast.

Upon dissolution, the DAO will appoint a representative to wind up DAO business in compliance with applicable law.

The quorum for a vote on Dissolution will be set forth in a separate proposal.

Article IX. Amendments

Amendments to this Constitution must follow the Proposal Process in Article VII but may only be approved and adopted pursuant to a vote of at least two-thirds of the number of votes cast.

The quorum for a vote on an Amendment will be set forth in a separate proposal.