UIP-15 DAO Convergence & Grant

Author: Usual Labs (core contributors) Type: Governance proposal (DAO vote) Subject: Settlement of 2024–2025 Obligations & Transition Toward Full DAO Stewardship

One Token, One Ownership, One IP, Two Entities

1. closes what the DAO already owes for 2024–2025 under existing agreements and real third-party operational costs,
2. locks in the direction: DAO-owned IP + DAO-mandated, DAO-funded development (end of “implicit” Lab control).

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0) TL;DR

If UIP-15 passes, the DAO approves:

1. Payment of 2024–2025 licence royalties owed under the existing licence agreement (formula-based).
2. Reimbursement of 2024–2025 operational market-making / conversion fees advanced by the Lab (third-party costs, not margin).
3. A formal commitment and path to transfer protocol IP from the Lab to the DAO (via the Foundation) before end of Q1 2026, and a new standard for future development: roadmap + scope + DAO validation + budget + reporting.

If UIP-15 fails, the DAO still has the same economic reality (contract + costs), but with more legal, reputational, and operational risk, and less clarity going into 2026.

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1) What this UIP is — and what it is not

What this UIP is

• A settlement proposal for past obligations (2024–2025) with a fixed, auditable formula (royalties) and documented third-party fees (operations).
• A governance reset: the DAO explicitly states how things work going forward (IP ownership + dev mandates).

What this UIP is NOT

• Not a blank check for the Lab.
• Not a permanent “rent” on protocol revenues.
• Not a vote to “give away the DAO.”
• Not an IP sale proposal (that will be a separate UIP with full terms, scope, and deliverables).

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2) Entities, roles, and responsibilities

Usual DAO

• Formed by USUAL holders (USUAL can be staked into USUALx).
• Holds governance authority over the protocol: upgrades, parameters, treasury policy, and decisions about financial rights tied to protocol infrastructure.

Foundation (non-profit, DAO executor)

The Foundation exists to let the DAO act in the real world without mixing governance with a commercial entity. It is meant to:

• execute governance decisions legally (contracts, payments, enforcement),
• operate / steward protocol IP on behalf of the DAO once transferred,
• maintain a clean separation between governance and any commercial operator,
• ensure continuity and decentralization.

Usual Labs

Usual Labs is the entity that designed, developed, audited, and launched the protocol in its pre-DAO phase. Historically, it handled:

• financing core development and security,
• shipping initial infrastructure,
• bridging operational gaps prior to active governance,
• enabling the TGE and the decentralization transition.

Key reality: before the DAO existed in a fully functional form, the Lab acted as the de-facto operator so the system could run safely and compliantly.

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3) Reminder: chronology (2022–2025)

1. 2022–2024: Usual Labs raised funds to build Usual and USD0.
2. Labs developed the protocol per the whitepaper commitments.
3. May 2024: launch of USD0. July 2024: launch of USD0++.
4. The Foundation was created before the TGE, alongside the birth of the DAO.
5. Because the IP was developed inside Labs and the DAO was not yet fully operational, a licence agreement was signed (July 2024) to allow legal operation of the protocol by the Foundation on behalf of the DAO.
6. Labs ensured USD0 peg stability via market making and advanced certain mandatory operational costs, including fees paid to the DAO and to Hashnote, plus redemption/conversion costs required by the USYC ↔ USDC cycles.

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4) Principles this UIP locks in

4.1 “Build for the DAO, owned by the DAO”

• The Lab exists to build on behalf of the DAO.
• When development is funded or mandated by the DAO, the output is an asset of the system: it belongs to the DAO (via the Foundation as legal holder).

4.2 “Pay for delivery, not for existence”

• Compensation must be explicit, proportional, and tied to delivered work.
• The Lab does not sit upstream of protocol revenues by default.
• Any ongoing compensation must reflect services rendered, not permanent claims.

4.3 “Governance maturity: USUAL becomes the center of authority”

• Early structures were designed to protect the system while distribution formed.
• As issuance progresses and ownership consolidates, governance becomes simpler and authority increasingly rests with USUAL governance.

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5) What UIP-15 formally approves for 2024–2025

UIP-15 ratifies that value generated pre-TGE and post-TGE accrues to the DAO, while also acknowledging that the DAO must settle obligations created during the transition.

5.1 IP transfer commitment (direction + deadline)

UIP-15 confirms the necessity to transfer the full protocol IP from Labs to the DAO (held legally via the Foundation) before the end of Q1 2026.

• A dedicated agreement will be proposed between Labs and the DAO/Foundation to:
  • transfer protocol IP and relevant assets (including the “front”/branding surfaces where applicable),
  • ensure that 100% of developments not covered by a specific development contract transition into DAO ownership,
  • align the system with decentralization goals.

5.2 Future post-TGE development standards

Any future development relationship between DAO and Labs must include:

• a published roadmap and spec / scope submitted in advance,
• DAO validation of scope and budget.

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6) Settlement item #1 — Licence agreement royalties (2024–2025)

6.1 Why the IP License Agreement Exists

The licence agreement was put in place to reflect a simple reality:

• In 2024 and 2025, the Labs / DAO and the Foundation needed clear legal rights to operate the protocol (deploy, maintain, run, etc.).
• The protocol’s initial development was funded by Labs through multiple fundraising rounds, meaning Labs carried the early effort of building and maturing the protocol’s IP.
• Because some parts of the development and IP had not yet been transferred to the DAO, a legal framework was required to enable their use and to structure the relationship between two distinct entities (Labs on one side, the DAO/Foundation on the other).

Key point: the royalty model reflects past development effort, not a perpetual upstream claim. UIP-15 is meant to settle historical obligations, and the governance path explicitly moves toward DAO-owned IP—which naturally makes the interim licence model temporary and ultimately obsolete, avoiding anything that could be perceived as an ongoing rent from Labs on the DAO.

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6.2 Royalty formula (contractual)

Royalties are defined as: 12.5 bps (0.125%) of annual TVL TWAP

6.3 Amounts owed (excl. VAT)

Year	TVL TWAP	Royalty rate	Amount owed
2024	$192,000,000	0.125%	$240,000
2025	$773,404,151	0.125%	$966,755
TOTAL			$1,206,755

License Agreement:

view

Fee calculation for 2024 and 2025

• 2024 & 2025: view

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7) Settlement item #2 — Reimbursement of operational fees advanced by the Lab (2024–2025)

7.1 Why these costs exist

Between 2024 and mid-2025, Usual Labs was the sole arbitrageur for USD0 and operated the market-making activity at a loss to maintain the USD0 peg during periods of secondary market volatility. Usual Labs facilitated over $675M in volume through the USD0 minting and redemption mechanism. In this process, the Labs paid 10 basis points to the DAO and 10 basis points to Hashnote in fees.

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1. Redeeming USD0 → USYC initially cost 10 bps in fees to the DAO
2. Redeeming USYC → USDC via Hashnote initially cost 10 bps in fees to Hashnote

These steps generate real third-party operational costs that:

• are not margin,
• were advanced by the Lab to maintain continuity,
• existed before the DAO treasury could reliably fund operations.

UIP-15 asks the DAO to refund these advances.

7.2 Amounts to reimburse

• 2024: $152,000
• 2025: $1,406,626 (USYC redemption + USD0 conversion operational costs)

Total reimbursements (2024–2025): $1,558,626.

7.3 Accounting Document

Transaction details: view

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8) Total financial impact

• Royalties (excl. VAT): $1,206,755
• Reimbursements: $1,558,626

Total approved outflow: $2,765,381 (plus VAT where applicable on royalties).

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9) Payment mechanics (how funds move, and why)

Funding source

DAO treasury.

Flow (to keep governance / operations legally separated)

1. DAO allocates funds to the Foundation (DAO executor).
2. Foundation pays in USDC:
   • the Lab for royalties owed (per contract),
   • the Lab for operational reimbursements (per documented third-party costs).

This structure preserves:

• legal enforceability,
• separation between DAO governance and any commercial operator,
• auditability (clear sender/receiver + documentation trail).

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10) On-chain vote options

• FOR — Approve UIP-15 as written (settlement + transition commitments).
• AGAINST — Reject the settlement and transition commitments.
• ABSTAIN — No position.