RE-VOTE: W&M DAO Crypto Treasury Partial Liquidation Proposal

This proposal represents a second vote on a proposed partial W&M DAO Crypto Treasury Liquidation. This proposal was initially put to vote between November 23rd and December 2nd, however it failed to meet the required quorum threshold of 70 votes from $STREAM holders in order to pass. The initial vote received 58 votes total (628K $STREAM, all in favor).

Given that the vote did not fail due to a majority of 'no' votes, but rather due to a lack of participation, the Core Team discussed and decided to re-propose the vote for another voting period, with the hope that we can meet the quorum requirements and officially register the community preference on this proposal.

While this proposal remains fundamentally the same in terms of the substantive outcomes triggered by an approval vote, we have added some additional contextual information to it, in response to feedback received from the community. Specifically, we have provided additional context around the current state of the W&M treasury on the whole (see below), which will allow voters to better understand how the proposal may impact the DAO's overall financial outlook.

PROPOSAL:

W&M DAO Crypto Treasury Partial Liquidation for Operational Expenses & Professional Services

Authors: cheriehu.eth, brookejaxon.eth, brodieconley.eth

SUMMARY: Approve a partial liquidation of Water & Music’s $STREAM DAO treasury ether ($ETH) and $USDC holdings for use in covering business operational expenses and professional services, totaling approximately $6,000 in USD fiat upon liquidation.

MOTIVATION/BACKGROUND: For the W&M DAO to act in good faith to comply with evolving guidance regarding regulations and governmental policy for DAOs, it is the core team’s recommendation that the DAO engage legal counsel to ensure all members are properly protected from any potential liabilities, taxes, and fees related to the DAO. Professional guidance is required to do this work correctly and confidently. The firm requires a retainer of $9,000 USD to begin the work, which will need to be paid in fiat, and therefore some current treasury cryptocurrency holdings will need to be converted to USD (liquidated) in order to provide payment.

SPECIFICATIONS: Members of Water & Music’s core team have interviewed and gathered project proposals and quotes from several firms and legal professionals who are experienced with DAOs, and would like to engage one* that we believe will be a good fit for this work and reasonable in cost.

The work will cover the following scope:

• Strategy opinion on legal structure, securities implications and misc. compliance components of DAO, tokenomics, transferability, etc.
• Restructuring / formation of DAO in permissive jurisdiction
• Advising re: pros and cons of jurisdictions
• Obtaining a Registered Agent and EIN (if necessary)
• Drafting an Operating Agreement or equivalent organizational documents
• Analyzing past securities offerings and existing legal materials, including token drops and NFT purchases
• Advising on compensation structure for core contributors and funds flow processes
• Advising and strategizing on personal liability of founder, core team and NFT/token holders

A mix of ETH and USDC cryptocurrency liquidation plus cash in the Water & Music LLC bank account from subscription membership revenues will combine to cover the fee.

The legal work should take approximately two-three months to complete.

ADDITIONAL TREASURY CONTEXT: The information below represents the current state of the Water & Music $STREAM DAO treasury (with market values captured on December 5th at 2:10PM):

Ether:

• Tokens: 4.21901272
• Value ($USD): $5,314.99

USD Coin (USDC):

• Tokens: 3,787.974375
• Value ($USD): $3,787.92

$STREAM:

• Tokens: 8,179,492.5009975
• Value ($USD): No financial value

CLUB (Seed Club Token):

• Tokens: 10,000
• Value ($USD): $30,157.35

SAFE (Safe Token):

• Tokens: 2,009.94885768
• Value ($USD): No financial value

RAD (Radicle Token):

• Tokens: 25.00
• Value ($USD): $42.66

TOTAL VALUE ($USD): $39,302.92 TOTAL VALUE ($USD) - ETH & USDC ONLY: $9,102.91

This proposal would liquidate $6000 USD in value of ETH and USDC from the DAO treasury to be put towards DAO legal and administrative costs. This represents approximately 65.91% of the DAO treasury reserves of ETH and USDC, and approximately 15.27% of the DAO treasury reserves held across all tokens.

To date, the W&M DAO treasury has received a total of 53.1403 ETH, generated through the sale of NFTs across multiple research seasons (Season 1, 1.5 and 2) and events (Wavelengths Event NFTs). We have also received a total of $12,899.99 USDC via transfer from the W&M LLC treasury, to support contributor payments in stablecoin. In total, we have paid out over 45 ETH and over 8000 USDC to Water & Music contributors over the last year.

CONSIDERATIONS:

• Approval of the proposal will mean less available cryptocurrency resources in the treasury for funding season-agnostic projects in the short term.
• The legal engagement scope and counsel will not cover tax strategy, only the legal wrapper that will help define what that strategy can be.

VOTE:

• Yes - Approve the liquidation of $ETH and $USDC W&M DAO treasury holdings equal to the approximate amount of $6000 USD on day of liquidation.
• No - Do not approve

All $STREAM holders can vote on this proposal using a 1 address 1 vote strategy (as opposed to 1 token 1 vote).

COMMENT PERIOD CHANGELOG:

• During the comment period for this proposal, a community member noted: “I think it could be very beneficial to share with the community which one's have been approached and which one has been chosen if that's possible."

W&M Response:

• While we are not releasing a full list of firms that we considered, we would note that our search was guided by input and referrals from a number of DAOs actively working in the ecosystem and facing similar legal issues to Water & Music, including Seed Club and their accelerator alumni network, among others. Our goal with this search was to identify a firm that has the background and is capable of supporting us as we consider our legal position and liabilities as a DAO, while also obtaining good value with respect to the overall impact on our treasury and ability to carry out our core work as a community.

A Google doc version of this proposal can also be accessed here: https://docs.google.com/document/d/1b1zWhN5aCwGK9lczPYnyXqJUxARQB3eyO0-H-wDPfgo/edit?usp=sharing