The 1inch decentralized autonomous organization (DAO) has made a significant leap forward by voting to hire permanent legal counsel from Geneva-based Web3 solutions provider, Storm Partners. This decision marks a pivotal moment for the DAO, as it acknowledges the complexities and challenges posed by its decentralized nature.
The vote, which concluded on January 9, saw an overwhelming 96.45% of participants in favor of obtaining “comprehensive legal support” from Storm. This Swiss firm's expertise covers a broad spectrum of legal aspects crucial for 1inch, including regulatory compliance, entity structuring, governance policy development, contractual support, intellectual property protection, and legal defense against external claims.
The need for permanent legal counsel stems from the increasing tendency of courts in Europe and the United States to apply traditional legal principles to decentralized entities. This application poses significant regulatory risks and legal ambiguities for organizations like 1inch DAO, necessitating expert legal guidance to navigate these challenges.
Storm Partners' role will not be limited to external legal matters. The firm will also be instrumental in drafting governance rules and policies for 1inch, ensuring they align with the community's decisions. A retainer fee of 50,000 USD Coin has been set for this engagement.
Nicola Massella, director of the Legal and Compliance department at Storm Partners, emphasizes that their role is to complement the DAO's self-regulatory abilities. The community retains full control over governance, while Storm Partners will translate these decisions into structured rules and legal frameworks. This partnership is proactive, aiming to safeguard the DAO and its members from potential legal issues, particularly personal liability risks.
The partnership with Storm is a historic precedent in the DAO community. It is the first instance of a DAO directly hiring a legal team, setting a model for others in the sector. The 1inch statement highlights the significance of this move in establishing a legally sound structure to support its growth and ensure its long-term existence.
The proposal [1IP-49] outlines the comprehensive legal support to be provided by Storm Partners. It includes regulatory compliance checks, governance policy development, contractual support, intellectual property protection, enforcement of rights, and legal defense against external claims. Importantly, it introduces a Power of Attorney authorizing Storm Partners to represent 1inch DAO legally, while remaining under the community's guidance.
This move by 1inch DAO is a clear recognition of the legal complexities surrounding decentralized organizations. It addresses the significant threats of legal uncertainty and ambiguity, which are paramount in shaping the future of DAOs and their place in the financial world. By engaging Storm Partners, 1inch DAO aims to mitigate risks related to regulatory compliance, personal liability, contractual ambiguities, legal recognition, and enforcement of rights.
In conclusion, the decision to hire Storm Partners reflects a strategic approach by 1inch DAO to balance its decentralized ethos with the need for legal conformity and protection. This partnership could potentially serve as a template for other DAOs navigating the intricate legal landscape of decentralized finance.