Establishment of Lido Labs BORG Foundation as a Lido-DAO-Adjacent Foundation

Proposals
1

PROPOSAL

This proposal seeks to inform Lido DAO and the broader Lido community of the details of the Lido Labs BORG Foundation’s proposed formation and operation, and to obtain Lido DAO’s support for the structure through an approval of the proposal via Snapshot voting. If the proposal is approved, the Lido Labs BORG Foundation will be established as described herein.

This proposal solely concerns the formation and initial operational set up of the Lido Labs BORG Foundation.

Described further below are:

  • Summary - Key Points of the Proposal
  • Motivation - Details of the Proposal
  • Implementation - How the Proposal will be Implemented
  • Voting & Discussion - Invite to the Lido Community for Discussion and Voting

SUMMARY - KEY POINTS

  • Following the approval of the Lido Alliance BORG Foundation, the creation of a new Lido-DAO-adjacent organization (“BORG”) is proposed to serve Lido DAO and the broader Lido community – the Lido Labs BORG Foundation.
  • The Lido Labs BORG Foundation will support the general goals set forth by the Lido DAO through its deliberative process. In particular, it will help facilitate GOOSE/ReGOOSE/GOOSE-2 goals of Product line for the staking ecosystem (stETH token), Market for validators (NO Set) and LDO alignment (Governance).
  • The Lido Labs BORG Foundation is limited to engage only in the activities identified in the Purposes (described below in the Motivation section).
  • Similar to the Lido Alliance BORG proposal that was previously approved, the Lido Labs BORG Foundation will be a BORG established as an exempted limited guarantee foundation company in the Cayman Islands without members or beneficiaries. The foundation structure of the Lido Labs BORG Foundation allows for Lido DAO to have a more active role in its governance and minimizes reliance on traditional decision-making processes and rules.
  • This proposal solely concerns the formation and operation of the Lido Labs BORG Foundation. No budget and funding requests are made in this proposal, the BORG will submit a new EGG budget proposal for its proposed scope of work at a later date in a separate proposal.

Important Benefits of Lido Labs BORG Foundation

Assists with Decentralized Administration

The formation of the Lido Labs BORG Foundation assists Lido DAO with having infrastructure within a new entity that is bound by and restricted to the Purposes, with a public organization structure monitored by Lido DAO.

Additional Accountability and Transparency

This framework presents a better accountability and transparency mechanism than the current Lido DAO adjacent entities by allowing Lido DAO to directly appoint/remove directors in addition to an individual or entity to serve as the Emergency Supervisor if an “Adverse Event” occurs (as defined in the Bylaws). Accountability of “unwrapped” multisigs’ members is enhanced because they will be subject to the policies and Purposes of the Lido Labs BORG Foundation, with the Board responsible for monitoring compliance (and having the authority to directly replace individual multisig members if necessary). As with the current Lido Contributors Group entities, the Lido Labs BORG Foundation will also continue to publish reports detailing the crypto assets held in the multisigs.

Easier Compliance

The formation of the Lido Labs BORG Foundation is designed to allow it, as needed, to procure relevant licenses or approvals for the activities that fall within the Purposes.

Power to Indemnify Contributors For Liability Claims Against Them

The Lido Labs BORG Foundation will be permitted to help reduce the potential liability risks of Lido contributors by entering into traditional indemnification arrangements with contributors that provide services to the Lido Labs BORG Foundation.

Gradual Migration of Contracts and Multisigs

  • The Lido Labs BORG Foundation will have the ability to assume existing service contracts between PML or ATC and Lido contributors dedicated to the activities within the scope of the Purposes. This transition will be done through a gradual assignment of these agreements to the benefit of Lido Labs BORG Foundation.
  • For the nominated multisigs to be wrapped, existing multisig members will be required to execute multisignature participation agreements with the Lido Labs BORG Foundation, acknowledging and agreeing it now oversees those multisigs. This is expected to lead to improved accountability of the multisigs (as described above under Benefits section) in addition to more liability protection for multisig members through agreements with the Lido Labs BORG Foundation.
  • Existing contracts with third parties such as vendors and contributors can either be novated or assigned to Lido Labs BORG Foundation, as applicable (from Lido Contributor Group entities or affiliates).

Links to Key Documents

MOTIVATION - DETAILS OF THE PROPOSAL

Purposes

The Lido Labs BORG Foundation is designed to assist the Lido DAO by:

  • researching, developing, deploying and helping to maintain the Lido on Ethereum protocol, canonical Lido smart contracts and related Lido applications and infrastructure (as applicable, with the relevant Lido DAO approval),
  • organizing and participating in events, webinars, AMAs, workshops, and other initiatives to foster community collaboration, knowledge sharing, and awareness of the Lido protocol & ecosystem,
  • developing and maintaining a Node Operator Portal, creating and maintaining technical and operational documentation, knowledge base articles, guides, and tutorials for those interested in participating as Node Operators (NO) in the Lido on Ethereum protocol,
  • helping develop proposals for, and support, mechanisms and processes through which the NO community utilizing the Lido protocol is organized and managed, (including supporting NO onboarding/offboarding processes, potentially via DAO-approved subgovernance groups or Multisigs),
  • developing and supporting Lido DAO’s governance processes and ecosystem (e.g. Snapshot/Aragon voting processes, Easy Track, Dual Governance - as applicable subject to DAO voting for any protocol changes),
  • identifying opportunities for collaboration with other Ethereum staking projects and fostering new cross-protocol initiatives within the Ethereum staking community, including any technical integrations,
  • identifying opportunities for grants related to staking or the wider Ethereum ecosystem and facilitating the process for such initiatives (e.g. via the Lido Ecosystem Grants Organisation), and
  • undertaking other ancillary and related services to the foregoing,

(collectively, the “Purposes”).

The Lido Labs BORG Foundation’s Purposes will help facilitate the general goals set forth by the Lido DAO through its deliberative process. In particular, the Purposes will aid in advancing all three of the Lido 2025 GOOSE goals identified in Hasu’s GOOSE-2 Submission, primarily in relation to open source software development and research and growth of the node operator community.

Lido Labs BORG Foundation would also seek to create and potentially submit future GOOSE proposals to the DAO. It would always look to progress any approved future GOOSE submission within the above mentioned Purposes, pending EGG approvals (either from itself or the community). It will do this by:

  1. Researching and developing new innovative, differentiated staking software products and offerings to allow for increased stETH adoption, ranging from tailored staking solutions for specific user segments (e.g. institutions), to novel and improved mechanisms for node operator participation in the protocol;
  2. Partnering with the Lido Ecosystem BORG Foundation and any other Lido DAO adjacent entities or staking ecosystem participants to develop product strategies that continue to improve Ethereum’s decentralization and resilience while making appealing staking products available to the market; and
  3. Continue to research and develop critical governance processes and products (e.g., Dual Governance), always committing to the culture of security of Lido DAO.

Benefits of new Lido Labs BORG Foundation

The current framework grew out of an October 2022 Lido DAO proposal, “Organizing the Lido Contributors Group, including Pool Maintenance Labs [(PML)] and Argo Technology Consulting [(ATC)]” (the “2022 Proposal”).

The core intent of the 2022 Proposal as stated was to allow for Lido contributors to initially organise themselves to provide services to the DAO via adjacent entities, be paid for contributions and to maintain certainty of key Web2 infrastructure/SaaS access. While these entities have fulfilled this initial purpose effectively until now, recent developments in the crypto ecosystem present both new opportunities and challenges.

The benefits of approving the Lido Labs BORG Foundation include as follows:

  1. Dedicated to Help Lido DAO Achieve its Goals – The Lido Labs BORG foundation is dedicated and restricted to the Purposes approved by Lido DAO.

The Lido Labs BORG Foundation is designed to support the Lido DAO in achieving its approved objectives, particularly in advancing GOOSE goals. It is a purpose-built entity (i) with a transparent structure, (ii) a Board that is accountable to Lido DAO, and (iii) that is bound by and restricted to the Purposes. This is achieved through provisions in the Bylaws.

  1. Additional Accountability and Transparency – Lido Labs BORG Foundation will bring greater accountability and transparency to the Lido community than currently exists.

Cayman Islands is a preferred jurisdiction because it allows for memberless foundation structures, helping to ensure that these entities are not “owned” by any individual(s) and can operate as non-profits aligned with community-aligned purposes.

The Bylaws of the Lido Labs BORG Foundation further provide for legal checks-and-balances between it and Lido DAO. This is an entity that is limited to the Purposes and will seek to use autonomous technologies in furtherance of those Purposes, subject to Lido DAO approval. Additionally, in circumstances where an Adverse Event (as defined in the Bylaws) occurs, the Lido Labs BORG Foundation’s rules can be forced extrinsically by an Emergency Supervisor. Such person/entity is appointed directly by Lido DAO, serves as a ‘liaison’ between the Lido community and Lido Labs BORG Foundation and acts as an enforcer, helping to ensure Lido Labs BORG Foundation complies with its public commitments by monitoring its performance and adherence to its own rules, without having direct managerial authority.

The Bylaws and other legal documents (see below for links to documents) of the Lido Labs BORG Foundation further provide for increased accountability of Lido Labs BORG Foundation to Lido DAO. The Bylaws, Memorandum and Articles of Association, Purposes and directors of the Lido Labs BORG Foundation are public and require approval by the Lido DAO. This helps provide more assurances that the governance structure is transparent, providing greater clarity on who is responsible for the governance and execution of the Purposes.

The Lido Labs BORG Foundation shall initially use Easy Track to complement the legal check-and-balance mechanisms outlined in the Bylaws and Memorandum and Articles of Association. Once established, there would be an onchain vote for the Easy Track setup for the new operational multisigs, which gives Lido DAO an onchain veto over transferring tokens from the Treasury to operational multisigs. In the future, the Lido Labs BORG Foundation may pursue further cybernetic controls for its multisigs between the DAO (i.e. the ability for the DAO to directly remove/add multisig signers).

The Lido Labs BORG Foundation simplifies member management of multisig members by granting such responsibility to its Board. The accountability of members in “unwrapped” multisigs is enhanced as they are required to adhere to the Lido Labs BORG Foundation’s policies and Purposes, with the Board tasked with monitoring compliance. The Board also holds the authority to directly replace individual multisig members if necessary.

Accountability is further strengthened by Lido Labs BORG Foundation providing annual reports on Multisigs and the assets therein. This facilitates oversight and reinforces the DAO’s ability to monitor and evaluate performance.

  1. Efficiency – The Lido Labs BORG Foundation will seek to operate efficiently and flexibly through a documented organizational structure where complementary activities and multisigs are organized into related groups under a single entity.

The Lido Labs BORG Foundation seeks to group similar activities together in a single entity in a way that promotes efficiency for their respective internal cultures and specialized activities. This helps reduce the operational complexity and administrative burden of forming and managing the activities within the Purposes. Furthermore, it wraps multisigs that are necessary to further the Purposes so that operational coherence is enhanced.

  1. Easier Compliance – This structure permits the Lido Labs BORG Foundation to apply for licenses in the Cayman Islands (and elsewhere) as required, and to comply with regulatory requirements, as applicable, in other jurisdictions.

  2. Power to Indemnify Contributors For Liability Claims Against Them – The Lido Labs BORG Foundation will have the ability to help reduce potential liability risks of Lido contributors by entering into contracts with indemnification provisions providing greater protection to contributors, as stated in the Bylaws.

This applies to Lido contributors who work as independent contractors for PML or ATC that will now be engaged with Lido Labs BORG Foundation, directors of the Lido Labs BORG Foundation and multisig members that will now be wrapped by Lido Labs BORG Foundation.

Committees and Multisigs

The Lido Labs BORG Foundation will help oversee and seek to legally “wrap” the following committees (and their multisig(s)) and multisigs: Lido Ecosystem Grants Organization (LEGO) and the Community Lifeguards sub-committee, Gas Supply Committee, Relay Maintenance Committee, GateSeal, Emergency Brakes, Treasury Management Committee, Simple DVT Module Committee, Community Staking Module Committee, Delegate Oversight Committee wallets (the “Multisigs”).

In general, the Lido Labs BORG Foundation would have the ability to adopt other committees and multisigs, provided their activities align closely with the Purposes. If through any operational or regulatory analysis conducted post formation within the migration period, it is discovered that any of the above mentioned multisigs are unsuitable for wrapping within the Lido Labs BORG Foundation, then the DAO will be updated as to any new proposed strategy regarding those multisigs.

Operational multisig wallet

  • The foundation will create a new operational multisig to hold operational funds held separately at the discretion of the Board.
  • It would be expected to be held in 4/7 multisig, but this will be confirmed when the Lido Labs BORG Foundation comes back to Lido DAO for an onchain Easy Track set up and voting
  • The Board of Directors shall propose configurations/Easy Track factories for this multisig ie. security limit amounts, limit periods, address and verified signers on the forum two weeks before an on-chain vote, and request that proposed configuration (new or changes to existing) be included in the nearest omnibus vote on Aragon.

Gas Supply Committee multisig wallet

Relay Maintenance multisig wallet

GateSeal multisig wallet

  • Used to pause WithdrawalQueueERC721 (pausing users’ withdrawal requests of ETH for stETH), ValidatorExitBusOracle (pausing validator exit requests to node operators) or both smart contracts. Further information in GateSeal | Lido Docs.
  • Lido V2 GateSeal Committee

Emergency Brakes multisig wallet

  • Used to disable deposits and withdrawals for wstETH bridging to Optimism, Arbitrum and other L2s in case of an emergency on Ethereum mainnet or L2.
  • It can further pause EasyTrack pipeline (which only Lido DAO can un-pause)
  • Further information may be found at Emergency Brakes | Lido Docs.

LEGO multisig wallet

Community Lifeguards multisig wallet

Treasury Management Committee

Community Staking Module Committee & multisig wallet

Delegate Oversight Committee

Simple DVT Module Committee & multisig wallet

Migration

  • The Lido Labs BORG Foundation will be established in case of the DAO approval of this proposal.
  • However, the migration process will be implemented gradually to align with operational readiness and any applicable regulatory compliance requirements.
  • The Lido Labs BORG Foundation will engage in a structured and phased assignment process under which it intends to transfer the services agreements of Lido contributors engaged in activities aligned with the defined Purposes directly with the Lido Labs BORG Foundation.
  • Existing multisig members of the Multisigs will execute multisignature participation agreements, acknowledging that the Lido Labs BORG Foundation will oversee these multisigs.
  • Contracts with third parties such as vendors and contributors will either be novated or assigned, depending on the specific terms of each agreement.
  • Following the proposal’s approval and the formation of Lido Labs BORG Foundation, the Lido Labs BORG Foundation will come back to Lido DAO, likely between February - March 2025, for:
  1. Onchain voting process to add Easy Track factories for Lido Labs BORG Foundation Operational multisig
  2. EGG approvals as required for operational expenditures of the Foundation and for grant continuity for any newly wrapped multisigs that had previous grants. This will be done to ensure funding continues past Multi-EGG Continuity Grant Funding periods (as specified: [EGG] Multi-EGG Continuity Grant Funding). The EGG requests will provide detail on the expected annual expenditures of the Foundation in relation to how it expects to advance latest GOOSE goals

It is expected that future EGG approval for the new Foundation BORGs (including proposed Lido Ecosystem BORG Foundation) would result in a phase out, including any appropriate buffer times to account for phased migration from current Lido Contributor Group entities - ATC / PML / RCC (as noted here: [EGG] Multi-EGG Continuity Grant Funding). No new EGG budget requests for the Lido Contributor Group entities (ATC, PML and RCC) are planned after the Multi-EGG Continuity Grant Funding.

Additional Benefits in Comparison with Evolving Current Lido Contributor Group model - i.e., ATC and PML

For ATC/PML to operate under a Cayman Islands foundation structure (the chosen jurisdiction and structure for the reasons mentioned above) the following steps would be required:

  • Establish a new Cayman Islands foundation.
  • Merge ATC/PML with the newly established foundation [not recommended, details below].

Net Benefits/Analysis

  • A merger between ATC/PML and the new Cayman Islands foundation offers no substantive or practical advantages to the one proposed.
  • Expanding the scope of ATC/PML to fit within the Purposes would still necessitate approval from the DAO.
  • A merger would impose additional administrative burdens, resulting in unnecessary work, as well as increase the associated costs, with no commensurate benefits.

Establishing a Cayman Islands foundation directly, with the Purposes that are explicitly included, represents a more simple, efficient and cost-effective solution.

IMPLEMENTATION

  • Upon approval, the formation of the Lido Labs BORG Foundation will proceed immediately. The Bylaws and Memorandum and Articles of Association to be adopted will be substantially in the form as those linked above.

  • Drawing of funding for the Purposes from DAO treasury will likely commence in April 2025, post any EGG approval, with budgets managed through the Lido Labs BORG Foundation’s multisigs established under the BORG framework.

  • The Board of the Lido Labs BORG Foundation will manage its affairs in its best interests. The initial Directors have a strong reputation within the Lido community and a close connection to the Purposes. They will be joined by a professional Cayman Islands-based director chosen for his technical and legal expertise in the crypto space, and potential valuable contributions to Lido Labs BORG Foundation.

  • The initial directors shall be @konstantin, @EvgeniyEmelyanov, @skozin and a professional Cayman Islands independent director, which will be one of the two DAO/foundation directors from Hash Directors.

  • Lido Labs BORG Foundation will raise a new proposal to Lido DAO in or about February-March 2025 which will include a detailed scope of work ,deliverables and a budget request for the period of on or about April to December 2025 to pay for it.

  • Existing DAO-adjacent-entities and wallets (namely ATC, PML and RCC) will not make any further drawdowns from the Lido DAO treasury via Easy Track past the best before dates. If there are any unutilised funds held within the multisigs from drawdowns occurring within the EGG period, then these cryptoassets could be used for a maximum period of 2 months post the best before date to assist with the smooth migration of operations to the Lido Labs BORG Foundation. Any remaining cryptoassets following the migration would be returned to the Lido DAO Treasury.

VOTING & DISCUSSION

NOTE: This proposal solely concerns the formation and operation of the Lido Labs BORG Foundation. No budget and funding requests are made in this proposal. Once incorporated, the BORG will submit a new EGG budget proposal to the DAO for its proposed scope of work at a later date in a separate proposal.

The Lido community is invited to weigh in on the proposal. This proposal will be followed by a Snapshot vote with the link published here, when ready.

By voting YES in the Snapshot vote, you indicate support for the establishment of the Lido Labs BORG Foundation and its Purposes as described herein.

By voting AGAINST in the Snapshot vote, you indicate you do not support the establishment of the Lido Labs BORG Foundation as described herein.

Further reading:

11 Likes
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We are in favor of this approach! Having a foundation-based structure, rather than relying on multiple companies as core contributors, is more straightforward and promotes greater transparency. In particular, we believe it’s a significant step that the DAO holds certain decision-making powers over personnel matters, as this is essential for preserving decentralization.

2 Likes
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The Labs BORG model clearly addresses the limitations of ATC/PML: scalability, high costs, and legal constraints.

Using Labs BORG brings more transparent and efficient governance with a clear legal structure while reducing financial pressure.

This allows DAOs to focus better on long-term strategies.

I know a few DAOs considered (or implemented) a similar governing body.

At the end of the day the DAO cannot run day to day operations - Less decentralization for the sake of efficiency.

So with this move, hope BORG can make the DAO more efficient.

Lido is in the scaling, war mode. Let’s go for it :slightly_smiling_face:

1 Like
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Acknowledgement

Thank you, @kadmil and contributors who worked on this, for bringing this great idea to the community’s attention. It is evident a lot of work was put into these BORGs, and we’re excited to see them in action.

Introduction

The past precedent set by the passing of Lido Alliance BORG serves as a foundation for evaluating the new Lido Labs and Ecosystem BORGS. By comparing both new BORGS to the Lido Alliance BORG, we can focus on material additions or absences to the new BORGS bylaws. To the Lido community, these additions, alterations, and removals are what is being proposed.

After thorough analysis of both the Lido Labs BORG and Lido Ecosystem BORG, we’ve found that the bylaws are otherwise identical in structure and wording; but each instance of “Labs” in the Lido Labs Borg version is replaced with “Ecosystem” in the Lido Ecosystem Borg version. The few exceptions to the former observation are noted in the “Dissimilar sections to <new borg name> relative to <other new borg name> & Lido Alliance BORG” section.

The following document will use <new borg name> to represent both the Lido Labs and/or Ecosystem BORGs.

P.S. we’ll be posting this on both the Ecosystem & Labs BORG forum proposal to increase visibility. The body limit on this post is too long, so it will be split into two parts.

Our Thoughts On The Addition Of The Ecosystem & Labs BORG.

In line with our previous thoughts on Lido Alliance BORG, we believe these two additional BORGs are required to further indemnify corporate partners and community contributors who have diverse needs and responsibilities. We found that the reasoning for adding these two BORGs rhymes with the past rationale. In 2022, the Lido Contributors Group (LCG) and Resourcing & Compensation Committee (RCC) were created. RCC was created to indemnify contributors and progressively decentralize Lido DAO, whereas LCG was formed to address critical business continuity risks, such as talent retention, tooling, and infrastructure support, that RCC alone could not fully mitigate (Source 1, 2).

Just as LCG moved beyond a single committee to establish compartmentalized, redundant structures that enhanced organizational stability and reduced project disruption, so too are the Ecosystem & Labs BORGs.

Questions

  1. In general and shortly, what are the reasons for each of the changes of A through R below?

Dissimilar sections to <new borg name> relative to <other new borg name> & Lido Alliance BORG

Ecosystem BORG mandate BYLAWS / Schedule 1.2.1 / Certain Purposes [(Source)](https://research.lido.fi/t/establishment-of-lido-labs-borg-foundation-as-a-lido-dao-adjacent-foundation/9344)
  • To ensure that stETH is the most used token in the Ethereum ecosystem, by pursuing the following activities:
  1. developing and managing relationships with institutions, projects and DAOs that wish to participate in the Lido ecosystem, which may include rewards share programs (e.g., by staking using Lido protocol directly or allowing for others to do so, including any facilitation of their users),
  2. promoting the expansion and the use of (w)stETH across blockchains and other projects,
  3. streamline the process for expanding (w)stETH to new networks,
  4. educating the Ethereum community on Lido protocol,
  5. provisioning and distributing appropriate incentives towards high impact projects to (i) strategically boost liquidity in crucial stETH applications, and (ii) identify and aid potential applications that can enrich the stETH ecosystem, and
  6. other ancillary and related services to the foregoing.
  • To develop and incentivise the growth of the Lido protocol, decentralised network and ecosystem.
  • To do all such things as in the opinion of the Directors are or may be ancillary, incidental or conducive to the above.
Labs BORG mandate

BYLAWS / Schedule 1.2.1 / Certain Purposes (Source)

  • To research, develop, deploy and help to maintain the Lido protocol, canonical Lido smart contracts and related Lido applications and infrastructure (as applicable, with the relevant Community Module Approval).
  • To organize and participate in events, webinars, AMAs, workshops, and other initiatives to foster community collaboration, knowledge sharing, and awareness of the Lido protocol & ecosystem.
  • To develop and maintain a Node Operator Portal, to create and maintain technical and operational documentation, knowledge base articles, guides, and tutorials for those interested in participating as Node Operators (NO) in the Lido protocol.
  • To help develop proposals for, and support, mechanisms and processes through which the NO community utilizing the Lido protocol is organized and managed, (including supporting NO onboarding/offboarding processes, potentially via subgovernance groups or Multisigs that have Community Module Approval).
  • To develop and support Lido DAO’s governance processes and ecosystem (e.g. Snapshot/Aragon voting processes, Easy Track, Dual Governance - as applicable subject to Community Module Approval for any protocol changes).
  • To identify opportunities for collaboration with other Ethereum staking projects and fostering new cross-protocol initiatives within the Ethereum staking community, including any technical integrations.
  • To identify opportunities for grants related to staking or the wider Ethereum ecosystem and facilitating the process for such initiatives (e.g. via the Lido Ecosystem Grants Organisation).
  • To develop and incentivise the growth of the Lido protocol, decentralised network and ecosystem.
  • To do all such things as in the opinion of the Directors are or may be ancillary, incidental or conducive to the above.

Added/Altered sections to <new borg name> relative to Lido Alliance BORG

A. BORG Personnel / Eligibility to Serve

Lido Alliance: “2.1.6.2. be deemed acceptable for such role by Community Module Approval, the aim of which is to make sure the candidate’s values and mission are aligned with the Community; and ”

<new borg name>: “2.1.4.2 unless it already acts as a multisig member of the relevant <new borg name> Multisig at the time of the BORG’s formation or at the time of the integration of the relevant <new borg name> Multisig within the BORG, be deemed acceptable for such role by Community Module Approval, the aim of which is to make sure the candidates’ values and mission are aligned with the Community; and

B. Directors / Purpose and Powers of Directors

Lido Alliance: “2.2.2. Minimum Number of Directors. The number of Directors shall be two and may be changed by approval of both the Board and Community Module Approval.”

<new borg name>: “2.2.2. Minimum Number. The minimum number of Directors shall be one and may be changed by approval of both the Board and Community Module Approval.”

C. \ Multisig Members / Purpose and Powers of \ Multisig Members

Lido Alliance: “2.4.1.3. The Alliance Multisig Members shall be of two types: (a) Alliance Multisig Members who are also Directors (“Director Alliance Multisig Members”); and (b) Alliance Multisig Members who are Guardians (“Guardian Alliance Multisig Members”)”

<new borg name>: “

  • 2.4.1.3. Each <new borg name> Multisig Member shall be appointed by the Board. The preceding <new borg name> Multisig Members shall take all action necessary or desirable to cause such person to be added as a Multisig Member of the <new borg name> Multisig.

  • 2.4.1.4. Notwithstanding clause 2.4.1.3, if a person already acts as a multisig member of the relevant <new borg name> Multisig at the time of the BORG’s formation or integration of the relevant <new borg name> Multisig within the BORG, he/she shall be deemed automatically appointed as an <new borg name> Multisig Member.
    ”

D. Emergency Supervisors / Purposes and Powers

Lido Alliance: “2.6.1.1. …and shall solely act in furtherance of the Purposes in accordance with the Principles.”

<new borg name>: “2.6.1.1. …and shall solely act in furtherance of the Purposes in accordance with the Principles. The Emergency Supervisor may also demand information from the Board, the BORG or BORG Personnel in accordance with the Governance Agreements, with reasonable notice, at any time, and also demand that such information be presented to the Emergency Supervisor in the form of periodic reports.”

E. Directors / Purpose and Powers of Directors

Lido Alliance: “2.2.1.1. The purpose of Directors shall be to serve on the Board. Directors shall not have any individual power or authority in their capacity as Directors.”

<new borg name>: “2.2.1.1. The purpose of Directors shall be to serve on the Board.”

F. BODIES / Acting as a Body

Lido Alliance: “3.1.3. The Board shall act as a body of the BORG, and the Directors shall not have individual power or authority to act on behalf of the Board in their capacities as such.”

<new borg name>: “3.1.3. The Board as a whole shall act on behalf of the BORG, and the Directors shall not have individual power or authority to act on behalf of the Board in their capacities as such unless determined otherwise by way of resolution of the Board.”

G. \ Multisigs

Lido Alliance: None

<new borg name>: “3.4 The Board may delegate signing authority on specific matters or subjects to designated BORG Personnel as it deems appropriate. Such delegation shall be made by a resolution of the Board specifying the scope, duration, and limits of the delegated authority. The Board shall retain the right to review, modify, or revoke any delegated signing powers at its discretion and in accordance with applicable law.”

H. NATURE OF BORG ACTIVITIES; NO GENERAL DUTIES TO COMMUNITY

Lido Alliance: “4.1 …other than duties owed by BORG Personnel to the BORG.”

<new borg name>: “4.1…other than duties owed by BORG Personnel to the BORG. For the avoidance of doubt, BORG Personnel may receive remuneration for their roles and contributions to the BORG as service providers, employees, independent contractors, agents, and/or other representatives of the BORG on commercially reasonable terms, as determined by the Board or any Officer duly authorized to do such hiring or engagement.”

I. RELATIONSHIP BETWEEN THE BORG AND THE COMMUNITY TOKEN HOLDERS

Lido Alliance: None

<new borg name>: “

  1. The Community Token Holders have governance authority over the BORG, which seeks to pursue the Purposes in connection with contractual and legal processes, including regulatory compliance and those other matters set forth in these Bylaws and the M&A.

  2. The Community Token Holders have the authority to make certain decisions in relation to the BORG as set forth in these Bylaws and the M&A. The BORG retains certain other decision-makers with responsibilities dictated by Cayman Islands Law. Notwithstanding any provision to the contrary in these Bylaws, to the extent there is ever a conflict between the decisions of the BORG the Community Token Holders, the decisions of the Community Token Holders will prevail, unless a different outcome is required under Cayman Islands Law.

  3. The Community Token Holders should ensure that the BORG has sufficient authority and resources, including funding, to execute upon the BORG’s mandate, meet the BORG’s obligations under applicable law, and satisfy the BORG’s contractual obligations entered into in accordance with the M&A or these Bylaws.

  4. The BORG has engaged with certain third parties to provide services as the Director and Supervisor, as required by Cayman Islands Law. In accordance with the terms of the M&A and these Bylaws, and subject to Cayman Islands Law, the Director and Supervisor are required to act at the direction of the Community Token Holders in respect of certain matters.

  5. Notwithstanding any provision to the contrary in these Bylaws, the Directors shall observe, implement, carry out, act upon, and execute any and all decisions of the Community Token Holders passed in accordance with these Bylaws and the M&A, provided that any Director may veto a proposal or place any limitations on its observation and implementation as a Director in its discretion deemed necessary or appropriate to ensure compliance with:

  6. any fiduciary duties to the BORG;

  7. statutory requirements of Cayman Islands Laws or the laws or regulations of any jurisdiction;

  8. the M&A;

  9. to prevent any harm (including reputational harm) to the BORG; and/or

  10. where applicable and necessary, for entering into or complying with any agreements or arrangements on behalf of the BORG.

  11. The Directors are authorised to take any actions reasonably necessary on behalf of the BORG to give effect to a vote of the Community Token Holders including passing any director resolutions to memorialise such vote.

  12. To the extent there is ever a conflict between the provisions of these Bylaws and the M&A, the M&A will prevail.”

1 Like
5

Absent sections to <new borg name> relative to Lido Alliance BORG

J. BORG Personnel / Eligibility to Serve

Lido Alliance: “2.1.2. Each BORG Personnel’s agreements with and duties to the BORG must not contravene, conflict with, or violate or constitute a breach or default under (or an event that with notice or lapse of time or both would become a violation or constitute a breach or default under) any applicable Legal Requirement or agreement to which such BORG Personnel is subject.”

<new borg name>: None

K. Alliance Multisig Members / Removal Of Alliance Multisig

Lido Alliance: “2.4.5.1. Removal of Director Alliance Multisig Members. Each person who is removed as a Director in accordance with these Bylaws shall also thereby automatically be deemed removed as a Director Alliance Multisig Member, and the Alliance Multisig Members shall take all action necessary or desirable to cause such person to be removed as a Multisig Member of the Alliance Multisig.”

<new borg name>: None

L. Emergency Supervisors / Disputes Regarding Emergency Supervisors Appointment

Lido Alliance: “2.6.6. Disputes Regarding Emergency Supervisor Appointment. Notwithstanding any other provision of these Bylaws, the existence, threat or pendency of any Dispute by a BORG Personnel (other than the Emergency Supervisor) regarding whether an Emergency Supervisor was duly appointed or regarding the scope of authorities of an Emergency Supervisor (including any Dispute regarding the existence of an Adverse Event forming the basis of a Community Module Approval of an Emergency Supervisor) shall not excuse any breach or non-performance of these Bylaws or any Governance Agreement by any BORG Personnel (other than the Emergency Supervisor) or any duty owed to the BORG by any BORG Personnel (other than the Emergency Supervisor), and all performance obligations and duties shall continue to apply to all such BORG Personnel during such Dispute.”

<new borg name>: None

M. Board Meetings:

Lido Alliance: “

  • 3.5. Board Meetings

  • 3.5.1. Place and Manner of Meetings

  • 3.5.1.1. The Board may hold meetings, both regular and special, in any place or in any manner (including remotely in accordance with Article 3.5.1.2 below) selected reasonably and in good faith by the Chair or agreed by any two Directors.

    • 3.5.1.2. Any or all Directors may participate in a meeting of the Board by means of internet conference, phone, or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

  • 3.5.2. Regular Meetings

Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.

  • 3.5.3. Special Meetings; Notice

  • 3.5.3.1. Special meetings of the Board for any purpose or purposes may be called at any time

by the Chair or any two Directors.

  • 3.5.3.2. Notice of the time and place of special meetings shall be delivered to each Director in the manner specified for giving notice to such Director recorded on the BORG’s records and shall be given at least 48 hours before the meeting is scheduled to occur. The notice need not specify the purpose of the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

  • 3.5.4. Quorum

    • 3.5.4.1. At all meetings of the Board, a majority of the total number of Directors then in office shall constitute a quorum for the transaction of business and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by statute or by the Constitution. If a quorum is not present at any meeting of the Board, then the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
    • 3.5.4.2. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of Directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

  • 3.5.5. Waiver Of Notice: Whenever notice is required to be given under applicable Legal Requirement, these Bylaws, or any other Governance Agreement, a written waiver thereof, signed by the person entitled to notice, or waiver by electronic mail or other electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors, need be specified in any written waiver of notice unless so required by the Constitution or these Bylaws.

  • 3.5.6. Board Action By Written Consent Without A Meeting

    • 3.5.6.1. Unless otherwise restricted by the Constitution or these Bylaws, any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if all members of the Board consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
    • 3.5.6.2. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

  • 3.5.7. Deadlocks

    • 3.5.7.1. “Deadlock” means:
    • (a) that, with respect to any proposal, resolution or action that has been submitted to a vote of the Board by a Director (including, if applicable, by Alliance Multisig Proposal):
      • (i) the full Board is evenly divided thereon such that there is neither a majority of the Board in favor of nor a majority of the Board against such proposal, resolution, or action and it cannot reasonably be expected that a majority of the Board will be voted in favor of or against such proposal, resolution, or action in the near future; or
      • (ii) a quorate meeting of the Board where such proposal, resolution, or action is scheduled to be voted upon has failed to be convened after three consecutive reasonable good faith attempts to do so in accordance with all applicable notice requirements and it cannot reasonably be expected that a quorum of the Board will convene for such a meeting in the near future. For purposes of this provision, a Director’s Signature Decision to intentionally refrain from signing an Alliance Multisig Proposal, indicated by any reasonable communication method of such Director signaling that such refrain is intentional, shall count as a vote against the relevant Alliance Multisig Proposal or other relevant proposal that is voted upon via Multisig; or
    • (b) as a result of circumstances described in the preceding clause ‘(a)’ or otherwise, a sustained vacancy in a position (such as Supervisor) that is required by these Bylaws to be occupied.
    • 3.5.7.2. During the existence of any Deadlock, any BORG Personnel may: (a) deliver written notice to the Board stating that in such person’s opinion a Deadlock has occurred and identifying the proposal, resolution or action giving rise to the Deadlock; and (b) submit a proposal to the Community Module to vote upon the proposal, resolution or action giving rise of the Deadlock. Following such a notice, notwithstanding any requirement for Board approval that would otherwise apply, a Community Module Approval on the proposal, resolution or action giving rise to the Deadlock shall determine the outcome of the Deadlock, and the Board and all other BORG Personnel shall be bound thereby and shall implement the resolution of the Deadlock approved by Community Module Approval.

  • 3.5.8. Minutes

The Board shall keep minutes of all meetings and record them in the BORG’s minute book.”

<new borg name>: None

N. Alliance Multisigs / Documentation and Updates to Schedule:

Lido Alliance: “

  • 3.6.3. Each Alliance Multisig shall be identified and described in reasonable detail on the Alliance Multisig Schedule including by identifying and describing in plain English, in reasonable detail:

    • 3.6.3.1. the Blockchain System to which the Alliance Multisig is deployed;
    • 3.6.3.2. the network address of the Alliance Multisig on such Blockchain System;
    • 3.6.3.3. the network addresses serving as the public keys corresponding to the Private Keys included in the Multisig Private Key Set for such Alliance Multisig (i.e., the network addresses used by the Alliance Multisig Members for purposes of interacting with the Alliance Multisig);
    • 3.6.3.4. the names (or public pseudonyms within the Community) of each Alliance Multisig Member and whether each such person is a Director Alliance Multisig Member or a Guardian Alliance Multisig Member;
    • 3.6.3.5. the minimum number of Multisig Private Keys required to execute transactions through the Alliance Multisig (broken down by transaction type, in the event that different transaction types have different approval thresholds);
    • 3.6.3.6. any and all abilities, powers, and rights such Alliance Multisig has with respect to any Community Autonomous Systems, including a technical and plain-English description of each function of a Community Autonomous System over which such Alliance Multisig has privileged, elevated or exclusive access, power or authority and the intended uses thereof;
    • 3.6.3.7. any and all abilities, powers, and rights the Community Module or any other Multisig, BORG, Blockchain System or Smart Contract has with respect to the Alliance Multisig;
    • 3.6.3.8. a copy of or persistent link to the source code for Alliance Multisig; and
    • 3.6.3.9. for each Alliance Multisig Member with respect to each Alliance Multisig, at least one public key address corresponding to the Private Key of such Alliance Multisig Member that belongs to the Private Key Set for such Alliance Multisig.”

<new borg name>: None

O. Multisig Private Key Management Practices:

Lido Alliance: “ 3.8. Multisig Private Key Management Practices

  • 3.8.1. Key Generation

    • 3.8.1.1. The Board or an Officer shall provide each person intended to be an Alliance Multisig Member (“Prospective Alliance Multisig Member”) with instructions for generating a Private Key intended for use in each Alliance Multisig, and such Prospective Alliance Multisig Member shall follow such instructions strictly.
    • 3.8.1.2. Each Private Key must be unique to one and only one Alliance Multisig Member and not shared with or accessible to the BORG or any other person.
    • 3.8.1.3. The Private Key generated by a Prospective Alliance Multisig Member in accordance with the aforementioned requirements may be deemed to be the Multisig Private Key of such Prospective Alliance Multisig Member for one or more Alliance Multisigs, and thus the Prospective Alliance Multisig Member become an Alliance Multisig Member for such Alliance Multisig(s).
    • 3.8.1.4. From time to time, the Board may require and direct that any Multisig Alliance Member replace or substitute any Multisig Private Key with a new Private Key generated in accordance with the aforementioned requirements.
    • 3.8.1.5. The Private Key shall be the property of the Alliance Multisig Member or Prospective Alliance Multisig Member and shall not constitute the property of the BORG. The Private Key of the Alliance Multisig Member or Prospective Alliance Multisig Member shall not represent any interest in any asset which is controlled by a Multisig.

  • 3.8.2. Private Key Security

    • 3.8.2.1. Each Alliance Multisig Member shall securely hold, custody and safeguard his or her Multisig Private Key(s) and immediately notify the BORG and the other Alliance Multisig Members if any of such Alliance Multisig Member’s Multisig Private Key(s) could reasonably be expected to have been stolen, published or otherwise accessed by, made available to or become known to any other person (including any other Alliance Multisig Member).
    • 3.8.2.2. Alliance Multisig Members shall not disclose or make available any Alliance Multisig Private Key to, or share any Alliance Multisig Private Key with, any other person, including other Alliance Multisig Members.

  • 3.8.3. Ownership of Multisig-Controlled Property

    • 3.8.3.1. Unless otherwise expressly agreed by the relevant Alliance Multisig Member and the BORG in writing, no Alliance Multisig Member shall be deemed to own any Community Tokens held in, by or through any Alliance Multisig or any other Blockchain Tokens, digital assets or other property held in, by or through, or received by an Alliance Multisig Member on account of such Alliance Multisig Member’s participation in any Alliance Multisig (including, without limitation, any “airdrops” or other distributions of Blockchain Tokens received or claimable by such Alliance Multisig Member’s externally owned account or blockchain address on account of such Alliance Multisig Member’s participation in the Alliance Multisig).
    • 3.8.3.2. In the event any such Community Tokens or other Blockchain Tokens, digital assets or other property is not owned by a third party, then such Community Tokens or other Blockchain Tokens or property shall automatically be deemed to be owned by, and constitute the sole property of, the BORG.
    • 3.8.3.3. In the event an Alliance Multisig Member receives any property of the BORG to such Alliance Multisig Member’s externally owned account or blockchain address, such Alliance Multisig Member shall promptly notify the BORG and remit such property to the BORG in the manner directed by the BORG (which may include depositing such property into an Alliance Multisig).
    • 3.8.3.4. In no event shall any Multisig, Alliance Multisig Member, or the BORG be deemed to own or control the Community Module, the Community Autonomous Systems, or any assets held therein or controlled thereby.

  • 3.8.4. Conduct of Alliance Multisig Members

    • 3.8.4.1. Coordination Among Alliance Multisig Members; Multisig Procedures
      • (a) Each Alliance Multisig Member shall undertake to maintain good relations with and engage in reasonably prompt, frequent and timely consultation and cooperation with the other Alliance Multisig Members on all other matters arising in connection with or relating to the BORG.
      • (b) The Director Alliance Multisig Members may from time to time establish various standard rules, practices, customs, protocols and procedures related to being an Alliance Multisig Member or participating in the Alliance Multisig, provided that the foregoing are only supplemental to these Bylaws and do not conflict with, amend, terminate, limit or waive any express provision of or right or duty existing under these Bylaws (the “Multisig Procedures”).
      • (c) Multisig Procedures may be established through course of conduct, informal agreement, or other reasonable means providing the Alliance Multisig Members with reasonable notice thereof.
      • (d) Each Alliance Multisig Member shall comply with any Multisig Procedures of which it is or reasonably should be aware.
    • 3.8.4.2. Proposals; Response to Proposals. Any Director Alliance Multisig Member may from time to time propose that a certain action be taken or transaction effected by the Alliance Multisig, pursuant to the Authorized Uses. A Director Alliance Multisig Member shall make such a proposal by signing with such Director Alliance Multisig Member’s Multisig Private Key a draft executable transaction message that, if such draft executable transaction message receives sufficient other such signatures from other Alliance Multisig Members, will be executed by the Alliance Multisig (each such proposal, a “Alliance Multisig Proposal”). A Director Alliance Multisig Member shall also follow any Multisig Procedures applicable to the making of an Alliance Multisig Proposal; provided, however, that any breach or non- observance of a Multisig Procedure in respect of an Alliance Multisig Proposal shall not in itself impair, void, or require any reversal or limitation of an Alliance Multisig Proposal that is executed by the Alliance Multisig pursuant to the Authorized Uses and otherwise in accordance with these Bylaws. Each Alliance Multisig Member shall promptly, reasonably, diligently, independently, and in good faith evaluate the merits of each Alliance Multisig Proposal solely in light of the Purposes, Authorized Uses and the Principles, and, based solely on such evaluation, and without regard to any personal or extrinsic interest or consideration, determine whether to vote in favor of such Alliance Multisig Proposal (i.e, to sign the relevant transaction message with such their respective Multisig Private Keys) or vote against such Alliance Multisig Proposal (i.e, intentionally refrain from so signing Alliance Multisig Proposal) (each, a “Signature Decision”). Upon an Alliance Multisig Member reaching an affirmative Signature Decision with respect to an Alliance Multisig Proposal, such Alliance Multisig Member shall promptly sign the relevant transaction message with such Alliance Multisig Member’s Key for potential execution by the Alliance Multisig. Once an Alliance Multisig Proposal has received sufficient signatures by the Alliance Multisig Members to be executed, the Alliance Multisig Members shall cause such Alliance Multisig Proposal to be executed by the Alliance Multisig as promptly as reasonably practicable in light of all applicable facts and circumstances, including security considerations relating to front-running and similar issues. For the avoidance of doubt, the Alliance Multisig Members and the BORG may make use of private mempools and other such confidentiality or transaction prioritization or transaction batching mechanisms in connection with the execution of Alliance Multisig Proposals, as determined in their reasonable good faith discretion in light of the Authorized Uses, Purposes, and Principles. The approval by a sufficient number of Alliance Multisig Members of an Alliance Multisig Proposal (to cause the Alliance Multisig to execute such Alliance Multisig Proposal onchain or as otherwise provided by these Bylaws) shall constitute the action of such Alliance Multisig as a body. Notwithstanding the foregoing, Guardian Multisig Members shall assess Alliance Multisig Proposals solely in accordance with the role of Guardians as set forth in Article 3.7.2, and shall only approve Alliance Multisig Proposals that have been approved by at least a majority of the Director Alliance Multisig Members (or in the event there are two or fewer Director Alliance Multisig Members, all of the Director Alliance Multisig Members).

  • 3.8.5. Navigating Conflicting Community Interests: In considering how to act in connection with a matter that, when considered in light of the Purposes and the Principles, involves any material conflict, competition or inconsistency among the interests of categories of Community members, each Alliance Multisig Member shall act in a manner intended to maximize benefits and minimize harms to the overall Community taking into account all relevant facts and circumstances then known to or reasonably discoverable by such Alliance Multisig Member.”

<new borg name>: None

P. NATURE OF BORG ACTIVITIES; NO GENERAL DUTIES TO COMMUNITY / Conflicts of Interest

Lido Alliance: “

  • 4.5.1. Each BORG Personnel shall use reasonable best efforts to continuously monitor and evaluate such BORG Personnel’s personal facts and circumstances (including such BORG Personnel’s direct and indirect investments and other economic interests in other blockchain-based companies, systems and communities) that could reasonably be expected to give rise to a material conflict of interest on the part of such BORG Personnel in connection with such BORG Personnel’s activities relating to the BORG.

  • 4.5.2. If a BORG Personnel becomes aware of an ongoing material conflict of interest with respect to such BORG Personnel’s participation in the BORG, such BORG Personnel shall resign from the BORG, unless such conflict of interest has been disclosed (along with all relevant material facts and circumstances) to the Board and the Community in reasonable detail and such BORG Personnel’s continued participation in the BORG has been approved by a majority of the disinterested Directors and by a Community Module Approval notwithstanding such conflict of interest (which consent may be conditioned on appropriate ongoing procedures, disclosures, limitations, or similar terms and conditions, which shall be observed by the applicable BORG Personnel from and thereafter).

  • 4.5.3. The holding, ownership or use of the Community Token or any right to receive or purchase any Community Token on the part of any BORG Personnel shall not in itself be deemed a conflict of interest,”

<new borg name>: None

Q. Indemnification

Lido Alliance: “ 7. INDEMNIFICATION

  • 7.1. Indemnification of Certain BORG Personnel. Each person who was or is made a party to, or is threatened to be made a party to, or is involved in any threatened or actual action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual or threatened proceeding, including any appeal or action for enforcement, in each case, whether civil, criminal, administrative or investigative, brought by or on behalf of or to be determined or tried by or before a governmental body or legal mediator, arbitrator or panel of mediators or arbitrators, in each case, by reason of the fact that such person (or a person of whom such person is the legal representative), is or was a BORG Personnel (each, a “Proceeding” and each such person against whom a Proceeding is brought, an “Indemnitee”) shall be indemnified and held harmless by the BORG upon the terms and conditions set forth in this Article 7 against all expenses, liability and loss (including attorneys’ fees, judgments, fines, excise taxes and penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith, provided such Indemnitee acted in good faith and in a manner that the Indemnitee reasonably believed to be in or not opposed to the best interests of the BORG, did not commit fraud, gross negligence, an intentional and knowing material breach of a material provision of these Bylaws or another Governance Agreement or legal agreement with the BORG, or a crime involving moral turpitude, and, with respect to any criminal action or Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful. Such indemnification shall continue as to an Indemnitee who has ceased to be a director or officer and shall inure to the benefit of such Indemnitees’ heirs, executors and administrators. Notwithstanding the foregoing, the BORG shall indemnify any such Indemnitee seeking indemnity in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board or such indemnification is authorized by an agreement approved by the Board.

  • 7.2. Advance of Expenses. The BORG shall pay all expenses (including attorneys’ fees) incurred by such an Indemnitee in defending any such Proceeding as they are incurred in advance of its final disposition; provided, however, that (a) the payment of such expenses incurred by such an Indemnitee in advance of the final disposition of such Proceeding shall be made only upon delivery to the BORG of an undertaking, by or on behalf of such Indemnitee, to repay all amounts so advanced if it should be determined ultimately by final judicial decision from which there is no appeal that such Indemnitee is not entitled to be indemnified under these Bylaws; and (b) the BORG shall not be required to advance any expenses to a person against whom the BORG directly brings a claim, in a Proceeding, alleging that such person has breached such person’s duty of loyalty to the BORG, committed an act or omission not in good faith or that involves intentional misconduct or a knowing violation of applicable Legal Requirements, or derived an improper personal benefit from a transaction.

  • 7.3. Non-Exclusivity of Rights. The rights conferred on any person in this Article 7 shall not be exclusive of any other right that such person may have or hereafter acquire under any statute, Governance Agreement, or otherwise. Additionally, nothing in this Article 7 shall limit the ability of the BORG, in its discretion, to indemnify or advance expenses to persons whom the BORG is not obligated to indemnify or advance expenses pursuant to this Article 7.

  • 7.4. Right of Indemnitee to Bring Suit.

    • 7.4.1. Right to Bring Suit. If a claim under Article 7.1 or 7.2 is not paid in full by the BORG within sixty (60) days after a written claim has been received by the BORG, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the Indemnitee may at any time thereafter bring suit against the BORG to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the BORG to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the BORG to recover an advancement of expenses pursuant to the terms of an undertaking, the BORG shall be entitled to recover such expenses upon a final adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in applicable Legal Requirements or these Bylaws.
    • 7.4.2. Effect of Determination. Neither the failure of the BORG to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in applicable Legal Requirements, nor an actual determination by the BORG that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit.
    • 7.4.3. Burden of Proof. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the BORG to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article 7, or otherwise, shall be on the BORG.

  • 7.5. Nature of Rights. The rights conferred upon Indemnitees in this Article 7 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a BORG Personnel and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators. Any amendment, repeal or modification of any provision of this Article 7 that adversely affects any right of an Indemnitee or an Indemnitee’s successors shall be prospective only, and shall not adversely affect any right or protection conferred on a person pursuant to this Article 7 and existing at the time of such amendment, repeal or modification.”

<new borg name>: None

R. General Provisions

Lido Alliance: “

  • 8.4. Severability. Any term or provision of these Bylaws that is found invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If a final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the court making such determination shall have the power to limit such term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and these Bylaws shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, such court or the Board shall be empowered to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term or provision.

  • 8.5. Entire Agreement. These Bylaws, the Governance Agreements and any other documents or agreements referred to herein or therein constitute the entire agreement and understanding with respect to the subject matter hereof and thereof, and supersedes any and all prior negotiations, correspondence, warrants, agreements, understandings duties or obligations with respect to the subject matter hereof and thereof.

  • 8.6. Further Assurances. The BORG Personnel shall execute and deliver any further instruments or documents and to take all such further actions as may be necessary or advisable in order to carry out the intent of these Bylaws.”

<new borg name>: None

6

We are supportive of the BORG approach as we have previously voted! Nonetheless, we expect the full picture to come up when the follow up proposal is presented in February-March in order to have a better sense of SOW and deliverables. As mentioned by @Ignas, scalability and legal contraints are issues that this structure adresses but BORG/DAO coexistence might look a bit diffuse at this point - any contributions such as @BlockworksResearch’s or even a RACI or flowchart should be useful.

2 Likes
7

Thank you for your questions @BlockworksResearch. Please see our answers below:

Answer: The Lido Alliance BORG Foundation was established to formalize a multisig whose future members were approved through Community Module Approval with the snapshot that also approved the establishment of this foundation. In contrast, the Lido Ecosystem BORG Foundation and the Lido Labs BORG Foundation will adopt existing multisig wallets with their current members (some of whom were previously approved by Lido DAO). The changes to this section were made to streamline the process of adopting these existing multisigs and their respective members.

Answer: This change was made to align with standard corporate governance requirements. The norm for foundations in the Cayman Islands is to set the minimum number to 1 to provide flexibility to the foundation in case there are resignations. This does not mean that the number of directors will be set to 1. Instead the expectation is that there will always be more than 1 and only in the case of unexpected resignations could there be a scenario of 1 director. In such a scenario, the Board and Community Module Approval would move to fill the vacancies with new directors. The Board and Community Module Approval can change this minimum number if so desired.

Answer: The Lido Alliance BORG Foundation was established to formalize a multisig structure in which all directors also served as multisig members (referred to as “Director Alliance Multisig Members”) and were responsible for decision-making. Guardian Alliance Multisig Members were included exclusively for security purposes. In contrast, the Lido Ecosystem BORG Foundation and the Lido Labs BORG Foundation will adopt existing multisig wallets with members who (i) are not directors of any foundation, and (ii) were not appointed to the multisig for security purposes. Also, for these entities to operate more efficiently, the multisig members should be those appointed due to their specialization and expertise, rather than requiring all directors to be mandatory members of all multisigs. As a result, the distinction between Director and Guardian Multisig Members is no longer relevant in these contexts.

Answer: This change was made to clearly state that the Emergency Supervisor has these powers. This is meant to provide Lido DAO with a clear understanding of the broad powers of the Emergency Supervisor.

Answer: Amended to reflect that the Board, by board resolution, may delegate certain limited powers to a Director to act on behalf of the foundation. In order for the Directors to fulfill their fiduciary duties, these delegations would typically be administrative. Any material matters would need to be decided by the Board and is not something that they can delegate to a single Director without breaching their fiduciary duties.

Answer: Amended to reflect that the Board, by board resolution, may delegate certain limited powers to a Director to act on behalf of the foundation. In order for the Directors to fulfill their fiduciary duties, these delegations would typically be administrative. Any material matters would need to be decided by the Board and is not something that they can delegate to a single Director without breaching their fiduciary duties.

Answer: This change was introduced to provide flexibility in proposing multisig transactions, allowing such authority to be delegated to individuals more closely involved in the multisig’s day-to-day operations.

Answer: This wording was included to clarify that although the BORG Personnel provide their services without any express or implied affirmative promise, duty, obligation, warranty, undertaking or assumption of duty or risk, they are remunerated for doing so (i.e., are not volunteers).

Answer: This is intended to reflect the accountability and transparency as set forth in the Bylaws and in the Memorandum and Articles of Association in order to avoid any ambiguity as well as expressly state the actions that the Directors may be required to take to fulfill their fiduciary duties under Cayman Islands laws.

Answer: This is best placed in the service agreements with the contributors instead of in the Bylaws. This permits the BORG to add any additional restrictions or obligations in the contributors’ service agreements as advisable. The removal of this in the Bylaws is not a signal that the BORG disagrees with this proposal, but rather, the appropriate place for this provision is in the contributors’ service agreements.

Answer: Please see answer to question C. Deleted because the distinction between Director and Guardian Multisig Members is no longer relevant to the Lido Ecosystem BORG Foundation and the Lido Labs BORG Foundation.

Answer: This is best placed in the service agreements with contributors rather than in the Bylaws. Including it in the service agreements ensures that the duty of loyalty of BORG Personnel is enforceable as a contractual obligation, which may not be possible if it were solely included in the Bylaws. The removal of this from the Bylaws is not a signal that the BORG disagrees with this proposal, but rather, that the appropriate place for this provision is in the contributors’ service agreements.

Answer: This is typically covered in the Memorandum and Articles of Association of a Cayman Island foundation instead of in the Bylaws, so it was moved accordingly.

Answer: The multisigs to be adopted by each foundation were clearly identified and detailed in the research forum, with all relevant information and links provided (as an alternative to the above Multisig Schedule). This information is also included in the snapshot proposal.

Answer: This is better placed in the Multisignature Participation Agreement, where it is now reflected, rather than in the Bylaws.

Answer: It was decided to include these provisions in a dedicated conflicts of interest policy rather than the Bylaws, in line with standard corporate governance practices. This approach allows for greater flexibility to update the policy as needed through a board resolution and leave the Bylaws for more fundamental aspects of the BORG’s governance.

Answer: This section was removed from the Bylaws to be included in Lido contributors’ service agreements and in the multisignature participation agreements to ensure the indemnification provisions are enforceable as a contractual obligation, which may not be possible if they were solely included in the Bylaws. This allows contributors and multisig members to seek indemnification directly under those agreements, ensuring enforceability of their rights. The removal of this section from the Bylaws is not a signal that the BORG disagrees with it, but rather, that the appropriate place is in the contributors’ service agreements and in the multisignature participation agreements.

Answer: This section was removed because these provisions are standard contract boilerplate clauses included in contracts, whereas Bylaws are not a legal agreement or contract. Therefore, these are not commonly included in Bylaws. The Directors are legally obligated under Cayman Island law to follow the Bylaws. Multisig member and contributors will be obligated to comply with the Bylaws and policies in their respective agreements.

4 Likes
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Snapshot vote started

We’re starting the Establishment of Lido Labs BORG Foundation as a Lido-DAO-Adjacent Foundation.
Snapshot, active till Thu, 30 Jan 2025 16:00:00 GMT. Please don’t forget to cast your vote!

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@LidoLegalContributor thank you so much for the clarification on the previous points!! Once again, appreciate your thorough work for Lido!

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Snapshot vote ended

Thank you all who participated in Establishment of Lido Labs BORG Foundation as a Lido-DAO-Adjacent Foundation Snapshot, we reached a quorum! :pray:
The results are:
Support the proposal: 56.8M LDO
Reject the proposal: 87.4k LDO

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Considering the plans to create an operational multisig, I (@Olga_K) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0xcb408B2c5e45E43DF0F3B2d665873F805D435598

You can verify my signature here.

Tweet: x.com

12

Considering the plans to create an operational multisig, I (@Angelina_L) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0x30ce91eb74e56d0df97c78774b3aca2144f6ad32

You can verify my signature here .

Tweet: x.com

1 Like
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Considering the plans to create an operational multisig, I (@dgusakov) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0x992ce4eec8288274f60880c7770dda265fcce610

You can verify my signature here.

Tweet: x.com

2 Likes
14

Considering the plans to create an operational multisig, I (@juan) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0xB8Dcad009E533066F12e408075E10E3a30F1f15A

You can verify my signature here.

Tweet: x.com

2 Likes
15

Considering the plans to create an operational multisig, I (@krogla) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0x000000dfe832ccd7a4011a1fca34602c9a598353

You can verify my signature here
Tweet: x.com

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Considering the plans to create an operational multisig, I (@alxmrn) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0x444C7182bD7cd40f323Ba7A9b84d6B7564ccf5EC

You can verify my signature here

1 Like
17

Considering the plans to create an operational multisig, I (@Alex_L) would like to announce my intention to become a signer of the Lido Labs BORG operational multisig at the following address: 0xE61F7F15f91cdb58008cAeaea46E2d3f2BaFF68c

Here’s my address verification.

1 Like