1. Key Concepts & Definitions
Before diving into the rules, here are the core terms we use to run the DAO:- Sortition: The process of randomly selecting people for governance roles. We use this to prove that management is “fungible” (replaceable) and doesn’t rely on specific “special” individuals.
- Goldilocks Algorithm: A specific math formula we use to pick our supervisory committee. It balances fairness and security to ensure no one can game the system to guarantee they get picked.
- Elected DAO: The supervisory committee selected by the Goldilocks Algorithm. They oversee operations and Curators.
- Curator: The person or entity managing the strategy (methodology) of a specific Index Series.
- Issuer Network: The decentralized group of node operators that actually execute the transactions and enforce rules.
2. The General Assembly (Token Holders)
The General Assembly is the ultimate authority of the DAO. It consists of everyone holding Governance Tokens.Voting Power
- Weight: Your vote is weighted by the number of tokens you hold.
- Staking: Where applicable, voting power can also come from USDC deposited into the governance staking contract.
Powers
The General Assembly holds the sovereign power to:- Change the Constitution: Ratify or reject amendments to this document.
- Manage the Network: Elect or fire members of the Issuer Network.
- Set Criteria: Decide who is allowed into the “Eligibility Pool” for leadership roles.
- The Nuclear Option: Initiate a “Vote of No Confidence” to immediately dissolve the current Elected DAO and trigger a new random selection.
Real Rights (Anti-Illusory Provision)
We are compliant with the principles of Williamson v. Tucker and SEC v. Merchant Capital. This means your voting rights are real, not just for show. We guarantee:- Notice: You will get detailed information and sufficient notice regarding proposals.
- Neutrality: Default voting rules will never favor the incumbent management.
- Ability to Fire: You have the practical ability to remove any Curator or Elected DAO member via a majority vote.
3. The Elected DAO & Goldilocks Sortition
The Elected DAO is a group of 15–20 members. Important: Their job is not to create policy. Their job is to supervise execution, ensure Curators follow the rules, and instruct the Issuer Network on sensitive parameters.Getting into the “Eligibility Pool”
To be eligible for the Elected DAO, you must be admitted to the pool by meeting three requirements:- Proof of Skill: Pass the Governance and Compliance Certification (covering smart contract safety, financial risk, and regulations).
- Stake at Risk: Deposit collateral. If you act maliciously, you lose this money (slashing).
- Identity Verification: You must prove your identity for legal accountability, though you may remain pseudonymous to the public where allowed.
The Selection Process (Goldilocks Mechanism)
We don’t hold popularity contests. We select the Elected DAO from the pool using the Goldilocks Algorithm:- Fairness: Every qualified member has a real, non-negligible chance of being picked. No exclusionary cliques allowed.
- Manipulation Resistant: The algorithm caps the maximum probability of selection. This stops “Sybil attacks” (one person pretending to be many) or gaming the criteria.
- Verifiable: The selection happens on-chain using a Verifiable Random Function (VRF) so anyone can audit the results.
Terms & Limits
- Fixed Term: Members serve for a set period (e.g., 6 months).
- No Incumbency: Once a term ends, a new Sortition event happens. Consecutive terms are prohibited to prevent power entrenchment.
4. Series Governance & Curators
The Master DAO can create new “Series” for each Index Token. Legally, each Series is a distinct liability cell.The Curator Role
Each Series is managed by a Curator.- Responsibility: They propose the basket of assets and rebalancing weights based on the Index Methodology.
- Selection: Any Member can propose a Curator, but they must be approved by the Elected DAO.
- Removal: Curators serve at the pleasure of the DAO. They can be removed by a General Assembly vote or by the Elected DAO (for cause).
Safety Limitations
To keep funds safe, Curators never have custody of assets.- They can only submit “rebalancing proposals” to the smart contract.
- These proposals are validated by the Issuer Network against pre-defined logic.
- If the proposal violates the methodology, it is rejected. A Curator cannot misappropriate funds.
5. The Issuer Network
The Issuer Network is the technical execution layer, made up of independent validator nodes elected by the General Assembly.Responsibilities
- Execution: They cryptographically sign and execute transactions approved by governance.
- Compliance Guardrails: They are mandated to block any transaction that violates the Protocol’s “Blacklist” (OFAC sanctions) or “Hard Cap” (risk limits).