Since its inception, eosDAC has been aware that legal company structures as they currently exist in the world do not accurately map onto the DAC. The DAC is not a company - it is intended to function as a community of people working toward common goals, governed by agreement - the Constitution. At the same time we have been aware that if the DAC does not proactively organise its affairs and how it contracts for the ‘real world’ resources it uses, such as servers and workers, ‘real world’ institutions may by default map onto the DAC whatever existing structures they consider are most applicable. This is likely to be disadvantageous to the DAC - the DAC would be better off intentionally organising its contractual arrangements rather than allowing governments and courts to apply an interpretation to the DAC by default.
The DAC has received consistent legal advice from more than one counsel that if it engages in contractual relationships directly it may be exposing its members to unnecessary liability.
Globally, the “company” is the standard for how parties enter into contractual relationships. It’s worth taking a moment to consider this.
The DAC has always been advised to contract with a service company
The legal personality and limited liability of a company is the backbone of modern business to the extent that many of us don’t even realise what a particular and possibly surprising construct it is. It arose conceptually in Britain and Europe around the time of the Enlightenment when the growth in trade and commerce (including to the Americas) necessitated large-scale financing. For shareholders and banks to take over from the monarch in financing ventures, those ventures had to have legal recognition with defined financing. The ‘company’ allowed its members to define a purpose and engage in contracts under a legally-created personality without individual managers and members being personally liable. Whatever you think of the ethics of the institution of the company - and many critique it for giving corporations an identity akin to a human being, which may create perverse outcomes - it is certainly the case that modern business is entirely geared toward its use.
Operating without such a structure may produce what many would regard as surprising and unacceptable liability outcomes.
And quite apart from the risks inherent in an entity like a DAC - not a company - engaging in contractual relationships normally designed to be undertaken by companies, it is also impossible from a practical perspective for the DAC to engage in many contracts, because it does not even have a physical address!
For this reason, back in Q2 2018, eosDAC Ltd was created by eosDAC launch team members to be a service provider to the DAC - that is, to procure all the servers and other external services which were necessary for the DAC to function. The service provider was switched to Incommsec Ltd, when eosDAC Ltd was unable to perform certain functions.
The contract with Incommsec was always envisaged as a temporary, though very much appreciated, solution, since a) Incommsec is domiciled in the UK, where the environment can be hostile to distributed ledger activities and b) innovative blockchain-related contracts need to be created between the service provider and the DAC to accommodate the DAC’s on-chain governance and payment systems.
eosDAC workers express their gratitude to Incommsec Ltd for its high degree of professionalism and exemplary service and look forward to continuing to work closely with Incommsec for the duration of outstanding contracts.
eosDAC is now working closely with a service company, Dacoco GmbH, which has been incorporated in the canton of Zug, Switzerland, by Rob Allen, Michael Yeates and Saro McKenna. Dacoco GmbH has a founding mission to serve DACs and eosDAC in particular, will be free to take on clients other than eosDAC and indeed will seek out such customers in due course.
eosDAC and the service provider will release key commercial terms in due course.
Why is Dacoco well placed to offer these services?
Whatever service provider the DAC chooses to use at any given time, such service provider must be able to understand the DAC’s technical needs and procure these in the real world. The members of Dacoco are eminently qualified to do this.
Why was Dacoco founded in Zug?
Zug is where crypto valley is emerging, and an ecosystem of banking, insurance and law services is forming there to service such companies.
Why was Dacoco founded by individual members of the DAC - Rob, Michael and Saro?
Someone had to create this business. Importantly, anyone is free to create a service company and pitch this to the DAC.
Rob, Michael and Saro appreciated that the DAC absolutely requires the services if it is to act with responsibility toward all parties.
Can anyone form a service company?
Absolutely, and we hope you do. Please self-organise to create a company to fulfill the DAC’s need for a company partner that can:
- Be its primary, replaceable contractual counterparty
- Understand eosDAC’s technical and other needs and procure them
- Have in place the relevant insurance and banking facilities, with those counterparties understanding the nature of the service provider’s business in the crypto space
- Be willing to procure adequate legal advice for the particular contracting needs of the relationship
- Offer competitive pricing for these services
Can eosDAC change its service provider?
eosDAC can change its service provider at any time; Custodians would need to determine if a service provider is able to discharge these functions when they make a future selections as to provider. It should be noted that any outstanding contracts entered into on behalf of the DAC must be continued to completion and/or transferred. Also, the DAC must ensure that the service company is not left out of pocket.
Will the service provider be holding fiat on behalf of the DAC?
No, Dacoco is only providing contractual services in return for payment. eosDAC will be charged an onboarding fee to cover some initial set up and contracting costs, but Dacoco will not be ‘holding’ any fiat for the DAC.
-Saro, Michael, Luke, Rob
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