Legal Wrappers for DAOs and The LexDAO Constitution

Think we’ve only been out there talking about “legal wrappers?” Nope. We’re using them too. Learn about our legal wrapper.

As you might expect from a bunch of legal minds, the first thing that LexDAO found itself concerned with upon summoning was how our DAO would be organized — legally speaking. We’ve already been out there talking about “Legal Wrappers” for DAOs so, here’s a look at where we landed as we deployed our own wrapper.

What is a legal wrapper?

A legal wrapper is pretty much just a boring old legal “company.” People have been using the legal system to organize themselves and handle their rights and privileges for centuries. DAO software lets us handle a lot of the internal admin for an organization in novel ways, but the way a group of people interact with the government hasn’t really changed.

So, a “legal wrapper”, in whatever jurisdiction it’s set up, is what we call the “wet” code. It’s comprised of the all of the non-automated, human-negotiated, contracts and filings needed to interface with a government.

The same way that DAOs are able to handle novel token incentivisation models, legal wrappers are massively flexible — ‘centuries of human scheming’ sort of flexible. There are b-corps and c-corps and LLCs, and on and on. All good options, for the right kind of organization.

LexDAO’s Legal Wrapper

To know which legal wrapper is the right one you really have to start from a look at what your organization is trying to do, so that’s where we started.

The LexDAO Mission (Roughly)

LexDAO is a non-profit cooperative, and the keeper of the “Web 3 Legal Engineer” moniker. Our mission is to continue to define the role of “legal engineer” and promote high standards for legal engineering work and education. As well as the growth of legal engineering as a practice and a public good.

Our Wrapper

LexDAO, “the DAO” has organized itself as a Wyoming Un-incorporated Non-Profit. For organizations like LexDAO, with a nonprofit and educational purpose, there are advantages of unincorporated nonprofits over whatever the “default” organizational type may be without a legal wrapper (usually a “general partnership”.) We might be the first formally tokenized version of such an entity. Maybe not 🤷‍♂️ But, it’s cool either way. 🚀

Articles of Incorporation

As part of setting up our wrapper, we’ve generated a DAO constitution to guide our collaboration with each other and the outside world. Often these are called “articles of incorporation”, and they are frequently filed with the state as a declaration of the intent of the members of the organization. In our case we’re unincorporated, so we just have to tell the state we’re a non-profit, and we get some extra protections.

Operating Agreement

Next step in legal wrapper setup is what’s usually called an “operating agreement.” It’s mainly just a contract among all the partners that lays out the rules you’re all agreeing to follow.

The LexDAO Constitution

Because of our unique org structure we decided to call this document our “constitution”. We expect that it will evolve over time. Already the document makes reference to documents like our handbook, which we expect will evolve at a faster rate. Either way, read up if you want to know how we do things over here:

The text of our constitution is available on Github: https://github.com/lexDAO/LexDAO-Constitution

And the LexDAO LDM holders have ratified the current version of the document on-chain, via vote: https://mainnet.aragon.org/#/lexdao/0x82c603da6b707e99d16e3931414c2c8eafa76bf0/vote/84/

The Real Work

That’s our legal wrapper, now the real work starts. We have structures in place, and the protections that come with properly applying both smart and dumb contracts — both wet and dry code. Now we need to decide what it means to be a legal engineer, and how to grow our expertise and our ranks.

Need help finding a legal wrapper?

LexDAO Legal Engineers are here to help. Use the links at the bottom 🚀

Join Us!

LexDAO is a maximally open project, everyone is welcome to take part and work toward a LexDAO Legal Engineer certification. (More on this soon.) If you are interested in the intersection of Web 3, transactional automation, and the law/government, maybe you should take a look.

https://lexdao.org or https://lexdao.chat

More on legal wrappers:

Special thanks to _g4brielShapir0 from whose work we started when generating our constitution. Find that document here.