The SushiSwap community proposes a Swiss legal structure to limit DAO liability

SushiSwap (SUSHI), a community-led suite of decentralized finance (DeFi) tools, plans to implement a legal structure aimed at mitigating risks for token holders and members of the Sushi protocol.

Sushi’s new legal structure is based on a community-approved one proposal dated March 20, stating the need for an association or foundation to provide legal clarity and administrative support for SushiDAO.

According to applicant and SushiSwap community member, Tangle, the intended foundation will play a key role in limiting liability for contributors and consequently fueling future growth of Sushi.

In view of the possibility of reducing risk and limiting liability through legal clarity for owners and contributors, the proposal received a 100 percent vote for the implementation of the legal structure.

Voting Results of the Sushi Legal Structure Proposal. Source: Sushi Forum

Tangle estimates upfront costs of up to $100,000 and recurring costs of $10,000 to set up the foundation:

“There are several jurisdictions that can be considered for the formation of a DAO entity, but Swiss association law is currently the leading solution.”

Estimated budget for start-up. Source: Sushi Forum

To build the foundation, the sushi community will implement a four-step process that includes determining and establishing members, token distribution and transfer, and drafting the foundation’s charter.

The proposal also includes the need for service companies, including “DevCo service companies and all other key contributor companies”. People residing in crypto-friendly jurisdictions are considered ideal candidates for membership in the foundation.

Complementing the discussion, community members highlighted the importance of defining the use of the foundation and ownership:

“It’s definitely a must, it really is the time for Sushi to update itself and have legal protections for all contributors.”

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As smaller crypto communities slowly break into the mainstream, foundations play a crucial role in determining the future roadmap and relevance of the project. In an attempt to weed out copycats, the Dogecoin Foundation registered “Doge”, “Dogecoin” and associated logos as trademarks in the European Union.

As Cointelegraph reported, the Dogecoin Foundation has had numerous issues with misuse of its name and imagery. According to ex-director Ross Nicoll, multiple parties registered trademarks for Dogecoin, and “in the summer of 2021 there was a potential lawsuit against the developers by someone who claimed we were responsible for their funds.”