Home News SushiSwap community proposes Swiss legal structure to limit DAO liability

SushiSwap community proposes Swiss legal structure to limit DAO liability


SushiSwap (SUSHI), a community-led suite of decentralised financial (DeFi) tools, seeks to establish a legal structure targeted at minimising risks for Sushi protocol token holders and participants.

In fact, Sushi’s new legal structure will be based on a proposal adopted by the community on March 20 that identified the need for an association or foundation to help give legal clarity and administrative support for SushiDAO.

Tangle, the proposer and a member of the SushiSwap community, believes that the proposed foundation will play an important role in lowering contributor liability and, as a result, driving Sushi’s future growth.

Because of the potential for risk minimization and liability restriction through legal clarity for holders and contributors, the proposal won a unanimous vote in favour of putting the legal structure in place.

Sushi Legal Structure proposal’s voting results. Source: Sushi forum

Moreover, Tangle predicts that establishing the foundation will cost up to $100,000 upfront and $10,000 per year:

“Forming a DAO entity can be done in a variety of jurisdictions. But Swiss Association legislation is currently the most popular.”

Estimated budget for foundation. Source: Sushi forum

The Sushi community will use a four-step procedure to develop the foundation. Which includes choosing and creating members, token distribution and transfer, and the foundation’s draught articles.

Service entities, such as the “DevCo services entity and any other essential contributor entities,” are also mentioned in the proposal. Additionally, individuals that live in cryptocurrency-friendly jurisdictions will be considered ideal members of the foundation.

Community members added to the conversation by emphasising the necessity of clarifying the foundation’s purpose and what it owns:

“It’s essential; now is the time for Sushi to modernise and provide a legal shield for all donors.”

In like manner, as smaller crypto communities gain traction in the mainstream, foundations play an increasingly important role in determining the project’s future roadmap and relevancy. The Dogecoin Foundation registered “Doge,” “Dogecoin,” and associated logos as trademarks in the European Union in an attempt to weed out imitators.

The Dogecoin Foundation, as previously reported, had various concerns with the abuse of its name and graphics. Likewise, several parties were registering trademarks for Dogecoin, according to ex-director Ross Nicoll. And “there was a prospective lawsuit against the developers in the summer of 2021 from someone who claimed we were accountable for their cash.”

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