G. Proposal to The DAO
- Otonomos BCC Pte. Ltd. (“the Company”) was founded in 2014 and is headquartered in Singapore, with offices in Hong Kong and London.
- The Founder, Han (Verstraete), has a proven track record as entrepreneur with several ventures behind him and experience in the incorporation and offshore fund markets when he was at Goldman Sachs earlier in his career. Han has been based in Singapore since 2013 after spending most of his professional life in London, where he read a LL.M. at the London School of Economics in 1994-95.
- In July 2015, Otonomos graduated from the FinTech Startupbootcamp Singapore.
- In October 2015, Mano Thanabalan joined Otonomos as its main Full Stack Developer, heading a bench which has since grown to 5 full-stack developers.
- Profiles of all team members can be found on the Otonomos website.
- In September 2015, the Company raised US$200,000 in angel money, mainly from Singapore-based finserv professionals.
- In April 2016, the Company closed a US$ 1.6 million Seed round of funding led by Fenbushi Capital (“Fenbushi”), a pure blockchain focused investment fund led by the founder of the Ethereum Foundation and inventor of Ethereum, Vitalik Buterin.
- Dymon Asia Ventures in Singapore, an alternative assets manager with US$2.5B in Assets Under Management, is the second investor.
- Otonomos offers a secure digital share wallet which serves both as a Know-Your-Customer/Anti-Money Laundering compliant registry of ownership as well as a mechanism for peer-to-peer transfer of private company shares on the Ethereum blockchain.
- As a user, the first step to get access to your share wallet is to go through the onboarding process. This involves a typical AML / KYC check, after which a private share wallet is created.
- As part of the onboarding process, each user is assigned a randomly generated private key. This Private Key is the password with which a user can authorize any action on the dashboard.
- In order to make it easier to remember or store the private key, it is encrypted into a 12 word phrase, which is easier to store and retrieve.
- From the dashboard, users can manage any company or shareholding, significantly simplifying portfolio management for fund managers, adminstrators, and trustees.
- There are five main tabs on the dashboard: Overview, Share Wallet, Capitalisation Table, Fundraising, Boardroom and Documents
- Through these tabs, users can manage their shareholding in a company. For example, it is possible to see the exact current status of each company, and see the entire history of how a company developed over time. A document room enables retrieval of all relevant company documents, which are stored in encrypted format.
- The power of smart contracts becomes clear in the transfer, fundraising, and boardroom functions. As the governance rights of each shareholder is programmed into smart contracts on the blockchain, it is possible to issue and sign board or shareholder resolutions, appoint or remove a Director, transfer shares to a new or existing shareholder, and even raise new equity funding with only internet access and each relevant user’s Private Key.
- The Otonomos dashboard sits almost entirely client-side, with only trivial functions such as graphic assets living on AWS. Our tech stack looks as follows:
We believe the Ethereum community as a whole has a once-in-a-generation chance to leapfrog the heavily centralised, cliquish VC funding model of yore and replace it with a decentralised, frictionless and smart-contract powered funding platform for its ecosystem.
Otonomos would like to apply for a grant from The DAO to:
- seek validation for its proposed legal structure for The DAO; and
- further develop its Ethereum-powered dashboard to enable The DAO to govern itself and manage the projects it funds.
Legal validation
Otonomos would take it upon itself to do the necessary legal research and marshall the required resources with the aim to settle on a legally valid operational mode for The DAO.
This validation would include:
- an overview of the jurisdictions which are least resistant to The DAO’s funding model and investment activities
- outside counsel legal opinion on our proposed legal template for the DAO
- a model set of governance protocols and smart resolutions for The DAO
- a further examination of the trust structure and how it applies to the relationship between DTH as beneficiaries of a decentralised autonomous trust (DAT)
- the optimal deed for the DAT, and the jurisdictional, legal and tax aspects of the DAT including the optimal structure and jurisdiction of the trustee
- a model set of by-laws and constitutional documents for real-world companies that want to submit proposals for funding to The DAO
Dashboard development
- a modification of the existing Otonomos dashboard offered to incorporated companies to accommodate for the specific structure of The DAO, with the view to giving DTH a front-end window to vote on proposals and monitor the projects it agreed to fund
- development of an aggregate view function that allows each DTH to see the projects funded by The DAO or a subset of DTH
- a full code repository of all smart contracts related to the governance of The DAO
- a full suite of smart contracts that incorporate the DAT and govern the relationship between the DAT and the DTH as its beneficiaries, including the resolution and trust smart contracts and the identity smart contract
Estimated budget
- We estimate for an overall budget of US$ 520,000. We have provided a breakdown of this budget here.
- We propose a tiered funding with a first tranche of US$ 200,000 by end of May and a further tranche of US$320,000 by end June, subject to the deliverable specified under the section on “Timeline” below.
All funding would be to a designated Ether wallet controlled by Otonomos as a company, and we would apply the Otonomos-developed Smart Synthetic Equity contract to allow DTH control over how the funding is allocated and used.
We would make our findings and results, including model code that takes into account the settled legal structure for the DAO, available on GitHub for the benefit of the wider Ethereum community.
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On the legal side, we have already reached out to some of the world’s most respected legal authorities on trust structures, and have put requests for proposal out to 5 top tier global legal firms. In addition, we are liaising with Stanford University’s CodeX Smart Contracts group, where the idea for Otonomos was born back in 2014, to provide research assistance and legal support. With this in mind, we aim to have preliminary results published by mid-July, with a settled legal template by September.
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On the development side, we aim to launch a beta dashboard for the governance of The DAO by mid-July. Further monthly releases are scheduled to include the SSE Smart Contract(s) and corresponding front-end interface for both The DAO and the DAT.