Case Study – Gearbox DAO
Introduction to Gearbox
Gearbox (https://gearbox.finance) is a blockchain protocol that brings about a paradigm shift in the DeFi landscape by providing on-chain leverage facilities. Governed by Gearbox DAO, which comprises $GEAR token holders, the protocol has been driven by decentralized decision-making since its inception.
Engagement Process
First Contact
Contributors from GEAR DAO reached out to DAObox to explore possibilities of creating a legal structure for the DAO. Subsequently, DAObox participated in an AMA session on Discord, centered around the prospect of structuring GEAR DAO. During this session, we outlined our strategy, addressed questions related to the proposed legal wrapper, and detailed the control mechanisms and system of checks and balances we intended to put in place.
Preparation Stage
Having assimilated the objectives of the DAO contributors and their vision for the legal wrapper, DAObox drafted a proposal that was shared with the DAO on their forum.
We proposed establishing the legal wrapper as a Cayman Islands ownerless foundation, which we consider to be one of the most cost-effective and flexible DAO structures currently available. DAObox offered to assume all key roles in the foundation, including director and supervisor positions.
Substantial discussions within the GEAR DAO ensued after our proposal was published, culminating in a consensus, followed by a formal governance vote on Snapshot, which concluded on December 03, 2022.
Commencement and Formation
Upon the approval of the proposal, funds were allocated by the GEAR DAO financial multisig to cover the initial expenses and the management fee for DAObox over a two-year term.
DAObox produced the foundational documents and established the Gearbox Foundation. On February 3, 2023, a formal notice of formation was posted on the DAO forum.
Token Distribution
Subsequent to the formation of the Gearbox Foundation, the DAO initialized the distribution contract and transferred DAObox's token incentive to this contract, ensuring distribution in line with the designated vesting schedule.
Final Configuration
On March 02, 2023, DAObox proposed the GEAR DAO to determine the long-term and short-term assignments for the Gearbox Foundation, encompassing IP and code acquisition and protection, technical infrastructure management, fiat account management, operation of the protocol's web interface, etc.
The proposal further included:
recommendation on the appointment of designated DAO representatives with the authority to liaise with the Gearbox Foundation on specific infrastructure management issues; and
proposal to allocate the 2023 annual budget of 20,000 USDC to adequately meet the anticipated costs related to tasks set forth by the DAO.
The GEAR DAO adopted a resolution confirming these appointments through a governance vote on Snapshot, which concluded on March 11, 2023.
Operations
From the outset, DAObox assumed the management of the Gearbox Foundation, overseeing the day-to-day operations of the wrapper as its acting director.
As per the DAO's mandate, we undertook the acquisition and management of IP and related rights from DAO contributors and assumed supervision of all technical infrastructure associated with the protocol, including domain names and GitHub repositories.
On June 09, 2023, a special interim report was published by DAObox on the Gearbox forum marking the completion of these tasks.
It's crucial to note that the GEAR DAO maintains control over the Gearbox protocol, its smart contracts, multisig wallets, and treasury.
Reporting
DAObox routinely provides reports to the DAO, documenting its performance, fund usage, and major activities carried out by the Gearbox Foundation.
On August 21, 2023, as the acting director of the Gearbox Foundation, DAObox presented the first semi-annual report to the GEAR DAO.
DAObox has prepared and compiled the Annual Report for GEAR DAO for the year 2023
Current Position
The Gearbox Foundation presently holds the ownership of the IP related to the Gearbox Protocol, manages third-party service subscriptions and GitHub, oversees social network accounts, domain names, and has established a fiat payment account for the wrapper.
The foundation is poised to register trademarks associated with the protocol and routinely advises the DAO on legal aspects and potential future directions.
Link Tree
Proposal on setting up a legal structure for the GEAR DAO;
GEAR DAO Snapshot vote (GIP) on the establishment of the legal wrapper;
Notice of formation of Gearbox Foundation;
Proposal on the determination of long-term and short-term assignments for the Gearbox Foundation, and draft DAO resolution proposed by DAObox;
GEAR DAO Snapshot vote (GIP) on the determination of assignments for the Gearbox Foundation;
2023 Semiannual Report (Jan – June 2023);
2023 Annual Report.
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