Hi all, thanks for the comments and questions! We’ve also enjoyed chatting w/ delegates and community members on our various calls over the last week and a half. Answering a few questions below:
General Protocol Fee questions:
(cc @WeAreAllSatoshiN @bendi ) DUNI will allow its Members to navigate the nuanced concerns (e.g., taxes and tax reporting, money services business issues, securities law) from a place of greater certainty. We have been monitoring the regulatory environment closely, and are excited to share our evolving thoughts on how to best implement the protocol fee in the near- to mid-term.
Once the DUNI proposal is enacted, any proposals passed and executed through Uniswap Governance will be legally binding on DUNI. There isn’t a separate “pause” or veto mechanism, so it’s important that Members review RFCs and proposals carefully before they advance, and discuss them with their personal advisors as needed.
That said, DUNI’s administrators owe duties of loyalty and due care to the Association. If a proposal were clearly unlawful (as opposed to just a bad idea), they would be highly unlikely to enact it, since doing so could carry real-world consequences beyond civil liability (and criminal liabilities are not covered under the limited liability shield of the DUNA). This is one reason community diligence at the discussion and voting stages is so important. Both the Administrator and the Ministerial Agent are empowered to make their concerns known and would do so in this case.
This is an important question. As detailed in Article III of the Association Agreement, highlighted in the Summary of the Association Agreement, and addressed in the FAQs, if you hold UNI tokens (i.e., greater than 0 UNI tokens) and engage in Uniswap Governance (by voting, delegating, or submitting/posting proposals), you are considered a member of DUNI. Membership is intentionally fluid, so there’s no requirement to disclose personal identity information, and DUNI will not collect, store, or report member data. If you don’t meet those criteria, you are not a member for liability purposes.
Members are covered by the liability protections laid out in the Wyoming DUNA statute. By default, members are not personally liable for the debts, obligations, or liabilities of the Association solely by reason of being a member or participating in governance.
Administrators also benefit from statutory indemnification: if they act in good faith and in accordance with their duties of loyalty and due care, they are shielded from liability, and the Association may indemnify them against related claims or expenses.
On external liability (particularly in non-U.S. jurisdictions) there is no single globally enforced mechanism. The DUNA still provides real benefits by clarifying who can speak on behalf of the Association and enter into contracts. But, as with any U.S. entity, recognition abroad ultimately depends on the laws of the foreign jurisdiction, principles of international comity (i.e., the deference courts afford to one another), and where the underlying activity occurs.
The indemnities for UF, Cowrie, and other administrators are structured as standard protections: they apply so long as those parties act in good faith, within the scope of their authority, and in accordance with their duties.
These protections do not extend to acts of gross negligence, willful misconduct, or knowing violations of law. In those cases, individuals could be held personally responsible for resulting harm.
If a dispute arose, the outcome would ultimately be adjudicated through the courts. In practice, however, issues are more likely resolved through governance, such as by terminating or replacing an administrator, unless the financial consequences are significant enough to warrant litigation.
The Administrator Agreement and Ministerial Agent Agreement each contain specific, limited grants of authority. These authorities are also summarized in the FAQ, and anything outside of those enumerated powers is prohibited.
Cowrie Administrator Services is required to provide quarterly financial statements, including schedules showing how funds were used. This provides a transparent record of activity. Separate quarterly attestations are unnecessary because the Administrator and the Ministerial Agent are already legally bound to act only within the scope of their limited authority, and any action outside those bounds would be invalid.
The process for replacing either Cowrie (as Administrator) or the Uniswap Foundation (as Ministerial Agent) is governed by the Association Agreement and their respective service contracts, which will be in force if this vote passes. In both cases, Members of DUNI retain the ultimate authority to amend or revoke those delegations of authority through governance proposals.
- Cowrie (Administrator): The Administrator Agreement linked in this proposal and here requires Cowrie to continue performing its functions for a transition period if terminated. This ensures an orderly handoff of documents, accounts, and responsibilities. Any governance proposal to replace Cowrie would specify the successor and set the parameters for that transition.
- Uniswap Foundation (Ministerial Agent): As per the Ministerial Agent agreement, replacement would similarly occur through a governance proposal. A reasonable transition period would be built into that proposal to ensure continuity and transfer of records, EIN, and contractual relationships.
Ultimately, control sits with the Members and the Administrators / Ministerial Agent only have the delegated authority set forth in their respective agreements. Governance can, at any tim,e choose to revoke or amend that grant of authority.
One of the UF’s north stars is transparency. We’ve committed to (and provided) quarterly and annual financial updates, worked with the UAC to instantiate the Foundation Feedback Group, and generally make ourselves available to delegates to answer questions to the best of our ability. We will maintain these values in our role as Ministerial Agent. Furthermore, reporting requirements for both the Administrator and the Ministerial Agent are set out in their service agreements. For example, Cowrie is obligated to provide quarterly financial statements and the UF is required to maintain records and provide periodic reports.
Independent annual reviews are possible, but the scope and mandate for those would need to be defined through a future governance proposal by the membership. Based on this proposal, Cowrie’s term runs through the end of 2026, at which point a subsequent proposal will need to be passed for an extension. Any such proposal would presumably include a holistic review of their activities during the term.
As for a log of governance instructions, the onchain record already serves this function, providing a transparent and immutable history of proposals and executions. Front-ends such as Agora and Tally provide visibility into those proposals.
The limited authorizations of the administrators often involve sensitive matters such as tax positions or litigation, where premature disclosure could harm DUNI. For that reason, some discretion is necessary for the design to be effective.
That said, the expectation is that redactions, if any, would be narrowly tailored, limited to legally or strategically sensitive information, and disclosed at the earliest appropriate time. Governance always retains the ability to revisit and refine reporting practices if members believe additional guardrails are needed.
Quarterly financial statements and schedules (as required under the Administrator Agreement) will provide detailed visibility into how the $16.5M reserve is maintained and spent. Because Uniswap Governance is only now wrapping itself in a legal entity, it isn’t feasible to lock in a precise line-item budget within this initial proposal.
Importantly, these funds are intended to ensure that DUNI always has sufficient reserves for formation, tax, defense, and compliance matters, including unforeseen needs to protect the community over time. While they are not held in the protocol’s Treasury, they are property of DUNI and are not structured with a return-of-funds policy.
As Ministerial Agent, the UF will be managing the liquidation of UNI for USD to cover the expenses noted above. Our incentives are to execute this liquidation in as efficient a manner as possible, to a) maintain our duty of loyalty and due care to the members and b) minimize the times we need to go through the governance process to get more funds. With that in mind, flexibility in liquidation strategy is essential to achieving best execution and preserving value. The immediate priority is ensuring that DUNI has sufficient cash reserves on hand to meet obligations reliably. The UF itself is an example of this flexibility working in practice. We received a large tranche of UNI after our funding proposal this spring and worked with several different counterparties to harvest enough USD to fund the next 9 months of our operations and grants runway without materially impacting the market.
Any resolution of IRS matters will be reflected in the quarterly financial statements, with supporting schedules showing how funds were used. The Association Agreement and service contracts already limit authority to what is expressly delegated, so no administrator or agent has discretion to exceed those caps.
As for ongoing tax posture, DUNI’s treatment will be clarified and disclosed once the IRS matters are resolved, and summarized positions will be shared with the community through financial reporting.
On a go-forward basis, Cowrie will monitor governance proposals and when appropriate weigh in to highlight the tax implications of any proposal to spend UNI from the protocol treasury; proposers can work that information into their requests.
The Ministerial Agent has the obligation to coordinate the legal defense fund within its duties of loyalty (acting in the best interests of DUNI) and due care (acting prudently and responsibly). These duties are legally enforceable. In practice, this means the defense must be reasonable, tied to legitimate DUNI needs, and consistent with DUNI’s purpose and undertakings.
If the Ministerial Agent were to make expenditures outside this mandate, there are clear repercussions. Delegates can vote to remove or replace administrators, and members or affected parties can bring claims to recover misused funds. Courts can order restitution, block improper use of funds, or even hold administrators personally liable for damages.
The design of these authorizations is intentionally narrow. Administrators and the Ministerial Agent have very limited discretion, and the judgment that does exist must remain with those entrusted to carry it out. Attempting to pre-commit to KPIs or highly prescriptive execution metrics would undermine that structure and reduce flexibility, which could impair effectiveness.
The community’s protection comes from two safeguards: (1) members retain the authority to choose and replace who holds these roles, and (2) administrators and the Ministerial Agent incur significant fiduciary and legal obligations in carrying them out. These built-in checks materially de-risk execution while preserving decentralization.