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3. DEFINITIONS

  • "Accreditation Authority" means any public or private authority that a jurisdiction which adopts or transposes the Model Law recognizes as legitimate to ensure compliance with one or more Articles of the Model Law.

  • "Administrator" means a Person, irrespective of title, that is appointed in a manner specified in the By-Laws to take discretionary decisions, either individually or collectively with other Administrators, with regard to specific, predefined operations of the DAO.

  • "Airdrop" means a free distribution of Tokens initiated by a DAO to a Public Address, but does not include distributions of Tokens for which a person must execute a function to redeem the distributed Tokens.

  • "Asset" includes both On-Chain assets and Off-Chain assets.

  • "By-Laws" means the rules and regulations that govern the procedures followed by a DAO and the interaction of its Members and Participants, which must be set out in plain language, in text or sound, visual or audiovisual recording.

  • "Contentious Fork" means a Hard Fork that results in two divergent and potentially competing blockchains.

  • "Decentralized Autonomous Organization" (DAO) refers to smart contracts (i.e. blockchain-based software) deployed on a public Permissionless Blockchain,[^12] which implements specific decision-making or governance rules enabling a multiplicity of actors to coordinate themselves in a decentralized fashion. These governance rules must be technically, although not necessarily operationally, decentralized.

  • "Developer" means a person involved in the development or maintenance of the DAO, whether through the contribution of software code, design, business, legal or ancillary support.

  • "Dispute Resolution Mechanism" means an On-Chain alternative dispute resolution system, such as arbitration, expert determination, or an On-Chain alternative court system, which enables anyone to resolve their disputes, controversies or claims with, arising out of, or in connection with, a DAO. Any such award, decision or judgment will be accorded the same status and treatment as an international arbitral award.

  • "Externally Owned Account" means a Public Address controlled by a private key and that has no associated code.

  • "Failure Event" means a DAO encountering a technical bug or exploit which renders the DAO unoperational or fundamentally changes the expected operation of the DAO.

  • "GUI" means a graphical user interface, publicly accessible by all DAO Members and Participants, whether hosted via centralized or decentralized means, through which users interact with computer software via visual indicator representations. This can include, but is not limited to, a web interface or standalone application.

  • "Hard Fork" means a blockchain software upgrade that is not compatible with previous versions of the blockchain software, and therefore requires all users to upgrade.

  • "Jurisdiction" means a territory that is under a defined legal authority.

  • "Legal Representative" means a Person who is appointed in a manner specified in the By-Laws to perform procedural functions Off-Chain.

  • "Majority Chain" means the version of the chain accepted by more than 50% of the blockchain's validators following a Hard Fork.

  • "Meeting" means a synchronous or asynchronous event for the purpose of discussing and acting upon DAO-related matters by Members or Participants.

  • "Member" means any person or DAO who has governance rights in a DAO.

  • "Minority Chain" means the version of the chain that is not the Majority Chain following a Hard Fork.

  • "Model Law" means this DAO Model Law.

  • "Off-Chain" means any action or transaction that is not On-Chain.

  • "On-Chain" means any action or transaction that is recorded and verified on a blockchain.

  • "On-Chain Contribution" refers to any Token segregated and locked in one of the DAO's Smart Contracts for the purpose of Member buy-in to the DAO and the provision of withdrawable capital.

  • "Open-Source Format" means the Open Source Initiative's definition of open source.[^13]

  • "Participants" means any person interacting with or holding native tokens in a DAO other than Members.

  • "Permissionless Blockchain" means a public distributed ledger, allowing any entity to transact and produce blocks in accordance with the blockchain protocol, whereby the validity of the block is not determined by the identity of the producer.

  • "Person" means an individual, a company or any other body of persons.

  • "Proposal" means a suggestion for actions to be taken by the DAO, to be decided on in accordance with the By-Laws of the DAO.

  • "Public Address" means a unique, durable identifier that person(s) can transact with on a Permissionless Blockchain.

  • "Public Forum" means a freely accessible online environment that is commonly used for the exercise of speech and public debate.

  • "Public Signaling" means a declaration authorised by way of Proposal by the DAO in a Public Forum.

  • "Quality Assurance" means that the code of the DAO has undergone security review according to industry standards, namely: (1) the completion of professional software security audit with an audit report available to the public with no significant security risks remaining, as well as the completion of a public bug bounty; (2) a formal verification by means of a mathematical proof-based methodology in which the Smart Contract's bytecode is directly checked as correct-by-construction to show the full functional correctness of security-critical properties of the Smart Contract; or (3) any other process recognized as meeting the same security standards.

  • "Smart Contract" is code deployed in a blockchain environment. It is made of a set of predefined and deterministic instructions executed in a distributed manner by the nodes of the underlying blockchain network, if and when the underlying conditions are met. Execution of a Smart Contract will produce a change in the blockchain state.

  • "Token" means a record on a Permissionless Blockchain, typically representing an Asset, participation right, or other entitlement.

  • "Transaction" means a new entry in a Permissionless Blockchain, often but not exclusively, recording a change in ownership of an Asset or participation in a DAO.