1inch DAO Makes Bold Move by Hiring Legal Counsel

The vote for obtaining comprehensive legal support from Storm ended with an overwhelming majority of 96.45% in favor of it as the only choice.

1inch DAO hires legal team for decentralization risks

The 1inch decentralized autonomous organization (DAO) has recently made a groundbreaking decision by voting to hire permanent legal counsel. The legal team, provided by Storm Partners, a Geneva-based Web3 solutions provider, will assist 1inch in navigating the challenges posed by its decentralized nature.

The voting process, which took place until January 9, saw an overwhelming majority of 96.45% in favor of obtaining comprehensive legal support from Storm. This support will encompass a range of services, including regulatory compliance checks, entity structuring, governance policy development, contractual support, intellectual property protection, and legal defense against external claims.

Facing the Legal Challenges of Decentralization

The motivation behind the decision to hire permanent legal counsel stems from the tendency of courts to apply traditional legal principles to decentralized entities. Recent cases in Europe and the United States have demonstrated the need for decentralized organizations like 1inch to address corporate liability and regulatory obligations.

The DAO recognizes that regulatory risks, liability concerns, contractual ambiguities, and enforcement of rights matters will likely arise in the future. As an organization with ambitions to reshape the future of finance and empower individuals to take control of their wealth, 1inch understands the importance of addressing these legal challenges.

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Storm Partners: More Than Just Legal Support

Storm Partners, besides providing legal counsel, will also play a role in the internal regulation of 1inch. They will collaborate with the community to draft governance rules and policies that align with the decisions made collectively. In this dynamic partnership, Storm acts as a complement rather than a replacement for the community’s self-regulatory abilities.

Nicola Massella, the director of the Legal and Compliance department at Storm Partners, emphasized that the community will retain full control over the governance of 1inch DAO. Their task is to translate community decisions into a structured set of rules and legal frameworks.

A Proactive Approach to Legal Challenges

While DAOs have hired legal teams for specific court cases in the past, this move by 1inch is groundbreaking. It is the first time a DAO has directly hired a legal team. By proactively managing legal challenges, 1inch aims to safeguard the DAO and its members against unforeseen legal issues, including potential personal liability risks.

The decision to engage a legal team demonstrates 1inch’s commitment to the long-term viability and success of decentralized finance. It sets a historic precedent for DAOs and highlights the importance of proactive legal strategies in this emerging field.

Q&A: Addressing Readers’ Concerns and Curiosities

Q: Why does 1inch need legal counsel?

A: As a decentralized autonomous organization, 1inch faces unique legal challenges. The hiring of legal counsel is necessary to ensure regulatory compliance, protect intellectual property, and defend against external claims. Additionally, courts tend to apply traditional legal principles to decentralized entities, making legal counsel crucial in navigating corporate liability and regulatory obligations.

Q: How will Storm Partners contribute to 1inch’s self-regulatory abilities?

A: Storm Partners will collaborate with the 1inch community to draft governance rules and policies. They will work in accordance with community decisions, providing legal expertise to ensure these decisions are translated into structured rules and legal frameworks. Storm acts as a complement, enhancing the community’s self-regulatory abilities rather than replacing them.

Q: Is hiring a legal team a common practice among DAOs?

A: While DAOs have hired legal teams for specific court cases in the past, it is not a common practice for a DAO to hire a legal team directly. However, the move by 1inch to hire legal counsel sets a historic precedent in the DAO space and highlights the growing recognition of proactive legal strategies in decentralized finance.

Analyzing the Future Trends and Potential Opportunities

The decision made by 1inch DAO to hire legal counsel paves the way for other decentralized organizations to consider legal support as an essential component of their operations. As the industry matures, regulatory scrutiny and legal challenges will only increase. Therefore, companies like Storm Partners, specializing in providing legal services to DAOs, are likely to witness a surge in demand.

Looking ahead, legal expertise will become a critical aspect of the success and sustainability of decentralized finance. As decentralized entities continue to reshape the financial landscape, navigating the legal complexities will be crucial for their growth and adoption.

References

1. From Hackathon Project to DeFi Powerhouse: AMA with 1inch Network
2. USDC Issuer Circle Files IPO in the United States
3. SEC Asks Court to Consider Terraform Labs Ruling in Binance Case
4. MakerDAO’s Plan to Bring Back ‘DeFi Summer’ — Rune Christensen

In Conclusion

The decision of 1inch DAO to hire legal counsel from Storm Partners is a significant development for the decentralized finance space. By proactively addressing legal challenges, 1inch sets an example for other DAOs and underscores the importance of legal strategies in ensuring their long-term success. With the support of a legal team, 1inch aims to navigate regulatory complexities, protect intellectual property, and safeguard its members from potential liabilities. This historic move will likely inspire other decentralized organizations to prioritize legal support and further legitimize the flourishing DeFi ecosystem.

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