[ARCHIVED] DAO Collective to acquire governance in a fully regulated Web2.5 infrastructure

DAO Collective to acquire governance in a fully regulated Web2.5 infrastructure.

5th of December 2022
Group Entities: Represented by @larhribAmine

DLTIFY - Crystaldash LIMITED Gibraltar

DLTify UAB Lituania

Operating Licences:

DLTify (Cryptaldash Ltd) is regulated by Gibraltar Financial Services Commission (reference number: 117043).

  • Regulated activity
    • Providing distributed ledger technology services
  • Service (DLT)
    • 3 DLT Provider – CAT 3 , Custody of clients’ assets and organizing digital asset Markets.

DLTify UAB is a registered EMD Agent of PayrNet Limited, an Electronic Money Institution authorized by the Financial Conduct Authority (reference number 900594).

Emoney and fiat account serviced by DLTify UAB, a subsidiary of digital asset provider Cryptaldash Ltd Gibraltar. DLTify UAB is registered with the Bank of Lithuania as an agent of EMD UAB ‘PAYRNET’. DLTify UAB is registered in Lithuania (Company code: 305684021).

Visa Card is issued by PayrNet Limited. PayrNet Limited is authorized by the Financial Conduct Authority to conduct electronic money service activities under the electronic money regulations 2011 (Ref: 900594).

Legal Ownership: 100% privately owned, single owner

Background and Introduction

As we witness the development of the current regulatory environment, we note a common misunderstanding of how comming regulations will impact the DAO ecosystem as well as the ability of DAOs to comply.

Common Misunderstandings include:

  • DAOs will be forced as single entities to comply with local and international regulations
  • Each DAO will be required to apply for required licenses to offer regulated services
  • Each DAO will be required to process PII * Personal identifiable information
  • Each Decentralized derivative and spot exchange will be required to fetch operating licenses

Given the current novelty status of DAOs as non-corporate entities, as well as the distributed nature of DAO’s.

It will most likely be the case that compliance to regulation will be required at the service provision level, rather than at the entity level. Meaning that a collective of DAOs can share a common infrastructure when it comes to :

  • A Common KYC / AML, peps, and sanctions infrastructure
  • Sharing compliance overhead
  • Sharing operational licenses
  • Sharing the utility of any regulated centralized infrastructure
  • Sharing the a common transactional or CeFi data feed.

Our aim in this first draft is to initiate the conversation, engage the discussion and find an adequate format in making a regulated Web2.5 Infrastructure beneficial to DAO collectives,we are bringing here initial ideas , and not a final solutions your feedback is highly appreciated.

Executive Summary

The new developments of the crypto industry has created an environment in which many changes are eminent, which may set us back as an environment.

Expected changes will affect.

  • The ability for DAOs to provide regulated services, this maybe exchange, derivatives, lending, and borrowing, etc
  • Prevented from Accessing and hosting certain types of data
  • Owning certain types of assets such as real assets
  • Heavy enforcement of such regulations, targeting project leaders, .
  • AML-KYC requirement enforcement.
  • Onramp and emoney service restriction.
  • DAO Members and founders persecution via existing Tax, AML and corporate legal frameworks.

The good news is that many Web3 builders share common values.

  • We believe in self-sovereignty

  • We are agile, innovative, and resourceful

  • We want the DAO revolution to succeed.

  • We believe in open-source technology and its philosophy

  • We need and therefore support, bold or wild ideas that embrace new ways of doing things.

In this first draft you will find :

  1. What we are proposing
  2. Description of the infrastructure capabilities and features
  3. How will the DLTify DAO function
  4. Description of the DAO’s already existing tools and resource


An opportunity for a DAO Collective to acquire governance in a fully regulated Web2.5 infrastructure.

We propose the DAOfication of a fully regulated digital Assets infrastructure. with built-in Cefi , Defi, and Regulatory Capabilities. Which we will call DLTify DAO

DLTify DAO memberships are open to DAOs only.

Member DAOs will participate in all aspects of the governance of the DLTify DAO.

DLTify DAO members will have unrestricted access to the DLTify regulatory, CeFi , and Defi capabilities, and are encouraged to integrate such capabilities into their current usecase, especially in regulatory sensitive components.

Background and context DAOs

As DAO structures grow, they are taking significant risks when it comes to engaging in activities that may risk threatening their decentralized nature, such as

  • Engaging in onboardings

  • Engaging contracts via foundations

  • Engaging in for-profit activities

  • Engaging in Calls with centralized service providers Ect …

In addition, the current structures of DAOs are prevented them from

  • Holding real-world assets
  • Engaging in certain types of contracts
  • Engaging in regulatory sensitive activities
  • Onboarding with certain centralized service providers
  • Inability to access traditional banking and other regulated services while maintaining decentralization.
  • Inability to meet Anti-Money Laundering (AML), Know-Your-Customer (KYC), without processing PII *Personal Identifiable Information.
  • Inability to onboard traditional service providers, while maintaining a significant level of decentralization.
  • Lack of recognition as a legal entity
  • Personal liability risks on DAO members and founders.

And because regulation and enforcement is coming many issues will arise

  • Tax and personal liability on DAO leaders
  • Onramp’s Offboarding of DAOs
  • Outlaw of DAOs falling within the substance over form argument
  • Pressure to comply with AML and KYC requirements

What if

A DAO collective is able to acquire governance over an infrastructure that allows it to .

  • Access traditional banking and other regulated services while maintaining decentralization.
  • When required meet Anti-Money Laundering (AML), Know-Your-Customer (KYC), without processing PII *Personal Identifiable Information.
  • Onboard traditional service providers, while maintaining a significant level of decentralization.
  • Comply with the law when compliance is required
  • Avoid exposure to personal liability risks and tax risks for its members

Solution and Benefits to the BitDAO Ecosystem

  • DAOs can access regulation-sensitive services and Data
  • Can access tools to substantially reduce or eliminate regulatory risks to the DAO and its members.
  • DAO’s can deploy use cases on top of DLTify Infrastructure capabilities.
  • When required meet Anti-Money Laundering (AML), Know-Your-Customer (KYC), without processing PII *Personal Identifiable Information.
  • Can launch Cefi products such as branded DAO Card program, without the risks related to the centralization of the DAO.
  • And many more features that can serve the DAO collectives that will enable the deployment of relevant use cases.


Governance NFT Distribution

  • One DLTify Membership NFT is trustlessly auctioned every 7 days,
  • Capping of the supply will be voted by the governance
  • 100% of DLTify auction proceeds are trustlessly sent to the treasury.
  • Settlement of one auction kicks off the next.
  • All DLTify NFT holders are members of DLTifys DAO.
  • DLTify DAO reserves governance uses a fork of Nouns DAO
  • One DLTify NFT is equal to one vote.
  • The treasury is controlled exclusively by DLTify NFT holders via governance.
  • Every DLTify NFT is linked to an artwork.
  • No explicit rules exist for attribute scarcity; all DLTifys are equally rare.
  • DAO early contributors receive rewards in the form of DLTifys (10% of supply)

Phase 1 | Bootstrapping Phase

BIT DAO Seed Funding.

Allocation of Seed funding to a trustless Bidding contract of 2000 ETH or BIT token equivalent.

The bidding contract will participate in auctions on behalf of the BIT DAO.

The Building contract will acquire the total amount of the allocated ETH, over the course of several auctions, and will transfer the acquired membership NFTs to its BITDAO Reserves.

Voting Rights: one NFT one vote, the BIT DAO may transfer the voting rights to a third party.

Phase 2 | Prolifiration

The proliferation goal is to have a sustainable participation rate in the NFT bidding process.

While the supply to the Membership NFTs may be capped, it is important to form a sufficient level of reserves allowing for the Growth of the infrastructure.

Groth of the infrastructure means acquiring more licenses, onboarding more partners, and global scaling.

This phase is designed to give governance control to the DAO Collective and to improve utility. This proposal does not define a precise structure for Phase 2; the collective should establish best practices for growth.

Underlying network tokenomics may be adopted here, favoring the adoption of Bit token.

The Infrastructure

DLTFY is a fully regulated Web 2.5 infrastructure, acting as a regulatory compliant environment for DAOs use case deployments while maintaining a significant level of decentralization for the DAO collective.

Such an environment will help :

  1. Mitigate the upcoming regulatory risks
  2. Help tool the voluntary transition of the DAOs to comply with the upcoming regulatory requirement.
  3. Equip DAOs with access to the necessary infrastructure that offerers opportunities for growth in innovation, while avoiding any regulatory risk to its members and innovators.

In short, this will allow regulatory compliant sandbox environment for the deployment of all regulatory-sensitive use cases of a DAO ecosystem,

Infrastructure Capabilities

DLTify infrastructures offer member DAO’s following capabilities

A regulated environment that gives DAOs a fully compliant infrastructure with already built-in access points to vital features, while maintaining a significant level of decentralization.

  1. Digital asset Capabilities

    Issue proof of reserves.

    Proof of real-world assets.

  2. E-money Capabilities

    Access to fiat onramp and accounts for your users.

    Issue and sponsor payment cards for your users.

    Access to open banking Data

  3. Data Capabilities

    Onchain Proof of KYC Solution

    Access to various DATA oracles

Regulatory Capabilities

Regulatory capabilities currently include

A Regulatory compliant implementation model Was developed in conjunction with WACEO a DAO-focused non-profit, allowing us to innovate in the following area.

  • DAO onboarding and Contract Law between DAOs and corporations.
  • AML and KYC in the context of DAO’s, foundations representing DAO’s and general legal representation including notifiable positions.
  • Best practices in maintaining a significant level of decentralization in the context of DAOs.

Financial Services,Data Bridge, and Oracles Infrastructure
DLTIFY will provide its members access to data provided by the open banking financial infrastructure as well as transaction Data bridge allowing the flow of data between Cefi, Smart contracts, and DAOs.


If we see interest in the above idea, we shall follow up with a more detailed plan in terms of DAO structuring, project-level funding, as well as other details related to infrastructure tool developments, etc.

In accordance with the forum archiving policy , this discussion will be moved to the General Archive