SushiDAO Seeks Shelter in Cayman Islands, Panama

The new legal structure will include the Cayman Islands DAO Foundation, the Panamanian Foundation and the Panamanian Corporation

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Source: DALL·E

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  • The implementation of the new legal structure received unanimous support from community members
  • DAO members cast 11 million voting tokens in favor of the proposal

SushiDAO, the governing body of decentralized cryptocurrency exchange SushiSwap, is implementing a new legal structure after receiving unanimous support from community members.

Sushi’s current administrative structure includes a DAO of community members with voting privileges, alongside an execution team that manages smart contracts and the front end of the protocol.

The new legal structure will split Sushi into three new entities: a Cayman Islands DAO Foundation, a Panamanian Foundation and a Panamanian Corporation.

The Cayman Island Foundation will oversee all administrative aspects of the DAO, including treasury, grants and on-chain governance management. It will also facilitate proposals and voting, and enter into agreements with service providers as part of the grant-making process.

Smart contracts related to Kashi — the exchange’s lending and margin trading platform and automated market maker — will be handled by the Panamanian Foundation, as well as staking.

The Panamanian Corporation, which will be a wholly owned subsidiary of the Panamanian Foundation, will manage and assist with developing and maintaining the web-facing apps that make Sushi’s protocol accessible to the public.

According to proposals, Sushi also looked into setting up governance in Switzerland but determined that it was inappropriate as the regulatory and taxation model was “not favorable to growth companies.”

SushiDAO opts to avoid “flawed” DAO legislation in Wyoming

Panama is an attractive place to incorporate due to its free economic zones, non-existent income and tax withholdings and physical proximity to the United States.

But Neil Bhasin, a community member of SushiDAO, said Panama was chosen to host its protocol governance as “Panamanian foundations are non-commercial in nature and do not have beneficial owners.” 

Further, Bhasin highlighted that “the corporate formation process results in two entities that can separately house the protocol and GUI [graphical user interface] layers, which reduces the need to form additional entities.” 

It is interesting to note that Wyoming, a US state which has catered to DAO LLCs, was not considered an appropriate home.

According to Bhasin, this was because “the Wyoming DAO legislation is widely accepted by those in the industry, including myself, as being flawed.” 

“It’s also untested in the courts. We’re meant to be offering protection to devs and ops [developers and operations] folks, not exposing them to experimental, untested, poorly drafted legislation,” he said.


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