7LANDS COMMUNITY DAO RULES

Community DAO Rules

Effective 3rd December 2022.

Note
These rules are taken to constitute the terms of a contract between the Community DAO (“DAO”) and its members.

PART 1 – PRELIMINARY
1 Name
The name of the collective agreement is “Community DAO Agreement”
2 Purposes
The purposes of the DAO are:
(a) to enable participation in the 7Lands metaverse for individuals unwilling or unable to purchase land in their own right or want to participate in fractionalised 7Lands land ownership;

(b) to provide an equal opportunity to individuals who wish to participate in the land sale;

(c) to facilitate and coordinate the joint management of land in the 7Lands metaverse.
3 Financial year
The financial year of the DAO is each period of 12 months ending on 30 December.
4 Definitions
In these Rules-
Basic proposal means a proposal in accordance with rule 22;
Board means the Board having management of the business of the DAO;
board meeting means a meeting of the Board held in accordance with these Rules;
board member means a member of the Board elected or appointed under Division 3 of Part 5;
Election proposal means a proposal in accordance with rule 31;
Final proposal means a proposal in accordance with rule 23;
financial year means the 12-month period specified in rule 3;
general meeting means a general meeting of the members of the DAO convened in accordance with Part 4 and includes an annual general meeting;
land means NFTs which represent parcels of land in the 7Lands Metaverse;
management portal means a platform which allows DAO Members to submit and vote on proposals as well as communicate with 7Lands to manage land and other assets;
member means a person or an entity who has owns a unit or multiple units of the DAO;
proposal means a suggestion to change the DAO submitted by a member;
unit means a fungible token which represents 1/5000th ownership of the DAO;
Remuneration proposal means a proposal in accordance with rule 32;
Special proposal means a proposal in accordance with rule 24.
PART 2 – POWERS OF THE DAO
5 Powers of the DAO
(1) The DAO has power to do all things incidental or conducive to achieve its purpose.

(2) Without limiting subrule (1), the DAO may, to achieve its purposes-

(a) acquire, hold, distribute, dispose of and otherwise deal with real or personal property, including land and tokens that the DAO receives and owns;

(b) open and operate accounts with digital asset related institutions, including centralised token service providers that offer exchange, custody, insured custody and return-yielding deposit or deposit-like accounts;

(c) invest its currency, both digital and fiat, or tokens in any property and or security in which the DAO may lawfully participate in;

(d) appoint agents to transact business on its behalf;

(e) enter into any other contract it considers necessary or desirable.

(3) The DAO may only exercise its powers and use its income and assets for its purposes.
PART 3 – MEMBERS, DISCIPLINARY PROCEDURES AND GRIEVANCES
Division 1 – Membership
6 Minimum number of members
The DAO must have at least 5 members.
7 Who is eligble to be a member
Any person who supports the purposes of the DAO is eligible for membership.
8 Becoming a member
A person who owns or purchases a unit of the DAO is a member.
9 General rights of members
(1) A member of the DAO who is entitled to vote has the right-

(a) to submit proposals for consideration in the management portal; and

(b) to vote on proposals submitted to the management portal; and

(2) A member is entitled to vote on matters pertaining to the DAO if the member owns a unit of that DAO.
10 Rights transferable
The rights of a member are transferable upon the transfer of the unit.
11 Ceasing membership
The membership of a person ceases when they dispose, sell, or burn their unit.
Division 2 – Disciplinary action
12 Grounds for taking disciplinary action
The DAO may take disciplinary action against a member in accordance with this Division if it is determined that the member –

(1) has failed to comply with these Rules; or

(2) refuses to support the purposes of the DAO; or

(3) has engaged in conduct prejudicial to the DAO.

13 Disciplinary subcommittee
(1) If the Board is satisfied that there are sufficient grounds for taking disciplinary action against a member, the Board must appoint a disciplinary subcommittee to hear the matter and determine what action, if any, to take against the member.

(2) The members of the disciplinary subcommittee—

(a) may be board members, members of the DAO or anyone else; but

(b) must not be biased against, or in favour of, the member concerned.

14 Notice to member
(1) Before disciplinary action is taken against a member, one member of the subcommittee must give written notice to the member—

(a) stating that the DAO proposes to take disciplinary action against the member; and

(b) stating the grounds for the proposed disciplinary action; and

(c) specifying the date, place and time of the meeting at which the subcommittee intends to consider the disciplinary action (the disciplinary meeting); and

(d) advising the member that he or she may do one or both of the following—

(i) attend the disciplinary meeting and address the subcommittee at that meeting;

(ii) give a written statement to the subcommittee at any time before the disciplinary meeting; and

(2) The notice must be given no earlier than 28 days, and no later than 14 days, before the disciplinary meeting is held.

(3) The mode of the meeting is to be provided by the notice and should be selected to ensure all board members can attend. Examples of meeting modes include:

(i) In-person

(ii) Online
15 Decision of Subcommittee
(1) At the disciplinary meeting, the subcommittee must—

(a) give the member an opportunity to be heard; and

(b) consider any written statement submitted by the member.

(2) After complying with subrule (1), the subcommittee may—

(a) take no further action against the member; or

(b) subject to subrule (3)—

(i) reprimand the member; or

(ii) suspend the membership rights of the member for a specified period; or

(3) The subcommittee may not fine the member.

(4) The suspension of membership rights or the expulsion of a member by the disciplinary subcommittee under this rule is subject to a proposal submitted to the management portal.

(5) The proposal operates according to rule 24 and 25.

(6) The decision of the subcommittee takes effect immediately if the proposal is approved. If the proposal fails, the decision of the subcommittee does not take effect.

16 Conduct of disciplinary appeal meeting
(1) At a disciplinary appeal meeting—

(a) no business other than the question of the appeal may be conducted; and

(b) the Board must state the grounds for suspending or expelling the member and the reasons for taking that action; and

(2) After complying with subrule (1), the members present and entitled to vote at the meeting must vote by secret ballot on the question of whether the decision to suspend or expel the person should be upheld or revoked.

(3) A member may not vote by proxy at the meeting.

(4) The decision is upheld if not less than three quarters of the members voting at the meeting vote in favour of the decision.

Division 3 – Grievance procedure
17 Application
(1) The grievance procedure set out in this Division applies to disputes under these Rules between—

(a) a member and another member;

(b) a member and the Board;

(2) A member must not initiate a grievance procedure in relation to a matter that is the subject of a disciplinary procedure until the disciplinary procedure has been completed.
18 Parties must attempt to resolve the dispute
The parties to a dispute must attempt to resolve the dispute between themselves within 14 days of the dispute coming to the attention of each party.
19 Appointment of mediator
(1) If the parties to a dispute are unable to resolve the dispute between themselves within the time required by rule 26, the parties must within 10 days—

(a) notify the Board of the dispute; and

(b) agree to or request the appointment of a mediator; and

(2) The mediator must be—

(a) a person chosen by agreement between the parties; or

(b) in the absence of agreement—

(i) if the dispute is between a member and another member—a person appointed by the Board.

(3) A mediator appointed by the Board may be a member or former member of the DAO but in any case must not be a person who—

(a) has a personal interest in the dispute; or

(b) is biased in favour of or against any party.
20 Mediation process
(1) The mediator to the dispute, in conducting the mediation, must—

(a) give each party every opportunity to be heard; and

(b) allow due consideration by all parties of any written statement submitted by any party; and

(2) The mediator must not determine the dispute.
21 Failure to resolve dispute by mediation
If the mediation process does not resolve the dispute, the dispute is resolved at the discretion of 7Lands.
PART 4 – DAO PROPOSALS
22 Basic proposal
(1) This proposal passes according to rule 27, 28 and 29.

(2) In the proposal it is recommended the Member includes key salient points such as:

(a) Description

(b) Reasoning/Purpose

(d) Cost

(e) Summary
23 Final proposal
(1) This proposal passes according to rule 27, 28 and 29.

(2) This proposal can only be submitted by the Board.

(3) This proposal represents a Basic proposal which has passed through the management portal and been sent to the Board for refinement.

(4) The Board has the responsibility to refine Basic proposals which are passed and draft a Final proposal which outlines the following:

(a) Description

(b) Reasoning/Purpose

(d) Cost

(e) Timeline of deliver

(f) Priority

(g) Summary
24 Special proposals
(1) The rules of this proposal must be followed if the subject area of the proposal related to the following topics:

(a) Merging and splitting the DAO units;

(b) Issuing, burning, and buying back DAO units;

(d) Any sale of assets amounting to more than 5% of the market capitalisation of the DAO;

(e) Amending smart contracts’ rules of operation, for events such as:

(i) Commissions that smart contracts take from each transaction for deductions made to the Treasury;

(ii) Issuance of a dividend to the members of the DAO;

(iii) Changes to the remuneration of the DAO board members.

(f) Disposing of the Treasury funds, in particular by issuing grants to ecosystem participants for the development of the DAO;

(g) Proposal for additional board seats to be added to the Board.
25 Submitting DAO proposals
(1) A proposal is submitted through the management portal.
(2) A member can withdraw their proposal at any time during the voting period.
26 Voting on DAO proposals
A member can vote on a proposal submitted to the management portal.
27 Quorum requirements
(1) The quorum for a Basic proposal is 500 votes.

(2) The quorum for a Final proposal is 2000 votes.

(3) The quorum for an Election proposal is 3500 votes.

(4) The quorum for a Remuneration proposal is 3500 votes.

(5) If quorum if not met within the voting period, the proposal fails.
28 Proposal Pass
(1) Once quorum is met, a proposal needs more than 50% of votes to pass.

(2) This rule does not apply if a proposal does not have a quorum requirement.
29 Voting period
Once a proposal is submitted members have 7 days to vote on a proposal.
30 Voting power
(1) A member’s voting power is in accordance with the number of units they own.

(2) A single unit is a single vote.
31 Election proposal
(1) 12 months after the formation of a DAO, the members must vote to elect 5 members to the Board.

(a) The DAO must pass this proposal before a member can submit additional proposals to the management portal.

(b) This proposal has no deadline and cannot be deleted.

(d) The 5 members with the highest number of votes are elected.

(e) If the Board fails to be elected within a voting period according to rule 29, the quorum requirement is halved. The quorum requirement is halved every voting period until the Board is elected.
32 Remuneration proposal
(1) After the successful passing of the Election proposal, the board must submit a Remuneration proposal outlining 3 options for remuneration in the form of a percentage share of DAO net profit.

(2) Members can either vote for one option or vote against the proposal if they reject all options.

(3) The quorum requirement is set out in rule 27.

(4) If the Remuneration proposal fails, the board must re-submit the remuneration proposal and the voting period starts again.

(5) If 3 consecutive Remuneration proposals fail, 7Lands has the power to determine the board’s remuneration.

PART 5 – THE BOARD
Division 1—Powers of Board
33 Role and powers
(1) The business of the DAO must be managed by or under the direction of a Board.

(2) The Board may exercise all the powers of the DAO except those powers that these Rules require to be exercised by general meetings of the members of the DAO.

(3) The Board may—

(a) appoint and remove staff and or contractors;

(b) establish subcommittees consisting of members with terms of reference it considers appropriate;

(d) access and manage the DAO’s multisig wallet in order to action approved proposals relating to land management and digital asset management;

(e) perform tasks relevant to pursuing the DAO’s purpose.
34 Delegation
(1) The Board may delegate to a member of the Board, a subcommittee or staff, any of its powers and functions other than—

(a) this power of delegation; or

(b) a duty imposed on the Board by any law.

(2) The delegation must be in writing and may be subject to the conditions and limitations the Board considers appropriate.

(3) The Board may, in writing, revoke a delegation wholly or in part.
Division 2—Composition of Board and duties of members
35 Composition of Board
(1) The Board is controlled by 7Lands for 12 months from the formation of the DAO.

(2) After the initial 12-month period 7Lands relinquishes control of the Board.

(3) After this initial 12-month period, the Board consists of 5 members of the DAO.
36 General Duties
(1) As soon as practicable after being elected or appointed to the Board, each board member must become familiar with these Rules and any relevant law.

(2) The Board is collectively responsible for ensuring that the DAO complies with any relevant law and individual members of the Board comply with these Rules.

(3) Board members must exercise their powers and discharge their duties with reasonable care and diligence.

(4) Board members must exercise their powers and discharge their duties—

(a) in good faith in the best interests of the DAO; and

(b) for a proper purpose.

(5) Board members and former board members must not make improper use of—

(a) their position; or

(b) information acquired by virtue of holding their position— so as to gain an advantage for themselves or any other person or to cause detriment to the DAO.
Division 3—Election of Board members and tenure of office
37 Who is eligible to be a Board member
Any member is eligible to be elected or appointed as a board member.
38 Nominations
(1) After the formation of the DAO, the members must vote on the Election proposal and elect the Board.

(2) An eligible member of the DAO may—

(a) nominate himself or herself; or

(b) with the member’s consent, be nominated by another member.

(3) A member who is nominated for a position and fails to be elected to that position may be nominated for any other position for which an election is yet to be held.
39 Term of office
(1) Subject to subrule (3) and rule 40, a board member holds office for 2 years unless he or she is voted out of the Board or resigns from office.

(2) A proposal submitted to the DAO may—

(a) seek to remove a board member from office in accordance with rule 43; and

(b) elect an eligible member of the DAO to fill the vacant position in accordance with this Division.

(3) A member who is the subject of a proposal under subrule (2)(a) may make representations in writing to the Board of the DAO (not exceeding a reasonable length) and may request that the representations be provided to the members of the DAO through the management portal.

(4) The Board may give a copy of the representations to each member of the DAO or, if they are not so given, the member may require that they be posted to the management portal.

(5) Before the end of the 2-year term a Board member must submit a proposal to be re-elected to the Board. If the proposal is approved, the Board member has their term extended by 2 years.
40 Vacation of office
(1) A board member may resign from the Board by written notice addressed to the Board.

(2) A person ceases to be a board member if he or she—

(a) ceases to be a member of the DAO; or

(b) fails to attend 3 consecutive board meetings without leave of absence under rule 53; or
41 Filling casual vacancies
(1) If a position of the Board has become vacant under rule 39 or 40, the Board must post a proposal in line with rule 42.

(2) The Board may appoint a member of the DAO to fill a position on the Board that—

(a) has become vacant under rule 39 or 40, and

(b) has failed to be filled under rule 42.

(3) The Board may continue to act despite up to 2 vacancies in its membership.
42 Board vacancy proposal
(1) When a Board member leaves the Board under rule 39 or 40, the Board must submit a proposal to the DAO.

(2) The proposal will allow members to elect themselves for the Board position.

(3) The proposal will take submissions from members for 7 days and then be locked for voting.

(4) The proposal has a voting period in accordance with rule 29.
43 Proposal to Remove Board Member
(1) A proposal to remove a board member does not have a quorum.

(2) A proposal to remove a board member must receive over 2,500 votes in favour of the board member removal.

(3) The voting period is 7 days.

(4) A proposal to remove a specific board member can be made up to 3 times.

(5) If the third proposal to remove a specific board member fails, no proposals to remove the specific board member can be made for 6 months.
Division 4—Meetings of Board
44 Meetings of Board
(1) The Board must meet at least 2 times in each year at the dates, times and places determined by the Board.

(2) The date, time and place of the first board meeting must be determined by the members of the Board as soon as practicable after the annual general meeting of the DAO at which the members of the Board were elected.

(3) Special board meetings may be convened by any 5 members of the Board.
45 Notice of meetings
(1) Notice of each board meeting must be given to each board member no later than 7 days before the date of the meeting.

(2) Notice may be given of more than one board meeting at the same time.

(3) The notice must state the date, time and place of the meeting.

(4) If a special board meeting is convened, the notice must include the general nature of the business to be conducted.

(5) The only business that may be conducted at the meeting is the business for which the meeting is convened.
46 Urgent meetings
(1) In cases of urgency, a meeting can be held without notice being given in accordance with rule 40 provided that as much notice as practicable is given to each board member by the quickest means practicable.

(2) Any resolution made at the meeting must be passed by an absolute majority of the Board.

(3) The only business that may be conducted at an urgent meeting is the business for which the meeting is convened.
47 Procedure and order of business
(1) The procedure to be followed at a meeting of a Board must be determined from time to time by the Board.

(2) The order of business may be determined by the members present at the meeting.
48 Use of technology
(1) A board member may participate in the meeting by the use of technology that allows that board member and the board members present at the meeting to clearly and simultaneously communicate with each other.

(2) For the purposes of this Part, a board member participating in a board meeting as permitted under subrule (1) is taken to be present at the meeting and, if the member votes at the meeting, is taken to have voted in person.
49 Quorum
(1) No business may be conducted at a Board meeting unless a quorum is present.

(2) The quorum for a board meeting is the presence (in person or as allowed under rule (use of tech) of a majority of the board members holding office.

(3) If a quorum is not present within 30 minutes after the notified commencement time of a board meeting—

(a) in the case of a special meeting—the meeting lapses;

(b) in any other case—the meeting must be adjourned to a date no later than 14 days after the adjournment and notice of the time, date and place to which the meeting is adjourned must be given in accordance with rule 45.
50 Voting
(1) On any question arising at a board meeting, each board member present at the meeting has one vote.

(2) A motion is carried if a majority of board members present at the meeting vote in favour of the motion.

(3) Subrule (2) does not apply to any motion or question which is required by these Rules to be passed by an absolute majority of the Board.

(4) Voting by proxy is not permitted.
51 Conflict of interest
(1) A board member who has a material personal interest in a matter being considered at a board meeting must disclose the nature and extent of that interest to the Board.

(2) The member—

(a) must not be present while the matter is being considered at the meeting; and

(b) must not vote on the matter.

(3) This rule does not apply to a material personal interest—

(a) that exists only because the member belongs to a class of persons for whose benefit the DAO is established; or

(b) that the member has in common with all, or a substantial proportion of, the members of the DAO.
52 Minutes of meeting
(1) The Board must ensure that minutes are taken and kept of each board meeting.

(2) The minutes must record the following—

(a) the username and or digital wallet address of the members in attendance at the meeting;

(b) the business considered at the meeting;

(d) any material personal interest disclosed under rule 51.
53 Leave of absence
(1) The Board may grant a board member leave of absence from board meetings for a period not exceeding 3 months.

(2) The Board must not grant leave of absence retrospectively unless it is satisfied that it was not feasible for the board member to seek the leave in advance.
PART 6—FISCAL MATTERS
54 Source of Revenue
(1) The currency and assets of the DAO may be derived from revenue generated from land, fund-raising activities, grants, interest, and any other sources approved by the Board.

(2) The DAO is entitled to a 5 million USDXX grant upon foundation to fund DAO activities and the pursuit of the DAO’s purposes.
55 Management of Fiscal Matters
(1) DAO assets are held by 7Lands.

(2) The DAO must submit a request though the management portal to action any outflows from the DAO Treasury.

(3) Subject to any restrictions imposed by a proposal of the DAO, the Board may submit a request for outflows from the DAO Treasury on behalf of the DAO.

(4) The Board may request an outflow on behalf of the DAO up to a specified limit without requiring approval from the Board for each item on which the funds are expended.
56 Fiscal records
(1) The DAO must keep financial records that—

(a) correctly record and explain its transactions and asset position; and

(b) enable asset statements to be prepared.

(2) The DAO must retain the fiscal records for 7 years after the transactions covered by the records are completed.

(3) The Board must keep in its custody, or under its control—

(a) the fiscal records for the current financial year; and

(b) any other fiscal records as authorised by the Board.
57 Fiscal statements
(1) For each financial year, the Board must ensure that the requirements relating to the fiscal statements of the DAO are met.

(2) Without limiting subrule (1), those requirements include—

(a) the preparation of the fiscal statements;

(b) if required, the review or auditing of the fiscal statements;

(d) the submission of the fiscal statements to the annual general meeting of the DAO;
PART 7—GENERAL MATTERS
58 Management Portal
(1) The DAO is managed through the management portal.

(2) All communications with the Board, members, and the 7Lands team are conducted through the management portal.
59 Notice requirements
(1) Any notice required to be given to a member or a board member under these Rules may be given—

(a) by posting on the management portal; or

(b) by email or electronic transmission; or

(2) Subrule (1) does not apply to notice given under rule 45.

(3) Any notice required to be given to the DAO or the Board may be given—

(a) by handing the notice to a member of the Board; or

(b) by sending the notice by post to the registered address; or

(d) if the Board determines that it is appropriate in the circumstances—

(i) by email to the email address of the DAO or the Board; or

(ii) by facsimile transmission to the facsimile number of the DAO