Polkadot DAO

Academic Research

Making enforceable frameworks for treasury-funded proposals. Wrapping investigation into the Polkadot DAO structure under U.S. and international law.

Active Bounties

Treasury-funded departments

Polkadot Governance Hierarchy

Polkadot DAO operational structure showing the flow of authority from DOT token holders through OpenGov to treasury-funded bounty programs. Click on any bounty to view its treasury page.

Development

7 bounties • Building tools, apps, and infrastructure

Security

3 bounties • Protecting the ecosystem

Community

4 bounties • Growing and supporting the community

Infrastructure

4 bounties • Core network services

Marketing

1 bounties • Ecosystem promotion

Governance

1 bounties • Legal and compliance

⚠️ CRITICAL GOVERNANCE RISKS

SYSTEMIC LEGAL PROTECTION GAP

• 19/20 bounties operate without corporate liability protection
• Individual contributors face direct personal liability
• No standardized legal framework across treasury operations
• Cross-border regulatory compliance gaps

CONTRACT ENFORCEMENT IMPOSSIBILITY

• No legal entity to enforce bounty deliverable contracts
• Treasury payments without recourse mechanisms
• Pseudonymous contributors cannot be held accountable
• IP ownership and licensing complications

📊 VOTING PARTICIPATION CRISIS

• Only ~1% of total DOT supply participates in OpenGov voting
• Vast majority of holders: Non-voting / Passive in governance
• Decisions made by tiny minority of token holders
• SubDAOs and organized groups control majority vote
• Democratic legitimacy questionable vs network security
• Most DOT holders focus on staking rewards, not governance

⚖️ DIRECT LIABILITY RISK

• High voting power entities have direct responsibility for treasury decisions without protection
• Concentrated voting power = Greater liability exposure
• Referendum #1591: PCF Creation & Scope Definition liability
• Treasury allocations could create fiduciary duty obligations

⚠️ Impact:These systemic issues create significant legal and operational risks for Polkadot governance participants and treasury beneficiaries.

✓ LIMITED LEGAL COVERAGE ENTITIES

PCF: Only Marketing Bounty (#33) - Cayman Islands

• PCF: Corporate liability protection for 1/20 bounties
• VASP/AML compliance framework (PCF only)
• Cayman Islands jurisdiction for IP management

Parity: Some Technical Fellowship members only

• Parity: Corporate protection for employed developers
• Technical Fellowship: Limited to company employees
• UK/EU legal framework coverage

→ Referendum #1591:PCF Creation & Scope Definition

Legal Research Context

Treasury Funded Research

Polkadot Regulatory Analysis: Legal Enforcement of Treasury Proposals

Approved through Referendum #1676 as part of the Polkadot.law initiative

Research Objective

Analyze and evaluate the execution of Polkadot treasury proposals and its ecosystem (Web3/DAOs) under the participation of the Polkadot Community Foundation (PCF) in Cayman Islands, with mapping to USA legislation, identifying obligations, rights, disadvantages and benefits of the current scheme, compared to expansion to the United States (or other jurisdictions).

Specific Objectives:

Analyze current Polkadot structure and ecosystem (Web3/DAOs), as well as treasury proposals
Legal implications and relevant obligations under Cayman Islands legislation
Legal implications and relevant obligations under USA legislation
Regulatory analysis of blockchain, web3, DAOs and tokens in Europe and Asia

Key Research Questions

Technical Elements: What technical elements of Polkadot (relay chain, parachains, XCM, NPoS, Agile Coretime, OpenGov) are legally relevant?
Ecosystem Participation: What does "being part" of the ecosystem mean and what risks/obligations does each role entail?
PCF Legal Framework: How does PCF fit into Cayman Islands law (foundation company) and local VASP/AML regime?
Treasury Proposals: How are treasury proposals regulated by different legislations? Can they be executed as contracts?

Technical Analysis

• Blockchain/Web3/Smart Contracts/DAOs fundamentals
• Polkadot architecture (Relay Chain, parachains, XCM)
• Consensus and security (NPoS)
• Agile Coretime (blockspace market)
• OpenGov (tracks, treasury, conviction, delegation)

Governance/Corporate

• Participation by role: holder, nominator, validator
• Collator/parachain teams obligations
• Treasury proposal structure and elements
• PCF on-chain/off-chain bridge analysis
• Foundation Companies Act VASP regulations

Regulatory Framework

• USA: SEC/CFTC/FinCEN/IRS regulations
• Token offering exemptions and case law
• European regulatory framework
• Asian markets: Hong Kong regulations
• Cross-jurisdictional compliance gaps