A newly passed proposal will see the entity behind SushiSwap separate into three distinct legal entities.
“Steady lads, Sushi Legal Structure is on the wei,” said the Sushi DAO on Wednesday, after a near unanimous vote from the community to restructure the entity behind the decentralized exchange. The proposal was passed with 11 million tokens in favour at a block height of 15,782,158.
The new legal structure will see the emergence of three new entities – a Cayman Islands-based DAO Foundation, a Panamanian Foundation and a Panamanian Corporation.
“The purpose of the entity structure & framework is to provide maximum flexibility for Sushi to proceed in whichever direction the DAO or governance takes it, while also mitigating risk,” said SushiSwap’s “Head Chef” Neil Bhasin.
The Cayman Island DAO Foundation will be responsible for SushiDAO activities related to on-chain governance and off-chain activities. These include administering a treasury and grants, while also facilitating on-chain governance like voting and proposals.
The Panamanian Foundation will administer the existing Sushi protocol, including smart contracts related to the automated market maker and staking.
The Panamanian Corporation will oversee the GUI layer, or the front end development of the protocol. This will be a wholly owned subsidy of the Panamanian Foundation. Both the DAO Foundation and the Panamanian Foundation will enter into agreements with service providers at a later date.
SushiSwap narrowed down on Cayman Islands and Panama to set up these entities after considering alternative locations like Switzerland. They found that the regulatory stance towards Sushi’s products “was less than ideal” and had a tax model that did not favor growth companies.
The team estimates that the process to set up these entities should take around four weeks after the proposal has been enacted.