Many citizens have expressed a desire to be able to tokenize CityDAO’s land and future real estate, buy it, own it and profit off of it. However, given a significant portion of our membership is based in the United States and we are a Wyoming DAO, the SEC’s accredited investor requirements make this difficult.
I’ve brought this up on the citizens’ Discord channels and with @scottfits via DM and there seems to be quite a bit of interest in exploring this issue and seeing what we can do about it.
I believe figuring out a legal method for CityDAO to fractionalize ownership of real estate benefits us on a few levels:
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Citizen utility - It seems that many people initially joined CityDAO expecting to be able to buy, own, and profit off tokenized land and real estate. I think we’ve reached an equilibrium where the majority of our population understands the regulatory pitfalls we face, and everyone is being patient on the issue; however, I believe citizens would derive utility knowing the DAO is making an effort to figure out this issue, a that there is massive utility to be gained if we were to solve the problem. Citizen utility = more emotional investment in the DAO = a stronger culture and a more valuable organization.
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Citizen wealth - In success, we open up an avenue for our citizens to build individual wealth in a manner not previously possible
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CityDAO value - perhaps most importantly, if we are the organization to lead the charge (or at best, crack the code) toward legal tokenized ownership of real assets, an endeavor in which other web3 organizations (like Royal) are already investing significant capital, we increase the value of our organization and our brand as web3 pioneers.
I propose allocating treasury funds toward researching, interviewing and ultimately retaining a law firm to advise us on this specific issue. The ultimate goal would be a legal opinion letter from a reputable firm outlining how fractionalized ownership can be achieved within regulatory bounds. Such a letter could then be used in court if we were unfortunate enough to have to deal with a lawsuit.
Note that there is a nonzero chance we will not succeed in finding a solution, either at this time, or ever. However, for the reasons above, I believe the endeavor is worthwhile.
Knowing that a firm’s time would likely cost on average about $500 / hour for work like this (with partners charging more, and associates doing the bulk of the research charging less), in lieu of proposing a specific treasury allocation at this time I’d love for others to comment on their appetite to spend on this project.
I see a couple of potential versions:
-We could allocate, say, 1-2 ETH toward exploratory conversations with a reputable firm in the space, and depending on what those conversations yield either dig in deeper or abandon the endeavor.
-We could commit a larger sum upfront if everyone believes in the value of this work, with the understanding that ultimately this is likely to be a complex, time consuming endeavor.
*One more thing to note - this proposal is independent of the idea of creating an accredited investor DAO to scale our organization more quickly while we try to figure out all of the above. Ultimately if we can figure out ownership for individual citizens, the two tranches of investors can work side by side.