CIP-25: Obtaining legal advice on tokenized ownership for citizens

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:

  1. 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.

  2. Citizen wealth - In success, we open up an avenue for our citizens to build individual wealth in a manner not previously possible

  3. 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.


Thanks for putting this together, really well thought out and you make some awesome points.

We currently do have a lawyer on retainer who is digging into topics exactly like this. Before expanding on that, here’s what we do know now: It is highly unlikely #2 “Citizen wealth” will be a possibility for unaccredited, US citizens. As you know, this is due to SEC regulation that “pRoTeCtS” individuals from investing in assets with the potential to do poorly.

As for the law firm to write an opinionated letter: when we were searching for lawyers we encountered significant bias going both ways. Some lawyers claimed we were fine and had nothing to worry about (this lawyer had many clients that depended on “having nothing to worry about”). Others claimed we were in grave danger and needed to immediately pay them $200K+ to find out “exactly how much danger we were in”, a clear scare tactic to get our money with little to no guarantee of a productive outcome. We ended up going with a lawyer in the middle who understands crypto and recognizes the legal gray area in which we fall. We are asking him to write multiple documents for us, such as an opinionated letter of the kind you described and an operating agreement for citizen NFT holders.

Finally, I do want to say there is a path for allowing average citizens to own tokenized, income-producing land, but it can’t be sold by the DAO. We can build tools to allow anyone to tokenize their land, whether it’s income-producing or not. This would provide the same benefits, it would just reduce the accessibility because the land would have to initially be purchased and owned through traditional measures, and not purchased through the DAO.


We may should first try utilize the internal talent resource in CityDAO NFT holders. I believe there must be a lawyer among the 10,000 of us.


Agree with this point. We have experts from so many fields. If we are able to work with internal teams we will control speed and quality. Similarly with our internal Dev teams, etc.

We could have citizen shouts outs for such teams to be formed and only when there is not enough interest and expertise, we can go for externals.

Looking forward for more feed-back on this.


First of all thank you very much gugz for taking the trouble to prepare the presentation of the idea. I think it is extremely important to legally clarify the issue of land tokenization. At the same time, I am thinking of the line of the colleagues who expressed their opinion above.

The DAO has been standing for a short time and if there is already a member of the same that is elucidating the legal question, in principle it would allow him to continue working on it.

Once again thanks for your proposal, I think it would be a great alternative if the partner needs outside help.

1 Like

I’m not a lawyer but I am a commercial real estate investor who has done this kind of thing.

You should be able to do this as Regulation D, 506(b) offering, which allows up to 35 unaccredited investors. You can also do 506(c) but that can only work with accredited investors. In either case you will need to have investors fill out a subscription agreement that includes KYC info.

You can find securities attorneys who will do this in the range of $5-15k depending on the size of the purchase.


If you’re looking for a lawyer, I’d recommend . I’ve had him on retainer for token projects. He understands blockchain, tax law, SEC regs, laundering laws, etc. Obviously DYOR like anything else, but worth a consult.

1 Like