Removing an Asset from the DAO: Process Overview

Scenarios for Asset Removal

1. Distressed Assets:

   • These include properties nearing bankruptcy or experiencing significant financial or operational issues.

   • Removal decisions aim to mitigate losses and maximize capital recovery for DAO token holders.

2. Pre-Bankruptcy Assets:

   • These assets may require expedited liquidation to avoid further devaluation or legal complications.

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Removal Methods

1. Off-Platform Sale:

   • Managed as a "MISC" Issue in the DAO voting system.

   • Process:

     • Proposal is raised with details of the sale (e.g., property address, expected value, and use of proceeds).

     • Token holders vote to approve or reject the proposal.

     • Upon approval, the property is sold, and income is distributed as capital dividends to DAO owners.

   • This method provides flexibility but requires manual execution by the DAO property manager.

2. On-Platform Sale:

   • Uses the Asset Token Sale (ATS) Issue type for a structured and automated process.

   • Process:

     1. Auction Announcement:

        • The DAO initiates an ATS vote with property details, starting price, and auction terms.

     2. Voting Outcome:

        • If approved, the asset is listed for an on-platform auction or tokenized sale.

     3. Successful Bid:

        • The highest bidder acquires the asset, and a new DAO is automatically generated to manage it.

     4. Proceeds Distribution:

        • Funds raised are distributed to the original DAO’s token holders proportionally, or used as specified in the ATS proposal.

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Benefits of On-Platform Asset Token Sale (ATS)

1. Efficiency:

   • Automates the transition of the asset to a new DAO, minimizing administrative overhead.

2. Transparency:

   • Entire process, including auction bids and ownership transfer, is recorded on the blockchain.

3. Flexibility:

   • Enables DAO owners to directly participate in the auction or retain value through distribution of proceeds.

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Key Considerations

• Voting Thresholds:

  • Both off-platform and on-platform methods require majority approval based on the DAO’s governance rules.

• Auction Parameters:

  • Minimum bid, bidding duration, and acceptable payment types (e.g., ETH, DST) must be clearly defined in the ATS proposal.

• Legal Compliance:

  • Asset sales must adhere to local regulations governing distressed or pre-bankruptcy property transactions.

By combining off-platform flexibility with on-platform automation, this dual-method approach ensures the efficient and transparent removal of assets from the DAO while protecting the interests of token holders.