Uniswap DAO Adopts DUNA Legal Framework to Obtain Legal Entity Status, Paving the Way for Activation of Fee Switch

This new legal entity will provide a legal framework while maintaining the existing governance structure of Uniswap DAO, allowing it to hire service providers, sign contracts, and fulfill regulatory and tax compliance obligations. If the proposal passes, Uniswap DAO will become the largest decentralized organization to adopt this legal framework.

According to the proposal, the plan will allocate $16.5 million worth of UNI tokens to cover past tax obligations and establish a legal defense fund. The foundation expects the bill from the Internal Revenue Service (IRS) to be less than $10 million to address any outstanding tax liabilities and penalties.

The foundation noted in the announcement that adopting the DUNA legal framework would pave the way for Uniswap to “open the fee switch,” allowing a portion of liquidity provider (LP) fees to be allocated to the DAO treasury. Uniswap Foundation’s General Counsel Brian Nistler stated:

“Under this legal framework, the scope of what DUNA can do, participate in, and trade will be significantly expanded, which clearly lays the groundwork for future ‘fee switch’ votes, while formalizing the operations of Uniswap governance and protecting the participants in collective decision-making.”

As DUNA, the organization is prohibited from distributing dividends to members, and no additional distributions are allowed other than paying “reasonable compensation” to service providers or reimbursing reasonable expenses. Nistler emphasized:

“While we have adopted this legal framework, it does not change the decentralized nature of Uniswap governance or the DAO.”

This proposal comes at a time when other protocols in the cryptocurrency space are reclaiming certain powers and operations that were previously managed by the community back to their core teams to enhance decision-making efficiency. For example, the LayerZero Foundation plans to acquire the Stargate cross-chain bridge, while NFT giant Yuga Labs has proposed dissolving the ApeCoin DAO. Nistler remarked:

“For me, the biggest breakthrough in this industry is not just moving things on-chain, but reinventing how we operate as a voluntary and collective decision-making body. DAOs have lagged in this regard, but I believe the DUNA entity is a pathway for DAOs to elevate their operational standards, gain protection, and continue collective participation to drive the future they wish to maintain.”