Talk recording available on TokenEngineering YouTube: https://youtu.be/geC4vhFLqpw --- Abstract: The importance of governance of blockchain/DLT networks is widely recognised. However, a truly holistic and structured approach to governance (on-chain and off-chain) is not available yet and many projects lack guidance as to the entirety of aspects which need to be taken into account. This talk aims to highlight current efforts of a roundtable recently invited by The Wharton School – University of Pennsylvania to create more transparency with regard to governance structures by developing a disclosure questionnaire. About the speaker: Dr Nina-Luisa Siedler, Attorney at Law / DWF Germany Rechtsanwaltsgesellschaft mbH Nina-Luisa Siedler is partner at DWF, a technology-oriented global law firm, and head of the international Blockchain Competence Group. She focusses on the legal implication of blockchain/distributed ledger technology projects and assists her clients with the structuring of business cases with view to legal and regulatory compliance. Nina-Luisa Siedler is active member of several associations and working groups (Blockchain Bundesverband, EU Blockchain Observatory & Forum) and on the board of thinkBLOCKtank asbl, IPDB Foundation and INATBA. Twitter: @ninsie3 LinkedIn: https://www.linkedin.com/in/dr-nina-l... Join the TokenEngineering community, discuss and learn more! Get updates, subscribe for our newsletter https://tegg.io/ Explore learning material at our wiki https://tokenengineering.net Follow us on Twitter https://twitter.com/tokengineering and https://twitter.com/tegg_io Join the conversation by using #TokenEngineering

1. Dr. Nina-Luisa Siedler
23 August 2019
DWF Germany
Cryptogovernance

2. Governance: Types of Blockchains
2
Permissionless Permissioned
open to public but acceptance
of certain governance rules
required
IPDB
ripple
Sovrin
Hyperledger Sawtooth
single entity consortium
e.g. internal R3 Corda
firmwide Hyperledger
Blockchain
Eris (Monax)
Public
Private (in permissionless mode)
Bitcoin
Altcoin
Ethereum
…
Access
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ValidationLack of clear
off-chain gov
Permission
may be given
acc. to various
gov. models
Permission
given acc. to
typ. corp. gov.
models

3. Decentralisation versus Need to Earn
3
decentralised structures centralised ventures using decentralised technology
public infrastructure corporate infrastructure/outsourcing or offering
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non profit for-profit
combined with:
non-profit infrastructure for-profit company (app provider, consultant)

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4
Problem: Financing
• How to finance an open source, public & permissionless infrastructure?
• historically: task of governments financed via taxes
• Governments left digital infrastructur building to private companies result: large internet monopolies ruling
• Counter movement blockchain ICOs
• Problem
• Used again for private profit making
• Anyone needs to make a living results in funding needs for core developers and other contributors
• Splintering of forces instead of joint movement decreasing chances for succes for all
• Decentralisation did not overcome funding issue so far
• Human‘s nature to seek personal wealth
• Any purely economic incentive driven system will foster centralisation of wealth/influence
How to overcome this mechanism?
Everything starts with creating true transparency!

5. Wharton Cryptogovernance Roundtable
5
Wharton Cryptogovernance Workshop in San Francisco 1/2 July 2019 (https://zicklincenter.wharton.upenn.edu/wp-
content/uploads/2019/05/Wharton-Cryptogovernance-Workshop-7-19.pdf)
Aims at asking relevant (and uncomfortable) questions to consider
• for projects in order to take into account the various aspects
• for investors and users to to get a checklist to evaluate the project
• for researchers to build further research
Poor research due to obligatory interdisciplicarity
• Lack of available science & research magazines for interdisciplinary research
• Lack of funding without relevant publications
organisation of research in silos (also resulting in lack of common language across reserch areas)
needs to be overcome by joint effort!
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www.dwf.law

6. Private & Confidential. Not for distribution. © DWF Germany Rechtsanwaltgesellschaft mbH 2018
www.dwf.law
6
Wharton Disclosure Questionnaire
1. Background section (purpose, success & metrics, coordinating entities, identification of participants)
2. Stakeholder groups
• Intrinsic groups (recognised by dry/wet code, delineated by the social or legal structure)
• Extrinsic groups (further groups directly or indirectly affected, groups NOT considered in the network’s governance)
• Access to intrinsic groups, ability and limitations to interact
• Cost of exiting network or any intrinsic group
3. Incentive Schemes
• What and how is behavious incentivised
• What experience did the network made (if already existing)
4. Governance Powers
• sources/roots of the network’s governance legitimacy/authority
• policy setting (“legislative") vs. implementation (“executive”) vs. interpretive (“judicial”) vs.transparency facilitating powers
5. Governance Procedures
• Conflicts & checks and balances/systems of accountability exist among the governance powers
• Voting & informal (social), formal (legal), and/or coded (machine-executable) commitments
• system for paying for protocol upgrades, development work, and/or other system enhancements

7. 9
Private & Confidential. Not for distribution. © DWF Germany Rechtsanwaltgesellschaft mbH 2018
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Legal Entity – What is a DAO?
Legal entity: created by mutual agreement to promote the achievement of a common purpose
Numerus clausus of legal entities
• Any jurisdiction provides for certain legal entites
• If no specific legal entity is chosen: "default entity"
• Standard consequence: unlimited liability of all partners/ shareholders
• Serves to protect public when dealing with such entity
Or rather „Star Contracts“ (e.g. Franchise)
requirement: dominant central entity, only bilateral agreements with others
DAO smart contract „dominates“ all?
But: Voting mechanisms move decision making power to group of token holders as a whole

8. Further Options
8
Which legal entities allow for a dissemination of control into the wider community?
Criteria
• No entrance barriers due to form requirements which may not be met electronically
• Providing for bodies of stakeholder groups with common interests
• Providing for balancing control between stakeholder groups
• Permitting stakeholder groups to organise individually as necessary for their purposes (democratic versus plutocratic
features)
Blockchain governance is in between of state (typically democratic) and corporate (typically plutocratic) governance
Differentiation between protocoll layer and application layer
Private & Confidential. Not for distribution. © DWF Germany Rechtsanwaltgesellschaft mbH 2018
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9. Contact
9
Nina-Luisa Siedler has twenty years' experience in advising on financing
transactions. Nina is used to manage complex transactions and to
cooperate seamlessly with auditors, tax advisors, software engineers
and other parties involved. Having worked on both borrower/issuer and
lender/investor sides, she has a deep understanding of the interests of
all parties involved in a financing situation, including their (factual and
regulatory) restrictions.
Nina is highly interested in new technology and advises FinTech
companies as well as blockchain ventures. She is advisor of
BlockchainHub (heading the international legal working groups) and
founding member of the Blockchain Bundesverband, the German
blockchain association where she heads the financing working group.
Further, Nina has been designated as Working Group member in the EU
Blockchain Observatory & Forum’s Working Group “Blockchain Policy
and Framework Conditions” and s erves as member of the board at IPDB
Foundation, thinkBLOCKtank and INATBA.
Dr. Nina-Luisa Siedler
Rechtsanwalt, Partner
DWF Germany Rechtsanwaltsgesellschaft mbH
T +49 (0)30 25090110-11
M +49 (0)173 5983343
E nina.siedler@dwf.law
Private & Confidential. Not for distribution. © DWF Germany Rechtsanwaltgesellschaft mbH 2018
www.dwf.law

10. © DWF Germany Rechtsanwaltsgesellschaft mbH 2018.
DWF Germany Rechtsanwaltsgesellschaft mbH is a
limited company incorporated in Germany and registered
at the local court of Cologne with number HRB 68568,
represented by the managing directors Oliver Bolthausen,
LL.M. (USA), FCIArb (UK), Klaus M. Brisch, LL.M. (USA),
Michael Falter, Dr. Mathias Reif. Copyright in this
document belongs to DWF Germany
Rechtsanwaltsgesellschaft mbH which asserts the right to
be identified as such and hereby objects to any misuse
thereof. This information is intended as a general
discussion surrounding the topics covered and is for
guidance purposes only. It does not constitute legal advice
and should not be regarded as a substitute for taking legal
advice.
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