On January 18th, 2023 – the DAO enacted a governance proposal providing additional disclosures on the ‘Builder DAO About Page’ to supplement the initial governance proposal establishing Builder DAO as a US entity. This proposal was enacted to provide additional clarity to potential members regarding Builder DAO’s entity form as a number of community members indicated that they were unaware of the US activity giving rise to potential tax obligations and informational requirements of the association.
A few members who have purchased NFTs prior to January 18th, 2023 have expressed that had they been aware of Builder DAO being formed as a US entity, they would not have purchased NFTs. Although it is important to note that it is the activity itself and not the selection of a US entity form giving rise to the informational reporting requirements – in the spirit of general community harmony, I am putting forth this Discourse to gauge community interest in the ability to have the DAO purchase back NFTs for members in this situation and the interest of current community members who purchased NFTs prior to January 18th, 2023 in participating in such a proposal if enacted.
As the form of this template could be constructed in a number of ways, it would be helpful to have some additional feedback other than what has occurred on the Townhalls and Discord. Specifically:
Should the proposal be constructed at FMV value at the date of purchase and date of sale back to the treasury or should the proposal be constructed 1:1 for the eth sale price? There would be obvious accounting / tax simplicity if this were done at the FMV – however logistically, that would require a more complicated process.
Should the proposal exclude wallets who purchased tokens both before and after January 18, 2023? The point of this proposal is to address those individuals who were unaware they were joining a US entity and subject to various tax and informational reporting requirements. If those individuals continued to participate in auctions after January 18th then they clearly were aware of the US entity.
Logistically, the simplest path proposed would be to utilize a multi-sig funded by a governance proposal that lists the tokens which can participate, provides a timeline for the tokens to be sent to the treasury, executes the return of ETH, and returns any unused funds to the treasury.
Considering the effort necessary to enact such a proposal and the relative unknown interest in how many members would like to participate – it is worth having a discussion on whether this is appropriate in the eyes of the community generally. I am happy to prepare a proposal on behalf of the members who reached out through DM’s but I would also like to have a better sense if this is a necessary action.
If there are any improvements to be made or strong opinions on the potential proposal – please make comments in the discourse.