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Summary:

With the departure of myself and David, who have historically kept the DAO in compliance, paid taxes, and maintained the off ramps, I believe now is the time to return the CityDAO Treasury funds to Citizens pro-rata.

After failing to pass 7+ proposals 4, I see no path forward for us to agree on a reasonable way to spend the money, and keeping millions of dollars in a multisig leaves it vulnerable especially over a long period of time with multisig members cycling in and out.

I will be leaving the multisig, closing the bank accounts, off ramps, and CityDAO social media accounts, discontinuing to pay taxes our properties, and completely removing myself out of the operation of the DAO.

The most responsible path forward is to return the funds to the Citizens who contributed them.

The claim will be about $320 per NFT according to my napkin math from this post 10, but that is heavily dependent on ETH fluctuations.

Implementation:

Upon passage of the CIP, any Citizen may volunteer to be a part of the Return of Funds Task Force. They will decide on an implementation mechanism and have a budget of $3,000 to develop and audit a smart contract as necessary and pay legal fees for any research needed into dissolution.

The most likely scenarios are either an airdrop to return the funds or a smart contract that lets Citizens claim their share of funds are options.

TImeline:

Upon passage of the CIP, the Return of Funds task force will convene and develop a mechanism to return funds and initiate the process within 30 days.

TLDR

The purpose of this CIP is to create a more inclusive CityDAO Council and to fund the Community Team, which will make sure we have engagement across multiple communities. This CIP will last for 6 months, followed by democratic, open elections. The quorum for this CIP is 500 votes and the requested total budget is $107K. This CIP combines both a council CIP and the community team CIP, which is why the budget is high.

Why is this needed?

For the past year, CityDAO has had some very important problems that we cannot fix without authorization by the community through a CIP. The main problems can be explained in three categories: administrative, legal and taxes.

Administrative:

Our multisig wallet has members who are no longer part of the DAO. This is not safe. Our quorums make it too easy to request large amounts of money and only require 51% approval from voters, no matter how much money is requested. Our voting allows for certain individuals to control the votes. Our international communities do not have enough representation. We have no process for complaints and grievances, which has led to negative behavior on the discord. This destabilizes our community and makes it harder for citizens to get involved with CityDAO. How to make sure that people who are paid to do work do not get paid unless they accomplish their work.

Legal:

We don’t have clarity on what CityDAO can do to earn money as an American DAO LLC. Without this, we keep spending money without making any money. We don’t have anyone who can legally sign contracts on behalf of CityDAO for our events, partnerships, or for when we hire independent contractors for work.

Taxes:

We need to pay our taxes and send out the proper forms from the American IRS to anyone who gets paid more than $600 per year. We need a CPA (certified public accountant) to handle some of these tax issues.

The proposed City Council 2.0 would include the following seven people: Blackacres, David, Nico, Ming, Lupei, SimplePixel, Serkan

Blackacres North American (NA) community communication Advisory board communication lead Handling and filing taxes including CPA oversight and paperwork Clarify the charter (GROUP) Clarify how an NFT holder confirms their citizenship for forum likes Clarify Snapshot voting to refine algorithmic quorums and/or implement quadratic voting Human Resource Management (GROUP) Complaint and grievance process

David Work with outside counsel to handle legal issues in CityDAO Clarify who can sign contracts on behalf of CityDAO Clarify the charter (GROUP) Clarify how an NFT holder confirms their citizenship for forum likes Clarify Snapshot voting to refine algorithmic quorums and/or implement quadratic voting Human Resource Management (GROUP) Complaint and grievance process Hiring and dismissal of independent contractors Dismissal of council members and other DAO members from groups Clarification on DAO tool access

Nico Taking notes on meetings Summarize round-ups Keeping things in check on that we’re on topic at meetings Community (GROUP) Cross channel communication across communities Help out with community calls, especially with NA and China areas. Hosting Twitter (X) Spaces Strategic operations (GROUP) If someone proposed something and didn’t follow through, should they still get paid? The work people say they’ll do and what they actually do should be documented and shared with the DAO. How can we ensure accountabilities for passed CIPs Assist with strategic communications about the long term development for CityDAO - what are we building?

Ming CN community communication Wechat group management and public account management IRL meetups in China Translate newspapers and round-up into Chinese Partnerships and communication with other CN DAOs DAO TALK Twitter Space Strategic operations (GROUP) Develop operational and marketing plans Plan CityDAO branding activities

Lupei Thai community communication Translation and content tailoring in Thai community IRL meetups in Thailand (as needed) Community operations (GROUP) Making sure everyone in the DAO has the same information Community activities / projects management CityDAO contest organization Publishing newspaper Twitter(X) management/access.

SimplePixel Co-lead Turkish community communication Management of partnerships with Turkish DAO/web3 organizations IRL events in Turkey Community operations (GROUP) Management of community activities and projects for overall DAO Hosting TR Twitter spaces CityDAO contest organization Strategic operations (GROUP) Clarifying the CIP process Making a clear template for the creation of CIPs Clarify the charter (GROUP) Clarify how an NFT holder confirms their citizenship for forum likes Clarify Snapshot voting to refine algorithmic quorums and/or implement quadratic voting Marketing / Events (GROUP) Figure out what upcoming events are happening globally and locally Make a CIP and work with others on an events budget Sponsorship & event participation for Turkish Community

Serkan Co-lead Turkish community communication Co-hosting biweekly Discord TR community calls Translation of newspaper and round-up into Turkish Community (GROUP) Representing the First & Founding citizens Connecting and gathering info about active/passive citizens on Discord & Twitter Strategic operations (GROUP) Research other DAOs about success / failure

Advisory / CityDAO Assembly (non voting): Anyone with more than 50 Citizen NFTs or any Founder NFTs. Being a member of the CityDAO Assembly provides streamlined access to the council and community team, which includes efficient feedback, communication, development of ideas and assistance in turning ideas into viable CIPs. This will be implemented after discussion and after main priorities are accomplished.

If any council member misses more than two meetings without explanation, they will be removed from the council. They will not be replaced until the next election. Voting on all issues within the council will require 4 of 7 votes to pass, except that choosing members of the multisig will require unanimous council approval.

RESPONSIBILITIES

City Council 2.0 is meant to accomplish very specific goals. Each of these goals is directly tied to the effectiveness of CityDAO. The planned goals are as follows:

Month 1-3

How to confirm citizenship for likes Adjusting quorums Update Charter Operations Clarify the process of CIP creation → Forum → Snapshot Making a clear template for the creation of CIPs Clarify how an NFT holder confirms their citizenship Ensure that only verified citizens are able to “like” CIPs on the Discourse forum Clarify Snapshot voting to refine quorums and/or implement quadratic voting Who posts Snapshot votes when the 20 like threshold is reached Clarification of DAO tool access Clarifying access process for Twitter & Discord Taxes and CPA relationship management and organization Appoint the 8-person multisig, remove non-participating members, and make clear rules

Month 3-6

Legal Establishing contact with outside council Making sure there is a clear pipeline for legal questions to be answered Who can sign contracts CityDAO treasury payments from projects Using NFTs as compensation to citizens Maintaining or hiring people to maintain the DAO tools including Discord, Discourse, Snapshot, Website, Notion, and Twitter

Human Resource Management Make rules for how members are removed in the future Establishing and enforcing regulations for behavior on Discourse and Discord Establishing a complaint and grievance process for CityDAO citizens

BUDGET BREAKDOWN

Council Members: $1500 per member per month ($63,000 total) Lawyers, Accountants and Other Professionals: $12K total Council Fund (only used for bounties and hiring): $20K total Community Fund : $12K total

TLDR

This proposal has 3 main fuctions:

1. Adjust Quorums
2. Hold Elections for City Council
3. Establish a Complaint Process

Category - Governance Criticalness - High Impact - High (All members of DAO will be affected) Duration - 6 months Quorum - 500 votes counted as 1 NFT = 1 vote Budget - 46,800 (+ bonuses up to $18,000)

The three goals are explained in more detail below:

--Adjust quorums--

Currently, the way votes are counted for quorum is 1 NFT = 1 vote. After a year of governance, CityDAO contributors have realized that it makes no sense for quorum to be the same for $11K and for $2 million, and it makes no sense that a non-financial vote has the same quorum as a CIP for $2 million. The new proposed system would still count 1 NFT as 1 vote for quorum with the following amendments:

1 vote = 1 quadratically-counted NFT An algorithm will be used to determine the quorum for different request amounts. An algorithm will be used to determine the voter approval rating

Quorum Algorithm: 50 + [1/2 * (sqrt $Ask)] Voter Approval Rating Algorithm: 66 + 24 ($ ask / treasury)

• To amend the Charter will require a quorum of 200 counted quadratically. Currently, it takes 1000 votes counted non-quadratically to amend the Operating Agreement (OA). This CIP does not intend to alter or amend the OA. This includes NOT changing how votes are counted for altering or amending the OA. They will be counted non-quadratically as 1 NFT = 1 vote.

--Hold Elections for City Council--

This CIP will create elections for seven (7) members of City Council. Within one week after elections are completed, the Council will choose one (1) individual from inside or outside the Council to serve as the Executive Facilitator (EF). If a member of the Council is chosen as the EF, then the remaining Council members will choose one additional member.

The EF will be a separate position and is not in the Council. The Council delegates the authority to the EF. The EF does not vote in the Council. The EF will be in charge of the day-to-day administration and operational execution, while the City Council is in policy setting and strategic direction. The Council may determine the authorities of the EF. The Council may not interfere in the EF’s authorities except if the EF is incapacitated. The Council are the decisions makers and the EF handles implementation.

The EF will have the following powers and authority:

• Implementation of projects, including resource availability and oversight
• Handle relationships with outside counsel
• Handle mailing address, copyrights, trademarks, legal formalities
• Handle relationships with CPAs for bookkeeping and taxes
• Any powers and authorities delegated by a majority vote of the City Council

The City Council will have the following powers and authority:

• Appointment of Executive Facilitator.
• Possible hiring of an Ops Admin
• Appointment of Multisig Signers.
• Create advisory boards of citizens.
• Policy setting and strategic direction.
• Maintain or hire people to maintain the DAO tools
• Adopt its own rules of procedure and set the time and place of its official meetings.
• Provide for the prosecution and defense of legal causes on behalf of CityDAO and retain counsel and set their compensation.
• Establish and enforce regulations for behavior.
• Establish and enforce regulations for the resolution of disputes.
• Enter into agreements with other DAOs or entities.
• Levy and collect taxes, rents, lease fees and other sources of revenue.
• Make investigations of CityDAO affairs; inquire into accounts, records, and transactions of any CityDAO department, office, or officer; and, for these purposes, require reports from any project and the production of official records.
• Adopt rules and regulations necessary for the exercise of its powers and prescribe fines and penalties for the violation of ordinances in accordance with city law.
• Place questions or propositions directly onto Snapshot, when agreed to by 5 of 7 of the total membership of the City Council.

The City Council will appoint the eight (8) multisig signers. The role of the multisig signers is transaction execution and transaction evaluation. All multisig signers will undergo proper training to fully grasp the implications and responsibilities of being on the multisig. The multisig signers are responsible to check transactions, to check where the funds are being sent, and to follow all the requirements for a proper transaction for the protection of CityDAO. The key aspect of the multisig is that the signers be trusted members of the DAO.

Operations and Day-to-Day Administration

The City Council will help organize and delegate operational tasks, such as maintaining the meeting minutes, permissions, passwords, independent contractor agreements and contracts. The City Council will schedule weekly meetings at regular times, which will not be changed with less than 48 hours notice. Council members will each have the highest level of admin permissions on each of CityDAO’s tools, including but not limited to discord discourse, Twitter, Notion, Snapshot and Google Workspace. The Council will determine who else should hold any permissions or passwords.

CIP Template Creation and Management

In addition to formatting a template for CIPs, the City Council will help problem-solve and request additional information where necessary, to make sure that proposals further the mission of the DAO.

Transparency Dashboard

The City Council will require that, for quality, transparency and clarity, all CityDAO projects create a transparent and available document that provides all pertinent information on funding received, expenditures, milestones and benchmarks. This document will be written in plain English and will be available at all times to all citizens on the CityDAO website or Notion page. The Council will finalize the details of the process. This is not meant to punish people but to provide transparency. Project members must populate the dashboard in order to receive continued funding.

Election Method

If this CIP passes, there will be open elections for seven (7) City Council members, all with six-month terms that begin on the day the election ends. Any citizen may run for any position. A citizen may be on the City Council and the multisig simultaneously. There will be no hierarchy of members on the City Council.

To be elected, candidates must put up a platform statement on Discourse. All candidates will take part in a series of two (2) public debates with questions submitted in advance by any citizen, moderated and run by the Community and Media Guilds together. After the debates, separate ranked choice votes will be put on Snapshot. All elected members of the multisig and the City Council must be willing to be KYC’d.

Election Rules

• The election may not be used as an excuse to disparage the character of another member of the DAO.
• Candidates may not make pledges, promises, or commitments of any sort.

Compensation and Budgets

Multisig Compensation: The multisig signers will receive $100 per month each, regardless of who actually signs the transactions. This is meant to incentivize all members to pay close attention to the transactions, their purpose, destination, suitability and potential liability to the DAO.

City Council Compensation: 3 Citizenship NFT per month per councilmember; City Council will have a fund of 5 NFTs total per month to bring in talented individuals to the DAO. 4 of 7 vote required to give an NFT.

Executive Facilitator: The EF will receive $3K per month in compensation + a potential bonus of up to $3K per month based on performance from the City Council, and will have a budget of $24K over six (6) months and the authority to execute agreements.

• In an emergency event where CityDAO gets sued and is required to pay fees in excess of the funds in the City Council treasury, the City Council can put a CIP on Discourse and Snapshot concurrently, with no time limits required. Quorum will be however many people vote.

Removal

The multisig signers will have one week to sign or reject transactions. If a transaction is rejected, the signers must document reasons why and next steps within a reasonable time. If any of the multisig signers refuse to sign (2) or more transactions, they will be removed and the candidate who had the next highest vote will replace them. If there are no candidates left, a new election will be held for replacements or the City Council will choose replacements. The members of the multisig can vote off any member with a 5 of 8 vote.

If any of the City Council members miss more than three (3) meetings, they will be removed and replaced in the same manner as the multisig signers. The City Council can vote off any member with a 5 of 7 vote. The City Council can remove the EF at any time with a 5 of 7 vote. CityDAO Citizens can call for a removal or replacement of members of the multisig or the City Council or the Executive Facilitator with a CIP and a quorum of 50 votes. If a CIP is put up, it will be done with an anonymous “City Council” account so no one feels pressure to doxx.

--Complaint Process--

A complaint may subject the citizen to penalties up to and including a prohibition on offending parties from holding administrative positions at CityDAO or in CityDAO projects.

• Substance - What Constitutes a Complaint?

An allegation of wrongdoing related to projects, behavior, transactions, or violations of the rules at CityDAO.

• Process - How is a Complaint Dealt With?

Step 1 - Mediation by an individual who is agreed-upon by both parties.

Both parties must agree on an individual, preferably (but not necessarily) a CityDAO Citizen, who will hear both sides of the argument and attempt to mediate between the two parties.

Step 2 - Random jury (Randomocracy)

Complaints that reach step 2 will be heard by a Kleros court. In case of failure, the City Council can choose to use a randomly selected group of six (6) CityDAO citizens using the Chainlink Verifiable Randomness Function (VRF). If either party is not satisfied with the decision, they may appeal to a Kleros appeals court.

Both parties must write a complaint document. This complaint of wrongdoing needs to be complete and make specific allegations along with any evidence. Payment for “jury duty” is $50 per person. This jury of 6 people will make a binding decision based on the facts presented. The Executive Facilitator will enforce the result by initiating a resolution that will go to the City Council to handle the dispute accordingly.