I understand the different point of view of the community and have to admit this isn’t an easy choice.
After thinking this carefully, my vision is ParaSwap is a permissionless protocol; however, the ParaSwap DAO retains sovereignty over the Treasury funds.
- The principle of ‘code is law’ still applies, but when a DAO includes a governance mechanism, its members become the rule-makers for its treasury. They bear the moral obligation to make decisions in the best interest of the DAO.
- Personally, I think there’s a significant legal and reputational risk for the ParaSwap DAO if it retains funds tied to illicit activities, such as those involving the Lazarus group.
I really like the community’s idea of automating the system to redistribute fees to PSP stakers. This could address such cases by reducing the scope of governance. On a related note, if a specific framework—considering factors like fee size or other criteria—is desired, such events could be managed in the future with a Kleros Constitution for Paraswap DAO. Transactions violating the rules or framework could then be vetoed by Kleros, acting as a neutral third party. However, as mentioned by some community members, it is better to address this topic, in a separate thread.
Regarding how the DAO should act in the short term, I support returning the funds to ByBit while retaining 10% as cost coverage for the governance process of the DAO and industry standard.
I also believe it’s important that Bybit include a formal legal release & indemnity to bring clarity and protect the interest of the DAO as explained by @citizen42.
I’d appreciate @Bybit’s input on these last two points to ensure the DAO process can proceed under the best possible conditions.