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Mango DAO – DUNAA Compliance Report

Executive Summary

This report analyzes Mango DAO’s suitability for adopting the Decentralized Unincorporated Nonprofit Association (DUNA) structure. Mango DAO, which governs the Mango Markets protocol on Solana, demonstrates strong potential for DUNA adoption based on its operational metrics, governance structure, and treasury management.

1. DAO Summary

Organizational Overview

  • Name: Mango DAO
  • Purpose: Governance of Mango Markets protocol (borrowing/lending and leverage trading platform)
  • Network: Solana
  • Treasury Value: $46.7M
  • Community Size: 2,900 token holders

Governance Metrics

  • Total Proposals: 984
  • Active Participants: 613 lifetime participants
  • Proposal Creation Threshold: 7,500,000 tokens
  • Voting Structure:
    • Uses community voter weight add-in
    • Maximum vote weight: 100% of supply
    • Number of Governance Instances: 15

Key Strengths

  1. Substantial treasury requiring professional management
  2. Active governance with nearly 1,000 proposals
  3. Healthy ratio of active participants to total token holders (21%)
  4. Clear governance infrastructure with defined thresholds

Areas of Consideration

  1. Concentration of voting power needs evaluation
  2. Relationship between treasury and protocol operations
  3. Current legal structure and compliance framework

2. DUNA Usecase Analysis

Nonprofit Purpose Alignment

Score: High

  • Primary focus on protocol governance rather than profit distribution
  • Treasury utilized for protocol development and ecosystem growth
  • Aligned with DUNA’s nonprofit requirements for DeFi protocols

Decentralization Assessment

Score: Medium-High

  • Positive Indicators:
    • Large token holder base (2,900+)
    • Active governance participation
    • Multiple governance instances (15)
  • Areas for Monitoring:
    • Voting power distribution
    • Proposal creation accessibility

Legal Structure Benefits

Score: High

  • Clear need for treasury management framework
  • Substantial assets requiring protection
  • Active governance requiring legal recognition
  • Complex DeFi operations necessitating liability shields

Operational Compatibility

Score: High

  • Existing governance structure aligns with DUNA requirements
  • Treasury size justifies formal legal structure
  • Active proposal system demonstrates operational maturity

3. DUNA Readiness Score: 85/100

Score Breakdown

  1. Membership Requirements (25/25)
    • Exceeds minimum 100-member requirement by 29x
    • Active participation demonstrates genuine community engagement
  2. Governance Structure (20/25)
    • Well-defined voting mechanisms
    • Clear proposal thresholds
    • Multiple governance instances
    • Room for improvement in voter distribution
  3. Treasury Operations (20/25)
    • Substantial treasury size
    • Liquid assets readily available
    • Need for formal management structure
    • Potential for automated tax compliance
  4. Activity & Engagement (20/25)
    • High proposal volume
    • Steady participation rates
    • Room for increasing active participant ratio

4. DUNA Impact Analysis

Immediate Benefits

  1. Legal Protection
    • Limited liability for 2,900+ token holders
    • Clear legal status for treasury operations
    • Protected contract execution capability
  2. Operational Efficiency
    • Streamlined treasury management
    • Clear tax compliance framework
    • Enhanced contracting capabilities
  3. Governance Enhancement
    • Legal recognition of governance decisions
    • Protected member rights
    • Clear framework for proposal execution

Long-term Value

  1. Ecosystem Development
    • Enhanced ability to engage with traditional entities
    • Reduced regulatory uncertainty
    • Improved institutional participation potential
  2. Risk Mitigation
    • Protected treasury operations
    • Clear liability boundaries
    • Regulatory compliance framework
  3. Growth Potential
    • Scalable legal structure
    • Enhanced credibility
    • Clear pathway for evolution

Recommendations

Immediate Actions

  1. Conduct detailed treasury activity analysis
  2. Review governance token distribution
  3. Assess current legal obligations
  4. Evaluate tax implications

Medium-term Steps

  1. Develop DUNA transition plan
  2. Create treasury management framework
  3. Establish compliance procedures
  4. Update governance documentation

Long-term Considerations

  1. Monitor regulatory developments
  2. Plan for potential structure evolution
  3. Consider additional protections needed
  4. Evaluate growth implications

Conclusion

Mango DAO demonstrates strong readiness for DUNA adoption with a readiness score of 85/100. Its substantial treasury, active governance, and clear operational framework make it an ideal candidate for the DUNA structure. The primary areas for attention during transition would be formalizing treasury management and ensuring equitable governance participation.

The DAO’s existing operations align well with DUNA requirements, and adoption would provide significant benefits in terms of legal protection, operational efficiency, and growth potential. A structured transition approach focusing on treasury management and governance documentation would facilitate smooth adoption of the DUNA framework.

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