Can a DAO Run Itself Without a Labs Entity? Mostly — But Not Entirely

Han Verstraete and Anton Kouprianov on why pure on-chain governance breaks down in practice, and what a pragmatic DAO actually delegates.

Try running a project where every decision needs a general assembly vote or a sub-DAO signature, and you'll discover the same thing every DAO eventually discovers: participation rates are low, even in the bigger projects. You can't mobilise a token-holder community to vote on whether to renew a SaaS subscription.

Delegate the day-to-day, keep a correction mechanism

The pragmatic answer isn't more governance — it's less, applied more narrowly. Tell your community plainly: do you trust the lead team to make the thousands of small day-to-day calls a project needs? Delegate that. Keep the general assembly for the big stuff, and build in a correction mechanism for when the leads go off the rails — replacement of the director, or in the extreme case, seizing the foundation's assets. A decentralised foundation structure gives you exactly that lever without requiring a vote on every decision in between.

You don't need to relocate to Cayman just because your foundation is there

A foundation domiciled in Cayman doesn't mean the team needs to live there. Keep your Labco — the operational, day-to-day entity — wherever you already are: a "cheap and cheerful" standard company, neutral, unremarkable. If there's a personal tax bill attached to that, pay it. The most defensible setup is often the most boring one, not the most jurisdiction-optimised one.

The team's token allocation should come with lockups, not a one-day payday — projects that skip this see their best people cash out and disappear the moment liquidity arrives. Properly vested, the team stays economically aligned with the token's long-term value, same as everyone else holding it.

Soft power, not legal power

Influence over a decentralised foundation should work the way Aave-style governance actually works in practice: token-weighted votes, snapshots, no special legal carve-out for the founding team. If you're the recognised founder and you say "I'd like to see X happen," there's a good chance it happens — but that's soft power, earned by credibility, not legal power, vested by structure. The moment you try to formalise the lead team's control inside the decentralised stack, you reintroduce the exact circularity — team controls foundation, foundation funds team — that the structure was built to avoid.