AMKT DAO Working Constitution
The AMKT DAO is responsible for creating and maintaining the AMKT Benchmark, a benchmark tracking the crypto-asset market. The DAO is composed of two bodies – the holders of the first implementation of the Benchmark (the AMKT Token), and a set of AMKT Governance Stewards.
The AMKT Governance Stewards are a group of value-aligned individuals from throughout the crypto ecosystem. They have the following responsibilities that are expanded on in other sections of the working constitution.
- Owning the smart contracts for the first implementation of the AMKT Benchmark, the AMKT Token
- Working in tandem with the AMKT Token holders to judge assets for fit within the AMKT Asset Universe
- Working in tandem with the AMKT Token holders to draft and adopt a Bedrock Constitution
Amending the Working Constitution
Any verified AMKT holder (see Verification for DAO Voting) may propose an amendment to the Working Constitution, which may be voted upon by any verified AMKT holder.
If a quorum (1% quorum of AMKT token supply) votes to adopt a proposal before the proposal expires, and the AMKT Governance Stewards believe that the proposal does not violate the spirit of the Working Constitution, the proposed amendment will be adopted and the Working Constitution will be amended accordingly. The framework for proposing an amendment to the Working Constitution is the same framework for proposing a change to the AMKT Asset Universe (See Appendix 2) – discussion, proposal, voting, interpretation, and implementation.
If a majority of the Governance Stewards determine that the proposed amendment is consistent with the Working Constitution, the Governance Stewards shall implement the proposed amendment. The Governance Stewards retain ultimate discretion to determine the timing of such implementation and whether it is reasonable and appropriate to impose any changes or conditions on the proposed amendment as part of the implementation process.
A majority of the current Governance Stewards may also propose an amendment to the Working Constitution. The proposed amendment will be submitted to the AMKT DAO community for review, and shall be implemented by the Governance Stewards within an appropriate time following the publication of that amendment as determined by the Governance Stewards.
The AMKT DAO has a set of guidelines and procedures for the conception, voting, and execution of new governance proposals.
The underlying assets for AMKT are currently custodied with a single central custodian in an account maintained by the Service Entity to the AMKT DAO. This concentration of assets in a single custodian represents a potential risk; for example, if the custodian were to discontinue support for those assets or for the custodial account holding those assets, AMKT could be negatively impacted.
Based on this potential risk, it is prudent for the Service Entity to create a fallback custodial account, so that the Service Entity, and by extension the AMKT DAO, will be adequately prepared in the event of a custodial outage or a custodian migration.
The AMKT service provider is permitted to switch, at its election and in its discretion, the custody provider of the assets underlying the AMKT token. This means that:
- A different custodian (or custodians) will hold the underlying assets; and
- A different platform (or platforms) will be used to buy and sell the underlying assets in connection with redeeming AMKT and rebalancing / reconstituting the AMKT index.
The service provider would seek to move the AMKT underlying assets to a different custodian (or custodians) in the event that one of the following enumerated events occurs:
- Custodian raises its fees for its services to a level that materially changes the service provider’s operating economics and, by extension, the fees paid into the AMKT network;
- Custodian no longer supports some or all of the underlying AMKT assets;
- Custodian no longer supports the service provider as a customer;
- Custodian no longer supports the geographic jurisdiction in which the service provider is located;
- Custodian faces a security risk, insolvency or some other material operational threat;
- Custodian’s licensing or regulatory status changes in a way that materially alters its business; or
- An event occurs that, in the service provider’s determination, would materially impact the ability of the custodian to safely and efficiently support the underlying AMKT assets.
Reputation and Regulatory Status: The proposed custodian should be recognized in the crypto-asset industry as a reputable and properly licensed participant with no legal or regulatory issues, either current or imminent, that could materially impact its business. The proposed custodian should be incorporated in, regulated by, and/or operate out of a jurisdiction that has adopted a clear and supportive crypto-asset regulatory framework.
As part of its selection of a new custodian, the service provider will determine that the reputation and regulation of the proposed custodian is comparable to the functionality offered by the current custodian.
Functionality: The current Custodian offers both custody services and trading support for the assets underlying AMKT, which facilitates the AMKT creation and redemption process, and the AMKT re-balancing and re-constitution process. The proposed custodian should support all of the assets that constitute the AMKT index, and offer sufficient API and other technical support to the service provider and to AMKT users that may interact with the custodian and its services.
The service provider will attempt to select a custodian whose functionality is comparable to the functionality offered by the current custodian.
Cost: The proposed custodian’s fees should be comparable or superior to the fees of the current custodian and should not materially impact the service provider’s current operating economics. If the fees of the proposed custodian are materially higher, the service provider still may select the proposed custodian if other considerations are met, such as functionality or network security.
The service provider will attempt to select a custodian whose fees are comparable to the fees of the current custodian and will not materially impact the service provider’s operating economics.
Network Security: The proposed custodian should offer network security that is comparable or superior to the network security of the current custodian.
The service provider will attempt to select a custodian whose infrastructure and procedures provide a comparable level of network security to the current custodian.
The DAO chooses a Service Entity to carry out tasks for which a legal entity is required.
The DAO's chosen service is Battery Labs, which will perform the following example functions related to the index on behalf of the Alongside DAO:
1. KYC-related activities
2. Holding the institutional custodian accounts
3. Operating front-ends
4. Coordinating auditing functions
Transferring tokens to some addresses may be prohibited by the laws of relevant jurisdictions. As part of their role in administering the smart contracts, Stewards can restrict transfers of AMKT to and from those addresses to comply with any jurisdictions they deem relevant.
This Working Constitution is an intentionally transitory document. This version of the constitution will remain in effect for no more than three years. We hope the AMKT DAO adopts a Bedrock Constitution within that time. There are still many lessons to be learned about how to ensure a vision is stably carried forward in the face of changing times. We may need to update our procedures along the way.
Any verified AMKT Token holder can propose a new Bedrock Constitution. If the proposal reaches a 10% quorum, the Governance Stewards will consider it for adoption. To reduce the chance of gridlock, a Bedrock Constitution proposed by a majority of Governance Stewards will pass by default unless a 10% quorum of AMKT supply opposes it.