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DAO ↔ L3C Authority Boundary Map

Placement: Governance architecture documentation, role & authority architecture, legal–governance alignment materials

Audience: Governance designers, counsel, funders, core contributors, reviewers conducting diligence

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How these three work together

L3C Operating Agreement = legal and fiduciary authority

DAO Charter = governance and mandate authority

Role Framework = operational and execution clarity

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DAO = Governance & Mandate Authority

The DAO controls:

Strategic intent and priorities

Budget approvals and capital mandates

Policy frameworks (spending, investment, risk)

On-chain governance decisions

Oversight and accountability mechanisms

The DAO does NOT:

Execute day-to-day financial transactions

Hold legal ownership of L3C assets

Interface directly with regulated financial institutions (unless separately constituted)

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L3C = Legal, Fiduciary & Execution Authority

The L3C controls:

Legal custody of assets

Regulated financial operations

Contracting, banking, compliance

Execution of capital deployment

Employment and vendor relationships

The L3C does NOT:

Set DAO governance outcomes

Override DAO-approved mandates

Represent itself as a DAO

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Commons = Shared Resource Layer (Non-Authoritative)

The Commons represents the shared resource layer of the ecosystem, encompassing public goods, shared infrastructure, and collective assets stewarded for collective benefit.

The Commons does not function as a governance authority or legal entity. Decisions related to commons priorities and resourcing are set through DAO governance and executed, where required, through affiliated legal entities.

Stewardship of commons resources is custodial and coordinative in nature and does not confer ownership or unilateral decision-making authority.

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Director of Finance & Investments = Bridge Role

The Director of Finance & Investments operates at the interface.

In the

DAO context

Serves as Treasury Steward

Executes DAO-approved budgets and mandates

Reports treasury status, performance, and risk

Does not hold unilateral authority

In the

L3C context

Acts as an executive officer with fiduciary responsibility

Executes capital strategy within approved bounds

Interfaces with banks, auditors, investors

Ensures legal and regulatory compliance

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Authority Flow (simple model)

Governance authority resides with the DAO, while fiduciary and execution authority resides with the L3C; the Director of Finance & Investments operates as the delegated execution and stewardship role between these structures.

DAO

→ sets intent, approves mandates

→ delegates execution authority

L3C

→ holds legal and financial responsibility

→ executes through officers

Director of Finance & Investments

→ translates intent into action

→ accountable upward to both structures within their domains

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