BPIP#6: Governance Review of Contributor Mark’s Actions

Discussion
1

Proposer: Blackpool Association
Date: 19/11/2024

  1. Preamble

This proposal seeks to address the actions of contributor Mark Sherman (“Mark”), specifically his unilateral sale of Sorare cards, the withholding of proceeds, and the imposition of unauthorised conditions for their release. These actions were taken without consulting Blackpool DAO’s governance framework, violating core principles of transparency, accountability, stakeholder protection, and community rights.

Moreover, these actions follow a recent governance vote [(BPIP#5 V1] rejecting a proposal for asset liquidation, making Mark’s unilateral sale not only unauthorised but also directly contrary to the DAO’s collective decision. Compounding this, Mark sold the assets significantly below their fair market value ($88,888 USDT instead of ~ $500,000 USD), further undermining the DAO’s financial interests and community resources and rights.

Furthermore, Mark’s attempts to negotiate his compensation and contractual obligations under these circumstances lack inherent legitimacy. Moreover, as per the mandate defined in matters involving contractual relationships with contributors fall under the purview of the Blackpool Association. This proposal urges the DAO to address this situation decisively, ensuring compliance with governance principles and protecting stakeholder interests.

  1. Background

Since 2021, Mark has been actively managing Sorare cards on behalf of Blackpool DAO under a signed agreement.

Recently, Mark unilaterally sold the Sorare cards via an Over-the-Counter (OTC) transaction for $88,888 USDT. He has withheld the proceeds in escrow, imposing the following unauthorised conditions:

  1. A signed acknowledgement from an individual (instead of the association or the DAO governance) terminating the agreement by 9:00 CET on November 20th, 2024.
  2. Retention of a portion of the proceeds until a final settlement is agreed upon, with a self-imposed six-month deadline. This retention is self-imposed and lacks governance approval.
  3. Additionally, Mark has indicated the following actions should his conditions not be met:
  • Release to Alternate Wallet: If an acknowledgement is not signed by the deadline, Mark threatens to release the escrowed funds to an alternate wallet under his control, claiming it would serve as “safe custody” for the liquidation process.
  • Final Compensation: Mark has further stated that if the DAO does not reach a settlement with him within six months, he will consider the retained funds as his final compensation, effectively closing the matter unilaterally.

These actions demonstrate a clear disregard for the DAO’s governance framework and undermine stakeholder rights by prioritising unilateral decision-making over collective governance.

  1. Violations and Lack of Legitimacy

Mark’s actions demonstrate clear breaches of DAO governance principles and lack legitimacy for the following reasons:

  1. Unilateral Asset Sale:
  • The sale was conducted without DAO governance approval or proper authorisation. Significant decisions involving DAO assets require transparent governance votes or oversight, which were not sought.
  1. Unauthorised Conditions:
  • Mark imposed self-determined conditions for releasing funds that lack governance endorsement. These conditions undermine the DAO’s authority and stakeholder rights.
  1. Improper Contract Negotiation:
  • Mark’s attempt to negotiate his contractual obligations and compensation unilaterally is improper and invalid under these circumstances.
  • As per BPIP#3, any renegotiation of contributor contracts falls within the mandate of the Blackpool Association, acting as a supportive entity to the DAO. Mark’s unilateral approach bypasses this mandate.
  1. Retention of DAO Funds:
  • Mark has retained funds derived from DAO assets as self-compensation without governance approval. Such actions are inconsistent with the DAO’s principles of accountability and stakeholder protection.
  1. Proposal

The Blackpool Association proposes the following immediate steps for the DAO:

  1. Governance Review of Mark’s Actions:
  • Evaluate the legitimacy of Mark’s actions, including the unauthorised sale of Sorare cards and his self-imposed conditions on the proceeds.
  • Assess whether his actions constitute a breach of implied responsibilities to act in the DAO’s best interests.
  1. Request Escrow Freeze:

  • Notify the escrow agent or any designated escrow wallet of the dispute and formally request that the funds remain frozen until governance issues are resolved.

  • Clearly state that the conditions imposed by Mark are not recognised by the DAO.

  1. Notification to Mark:
  • Inform Mark that:
    • His actions and conditions are not recognised as legitimate by the DAO.
    • His attempts to renegotiate his contract under the current circumstances are invalid and must be handled in coordination with the Blackpool Association as per BPIP#3.
    • He must refrain from further actions related to the escrowed funds until a governance decision is reached.
  1. Engage Legal Counsel:
  • Retain a legal expert to:
    • Evaluate the enforceability of Mark’s imposed conditions.
    • Assess potential breaches of fiduciary duties.
    • Explore recovery options for the withheld funds and mitigate risks associated with his actions.
    • Develop a framework to resolve Mark’s potential claims in compliance with BPIP#3.
  1. Ensure Transparency:
  • Ensure transparency and stakeholder alignment throughout the process.
  1. Rationale

Mark’s actions lack legitimacy and violate fundamental governance principles. Additionally, his unilateral attempts to renegotiate his contract contradict the processes established under BPIP#3, which delegate such matters to the Blackpool Association. Allowing these actions to proceed unchallenged would set a damaging precedent for the DAO’s governance framework.

This proposal ensures that going further, the DAO:

  1. Upholds its governance standards and maintains stakeholder trust.

  2. Protects its assets and resolves disputes in a compliant, transparent manner.

  3. Reinforces the role of the Blackpool Association as a supportive entity for handling contributor contracts.

  4. Conclusion

The Blackpool Association strongly recommends that the DAO adopt the steps outlined in this proposal to promptly address Mark’s actions and align with governance principles. This approach ensures compliance with BPIP#3, protects stakeholder interests, and preserves the integrity of Blackpool DAO.

Proposal Decision:
☐ I agree with the proposal.
☐ I disagree with the proposal.

  1. Proposal Specifications

Admin(s): veBPT and sdBPT holders
Community feedback: 3 days min
Voting Duration: 7 days

2

I acknowledge the proposal and its contents but strongly contest its claims and implications.

The actions taken were in line with the discretionary authority granted and executed no differently from the thousands of transactions that preceded this.

It remains telling that the BlackPool Association continues to deflect from the unresolved issue of over $3 million in missing and misused treasury funds from the initial seed capital, favoring a smoke-and-mirrors attempt against its leading protagonist instead.

Unfortunately, governance mechanisms that should enable transparency and accountability have been undermined by concentrated control over voting power, making any genuine investigation into these issues difficult to pursue.

Unless the Association commits to addressing the systemic issues at the heart of the DAO’s struggles—namely, the unchecked actions of the individual it repeatedly defends—any further attempts to disseminate misinformation or damage my reputation will only further erode the very principles it claims to uphold.

No further comment will be provided.