FLUID token holders will maintain full authority over the new legal entity through decentralized governance.
The DeFi ecosystem is undergoing a significant legal and operational evolution following the news that Fluid DAO is debating the transfer of all its intellectual property into a foundation structure. This initiative, presented by Instadapp’s COO, aims to protect the protocol’s assets under a legal entity in the Cayman Islands.
The plan envisions that Fluid’s smart contracts, front-end interfaces, and domains will no longer belong to specific individuals or companies, but rather to the foundation. However, the development team clarified that they will act only as custodians, leaving final control in the hands of the community.
The presented document reveals that this structure is necessary for the protocol — which already exceeds $1.2 billion in Total Value Locked (TVL) — to comply with global banking and regulatory requirements. Therefore, the goal is to find a balance between decentralization and legal formality.
To finance this new framework, the approval of a $250,000 monthly grant is required, totaling an annual budget of $3 million. These funds will be used to cover infrastructure, security, and business development to ensure the platform’s sustained growth.
While this amount represents a significant portion of the protocol’s monthly revenue, proponents argue that it is a vital investment for scalability. Furthermore, by establishing the foundation, the entity would assume legal costs and liabilities in the event of legal disputes or external lawsuits.
In summary, this transition marks an important step toward Fluid’s institutional maturity within the competitive decentralized lending market. If approved, the intellectual property transfer work would be completed by mid-2026, consolidating the DAO as the ultimate decision-making body.
