This token swap formalizes alignment between the two projects, which are both working to build better tools for human coordination on the blockchain. Onchain governance (Aragon) and digital jurisdictions (Nation3) go hand in hand and need to evolve in lockstep.
Digital jurisdictions like Nation3 have the potential to unlock novel dispute resolution mechanisms for DAOs, so they don’t need to rely on nation states’ legal systems.
This is particularly impactful at a time when traditional nation state jurisdictions have not yet adapted to the needs of DAOs and create legal uncertainty for participants. As onchain-native organizations, DAOs should have the choice to resolve their disputes and enforce their rights in a jurisdiction that meets their unique needs.
DAOs provide the infrastructure for digital jurisdictions to govern themselves onchain. DAO technology allows digital jurisdictions to manage citizenship, make and enforce decisions, and govern shared resources.
"Aragon is excited about Nation3’s broader vision of a decentralized jurisdiction, and in particular a new dispute resolution system. We acknowledge that Aragon does not need to build everything itself and delivering this new system is not in our current roadmap. Thus, partnering with organisations to build these capabilities could have a substantial impact in super powering DAOs.
We are very excited to see continued strategic alignment between our two organisations."
- Anthony Leutenegger, Head of Growth at Aragon
"There is already significant ideological alignment and team alignment, and this proposal would take this a step forward by formalizing financial alignment as well. This proposal would also enable Aragon to superpower its offering to DAOs and DAO contributors with legally-binding agreements, while being able to remain laser-focused on DAO tooling and the DAO framework offerings."
- Luis Cuende, Founder of Nation3 and Cofounder of Aragon
In the proposal put forward on the Aragon forum, Luis described what Nation3, the first internet-native jurisdiction, can bring to Aragon:
Disputable voting: DAO token holders can deposit collateral and make a proposal to undergo a vote, but if such proposal contradicts the DAO’s charter, anyone can dispute it. This mechanism can help keep the DAO mission-aligned.
Disputable payment streams: Nation3 can introduce disputable Sablier or Superfluid crypto payment streams. For example, DAOs could enter an agreement with each guild, and then have their operations guild oversee their work and pause the stream if needed. Any of the parties can open a dispute if they feel the agreement has been breached.
Charter enforcement: The DAO’s charter could define actions that are illegal, such as funding or undertaking any criminal activities, or paying out dividends. This could outsource the need for third party intervention to a digital jurisdiction.
Eventual legal recognition for DAOs in SEZ (Special Economic Zones): Nation3 aims to prove that it can run an Internet-native jurisdiction and a system of law first, and then negotiate the creation of Special Economic Zones in traditional jurisdictions.
He also described what Aragon can bring to Nation3 in the proposal to the Nation3 community:
Distribution to the world's top DAOs: Aragon can help Nation3 introduce Internet-native legally binding agreements to DAOs and their contributors.
Battle testing the Nation3 Jurisdiction: If Aragon chooses to secure its treasury in the Nation3 jurisdiction, this would help test the protocol and increase confidence in its security.
Powerful DAO infrastructure: Aragon OSx allows DAOs to experiment with governance at the speed of software. Nation3 can leverage these tools to continue advancing digital jurisdictions.
The terms of the swap are 1,000 NATION for 300,000 ANT, and 1,000 NATION for 1 million USDC. All NATION and ANT are subject to a one year linear vesting.
Nation3 is an online-first, zero-tax nation with its own jurisdiction, court, and system of law. It gives you the legal guarantees you need to safely transact on the Internet, without using traditional jurisdictions and processes.
They create agreement templates that DAOs and their contributors can use to make binding agreements. Pick your collateral assets and the amount, agree on terms, and sign the agreement. Then, if either party breaches the agreement, Nation3 judges can make a ruling enforced with the collateral.
Metagovernance is when a DAO holds voting power in another DAO, typically through holding their native token. Metagovernance is important for increasing alignment between projects and making the DAOs stakeholders in each other’s projects. This token swap with Nation3 is an example of metagovernance.