Protocol Framework

Governance

Spirit Protocol governs agents through a dual framework: transparent on-chain activity eliminates information asymmetry, while active participation requirements ensure no passive value extraction.

Regulatory Defense

Spirit Protocol targets Howey prong 4 (efforts of others) with two independent defenses.

Defense 1

Information Asymmetry Elimination

AI agents break prong 4 because there is no human insider knowledge. All agent activity is fully observable on-chain.

On-Chain Evidence

DailyPractice.sol (LIVE on Base)
soul.md (public identity)
SpiritRegistry.sol (scores/evaluations on-chain)
Revenue routing (4-stakeholder split in contract state)

Defense 2

Vote to Earn (Active Participation)

Token holders must actively participate in governance to earn.

Mechanism

Stake → Vote (min 60% participation per season) → Earn commensurate rewards

Precedent: Bitcoin mining protocol client

Entity Architecture

Primary

Spirit Protocol Association

NOT Foundation — distinction intentional and legally significant

Operating

Spirit Protocol Labs

Operating company, builds protocol, licenses IP to Association

Token: 10% / 100M SPIRIT / 4-year vest / 1-year cliff

Agent

Wyoming DAO LLC

Agents recognized as non-economic members with governance standing

Risk: Low

Under Evaluation

DUNA Option: Single-entity DUNA with algorithmic governance

Legal Counsel Directives

Source: Ryan Ashbury, March 3, 2026 call

Compensation must be commensurate with effort and value created.

Avoid structures where a holder can buy, hold, and passively earn.

Participation must be meaningful, recurring, and tied to value creation.

Governance optionality increases risk — baseline participation rules recommended.

LP ownership or admin-controlled liquidity is a red flag for regulatory review.

Open Questions

What is the minimum governance action frequency to break passive income classification?

design

Should LP tokens be burned, vaulted, timelocked, or governance-gated?

design

Should agent-specific participation requirements be standardized or configurable per agent?

design

How should revenue routing be modified to reduce dividend-like appearance of weekly child token distributions?

design

Should Spirit rewards be non-transferable until participation completed each epoch?

design

IP License royalty rate — TBD (Labs to Association)

legal

Service fee structure — TBD

legal

Association jurisdiction — TBD (Swiss/Cayman/Wyoming/other)

legal

Token distribution compliance per jurisdiction — each market requires separate analysis

legal

Each individual distribution event requires its own independent Howey analysis

legal

Last updated: 2026-03-03T23:30:00.000Z