Phase 1: Submitting a QWIP Idea
After a QWIP Idea is submitted, Phase 1 defines how it transforms into a Formal QWIP for consideration by the QWAN DAO. This includes a level of community support, incorporating relevant feedback, and putting together the formal proposal that moves onto the next phase in the governance process.
• A QWIP Idea must be submitted as a topic.
• The topic is reviewed by a Foundation administration team to ensure the proposal is relevant and meaningful to the QWAN ecosystem and its development, and otherwise meets community guidelines.
• Tokenholders engage with the topic and the author(s) to informally gather feedback and initial support.
• The QWIP remains in Phase 1 for community discussion until all of the following are met:
          • Minimum Time Period: A minimum time period of seven (7) days is set to allow for sufficient time for community discussion. An author cannot request to continue forward in the process until the minimum time period is met. The Special Council shall have the right to expedite the timing of the QWIP process at its discretion.
          • Explicit Request: The QWIP Idea shall remain in community discussion until the author believes they have received sufficient feedback from the community and explicitly requests to move to Phase 2. An author cannot request to continue forward until the Minimum Time Period has been met.
          • Formal QWIP Template: While the initial idea or topic may be submitted as a vague or ill-defined idea, it must follow a specific template and provide sufficient information to the community prior to moving forward. This formal template includes but is not limited to:
• Summary: A summary of the proposal.
• Background: Provide background information, if any, for the proposal.
• Objective: Explain the goal of the proposal. Clearly state how and why the proposal will benefit or foster the interests or goals of the QWAN DAO.
• Team: Identify the team or persons that will execute or implement the specifications of the proposal.A QWIP Idea must be submitted as a topic.
• Specification: Explain in detail the project, development, expected/proposed timelines, use case, feature, or change that is being proposed, and other information relevant to the proposed idea.
• Implementation Plan: Clear step-by-step process on how the proposal will be executed or implemented and what resources, support, or contributions, if any, are being requested from the community and/or the QWAN Foundation.
• Costs: Define the budget or costs for the proposal.
• Once all the criteria listed above are met, the QWIP Idea moves to the next phase in the governance process.

Phase 2: Review and Analysis of Formal QWIP
Once a proposal has passed Phase 1, it moves to Phase 2 for review and analysis. This includes critical considerations involving understanding the purpose of the proposal, how it benefits the QWAN DAO, and fulfilling any specific requests from the QWAN Foundation, Administration Team, or Special Council, if any.
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• In this Phase, all QWIPs will be assigned a unique identification number which will be used throughout all stages of the proposal lifecycle. The Foundation administration team will update the title of the topic.
• The Foundation administration team will review the Formal QWIP submitted by the author(s). Further questions may be asked if certain areas of the Formal QWIP are unclear.
• A risk-based approach is applied for the analysis.
          • Author(s): Online presence, information, and any other relevant publicly available information about the author(s) is reviewed.
          • Request: The request from the QWAN Foundation is clearly stated and unambiguous so that it can be fulfilled if the Formal QWIP is accepted.
          • Operations & Risks: Identify the operational requirements and risks to the QWAN ecosystem. This includes but is not limited to:
                • Legal risk;
                • Jurisdiction risk;
                • Sanctions risk;
                • Market and economic risks;
                • Product & services risk;
                • Key person risk;
                • Regulatory risk;
                • Operational risk;
                • Brand & reputational risk; and
                • Protocol, technology, and network risk.
• Once the Foundation administration team has reviewed the QWIP, has identified the operations and risks, and the support levels are met, the proposal and analysis is presented to the Special Council.
• The Special Council may perform the following actions:
          • Ask additional questions to the author(s). Once these questions are answered, it is presented back to the Special Council for consideration.
          • Reject the Formal QWIP: The Formal QWIP may be rejected if the Special Council determines, in its reasonable discretion, that costs are not clear, there are material risks to or resulting from implementation, it may cause harm (including reputational harm) to the QWAN DAO, requires a commercially unreasonable amount of assets or resources, does not align with or foster the objectives, interests or mission of the QWAN DAO, unduly increases risks to the ecosystem or the DAO, as determined in the Special Council’s sole discretion, has the potential to violate any applicable laws or regulations, or other appropriate reason to reject.
          • Permit the Formal QWIP to proceed for official vote by the QWAN DAO.
• Withdrawn Proposals: Formal QWIPs may be withdrawn and exit the governance process at this phase as follows:
          • Specifically requested by the author(s).
          • After a time period of no or incomplete response to questions proposed by the QWAN Foundation administration team or Special Council within 30 days.

phase 3: Voting Process
Phase 3 outlines the voting parameters, mechanics, procedures, and criteria for a Formal QWIP to be considered officially accepted by the QWAN DAO.
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• If the Formal QWIP has been approved for a Tokenholder vote by the Special Council members, it is then posted for community voting.
• Voting will occur at theqwan.eth (an Ethereum Name Service domain address) and initially utilize Snapshot which can be accessed through dTerminal.
• Votes will be counted by the number of $QWAN tokens voted in favor of or against the Formal QWIP.
• Voting options will be “For” and “Against”.
• Voting by a minimum of 10,000,000 $QWAN tokens is required for a quorum in order to have a valid voting process. If less than 10,000,000 $QWAN tokens are voted, the Formal QWIP will be considered Rejected.
• Any $QWAN Tokenholder can delegate their vote, provided that, in the absence of a QWIP approved at a later date, the Special Council may establish guidelines for token voting delegation.
• The Foundation administration team can create the vote up to 48 hours prior to when voting is opened.
• The voting period shall last for 6 days.
• A Live QWIP becomes an Accepted QWIP if there are a majority of “For” votes and quorum achieved. A Live QWIP becomes a Rejected QWIP if there is not a majority of “For” votes. A tie means the Live QWIP becomes a Rejected QWIP.

Conflicts
One or more QWIPs may be in direct conflict with one another. Once a Formal QWIP is approved for an official vote by the Special Council, any QWIPs or Formal QWIPs that are in direct conflict with such Formal QWIP (as may be reasonably determined by the Special Council) shall be put on pause until the vote has taken place. If the Live QWIP becomes an Accepted QWIP, the QWIPs and Formal QWIPs in progress are considered null and void. If the Live QWIP becomes a Rejected QWIP, the QWIPs and Formal QWIPs in progress are unpaused and continue through the governance process.
An Accepted QWIP shall be given a period of four (4) months after implementation before a QWIP that is in direct conflict can be submitted into the governance process. This provides time for the Accepted QWIP to develop and minimizes the duplication of QWAN ecosystem assets and resources.

Initial Set-up Costs

Introduction
The QWAN DAO exists as a governance framework within the Foundation, a Cayman Islands foundation company, which serves the QWAN ecosystem. To establish the Foundation, certain costs were incurred for legal compliance, registration, and operational requirements. Decentralized governance, while an indispensable component of the QWAN ecosystem, comes with financial costs. In the interest of transparency, the Foundation publishes the below report detailing the actions and expenses involved in establishing, developing, and operating the Foundation and the QWAN DAO.

Directors of the Qwan Foundation
Cayman Islands foundations, including the QWAN Foundation, is required to have at least one director responsible for the management and operation of the Foundation and to see to it that the wishes of the QWAN DAO are executed in accordance with the system of decentralized governance outlined in this QWIP-1. In particular, this includes entering into contractual arrangements on behalf of the Foundation, subject to Tokenholder direction where appropriate. These directors were required to be appointed as part of the initial set-up of the Foundation.The initial director(s) of the Foundation are the following individuals:
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•Glenn Kennedy is the founder of Leeward Management Limited. He serves as an advisor to, and independent board member of Cayman Islands investment funds, investment managers, and technology companies. In these roles, Mr Kennedy's focus is on corporate governance and legal and compliance matters, bringing over 20 years’ experience with fund formation, operations, regulatory and business law to client boards. Mr Kennedy leads Leeward’s digital assets practice, working with some of the largest blockchain and digital assets investment funds, blockchain, FinTech and DeFi development companies and DAOs. Prior to founding Leeward, Mr Kennedy was an associate attorney with the Cayman Islands office of a multi-jurisdictional offshore law firm as part of the firm’s investment funds team, and was prior to that an equity partner with a Toronto, Canada based business law firm, practicing in the areas of corporate law and investment funds. Mr Kennedy holds Bachelor of Laws and Bachelor of Arts degrees from the University of Manitoba, Canada. Mr Kennedy is a Professional Director registered pursuant to the Directors Registration and Licensing Law, 2014. Mr Kennedy holds Canadian, United Kingdom and British Overseas Territories citizenships, and is a permanent resident of the Cayman Islands.
The director(s) are supervised and ultimately checked by the Supervisor to the Foundation, a Cayman Islands law requirement. Further, the Foundation is required to appoint a Secretary to carry-out its duties under Cayman law. The QWAN DAO has the ability to expand or reduce the number of directors at any time pursuant to a QWIP, within the confines of what is required by Cayman law.

Initial Set-up Costs for the Foundation and DAO
The Foundation faced pre-launch expenses while establishing the QWAN DAO and its governance. This process involved meticulous planning and consultation on legal structures, as well as technical expertise and development. The objective was to provide a secure, legally compliant, and technically sound framework for the DAO to self-govern on a trusted platform. Upon the launch of the QWAN DAO, the responsibility for designing and shaping the QWAN ecosystem was handed to the QWAN DAO. In its commitment to the DAO, the Foundation has taken on the expenses related to operations, marketing, blockchain management, infrastructure, service contracts, and ongoing enhancements to the QWAN ecosystem. In addition, a portion of $QWAN is allocated to establish a partnership with well-regarded financial service providers. This collaboration is designed to enhance the stability and growth of the ecosystem, ensuring a seamless experience for Tokenholders and the QWAN ecosystem. To allocate sufficient resources to cover these necessary expenses, the following allocations were made: 2% of the total supply has been distributed to the Foundation treasury to meet its obligations related to initial governance set-up, near and medium-term operating expenses and funds, and upfront and near-term costs on behalf of the QWAN DAO. This allocation was made to ensure fulfilling the following category of obligations, and to ensure the continued and well-ordered functioning of the Foundation and the QWAN DAO:
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Initial QWAN Foundation Setup Costs
• The setup costs include legal fees, DAO administration setup, DAO software and setup, domain purchases and fees, listing fees, security audits, and miscellaneous out of pocket costs
• The total setup costs amount to: 1,188,075 USD

Fees to Administration Service Providers
• Providing administrative, operational, and project management support for the Foundation and the QWAN DAO;
• Acting as the moderators and administrators of the DAO governance proposal process;
• Acting as reviewers, preparing analysis reports, and preparing supporting documentation when necessary;
• The compensation over an initial term of twelve (12) months will be 906,020 USD and granted in $QWAN equivalent per month from the Foundation treasury, with $QWAN being subject to monthly unlock provisions over the twelve (12) month period.
• The CEO of the Foundation administration team will be entitled to additional variable compensation determined and paid in $QWAN at the end of the Foundation administrators initial term.
       • The variable compensation is capped at 1,000,000 $QWAN and will be determined at the end of the Foundation administrator’s initial term. The variable compensation will be calculated as the time weighted average price for the duration of the Foundation administration team’s term divided by the Initial Listing Price of $QWAN multiplied by 300,000 (the CEO annual fixed fee) minus 300,000. This amount shall be converted into the $QWAN equivalent based on the time weighted average price for the duration of the Foundation administrator’s term.

Compensation to Special Council Members
Each Special Council member will be paid 670,000 $QWAN per year, with $QWAN being subject to certain equal monthly unlock provisions over a 12 period

Token Distribution
The total supply of $QWAN is 1,000,000,000 (“Total Supply”). To support the mission of the ecosystem and DAO, the Foundation’s supply of tokens has been allocated in the following ways:
Ecosystem Treasury   435,000,000
Foundation Treasury     20,000,000

List of Special Council Members
Tokenholders are critical to the proper functioning of the DAO’s decentralized governance and therefore have the ability to directly propose, vote on and effectuate changes with respect to the QWAN DAO and ecosystem.
To ensure the safety of the Foundation, QWAN DAO, and Tokenholders, the Foundation has established a committee to provide oversight for the Foundation and DAO, called the Special Council. The Special Council, established through the foundational documents of the QWAN Foundation and whose duties and responsibilities are otherwise subject to the terms of the Bylaws, is an administrative body formed to assist the Foundation and the QWAN DAO.
The initial Special Council is composed of three (3) members. Special Council members will serve for an initial one-year term, and following their appointment by the Foundation, the members of the Special Council will be elected by a vote of the Tokenholders.The initial members of the Special Council are:

Dr. Marwan Alzarouni: The CEO of Dubai Blockchain Center. He is one of the Middle East’s crypto pioneers, founding OTC Supply, the United Arab Emirates’ first over-the-counter exchange, and setting up Dubai’s first Bitcoin ATM. He is recognized internationally as an advocate of blockchain technology, a strategic advisor and a keynote speaker. Alzarouni earned a master’s degree in information security and intelligence from Edith Cowan University in 2005. He then pursued a doctorate in information technology at the same university, earning his doctoral degree in 2008. While pursuing his education, he owned a business called MySecured Inc. Since then, he started several other companies and has taken up leadership positions in some of Dubai’s top firms. Founded in 2018, Dubai Blockchain Center is a global blockchain hub that supports the adoption of blockchain technology. It provides training for students, entrepreneurs and government departments. Apart from this, the company also hosts local and international blockchain events and conferences. The firm also provides blockchain consultancy to the private and public sectors.

Herve Larren: The Founder and CEO of Airvey Metaverse LLC. Sitting at the epicenter of the non-fungible token (NFT) and Metaverse industry, Mr. Larren helps companies transition to Web 3.0 and capture this USD 1 trillion a year opportunity.A Bitcoin and blockchain adopter since 2013, Mr. Larren became one of the first crypto miners in the US before listing his coins in US public vehicles. He currently advises projects in the crypto ecosystem and gives talks around the world on the subject of the Metaverse and NFTs. He is also the owner of Airvey Gallery and was one of the few collectors approved by Christie’s for the 69 million USD Beeple auction.Prior to founding his companies, Mr. Larren had worked at LVMH and Pernod Ricard.Mr. Larren is an alumnus of Harvard Business School Presidents’ Program and has an MBA from Columbia Business School. He has been a member of the Young Presidents’ Organization since 2012.

Ben Charbit: A graduate from University Paris Dauphine and the University of Chicago, Benjamin is the CEO of of Life Beyond Studios, a subsidiary of Animoca Brands that he founded after several years at Ubisoft where he led the strategy of its online games division before becoming one of the directors of the famous franchise Assassin's Creed. Before, Benjamin worked as an associate within the investment banking division at Lazard and a private equity analyst at Rothschild. Benjamin is also the Director of the French Video Game Trade Association.

Foundation Bylaws
The Bylaws of the QWAN Foundation can be found here.

Foundation M&A
The Memorandum of Association of the QWAN Foundation can be found here.