---
tags: LAO
author: H. Diedrich
---

# Lexon DAO Text

PREAMBLE.
These are the bylaws, and the smart contract code of the Oversimplication DAO LLC.

It is written in Lexon, a controlled English that can be compiled to a smart contract and thus, this document is at once legally binding prose and unstoppable blockchain code.

The bylaws also include a Drafter Micro Fee as proposed by the Lexon Hub.

The Oversimplication DAO is a hedge fund whose members appoint a trader who during the week trades the fund’s capital on an exchange. Over the weekend, members can exchange the manager or trader or make an upgrade to this document, i.e., amend these bylaws.
The following is partitioned into general terms and terms that govern the application process, membership, manager and trader election and amendments of the bylaws.

The Organizer sets the stage in the recital, appointing all roles and setting relevant rates for the distribution of gains. The Organizer appoints the manager, who has to be a member.

Members receive shares as expression of their interest, strictly pro-rata the capital they pay in. They can leave after three months or after a vote brings a change that they voted against. They receive a pro-rata payout for their shares, which means that earlier members will receive a relatively higher payout, in the case that trading had a net positive results.

The trader receives a fee when during a week more than 5% capital gains were achieved, and only from the gains over 5%. Similarly, a maintenance account, a reserve and a receiver of support receive a share of any gains over 5%. The exact rates are determined during organization.

Voting for a new manager or trader can be initiated by any member on any weekend. A simple majority of votes, weighted by interest, decides the proposal. An amendment of the bylaws though, has to be unanimous, with every member voting and the Organizer running the process.

An emergency process can be started in case a member loses access to their account. After three months without protest, the manager can send a payout for that member any place.

On dissolution, all members receive their share. The last Manager or the Organizer can wind the company down if it has no capital or no members anymore. The Registered Agent can wind the company down at any time.

The original programmer was Henning Diedrich, the original trader, Hendrik Pisters.

GENERAL TERMS.
DEFINITIONS

“Company” is the entity described in these bylaws. “Assets” is its blockchain escrow.

“Trade Capital” is an amount.
“Resulting Capital” is an amount.
“Total Raise” is an amount.

“Maximum Members Count” is a number, initially 100. “Exception or Registration” is a text.

“Initial Share Price” is an amount that is greater than zero.
“Minimum Buy In” is an amount.
“Application Fee” is an amount.

“Trading Account” is an account.
“Active Trading” is true or false.
“Trade Result” is an amount.
“Trade Gain” is a percentage.
“Trade Gain after Fees” is a percentage. “Total Gains” is an amount.
“Total Losses” is an amount.

“Organizer” is a person.
“Registered Agent” is a person.
“Manager” is a person.
“Trader” is a person.

“Maintenance Account” is an account.
“Reserve Escrow” is an account.
“Support Receiver” is a person.
“Drafter” is the person identified by 0x84475f487d0EceCfe47FCc13FC3F1a4586E587F0.

“Trader Rate” is a number.
“Maintenance Rate” is a number.
“Reserve Rate” is a number.
“Support Rate” is a number.
“Drafter Rate” is 1%.

“Election Is In Progress” is true or false. “Ballots” is a number.
“Ayes” is a number.
“Nays” is a number.
“Abstentions” is a number.

“Total Shares” is defined as the sum of all Shares of all Members.

“Total Capital” is defined as the sum of Assets and Trade Capital, less the Capital Offerings.

“Share Price” is the amount of Total Capital divided by the amount of Total Shares, provided neither the amount of Total Capital nor the amount of Total Shares is zero; otherwise, the Initial Share Price.

“Capital Offerings” is defined as the sum of all Initial Capital Offers of all Applicants plus the sum of all Capital Top Up Offers of all Members.

RECITAL
The Organizer appoints the Registered Agent,
appoints the Manager,
appoints the Trader,
appoints the Maintenance Account,
appoints the Reserve Escrow, appoints the Support Receiver, sets the Trader Rate,
sets the Maintenance Rate, sets the Reserve Rate,
sets the Support Rate,
sets the Initial Share Price, and sets the Minimum Buy In.

SECTION: MANAGER.

CLAUSE: Appoint Manager.
If no Manager is appointed, the Organizer may appoint a Member as the new Manager. At any time, the Manager may appoint another Member as the new Manager.

CLAUSE: Step Down.
The Manager may declare that no Manager is appointed.

SECTION: VOTING.

CLAUSE: Initiate The Election Process.
Declare that an Election Is In Progress.
Set the number of Ballots, Ayes, Nays and Abstentions to zero. Enable Voting for all Members.

CLAUSE: End the Election Process.
Declare that no Election Is In Progress.

“Proposal Succeeds” means: the recorded number of Ayes is greater than the recorded number of Nays.

“Most Recent Proposal Succeeded” means: no Election Is In Progress and the recorded number of Ayes is greater than the recorded number of Nays.

SECTION: WINDING DOWN.

CLAUSE: Dissolution.
The Manager or the Organizer may, in case the Company is Depleted or Uncontrolled, Wind Down the Company.
The Registered Agent may Wind Down the Company at any time.

“Depleted” means: the amount of Assets being zero while there is no Active Trading.

“Uncontrolled” means: the number of Total Shares being zero.

CLAUSE: Wind Down.

Cancel all Applications, Pay Out and Terminate all Members, and terminate the Company.

SECTION: TRADING.

CLAUSE: Begin Trading.
If no Election Is In Progress and Active Trading is not ongoing,
the Trader may declare Active Trading,
declare the Trade Capital to equal Assets minus Capital Offerings, transfer the Trade Capital to the Trading Account,
and notify all members that “trading has started” with the certain amount of Trade Capital.

CLAUSE: Payment.
A Payment from the Trading Account effects the End of Trading based on the Payment.

CLAUSE: Trader Ends Trading.
The Trader may make a Payment to certify the End of Trading based on the Payment.

CLAUSE: End of Trading.
Active Trading is declared to be over.
Log Results based on the Payment and Distribute Gains. Afterwards, declare Trade Capital to be zero.

CLAUSE: Log Results.
The Payment is recorded as the new Resulting Capital.
The Trade Result is the Resulting Capital minus the Trade Capital.
The Trade Gain is Trade Result divided by the Trade Capital.
If the Trade Result is greater than zero, then increase the Total Gains by the Trade Result; else, increase the Total Losses by the negative of the Trade Result.
Finally, notify all Members that “trading has ended” with the Trade Gain and Trade Result.

CLAUSE: Distribute Gains.
Pay the Trader Fee to the Trader,
pay the Maintenance Share to the Maintenance Account, pay the Reserve Share to the Reserve Escrow,
pay the Support Share to the Support Receiver,
pay the Draft Fee to the Drafter.

SECTION: DISTRIBUTION.

CLAUSE: Trader Fee.
The “Trader Fee” is: provided, the Trade Result is greater than 5% of Trade Capital, then the Trader Rate times the difference between Trade Result and 5% of Trade Capital; otherwise, zero.

CLAUSE: Maintenance Share.
The “Maintenance Share” is: provided, the Trade Result is greater than 5% of Trade Capital, then the Maintenance Rate times the difference between Trade Result and 5% of Trade Capital; otherwise, zero.

CLAUSE: Reserve Share.
The “Reserve Share” is: provided, the Trade Result is greater than 5% of Trade Capital, then the Reserve Rate times the difference between Trade Result and 5% of Trade Capital; otherwise, zero.

CLAUSE: Support Share.
The “Support Share” is: provided, the Trade Result is greater than 5% of Trade Capital, then the Support Rate times the difference between Trade Result and 5% of Trade Capital; otherwise, zero.

CLAUSE: Draft Fee.
The “Draft Fee” is: provided the Trade Result is greater than 0, then the Drafter Rate times the Trade Result; otherwise, zero.

CLAUSE: Change Maintenance Rate.
The Organizer may change the Maintenance Rate.

CLAUSE: Change Reserve Rate.
The Organizer may change the Reserve Rate.

CLAUSE: Change Support Rate.
The Organizer may change the Support Rate.

CLAUSE: Change Maintenance Account.
The Organizer may change the Maintenance Account.

CLAUSE: Change Reserve Escrow.
The Organizer may change the Reserve Escrow.

CLAUSE: Change Support Receiver.
The Organizer may change the Support Receiver.

SECTION: LIMITS.

CLAUSE: Change Initial Share Price.
The Manager may change the Initial Share Price.

CLAUSE: Change Minimum Buy In.
The Manager may change the Minimum Buy In, provided the new Minimum Buy In is higher than the Application Fee.

CLAUSE: Change Application Fee.
The Manager may change the Application Fee, provided the new Application Fee is smaller than the Minimum Buy In.

CLAUSE: Change Minimum.
The Manager may change the Maximum Members Count and certify a new Exception or Registration.

APPLICATION TERMS.

“Applicant” is a person.
“Initial Capital Offer” is an amount that is not zero. “Limit” is an amount.

The Applicant pays an Initial Capital Offer into escrow.
If the Initial Capital Offer is less than the Minimum Buy In, the Initial Capital Offer is returned to the Applicant, and this Application is terminated.

CLAUSE: Accept Application.
If no Election Is In Progress and the count of Members is less than the Maximum Members Count, the Manager may Create a Membership for the Applicant based on the Initial Capital Offer and terminate this application.

CLAUSE: Deny Application.
The Manager may return the Initial Capital Offer minus the Application Fee to the Applicant, and terminate this application.

CLAUSE: Partial Acceptance.
If no Election Is In Progress, the Manager may return the difference between the Initial Capital Offer and a given Amount to the Applicant, Create a Membership for the Applicant based on the given Amount, and terminate this application, provided, the given Amount is lower than the Initial Capital Offer and higher than the Minimum Buy In.

CLAUSE: Retract Application.
The Applicant may return the Initial Capital Offer less the Application Fee to themselves. The Application is then terminated.

CLAUSE: Cancel.
The Initial Capital Offer is returned to the Applicant and this Application is terminated.

MEMBERSHIP TERMS.

“Member” is a person.
“Accepted Capital Offer” is an amount that is not zero. “Capital Top Up Offer” is an amount.
“Shares” is an amount.
“Last Buy In” is a time.
“Vote” is aye, nay or abstention.
“Voted In The Current Election” is yes or no. “Last Vote” is a time.
“Emergency” is yes or no.
“Start of the Emergency” is a time.
“Member Capital” means: the Assets divided by Total Shares times the Member’s Shares. “Never Voted” is defined as: no Last Vote on record.
The Member Receive Shares based on their Accepted Capital Offer.

CLAUSE: Receive Shares.
The number of Shares is increased by a given Amount divided by the Share Price. The amount of Total Raise is increased by the given Amount.
The Last Buy In is fixed as the current time.

CLAUSE: Top Up.
The Member may pay a Payment into escrow. The Capital Top Up Offer is increased by the Payment, and the Manager notified of the “Top up request” of the Member and the Payment.

CLAUSE: Accept Top Up.
The Manager may certify that the Member Receive Shares based on the Capital Top Up Offer and declare the Capital Top Up Offer to now being zero.

CLAUSE: Deny Top Up.
If there is no Emergency, the Manager may: return the Capital Top Up Offer to the Member; as a result, the Capital Top Up Offer is then zero.

CLAUSE: Retract Top Up.
The Member may:
return the Capital Top Up Offer to themselves; as a result, the Capital Top Up Offer is then zero.

CLAUSE: Pay Out and Terminate.
If there is no Emergency, then Return the Member Capital plus any Capital Top Up Offer to the Member;
otherwise, pay the Member Capital plus any Capital Top Up Offer to the Manager. If the Member is the Manager, declare that no Manager is appointed.
Afterwards, terminate the Membership.

CLAUSE: Enable Voting.
Certify that the Member has not Voted In The Current Election yet.

CLAUSE: Vote.
If an Election Is In Progress and the Member has not Voted In The Current Election yet, the Member may: certify a Vote; Count it; certify the Last Vote as the current time, and with that, has Voted In The Current Election.

CLAUSE: Count.
In case the Vote is aye, increase the number of Ayes by the number of the Member’s Shares;
in case the Vote is nay, increase the number of Nays by the number of the Member’s Shares;
in any other case, increase the number of Abstentions by the number of the Member’s Shares;
in any case, increase the number of Ballots by one.

CLAUSE: Leave.
The Member may if Eligible to Leave and no Active Trading is going on, then Pay Out and Terminate themselves.

CLAUSE: Take Out.
The Member may if Eligible to Leave, no Active Trading is going on, and the given amount is less than their Member Capital: return the given amount to themselves; the Member’s Shares are decreased by the given amount divided by the Share Price.

CLAUSE: Eligible to Leave.
“Eligible to Leave” is defined as:
the Most Recent Proposal Succeeded and the Member’s Vote was nay;
or the Member’s Last Vote was more than three months ago;
or the Member Never Voted and the Member’s Last Buy In was more than three months ago.

CLAUSE: Start Emergency Process.
The Manager may declare Emergency and certify the Start of the Emergency to be at the current time.

CLAUSE: Stop Emergency Process.
The Member may certify that there is no Emergency, and the Start of the Emergency is void.

CLAUSE: Finalize Emergency Process.
The Manager may on a Saturday or Sunday, if there is no Active Trading, there is an Emergency and the Start of the Emergency was more than three months ago, then pay the Member Capital to any given Account and terminate this Membership.

MANAGER ELECTION TERMS.

“Manager Candidate” is a person.

On a Saturday or Sunday, if no Election Is In Progress, any Member may appoint a Manager Candidate, Initiate The Election Process, and notify all members of the Manager Election and the Manager Candidate.

CLAUSE: Process Manager Election Results.
On a Monday, anyone may, in case the Proposal Succeeds, appoint the Manager Candidate as new Manager; afterwards, in any case End the Election Process and terminate this Manager Election.

TRADER ELECTION TERMS.

“Trader Candidate” is a person.

On a Saturday or Sunday, if no Election Is In Progress, any Member may appoint a Trader Candidate, Initiate The Election Process, and notify all members of the Trader Election and the Trader Candidate.

CLAUSE: Process Trader Election Results.
On a Monday, anyone may, in case the Proposal Succeeds, appoint the Trader Candidate as the new Trader; afterwards, in any case End the Election Process and terminate this Trader Election.

UPGRADE INITIATIVE TERMS.

“Amended Bylaws Proposal” is an account.

On a Saturday, if no Election Is In Progress, the Organizer may appoint an Amended Bylaws Proposal, Initiate The Election Process, and notify all members of the Upgrade Initiative and the Amended Bylaws Proposal.

CLAUSE: Process Upgrade Vote.
On a Saturday, the Organizer may: in case the Proposal Succeeds and the sum of Ayes, Nays and Abstentions is equal the number of Total Shares, then End the Election Process, terminate this Upgrade Initiative, and afterwards, certify the Amended Bylaws Proposal with the state of this entity and its Assets and terminate these bylaws; otherwise, End the Election Process and terminate this Upgrade Initiative.

On a Sunday, anyone may End the Election Process and terminate this Upgrade Initiative.