A blockchain foundation holds up when it is built as four documents and two entities: a constitution, private bylaws, a treasury policy and a labs services agreement, with the foundation and the labs company kept apart. In Cayman, the law lets a foundation company run with no members at all, as long as it keeps at least one supervisor. That freedom is the reason to write the rules down before the token exists, not after.
Who decides this
The founders and the board decide the shape before incorporation. After that, the foundation council (directors, plus any supervisor) owns it. The founders are accountable for the split between foundation and labs, and for what the founding documents reserve to themselves. The council is accountable for running the foundation to its stated objects, keeping records, and controlling the treasury. If the same people sit on both sides, the board should name which hat they wear for each decision.
Should the token sit in a foundation and the team in a separate labs entity?
Yes, for most funded projects: the foundation holds the token, treasury and governance, and a labs company employs the engineers under contract. The split separates a body that serves the network from a business that can hire, raise equity and be sold.
The pattern has a legal logic. A Cayman foundation company may have no members once its memorandum allows it, provided it has one or more supervisors (Foundation Companies Act, s.8(2)). Distributions to members as members are prohibited. A Swiss foundation has no members and no owners at all, only beneficiaries (University of Zurich course materials). Neither suits a team that wants equity upside, which is why the labs entity exists.
The trade-off is friction. Every dollar that moves between the two entities needs a contract, a price and a record. A 2018 Baker McKenzie work plan flagged that paying for services and IP between a Swiss token foundation and others raises legal and tax challenges. Some projects use a company instead, or a network of entities linked by contracts. We would still default to the split, because it gives a token foundation a clean answer when asked who it serves.
Who should sit on the foundation council, and who watches them?
Put at least two directors on the council, at least one of them independent of the labs company, and appoint a supervisor whose only job is to check the directors follow the documents.
The statute is lighter than most boards expect. The Cayman Act sets no minimum number of directors; the model articles in its schedule call for two. The company must always have a licensed Cayman secretary, and its registered office sits at the secretary’s address (Appleby). A supervisor has no ownership or economic rights and may also be a director. Local service providers can supply independent directors and act as supervisor (Carey Olsen).
In Switzerland the oversight is external. A foundation board manages and represents the foundation, an auditor is required in principle, and a public authority supervises it under Art. 84 of the Civil Code. Since January 2024 the board must also report to the supervisory authority each year the total remuneration paid to it and to management (Forvis Mazars).
The real choice is how much of the council the labs team controls. Full control is fast but undercuts any claim that the network is independent. No control slows every grant. A council where labs holds a minority, with an independent chair and a supervisor, is the position we would defend.
| Role | Cayman foundation company | Swiss foundation | What the board decides |
|---|---|---|---|
| Directors / foundation board | No statutory minimum; model articles say two | A foundation board is the mandatory supreme organ | How many seats labs people hold |
| Supervisor | Required if there are no members | A public supervisory authority | Who appoints and removes it |
| Secretary | Licensed Cayman secretary at all times | Not a statutory role | Which provider, and its fee |
| Auditor | Not set by the foundation statute | Required in principle | Scope and frequency |
| Founder rights | Only what the documents grant | Purpose or organisation change only if reserved, after ten years | What founders keep, and for how long |
What must the bylaws say, and what stays in the constitution?
The constitution should hold what must not move: objects, the ban on distributions, and who can appoint directors. The bylaws should hold what will change: grant rules, token-holder input, conflicts and council procedure.
Cayman makes this split easy. By-laws are optional, private, not filed with the Registrar, and kept at the registered office (Appleby). The constitution may give rights and powers of any type to members, directors, supervisors, founders “or others” (Harneys). That is the hook many projects use to give token-holder votes weight. By default, beneficiaries have no rights over the company or its assets unless the constitution expressly grants them (s.7(4)(e)).
Switzerland is stiffer. A foundation is set up by public deed and registered in the commercial register. Since 2024, founders can reserve the right to change purpose or organisation, but only after ten years have passed. Minor deed amendments are allowed for objective reasons if they do not affect third parties.
Write the bylaws to answer three questions. When does a token-holder vote bind the council, and when is it advisory? Who can veto a vote that breaks the law or the objects? How are conflicts recorded when a director also works for labs? Leave these vague and the council will answer them under pressure.
Who controls the treasury, and how is it spent?
The council controls the treasury through a written policy that sets signers, limits and reporting; no single person should be able to move it. The labs company should never hold foundation funds.
A foundation can hold a project’s treasury to pay for ongoing services, and it can run airdrops and grants (Carey Olsen). Cayman law restricts disposals that would leave the foundation unable to pay its debts as they fall due (s.15(1)). That is a solvency test the council must be able to evidence.
The policy should cover four things: the multi-signature or custody arrangement and who holds keys; spending limits that need one, two or all signers; how token and stablecoin reserves are split; and a quarterly report to the council.
Treasury activity also has a regulatory edge. Issuing virtual assets is a listed service under the Cayman VASP Act, and custody requires a licence from CIMA (Mourant). In Switzerland, FINMA assesses tokens case by case, and treats asset tokens as securities (PwC). Counsel should map which treasury actions trigger which regime before the first transfer.
How should the foundation and labs entity contract with each other?
Through a services agreement with defined deliverables, an IP licence or assignment, and grants approved by the council, each priced and minuted. Informal arrangements are the weak point of most foundation and labs entity structures.
The services agreement should say what labs builds, on what milestones, for what fee, and who owns the code. The IP terms should say whether the foundation owns the protocol or licenses it, and what happens if labs is sold. Grants to labs should follow the same process as grants to anyone else, with conflicted directors stepping out.
The trade-off is speed. A foundation that pays labs on milestones moves slower than a team that pays itself. It also has a defensible record when an exchange, a regulator or an acquirer asks how money moved.
What goes wrong: the question you could not answer
The usual failure is not a bad structure. It is a reasonable structure with no records.
Picture the diligence call two years after launch. An exchange or regulator asks which exemption covered the token sale, what was disclosed to buyers, and whether control was really with the council or with labs. The founders know the answers. The foundation cannot prove them. Council minutes are thin, grants to labs were approved in chat, the treasury signers changed without a resolution, and the bylaws never said when a token vote binds.
The fix is cheap if it is done early. Minute every council decision. Record each conflict and who stepped out. Keep signed agreements for every payment to labs. File treasury reports quarterly. Then the question has an answer on paper.
How Alcyone approaches it
Alcyone does not list legal structuring among its services; the legal structure belongs with counsel. Where Alcyone works is the commercial layer that the structure has to carry: the token allocation between foundation and labs, vesting structures and the fundraising plan, so that what counsel drafts matches how the project will actually run. That work sits within Alcyone’s fundraising and tokenomics advisory. In one published case, a first token launch on a major Layer-1 left about $10M locked in vesting, the kind of schedule a foundation council then has to administer and report on.