The structure

SukukDAO borrows its shape from Lloyd's of London, where members supply capital, syndicates carry it and managing agents decide which risks to write. Here the three roles are Members, Syndicates and Agencies. Members bear the risk of the capital. Syndicates are paid for raising it. Agencies are paid for managing it. Nobody votes on where capital goes: each decision belongs to one role, and the contracts enforce the boundaries between them.

In short: a Member buys a Sukuk with USDG and names a Syndicate. The Syndicate's owner has chosen an Agency for that tranche. The USDG is deployed into the tranche's vault. Realised profit pays the Agency's fee and then buys SUKUK, which is credited to the Members and burned. The Syndicate owner receives a raising fee in SUKUK on the capital the seat raised. A loss is borne by the Members whose Sukuks were locked and by the Agency's stake, side by side.

Members

A Member is anyone who buys a Sukuk. They pay USDG into one tranche, choose a lock length, and name a Syndicate. The Syndicate is required and there is no default: it comes from a referral link, or the Member picks one from the list. The Member chooses once and does not vote on anything afterwards.

The Member's position holds the SUKUK the Sukuk bought. While it is locked, the Member receives credits from the tranche's realised profit and bears the tranche's losses. Once the lock ends, the share of tranche capital it paid for belongs to all holders: profit on it is burned, and a loss on it falls on backing. Details are in Sukuks and tranches.

A Member can move a Sukuk to another Syndicate only while the current seat is under sale notice. The move costs nothing.

Syndicates

There are 500 Syndicate seats, sold before launch in the seat sale. Each seat is an NFT. Its number is also its referral code, and every Sukuk bought with that code is attributed to the seat.

Each seat carries 1,000 SUKUK, minted at launch and locked for 48 months. After 48 months the SUKUK is released to whoever owns the seat.

Allocation. For each tranche, the seat owner chooses which Agency manages the capital the seat has raised. Only approved Agencies can be chosen, and never an Agency the owner is a registered member of. A seat with no allocation is managed by the genesis Agency. No new capital goes to an Agency that is closing or releasing its stake.

The raising fee. A seat receives 1.2% a year on the USDG raised through it, paid in SUKUK at the 4-hour average price. The fee runs only while the tranche is deployed and the Sukuk that raised the capital is still locked. It accrues month by month, in whole 30-day months. Then:

• nothing vests for 9 months after the seat's first accrual, and the fee vests in a straight line over the following 15 months;
• a Sukuk that exits before the cliff cancels its fee, which goes back to the tranche's budget;
• capital the seat owner put in through their own wallets earns no fee;
• months while the tranche is impaired do not count;
• a Sukuk that moves Syndicate pays the old seat for its months there, and the new seat from the move.

Each tranche has a fixed fee budget: 1.2% of its capacity for 4 years, converted into SUKUK at the 4-hour average when the tranche opens. Each month can pay at most the remaining budget divided by the months left of 48. A fee that month's room cannot pay stays owed to the Sukuk. Across all tranches, raising fees can never create more than 10,000,000 SUKUK.

Selling a seat. Seats cannot be transferred freely. The owner names a buyer, which starts a public notice period (its length is set before launch). The buyer must be on the conflicts register, must not be the seller, and must not be an Agency wallet. The sale completes only if no tranche anywhere is impaired. The buyer receives the raising fee from the day of purchase, so a seller should accrue every Sukuk's fee before the sale completes. Months left unaccrued are lost. Seat sales open 120 minutes after launch. The price is agreed between the two parties.

Agencies

Agencies are the curators and strategists. An Agency manages the capital Syndicates allocate to it and takes a performance fee on realised profit above its high-water mark. Each Agency is an NFT.

Stake. Every Agency has its own capital at risk. The genesis Agency's stake is SUKUK from the migration. Later Agencies will co-invest USDG alongside the capital they manage, about 5%, pro rata and not as a first-loss layer. That design is not finished, and no second Agency can register until it is. Until then, all capital is managed by the genesis Agency.

In force. An Agency stays in force until it closes voluntarily on 90 days' notice, or until it has had no capital allocated to it for 6 months. Its stake stays locked while it is in force and for as long as any exposure it created is still open. That is the liability tail: the stake keeps bearing losses until every tranche it managed has closed.

Selling an Agency. The Agency NFT can be sold through the same gated path as a seat. The buyer inherits the stake, the liability tail, the holdback, any deficits and every high-water mark. The date of the ownership change is recorded, so the track record shows it.

The genesis Agency

The genesis Agency is a collective of migrated SUKUK holders (14 at the time of writing; more may join). Its stake is about 2,256,000 SUKUK, claimed straight from the migration into the Agency and locked. It operates through an offshore company whose internal terms sit outside the protocol. It makes no USDG co-investment.

Its fee is the only pay its founders receive from the protocol for managing capital. Once its liability tail closes, its stake is released to its members in 12 monthly portions, and each member directs their own share. Only the Agency's owner can start that release.

Genesis members are also limited in the treasury: at most 2 of the 9 Safe signers can be genesis members, and they are recused from changes to how backing is defined. See Control of money.

Fees and the fee cap

An Agency sets its own fee rate. The rate it can charge is capped at the lower of two numbers:

• 20%;
• twice the Agency's own share of the capital it manages, where its share is its stake value divided by all the capital it manages.

For example, an Agency whose stake is worth $50,000 and which manages $1,000,000 has a 5% share. Its fee is capped at 10%. If it manages $250,000, its share is 20% and the cap is 20%.

The genesis Agency's stake is valued at its SUKUK multiplied by the lower of the 4-hour average price and backing per token. The cap is checked each time a fee is charged.

A change of rate needs 30 days' notice. A cut applies at once. A rise never reaches capital already placed: in each tranche, every part of an Agency's capital keeps the rate in force when it came, and new capital comes at the lower of the current rate and the tranche's. So the tranche's rate is the average of those rates, weighted by capital, and no new capital can lift it. Capital that arrives during a cut pays the cut on its own share only.

No Agency fee is charged on a Syndicate whose owner is a member of that Agency.

Holdback

Of every fee, 70% is paid to the Agency's owner at once and 30% is held back in the deployment contract. On revolving vaults, the holdback for each year is released 90 days after that year's receivables settle with no deficit. The Safe releases it. If a later loss shows that a fee was not earned, the Safe can send the held-back part to the reserve instead.

If the Agency owner's address cannot receive USDG, the fee is kept as owed and can be claimed later. It never holds up a profit distribution.

High-water mark

The high-water mark is kept in dollars, for each Agency and each Syndicate it manages. When a tranche records a loss, each Syndicate's share of it is recorded as a deficit against its Agency. Profit for that Syndicate, from any tranche, clears the deficit before any fee is charged. When the losing tranche's write-down is refilled, the same amount is cleared. A loss is earned back once.

Deficits and high-water marks travel with the capital. If a Syndicate changes Agency, or a seat or Agency is sold, they move with it.

Conflicts register and recusal

The conflicts register records people, their wallets, their roles and their interests: Safe signers, verified independents, genesis Agency members, Agency members, Syndicate owners and others with a recorded interest. Only the Safe can write to it, through the protected path. Independence is verified outside the chain before a person is registered. Failing to disclose an interest is grounds for removal.

The contracts read the register to enforce the separation of roles:

• registered Agency wallets cannot buy seats, in the whitelist or the auction;
• a seat owner cannot allocate to an Agency they are a member of;
• a seat earns no raising fee on its owner's own capital;
• a registered insider who wants to exit a Sukuk early must give notice past the tranche's next payment date (see Sukuks and tranches);
• seat and Agency buyers must be on the register;
• the treasury guard does not count the signature of a signer with an interest in the action being signed.