This proposal establishes an overarching framework through which the Marketing Bounty can execute formal contracts with service providers on behalf of the Polkadot DAO. The Polkadot Community Foundation will act as the legal counterparty for these standardized contracts.

## Article 1 - Definitions

1. **Marketing Bounty (MB):** A treasury-funded on-chain body with a mandate to fund marketing initiatives that benefit the Polkadot Network. It was established in its current form by [Ref 1166](https://polkadot.polkassembly.io/referenda/1166).
2. **Polkadot Community Foundation (PCF):** A foundation incorporated in the Cayman Islands that serves as a DAO Execution Vehicle on behalf of the Polkadot DAO in the physical world. It was established by [Ref 730](https://polkadot.polkassembly.io/referenda/730).
3. **Service Providers (SPs):** Third-party service providers, such as marketing agencies, are engaged by the MB to provide marketing-related services.

## Article 2 - Considerations

1. Some SPs require a physical address when writing an invoice. The MB, as an on-chain body, does not have a physical address. A legal counterparty with a physical address is needed.
2. Some SPs only accept fiat currency as payment for their services. A legal counterparty is needed to process the contractually obligated payment.
3. Some SPs require a formal legal entity to enter into *contracts* or *service agreements* before they can begin their work and need a legal entity to receive their invoices. The MB, as an extension of the Polkadot DAO, is not a legal entity. A legal counterparty is needed.
4. The PCF, as a DAO Execution Vehicle acting on behalf of the Polkadot DAO, may be used to facilitate the process. As per the bylaws of the PCF, instructions to the PCF must be given through OpenGov. Instructing the PCF on a case-by-case basis for the MB would be cumbersome and slow, as each instruction requires a separate proposal submission via OpenGov (1–35 days, depending on the proposal), followed by a 60-day lockup period for PCF approval, plus additional time for contract negotiation and legal approval. A faster and more streamlined process would be sensible.

## Article 3 - Framework

1. The objective of this framework is to create a streamlined (fast and affordable) process for providing SPs with a legal counterparty and fiat payments if they require them.
2. The MB is permitted to instruct the PCF to process fiat payments and manage contractual relationships and related administrative work (such as KYB procedures) with SPs.
3. The costs incurred through these procedures must be covered by the MB. For example, costs may include processing fees and administrative fees for setting up and managing the contract, as well as the amount to be paid upon fulfillment of the contract.
4. A dedicated account (“legal fund”) will be created to cover costs for services related to compliance, contract creation, contract management, contract negotiation, contract execution, and administrative fees of the PCF.
5. To reduce costs and execution time, a set of standard contracts will be developed with the PCF and should be used whenever feasible. In addition, the Marketing Bounty shall have the discretion to set up custom contracts if the standard contracts do not work in specific situations. These will be discussed and agreed upon with the PCF on a case-by-case basis.
6. The PCF may be instructed by the MB to liquidate a specified amount of assets in the legal fund into fiat via an OTC trade. This conversion to fiat may happen as part of a single payment or to ensure the legal fund keeps a reserve of fiat for future payments.

## Article 4 - Instructions

1. The PCF is instructed to set up an account on Polkadot Hub. The account is controlled by the PCF, and all costs of the PCF and its affiliates will only be deducted from this account. The Marketing Bounty will top up the account at its discretion.
2. The PCF and MB are instructed to develop a library of standardized contract templates tailored for various marketing services (e.g., advertising campaigns, social media management, and event promotion). These contract templates cover essential, pre-agreed legal and operational criteria.
3. The PCF and MB are instructed to define specific processes together and publish them on the transparency website of the MB.
4. The PCF is instructed to execute instructions given by the MB to perform actions related to contract management, including but not limited to KYBing potential partners, contract setup, contract changes, contract termination, and payments. The MB shall do so through Child Bounties that contain clearly recognizable instructions to the PCF in the description field.
5. The MB shall report quarterly on its business with the PCF so that stakeholders get a full picture of what costs and efforts have been incurred by the PCF.

## Article 5 - Conditions

1. **Scope Limitation:** Agreements are exclusively for marketing initiatives related to the Polkadot Marketing Bounty.
2. **Compliance Requirements:** All contracts must comply with Cayman Islands law, Polkadot’s governance protocols, and any specific conditions set by the MB.
3. **Approval Criteria:** Contracts must align with Polkadot’s marketing objectives and the MB mandate agreed upon in Ref 1166 and any potential future amendments agreed by OpenGov.

- **Problem Statement & Audience:** Establishing a legal framework for Marketing Bounty to formalize contracts with service providers on behalf of Polkadot DAO.
- **Significance:** Addressing the need for a legal counterparty with a physical address and the ability to process fiat payments for service providers engaged by Marketing Bounty.
- **Proposed Solution:** Creating a streamlined process where Polkadot Community Foundation acts as the legal counterparty for Marketing Bounty, managing contractual relationships and fiat payments.
- **Expected Outcomes:** Reduced costs and execution time through standardized contract templates, dedicated legal fund, and quarterly reporting on business activities with the Polkadot Community Foundation.

#1416 Polkadot Community Foundation: Allow the Marketing Bounty to Execute Formal Contracts through the Polkadot Community Foundation