Fluid Protocol Moves ₱57.64 billion ($1 billion) in User Funds to Cayman Foundation
Fluid protocol is establishing a new Cayman Islands foundation to handle real-world legal and regulatory requirements while preserving decentralized governance. Token holders will gain direct enforceable control over the protocol's intellectual property and operational assets for the first time.
Key Takeaway
Foundation model lets DeFi protocols handle real-world legal tasks without surrendering token holder control.
Instadapp COO DeFi Made Here proposed transferring Fluid protocol's intellectual property and operational control to a newly incorporated Cayman Islands foundation.
The foundation structure gives token holders direct legal authority over protocol assets for the first time. DeFi Made Here said establishing the foundation allows Fluid to meet AML, KYC, banking and regulatory requirements when working with off-chain partners without compromising decentralized governance. Token holders retain oversight over objectives, budgets and major decisions through the foundation's constitutional documents.
Fluid currently holds over ₱57.64 billion ($1 billion) in user deposits and ranks 10th among lending protocols by size. DeFi Made Here requested ₱14,410,550 ($250,000) per month from the DAO for team maintenance and protocol growth under the new structure. He said the foundation setup has been in progress for six months, denying claims the move came in response to recent governance drama at competitor Aave.
Delegate Ignas, who participates in several DAOs, said handling potential equity and token ownership conflicts before tension arises shows smart planning. He pointed to Aave's current struggles with similar discussions as evidence that Fluid is getting ahead of the issue.
The foundation model has become standard practice among mature DeFi protocols. More than 1,700 foundations now operate in the Cayman Islands, up from 793 in 2023. These structures typically start with one member who resigns immediately, creating an independent board that aligns with DAO governance while allowing protocols to execute off-chain legal actions.
DeFi Made Here emphasized the foundation cannot be owned and exists as a neutral entity aligned with protocol goals. As of February 2026, token holders will have real enforceable control over Fluid's intellectual property instead of leaving those assets with the development team or early contributors.
This article was written based on reporting from Dlnews.
