A DAO is a decentralized autonomous organization. This essentially means that it’s a community that can self-govern and take on some aspects of a company. A DAO represents all users who comprise it, and is the most efficient way to organize a global community with aligned incentives.

SailGP believes that a fan-owned team is the ultimate fan loyalty program and has the potential to build a highly engaged and passionate fanbase. SailGP and NEAR want to lead the way in creating the first professional sports team fully owned and operated by a DAO, and show how a fan-governed team can be established in the world of professional sport.

The team has been launched by Bernoulli | Locke. Founded by David Palmer, Bernoulli | Locke specializes in creating partnerships and experiences facilitated by Web3.

The Fan-Owned Team’s territory will encompass Bermuda and the Caribbean islands - drawing on the region’s rich sailing history and homegrown talent. The concept will be similar to the West Indies cricket team or the Pacific Islanders rugby team - with all involved nations competing together under a common flag. The team will have to comply with the nationality rules set out under SailGP’s Participation Agreement, which require developing nations like Bermuda and the Caribbean to have four nationals on board in a six-person crew configuration.

The Fan-Owned Team must meet a number of requirements set out in SailGP’s Participation Agreement before it is allowed to form, which cover fundraising and compliance. The team must have a constitution, which defines the DAO’s governance protocol, as well as a legal entity that appoints a management committee responsible for complying with the Participation Agreement. The DAO must use ownership tokens that comply with U.S. Securities Law, and have a class of tokens available to all investors. There must also be a method in place designed to resolve disputes between the DAO and the DAO legal entity. There are two main funding requirements for the Fan-Owned Team - firstly the team must pay the Team Ownership Fee, as well as funding annual operating costs for two seasons. Only by meeting these requirements will the team be allowed to form.

The specifics of how the team will operate - including the constitution and use of tokens is up to the members of the DAO to decide. However, the tokens will be split into two different types. Class A ownership tokens will be handed out to founding members and grant them a say in financial and commercial decisions, as well as giving them ownership benefits. Class B fan tokens meanwhile will allow members a say in team decisions, as well as granting exclusive member benefits and team experiences. The founders will be able to shape how the team is constituted, with decision making over governance structure, token ownership, team operation and commercial activities.

The ambition is for the Fan-Owned Team to be on the start line during Season 4. But the formation of the team depends on it satisfying SailGP’s Participation Agreement.