1. Abstract – What STS Is

TLDR:

STS is a legal-and-on-chain standard that lets startups partially tokenize company upside via a DAO LLC/SPV, while keeping tokens freely tradable and founders in full operating control.

The Stakeholder Token Standard (STS) defines how early-stage companies can:

• Anchor real economic rights (SAFE or Revenue-Share) in a DAO LLC/SPV,
• Route upside from the operating company (OpCo) to that DAO LLC
• Govern that upside on-chain through a freely tradable governance token, without turning the token itself into direct equity

Under STS:

• The OpCo remains a normal venture-scale company (LLC, GmbH, AG, LLC, etc.).
• A DAO LLC (or comparable SPV) holds the economic instrument (SAFE or Revenue Share) and appears as one line on the cap table, when converted.
• Tokens govern the DAO LLC (treasury, monthly allowance, key decisions), but do not themselves represent equity or direct claims.
• All token supply is held in a vault contract with visible buckets (team, investors, reserves, incentives) and enforced unlock rules.
• OpCo funding flows via a monthly on-chain allowance, adjustable/pausable by token governance.

STS is designed so that:

• Token success is structurally tied to company success (through the DAO LLC claim)
• Founders keep full operating control of the OpCo and can still do VC and angels raising
• Retail participants get a transparent, enforceable, on-chain structure instead of “buyback” promises and missing information