Dispute Resolution Proposal: 1inch DAO and HWLT

Dear 1inch DAO Community,

This proposal addresses the resolution of an ongoing dispute between the 1inch DAO and HWLT (Hardware Wallet Team) concerning the Hardware Wallet Project.

Current Situation

A dispute has arisen between 1inch DAO and HWLT regarding various aspects of the Hardware Wallet Project development and delivery. After extensive discussions, both management teams have expressed a strong desire to resolve this matter amicably and in the best interests of all stakeholders.

Proposed Settlement Framework

The management teams from both sides have collaboratively developed a settlement proposal centred on a phased code release approach. This structured timeline aims to:

• Ensure transparent and measurable progress
• Protect the interests of the 1inch DAO and community
• Provide HWLT with a clear path forward
• Maintain the viability and completion of the Hardware Wallet Project

Timeline for Phased Code Release

The proposed settlement includes a detailed timeline for code releases, with specific milestones and deliverables at each phase.
The full document is available at the link below:

Moreover, the HWLT team remains fully committed to fulfilling its obligations. In accordance with the roadmap, on December 1, the list of files for the first publication phase of the project was released to the public. All materials are available in the official GitHub repository via the link below.

Benefits of This Approach

✓ Avoids costly and time-consuming litigation
✓ Preserves the value of work already completed
✓ Establishes clear accountability and deliverables
✓ Maintains positive working relationships
✓ Protects DAO resources and community interests

Next Steps

We invite community discussion and feedback on this proposed settlement approach. Following community input, this will proceed to a formal governance vote.

Your input is valuable in reaching a resolution that serves our community’s best interests.

The Legal Working Group thanks the ERA Wallet team for publishing a detailed and technically granular Source-Code Publication Roadmap and for already making Phase 1 repositories publicly available. Below, the LWG sets out its general observations on the proposal, followed by a number of specific points we would appreciate the ERA Team clarifying or correcting.

General Observations

Having reviewed the Source-Code Publication Roadmap and the broader history of the DAO’s engagement with the Hardware Wallet project under 1IP-30, the Legal Working Group considers this proposal a rational and constructive path toward closure.

It is the LWG’s view that a substantial portion of the core deliverables contemplated under the original grant have been developed. The firmware stack, cryptographic libraries, bootloader, and companion application — which together constitute the technical substance of what was funded — have been built, are operational as a live product, and are now being made available as open-source code under recognized licensing frameworks.

The DAO did actively pursue formal enforcement, including the execution of an Arbitration Agreement and engagement of external counsel. In the course of that process, it became apparent that where a contractor has substantively performed the technical scope of work but failed to meet certain timelines or ancillary conditions, the remaining claim is typically confined to damages arising from delay — which are inherently difficult to quantify, speculative in nature, and disproportionate to pursue relative to the likely recovery.

The LWG acknowledges that the DAO will not receive a 1inch-branded hardware wallet product. This follows from the community’s decision through 1IP-62 to terminate the licensing arrangement with HWLT due to brand and reputational concerns. While some community members may view this as a shortfall relative to original 1IP-30 expectations, the core deliverable under the grant was the development of the underlying technology — and it is this technology that has been substantially built and is now being open-sourced. The published codebase would be available for the community or future contributors to adapt or build upon. That said, the LWG recognises this is primarily a commercial and strategic consideration, and we defer to the broader governance process on how that opportunity is assessed.

For these reasons, and subject to the specific clarifications set out below, the LWG views acceptance of the proposed roadmap as a sound resolution that serves the DAO’s interests.

Clarifications Requested to the ERA Wallet Team:

Based on our review, the LWG confirms that the licenses currently published for Phase 1 repositories are consistent with the roadmap as described. The overall structure of the roadmap, the use of BUSL 1.1 with a defined GPL transition, and the immediate GPLv3 release of the Companion App are generally aligned with the commitments described in the proposal. In addition, the license terms published to date generally conform to accepted industry standards.

That said, acting in our role of representing community interests and focusing on legal clarity, auditability, and governance hygiene, we would appreciate ERA Team to clarify or correct the following points:

1. Phase 1 Repository Count Consistency

In the proposal narrative, Phase 1 is described as covering “5 repositories.” However, the detailed Phase 1 release schedule lists 6 repositories.

This appears to be a minor inconsistency in counting rather than a scope issue, but we suggest correcting the text to avoid confusion for community reviewers.

2. Patent Filing Timeline Reference

The proposal repeatedly states that:

“All patent applications are scheduled for filing by December 2026, enabling public release in March 2026 while maintaining intellectual property protection.”

In context, this appears likely to be a typo, and that December 2025 was intended (i.e. prior to the March 2026 Phase 2 release). As written, “December 2026” creates a temporal inconsistency with the stated March 2026 publication date.

We suggest clarifying or correcting this reference in the proposal text.

3. BUSL Change Date Clarity

The BUSL 1.1 license headers currently define the GPL transition as occurring “three years from the date the Licensed Work is published.”

While this formulation is legally valid under BUSL 1.1, it introduces avoidable ambiguity for third-party reviewers and future auditors. For clarity and verifiability, the LWG suggests hard-coding a calendar Change Date in the license text, namely:

Change Date: 2028-12-01

This would improve transparency without changing the substance of the licensing model.

4. Release of Phase-2 Date

The proposal states a Phase 2 release date of 1 March 2026 for the patent-pending repositories (Secure-Storage, Secret-Key-Protection, EntropyGen, and NFC-Backup). As of the date of this commentary, these repositories have not yet been published on the ERA Wallet GitHub, which the LWG understands to be linked to the fact that the proposal has not yet been put to a vote. Regardless of the reason, the stated date has now passed.

We suggest the ERA Team update the proposal to reflect a revised Phase 2 release timeline — ideally expressed relative to a governance milestone (e.g., “within [X] days/weeks of proposal approval”) rather than a fixed calendar date, to avoid a recurrence of this issue.

We appreciate the ERA Wallet team publishing the Source-Code Publication Roadmap. We trust that the clarifications and suggestions outlined above will be taken into consideration as the proposal is finalized for community governance.