This is epicenter episode 376 with guest Aaron, right?
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podcast, be sure to subscribe on Apple podcast Spotify or
wherever you listen. Today our guest is Aaron, right?
He's a professor at the Cardozo School of Law.
He's the co-founder of open law and he's an expert on the legal
treatment of dows. In fact, he co-authored a book
called blockchain and the law with Primavera de filippi.
I believe it was last year, that that book came out last year.
He participated in the launch of the Lao, the LA Whoa, It's a
dowel that is organized, as a legal entity, it's an LLC in
Delaware and its back to both 30 projects in the theorem
ecosystem since it came into existence.
So we had a really interesting conversation about Dows and how
they're treated in existing legal Frameworks although we
mostly focused on the US. We talked at length about the
legal status of dowsing Wyoming. There's some really interesting
developments going on there. As I'm sure you're probably
aware prior to this conversation, I had only like a
Understanding of what Wyoming is doing in the space.
But it's really cool actually that they're making it possible
for a doubt to be registered and recognized by law and that they
have the Frameworks also to kind of simplify this registration
process. I think it's like a very good
sign for the ecosystem. We also spend some time
discussing the different types of videos that exist and
different applications that exist in this ecosystem and we
speculated about the types of exciting applications that could
emerge in the future. The personally I think dowels
are just One of the most interesting things in the space
and one of my first encounters with this concept, the concept
of an autonomous organization was this pretty famous Mike her
and talk from 2013 at the touring festival.
At least it's famous in my mind because it really inspired me
and it's it was the thing I think that really made me want
to get into the crypto space back in 2014 or wherever it was
when I got into it. And he describes this autonomous
organization that runs a fleet of self-driving cars and it's
like super far out and futuristic.
So if you haven't seen this talk, if you're new to crypto
and perhaps don't know about the stalker, perhaps don't even know
who my current is, you should check it out.
The link is in the show notes of course towels have come a long
way since those early Concepts and most owls now have
governance tokens. And well you know where you can
easily trade governance tokens on one inch.
It's my go-to decks aggregator and I know that when I use one
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to start. Using one inch, go to epicenter,
rocks / 1 inch. And with that, here's our
conversation with Aaron, right? Welcome to have to Center.
We're here with Aaron right today, Aaron.
You are the co-founder of open Dot and one of the founders of
the Lao and basically, a thought leader in the Dow space and the
Digger Block Chain space. In general.
It's a pleasure to actually have you on.
Can you can you tell us a little bit about your background?
Yeah, absolutely. And thanks so much for having me
on as I noted before, I've been a longtime listener.
So it's great to to be able to join the podcast.
My background is a bit interesting.
I have a background in law and and Technology.
I'm a professor at Cardozo law school in New York before.
Joining kurtosis faculty. I started a company and sold it
to the for-profit sister project to look at Pedia.
So I spent quite a bit of time in the Wikipedia ecosystem and I
have been deeply involved in the blockchain ecosystem.
As since about 2011, when I started falling down the Bitcoin
Rabbit Hole, I had the pleasure of playing a small role to help
launch aetherium and work through some of the issues
there. I've also had the pleasure of
working with lots of other great folks.
In, in the ecosystem, I co-authored a book with
Primavera. T Philippi Tame Impala.
See, I was able to help out a number of great projects when
they were starting or early on including working with juban at
consensus working with some of the folks on the chain-link
team. Also working with folks and
other other great teams over the years, from my research with
Primavera and thinking about kind of this emerging blockchain
ecosystem, I've been able to help build and co-founder
project called open In law which is thinking about what I view
is, the Third Leg of kind of the commercial revolution that we're
building. We have Bitcoin and as kind of a
first e currency, etherium of easiest and axiomatic smart
Contracting platform and the last leg and kind of the
cypherpunk dream has always been a ricardian Contracting system
which is this idea of linking together, traditional legal
agreements digitizing them cryptographically, securing them
and hopefully Providing a sort of interface for that
traditional world or meatspace world that that I think we still
and have it. So that's been a really great a
great opportunity to work with so many great teams and
obviously built some hopefully important technology and kind of
related to that. And we've been applying some of
the tools we developed on open law to start building out, a
network of dowse. The first doubt that we launched
was the the loud and which I'm sure will get into.
We've also launch another Dow called Flamingo, Dow just more
nf2, you focus. And we have about three or four
more that I think you'll see over the next couple weeks, and
months that are that are in the hopper.
It's a quit. So you've been in the ecosystem,
a very long time. So you were here when the Dow
that the entire, the Dow thing went down.
We're you interested in Dallas before that or did that kind of
kick it off for you? Yeah, I mean I actually was an
Avid Reader of the coin magazine way back in the day and I
remember Jane Larimer writing about decentralized autonomous
corporations, which was kind of the precursor to dowse.
I thought that that was a Fascinating concept.
This is the thought being that you could use at that time, the
Bitcoin blockchain, and an interesting implementation
called colored coins, to begin to represent the organizational
structure of a corporation. So using a blockchain to kind of
record interest in the entity using those interests to think
about how to transfer assets, how to build controls into a
corporation, using smart contracts.
I thought it was absolutely fascinating and kind of all
click together so not surprisingly Rising when when
vitalik and and others began to veto Venture towards a theory on
and dowse. Became an important part of that
story, right, Das appear in the white paper.
There was lots of conversations around as that they threw in
community. I began to think about.
I was equally fascinated, and the dial itself was really the
first expression of that interest, right?
So, etherium was just recently launched for the most part, even
though, Take some time to get the on test Nets and the whole
bunch of other technical hurdles.
But, you know, I really thought it was great that Kristoff and
and team began to really push here.
They wanted to build. What was in the white paper?
They wanted to explore what these new digital organizations
can look like. And the Dow is really the first
great experiment in that area. I remember, even before the Dow
launched seeing certain demos and other things by this locket,
team dealing with You know, etherium / iot related devices,
which I thought were incredibly cool and and I think to
everybody's surprise though, the Dow just was much more
successful than I than I think anybody would have imagined,
right? It was supposed to be kind of a
small experiment, it became a massive experiment and then it
had a kind of a spectacular finish which I think was was
great in terms of animating people's minds about the
possibilities of ethereum. But at the same time
highlighting, A number of the challenges and pitfalls both
Technical and then over the subsequent months as you know
lawyers and other folks began to get some regulatory challenges
as well. So you know I think it was a the
first great use case for 30mm was Dows.
And I do think people had a bit of PTSD, ow after the Dow, and
they were kind of afraid to play around and dive in and start to
start to see what this ecosystem could look like.
There was obviously developer teams like the Aragon.
Team and the Dow sex team that were that were pushing forward,
but I think people put it to the side, you know, as we saw token
sales, and other other kind of crypto economic systems, begin
to be explored and 20s 16, 17 and 18, but they're back, right?
As are coming back into Focus. There's a lot of activity in the
Dow space that I think, you know, folks are beginning to pay
attention to. And if you are a developer, or
are somebody that's interested in blockchain technology, I
imagine that. It's With your time to start to
dig in here and think of that, what may be coming over the next
couple months and years. We certainly come a long way and
when you talk about like colored coins and these things back in
back in the early days like really takes me down memory lane
right alike. And also I think I was also very
kind of Marvel that this idea that you know things objects and
also more ephemeral things like like corporations could be
managed by some sort of an autonomous organization and if
you remember in the beginning and you can have loser this, A
lot of the interest in Dows was coming from this idea of
managing devices, like physical devices with lock.
It was one example of this, but even before that, it was my Kern
who given this really interesting talk about
autonomous agents. And, you know, how you could
basically have like a car, drive itself, and be its own
autonomous economic agent, a lot of the introspect them seem to
be coming from this place of wanting to govern physical
objects or having doubts, governed, physical objects that
turns out that at what the primary use case is meant to
govern software projects, govern things like investment funds,
and things like that. Where do you think?
The initial, the initial vision for dowse perhaps was wrong?
Or why do you think that this iot vision of a doubt, didn't
quite come to fruition? And rather, we were governing
things like software, and an investment vehicles.
What where was the disconnect there in your view?
Yeah, I don't know if there was a disconnect, right.
I think we're I think it's both right.
I think we're going to see Dow's manage human Endeavors, right?
People getting together and wanting to do something more
productive, you know, and hopefully beneficial to society.
And I think at the same time and that might hurt and talk, I
think that was at a London meet up or something along those
lines. It's fantastic.
If you haven't taken a look at it, I think you should.
It's definitely worth your time. And I think that That that's the
end point, right? And so Das will operate on a
spectrum from helping to coordinate human activity.
And over time as the technology matures also increasingly
coordinate machine related activity as well.
And then the notion is that these software based systems are
natural fits to create efficiencies when it comes to
coordinating human activity. And at the same time, due to
their decentralized and autonomous and automatic nature,
or also going to be useful for coordinating.
Jeans and I don't think we're there yet.
I don't think the iot ecosystem is necessarily there yet,
although we obviously see lots of continued growth there.
I don't think the scalability of thorium or other blockchain BAE
Systems, is there quite yet? And Trust, because once you're
managing a device, particularly something like an automobile,
which can hurt people, you're going to want really strong
security guarantees and I think that the last piece is this, you
know, kind of real world to crypto or real world to Smart
contract divide. I don't know if anybody is
Firmly tackle that yet, right, but this locket folks were
playing around with some early examples with that and and I
don't, I haven't seen as much interest in that yet my sense is
when we get to blockchain 2.0 or blockchain 3.0, which I think
we're kind of Meandering towards folks will begin to pick up
those technical challenges again.
But you know, at a high level I think gals are a very, very big
umbrella and tent. There are going to govern both
the coordination of people and the coordination of machine.
And I think we're just really taking the first steps in that
direction after, you know, taking some steps getting
knocked out. And now, we're dusting ourselves
off as an ecosystem and kind of pushing forward.
Mmm. Yeah, I think for the physical
objects, I think liability is probably one of the biggest
challenges to get passing. There are some practical
examples of this. Like, if you look at say what
are they like booze. You know, the scooters that you
see all over like major cities. I think have probably some
similar legal challenges around liability and like even I mean,
I know that, for example, here in France, a question about
who's responsible, if those they're damaged, right?
Like You hold someone accountable for damaging one of
those scooters. If, in fact, I mean, they're
owned by company, but there are sort of in the public space so
probably quite a few legal questions around that.
Yeah, a thousand percent, right? So questions when it comes to
machines, is who's responsible, if somebody gets hurt and, and
in many ways, it's not that dissimilar with more autonomous
organizations. So one way to think about Dows
is to break them down, into subcategories one would be more
of a decentralized organization so when we're humans are really
in charge the second one which I had considered it be the pure
Dow is where the algorithm kind of sits in the center so if that
algorithm is coordinating activity, Responsible, if it's
coordinating physical objects. Should the algorithm itself be
responsible? Or should the manufacturer be
responsible for? These are kind of meta questions
that I think policy folks that are looking into technology or
grappling with and will grapple with it in the blockchain
contacts but also as it comes to other forms of autonomous
idevices right. Like an autonomous car, where
self-driving car being kind of first.
I think major example, they're both sort will sort through it.
I think there's some Um, some folks that are thinking about
where that liability should attach and humans tend to find
somebody responsible for something, if people get hurt or
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podcast. If you look at that, was one of
the Hallmarks is that your that those are able to make decisions
with various stakeholders, right?
So basically, if you look at blockchains in the way they
could be described as super low throughput towels.
So basically you coordinate on a new version of a consensus
algorithm, or you can stay on the old one.
And basically, then you and basically, the way that it
decision is made Has you folk and the the folk that kind of
that fears legitimate to most people is legitimate?
So ideally you want to make a lot more decisions than whether
to upgrade the consensus protocol.
So what are the options here? So I imagine I mean if you look
at that house they often deal with low participation and
there's you know, problem around the bandwidth for of the
attention of individual people. How do you make sure that a Our
can effectively create decisions between so many different
stakeholders. Yeah, I mean, this is a good
question and a challenge that I think both developers and other
folks that are interested in dowser going to have to sort
through. So on the one hand you have to
our dead like structures that's a debate as to whether or not
Bitcoin and or etherium or and should be classified as Dows.
And my mind, I do view them as those You know, where you have
this code base and consensus algorithm and other aspects of
the of the blockchain that's kind of coordinating human
decisions at the edges. And and or you have other forms
of dads but I would call more decentralized organizations
where human decision-making is kind of bored.
The Forefront and people are beginning to use blockchain
technology in order to to coordinate their activity at the
same time and one of the major benefits That's what ours is
that they lower transaction costs, right?
The thought is by using smart contracts.
By using blockchain technology by using other aspects, you can
reduce the cost and friction of coordination.
So the transaction costs go down at the same time.
There's one transaction cost that you can't limit with
blockchain technology and that's attention right.
So there's there's a cost to accumulating information to
assembling it to processing it to taking and making decisions
related to a certain organization.
And that's That's why I think in part we see low participation
rates, not everybody is going to be engaged.
They're not going to invest their time and energy to
actually get up to speed on certain decisions.
So you see in some days that the participation rates are very,
very low. And in my mind that's not
surprising when we spent. And when I spend time in the
Wikipedia ecosystem, it was very, very hard to get people to
edit anything. Right?
Even click the edit button to change one word on Wikipedia.
It was about 2% of Users of Wikipedia would actually click
the edit button and a fraction of a percent would actually make
an edit. So it's not surprising
particularly online environments that people are not going to be
actively participating. Many people just like to lurk
and read and kind of process. I think, though we see something
a little bit different and some of the devs that we put
together, most notably in the layout and also Flamingo, where
the participation rates are higher, there are like 60 to
70%. I think that's in part because
the amount of assets that that folks are assembling together is
higher. So there's more at stake, right?
So they're able to enter more committed to actually taking
actions or weighing in on certain things because there's a
financial incentive for them to do so and because they've put up
they've contributed a fair amount of capital as part of
this Collective. So I think that that's one way
that that some of these Solutions may be addressed, it
could just be making sure that people put enough at stake in
order to guarantee a sufficient amount of participation at the
same I think we're seeing other experiments where they're
flipping kind of the question. And so, the folks at Connie I
know are looking at this. And I think it's quite
interesting. They're basically saying that,
if you put up something up for proposal, it will pass.
Unless people vote against it. So they're changing the dynamic,
which I think is clever and smart.
So if people aren't violently opposed to a certain activity or
something that's going on, within a dow things will move.
Forward right? You have an implied consensus
around that but the folks that are participating are paying
attention at that point in time, if they see something that goes
wrong, they're able to block that.
I think we're also seeing other forms of governance mechanisms,
whether that's weighing different conviction, related to
a certain activity that people are going to experiment with to
kind of solve this attention issue.
But the big barrier my mind at least, is this the cost of
attention, right. There's coffee.
Associate an affiliate with it. And that's, that's something
that we're going to need to figure out ways to deal with.
But the nice thing about the house is that we can actually
play around with these Mechanics for the first time, we have a
Sandbox or an ecosystem, where we can take these governance
related decisions and not the complex governance related
decisions that we have for kind of core blockchains, but smaller
groups of people and we can begin to play around with
different ways to address that. So if we want to optimize My
eyes for high participation, but we can play around with
different approaches and implementations to do that.
Maybe we don't want that, right? That's what the folks at Colin
are beginning to think about maybe we don't want, we have to
assume, there's not gonna be high participation, you know,
maybe we need to do with it at that point in time.
Maybe we use markets and some sort of prediction Market to
make decisions, right? Lots of folks are interested in
that as well, but at least now we have the framework to begin
to explore those things and that's very different than the
traditional world. And that's in part why I find
this face A so interesting. These governance decisions which
are very hierarchical hierarchical in a sense of like
a corporation or fairly hierarchical when it comes to a
traditional fund structure, they've been kind of set in
stone over the past 52. Several hundred years and now we
have the opportunity to begin to play around and experiment with
new forms and my senses through that experimentation.
Even though we don't know the right answer, we'll figure out,
better ways to begin to govern ourselves and hopefully make
better decisions. And I think particularly in
today's That's certainly needed across the board, no matter
where we are. Hmm, so around 10 years ago.
So in Europe, there was this huge wave of euphoria in it
circles for liquid democracy, where basically you would
delegate your vote, depending on the topic.
Two different people. Do you think something something
like this has a future in the context of the house?
Yeah. I mean, I think we're starting
to see the threads of that. So A more traditional lawyer
would call that proxy. Voting as a proxy voting is
existed in corporate and corporate context for quite some
time. So you can provide somebody else
that authorization to vote on your behalf.
The problem when it comes to more traditional corporations or
legal entities, there's a lot of expense and cost in providing a
third party, with the ability to vote on your behalf.
There's a lot of difficulty and expense and kind of aggregating
those You have to usually use a third-party service to implement
like some sort of shareholder Vote or other other voting
scheme. So it's quite expensive on a on
a blockchain or in aetherium. It's super easy, right?
You pretty much have to put an address assigned, a transaction
pay a little bit of gas and then that person can be your proxy.
So on the my like V2, smart contracts, that we helped put
together at that, undergird, the loud, and also Flamingo.
We already have delegated voting, other doubt Frameworks
have it as well. And we're Waiting to see in some
of these organizational values related to open source
technology things that are trying to manage defy protocols
or other emerging blockchain protocols we're starting to see
Services built on top of it. So boardroom is a good example
there where they're beginning to make it easier for you to
basically back a protocol politician.
So that that person can make and or take a an action on your
behalf. So I think that it's there.
The substrate is there right? Basic core.
Oceans are there but the tooling isn't yet mature.
The ecosystem and as has not yet mature but I do think we'll
start to see things that are what I think you could call
Liquid democracy or kind of a more advanced form of proxy
voting emerge in part and I think that that could be a good
solution to solve this information problem, right?
If you are a protocol politician, if you're somebody
that's aggregated a lot of votes from other folks that are
participating in the house, then you may have an incentive to
actually cut through that information, you cut through the
noise. As of whatever information these
days are producing and invest your time and resources to
making good decisions. So I think it's I think it's a
super fascinating part of kind of emerging dial governance.
Do you think there's an upper limit to how many people can
coordinate within a doubt? Yeah.
This is a good question. So and here you can go back to
some famous economist. So, Ronald coase actually, wrote
not just about transaction cost but he also wrote about
transaction costs and Jensen, how they form and other
structured, he has a some pretty prescient writings on this topic
where he noted, that when the cost of organizing and when the
ability to disseminate information related to an
organization is reduced, so you can think of that as the smart
contract based out Frameworks that people putting together,
and then the internet as a means of propagation, it suggests that
you should have organizations that are much larger in scale
and that's why I think. You've seen some folks say that
Dow's at some point. Should be able to coordinate,
you know, tens hundreds, hundreds of thousands, if not
millions of people, I do think that the entropy and the the
complexity of organizations that are much, much larger May
provide some sort of Upward Bound, but I do think we can get
to dowse that are of that size assuming that scalability
Solutions are implemented. There's Innovations when it
comes to governance mechanisms and I I think naturally they'll
gravitate towards larger organizations that being said,
in in the lab and also Flamingo. It's a, it's a much smaller
group of people. So do they US legal regulations?
It's capped at 99 members. And, and we found that even
though it's not five people, it's kind of like a smaller
roving band of folks that it actually is working pretty well,
right. As noted before we have
participation rates at our high much higher than what you see in
other Dows. And you also, Have some form of
cohesion, but I do think that at some point, as are going to get
quite large. And, and that's not surprising,
right? We have corporations that are
quite large to. So if you look at some of the
largest corporations in the world, you may not be fans of
those corporations. You may not like their products,
but they're coordinating hundreds of thousands of people,
whether that's like a McDonald's or like a Walmart or even a
government, right there, they're coordinating the activity of
lots and lots and lots of different people.
So I don't see. Conceptually wide as wouldn't be
able to do the same thing. I think the framework component
of this is is what's most interesting here.
It's sort of a governance system to end all governance systems
because the governance system itself can evolve to cater the
needs of how it scales. So setting aside platform
scaling solute problems. Like so like the ability for
theorem, for example, to process transactions at scale, the the
governance system itself can Evolve as the size of the number
of participants Grows, Right? So we're talking about this
earlier, a governance model that implements a gini coefficient,
for example that is malleable based on the inequality of
wealth in the system but you could also think of a governance
system that evolves based on the number of participants so it
could start off for example as a very sort of stake based system.
But as you start approaching higher bounds of users that
Turns into something, more akin to a democracy where you have
like a one-person one-vote type of system, Ivan person.
I think this is just like the most fascinating aspect of this,
is that it's governance technology for governance as
well from a from a meta perspective.
Yeah, absolutely. And I think the other areas
outside of, I think those are really great examples.
I do think that was can also explore multi token models,
which I think are under exploded.
At this point, we're starting to see some projects that are
taking in a bit more there. But I do think multi-tow can
models. Could be helpful to start to
segregate people in 2002, maybe different groups or folks that
have different rights or weighing in on different
decisions, which can allow for specialization and maybe cut
through some of the some of the noise or The challenges of
coordination. So it's a playground, right?
It's a governance. It's a governance framework,
governance playground. We have the ability to do the
same thing to organizations. Like we've done to software
which is evolved over time and that's important and something
that that I do think is going to, you know, to go back to your
question before, you know, coordinate a whole bunch of
different people, start to seep into lots of different places
because it's probably more efficient, right?
If you have better governance and you have lower, Cause I
built the ability to operate these organizations of our cost.
That should be in the long Arc of History.
The endpoint for organizations, right?
There's probably not going to be a reason to have a corporation,
or an LLC, or some of the existing organizations we have
today. If you have something that can
get propagated around the globe is entirely digitally, native
has you know, lower costs to operate and also has the ability
to actually solve some of the corporate governance or just
governance in general issues, that that we know that they
exist. Organizations have developers
can experiment and figure out the kind of right approach.
Their tag is straight how a Mikey token, Dow might work.
Yes, this is something. We've talked quite a bit about.
So, you know, there's lots of legal challenges, obviously
around the house and I'm sure we will dive into that at some
point, you know, one question is, if there's a profit that's
made who should be entitled to that prophet in the US.
And in other jurisdictions, we say that only folks that are
wealthy accredited. Investors should be able to hold
those tokens trade, those tokens Etc.
And while those are in my opinion, Dreadful policies that
is just kind of the the law of least my land.
And the many other folks land with a multi token model though,
you could support those requirements where by folks that
may be entitled to distributions are let's say accredited or
wealthy and able to satisfy the requirements.
But maybe you want other folks to weigh in on governance.
So you could have a multi token model where you split economic
rights from governance rights. And that may be kind of a first
step towards the democratization of some of these organizations
where you're gaining the benefit and the The wisdom of a group of
people that may be interested in a project whether it's an open
source project or otherwise that can weigh in on decisions but at
the same time the value transfer is kind of held by another
party. You can almost think about it
and I have a u.s. perspective here as a separation between the
house and the Senate, right? You can have the house, the
folks that have the governance Road saying, hey you should be
paying attention to. This is important to us, we
believe in this project but anything dealing with acids are
transferring Let's go through another house right there, the
folks that have another token and maybe that's a decent way to
a navigate, some some legal requirements, and be ensuring
appropriate, separation of powers.
We've already said wait a little bit into into the legal model of
the house now, so, I mean, obviously, the legal framework
has come. I don't want to say a long way
but it's come some way since the Dow.
So if you speak with legal doll people that they typically
distinguish between wrapped and unwrapped hours.
Can you explain to us what the distinction he is?
Sure. So there's a always been a
question when it comes to Davos as to what they would be
characterized under the law and what are some of the tricky
legal questions that may emerge? The first time I learned to
these questions or some great programs at MIT put together
right before. 3M launched looking at Bitcoin and
aetherium, another blockchain technology, and we began to have
a conversation about. Well, let's, let's assume that a
doubt exists, what would it be characterized as at least in the
US and many other Parts of the globe, they be characterized as
general Partnerships which which means that each partner would be
responsible for the activities. The other partners both from a
liability perspective and potentially also from a
financial perspective. So that's not a great place to
start. So folks began to think about
well, how can we limit that and they looked at different
organizations that exist today, and looked at organizations like
a limited liability company or some coops or other other forms
of organizations and began to think about Why don't we use
this vehicle as illegal rapper? Will wrap it and there's more
traditional entity, but the engine of it will actually be
administered entirely or primarily through software or
some sort of software based system.
So that's the idea of kind of a wrapped Dow where you you have a
doubt that's embedded within a traditional legal entity but
it's operating the way that folks that want to participate
in Dow's, enter the developers of the Dow's are intending.
I operating via software R and we've seen some, some early
experiments in that vein. So from kind of these more
academic conversations we've seen over the past couple years,
folks, like, Ross Campbell was on the open.
Lawn team? Who set these up and the Dior
team begin to explore. What wrapped Dows would look
like in the US and then obviously with the Lao and
Flamingo. Flamingo, Dow, we've been
pushing on that some more the way they tend to work.
Is that there are a limited liability company in the US and
at modifies, almost a number of the default rules under the law,
which is permitted using a contract, a traditional legal
contract, such that it can set up something that's akin to what
people want in a down. So what does that tend to mean?
Well, I can't speak to all the projects but I can speak to what
we've done on the land Flamingo side.
It means that when you join the Dow, you're not joining as a
partner. You're joining without and to
the extent, limited by law without any other fiduciary.
Duties to your other down members, you're agreeing that
potential conflicts of interest or waived so that we can kind of
preserve this arms-length notion of how does operate.
We're making clear that the underlying smart contracts are
governing the behavior of folks within the organization.
So it's not as Extreme as what we saw with the bow itself where
they put I had a terms of service that said the code rules
or something to that effect, but it's trying to kind of preserve
that same that same feeling and then it's dealing with other
issues that that lawyers worry about things like dispute
resolution, things like representations and warranties
these very boring basic things. That just help clear out some of
the craft if something goes wrong.
And so that, that's how we've set it up.
It's set up as a member managed limited liability company with
the default rules related, to those Limited.
Liability companies operate modified such that it can
accommodate the Dow the US and least in my understanding is a
bit unique here. There's no need to have a
manager of a legal entity in the u.s. it can be entirely member
managed. They can enjoy limitation of
liability, which means that they're not responsible for for
activities related to the organization except to the
extent that it relates to their activities within the
organization. And its it's been growing.
Pretty quickly in terms of in terms of in terms of
development. So I assume that the 99 member
limit kind of Rises out of that. What's the constraint here?
And is there any way to lift this?
So those are not organizational, corporate law, constrains.
And instead those are other constraints that are in the u.s.
related to Securities laws and a related statue called the
investment advisor act. So for Dows that want to pull
capital and deploy it for investment purposes.
There's a couple additional concerns.
One is what are the interests of the data itself?
Are they Securities, are they not Securities?
And, I know as a long time listener, you guys have spent
quite some time. Looking at, at some Issues
related to token. So I don't think we need to go
into that but it's not that dissimilar from some of those
challenges that we saw with characterizing tokens from the
2016 to 2018 token sale Euphoria and then related to that, you
know, if if you pull together capital from a lot of different
people, the u.s. tends to view it as a something, akin to like
a mutual fund and you have to go public at that point in time.
So there's some limitations the most notable one being If it's
under 100 people, then those requirements don't necessarily
apply. So, those are some other, some
other kind of parameters that we kind of had to navigate through.
And so, that's why in the lab now you have at its core.
It's a limited liability company that defers almost entirely to
software. It deals with all these
ancillary issues that we saw with the Dow, in terms of
limitation of liability, in terms of questions related to
fiduciary responsibilities, including questions related to
dispute, And and then at the same time to comply with
Securities and or the investment adviser acts limited to 99
members in the abundance of caution, we have limited it to a
credit investors. Although my personal belief here
is, we shouldn't have needed to do that.
And that's, that's kind of a separate issue, but something
that we're hoping to fight for the long run and it's growing
pretty well, you know. So the allow as an example
started with about a half a million dollars worth of ether,
in April this year, At least as of today, it's circulating
around 15 million dollars Flamingo.
Dow has about five million dollars in it and just to give
you a point of comparison that you know the Dow when it
launched at about 50 million dollars.
So using this approach we're about halfway to where the Dow
was just taking a little bit slower burn in terms of kind of
growing up. Ecosystem to what extent do you
think the the Frameworks of the libel limited liability company
can dissolve into the code? Like I'm thinking about things
like, Dispute resolution, for example, these are things where
we've already observed significant number of examples
in the blockchain space where we have dispute resolution like
things like like like are gone of course they are gone Court.
When do you think you know we'll be able to have a sort of like
legal doubt that exists only as a dow is that even where there's
no rapper company around it Yeah, I think that dispute
resolution at least four to be enforced, by traditional courts.
It's going to need some sort of legal agreement.
That's attached to it. It doesn't necessarily need to
be a heavy-handed one, but there's a certain Provisions
that if they're in a binding contract and if they deferred to
some sort of arbitration system, whether it's, you know, digital
based on arbitration system or some other more traditional or
Patrician system, it will be deemed enforceable.
So I do think they'll be pretty much like a light light wrappers
around a lot of down structures, particularly sophisticated ones
and particularly ones where the amount of assets that they want
to administer or pool are fairly large, I think until there's an
actual modification of the core statues.
To to permit this, you're going to have to have some sort of
like, Penning on it. You know, that being said, if
you can wrap it, Or wrap a dow or at least wrap some sort of
relationship with and a contract.
And that contract does have an arbitration provision in place,
at least in the u.s. it's pretty hard to impeach that.
So the way I view this, in many ways is these contracts create
the space so that people can experiment in the digital world,
you can actually begin to kind of quarantine out the ability
for more traditional entities like chords Etc 2.
Then to administer what's going on in the online world.
And with the caveat being that it doesn't obviously absolve
criminal related questions and concerns.
So Right. This is something I totally
neglected is the enforcement aspect which of course, for the
time being at least and probably for the first table future
relies on on the state enforcing.
Yeah. Exactly.
Yeah yeah I mean you see some early examples and there's some
great projects where that's beginning to get challenge.
Right. So one I do think
underappreciated thing about smart contracts is that they can
in effect enforce, right? The question is how do you get
claim on those assets? Yes, smart contract, right?
So unless people are depositing, the amounts in dispute into some
sort of smart contract and online.
Dispute resolution provision comes in place and that
arbitrator group of folks has the ability to administer those
assets. You're probably are going You
know, want to file that in the traditional Court especially if
you've lost a tremendous amount of money and enforce against
that. So I think I think we'll get
there but we're not, there's not enough enough assets that are
able to be easily managed on chain.
And some of these questions related to giving an arbitrator,
the ability to settle a dispute or still not fully worked out.
Although I imagine folks, we'll figure that out such that we can
kind of have a full close, this loop system, but if that falls
in place and You wrap it in a legal agreement.
There's not much that a court can do to unwrap it if it's done
appropriately. And if the decision is
administered in a reasonable way, and there's obviously
exceptions to that, but it makes it really, really difficult to
do that. And that means that we can kind
of move into an entirely digital framework, which is something
I'm interested in and kind of shed some of the more
traditional aspects of the legal system, Etc.
Let's dive into unwrapped house. A little bit later.
But there's also a means to basically, in the, in the, when
you talked about the reptiles, you kind of talked about giving
the dials of legal personality of like, some sort of Legacy
system. There's also novel legislation
that actually seized hours as a legal that kind of amused them
with legal personality in their own, right, right.
And can you talk about The legislation that's kind of come
into Force there. That's going to come into Force
soon and how you see that? Yeah sure.
So in the u.s. there's been a couple of attempts at kind of
Legally recognizing bad as the first one it was in a state of
in the state of Vermont which passed an act called the BB
blockchain based L. Say so the BBL see it was a
really important but pretty narrow act.
That just said if you have an LLC you can designate it.
A BB L. Za launching base LLC and that's
going to be fine under Vermont law.
And I along with other folks have been working with some
state senators in the state of Wyoming, which is passed a
number of bills related to blockchain technology, Caitlin
long. I imagine many of many of the
folks that are listening are aware of.
She's been historically spearheading that effort,
although I think other folks are jumping in increasingly there as
well. And the idea is and this is a
bill that's been pushed through a committee in Wyoming.
Is that you be able to set up a doubt in Wyoming?
So, you know, x y, z dou. So it can actually be called a
doubt. They'll be recognized by the
state of Wyoming. You'll file one document.
So, instead of extensive paperwork, and if you've ever
set up a business, you get a stack of paperwork, that your
lawyer lawyers will prepare, you have to sign a whole bunch of
different things, it's very confusing.
So the thought here is but strip that all away, you can file one
document called an articles of organization.
It identifies the Line, smart contracts that are managing the
system. Your designating, the Dow is
either a member managed out or one where humans are involved or
an algorithmic, Tau where an algorithm is involved, you can
put in place any legal Provisions, that you need to
either account for things like dispute resolution modify
certain Provisions. To just make sure it fits neatly
onto your organization and then you can file this document and
You will have a Dap. And what's also interesting
about what Wyoming is pushing towards they've authorized this,
although it's not built yet. They want to make it feasible so
that you can file things in Wyoming via an API.
So, I think we're rapidly getting towards a future where
you're going to be able to set up an organization hopefully
from command line, right? You'll be able to load up
terminal type in a couple of commands and and push that to
Wyoming. Push some code to aetherium and
your organization is set up and some of the automation tooling
that's in part. Why we built things like open
La, you should be able to automatically generate those
filing documents as well, right? That's incredible maybe pay the
fees in ether as well. Like just right there in your in
your gut or you know or USD see I don't know or you know but
something that presumably and will hopefully be settled on on
aetherium and That's amazing and not only is that amazing that
you could soon be able to do that.
It's also amazing that the cost of setting up the organization
should go down, right? So just like we saw it software
and if if the agreements themselves, this document that
you need to file become standardized or there's a couple
templates that people can use the smart contract, code is
standardized. Something like the moloch
framework or some future framework and and the cost that
Wyoming charges to set up an organization or not,
unreasonable several hundred dollars.
And it may be unreasonable for some, but in the scheme of
things, is a lot better than where we are today.
That's pretty incredible, right? Instead of spending tens of
thousands of dollars talking to lawyers that are going to run
you in circles putting together agreements that in many ways are
unnecessary or unnecessarily, complex, you'll be able to
hopefully, you know, treat it like any other software, just
another task that you need to do.
Another thing that you can click off your checklist, What?
But the very idea of interacting with any government authority
over an API is something that I never thought I would see in my
lifetime and living in France. I never thought this would be
something I would see in my lifetime but this is very, very
cool. Yeah.
So you know, the API piece that, you know, I think they're
well-intentioned. I don't know how far along that
is in development but I think that that that's where we'll get
at some point and then on this at the same time I think going
back to what we were talking about before then we'll see.
Jinan governance and really have a, hopefully a framework to
begin to do that kind of just Loop in that.
So, basically, if you talk about the internal governance of the
doubt, I assume that the state of Wyoming, won't be able to,
but in there, right? So because you could, you can
have all kinds of internal dispute resolution.
That Wyoming wouldn't be able to facilitate and that kind of,
that holds is that so. And so basically the legal
personality that the Dow has is only in external circumstances.
So basically it can enter into a contract with like it.
Apply. Oh, I'd caught it.
Can contract people to do things for it and can open a bank
account, but I assume there's no dispute resolution.
And you can't, you can't sue a fellow Dow member in front of a
Wyoming court for breach of contract or whatever I assume.
I mean, you could, the Wyoming courts would have the ability to
administer any disputes for any Wyoming entity.
But in general, the u.s. the u.s. loves contracts.
We love them. We think that they're absolutely
fantastic. What legal academics will call
this as private ordering. So we enable to a great degree
and probably to the great greatest degree in the world,
the ability of individuals or groups of individuals to
organize their Affair, using contracts, and the state has
very limited ability. A to open that and that includes
to decide how you want to administer disputes, you want to
use Aragon court and that's in the contract and that's written
down clearly all folks signed it, you're going to use Aragon
court, right? There's there's not going to be
much much choice. So if you walked into Wyoming
and talk to a judge there, he's going to say, well, look in this
contract, you agreed to use Aragon court.
So, what are you doing here, right?
Go to Oregon court and get that administered.
And if you're trying to kind of work around that you're not
going to have much wiggle room to do that.
And in general, the state doesn't really get in into the
Affairs of private Enterprises, right?
Whether that's a corporation you know, and or a company and what
that would mean is also a doubt that there's obviously lots of
exceptions to that but in general, they're fairly narrow
and that's exciting that there's certain abilities though, in
this statute, for Wyoming to basically unregister a dow.
If it goes completely Haywire, And that's something that we
were concerned about at. There's also, if you're going to
have a purely algorithmic system, there's a requirement.
Now, you're getting, you know, like a charter from the state of
Wyoming. So you have to give something up
and what what we propose that folks have to give up to set up
a entirely algorithmic system. So something to kind of manage
this future. Autonomous car that I think
folks that are thinking about, it's just that, it's upgradable,
but in some capacity there has to be some ability to upgrade it
as. So that's the trade-off that
That I think the state senators at least those on the committee
that was somewhat reasonable and that may change over time as it
goes through committee, Etc. But one of the dispute
resolution things that come to mind.
I don't know if you guys have thought about this but what if
one of the members of the Dow is another Dow and how does that?
How would one then handle dispute resolution when you have
perhaps like a sort of cascading doubts, right?
That Some point have ownership in a dow and there's there's a
dispute that needs to happen there, right?
Or dispute resolution. Yeah, well, that, that happens
all the time right in traditional legal Arrangements,
right? Like a corporation can be a
shoulder and another Corporation, or a corporation
could be a shareholder in an LLC and the LLC will have an
agreement that has an arbitration provision.
So you just have to find kind of the operative agreement to deal
with the dispute and then you look to that.
So that's why to your previous point.
I just think that there's Probably going to be some light
pinning with some legal documents.
It could be something like what we're building on the open up
side where you're able to, automatically generate them for
more complex, things, it could be something even like a terms
of service or some sort of Click through like related agreement,
that that will that will kind of deal with some of these types of
questions. Can I just ask one last question
on the Wyoming framework? So basically if your doll goes
haywire and it's kind of ghee registered by Wyoming.
What then happens. Because I mean basically it's On
the blockchain. It doesn't you can't unsummon
it. It's still there.
So basically it does it no longer have legal personality or
what? What exactly it doesn't feel
like if he fights back to a general partnership is that it
or is that exactly? Yeah, that's the thought.
I mean, there's not the state can pick it up, take it down,
right? You know, the one thing if it is
upgradeable that could be conceivably part of some sort of
court order read that you need to Upgraded so that it no longer
is operating, you know, these are the edge cases.
I imagine over over time, those edge cases, where we come little
bit more magnified. So that that's the concern that
folks have. But as, as you know, and as I'm
sure many of the folks listening and no one, something is the
point theorem or other comparable pouch and they
systems. It's hard to put the genie back
in the bottle, if people want to use it.
So that's some of the challenges This is Oakwood.
I'm super excited to see how this actually plays out and so
it's going to be wild and so what wait what wait, wait wait
wait. What about if a dow summons,
another Dow and you know through this this API like creates
another legal entity can we have a dow owning a dow in Wyoming.
Yeah, I don't, I don't, I don't see why not, I mean, it's the
same thing, traditional corporate structures.
You'll have a corporation that has a subsidiary.
Every right. So, you know, with the Lao,
we're already members of other dads and that's been immediated
entirely through just smart contract based calls.
So it's already possible to do this.
So you know, the the low is a member of Pi doubt.
And so the members voted that they wanted to join Pi Tau and
then we did write as a once the vote happens, read smart
contracts or triggered. Once the smart contracts were
triggered, it interfaced with the Aragon Dow that undergirds
pie dough and, and we joined, You know, I think it's going to
happen. There's nothing technically
limiting that ability to happen. Yeah, there's nothing
technically limiting it. I just wonder what kind of
complexities might arise when you have little like Dows and
child as and child. I was being completely automated
and autonomous themselves. Forming new Dows through some
sort of an API and then like, I don't know, it just seems like
like a bee's nest of complexities to me with some
Some sentient AI administering the entire thing.
Yeah, I mean, not even an AI just it could be pretty simple,
business logic. I mean, I think like the come
back to the mic, her an autonomous vehicle.
I think, like, in his example, there was this, this notion that
at some point if the vehicle had sufficient Capital, it could
invest in other vehicles and those would be sort of
autonomous vehicles and themselves and they would be
like a child vehicle the other. So, this this this kind of thing
is always fascinated me. Since I've heard the stories of
this kind of Like just wakens all those Fascinations again.
Yeah. Again I don't, I don't think
that there's, there's nothing conceptually that would limit
that there's a couple technical requirements in it.
You know, the entities need to have a registered agent, which
is basically, like a point of somebody to contact in the state
of Wyoming so that would have to be accounted for.
But, you know, you don't need to have a manager.
Like there's nothing necessarily saying that you need to have a
manager of an organization you need to have you know, some
Legal person that would probably file it.
So, that's a big question. I don't know what's going to
happen with this API and whether or not they'll be some sort of
like technical issue that made them a mock-up, what you were
just describing. But I don't see why you would
necessarily not want that to occur.
We already in enabled humans to do that.
Why? When the sensor to algorithmic
system had a the same place same general ability to do that.
I agree. Yeah, it's it but it's a good
question. I don't I haven't fully thought
through it but I'm going to make sure to spend some more time
thinking that through over the next couple days.
Your next book. So if you look back at the
history of organizations, it kind of seems, it seems weird
now, but I mean, you didn't always have shareholder base
organizations, right? So basically, if you look at, if
you look at the Dutch East India company, that was founded, I
would even 1602. And that was the first one of
those. Do you think this is that moment
again? Do you think that was are going
to have an Analogous position in our society and legal system.
So my belief is yes. Right?
For the reasons described before, you have an organization
that can propagate anywhere around the globe via the
Internet. And I do think smart contract
based organizations will just be cheaper and cheaper to
administer and presumably over the next X number of years, will
develop Superior governance mechanisms and that's a big
question and you can disagree with that but that's my belief.
So I think that this is going to be the default Vault, almost
like how folks argue that Bitcoin is the sound is money.
And obviously, all money over time, at least as the argument
goes, well, will gravitate towards the soundest money.
I personally think that Dows will be an are the soundest
organization for the digital age, and that means that
increasingly, I think you're going to see more and more
organizations, begin to operate via Das.
And this is not fully surprising.
So you mentioned the Dutch East India Company.
But if you even go further back in time, people have been
setting up organizations of different stripes for Millennia.
You know, Romans had limited liability entities to deal with
trade and shipping. Obviously, we saw the adaption
and English state-chartered corporations, that really led to
the age of exploration with all the benefits and the downsides
related to that in the u.s. though.
You know, we came up with this state, chartered corporation
that was 1811 in New York. So we said, why do I have to ask
Permission from the state. I should just be able to set
this up. Anytime I want, if I satisfy
these requirements, very, very American way to approach it.
And then corporations became the dominant form when there was the
railroad, boom, in the 18, you know, the 18 mid to late 1800s
in the u.s. it led to the birth of preferred stock or different
forms of stock that a company can have, which is what fuels
Venture Capital investing when we saw the increasing
internationalization. Finance.
We saw the birth of the limited liability company, which is what
predominates in in the u.s. now for many businesses.
So I think for each technical age and each technical
Innovation, we've seen kind of a subsequent shift in the way we
decide to organize our Affairs and and I think that that was
our that shift for the internet. There's no reason why you
shouldn't have an organization that can stretch across the
globe. That's lightweight that kind of
reflects the behaviors of how people interact, right?
They don't. Not necessarily want to join
together as a Partners like venturing out to do something.
They don't want necessarily to be have somebody in charge of
them and some sort of, you know, top-down hierarchical way they
want something that's looser, weren't arm's length and that
relies on software, so they can actually begin to coordinate
things because it's a bit more trustworthy than these, you
know, paper-based agreements that are that are hard to
administer expensive to put together and, and specific to a
particular jurisdiction. So, I just don't see how dad's
don't win in the long run, and I think we're starting to see that
play out. I don't know if you've looked at
the numbers and I do like numbers.
But if you go to platforms like deep down, which is a really
great platform. If you haven't been there,
that's taking a stock. If it how ecosystem.
At the beginning of this year, there was about a little under
10 million dollars worth of digital assets into house, and
it's up to almost 500 million. And the last time I saw growth
like that, I think it would be defy, right?
When we Are, you know, and in 2017 18, when we started seeing
the first D5 projects, kind of emerge, there was a couple
people, you know, a couple projects that we're getting some
traction. But I think the Dow ecosystem
we're going to, we're going to see similar levels of growth.
I think that's particularly true for their dads that you
mentioned before those managing, open source projects.
I do think the developers have a significant amount of demand to
either have their assets or the entire project kind of managed
in a more democratic like participatory way.
So I think we're going to see a lot of growth here.
And then as the blockchain ecosystem, continues to grow,
eclipses, more than a trillion dollars in assets, you know,
tens if not hundreds of trillions of dollars, then it's
just going to be difficult for organizations to compete and
they're going to have to, you know, they're gonna have to copy
just like just like they always have done.
So that's that. That's how I see things blowing
up super quick. So just before we dive into the
current, our ecosystem, And one last directly could question on
Dallas. So basically we've talked about
wrapped hours in both Legacy rappers and novel rappers.
What about unwrapped out? So if you don't actually have a
legal wrapper for yet our is there any way to not
automatically default into becoming a general partnership?
Yeah, so this is the tricky part.
It's going to depend on whose members and it's going to depend
on all the jurisdictions in which they reside.
So at least in the US and Europe that tends to be and I'm not a
European lawyer, but this is my understanding it, that tends to
be a general partnership. That that's also why I think it
does make sense to have some sort of contract in place
amongst the members. I call those contract Harry
endows, so you can have a contract.
Even if you're not legally recognized, governing the
Affairs of the different members and potentially limiting, or
waving rights that you think are sensible as a group to the
extent permitted by by law. And that's a complex.
Question, you know, which will governs, you know, what rights,
you're able to wave and you know, some things you can waive
some things you can't when it comes to partnership.
But at least I think that gives you some shot at organizing
things and dealing with these these risks.
It's, you know, being a lawyer's, a little bit like
being a security researcher. You're not thinking about the
happy path or thinking about the bad path, right?
And we saw some dramatic bad pass with like the Dow itself
where there was a big questions and if there wasn't the hard
work and people really lost their shirt, my sense is the
courts would have weighed in at that point in time.
But, you know, dealing with some of those downside risks, I think
are important particular for trying to build something that's
potentially massive. We're even seeing that the Maker
Now ecosystem, right? As maker died, was becoming more
and more important as diet is becoming a more essential asset
to the crypto ecosystem and potentially other ecosystems.
These types of legal questions about who's responsible as the
foundation? Is it somebody else they're
beginning to come into focus and I do think agreements that are
put in place can kind of Stave off those forms.
I've read called like Regulatory and tax in the future, so that's
something folks should consider. And I think there's some great
projects that are already considering that, and I think
we'll start to see some more. We're following that path to
because legal recognition is not for everybody, right?
So either philosophically or, you know, or otherwise but, you
know, we decided to go down that path and the reason we've kind
of thought about it is it's a little bit like coinbase.
I know coinbase is a bit of a touchdown but they took man
cocks, right? They just copy down Cox and just
said, hey, let's do it in the right way in the US.
And in many ways, what we're trying to do with the Lao and
this ecosystem is, is explore the same thing.
Like can we do this in the right way?
Just we can push the ecosystem forward, you know.
We know that that's not going to be the right approach for
everybody though. Speaking of ecosystem.
So we've talked about lots of different doubts.
They were, at least mentioned a few looking at the different
dowse exists. Do you have a way to categorize
them? Like, how would you kind of put
them in different for different use cases or applications?
Yeah so I think I think one major category is this idea of
using a dow to coordinate an open source project?
I think we're seeing that first emerge in the blockchain
ecosystem, 45 projects but I don't see any conceptual reason
why that should be limited to just booked in projects.
And I think we're seeing interesting experiments like
that protocol and some other interesting projects that are
trying to kind of bring, you know, bring comparable models to
other open source projects. So I think that's one area I
think the The second area would be what we talked about before
these, like, based protocols. So that's an argument, I tend to
think that they are kind of do like, and structure things like
Bitcoin and etherium. So, I called as a protocol level
dowse and and then I think, I think that there's a lot of
potential use cases around pulling Capital.
So if you think about a lot of Industries at their core, what
are they doing? They're pulling in deploying
Capital. So venture, capital is an
obvious example there, right? People pull together.
Capital make He's into projects, but if you think about media,
it's not that dissimilar label that maybe funding music or some
other form of creative Endeavor there.
If Capital they Folks at decide where it gets deployed, they
this they cool capital and decide work is deployed very
similar. So I think you're going to start
to see a lot more Dows in that ecosystem.
If you think about insurance, it's just pulling capital and
deploying it. If you think about other forms
of fun structures, whether that's hedge funds, private,
Equity, Funds, Etc, pulling in deploying capital and really,
any corporate. I'm is not that dissimilar read,
if you're running a dive shop, you're you're pulling instead of
intangible Capital its human capital read.
So and you're pulling human capital and deploying it.
So I think that the pooling of capital is the other major
category and that's the one that we're just beginning to explore
with projects, like allow and Flamingo, dial and a handful of
other examples are too. So that's kind of my broad
categorization there. You also have some sort of
coordination to us, right? So basically for instance
there's keeper Dow which hasn't been around that long.
So basically for for organizing the extraction of Mev is
probably how I would characterize it.
Do you have any other towers that are centered around
coordination and basically division of assets?
Yes. So I think that this isn't
interesting potential new frontier for now.
So viewing it as almost like a like a point for coordination or
also point for signaling. So you can view it as almost
like a bit, like a web of trust of some sort.
So if you're like interested in a particular topic or particular
project, you can, you can see douse potentially be useful for
curation or dissemination of up certain things.
So an example, we did this in. We're Flamingo die, which is an
empty focused out. We had a doubt drop where an
artist was able to drop onto all the members and nft that that
they created. So they use the Dow is kind of
like a vetted web of trust of folks that were interested in
and of tea or digital art related things.
So I do think that there's going to be more forms of use cases
for dads. I just think we're just starting
to scratch the surface and what we're doing is looking towards
prevention. Models and trying to apply them
in the digital context, a little bit like web one and then we'll
start to see some more kind of emergent things that we may not
be able to think about things like you poured out with things
like using Das for creation or or other other aspects.
Like that could also be potentially.
Interesting. So I don't have all the answers
but and I definitely don't but I think that there's lots of
ingenious things that will be able to do with organizations.
Now that we are effectively turning them into software.
So what's the outlook here? What, where do you see this
space evolving in the next say, decade and what are some of the
risks that you might perceive? I mean, one of the risks and
felt like a mentioned this in the short run down, but I think
given the current context with the social media censorship that
we've observed, is there a space for doused to occupy some some
of that space and what are potential?
Some of the risks that that might incur on society.
Sorry, I went from a broad question to a super narrow
question. No.
Well, you know, from my my vantage point, I hope that
boxing technology can come and, and hopefully address some of
the issues that I think we're seeing with centralized social,
media platforms and other services, and hopefully by
banding together, in these more loose digitally native
structures were able to replicate if not improve improve
what we're seeing. On social media or otherwise
with all the caveats that about scalability and all the other
issues with some of these broader kind of more consumer,
Focus applications will have, I think the other four days is
bright, you know, I think it's one of the core use cases.
It's something that's animated both the Bitcoin and the theorem
communities for, you know, a number of years.
Now I think the tooling is coming into place so we have
shaken off this PTSD. How I think Malik Dow was wildly
Innovative I think I mean and team who put that together I
Really Deserve Pat on their backs because I think it was a
tremendous work. I think we're going to continue
to see some kind of core Innovations around the
underlying smart contract Frameworks.
So some issues that dams are facing are not just regulatory
questions. They're actually just
nitty-gritty technical issues. It's very expensive to deploy a
doubt. It's very expensive to run it
down in terms of gas and other other issues.
So I do think we're going to see innovation in that realm, you
know, on the open mouth side, we've been working on this.
We've been putting Together? What we consider to be the third
version of the moloch doubt framework, which means that
you'll be able to set up a more modular Dow, you'll have the
ability to vote on governance related decisions at no cost and
transfer assets. If there's no evidence of fraud
at effectively, the cost of transferring that asset which
is, you know, a couple bucks of gas at least 11, things are not
entirely insane which we think will lower the cost related to
operating Das which is a big pain point and a problem that
needs to be solved. I think.
We were talking about earlier in the show related to the
appropriate way to get people involved and participating in
these structures is something that needs to be solved, but I
think we're getting close to to having at least Frameworks where
people can begin to experiment there and then the last is
regulatory questions. So we may have figured out a way
to set these things up, but I'm not satisfied.
That we can only set up a day out in the US.
That's under 100 people. I want to see those jobs that
are tens of thousands of people. So I do think that there's The
long slog of convincing the gray-haired and graybeard
politicians that that have a disproportionate weight on our
lives that it's okay for people online to organize and do
something productive together. I think that that's a pretty
reasonable argument to make, but, and something that does
need to be does need to be made and hopefully we'll be able to
begin to do that. Yeah, I mean, but if I buy my
regulator hat on for a second, you'd great hats, if it's a
green hat for some reason, But if I put that hat on and and,
and I think, okay, well, this is great.
But I mean, a dow can also allow for extremist groups to organize
for Dows to also serve purposes that are not in the common.
Good. What is your answer to that
concern? I think that's always a concern,
right? But people can band together to
to do bad things all the time, right?
And plenty of people set up legally recognized entities and
perpetuate, a tremendous amount of harm to begin with.
So I think it's just like anything else.
If you're putting together a doubt, set up an assassination
Market or something crazy like that wouldn't be a good
conversation for some dive into those types of questions.
You know, there's other regulations that you can, you
know, there's other regular regulations that can apply
there. And if folks are doing bad
activity and can be identified and that may become more
challenging over time as you know cryptographic Primitives
become easier to implement Etc. Then you know I think we're good
we're just going to have to Grapple with these types of
questions. I don't know.
You can't again put the kind of Genie back in the bottle.
You just have to kind of deal with the hand that's dealt.
How much do you think the overlap between regulatory reach
and ours will be? So basically if you look at
technology where it's now and where it's going, you can kind
of see that it relies on centralized infrastructure
increasingly less and we see the rise of privacy protecting
technology on a theorem and other platforms.
So in principle it would be Possible feasible to actually
partake in Dallas completely anonymously, without being able
to be traced. Do you think that was well,
evade regulatory capture or I mean, basically because not only
as good as they are, if you can enforce them, right?
Basically, non-enforceable laws. Don't really I mean, they just
described it as a state. So how do you resolve that that
conundrum? It's a great.
It's a great question, right? We saw early.
Examples of this. I remember there's a project
called Daymond. Do it was claiming to be purely
Anonymous and trying to explore this, you know, this this
Vector. I think there's always just met
a questions just about how Anonymous can you actually make
things? So even with more advanced
privacy-preserving tools, like tornado cash, we've seen that,
there's still holes that people can poke through to identify
people. It's hard to kind of achieve
that pure and intimidate. I guess that raises the question
as to whether or not Even though it's an interesting theoretical
question and practice that will actually play out, you'll have
some completely impervious system with no no way to be
anonymous things. But I think it's an issue.
Right. I think as more anonymizing
technology gets deployed and as the coronation tools get better
and it can be used for good or bad.
You hope that people and I tend to believe this that people are
generally good and if folks are perpetuating something bad,
They're identifiable. There's other tools to do that
you know, but this is a risk that's been known for a while.
We can go back to the crypto. Anarchists Manifesto that
Timothy may put together where he prophesized that you know,
strong cryptography, other forms of of systems, including things
that in my mind in my wreaths and intimate and kind of
prophesize blockchains, this was written in like the late 1980s,
early 1990s are going to create a lot of regulatory challenges
But in my mind again, you can't go backwards, right?
So you just have to deal with the issues as they as they
emerge, I will say that we didn't have this pervasive
surveillance systems that we've been putting in place globally
over the past 20 plus years before the 1990s.
Right? So we were able to stop Bad
actors then I'm assuming that we'd still be able to stop Bad
actors in the future even if our ability to track and Trace
things is not as As strong as a maybe today.
You weren't in the politicians, is I think this is a great great
note to wrap up on techno optimistic to the maximum.
I love it. Fantastic, I'm Aaron.
Thank you so much for coming on. Yeah, thank you so much for
having me. I really appreciate it.
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