This is epicenter episode 376 with guest Aaron, right? I am suggesting that you on your listening to epicenter the podcast where we interview crypto, Founders, Builders and thought leaders. On this show, we dive deep. Learn how things work, at a technical level, and we fly high to understand Visionary, Concepts, and long-term trends. If you like epicenter, the best way to support us is to leave a review on Apple podcast. If you're on a Mac or iOS device. The easiest Do that is to go to
epicenter rocks / apple. And if you're new to the 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 inch I'm The best price for my trade across all dex's and M&M's 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 something goes wrong, one inch is a decentralized exchange. Aggregator that sources liquidity from the top dex's in the M&M's to save you money and time on swaps 1-inch finds the best possible training. Paths across over 20 supported liquidity, protocols and splits them up across multiple Market
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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. Thank you for joining us on this week's episode. We release new episodes every week. You can find And subscribe to the show on iTunes Spotify, YouTube SoundCloud or wherever you listen to podcast.
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