I had the pleasure of lecturing on DAOs and the Law at Cornell Law School last week as part of @daughertylawyer's Crypto Assets and Web3 seminar.
Here is a summary of what we covered. 🧵
We considered whether US administrative agencies are suited to perceive the technological reality of DAOs.
I argued that they are not.
The legislature is best positioned to update the law's view of reality for DAOs, as long as the legislature studies the new reality closely.
Sep 13, 2022 • 10 tweets • 8 min read
I am lecturing on DAOs at Cornell Law School next month for @daughertylawyer's Crypto Assets and Web3 Seminar. Here is some of the required reading. 👇
Louis Lehot & Patrick Daugherty, DeFi and the DAO: How the Law Needs to Change to Accommodate Decentralized Autonomous Organizations, tinyurl.com/59dm6k9z
Litigation finance is getting more traction in Web3.
What is it, and how will it affect the industry? 🧵
We have seen three forms of litigation finance in Web3 over the past month: activist financing, defense financing, and plaintiffs financing.
I will cover each form of financing below, with recent examples.
Sep 2, 2022 • 8 tweets • 2 min read
I have never been more optimistic about the future of DAOs.
The Stanford DAO Workshop brought together a group of the brightest minds working on DAOs to found the field of DAO Science.
Together we identified critical questions to answer in order to improve the collective understanding of what DAOs are and why they matter.
Jun 19, 2022 • 16 tweets • 5 min read
Early today, Solend announced that it would hold its first DAO vote to seek emergency approval to seize the assets of its largest user.
Within hours, Solend claimed it had approval.
tldr: Solend's actions expose a shortcoming of a centralized team, not that of a DAOs. 🧵
Background:
Solend promotes itself as "the autonomous interest rate machine for lending on Solana."
Solend's largest user held a risky position. The wallet had deposited 5.7mm Sol and borrowed 108mm in stablecoins. Sol liquidation price of $22.3 (~31% drop from current).
Jun 15, 2022 • 13 tweets • 3 min read
Here's what I think is going on behind the scenes with Celsius.
(Caveat: not financial or legal advice, could be wrong).
When a company faces a liquidity crunch, it needs three things: lawyers, bankers, and time.
Lawyers provide options, assess liabilities, and communicate with attys for the creditors.
Bankers look for buyers + capital, model asset sales and liquidity, and determine solvency.
Jun 8, 2022 • 11 tweets • 2 min read
As the frenzy of coverage of the Lummis-Gillibrand bill settles, I want to highlight some of the very positive developments in the bill.
First, the bill provides a feasible path for the recognition of governance tokens to be recognized as commodities.
Jun 7, 2022 • 7 tweets • 2 min read
Today you will see a lot of commentary on what is in the latest draft of the Lummis-Gillibrand bill.
This thread focuses on the securities implications and discusses how the bill has changed since March.
tldr; the March bill would have been better for Web3 creators. 🧵
The gist of the bill is that it divides regulation of digital assets between the SEC and the CFTC.
The SEC is given limited oversight over certain digital assets, called "ancillary assets," but otherwise leaves the SEC's jurisdiction over investment contracts intact.
Jun 5, 2022 • 25 tweets • 6 min read
Will the Lummis bill be a BTC maxi coup?
I don't think so. Let's follow the incentives.
Sen. Lummis is the Senator from Wyoming. Wyoming proudly pioneered the DAO LLC and is lightyears ahead of other states. There were 130 active DAO LLCs in Wyoming as of Dec. 31, 2021.
Hear more from Sen. Lummis' State Policy director.
"How do you find and vet a good lawyer in Web3?" I hear this question from founders repeatedly. The question evades more than founders: it stumps investors and lawyers. I have the handbook for you: mirror.xyz/0x367B4bDf414D….
Before you crack the tome, follow me on a journey. 🧵
In order to learn how to find strong representation, it is important to consider why suitable Web3 lawyers are so hard to find. There are four reasons.
Mar 10, 2022 • 5 tweets • 2 min read
The next installment of the DAO governance primer covers the ideal of "flat" DAOs. Even in collectives, hierarchies emerge. Without naming or structuring the hierarchy, we give no compass to DAO members and ultimately see concentrated participation. mirror.xyz/0x367B4bDf414D…
Some highlights: an analysis of the Discord participation in collectives shows consistent exponential decay from the input of the top user to the input of the tenth user.
Jan 21, 2022 • 8 tweets • 2 min read
1/DAO != corporation. Four critical divergences: (1) DAOs are self-legitimizing; corps are state legitimized; (2) DAOs are complete systems; corps are porous; (3) DAOs orient toward transparency; corps toward opacity; (4) DAOs are mission agnostic; corps are mission limited.
2/ A DAO comes to life with a constitution. A corporation sprouts from a charter. Forming a DAO is similar to forming a nation, though to date no DAO is powerful enough to assert its sovereignty. Corporations benefit from the hedges and favors of the law.
Jan 18, 2022 • 5 tweets • 2 min read
1/ gm,
I have always admired this line of Ruskin: “When we build, let us think that we build forever.”
Few outlets in conventional society let us harness the power of this sentiment.
I found an outlet for building something larger than myself when I joined Alliance DAO.
2/ "Let it not be for present delight, nor for present use alone; let it be such work as our descendants will thank us for.”
At Alliance, our vision goes beyond our beginnings. We will create the origin story of a powerful new tool in human association: a virtual startup nation.
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