The Otonomist - June 2023 Issue

BOUNDLESS THINKING

§ 2Dumb vs. smart contracts: Why Brad and Angelina fight over a French vineyard and how smart contracts could have avoided their court battle

The facts are known (at least to readers of Vanity Fair): After jointly buying a prestigious French vineyard, yesterday’s Hollywood dream couple find themselves (again) in court after Angelina allegedly sold her share to an outside buyer without Brad’s knowledge.

Dumb contracts (and ill will) lead to litigation. When words are law, interpretation differs and restitution can only ever happen after infringement. In contrast, when code is law, contracts are deployed, which prevents infraction and avoids restitution.

In this post we look at how smart contract code can replace common clauses in a shareholder agreement and, using a typical VC-funded deal as a guide, how a company’s operating agreement more broadly could gradually be turned into self-executing software OS.

Read full post

JURISDICTION DOUBLE-CLICK

§ 3The Marshall Islands DAO LLC: Strange crossbreed or desirable offspring from the union between a DAO and an LLC?

In this research post, we examine the Marshall Islands as a jurisdiction and take a deeper look at its “DAO LLC”.

We first talk about the Marshall Islands LLC as a carbon copy of the U.S. Delaware LLC.

We then look closer at its genetically modified version, the Marshall Islands DAO LLC and ask ourselves whether any crossbreed between DAOs and limited liability entities, including LLCs, can maintain the fundamentally flat and participatory nature of a DAO.

Our conclusion is that DAOs cannot and should not be shoehorned into existing legal entities but rather gain legal personhood and limited liability via international private law, case-law or statute.

Read full post

COMMUNITY

§ 4Digital Assets and Democracy: Educating lawmakers and everybody else about the self-sovereignty of digital assets

As regular readers of The Otonomist will know, we are concerned about the general low level of understanding of blockchains as a transformational technology with lawmakers and crypto non-illuminati.

For this, the community also has itself to blame:

• First, in our view Web3 is being built the wrong way round, starting with hyper-financialization of digital assets (another DeFi exchange, anyone?) rather than growing value in the underlying assets themselves.
• Second, by not building bridges with what we believe is a majority of people, including lawmakers and even “suits”, who are naturally curious about the space but put-off by the esotericism and juvenility of a large part of its community.

It’s nice to see some practitioners including crypto-focused legal firms making efforts in this regards, such as UK-based Cummings Pepperdine with their “Cryptionary.”

Cummings Pepperdine has also submitted comments on behalf of the crypto industry to help shape the UK’s upcoming crypto regulations, and some of its principals are behind a new initiative called the Centre for Digital Assets and Democracy that highlights the importance of digital assets and decentralized ledgers as a fundamentally emancipatory technology which governments and its agencies should help enable.

CFAAD will shortly open a fundraising campaign and Otonomos plans to help them get their contents out.

Quoted from the entry

“Get updates and share other initiatives you think are worth mentioning to our readers via our official “Towards Full Autonomy” Telegram group .”

— Otonomos, 29 June 2023

Join now

ANNOUNCEMENT

At midnight Pacific Time tomorrow, Friday 30 June, we are opening the second tranche of our online equity round in Otonomos, giving our wider community the opportunity to invest in us on favorable terms. Go to fundingclub.otonomos.com to create a profile and, once approved, get a genuine carry in our growth and eventual exit.

Join our Funding Club

The Otonomistis skipping its July issue and will be in your inbox on the last Thursday (which is also the last day) of August.