March 2024 Recap
In March there's always madness...
Time flies and so has March! As you all surely know by now, that means the LexDAO team has spared no time making magic happen while we continue building one of the best web3 communities out there. Keep reading to see some contributions from our members and get some updates about the DAO!
Attention lawyers: we'll pay you 75 USDC for a 30-minute meeting to tell you more about MIDAO! Book your meeting here today! - the MIDAO team
What’s New at LexDAO
The hard work of the LexDAO legal engineers paid off with a hugely successful ETH Denver. And we’ve carried that momentum through the rest of the month as we continued to build and explore new ways to support our members and the web3 community. Curious to know what’s happened? Well, you’re in luck! This March Recap will get you back up to speed in no time.
Are DePINs a Paradox of Decentralization?
written by @haroldo_msn
DePINs, or Decentralized Physical Infrastructure Networks, are real-life infrastructure networks built by on-chain communities (instead of corporate networks). These community-led projects align the interests of their members (creators, developers, users, etc.) to effectively organize the construction and management of tangible, real-world infrastructure. Although they are still novel, DePINs are already revolutionizing physical infrastructure in energy, public housing, telecoms, computing, mobility, and other services. Some notable DePINs are Filecoin (decentralized file storage), Helium (decentralized wireless network) and Bittensor (decentralized machine learning network). Pied Piper’s New Internet from the television series, Silicon Valley, is a good fictional portrayal of a DePIN.
In the world of large-scale infrastructure, a notable transition is unfolding as DePINs makes grassroots, community-owned, ground-up infrastructure possible. Unlike the traditional top-down infrastructure development led by corporate networks, DePINs enable decentralization, spreading decision-making and ownership across the individuals that make it a reality. Community members contribute capital, assets, and labor toward a shared objective, and are empowered by transparent and equitable token incentives that serve as catalysts for collaboration. This type of organization and collaboration was not feasible before web3 because the incentive systems to make them happen were not available.
To coordinate incentives and governance as well as raising, holding, and deploying capital, communities building DePINs will almost invariably be organized into DAOs. The nature of these projects will, however, present these DAOs with plenty of off-chain challenges to navigate. Potential regulatory matters, standard issues of liability, property rights, and agency before real life institutions all require these DAOs to have off-chain legal wrappers. In this sense, DePINs represent the epitome of decentralization, while simultaneously requiring the usage of the same traditional entities as corporate networks.
Maximalists often contend that employing off-chain wrappers for DAOs deviates from the core principles of decentralization, this is sometimes referred to as “decentralization theater.” They assert that relying on off-chain solutions introduces elements of centralization and external dependencies, potentially compromising the trustless and autonomous nature of blockchain networks. On the other hand, using traditional legal entities, in and of itself, does not distort the promise of DePINs, nor does it turn them into thinly veiled corporate networks. While it is likely true that the incorporation of legal wrappers does introduce the element of reliance on external entities, there are ways that attorneys can structure matters to keep with the DAOs ethos and be relatively trustless.
If we look at each issue individually, we can see that legal wrappers do benefit DAOs and that the DePINs couldn't exist or operate without them. An “unwrapped DAO'' can be considered to be an unincorporated association and potentially a general partnership, introducing undesirable externalities, including potentially unlimited liability for each member, agency power for each member over the DAO’s property rights, and the ability for each member to act as an agent on the DAO’s behalf with any real-world institutions. Based on these risks alone, the necessity of legal wrappers becomes apparent. In addition, most legislation recognizing DAOs allows the legal wrapper to be governed directly by smart contract so that on-chain proposals passed by DAOs affect the legal wrapper in equal measure.
DePINs need to carry-out a balancing act to use legal wrappers to protect themselves and allow their physical infrastructure to operate while simultaneously safeguarding communities’ control over their DAO’s governance and resources. The result need not be “decentralization theater,” and can likely shine light on the ways that real and attainable decentralization can spill into evermore facets of daily life.
The Inverted City
LexDAO’s Kyle Smith (@bestape) and Christina (@BorrowLucid) contributed to to Volume 0 of The Inverted City: A Journal of Ethereum Localism. Published by the Open Machine (@theopenmachine), the article reflects on capture-resistant web technologies and the way they relate to urban spaces. Christina contributed the centerfold piece in the article titled “Berries Exist” where she put a speculative, fictional eye on the institutions of radical inversion that may be waiting for us. In “Local Clarity, Global Precedent: The Legal Question,” Kyle explored some golden ratios for cosmolocal dilemma, linking legal engineering and cybernetics to show how global and local can flourish in a sacred economy framework.
You can download and read the article here and purchase the support NFT here!
LexDAO at Vitalia.city Talking About Permisionless AI
We previously wrote about the two-month long popup city, #Vitalia (located in the special jurisdiction Prospera), an event at the forefront of technology and policy. This month, Kyle Smith spoke at Vitalia about permisionless AI during the AI & Technological Progress Conference.
Be sure to watch the recording of the presentation here.
LexDAO’s ETH Denver Takeover
LexDAO's presence at ETH Denver was a massive success by all accounts. Members from across the globe had the chance to get together, enjoy each other's company, and discuss ideas for the future. We also had the opportunity to interact with a number of key partners across the space and continue to build relationships that should help LexDAO ride the bear market wave that is currently at hand.
As part of our time in Denver, both Kyle (@bestape) and Nick (@tertius) participated in an event sponsored by MetaCartel and Unlock Protocol to discuss some of the nuances of the regulatory environment globally around the world. Much of the discussion was around network states in Prospera, a unique economic zone in Honduras and the freedom that developers are seeking out in global markets that are more friendly to the crypto space. It was good to hear from both panelists to discuss the positive and negative aspects of these "free for all" communities, especially with regard to the preservation of integrity in these spaces.
There is a significant dialogue around the idea of helping local communities as a result of a new digital revolution. Thank you to all of the members who attended and to the community for your support and participation. To hear more, feel free to listen to the dialogue here 🔉. We look forward to seeing you all again next year!
Optimism Grant Funding
The Optimism Grant round was successful and Optimism tokens are flowing into the LexDAO treasury. In the most recent tally, the USD value of the total token drop will be right around $250K depending on the Optimism token value on any given day. Over the last few weeks the Operating Committee has taken a look at a budget proposal that helps increase compensation for our DAO’s Directors as well as to jump start some of the strategic positions that will help bring future value to the organization. Some of those proposals include a potential General Counsel role which will help with risk mitigation and contracting in the future of the DAO as well as providing compensation to all of our Operating Committee members moving forward.
As part of this token drop, the Operating Committee has also suggested that we consider a treasury allocation of tokens that would allow LexDAO to begin creating validator nodes on key networks. This includes Etherium, Polygon, Gnosis, Optimism, and others as part of our overall support of maintaining liquidity pools and participating in the networks of blockchains that we believe in, as well as provide risk-free yield on the passive aka lazy treasury holdings. We hope to provide a breakdown proposal for this initiative as a supplemental proposal and welcome any thoughts and feedback from our members on the community.
Be on the lookout for the final draft of the budget, which will be up for Snapshot vote in the coming weeks.
Simplifying Proposals
As an ancillary task related to the construction of an overall DAO budget for the year, @drllau has prepared a template for grant proposals for LexDAO. The key result will be sufficiently outlining proposed changes for the squabble of legal engineers (ahem, our members) to give them the context they need to vote on Snapshot while linking to discussion points and project milestones within our github repository (so that we can maintain a history of deliberation). A visual illustration of this method is included below:
The objective is to have sufficient information to fit within a 3- to 5-year roadmap but defer detailed design choices and discussion until the DAO’s members have had a temperature check. This will allow the DAO to gather sufficient momentum for formal allocation of resources and delegation of responsibilities for accountability and successfully monitoring milestones.
LexDAO’s Membership Drive Continues Forward!
LexDAO is aiming to generate 250 paid memberships by the end of 2024. This is a big goal, but we are working our way toward it step by step. As we continue our mission, promoting the philosophy of Law as a Public Good, we hope that those in and around the web3 community will continue to support our organization and its future development. Part of this initiative will be centered around our ongoing presence at in-person events throughout the year where we will aim to put on events and contribute commentary, including exclusive content and networking opportunities.
As part of delivering more value to our paid members, we are experimenting with
More topical and focused study groups (such as our April 4th session on the Wyoming DUNA);
A pathway to LEETH certification including (l)extern legal clinic and priority placement for legal-engineering work; and
DAO governance case studies published in journals with citation counts.
Please continue to support these initiatives, and if you aren’t a member already, consider joining us at lexdao.org/membership.
LexDAO’s Members Are Making Moves
It should come as no surprise that LexDAO’s membership includes thought leaders in the web3 space. This past month, several have published articles on various topics, including how legal engineering builds bridges between wet-ink and firm code contracts, and as practitioners, we need to practice what we preach.
@ross has published a lite paper on ADR;
@drllau - article on Creative Commons rights expression language;
@shaswata - LinkedIn post comparing expansive regulatory action vs. a narrow court defeat on classification of financial products.
Upcoming Events
As we transition into April, our forecast predicts showers…of information! Check out what’s on the horizon from the folks at LexDAO.
LexDAO’s Study Group Continues with Paolo Gangi
Paolo Gangi has been hard at work setting up our next riveting Study Group discussion on DUNA (Decentralized Unincorporated Non-profit Association) organizational models with some incredible speakers. We've been able to secure representation from David Kerr and Michael Jennings of A16Z as well as a long time LexDAO LEETH holder Jordan Teague along with LexDAO member, JupiterBlock. We expect this to be an intellectually stimulating and informative conversation around the benefits and risks associated with this type of entity structure, both domestically and abroad. If you would like to check out our pre-read materials, please read this article by David and Michael. Please join us on April 4th at 10AM PST. The link will also be posted in our Discord.
Safe Harbor - Legal Engineering for a Bio-Crypto Future in Vitalia
Taking place in the unique jurisdiction of Próspera ZEDE (Hailed as “the most innovative legal system in the world,” by Scott Alexander), a group of pro-technology legal minds will come together with biohackers and crypto futurists to build the legal foundations for a better future. The event, titled “Safe Harbor - Legal Engineering for a Bio-Crypto Future in Vitalia,” is taking place from April 26-28 and will elaborate on how law is the software of society and discuss how outdated legal systems may stifle the growth of life-saving technologies and decentralized money.
If you would like to learn more and sign up to attend, visit the event website here!
Like what you see?
LexDAO relies on donations from the community to maintain our operations and continue delivering content and resources to the web3 community. If you enjoy our work, please consider donating! Visit https://lexdaogrant.us to see how you can contribute. We thank you for your continued support!
Get Involved!
LexDAO is always looking for new members! If you are interested in the work we are doing:
Check out our Discord and ask some questions (feel free to DM our Assistant Operator Cimply (Cimply#3820) with any onboarding questions).
Join our bi-monthly governance calls on Wednesdays at 12pm EST in Discord!
When you are ready, check out the LexDAO website for more information on how you can become a part of our growing community of builders, thinkers, and legal explorers!
