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September 2023 Recap
The Definitive Pumpkin Spice Newsletter
The heat is finally dissipating and fall is upon us once again. While the LexNews+ Weekly Newsletter team is taking a well-deserved vacation, we have some exciting updates from several LexDAO members who have been working hard to further LexDAO’s mission of providing web3 education and resources to the community.
What’s New in LexDAO
We at LexDAO have been hard at work bringing the light of web3 to the masses. This month, we have a few pieces to highlight from several of LexDAO’s members about how web3 technologies are changing the way we interact with the world around us, how even non-technical members are learning about web3, and some projects our members have been working on. Read on for more!
Real Estate Tokenization Types: An Overview
Written by @haroldo_msn
The tokenization of real world assets (RWA) is pivotal for moving trillions dollars of value on-chain. Real estate tokenization is an important part of RWA mobilization and is getting plenty of deserved attention. An increasing quantity of platforms and protocols that enable property tokenization and trading are springing up to meet this demand. There are, however, important variations in the rights that these tokens afford token holders. Real estate tokenization essentially means placing property rights on a blockchain, yet there are three primary trends emerging with regards to what property rights are included: Fee simple tokenization, rental interest tokenization, and fund participation tokenization. This series will explore these trends and the features of each, starting with an overview of how each type of tokenization functions.
Fee Simple Tokenization is the bundle of property rights most people immediately think of when discussing real estate tokenization. Simply put, this category of tokenization involves token holders receiving digital ownership of property, indistinguishable from Fee Simple Ownership. In this format the DAO that created the tokens owns the real estate outright with the DAO’s legal wrapper as recorded owner.
The DAO’s internal quorum of token holders has the right to:
Exercise control, directly or indirectly, over tenant selection, rental rates, property improvements and other day-to-day matters.
Receive all rents coming from the property.
Dispose of the property, subject to varying limitations.
Benefit financially from any appreciation that may have accrued to the property.
In this case, the DAO is responsible for the property’s maintenance and tax obligations.
Rental Interest Tokenization is a more limited format that leaves another entity as holder of a reversionary interest in the property. The rights bundled together might range from the right to earn rents to something approaching a life estate. In any case, the DAO that created the tokens has a contractual relationship with the owner, with the rights being conferred to the DAO’s legal wrapper.
The DAO’s internal quorum of token holders has the right to receive all rents coming from property.
The DAO may be able to exercise control over day-to-day matters, but will not be able to dispose of the property and generally will not be entitled to any appreciation that may accrue to the property. The maintenance of the property and tax obligations may be the responsibility of the naked owner, depending on the terms provided by each platform.
Fund Participation Tokenization is even more limited than the other formats as, in a strict sense, this format is not really real estate tokenization at all. This format is usually a fund tokenizing the rights to profits from its own off-chain real estate. No actual property rights are put on-chain. Even if the fund purchased real estate tokens themselves, the tokens that the fund creates are entitled to the fund’s profits, not the underlying property rights.
Understanding these distinctions between the types of real estate tokenization is crucial for token purchasers and stakeholders navigating this evolving landscape. The tokenization format makes a great deal of difference on the level of decentralization, on whom trust is being placed, and on the likelihood that an investment contract is being created around the token.
A Non-Technical Member’s Perspective on the Token Engineering Fundamentals Course
Written by Christina @borrowlucid
I’ve been contributing to DAOs for two years now. As a non technical member, my focus has been mostly on communications and community, grants and governance operations, and trying not to break anything. I accidentally gave myself a bazillion loot once, but that is a story for another time.
Luckily, most everyone in DAOs are kind and supportive, and I’ve been an excellent lab rat for our experiments with incentives, behaviors, entanglement and reputation. From these experiences, it’s easy to see that education around token engineering and complex systems is highly beneficial to anyone participating in DAO governance!
This summer, I started hosting the DAO Pals study group, which meets weekly to discuss the Token Engineering Fundamentals course. My motivation to host the group was to be held accountable to consistently learn the material and pass the exams. Friends also signaled their interest in joining a study group.
When I introduce myself to new members of the group, I let them know that I am not an expert, but I am very committed to completing the course and will hold the space for us to study together. So far, this offering has been accepted without discussion or concerns.
The Token Engineering Fundamentals course, consisting of 5 modules with multiple chapters in each module, has only been around for about a year, and I enrolled as soon as it was available. I didn’t know how technical token engineering would be, but as it turns out, I never felt the need to reach for a dummy’s guide and have been able to learn all of what is necessary from the course.
Even though I enrolled in the course last year, it wasn’t until September 25, 2023 (and some motivation from the DAO Pals) that I finally passed the Module 1 exam. Don’t ask how many attempts it took me. Distractions are too easy to get lost in. Insecurities are too easy to believe in. But friends make it easier to return to our challenges and continue until we find success.
On October 4, 2023, DAO Pals will discuss Module 2, Chapter 1. We’re intentionally moving at a slower pace, so anyone who wants to has a chance to pass the Module 1 exam. You also don’t need to complete Module 1 to study Module 2.
In upcoming modules, there will be a little Calculus and Python. I haven’t done any Calculus since 1998 and have only studied Python from a very high level. For context, I am just beginning to understand what a string is and when to use ‘else’. Luckily, a couple of friends have offered their support and the Token Engineering Academy community is full of resources and resourceful people.
I’m most excited for Module 5, which was written by Jessical Zartler. Rumor is we’ll get to try out building our own token system. I have so many ideas I want to play around with and hack on that I can’t wait to try my hand at building something of my own. Anticipation for Module 5 could easily be the carrot that keeps me returning to the course material. Although I've been learning so much and expanding my perception every week, Module 5 feels more like whip cream on a sundae.
If you’re curious about the Token Engineering Fundamentals course, there are many options for study groups. DAO Pals meet every Wednesday, at 16:00 UTC, in the TE Academy Discord and all are encouraged to join us!
While raising her son in the Wild West, BorrowLucid is slaying Moloch and irrigating the infinite garden. She’s building Chones, strategic ecosystem weavers, and is a DAO member and contributor at MetaCartel, DAOESCO, FWB, DAO East West and more.
The Failsafe Committee
LexDAO member @Clinamenic recently published an article discussing the “failsafe committee” as a means to allow on-chain organizations to better institute community-led governance while also protecting itself against certain risks inherent in organizations relying solely on protocols without the opportunity for manual intervention. A failsafe committee would provide guardrails within an organization and act as a hedge against some of the risk created by relying purely on algorithmic governance.
The article discusses these concepts and suggests some boilerplate provisions that organizations may wish to include in their bylaws and operating agreements. Check out the full article here to learn more.
Web3 Education Project Index
Education DAO and @Clinamenic have put together an index of various projects across web3 that provide educational resources for those interested in learning more about web3. The index includes names of multiple projects with descriptions of each and links to visit them. The projects listed in the index span a wide range of topics, including finance, programming and development, DAO governance and structure, and more. If you are interested in learning more about the web3 landscape or want to brush up on some topics, please visit the index here and see what the community has been putting together.
ETHMilan on October 5 and 6
ETHMilan will be taking place in Milan at the Hotel Palazzo Delle Stelline on October 5 and 6. You can visit the official event website to read about the topics to be discussed, see a list of speakers, apply to speak, sponsor, or volunteer at the event, and buy tickets
LexDAO is cooking up some fun to hand out at the event and LexDAO member, Paolo, will be attending. So, if you will be there as well, make sure to find him and pick up some exclusive LexDAO swag.
Crypto Futures & Legal Engineering - A Próspera Builders’ Summit on November 3
A Buidlers’ Summit on Crypto Futures & Legal Engineering will be hosted by Infinita and LexDAO in Próspera on November 3 from 10:00 AM to 6:00 PM CST. This will be a multi-session event for cypherpunks, legal hackers, financial engineers, and others working and investing in startups seeking to challenge the status quo and accelerate innovation using digital assets powered by blockchain-enabled financial systems.
Speakers from across the industry will host introductory sessions on the Próspera legal and regulatory system, workshops for attendees to discuss business ideas a new technologies, and present startup and project ideas currently in development. And all of this is taking place on a beautiful island in the Caribbean with plenty of sights to see, places to visit, and experiences to bring back with you.
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!
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!
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