New Bounty: Write for Twali Wrapped and Mark Roszak on Decentralization, Open-Sourcing UI, and Regulatory Whack-a-Mole
Andres’s Cooperativ Labs partners with the Algorand Foundation to build private token exchanges and Twali at NFT NYC on Wed. 22nd
Werk from Blockchain Home Registry—or referral! and Write for Twali Wrapped
From the Community: Andres’s Cooperativ Labs partners with the Algorand Foundation to build private token exchanges and Twali at NFT NYC on Wed. 22nd
Twali Expert Mark Roszak on Decentralization, Open-Sourcing UI, and Regulatory Whack-a-Mole.
Available Werk / Opportunities
Blockchain Home Registry (BHR) is looking for a part-time social media manager! Experience in real estate and web3 required.
BHR is a real estate platform that allows homeowners to claim a verified NFT of a property they own, giving them access to a permanent, transferrable, historical record of their home. New data (ownership history, maintenance and renovation records, solar potential, etc.) is added to each home on the network by integrating organizations across the real estate ecosystem, which homeowners can choose to monetize on their own terms.
We’re looking for an experienced Social Media Specialist (US-based) to manage our Twitter account, engage with our community, create content, and help grow our user base. You will work closely with our founders and marketing team. The ideal candidate is thoroughly versed in Twitter and the communities, projects, and influencers relevant to both Web3 and real estate. Full description here.
For: Marketing, Public Relations, Other Apply by: 2022-06-17
Is there anyone in your network that would be a great fit for this role? Refer them to Twali and get $200 in ETH!**
Write an article with Twali Wrapped!
If you have an idea for an opinion/relevant piece exploring an issue or idea in policy/law/regulation or accounting, schedule time with us here to pitch and determine a writing schedule.
Apply by: ongoing Compensation: $50ETH
From the Community
Twali Expert Andres partnered with the Algorand Foundation and REI DAO to build Cooperativ Labs!
Cooperativ Labs uses a hybrid of law and blockchain to help businesses launch and grow much faster — offering services such as private token exchanges, contributor credits, and rapid incorporation.
Their partnership with the Algorand Foundation will be to support their joint initiative with REI DAO to let Real Estate syndicators conduct private offerings on the blockchain.
Twali NFT NYC lunch - Wednesday June 22nd, 2:00 PM EST at Bryant Park Grill
Tomorrow during the day, Twali will be hosting a lunch for 15 community members and close friends at Bryant Park Grill at 2:00 PM EST. We have only a few spots left so if you’ll be around make sure to RSVP to the event in our Discord.
An Interview with Mark Roszak on Front Ends and Decentralization
A few weeks back, I sat down with Twali Expert Mark Roszak to discuss attack vectors for crypto. An attorney and advisor to Jet Protocol, Goldfinch Finance, and Syndicate Protocol, Mark shared his thoughts on the definition of decentralization, the permanence of smart contracts and code as Freedom of Speech, and the endless game of Whack-a-mole crypto has sprung on enforcement agencies. Read it below.
Definition of Decentralization
MR: While decentralization is a spectrum, I think decentralization begins once you get into true community members who are not only token holders, but also active in the governance. I can imagine a situation where the community holds 75% of the tokens, but every proposal and every vote is pushed through by the founder who holds the other 25%. Token distribution does not equal decentralization if the community members are passive holders.
Right now, I think the largest misalignment is that people are focused on setting up governance mechanics for decentralization rather than actively decentralizing through community involvement. The Holy Grail is where the team is not involved in making proposals or voting, but rather the community is. If the DAO is just an instrument for one party to control the protocol, then it's not decentralized. My advice early on is for the core team to abstain from voting.
Take Andreessen Horowitz (a16z) and their token delegation program —(the process of delegating their tokens to other parties to spread their share)— for example. They have never said this to me, but I would suspect they instituted the program because they are concerned with being viewed as being in control of some of these protocols. Yes, they have economic interest and investment through holding the tokens, but they delegate their votes so the community can have the determining say in shaping the evolution of the protocol — or seeming like they are.
Back to the community though. The question is how do you get people active in governance. That is a community initiative, rather than a legal one — since both affect each other. While I don't know how you make people not be lazy, I also don't know how you reach decentralization if you don’t foster community and engagement. The projects that do are the ones that are going to last long term. Not only from a community perspective, but also from a legal perspective, I think they're less likely to get scrutinized from a regulatory perspective because they will actually be decentralized.
Smart Contracts, Forking, and Freedom of Speech
MR: On the DeFi side, is there a legitimate argument that says, Hey, even if what this protocol is doing is something that requires a license under US law, how do we issue or even require a license if there is no one group controlling it? In my book, if I'm deploying code to the blockchain with no admin keys or ability to update it, I think that this activity is protected under the First Amendment as free speech.
But if I deploy something that looks like a broker dealer and I have admin keys to that, it certainly looks like I'm operating a broker dealer. That is pretty clear. But let’s look at more unique cases, let us say a DeFi protocol has been deployed. For argument’s sake, it is broker dealer activity and the government orders a cease and desist — who do they order the cease and desist to? Yes, there may be the DAO or company running the UI, but the smart contracts live on chain. They could certainly take the UI down, but they cannot block the smart contracts themselves. Obviously, this puts the government, and particularly the SEC, in an odd spot thinking, even if we take action, what is the outcome?
For example, if the government were to declare that Uniswap was operating illegally, I'm sure that they can take down the Uniswap UI, but I'll guarantee someone in Singapore or Israel, or wherever, is going to spin up a new UI and will access those same smart contracts. From there, if the UI is controlled, not by a regulated entity, but by a decentralized — truly decentralized — DAO, what does it even mean from an enforcement standpoint to take an action against one of these protocols? Generally, they're going to take action against the development shops that created it. But even if the development shops stopped operating, disbanded, and couldn't develop anymore, I still think a lot of these DeFi protocols live.
I don’t know if it has happened yet, but there has been a push for open sourcing UI. Compound has talked about doing this — having another party or individual host the UI instead of them. That gets into a different situation. If Compound Labs is not hosting or operating the UI, do you bring an action against Compound Labs if you determine they are doing something that requires licensing? That is a tough one. And I think the reason that we have not seen more actions on that is because I don't think they know how to enforce it. What is law without enforcement?
Attack Vectors/Points of Chokehold
MR: If the US outlaws tertiary practices, such as mining, to put a hold on Bitcoin, we are just going to move that activity offshore. Crypto being borderless basically makes for regulatory Whack-a-Mole.
If all of a sudden the US decided that all these DeFi projects and all their tokens are securities and can't be traded in the US, they'll just all go offshore, and stay offshore.
I've already seen a lot of venture funds move their funds down to BVI (British Virgin Islands), because companies don't want to take money from any US based entities. These are very well known Layer 1 funds, too.
In essence, it is a tricky matter for the SEC and the government being damned if they do, damned if they don’t. No regulation loses them power, while hostility does, too. A positive outcome from a regulatory perspective puts the US behind and risks the US’s status as the financial center of the world. If I was sitting in the government, I would say crypto is here to stay. Let's be the center of this thing.
On Exchanges
MR: If they are a centralized exchange, they are regulated not only on the federal level, but on the state level. They have to play ball with the regulators, and they can't make this DeFi argument of, hey, we don't control this. In other words, they are at the whim of the state or federal regulator as it relates to money transmission.
This may make them a good choke point for governments to control crypto networks. Whatever crazy activity goes on in DeFI land, when it comes to the fiat on and off-ramps, centralized exchanges hold the keys in that regard. If I am the federal government, they are a good place to target.
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