Session
Dynamic Coalition on Blockchain Technologies
Break-out Group Discussions - 60 Min
Blockchain, Digital Assets & Web 3-based Ecosystems
The DAO Model Law is a multistakeholder effort led by COALA (Coalition of Legal Automated Applications) to provide legal certainty for so-called ‘unregistered’ DAOs (i.e., DAOs that are not wrapped in a legal entity form) and their participants, and unlike other regulatory frameworks, accommodate flexibility for their unique features and further innovation. Since its development the Model Law has served as a precendential source in the development of legislation such as the DAO Acts in both Utah and New Hampshire, parliamentary discussions in Australia, and has also been referenced in the recent call for evidence by the UK Law Commission. The session seeks to take the discussion further from the session hosted at IGF 2022, to analyse how different legislators and policy makers are approaching the development of legal frameworks to govern DAOs and also outline lessons learnt as well as recommendations for the way forward as more jurisdictions express interest in regulating unregistered DAOs. The session will have great benefit for policy makers, governmental representatives, law makers, practitioners as well as DAOs in navigating the course of granting legal recognition and certainty and will address the critical aspects of inter alia governance, functional and regulatory equivalence, liability attribution and taxation of unregistered DAOs.
It is intended that the workshop will be conducted in hybrid format to accommodate onsite participation at IGF 2023 as well as online attendees within various jurisdictions who wish to contribute to the discussion on the implementation on the DAO Model Law. In this regard it is anticipated that the official IGF Online meeting platform will be utilized and online partcipants will be able to post comments and also ask questions in relation to the content of the disussion.
It is proposed that this session is hosted by the Dynamic Coalition on Blockchain Technologies, under the auspices of COALA (Coalition Of Automated Legal Applications) which is the leading think tank on the legal and societal aspects of blockchain technologies in collaboration with BlockchainGov, a 5-year long, transdisciplinary research project funded by the European Research Council aimed at restoring trust in institutions at the community and global levels, by promoting better on chain and off chain distributed governance practices. The discussion will be led by a team of subject matter experts who have worked on the development of the Model Law for DAOs and are actively involved in advocating for the implementation of the model law across various jurisdictions. The session will be moderated by Jarrell James and the discussants will be Dr. Primavera De Filippi, Dr. Morshed Mannan, Silke Noa Elrifai and Fatemeh Fannizadeh, all of whom were co-authors of the DAO Model Law.
Dynamic Coalition on Blockchain Technologies, under the auspices of COALA (Coalition Of Automated Legal Applications) in conjunction with BlockchainGov.
The session will be moderated by Jarrell James who is an internet resiliency researcher and technologist. He is the founder of Ocelot Labs, a DAO that funds research focused on consensus models and cryptography. His written work and hardware experiments challenge assumptions around internet infrastructure to welcome alternative approaches to Internet and connectivity.[[email protected]]
The Speakers represent a multi-disciplinary team of experts that are based across various jurisdictions, and are as follows:-
Dr. Primavera De Filipi: Director of Research at the National Center of Scientific Research (CNRS) in Paris, Faculty Associate at the Berkman Klein Center for Internet & Society at Harvard University, and Visiting Fellow at the Robert Schuman Centre for Advanced Studies at the European University Institute. [[email protected]]
Dr. Morshed Mannan: Postdoctoral Research Fellow at the Robert Schuman Centre for Advanced Studies, European University Institute and Researcher on the BlockchainGov European Research Council (ERC) Project. He is currently researching blockchain governance, platform cooperatives, and data cooperatives for a number of forthcoming academic articles and a book on ‘Blockchain Governance’ (with Dr. Primavera de Filippi and Dr. Wessel Reijers). He has also acted as an expert or consultant on matters regarding decentralized autonomous organizations, cooperative law and governance for the International Cooperative Alliance and NCBA Clusa International, the UN Department of Economic and Social Affairs, the OECD, the European Commission as well as several local and national government bodies. [[email protected]]
Silke Noa Elrifai: Lawyer and mathematician with a passion for disintermediation and privacy tech. Silke has advised blockchain projects since 2014 focusing on legal product design that is both pragmatic and dispute-resistant. She regularly advises on DAO structures and their interaction with legacy legal systems. Silke is admitted to practice law in England & Wales, New York and Germany and is a Fellow of the Chartered Institute of Arbitrators. Silke is a Stanford Law School alum (JSM 2012). [[email protected]]
Fatemeh Fannizadeh: Swiss qualified lawyer and independent practitioner. During the past five years, she advises blockchain projects of public interest throughout their development and leads teams of international external counsels to address specific regulatory and dispute resolution needs of the clients.[[email protected]]
Constance Choi: Constance is a Co-Founder and Director of the COALA Foundation, a global multi-disciplinary research and development initiative for blockchain technologies (www.coala.global). Constance undertakes independent research at CERSA/CNRS/Université Paris II, focusing on the critical intersection of decentralised governance, novel techno-legal frameworks, and potential enablement of new social and economic contracts as emergent features of blockchain-based systems. She also advises startups and government institutions in blockchain policy and regulation (www.sevenadvisory.com). In 2011, Constance co-founded the Kraken Exchange, where she served as the first General Counsel and Chief Compliance Officer in the blockchain space, and pioneered legal structures for blockchain technologies (www.kraken.com). Prior to these roles, she practiced at Kirkland & Ellis, Wilson Sonsini Goodrich & Rosati, Electronic Frontier Foundation and Perkins Coie, focusing on Internet law, intellectual property litigation, startup counseling, privacy law and constitutional rights. During her tenure, Constance litigated precedent-setting cases on Internet, IP, and civil liberties issues, including Google v. Viacom, the AT&T anti-spying cases, and fundamental issues of software patentability that eventually reached the Supreme Court. Constance is a member of the California State Bar, holds a J.D. from UC Berkeley School of Law, and undergraduate degrees from Brown University and University of Cambridge. [[email protected]]
Rick Dudley: With over fifteen years of experience as an architect and consultant, Rick has established several significant blockchain architectures. His firm Vulcanize worked on the EIP1559 implementation and served as a Core Contributor for the Interchain Foundation. Vulcanize has received grants from Protocol Labs, Uniswap, and MolochDAO. Developing a third-party verifying and caching service, Vulcanize assisted MakerDao, providing the necessary infrastructure to support the Maker Stablecoin DAI. With a focus on mechanism design and Federated Proof-of-Stake Consensus systems, Rick and his team are currently contributing the the launch of Laconic Network, a network that facilitates data exchanges for Dapp developers and service providers. [[email protected]]
Jarrell James
Vashti Maharaj
Vashti Maharaj [[email protected]]
Targets: The peoposed session seeks to support SDG Goal 9 "Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation Target 9.b "Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities". DAOs are blockchain-based and borderless forms of social and business organizations, with a shared, communally-managed, wallet and a governance process that is more open to diverse stakeholders than traditional companies. According legal status to such entities allows DAOS to further contribute to the social and economic benefit of society within a more structured environment. ,
Report
DAOs are a global technology that knows no borders and there should not be a rush to regulating this technology and stifling its growth. We are also starting to see the emergence of case law in relation to key issues such as liability, tort, fidiciary duties etc. What would be needed s the use of sandboxing to allow them to grow and deliver on its promise.
When looking at the development of legal frameworks in relation to DAOs some of the prcedural requirements already fits under existing legislation. For certain issues there may not be the need to develop de novo frameworks, but to address the key issues such as the impact of joint and several liability on DAOs which can stifle their development.
There needs to be greater sensitization and discourse taking place between DAO practicioners and governmental policy and law makers in order to remove misapprehensions about DAOs and also clarify how the technology works and its benefits. In addition to which, DAOs could and should be used as an effective tool in promoting global participatory democrarcy by instutions such as the IGF and this should be definitely explored further.
Session Report IGF 2023 DC-Blockchain Implementation of the DAO Model Law: Challenges & Way Forward
- Session Details
The DAO Model Law is a multistakeholder effort led by COALA (Coalition of Legal Automated Applications) to provide legal certainty for so-called ‘unregistered’ DAOs (i.e., DAOs that are not wrapped in a legal entity form) and their participants, and unlike other regulatory frameworks, accommodate flexibility for their unique features and further innovation. Since its development the Model Law has served as a precedential source in the development of legislation such as the DAO Acts in both Utah and New Hampshire, parliamentary discussions in Australia, and has also been referenced in the recent call for evidence by the UK Law Commission. The session seeks to take the discussion further from the session hosted at IGF 2022, to analyse how different legislators and policy makers are approaching the development of legal frameworks to govern DAOs and also outline lessons learnt as well as recommendations for the way forward as more jurisdictions express interest in regulating unregistered DAOs. The session will have great benefit for policy makers, governmental representatives, law makers, practitioners as well as DAOs in navigating the course of granting legal recognition and certainty and will address the critical aspects of inter alia governance, functional and regulatory equivalence, liability attribution and taxation of unregistered DAOs.
It is intended that the workshop will be conducted in hybrid format to accommodate onsite participation at IGF 2023 as well as online attendees within various jurisdictions who wish to contribute to the discussion on the implementation on the DAO Model Law. In this regard it is anticipated that the official IGF Online meeting platform will be utilized, and online participants will be able to post comments and also ask questions in relation to the content of the discussion.
- Panel Discussion
The Presentation made during the Panel Discussion and ensuing conversation centred around why is there a necessity to develop a DAO Model Law, the inherent advantages of DAOs, the primary principles of the DAO Model Law (viz. functional and regulatory equivalence) as well as the outline of the fundamental sections of the DAO Model Law.
The discussion then focussed on what are the next steps and the progression being made by various jurisdictions towards the implementation of regulatory frameworks. This therefore involved taking a close look at the jurisdictions that have instituted incorporation options such as Wyoming, Vermont as well as the Marshall Islands as well as countries where the Model Law have been considered/reviewed/(partially)transposed, such as Australia (Bragg report, Senate of Australia), United Kingdom (UK Law Commission DAO Consultations), St. Helena, New Hampshire and Utah.
During the session the Panel then focussed on what are some of the challenges faced in garnering adoption by countries which centred around the key sensitive issues of regulatory equivalence, privacy rights (incl. privacy of remuneration) recognised by law as well as taxation.
- Next Steps/Way Ahead
It as identified that there is further work that can be undertaken to refine the DAO Model Law, based on developments within the global sphere. As such new taskforces will be convened to work on the key areas of Identity and Limited Liability, Privacy/Transparency, Taxation as well as Technical Guarantees for Functional & Regulatory Equivalence and Updates.
- Key Session Takeaways
DAOs are a global technology that knows no borders and there should not be a rush to regulating this technology and stifling its growth. We are also starting to see the emergence of case law in relation to key issues such as liability, tort, fiduciary duties etc. What would be needed s the use of sandboxing to allow them to grow and deliver on its promise.
When looking at the development of legal frameworks in relation to DAOs some of the procedural requirements already fits under existing legislation. For certain issues there may not be the need to develop de novo frameworks, but to address the key issues such as the impact of joint and several liability on DAOs which can stifle their development.
There needs to be greater sensitization and discourse taking place between DAO practitioners and governmental policy and law makers in order to remove misapprehensions about DAOs and also clarify how the technology works and its benefits. In addition to which, DAOs could and should be used as an effective tool in promoting global participatory democracy by institutions such as the IGF and this should be definitely explored further.
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