S.1 Ep.5 Crypto, Chaos & Clarity with Tally CEO Dennison Bertram
In this episode of Governance Futures, Eugene and Jamilya speak with Dennison Bertram, co-founder and CEO of Tally, about the evolving role of regulation, DAOs, and decentralization. We dig into the implications of the Clarity Act, why tooling isn't the only thing DAOs need, and how state alignment is becoming essential to scale Web3 governance. This is a thoughtful, provocative conversation for anyone building or thinking critically about the future of crypto, compliance, and the critical role of legal frameworks in shaping the next era of web3 innovation.<br>Timestamps00:00 Teaser and Introduction03:50 Building crypto for real inclusion06:10 Tech as a double-edged sword08:50 Missed opportunities with NFTs & innovation11:47 The importance of clear crypto regulation13:15 From tools to infrastructure: evolution of Tally15:30 DAOs as the next corporate structure19:59 What does decentralization *really* mean?27:24 How the Clarity Act changes the game33:38 Why regulation and incorporation matter38:00 The risk of operating in a legal gray zone42:00 The new age of institution-friendly crypto47:25 Global regulatory competition & jurisdiction shopping54:34 State bailouts & crypto collapse responses59:18 What DAOs still get wrong1:01:16 Why builders really need clarity1:06:36 Regulation isn't top-down—it's collaborative1:10:36 Quiz: Governance in one word1:11:37 Outro
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Transcript
I I think most smart people know that technology is nonpolitical. Right? And it's nondenominational. It's it's knowledge and how it's used is is where you can run into trouble. And
I would disagree here just because technology is often built with values, often unconsciously, just based on what it prioritizes, who it serves, who it excludes. But, starting to think we should add a question, what is decentralization to you? It doesn't mean something to me.
It is a state
that you are in from someone's point of view. You've tweeted some time ago that if you didn't want the state, you should not have made it economics.
Can you unpack here what did you mean by that? I mean, there's some exceptions, but there's a ceiling to how far you're gonna get on sort of, like, anonymous meme coin money. No. We don't need more modular smart contracts. Sorry. What we need is clarity on we have the right and ability and path to build this in The United States and anywhere around the world in a way that's safe for builders to be able to wake up in the morning and bring their passion to what they do. And then last but absolutely not least, the question we ask in all of our quizzes,
what is the future of governance in one word? Hi. I'm Eugene.
And I'm Jumila.
And this is the Governance Futures podcast, where we explore the past, present, and future of decentralized governance.
This week, we had the pleasure of speaking with Denison Bergman from Tally. Denison is the CEO and the cofounder of Tally. He spent the last five years transforming Tally into the platform that powers institutional grade token management for the world's most valuable networks, building infrastructure that helps digital assets reach maturity with speed and confidence. Eugene, what stuck out to you the most from our conversation with Denison? I thought it was really interesting how Denison
wanted to really focus on this intersection of the state's role in governance and kind of how that's looking like and, like it or not, how regulation has been and will continue shaping governance in different ways. I feel like that's not always a conversation that those working on governance or gov tooling wanting to kind of frame things around. I feel like it's, we have to deal with regulation. Or if someone's a lawyer, they might be more excited about it. But I thought just that general openness to having that conversation was really interesting and kinda opened the door to exploring some of the specific regulations that are going on and understanding what their potential impacts on governance would be. And what about for you? I know I called out being a lawyer as part of that or having that background. But, yeah, like, what spoke to you most in that conversation?
I feel like it's fair to say that Denison is very bullish on clarity act, and he's quite hopeful that they would provide the needed clarity to innovators to build safely or at least have this feeling that they can plan ahead. So it's interesting how it would all plan out and what will come out of it act if it ends up being passed. But it was also very interesting to hear from him about his insights, his journey, and some of the things that he observed. So, yes, it's definitely was a great conversation, and I just don't wanna give too many spoilers to our listeners. Yeah. And before we get into it, remember to subscribe,
wherever you're listening this. Please tell a friend, leave us a review, and feel free to reach out if you wanna chat.
And now here's the chat with Dennison.
Welcome, Dennison. We're excited to chat with you today, and I wanted to start the conversation with what you think is missing in how cryptosystems are being designed today and that can truly make them more inclusive and not just for the sake of, you know, inclusion as a buzzword, but from the perspective of actual gross benefit to humanity?
Yeah. So that's really timely and really interesting discussion because I think, you know, that's an issue that is being really dealt with in a lot of places, you know, in The United States, many other places. You know, I think the the sort of idea of, like, who belongs in a place and what access people have to what services and under what conditions and what rules, that's actually being kind of, like, discussed everywhere right now. And, of course, there's a lot of different sides in the debate, and people get pretty heated about it. But when we talk about crypto, one of the important things that was a big part of, like, the early days was this idea that crypto would bring a lot of prosperity to, other kinds of people, you know, who have different levels of access. And maybe some aspect of crypto has taken on a little bit of a trickle down economics perspective on this where, you know, we we there's a lot of opportunity at the top and that, like, this opportunity at the top is going to sort of eventually find its way down. I think it's generally probably pretty accurate in that what we are building actually requires a lot of capital. It requires a lot of, like, institutional alignment, a lot of, like, state alignment to build the proper frameworks and systems to make the things that we're building safe and accessible to many more people. So I I think that this is something that becomes very, very nuanced. But I was really addressing with the the tweet that you mentioned is how a lot of cryptosystems are cryptoeconomic systems. And the economic component of cryptoeconomics really implies that eventually, we are going to have to build systems that interface with the state. This is kind of a little bit antithetical to some of the early parts of the the foundations of, like, the crypto movement, like the sort of cypherpunk movement, the sort of ideas that we were building self sovereign systems. And as kind of like, you know, a little bit on a a a lark, this this tweet's a little bit in jest. When I think about, like, okay. What does actually cryptoeconomic mean in terms of the downstream effects? Well, you get things like incentives. Right? Like, okay. You know, there's a great quote. Give me, you know, an action. I give you an incentive, or I give you an incentive. I get you know, and I'll show you an action. And by designing systems that are incentive based, because it's cryptoeconomic based, there's a lot of the sort of, like, outcome that's sort of, like, predetermined. It was inevitable that the state would want to regulate crypto because it's economic, and the state, you know, believes it's it's natural. Priority or prerogative is the economy and economic systems. And there's a lot of, you know, sort of understanding, like, what is sort of, like, the sort of, like, gray or black part of the the the economy, the hidden parts of the economy, what part of the visual visual parts of the economy. So there's a little bit of a play on what if, like, we had built systems that weren't cryptoeconomic but were built on some sort of other structure. You know, I sort of jokingly with friends talk about, like, crypto love or, like, crypto altruism where, you know, systems require more or less altruism to function, and then the the mechanics are based around, you know, structures that involve, you know, things like altruism or love or happiness or something like that. And, you know, it's a little bit funny, but it's a it's a it's not a ridiculous way of thinking about it. You know, when you think about things like Tinder, that's a very different sort of thing going on. There there there's maybe you could argue maybe there's incentives, but it's not economic. Right? Like, there's kind of a social level incentive that's happening that that goes on, like, people's natural desire to to, you know, meet other people and be in couples and have relationships and that it creates an entirely large, interesting, vibrant ecosystem around a sort of a different label. So the cryptoeconomic, I think, was always baked into crypto because of Bitcoin primarily. But, you know, it's it's from a playful point of view, it would be interesting to think about what it would look like if it weren't economic and it was sort of, like, based on some sort of other fundamental human human desire or need, to sort of, like, drive its its development. You know, it might look like might look very different. Obviously, it would look very different. Might not be valuable or valuable in the same way, but, you know, dating apps are valuable. And so maybe it would be some other it would be a very different world, though.
For sure. That also just makes me think of, you know, in the web two world, you know, we saw tech go through its own, let's say, brighter days where it was, you know, Google does no evil and social media is just for helping with connections and all of the upside of it. And then we kinda came back to these times when it was so much more recognition of, oh, this is actually a double edged sword. This isn't just all sunshine and roses, and we shouldn't be pretending as such. Whether it's with, you know, just recognizing that a lot of things that need training data, we're getting from very limited populations, so it only really serves certain populations, or just if you develop some really cool tech, you can't really stop a dictator from using it. And so it it also just brings up, I guess, this question of, you know, as web three matures and grows. Because arguably, you know, it seems like we've been around forever for those of us living in it, but we're still a a baby as far as the space goes. You know, like, where does your own intuition let your mind go when it comes to thinking about our own evolution there? And, you know, the upside is, you know, you know, we might have systems that can't just be broken. You know, we have Bitcoin of money that no one can just, like, make up an accounting around it, and it is what it is in a public chain. But, yeah, there is this kind of other side to it. And so I guess building off that initial answer, you know, do you have either any particular hopes or concerns when it comes to how we're gonna keep this evolution rolling in the coming years?
You know, I I think most smart people know that technology is nonpolitical. Right, and it's nondenominational. It's knowledge, and how it's used is is where you can run into trouble. You know, I think a great example is, like, you know, atomic technology. Right? You know, the thing that drove the first need was winning the war, and we we got nuclear weapons. But, unfortunately, that really crowded out for many, many decades, you know, more than half a century, all the other wonderful things that we could use nuclear power for. Right? You know, when we think about, like, where we are in terms of, like, the planet and, you know, sort of, like, environmental concerns, just society's bad taste from how the technology was first implemented and used. It really led them to forego all the transformative advantages and and things that it could have brought the world. Right? Like, and that's so faint. Right? The the there's untold sort of innovation that never happened. You know, ironically, you can think a little bit of the same around crypto, especially NFTs. Right? The level of of of, people disliking the energy usage of Ethereum at the time and sort of, like, blaming your JPEG on deforesting the rainforest really set back the sort of vision and opportunity that NFTs really presented. And so the people you know, I I think a lot about, like, the video game community for whom NFTs should have been this, like, enormous unlock of, like, sovereignty and independence and, you know, self ownership of their assets and games, really turned out to be, like, a big kind of nothing burger because it was really overwhelmed by this this sort of, like, negative first impression that people had. I was like, alright. So I think it's important to to think about how, you know, the crypto scams that sometimes we we ourselves have been, like, culpable and not calling out greater force at the time has always sort of, like, set ourselves back. Right? Where now we have to do twice as much work to convince people that the technology that we're building, the problems we're solving are legitimate in the face of such obvious illegitimate uses. Right? If you look at even the sort of, like, senate's new bill to sort of, like, be sort of, like, a reworking or rewriting of, like, the House's Clarity Act that they just passed. You know, there's a lot of concern around crypto scam potential. Right? And maybe not enough concern around the opportunity that the technology offers. So for for myself, I think we have to embrace technology for the potential that it brings us. Right? And there's also kind of a necessary, like, revelation that you can't really stop technology. Right? Technology is like the progress of human innovation and recombination of knowledge and, like, pursuit of understanding the fundamental nature of the universe. You know? I I think we've seen this a lot with AI now. People are like, well, we could just stop. That's like, well, that's not really how the world works. Right? Like, that's not where we're going. Knowledge has this habit of, like, you know, sort of multiplying and getting deeper and more interesting. So with crypto, what I would really hope that we see is, I think, you know, now it's like the the new administration. They've really spearheaded this endeavor to get us clear crypto, like, legislation, give us a regulatory environment that is is friendly to to builders and friendly to products or projects that gives people the opportunity to, like, you know, certainly in America, you know, bring crypto home, make America kind of the home of crypto, gives American institutions this ability to really take this new technology and transform the world. Right? And that's very exciting, and there will be downsides to it. Right? You know, I think there's a lot of things that people worry about with, you know, the innovation and technology, but it's it's probably better to put that sort of energy into shaping the future rather than trying to sort of, like, hold back the wall on it. Mhmm. Because, you know, even with nuclear power, it it really only slowed the process down. Nuclear power hasn't gone anywhere. Like, research hasn't gone anywhere. It's just we sort of, like, stymied innovation that could have, really advanced, you know, cause of of of humanity while, you know, we still had disasters. So it's not like we succeeded in in not having disasters. Right? In fact, you know, you would argue that, you know, was was the negative as large as the positive, and the positive, you don't know. Right? Maybe we have biomes on the moon and Mars by now.
Yeah. The counterfactual, the version of reality in the other instance is always, fascinating to think about. But, yeah, unfortunately, we don't know. We just see what kind of plays out in front of us. And one thing I wanted to kinda double click on and zoom into a little more as we wrap up this context setting portion of the conversation is, you know, when we're talking about innovation or the evolution of technology, you know, a lot of technologies or rather a subset of technologies do go from being broad tools that are generally being used to actual infrastructure, things that we rely on to be able to do things. And I kinda wanna, wrap up this beginning part of the conversation coming to Tali, you know, an organization that you founded and have been overseeing the development of and kind of thinking about how you're seeing Tally in this context of what we were just talking about with Web three and the evolution of crypto more broadly. And I if I'm not mistaken, I think I saw you tweet in a few days before we recorded that. Is it Farcaster that you're having the same monthly average users of? Or it was some, like, app that you would not think has the same usage as a governance app. And so, yeah, it would it would be interesting just to see, like, where you're at with your own thinking of this evolution of Tally potentially from being a tool to being infrastructure.
Yeah. So, yeah, that was, pretty funny. I was going through just some, usage stats. I was just preparing some, you know, internal documents. And, I just noticed that, you know, the the user base of the monthly active users is about the same as Talos, which was like, wow. I never really thought of that. Maybe it should be a social app. But rather speaking to oh, well, a lot of people are doing this relatively obscure niche thing, many more than I certainly would have thought. You know, usage of participation tends to be relatively spiky around major events. But seeing that there's enough major events going on that, you know, a kind of an average month starts to look like that on time, it was pretty pretty pretty exciting. You know? It was, like, really spoke to, like, you know, ideally that we're both succeeding
and that, you know, like, we're sort of growing. And then, you know, maybe we should launch a, you know, social social media client, tally tally social media. Yeah. We'll see how much free time you and the engineering team have. Yeah. And I I guess just to sort of add one more element to that. And I guess bridging to I know we were talking about some of the, you know, the Web two world and comparisons to Web three evolutions of tech. And I know you had written in the past about, you know, like, communities like Reddit with their experimentations of community work that kinda seemed more in the web two Daoifying world. I guess, what role do you see Tali potentially playing as this kind of you know, that specific experiment that I was alluding to at Reddit got sunset, it didn't necessarily progress. But, you know, as the infrastructure that we are building, as the standards we are setting become more exportable beyond, you know, crypto native and super digital native folks to other environments, whether it's, you know, Internet first communities, whether it's corporations start shifting or nonprofits start shifting and, you know, dalifying. I guess, yeah, maybe getting a sense of what excites you about that element of dalification of the web two and what role you see tools, and infrastructure like Tali playing in that would be, I think, a great way to to wrap the context setting.
So, actually, I don't really think about much about dalifying Web two. I think under COVID, we we have, like, a huge boom of, like, sort of online communities. People are kinda, like, locked in, sort of suffering this, like, shared global trauma, and you see, like, a huge explosion in things like Discord. I think people tend to be a little bit more outside these days, so I'm not sure if those ecosystems are really thriving as much as maybe they once once were. But, also, our vision of Tali is, I would argue, different. May maybe in some ways larger, but different. We don't see Tally as or I don't see Tally. I'm not sure some people see Tally. I don't see Tally particularly as this, like, native community tool. It's used by communities, but it's it's a decentralization tool. Right? It's a tool that enables the credibly neutral operation of protocols at scales of of billions and hundreds of billions and and one to trillions. Right? I see it more in the lineage of the sort of, like, the story of state charters since, like, the joint stock corporation through, you know, limited liability corps and management corporations, blah blah blah blah. Just the history of, like, corporate personhood and how do we create organizations, a new kind of organization. Right? DAOs, or decentralized, you know, autonomous organizations really are, in my mind, this evolution of the corporate structure. It has many new challenges, many new opportunities. One of which, because I would be remiss if we didn't slip AI into that conversation, one of them is which is that you we finally have a corporate structure where a decentralized corporate structure where artificial intelligence can naturally and directly plug in and participate. Right? Like, you can have AI agents can have the same sort of agency and the same rights as a regular token holder in participating in a DAO. Right? So it's this organization that starts to bridge the gap between the past and the future and the different kind of, like, types of entities that'll be participating in in governance, going forward or in operating things like protocols going forward. Right? You can imagine AI agents operating their own protocols to operate themselves. So I would say the vision here is a lot larger than sort of communities. Communities are definitely important. Communities, I think, are part of this. But Tali's vision is really to fundamentally restructure the organization. You know, when I first raised the I just I just raised on, like, a, you know, one or two page Google doc, and a big pitch was we can drive the cost of capital formation of zero and incorporate in software rather than jurisdictions. A little bit naive in the end. It turns out that actually, you have to always incorporate in jurisdictions because, if you're not, everything that's not some form of a charter from the state is just a general unincorporated partnership by definition, unless you run into things like liability and you you don't get that that sort of, like, personhood that that corporations get. That was the real idea. Right? Like, corporations been around for a long time. We've had hundreds of years of sort of incremental evolution on this structure. What's the next big leap? And the idea was decentralized organization mentality could be that next big leap.
I wanted to pick up on several things that you've mentioned. First, you said that technology is not political, and I would disagree here just because technology is often built with values, often unconsciously, just based on what it prioritizes, who it serves, who it excludes. And the second thing, you mentioned that Tally is a decentralization tool. And we have this signature question that we ask every guest at the end of the podcast whether it's the future of governance. But, starting to think we should add a question, what is decentralization to you, because we just, you know, always go back to the core question, how do we define decentralization. So it would be great if you could just share what decentralization means to you. And as service providers, how do you define decentralization? And if Tali is a decentralization tool, then I personally think, for example, that decentralization is a spectrum. So where would you put Tali and the tools that you're providing and equipping DAOs in that spectrum from, let's say, fully centralized to completely decentralized, whatever that might mean. So Wow. Please.
So first of all, I've come to realize that that decentralization, it doesn't mean something to me. It is a state that you are in from someone's point of view. Okay. And that's you know, I used to say that if a lending protocol was decentralized for only the banks, it's still decentralized. Right? Maybe there's only 10 huge banks around the world. They don't trust one another. They need a credibly neutral, way of operating a a protocol. Thus, if they each have an equal share of ownership and operation, in some senses, it's decentralized. For other people, decentralization is when you have every human being on earth participating. And then you have to ask yourself, well, what is what does decentralization serve? Like, why is it decentralized? Right? Is it because everyone on Earth has has an opinion? Is it because everyone who uses this thing should be taken to an account? Right? Decentralization, what I think crypto is going to learn very soon, thanks to the clarity act passing the house, and we'll see what version gets to your senate. We will see that decentralization is a state that you exist in based on the definition or the successful application of the definition by the government. The government will say, you are no longer some unincorporated general partnership. You are you're decentralized. So I think for a practical working purpose, that's what's going to matter. Right? It's not going to be, well, we've got everyone signed up. The government is going to say, here is the checklist for what decentralization means. Because the reality is is is that, like, even if you have every human being on Earth, you don't have some of the other components of functional decentralization which are necessarily important, which is, the quality of access to information. Right? There's asymmetries that exist in decentralization which can undermine the value of decentralization itself. Right? You know, this is very relevant when it comes to machines. Right? You can imagine a future where you have a DAO that's, half on Earth and half on, Mars, and it's mostly AI agents, and you can't get information to move faster than the speed of light. So these two two different parts of this organization or this DAO exists in different states of understanding of what the shared truth is. And, you know, if if this sort of organization always works at a really high speed, is it possible that actually that information asymmetry never goes away? Or you have that already with things like high frequency trading where the closer you are to the source of information, the sooner you know it. Right? And that's akin to seeing the future. When we get into, like, what does decentralization mean to me, I'm not sure if it it is one thing, actually. Right? Because the nature of it depends so much on what you're applying it to and what are the various entities that are going to participate in it. Right? Not to keep harping on AI, but, you know, a lot of people build things, with AI, and, actually, it's all a wrapper on the same ginormous model at OpenAI. Right? If we have a thousand different AI agents operating a protocol, but it's actually all one mega model with just different masks, is that is that decentralization? If you have millions of people who are participating, but none of them have accurate information, are they really taking actions that are somehow under their thoughtful control? So I think it actually is very complicated, but, fortunately, the government is here to save us with the definition of what decentralization is going to be. But I think it's interesting that in all these years, no one has made a definition that's stuck for, like, a DAO. What is a DAO? What is decentralization? People always strive towards it. But if you say exactly what is it, they often have difficulty of saying what it is. Right? Even Ethereum, you know, people say, well, homestakers, everyone can stake that's decentralization. And then someone else says, yes. But how are the four decisions made? Right? Like, who are the core developers? What is their flow? Why is that decentralized? Right? Does does what they, you know, create this information constitute a kind of centralization? You know, maybe. Right? What if, you know, for other things, people just don't care? Right? Like, what if everyone in the world is a part of it, but no one gives the shit but you, me, and the other person. Right? And, you know, is it decentralized? Everyone has the ability to participate. Right? But most don't. Right? So there's just so many sort of things that mutate the applicability of the word decentralization, and I think that's important to keep in mind. I was gonna say your first one, like, technology is inherently political. Yeah. I don't think so. Mostly because It's okay. We can disagree. Yes. Yeah. But I just Why it was huge body of literature on, like, why it is political. Enormous, enormous body of literature there. I just tend to think that it's the application of technology that's political, not Mhmm. In, like, guns, for example. Guns are an incredibly divisive political topic and political technology.
But one might say the gun, whether it's regulated or not regulated, it's still made from the same materials, but LLM models are, you know, trained on different information. So at their core, they're quite different. So it's not just about how we use them, but it's also what are they at their core. I would argue it's very different, but it's very interesting to hear your point of view, especially as a service provider, that you think that it's more about the application, not so much about the core of the product or technology itself.
Yes. Because the LMM is an application of the like, ChatTBT is an application of the large language model technology. You know, we we could certainly say everything is is technology. But the idea of, like, we'll process all human knowledge and then find a relationship between every piece, that isn't inherently political. Right? Certainly saying that, like, well, we'll build a specific model only on right wing conspiracy theories. Well, that is that is political application of it. So but there are much smarter people than me who have debated this much, much, much greater.
You mentioned before the Clarity Act. And from what we know, it aims to provide regulatory clarification and kinda divide this responsibility oversight between SEC and CFTC. And we know that Tali launched Clarity as a tool to help teams navigate crypto regulation. Mhmm. So you've already spoke about the role of tooling, but maybe you could provide a little bit more context on the role of clarity in helping DAOs to stay compliant by design. And what are your observations, and just general feelings? Are you hopeful about the Clarity Act? Are you perhaps not so hopeful? So very curious to hear your immediate thoughts and where you think that would change the trajectory, how DAOs choose to tool themselves.
Yeah. So in my opinion, and probably most crypto people, the Clarity Act is a tremendous step forward. And, importantly, it's bipartisan step forward. Right? If you look at the vote count, the tally of the votes in the house, an enormous number of Democrats came over to support what is valuable needed common sense legislation around the regulation and definitions of what are digital commodities, what are what are securities Mhmm. What the sort of, like, market structure of, like, is is gonna is going to look like. I cannot be more excited about it. So often, you know, so much energy has been lost in our industry to trying to guesstimate what the government would would deem things that we build or how to interpret things that we built. It's always a surprise, isn't it? It's always a surprise. It's always a surprise. And you never know. For example, I was subpoenaed by the SCC for an NFT project that I created, a free NFT project that I created. You could just claim. You just grab them. Right? And that sort of lack of clarity, just like, oh, I'm I'm building an art project. They're like, oh, are you? Or maybe you're in trouble now. Right? That is an enormous chill on innovation. Right? You don't know what you're building. You don't know how to do it right. Right? You want to build something transformative here in The United States, in New York City. You wanna do everything right. You wanna service the largest institutions in the world. But no one will tell you how. So the the this bill is is just incredibly important for, you know, crypto at large, crypto in The United States, the sort of, like, you know, preeminence of The United States as being the home for innovation in, Crypto. I'm American. I'm based in The United States. Talley is an American company. We lean heavily into the the, you know, where where we're based. This is enormously important for us, and it also sets the path towards a world where we can actually build really huge transformative things in a way that protects consumers. Right? Consumers now, under clarity, can have a reasonable expectation of knowing what projects are doing, why they've done certain things, what the road map is, what sort of, like, deals maybe they've made with exchanges. You know? And there's gonna be a clear way of failing these tests and clearly being, you know, a fraud. Right? And you'll have a world in which, you know, retail investors will be able to say, well, this project, they've disclosed everything. They're on this road map, this four year path to to, you know, complying with the SEC, with US government. This is something legitimate. And if someone won't submit to the requirements and the disclosure regimes of this, you know they're not up to some some good. Right? You can make educated choices. But in a world where you can launch anything anywhere, while that is very important and good from the Cypherpunk sort of, like, perspective, for consumers and for institutions to build with confidence, you know, the Roman storm trial is going on right now. Right? Is he guilty of making open source code? I think this is another great example of the technology question. Right? Is it money laundering because he built something that gives you the right to privacy? Money laundering requires privacy, but so does human dignity. Right? It's just a matter of opinion to to say which one is which. Right? I mean, I know the trial is a little bit more subtle than that, and there there is a bit more going on there. But the idea that, like, you're guilty for having spoken code is really just, you know, you know, wild. So any sort of, like, clarity that we get and this is a really well written bill. This is a really well structured regime. So, yeah, I'm extremely excited about the clarity of that.
It's interesting because at the start of my career, I was a lawyer before joining crypto full time. And in the jurisdiction, I was practicing law. It was civil law. So it was a great challenge to try to codify and try to define everything that relates to blockchain and technology because well, it was back in 02/1617 when Ethereum was kinda starting to get traction among, let's say, just people who are not that much interested in technology, and there is just so many things, so many acts all across the globe. And funny enough, in civil law systems, if if the code doesn't say that this specifically is illegal, it is considered in general terms, I'm oversimplifying, of course, that it is legal. So that goes back to your question where you provided example, what does how do we define some things legal or not? I'm aware that US is a common law system, of course. And another thing, when I was advising clients who were seeking that clarity, based on what you were saying, it felt like clarity equals relief. And, like, I can just, you know, pay taxes, file for whatever, you know, anything that I need to do. I have the procedural guideline. Yeah. I will do that, and I will just sleep tight and know that everything is okay. I'm not gonna live in this state of constant anxiety. Right. But there is another side of people in our ecosystem who don't appreciate any regulation whatsoever. And I remember that you've tweeted some time ago that if you didn't want the states, you should not have made it economics. Can you unpack here what did you mean by that and how it applies to today's crypto ecosystems who are still trying to be neutral or stateless while still operating token economics?
Yeah. So when I first raised for Tali, I I mentioned that I had said incorporate in software, not in jurisdictions. And I was naive because everything that's not incorporated in a jurisdiction is unincorporated, and the state will term that an unincorporated general partnership. And maybe you're not worried about the state, but the weird thing that happens when you have an unincorporated general partnership is that you are legally liable to basically anyone else in the world. Right? Anyone who who does something in your group, if you somehow make an organization that just looks like a general partnership, any one of you has this unlimited, unseverable liability to one another. And this is very interesting because that's actually the state of the world before the joint stock corporation was even created. Every business operated as a general, unincorporated partnership. And, actually, at the time, you know, the most people preferred that. There was a common understanding around economic economists at the time that a corporation or an organization owned by everybody will be operated by no one Mhmm. Which ironically parallels a lot of the problems that actually come up and exist in in DAOs and crypto today. The other part was is that you didn't want disinterested parties because you didn't know what they might do. Right? You're both concerned about, like, okay. The three of us, we're gonna do business. We're gonna do partnership. I want this unlimited liability because now all three of us are gonna work really hard to make sure that we all keep one another in check. Any one of us can do something that can end up jeopardizing our freedom. Right? We can lose everything because one of us messed something up. So that was the way that folks could keep one another accountable in a system and aligned towards success. Right? We all want to make the maximum amount of this, and we all want to to avoid the maximum sort of downside.
What would you say to some of the builders that still behave like they are operating in a regulatory vacuum or trying to decentralize their way out of legal obligations?
The problem is other people in the world. You know, in America, unfortunately, there's a little bit of a legal cottage industry, which just goes around seeking opportunities to make people's lives miserable. So, you know, you'll you'll probably be, pretty familiar with, like, the lawsuits against Compound or the situation that happened with Ookida, the lawsuit that eventually kinda basically led to the closure of pool together, the the the protocol. Basically, the this firm went and bought $1 worth or anything with compound was $10 worth of this token off an exchange, and then it went down in price. And as soon as it went down in price, it was like, ah, I've lost money, and now I have legal standing to sue everyone involved on having sold me an unlicensed and unregistered security. Now I'm gonna sue for damages. So what actually happens is there's a whole business model because this is America where lawyers raise money, to mount a lawsuit. And they basically look at a project and think they think this project has maybe this much money. And, now we're gonna go buy a token off Coinbase, and we're gonna go sue them for for, you know, unregistered securities, and we're gonna try and go get some default judgment or try and settle or something. And, it'll be invest an investment. We'll invest this much money in our time and energy, and then, you know, this is what, you know, we think the payoff is gonna be based on people involved. Of course, they go, they sue the everyone they could possibly think of and reach, and that is what builders have to really be afraid of. Right? The government, you you sometimes have to be afraid. Right? Especially if you're doing something illegal, especially if you're doing something that explicitly is involved where they believe they're involved. Right? You cannot serve North Korea no matter how much you may have sympathy with the plight of the day to day North Korean who suffers under, a tyrannical regime. You cannot serve North Korea. There's sanction laws. These are extremely serious. You know, you violate that, you lose your personal freedom. No joke. Right? I think most crypto founders, even CipherPunk teams, will probably begrudgingly say, yeah. Okay. Fine. Makes sense. Right? The downside is just too great. But if you're not doing something the state feels that has some, like, turbo prerogative over, really, you're just worried about the kind of better better call Saul kinda lawyer down the strip mall who's got just like a business seeking opportunity. Right? And that's dangerous. So, you know, people go through a lot of effort to remain anonymous or maybe, you know, they launch something out of other countries and other jurisdictions. And fine. Right? Like, United States law does not apply everywhere as long as you are not dealing with United States citizens because, of course, America has a very large expansive view of its rights, which is, you know, if you do anything with an American citizen, you fall under their laws, and they will come after you. But the problem here is is that depending on what it is that you're building, success will only look a certain way. If you are an anonymous founder of an anonymous organization building a tool that, like, does not comply with jurisdictional law, you You know, ordinary people aren't going to put their money in it. You know, even with tornado CAF, many people were afraid to use it because just the association, what would that mean? You know? Something I brought up at ETH Berlin a huge number of years ago was how I was worried that you pool funds to build tornado cash, which might be used by criminals. And, you know, I was looking at RICO loss at the time where, like, if you pool your money together to do something and one person uses it badly, well, welcome back to Unincorporated General Partnership. You're all on the hook because one person laundered money through something that is a legitimate and important tool for privacy, which is a human right, and you help fund it, well, you know, now you're you're on the hunt. Right? Not everybody wants to be involved in that. Right? Whether or not they think it's a good idea. So if you are a builder and you are working in this sort of anonymous realm and you wanna build something anonymous, good luck to you, but there's a ceiling to the kind of, like, market reach and penetration that you can get to. So I think that's just, like, what you have to take into account. For a lot of people, the principles are principles, and I applaud that. Right? And their goals are building things that, you know, maybe never interface with the state, and they don't want the state deliberately finished. And that is their prerogative and and that's their right. I think crypto builders just have to keep in mind what does success in your mind look like. Right? If you want institutions to deposit capital on it, well, then you can you can believe that Bitcoin is the last project you're allowed to be anonymous. Right? So, you know, I I think there, it's it's really a question of, like, what does what what's your goal? Why are you building in this first place? Like, where are you going with it?
It seems like you tie the success of the project to how the state views the centralization or how the state defines certain core components of governance. And from what you said, it seems like the Clarity Act, hopefully, will be that massive relief to all the builders that want to build in the space and have this ability to predict what will be the future move or at least plan for a couple years back. But I have to say that this administration, is kinda known for overruling pretty big agreements and different laws considering, you know, not just outside of crypto. So my question, I guess, is, I know that based on your definition, it feels like the future regulation almost defines the present of the tooling that we choose or the governance systems that we design. So, obviously, it's good to be in the moment where, like, okay. We have clarity now, but how should people who just starting to define their governance think knowing that in the future, it might change?
Yeah. Well, I mean, I think first of all, you know, love it or hate it, the current administration is really doing a fantastic job when it comes to crypto legislation. Right? Like, you know, this is coming from, you know, a builder who lives in New York City, who has been through the previous administration, has has seen, all the sort of difficulties and contortions that we try and do to, like, make it work. So, you know, without delving into, you know, all the different aspects of the administration, when it comes to crypto, when it comes to this focus on, like, making crypto, a a place that you can build, DeFi, where you can build, new innovations, you know, they're doing a great job. And not only they're doing a great job, but this is bipartisan. Right? You look at how many Democrats, voted for the Clarity Act and, you know, I hope we see that repeated in the senate. This is the bipartisan issue. Crypto should not be a single party issue. Right? Innovation should not be a single party issue. So I think that's that that's important to sort of, like, stress that, like, crypto is moving forward. For founders, yeah, I think your point, like, does the things we talk about today define the future? In many ways, yes. Right? Today, crypto is becoming institution friendly. And what that means is if you are building something new today in DeFi or in the financial space, if you're raising money for it, if you are opening an office and hiring people for it, your success plan includes somewhere along that way institutional capital. Right? If you're building a new DeFi protocol, the time of living off the degens has probably passed. I mean, there's some exceptions, but there's a ceiling to how far you're gonna get on sort of, like, anonymous meme coin money. Mhmm. And what that means is is that institutions are going to have a different checklist of requirements before they participate and use your product. Right? If you don't geoblock North Korea, you're not going to get institutional money. Right? Like, there's no institution that, like, wants to wake up in the morning, find their money is commingled with with Kim Jong Un. Right? Like, there's just no world where they wanna deal with that sort of scrutiny. They're where they deal wanna deal with that sort of blowback. And then in many case, many of these institutions are also very patriotic. Right? They they they don't want to to break, you know, laws, especially that seem in the national interest. So if you are going to be successful, if you're going to attract institutional capital, if you are going to have partnerships with banks and exchanges and global partners, you are going to want to take out your clarity text bonafides and say, we are compliant. We have done everything the state asked, and we have been above board and gone above and beyond what's required to be compliant. And that's really going to be the first step in anyone's success path. Right? You want a token that's going to be considered a digital commodity. You want a protocol that's gonna be considered compliant. You want to build your project in a way that is going to be really compatible with what the future of legislation is. Because if you don't, it's gonna be very hard to to build, path towards success. Now I caveat that with many people are building things that don't require institutional capital or don't want institutional capital. And, you know, they would say, fuck the banks. I'm not interested. Right? I'm gonna build x, y, and z over here, and that is fine. That's actually the beauty of what's going on here. Finally, have you know, blockchain is this kind of substrate that allows everything that exists simultaneously. Right? You could have these, you know, cypherpunk, you know, self sovereign, hyper independent ideas, smart contracts that exist, and you can have regulated global currencies and this and the same substrate, but using different regimes. Right? Maybe they talk together, maybe they don't. But this is like a public resource. This is an infrastructure on which we build the future. Right? And it's not gatekept to building something. Right? Maybe institutions are gonna require x, y, and b of you, but you don't have to use it for that. You don't have to do that, but you can still share the same ledger. And that's actually really pretty fundamentally amazing because prior blockchain, you just couldn't do that. You couldn't build your own private money and use the same you know, you couldn't use SWIFT with your own funny money. You know, you couldn't can't build Banana Coin and be like, I'll use SWIFT anyway. Right? No. So it's just for the banks. You're not allowed. Right? You can't say, so this is really cool. Maybe I can take, you know, JPEGs of monkeys and use it on on Swift. No. You can't do that. You're not allowed. Right? Finally, you can say, yeah. We have a system that's more powerful than Swift that the banks use, and you have your funky JPEGs of monkeys, and they can live in the same place. I think, you know, this this is super important to sort of recognize how this allows for all the sorts of kinds of builders that are out there. Right? And that and that's very, very important. Right? That's that's what's so novel here, and that's, like, what's so transformative.
It seems like we're back again at jurisdiction shopping. And by just clarity act, we can see that US is trying to attract builders from abroad or, let's say, legitimize those who are building within the country. And quick question here, do you predict any trends on some sort of, like, harmonization of international laws that would, obviously, I think, take into consideration the Claritag, the MICA that we have in Europe. So what do you see the trends are going? Because sometimes when you just see a graph, always, it goes up and down. Because I remember in 02/1617, there was out of nowhere massive excitement, and then people started to lose money. And central banks started to issue statements, no. Don't touch crypto. And then they were like, okay. Touch, but under certain conditions. And then again and again and again, it's like cyclical thing. So curious to hear from you on, like, global regulatory frameworks. Where do you see it's headed? Whether it's gonna be more fragmentalized and each jurisdiction will try to attract builders and offer new perks or special economic zones or whether that might be zero tax or whether that be something within, like, the same lines of harmonization, making sure that we distinguish good actors who want to comply and want to build and stay within the framework from not so good actors that can be seen by the states, those who do want, do not want to collaborate and report to the state. So could you just share maybe some of the observations that you see?
Yeah. Absolutely. So, you know, to your point, you know, the cyclical nature, yeah, people put their money in banks. Governments control the money supply. People lose the money in the banks. Right? If you lived in Cyprus in 2008, you live in, you know, a lot of different jurisdictions. That happens pretty cyclically. Right? So that that I think, is not unusual, and, you know, I think it's a little I think it's important for people to keep that, like, in mind. Like, everything goes in these kind of cycles. Losing money, you know, it's really interesting. You know, you you could argue if you hold US dollars today, maybe you're losing money. Right? Like, I I was seeing a report that, like, you know, US dollars performance is, like, the worst it's been in a long time. And ironically, you know, a long time people used to say, you know, Bitcoin is eventually gonna hit a million dollars. And the running joke was it was because, like, the dollar had, dropped so precipitously that it was just like, is it a million dollars for Bitcoin or Bitcoin's for a million dollars? So I I kinda love thinking about that. Yeah. If you look at the spread of the joint stock corporation, The United Kingdom or Britain, I guess, at the time, they were very early in giving state charters for joint stock corporations. And then they had some trouble with it. You know, people people ran away with some ideas, and they had, you know, some bubbles that exploded. And they were a little bit conservative after a little bit of while on what you could do with joint stock corporation. And then people started leaving The UK to open joint stock corporations in France and then do business in The UK. And that led, of course, to The UK or Britain at the time, I guess, to modernize its joint stock corporation. They didn't like this idea that, like, you know, there were London companies just opening up, incorporating in France, and then coming back to do business in London. I think you'll see the same thing here with clarity. The United States tends to set the sort of, like, trend globally in terms of, like, you know, how we are going to do these sorts of things to create regulations in a standard way. People will regulation shop. You know? They will definitely look for regulatory zones that work best for them. And then they also be cultural that may be patriotic that might just be, oh, I happen to live in this jurisdiction, so the lawyer that I know knows this jurisdiction, so I'm gonna work in this jurisdiction. Right? If you're in Zug, you probably build things in Swiss Swiss law mostly because it's what you're familiar with. Right? Whenever you sign contracts, you always try and determine where you're going to debate the contract as the agreement goes south. And, you know, people love to choose Delaware, but, you know, sometimes you end up saying, okay. I have a jurisdiction somewhere else. So we will probably see a lot of jurisdictions try and compete very quickly. You know, I expect to see, you know, MICA or or probably see some more work coming out of Singapore, maybe Hong Kong. I expect the same way that the corporation eventually became a standard corporate personnel became a standard world over. We will say that we see the same thing there. Some regions that feel particularly, capable of building their own path will build their own path. Some, regions will see the opportunity to play a little bit of, like, a little bit of regulatory offshoring, and they'll make something a little bit looser, but still, you know, sort of recognized or or viable. I think this is sort of like a natural state of, like, you know, how states compete for resources. And, you know, in this case, a big part of, like, you know, this administration's push is, you know, America first. And, you know, big part of this is bring all crypto home. Right? Let's make, America the most viable place to to build the future of of blockchain technology. So you'll definitely see other states pushing back with their own with an attempt to make their own jurisdiction. Right? We see this in The United States Of States where, you know, each state is trying to make their state a little bit more friendly to corporations. Right? And then they, like, compete with one another inside The United States. And, you know, you see folks like, you know, Elon Musk moving Tesla from California to Austin. And, you know, you see teams moving from, you know, New York to Wyoming. So you'll see you'll continue to see this. This is the natural cryptoeconomic incentive layer.
I wanted to ask you a question here since we're discussing state and state intervention or regulation. So what is your opinion on state bailouts? I know that we didn't have, like, specific, like, bailouts since 2008 or not to my knowledge at least, but there were some indirect responses, for example, to Silicon Valley Bank collapse to USDC, to pay a couple years back. Obviously, everybody's familiar with FTX collapse. So it seems like, and now I'm wearing my lawyer hat, that nobody wants to be regulated or nobody wants the innovation to be regulated, as long as it kinda doesn't cover them or doesn't touch their personal interests directly. But then just as a researcher observing the response from the public after FTX collapsed, it seemed like a lot of individual investors really wanted state intervention and bailout or, protection that kinda usually doesn't really go hand in hand with high risky, volatile, assets. So curious your opinion on that.
You know, I don't have a super strong opinion on state bailouts. Sometimes they make sense. Sometimes they're regrettable, but they're still a good idea. Right? Like, there's a world in which, like, yeah, it's better to let a company fail, and then you're like, but as the government, you know, do we really let everybody lose their retirement? Five years later, you're gonna deal with a revolution. You know? So there's a lot of, like, decision making that has to sort of evaluate the pros and the cons of, like, the situation. Certainly, people get frustrated when they see bailouts. Right? But, you know, if if if your family depends on, like, your pension, you know, you're probably gonna wanna bail out. I think this goes the same with sort of, like, human nature. Right? Like, if there's an opportunity to get your money back and all it takes is for you to feign ignorance now, you know, you're probably gonna feign ignorance and try and get your money back. With crypto in particular, though, I think this is a big part of why the carry ax is so important. Because of FTX, you could make a reasonable argument saying like, hey. I should get my money back because I was lied to. I was misled to. Right? And there aren't good structures. They weren't good structures to make sure that, you know, SPF and crew were being honest. Right? So, you know, as a retail investor, you could say, hey. You know, they've got a stadium in Florida. It looks like a legit company. There's a US entity. Clearly, it must be thoughtfully regulated, and clearly these assets I'm using must be thoughtfully regulated. Clearly It's not like there wasn't regulation.
It's not like they were operating in regulatory, like, vacuum. The the there was regulation. The the question was that whether they were following or who was auditing them. So yeah. But we can talk about it for No. No. No. No.
I think it's a relevant point. Right? Like, STX Coin, right, if Clarity had been around, they would have to be making very regular, very public disclosures about the the token that anyone would have been able to see. Alright? And they would have been having to tell the SEC everything they were doing with it every six months. Yes. Regulation exists for corporations, but the scrutiny, at least, around the crypto asset, which was, like, a big part of it. Right? Because they were backing they're basically taking loans out of the own money that they were printing. Right? Like, that was that was really economic engine behind what they were doing. Right? And then they were, like, backing new projects to create new tokens that would have, like, more value, and then have a whole bunch of it, and they take loans against that. Right? Had these projects been required to register every six months with this SEC and basically disclose every step along the way, the market making, the the the exchanges, all these different portions, it would have been much harder to hide the fact that this was a fraud from the start. SPF would have been denied his critical tools to sort of, like, vapor money out of thin air to sort of bankroll this sort of, like, starting part of this, like, scheme. So it would not have, like, totally not happen most likely, but, you know, things like Do Kwon's, Terra Luna, these things would have been much, much, much more difficult to have work because you can't rely on the founders just saying, trust me, bro. You have to go to Tali and actually, like, see all the documents. Right? And, like, Zach x p t or anyone on Twitter is gonna be like, I checked the documents. This doesn't add up. This doesn't make any sense. Right? So that level of, like, enforced transparency will give consumers the ability to make their own decision. Right? Today, if you lose all your money on PP Coin, you're just not going to get an audience from a federal court judge about how you lost all your money on PP Coin. Right? You're not. Right? But if you if you go into court and you say, hey. You know, I read all these stories. This is clear fraud. It's a little bit different. Right? And you're going to have to do a lot of fraud to get past the SEC on a regular basis. People can argue with that. Right? But at least then it's clearer that it's fraud. Right? SPF is like, no. It wasn't really fraud. And, you know, in in the clarity or post 30 world, the SCC could be like, yeah. You lied here on line 49. Right? Or, oh, you had this other account. People were wiring money to your your girlfriend. Well, you didn't disclose that, so you're in violation. It's it's pretty cut and dry. Right? So, yeah, I think that that would would be beneficial.
Okay. Beyond Tally, forget about Tally for a second. What are the projects or, like, governance decisions or, like, just integral components of the architectural design that you see some DAOs are still making where you're like, why are you doing this? Why are you still doing this? Do you ever, like, have this full cross your mind?
Well, I think that right now, there's a little bit of focus on maybe we can just tweak the tool. Maybe we can, like, claim it's more modular or maybe more secure, or maybe we could add some sort of new incentive wheel to it, you know, add a little bit more color here and stuff like that. I think all of that really misses the point. Right? It misses the point of where the industry is going. It misses the point of what actually projects need at scale. Right? And what we need is a world again, I I think it really goes back to clarity. Right? What we need is a world where you can build world changing ideas at scale with certainty about how the state is going to react. No one likes to go to jail. No one likes to be stuck in court. No one likes to not be able to succeed because nobody trusts them. What we need is transparent trust frameworks, And those can be implemented in smart contracts, but they don't have to be. They can be implemented through, you know, complicated permission structures that have to be. There's a really great project, hats out there. Shout out to the hats boys, and girls, who are building some really awesome tooling to this channel. Hoping to bring them to our podcast as well. Oh my god. They're fantastic. So send send them send them my love. But what organizations need today is compliance. Right? And this is someone I've been in crypto since 2011. Right? So for me to say compliance is like a big thing. Right? But we need compliance. We need clarity. We need to understand understand what can we build and have so that we can build safely so that we don't launch NFT projects because it looks like fun art and then spend tens of thousands of dollars in legal bills trying to explain yourselves to the government and tell them that it's not really an AK 47. It's just like a JPEG NFT for a game where you sell drugs. Oh my god. I guess I'm going to jail. You know? Like, you need that to be able to do exciting things and continue to be excited about it. You know? I'm sure there are a lot of, like, folks out there who are gonna be screaming their heads about, like, no. Cypherpunk values rules. And they're right, but they might not have spent countless nights like so many of the founders of protocols, leading protocols that I know personally who have just really lost sleep, lost time with their families, had to move countries, move jurisdictions, afraid about themselves, all because they didn't know how they were supposed to do it the right way. Mhmm. Right? And that's not a world in which you can innovate. We've lost so many smart people to the fact that they're like, I'm done. This is too hard. Right? It's too scary. Right? Or remember the time when, like, you know, Elizabeth Warren is just, like, raising an anti crypto army to go after you shadowy super coders? Shadowly super coders are, like, you know, women with kids who are, like, sitting on their computer writing out the next DeFi protocol that they thought were cool, and now they're the enemy that we're raising some sort of army to go after. Right? Like, there are people who wanna fight that battle every day, but there's actually way more honest innovators who are excited about the technology, who wanna build a better future, who just want to know how to build a better future. Right? And I think that is probably what stands out to me more. Right now, yes. We need cooler smart contracts. We need more modular things. That's great. Different kinds of voting. Sure. But what we really need, what the founders really need, what the innovators really need is they need clarity that they're not going to jail, that they have an opportunity to change the world, and they can do it without sleeping with one eye open and retaining high priced lawyers for thousands of dollars an hour for as long as they may live. That's what we actually need to move the the space forward. Right? Like, we need founders like Andre Cronje. Andre Cronje, he he he had a fantastic tweet about he built urine and made nothing out of it, except for headaches and a heartache and had to, you know I I think in the end, he had, like, moved to maybe, like, Dubai or something. He didn't even make you know, he didn't even, like, mint himself tokens. You had to yearn it, if you remember it when he launched. Right? But to become a target of, like, the largest, you know, government, most powerful organization in human history because you had an idea, and you wrote it and put it in a GitHub, no. We don't need more modular smart contracts. Sorry. What we need is clarity on we have a right and ability and path to build this in The United States and anywhere around the world in a way that's safe for builders to be able to wake up in the morning and bring their passion to what they do. The rest of it, we will work out. We will work out privacy. We will work out sovereignty. I promise we will work out these things. But if you don't have a place where the smart, you know, men, women, and everyone in between who are out there building things and wanna build things, you know, we can't have nice things.
That's a great summary of our discussion. And based on what you just mentioned, it feels like it's great to have this clarity, as you said, to have this predictability and ability to plan. I guess one of the biggest arguments here for those who might view the Claritax or similar regulatory frameworks different to you is that we want regulation that is not imposed top down, that maybe stems something from, like, bottom up, some community standards or regulation that is sync with what is industry doing, because I think one of the arguments is that the state rarely understands the nature of technology even if they try to. Well, let's end on this hopeful note that the Clarity Act will provide this ability for builders to build in The United States safely as long as they are happy to comply with the regulation and decentralization and other definitions in the way that the state sees it. It's also a choice. If you're there, if you choose to build there, you don't have really a choice to choose to opt out of this act. And that was a fantastic conversation, and I wish we could go for hours. I'm handing it over to Eugene because we have quiz
and our signature question. I do wanna actually reply to that really quickly, though. Yep. People see laws like Clarity as top down, but what they don't see is the past decade of work by the crypto industry to actually help shape this legislation, to build this legislation together. Right? The DeFi Education Fund was funded by the Uniswap DAO. So the tune of millions of dollars was funded by the Uniswap DAO. There's the blockchain association. There are the VCs in the space. There are the lawyers. Right? There are all the different parts, constituents in our ecosystem, the Miles Jennings, the Jake Chervinskis, the Rodrigo Sierras, the Kathy Youn, the Hester Peersons. All of these people have been collaborating and more. You know? Melettes, Gabe Shapiro. Like, all these people have been collaborating for year with the government, doing the work of going to DC, doing the work of talking to commissioner, doing the work of talking to everyone that you can imagine to build this legislation. So for some in the crypto space, it feels like it came from on high. Some legislators are now gonna tell us what to do. But what they missed is is that so many people have been working for so many years to actually write this legislation with the legislators. Right? The reason why Clarity is so exciting is not because some congresswoman somewhere just came up with it and thought this looks great, but because this is what we have helped co write. Right? These are what the profits of our industry have helped paid for. So it's important to, like, have a note there that this isn't on high. This is actually a sign of the maturity of our industry where ground up is now so many a 16 z puts out, you know, amicus briefs all the time. You know, Paradigm puts out so much work into to research. Like, there's a lot of teams out there who've been defending both their own interests, but, like, the vision of a larger organization, Joe Lubin, a consensus. Right? This isn't from on high, and that's what I think a lot of people need to sort of understand that this is actually a collaborative act that is going. Right? It's not top down. This is us meeting the state
somewhere in the middle. In the middle. Yeah.
And that's what's so exciting about it.
And that's a good point because there are other, you know, governments across the globe, like UK, that are also law commissioned, trying to reach out to the industry to get their opinions and hopefully to shape the act that would reflect the realities of the, ecosystem and the most recent technological innovations. Yeah, I feel like we could just go back and forth on specifics of the ads or just, like, the approaches. Hopefully, the act that we've been discussing in great detail will bring that clarity and relief to most or bring more positives, than negatives. But, yeah, Eugene, do you have anything to add here?
Yeah. I feel bad that we're we gotta start going to the quiz part because, again, yeah, this is such a interesting conversation. I think this is underexplored, especially that note that you ended it on, Dennison, with that the collaborative nature and kind of realizing what we're building off of and the benefit. This will all espouse as opposed to just focusing on, like, one tiny element of ideology and being like, how does it not fit into certain, like, cyberpunk elements or anything like that? But, nonetheless, we are at the time when it is quiz time, and we are always excited for this to wrap with four questions where we please request one word answers. And the first one I want to ask building off the conversation that we were just having. Looking ahead to the next couple of years, how would you summarize the impact that governments will have on DAOs in one word?
Why are they?
I figured that would be an easy setup given the rest of the conversation. What do you see as the most misunderstood concept relating to governance in web
Decentralization. I
feel like that's a whole podcast episode in of itself unpacking that. But, if we could get more of any single profession or skill set into DAOs, which one would it be for you? Critical thinking, one word. We'll hyphenate it. That's okay. And then last but absolutely not least, the question we ask in all of our quizzes, what is the future of governance in one word? Past.
Past? Yeah. The past. The future of governance is the history of governance. Yeah.
Love I love ending on such a circular note. But, yeah, Denison, thank you so much for joining us. It's been a pleasure having the conversation.
Thank you so much. Thanks so much. Been a pleasure being here.
Thanks for tuning in. The Governance Futures podcast is sponsored by the Scroll Foundation and produced by the governance team at the foundation, Jamila Kamalova and Eugene Leventhal, with editing support from Hurdesh Subquota. Any music and photos are attested in the episode description. Feel free to subscribe, leave a review, or share with a friend. Until next time.