View the proposal here:
View the proposal here:
Here at Gauntlet, we try to focus our participation in governance on outcomes we know well - market risk management and parameter optimization. We often abstain from votes like this, but after careful internal discussion we are supporting this proposal**
There has been great feedback, much of which we hope is addressed, but that can happen before or after the proposal passes. However, the value of creating greater regulatory certainty in the space is very high, and we need to bias towards action here. Our team met with the CFTC in 2019 and regulators have had every intention of creating a regulatory environment in which crypto can operate for quite some time. However, the regulatory "progress" over the past years has been limited to a few misguided efforts like The STABLE Act. It is clear from our discussions with knowledgeable parties that creating regulatory certainty will be a herculean task. While the sum requested is large, the sum needed is even larger. DeFi should expect this to be the first of many such requests, not just to the UNI community, but to other large DAOs in the space as well. Many of the options discussed, like a small budget to fund an exploratory committee, do not provide a clear path to creating meaningful progress. This is a hard problem, and we shouldn't kid ourselves when considering other options.
Here at Gauntlet, we try to focus our participation in governance on outcomes we know well - market risk management and parameter optimization. We often abstain from votes like this, but after careful internal discussion we are supporting this proposal**
There has been great feedback, much of which we hope is addressed, but that can happen before or after the proposal passes. However, the value of creating greater regulatory certainty in the space is very high, and we need to bias towards action here. Our team met with the CFTC in 2019 and regulators have had every intention of creating a regulatory environment in which crypto can operate for quite some time. However, the regulatory "progress" over the past years has been limited to a few misguided efforts like The STABLE Act. It is clear from our discussions with knowledgeable parties that creating regulatory certainty will be a herculean task. While the sum requested is large, the sum needed is even larger. DeFi should expect this to be the first of many such requests, not just to the UNI community, but to other large DAOs in the space as well. Many of the options discussed, like a small budget to fund an exploratory committee, do not provide a clear path to creating meaningful progress. This is a hard problem, and we shouldn't kid ourselves when considering other options.
If you look at Uniswap governance, there have been two proposals passed since it was deployed last year. The Uniswap DAO is a $7B organization that has, for all intents and purposes, done two "things" in 9 months. You could chalk this up to token holders being fiscally conservative, but calling this conservative is a euphemism that obscures a somber truth - the DAO is in a state of almost total stasis. Protocols like Compound have been more successful, with 30 or so proposals passed in that same time period. But don't be mistaken - even 30 "things" is almost nothing for an organization of this size, which could have a tremendous impact not just for UNI token holders but on the world itself. DAOs need to take more risk, but this risk should be justified by a real chance of an outsize reward. The regulatory risk in crypto is one of the largest impediments to adoption and this Political Defense Organization is a group of people with decades of experience advocating in Washington effectively for improved technology policy. There are no guarantees, but the chance of success here is very credible. Gauntlet hopes this is the first of many more proposals that think big and take a swing at hard problems like regulatory risk.
If we had one piece of feedback, it would be that compensation for PDO employees be denominated in UNI (or other DeFi protocol tokens), so that there is better incentive alignment. After all, the PDO should provide value to UNI holders and this would cement that commitment. However, this is not blocking feedback - we trust the committee members to balance this with other tradeoffs that arise. This trust might be misplaced, but we have much reason to think it's not and we are willing to take the risk that we are wrong here. In the end, if you don't risk being wrong, you don't ever have a chance to be right. This could be a step forward, not just for UNI, not just for DeFi, but for decentralized organizations to enter a new era of faster and greater progress.
** Of course, when the final proposal is published, we'd have to re-evaluate in the face of any material changes.
I was watching this (youtube: "6. Smart Contracts and DApps" 44:37min) when I saw Lawrence Lessig say that these types of contracts (paying people to lobby congress) are illegal.
He was talking in the context of ethereum smart contracts
this is really so fucking stupid its ridiculous
the price of uni keeps going down in satoshi's, the price of solana keeps going up
there's a reason for that (uniswap usa based, solana is not)
the fee switch isn't turned on, there's no discussion of it
and you want to allocate more money than hayden used to build uniswap to lawyers
its a joke
this is really so fucking stupid its ridiculous
the price of uni keeps going down in satoshi's, the price of solana keeps going up
there's a reason for that (uniswap usa based, solana is not)
the fee switch isn't turned on, there's no discussion of it
and you want to allocate more money than hayden used to build uniswap to lawyers
its a joke
the uniswap protocol is now controlled by lawyers if this goes thru
satoshi would vomit
i love u hayden, but i sold all my uni and since then it just looks like its getting worse
definitely wont be back if htis goes thru and jake is the de facto leader ... lol, couldnt be any more uninspiring ... not hitting jake, but lawyers suck. devs rule. sad state of affairs ...
good luck boys, i wont be joining u
Thanks to everyone for the discussion. To address a few questions since my last post:
Re: the urgency of moving forward, there really isn't anything confidential you need to know to understand the difficult policy environment we're in now. It was all over this week's news. Take the speech from CFTC Commissioner Berkovitz on Tuesday, for example. He said:
Thanks to everyone for the discussion. To address a few questions since my last post:
Re: the urgency of moving forward, there really isn't anything confidential you need to know to understand the difficult policy environment we're in now. It was all over this week's news. Take the speech from CFTC Commissioner Berkovitz on Tuesday, for example. He said:
Not only do I think that unlicensed DeFi markets for derivative instruments are a bad idea, I also do not see how they are legal under the CEA....Apart from the legality issue, in my view it is untenable to allow an unregulated, unlicensed derivatives market to compete, side-by-side, with a fully regulated and licensed derivatives market....For all these reasons, we should not permit DeFi to become an unregulated shadow financial market in direct competition with regulated markets.
Thankfully Commissioner Berkovitz doesn't speak for the entire CFTC, but it doesn't take much for a speech like this to turn into new anti-DeFi guidance or rulemaking. We need to make our case to the CFTC now, not twelve months from now. The same is true for Congress, as you can tell if you listened to Senator Warren and her colleagues during yesterday's Senate Banking Committee hearing.
Re: conflicts of interest, I think DeFi projects in general are incentive-aligned to the point that there's no conflict in advocating for them as a category. The difficult question is how to define the category, which determines the projects that fall within our scope. This is something I'd want community feedback on, but not something I view as a conflict. For me personally, having worked on DeFi policy for a couple years now, I don't anticipate any conflicts between my day job and my work here. If a conflict did arise, I'd handle it according to my fiduciary duties, abstaining or recusing myself if necessary.
Re: transparency, we've said a lot here about the steps we'll take to keep the community informed and engaged. Because of the nature of the work, there may be some details that aren't appropriate to publish online (advice of counsel, litigation strategy, etc.), which is why I said "as much public transparency as possible" in my last post. Regardless, I'm confident that we can and will share more than enough information for the community to assess our progress.
Re: WEF, I can't tell anyone what to think about the organization, but I will say I hold Sheila in high regard and think she would bring a unique and valuable perspective to the program. She led the WEF's DeFi Policymaker Toolkit project which resulted in solid work product, and from what I know, her views on DeFi are well-aligned with the community.
Re: funding, I agree with the comments from @dennisonb and @jmo on the size of the request. As I said before, I think the total amount is justified given the magnitude of the challenge. Still, I don't think Uniswap has to fund it all at once, or alone. I support a smaller initial funding amount than proposed, with the expectation that we'll make future requests from Uniswap and other protocols.
Re: accountability, I support governance having an oversight mechanism to keep the 501(c)(4) accountable, as long as it doesn't discourage other protocols from contributing as well (such as if Uniswap has special oversight privileges). I don't have any particular preference as to how oversight is achieved; perhaps a limited initial funding amount with the ability to deny future requests is sufficient.
Here at Gauntlet, we try to focus our participation in governance on outcomes we know well - market risk management and parameter optimization. We often abstain from votes like this, but after careful internal discussion we are supporting this proposal**
There has been great feedback, much of which we hope is addressed, but that can happen before or after the proposal passes. However, the value of creating greater regulatory certainty in the space is very high, and we need to bias towards action here. Our team met with the CFTC in 2019 and regulators have had every intention of creating a regulatory environment in which crypto can operate for quite some time. However, the regulatory "progress" over the past years has been limited to a few misguided efforts like The STABLE Act. It is clear from our discussions with knowledgeable parties that creating regulatory certainty will be a herculean task. While the sum requested is large, the sum needed is even larger. DeFi should expect this to be the first of many such requests, not just to the UNI community, but to other large DAOs in the space as well. Many of the options discussed, like a small budget to fund an exploratory committee, do not provide a clear path to creating meaningful progress. This is a hard problem, and we shouldn't kid ourselves when considering other options.
Here at Gauntlet, we try to focus our participation in governance on outcomes we know well - market risk management and parameter optimization. We often abstain from votes like this, but after careful internal discussion we are supporting this proposal**
There has been great feedback, much of which we hope is addressed, but that can happen before or after the proposal passes. However, the value of creating greater regulatory certainty in the space is very high, and we need to bias towards action here. Our team met with the CFTC in 2019 and regulators have had every intention of creating a regulatory environment in which crypto can operate for quite some time. However, the regulatory "progress" over the past years has been limited to a few misguided efforts like The STABLE Act. It is clear from our discussions with knowledgeable parties that creating regulatory certainty will be a herculean task. While the sum requested is large, the sum needed is even larger. DeFi should expect this to be the first of many such requests, not just to the UNI community, but to other large DAOs in the space as well. Many of the options discussed, like a small budget to fund an exploratory committee, do not provide a clear path to creating meaningful progress. This is a hard problem, and we shouldn't kid ourselves when considering other options.
If you look at Uniswap governance, there have been two proposals passed since it was deployed last year. The Uniswap DAO is a $7B organization that has, for all intents and purposes, done two "things" in 9 months. You could chalk this up to token holders being fiscally conservative, but calling this conservative is a euphemism that obscures a somber truth - the DAO is in a state of almost total stasis. Protocols like Compound have been more successful, with 30 or so proposals passed in that same time period. But don't be mistaken - even 30 "things" is almost nothing for an organization of this size, which could have a tremendous impact not just for UNI token holders but on the world itself. DAOs need to take more risk, but this risk should be justified by a real chance of an outsize reward. The regulatory risk in crypto is one of the largest impediments to adoption and this Political Defense Organization is a group of people with decades of experience advocating in Washington effectively for improved technology policy. There are no guarantees, but the chance of success here is very credible. Gauntlet hopes this is the first of many more proposals that think big and take a swing at hard problems like regulatory risk.
If we had one piece of feedback, it would be that compensation for PDO employees be denominated in UNI (or other DeFi protocol tokens), so that there is better incentive alignment. After all, the PDO should provide value to UNI holders and this would cement that commitment. However, this is not blocking feedback - we trust the committee members to balance this with other tradeoffs that arise. This trust might be misplaced, but we have much reason to think it's not and we are willing to take the risk that we are wrong here. In the end, if you don't risk being wrong, you don't ever have a chance to be right. This could be a step forward, not just for UNI, not just for DeFi, but for decentralized organizations to enter a new era of faster and greater progress.
** Of course, when the final proposal is published, we'd have to re-evaluate in the face of any material changes.
I was watching this (youtube: "6. Smart Contracts and DApps" 44:37min) when I saw Lawrence Lessig say that these types of contracts (paying people to lobby congress) are illegal.
He was talking in the context of ethereum smart contracts
this is really so fucking stupid its ridiculous
the price of uni keeps going down in satoshi's, the price of solana keeps going up
there's a reason for that (uniswap usa based, solana is not)
the fee switch isn't turned on, there's no discussion of it
and you want to allocate more money than hayden used to build uniswap to lawyers
its a joke
this is really so fucking stupid its ridiculous
the price of uni keeps going down in satoshi's, the price of solana keeps going up
there's a reason for that (uniswap usa based, solana is not)
the fee switch isn't turned on, there's no discussion of it
and you want to allocate more money than hayden used to build uniswap to lawyers
its a joke
the uniswap protocol is now controlled by lawyers if this goes thru
satoshi would vomit
i love u hayden, but i sold all my uni and since then it just looks like its getting worse
definitely wont be back if htis goes thru and jake is the de facto leader ... lol, couldnt be any more uninspiring ... not hitting jake, but lawyers suck. devs rule. sad state of affairs ...
good luck boys, i wont be joining u
Thanks to everyone for the discussion. To address a few questions since my last post:
Re: the urgency of moving forward, there really isn't anything confidential you need to know to understand the difficult policy environment we're in now. It was all over this week's news. Take the speech from CFTC Commissioner Berkovitz on Tuesday, for example. He said:
Thanks to everyone for the discussion. To address a few questions since my last post:
Re: the urgency of moving forward, there really isn't anything confidential you need to know to understand the difficult policy environment we're in now. It was all over this week's news. Take the speech from CFTC Commissioner Berkovitz on Tuesday, for example. He said:
Not only do I think that unlicensed DeFi markets for derivative instruments are a bad idea, I also do not see how they are legal under the CEA....Apart from the legality issue, in my view it is untenable to allow an unregulated, unlicensed derivatives market to compete, side-by-side, with a fully regulated and licensed derivatives market....For all these reasons, we should not permit DeFi to become an unregulated shadow financial market in direct competition with regulated markets.
Thankfully Commissioner Berkovitz doesn't speak for the entire CFTC, but it doesn't take much for a speech like this to turn into new anti-DeFi guidance or rulemaking. We need to make our case to the CFTC now, not twelve months from now. The same is true for Congress, as you can tell if you listened to Senator Warren and her colleagues during yesterday's Senate Banking Committee hearing.
Re: conflicts of interest, I think DeFi projects in general are incentive-aligned to the point that there's no conflict in advocating for them as a category. The difficult question is how to define the category, which determines the projects that fall within our scope. This is something I'd want community feedback on, but not something I view as a conflict. For me personally, having worked on DeFi policy for a couple years now, I don't anticipate any conflicts between my day job and my work here. If a conflict did arise, I'd handle it according to my fiduciary duties, abstaining or recusing myself if necessary.
Re: transparency, we've said a lot here about the steps we'll take to keep the community informed and engaged. Because of the nature of the work, there may be some details that aren't appropriate to publish online (advice of counsel, litigation strategy, etc.), which is why I said "as much public transparency as possible" in my last post. Regardless, I'm confident that we can and will share more than enough information for the community to assess our progress.
Re: WEF, I can't tell anyone what to think about the organization, but I will say I hold Sheila in high regard and think she would bring a unique and valuable perspective to the program. She led the WEF's DeFi Policymaker Toolkit project which resulted in solid work product, and from what I know, her views on DeFi are well-aligned with the community.
Re: funding, I agree with the comments from @dennisonb and @jmo on the size of the request. As I said before, I think the total amount is justified given the magnitude of the challenge. Still, I don't think Uniswap has to fund it all at once, or alone. I support a smaller initial funding amount than proposed, with the expectation that we'll make future requests from Uniswap and other protocols.
Re: accountability, I support governance having an oversight mechanism to keep the 501(c)(4) accountable, as long as it doesn't discourage other protocols from contributing as well (such as if Uniswap has special oversight privileges). I don't have any particular preference as to how oversight is achieved; perhaps a limited initial funding amount with the ability to deny future requests is sufficient.
Unfortunately, I missed this message.
For conflicts, here is the most obvious ones.
Unfortunately, I missed this message.
For conflicts, here is the most obvious ones.
Each of the board members (except Marvin) is currently employed full time by a different organization, with different goals and reports directly to a boss who has different goals for them. Each cannot serve both his or her current boss and those businesses while serving the interests of Uniswap.
Most of the board members also serve on lobbying or special interest organisations that have different goals than what is in the best interest of Uniswap.
In addition, several of the board members appear to have been hired by Uniswap in the past to work on legal issues as outside counsel, which creates inherent conflicts on evaluating Uniswap's current regulatory position and the need for more work (which could be done by them or their previous firms).
Moreover, under the expanded mandate of this proposal, these very board members will be charged with decisions to fund (or not) the other lobbying and special interest organizations that they currently are part of.
To quote Harvard Law BFI:
Jake Chervinsky , General Counsel, Compound Labs [CONFLICT] & Strategic Advisor, Variant Fund. **[CONFLICT]**Jake serves as general counsel at Compound Labs and as an adjunct professor at Georgetown University Law Center.
Larry Sukernik , co-founder, Reverie. [CONFLICT] Larry co-founded Reverie to steward the development of DAOs. Previously, he was an investor at Digital Currency Group.
Rebecca Rettig , General Counsel, Aave Companies. [CONFLICT]. Rebecca is a well-known DeFi lawyer who has advocated before government bodies around the world. [CONFLICT]. Aave is based in Europe so she can help ensure connectivity with European based groups.
Marc Boiron , General Counsel, dYdX Trading. [CONFLICT]. Marc is a DeFi attorney who has designed the regulatory strategies and DAO structures for many of the leading DeFi protocols [CONFLICT] in addition to having educated regulators on DeFi. [CONFLICT]
Marvin Ammori , Chief Legal Officer of Uniswap Labs. Marvin has spent his career advocating for new technologies from the internet to DeFi. He has served as a board member of multiple advocacy nonprofits.
Katie Biber , Chief Legal Officer of Brex, [CONFLICT]. Board of Directors of Anchorage. [CONFLICT]. Katie is a fintech and crypto leader and political superlawyer who served as the General Counsel of the Mitt Romney presidential campaign in 2012.
Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). [CONFLICT] Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF [CONFLICT]
To fully understand the conflicts of interest, each potential board member should be required to disclose his or her other positions and conflicts of interest in the same way that a lawyer at a law firm hired by Uniswap would be, as well as in the ways a public company board member would be.
Who does Jake serve? Uniswap or Compound or Variant fund or someone else?
Who does Marc serve? Uniswap or DyDx or ,...?
Likewise, who do they support when they push this proposal? These are clearly conflicted opinions given that these folks will either be on the board or routinely work with the members of the board who they are supporting:
@lay2000lbs @HarvardLawBFI I'm 100% in favor of the proposal & will share more detailed thoughts soon. In short, the days of DeFi flying under the radar are over. Policymakers worldwide are paying attention. Now's the time to allocate resources to education & advocacy, & this is the right way to do it.
And Rebecca Rettig signaled agreement with Marcs post [Rebecca is a former coworker of Marc's who worked with him now from a different company and often Tweets her support and allegiance to him]
As usual, @boironattorney makes excellent, thoughtful points about the
For competence, there are numerous examples on Twitter and in podcast interviews in which several of these board members fear monger over the risks from regulators who have no jurisdiction over Uniswap or miss and mistate key risks to Uniswap, like OFAC (sanctions) risk. Unfortunately, we are not permitted to post linked or media to show them. And, it probably doesn't make sense to start a gotcha witch hunt!
More importantly, if you look at their backgrounds, you will quickly see that none (?) of these lawyers has substantial experience with the two biggest legal risks facing DeFi protocols in the US: OFAC risk and Bank Secrecy Act money laundry risk.
Likewise, only Katie Biber appears to have experience actually working within government.
This is odd.
Why this board and not experts in the most important regulations affecting Uniswap and former government officials who have been involved in creating and enforcing these laws?
@lex-node @monet-supply
Marvin Ammori, again, the CLO of Uniswap Labs.
Providing a few more comments. You can read more about my background and thoughts above.
Marvin Ammori, again, the CLO of Uniswap Labs.
Providing a few more comments. You can read more about my background and thoughts above.
First, I am a big fan of innovative structures beyond traditional corporations. I am particularly in favor of choosing the right structure for the right task. Injecting a novel funding structure in the cryptocurrency political environment, unfortunately, is probably the last place to do it. When policymakers see novel structures, they will not assume transparency but the lack thereof! They understand 501(c)4 organizations and deal with them often and know their transparency safeguards, which nobody would have to reinvent or explain. New structures will likely confuse partners and policymakers and at the least add considerable overhead to most interactions in a pretty traditional town. If the choice is to be effective and trusted in policy circles or to be slightly more crypto-native, for this amount of money and with this much at stake I would choose more effective and we know a 501(c)4 can be effective.
Second, I expect some other proposals to distribute funds in tranches. That is not right for this proposal.
We are balancing several considerations, which include participation, trust, transparency and, most importantly, effectiveness in spending funds to advance these important goals (a constant topic in this discussion).
To tranche out the funds will dramatically weaken the organization’s effectiveness.
First, the crypto advocacy organizations would not be able to effectively compete in the job market against organizations that have obviously stable long-term funding versus short term trial grants. I have been involved in trying to hire people to organizations with uncertain funding, and it scares away a lot of the best people who have offers at other organizations with more stable funding. (This is another reason why the committee should not try to hire a full-time person now, as the hiring process is usually very intensive and fewer people will interview for a proposed role rather than a secure role.) Second, organizations in the space applying for funding won’t be able to appropriately make long-term plans without secure funding. Third, policymakers need to understand that their counterparties are credible repeat players. They know well-funded multi-year organizations are not fly-by-night operations. They will be extremely skeptical of and confused by a smaller fund that may be replenished based on ongoing votes. There is no need to hamstring or cripple these efforts.
Finally, the proposal to tranche seems inspired by the view that 1M is too much for the purposes here. As many of us have explained, that is simply not the case.
Trust and transparency can be addressed in the ways discussed by the committee in many comments above (frequent spending reports, budget, progress reports, community calls etc.). Tranching is another way to address them, but would undermine the fund’s effectiveness.
Finally, it is worth noting that 77% of votes in the Consensus Check have been cast in favor of the proposal. Even the small holders are overwhelmingly in favor, assuming nobody tried to game the system by voting multiple times (which would have no effect on the vote’s outcome). While there is some dissent, this process is designed to reach an outcome with a majority of holders and delegates--and not complete paralysis without unanimity. While the community comments, support, and suggestions have been very useful and the proposers and committee intend to incorporate the feedback — particularly around accountability and transparency — into the final on-chain proposal, I am delighted to see that there is such majority consensus in this vote among holders and delegates.
Unfortunately, I missed this message.
For conflicts, here is the most obvious ones.
Unfortunately, I missed this message.
For conflicts, here is the most obvious ones.
Each of the board members (except Marvin) is currently employed full time by a different organization, with different goals and reports directly to a boss who has different goals for them. Each cannot serve both his or her current boss and those businesses while serving the interests of Uniswap.
Most of the board members also serve on lobbying or special interest organisations that have different goals than what is in the best interest of Uniswap.
In addition, several of the board members appear to have been hired by Uniswap in the past to work on legal issues as outside counsel, which creates inherent conflicts on evaluating Uniswap's current regulatory position and the need for more work (which could be done by them or their previous firms).
Moreover, under the expanded mandate of this proposal, these very board members will be charged with decisions to fund (or not) the other lobbying and special interest organizations that they currently are part of.
To quote Harvard Law BFI:
Jake Chervinsky , General Counsel, Compound Labs [CONFLICT] & Strategic Advisor, Variant Fund. **[CONFLICT]**Jake serves as general counsel at Compound Labs and as an adjunct professor at Georgetown University Law Center.
Larry Sukernik , co-founder, Reverie. [CONFLICT] Larry co-founded Reverie to steward the development of DAOs. Previously, he was an investor at Digital Currency Group.
Rebecca Rettig , General Counsel, Aave Companies. [CONFLICT]. Rebecca is a well-known DeFi lawyer who has advocated before government bodies around the world. [CONFLICT]. Aave is based in Europe so she can help ensure connectivity with European based groups.
Marc Boiron , General Counsel, dYdX Trading. [CONFLICT]. Marc is a DeFi attorney who has designed the regulatory strategies and DAO structures for many of the leading DeFi protocols [CONFLICT] in addition to having educated regulators on DeFi. [CONFLICT]
Marvin Ammori , Chief Legal Officer of Uniswap Labs. Marvin has spent his career advocating for new technologies from the internet to DeFi. He has served as a board member of multiple advocacy nonprofits.
Katie Biber , Chief Legal Officer of Brex, [CONFLICT]. Board of Directors of Anchorage. [CONFLICT]. Katie is a fintech and crypto leader and political superlawyer who served as the General Counsel of the Mitt Romney presidential campaign in 2012.
Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). [CONFLICT] Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF [CONFLICT]
To fully understand the conflicts of interest, each potential board member should be required to disclose his or her other positions and conflicts of interest in the same way that a lawyer at a law firm hired by Uniswap would be, as well as in the ways a public company board member would be.
Who does Jake serve? Uniswap or Compound or Variant fund or someone else?
Who does Marc serve? Uniswap or DyDx or ,...?
Likewise, who do they support when they push this proposal? These are clearly conflicted opinions given that these folks will either be on the board or routinely work with the members of the board who they are supporting:
@lay2000lbs @HarvardLawBFI I'm 100% in favor of the proposal & will share more detailed thoughts soon. In short, the days of DeFi flying under the radar are over. Policymakers worldwide are paying attention. Now's the time to allocate resources to education & advocacy, & this is the right way to do it.
And Rebecca Rettig signaled agreement with Marcs post [Rebecca is a former coworker of Marc's who worked with him now from a different company and often Tweets her support and allegiance to him]
As usual, @boironattorney makes excellent, thoughtful points about the
For competence, there are numerous examples on Twitter and in podcast interviews in which several of these board members fear monger over the risks from regulators who have no jurisdiction over Uniswap or miss and mistate key risks to Uniswap, like OFAC (sanctions) risk. Unfortunately, we are not permitted to post linked or media to show them. And, it probably doesn't make sense to start a gotcha witch hunt!
More importantly, if you look at their backgrounds, you will quickly see that none (?) of these lawyers has substantial experience with the two biggest legal risks facing DeFi protocols in the US: OFAC risk and Bank Secrecy Act money laundry risk.
Likewise, only Katie Biber appears to have experience actually working within government.
This is odd.
Why this board and not experts in the most important regulations affecting Uniswap and former government officials who have been involved in creating and enforcing these laws?
@lex-node @monet-supply
Marvin Ammori, again, the CLO of Uniswap Labs.
Providing a few more comments. You can read more about my background and thoughts above.
Marvin Ammori, again, the CLO of Uniswap Labs.
Providing a few more comments. You can read more about my background and thoughts above.
First, I am a big fan of innovative structures beyond traditional corporations. I am particularly in favor of choosing the right structure for the right task. Injecting a novel funding structure in the cryptocurrency political environment, unfortunately, is probably the last place to do it. When policymakers see novel structures, they will not assume transparency but the lack thereof! They understand 501(c)4 organizations and deal with them often and know their transparency safeguards, which nobody would have to reinvent or explain. New structures will likely confuse partners and policymakers and at the least add considerable overhead to most interactions in a pretty traditional town. If the choice is to be effective and trusted in policy circles or to be slightly more crypto-native, for this amount of money and with this much at stake I would choose more effective and we know a 501(c)4 can be effective.
Second, I expect some other proposals to distribute funds in tranches. That is not right for this proposal.
We are balancing several considerations, which include participation, trust, transparency and, most importantly, effectiveness in spending funds to advance these important goals (a constant topic in this discussion).
To tranche out the funds will dramatically weaken the organization’s effectiveness.
First, the crypto advocacy organizations would not be able to effectively compete in the job market against organizations that have obviously stable long-term funding versus short term trial grants. I have been involved in trying to hire people to organizations with uncertain funding, and it scares away a lot of the best people who have offers at other organizations with more stable funding. (This is another reason why the committee should not try to hire a full-time person now, as the hiring process is usually very intensive and fewer people will interview for a proposed role rather than a secure role.) Second, organizations in the space applying for funding won’t be able to appropriately make long-term plans without secure funding. Third, policymakers need to understand that their counterparties are credible repeat players. They know well-funded multi-year organizations are not fly-by-night operations. They will be extremely skeptical of and confused by a smaller fund that may be replenished based on ongoing votes. There is no need to hamstring or cripple these efforts.
Finally, the proposal to tranche seems inspired by the view that 1M is too much for the purposes here. As many of us have explained, that is simply not the case.
Trust and transparency can be addressed in the ways discussed by the committee in many comments above (frequent spending reports, budget, progress reports, community calls etc.). Tranching is another way to address them, but would undermine the fund’s effectiveness.
Finally, it is worth noting that 77% of votes in the Consensus Check have been cast in favor of the proposal. Even the small holders are overwhelmingly in favor, assuming nobody tried to game the system by voting multiple times (which would have no effect on the vote’s outcome). While there is some dissent, this process is designed to reach an outcome with a majority of holders and delegates--and not complete paralysis without unanimity. While the community comments, support, and suggestions have been very useful and the proposers and committee intend to incorporate the feedback — particularly around accountability and transparency — into the final on-chain proposal, I am delighted to see that there is such majority consensus in this vote among holders and delegates.
I think there are perhaps more "reporting lines" and "accountability" than is being given credit for given the broad skepticism. Could it be better? Sure. Let's work on that. At the same time, this concept of micro-funding and milestones etc. isn't tenable for a venture like this, particularly if you want to pull in the heavy hitters who are going to dedicate their time to make this possible. There needs to be a budget that's approved, functional objectives (that can be modified), and perhaps a transparency framework beyond what's already inherent in non-profits. I'm a pragmatic person, so I don't think I share any of the concerns about this being a front to pay Uniswap or their investors legal fees (I'm sure they can pay their own, if they have any), so I'm inherently more trusting of the budget because I understand the cost of a project like this and I have confidence in those participating and the non-profit structure.
As for what Joe would do? I would encourage you to take a look at ConsenSys from 2015-2020. It is essentially a lot of exactly what your hypothetical asks as we worked to help grow the ecosystem around the globe.
My name is Grant Gulovsen, an attorney who represents clients in the crypto industry including a few DeFi protocols. I am also a UNI holder. I’m not opposed to the proposal per se but I am concerned that the interests of the committee members (as well as their respective clients) may not align with the interests of “DeFi” as a whole. I therefore would recommend that at least a few more non-lawyers be added to the committee to ensure that broader interests are taken into account.
In full support of this proposition. I also second @jonsnow in that $40M may be too much, however I would fully support an initial allocation that would be sufficient to bootstrap the initiative. As progress is made, Uniswap governance can determine how much more should be allocated from the treasury to fund the agenda. Thank you for taking action!
I think there are perhaps more "reporting lines" and "accountability" than is being given credit for given the broad skepticism. Could it be better? Sure. Let's work on that. At the same time, this concept of micro-funding and milestones etc. isn't tenable for a venture like this, particularly if you want to pull in the heavy hitters who are going to dedicate their time to make this possible. There needs to be a budget that's approved, functional objectives (that can be modified), and perhaps a transparency framework beyond what's already inherent in non-profits. I'm a pragmatic person, so I don't think I share any of the concerns about this being a front to pay Uniswap or their investors legal fees (I'm sure they can pay their own, if they have any), so I'm inherently more trusting of the budget because I understand the cost of a project like this and I have confidence in those participating and the non-profit structure.
As for what Joe would do? I would encourage you to take a look at ConsenSys from 2015-2020. It is essentially a lot of exactly what your hypothetical asks as we worked to help grow the ecosystem around the globe.
My name is Grant Gulovsen, an attorney who represents clients in the crypto industry including a few DeFi protocols. I am also a UNI holder. I’m not opposed to the proposal per se but I am concerned that the interests of the committee members (as well as their respective clients) may not align with the interests of “DeFi” as a whole. I therefore would recommend that at least a few more non-lawyers be added to the committee to ensure that broader interests are taken into account.
In full support of this proposition. I also second @jonsnow in that $40M may be too much, however I would fully support an initial allocation that would be sufficient to bootstrap the initiative. As progress is made, Uniswap governance can determine how much more should be allocated from the treasury to fund the agenda. Thank you for taking action!
I’m Marvin Ammori, the CLO of Uniswap Labs. Since other committee members have commented somewhere publicly now, I figured I would add my voice.
For background, I spent much of my early career as a lawyer fighting for internet freedom and a more decentralized web. I lived in DC for over a decade and was privileged to work on many of the signature internet freedom cases of the era, including the net neutrality fights, some privacy and encryption fights, and some of the copyright/web 2.0 fights. And, while 20/20 hindsight is strong, the truth is we could have lost many of those fights over the internet’s future and were overwhelmingly expected to. But we won most of them.
I’m Marvin Ammori, the CLO of Uniswap Labs. Since other committee members have commented somewhere publicly now, I figured I would add my voice.
For background, I spent much of my early career as a lawyer fighting for internet freedom and a more decentralized web. I lived in DC for over a decade and was privileged to work on many of the signature internet freedom cases of the era, including the net neutrality fights, some privacy and encryption fights, and some of the copyright/web 2.0 fights. And, while 20/20 hindsight is strong, the truth is we could have lost many of those fights over the internet’s future and were overwhelmingly expected to. But we won most of them.
So I saw what it takes to win. In many of these campaigns, I would help quarterback, direct, and allocate funds and resources. I even worked alongside some of the legendary engineers who helped design the initial internet protocols and across party and national lines. I have worked on policy more than most lawyers and on a bigger stage. I have put in 10,000 hours (twice over) on shaping policy and educating policy makers usually against long odds. It doesn’t mean I know everything, but it does mean I learned at least a few things the hard way. And I try to apply that every day in what I do now alongside this incredible community.
A lot of policymaking is surprising, counterintuitive, and completely bizarre. I understand why some people are confused. I also understand why people, like Matt Corva at Consensys, who have devoted so much time over five years in the policy arena, strongly support the proposal.
I support the proposal and think others should. I am reassured for several reasons:
This money will be well-allocated. The concern over “too much” or “too little” money seems to really be a concern that money will somehow be wasted, either through incompetence or (some suggest) nepotism or worse. I know many of the people on the committee and I know they are well-suited to manage this process. There won’t be some mad dash to over-invest or misuse funds. They have expertise, are committed to the growth of this space as evidenced otherwise in their own careers, and are also bound by fiduciary obligations, which cannot be taken lightly (as these folks know). We live in a world of imperfect alternatives, but, if you are going to trust a group, I don’t think there is another group of people I would trust more to make these allocations. (If there is simply no group someone would trust, then that is a different point regarding structure and tactics.)
We are not at the “seed fund” stage for politics. We are more like at the “Series F” stage. For those who think that the size of the proposal alone suggests mismanagement, this is simply (a fraction) of what it costs to win. Politics is sometimes an adversarial game, much like sports or litigation. If you had to beat, say, the LA Lakers at home … you can’t do it on a $2 million dollar budget. There is no point fielding a team of amateurs that will definitely lose, so you have to go big or go home. The top trade association bosses make over $2M each year (it is pretty sickening but there is often much more at stake, and democracy is better than the alternatives). Many of the most persuasive lawyers who lead teams that win these fights earn more than the average professional athlete. The proposed fund here is actually much too small to hire many of those people, but it could support the hiring of more good, hungry junior talent and a few targeted big hires--as needed on specific topics for limited hours--to field a solid team that can win consistently over time. This team could cost-effectively educate policy makers so that the community does not have too many last-minute, rushed, fire-drill, major threats. There will still be some unexpected major threats, and rebuffing those is where much of the budget will go. That cannot be easily predicted. The “seed” stage time for funding crypto policy was long ago; I was a consultant on a project for Coin Center back in 2015 and I remember having the luxury of time and seed stage budgets.
There will be a full-time hire. Someone has suggested we should name a full-time staff member because the committee members are busy. This is a great point. This overhead is necessary and there will be a full-time staff hire for the 501(c)(4) to focus exclusively on this organization and grant proposals. There would be a process to vet, select, interview, and hire the best person for the role. Interviewing the best people, likely in DC, willing to leave their current employers … is not something that could be done publicly. But doing so is probably the best way to identify and select talent.
We should agree to move quickly. The industry has had a bit of a grace period at least in the US. The administration change, appointment process, and hiring have given everyone about a 4 month break since the last major battle in January. This relative quiet was a happenstance … things are not going to stay quiet. Now the new administration is settled in. If this committee were funded today, it would also have to spend weeks hiring an initial staff member, reviewing proposals, analyzing strategy, etc. so that these funds are allocated the most effective way by Fall 2021. So the sooner that process could start, the more likely the industry can get ahead of some issues.
All committee members are strongly aligned with the interests of the Defi industry. Regardless of strategic preferences and tactics, we are all on the same team and striving for a fairer, more accessible, safer future of finance. While the committee does not claim to represent the industry as a whole, the committee does include three head lawyers from some of the world's leading Defi projects who think about and work to advance these issues every day with considerable real responsibility.
So to summarize:
All that said, I agree with many of the suggestions.
I hope people find my views as useful as I have others' and I look forward to continued discussion.
Some clarification:
If you believe a person associated with a proposal is dishonest, lacks the claimed expertise, or has a conflict of interest - there would be a valid case to argue against the proposal on that ground. But you should have some very credible evidence to back the argument up.
Example: Individual X is not to be trusted because they were previously involved in a scam token.
Some clarification:
If you believe a person associated with a proposal is dishonest, lacks the claimed expertise, or has a conflict of interest - there would be a valid case to argue against the proposal on that ground. But you should have some very credible evidence to back the argument up.
Example: Individual X is not to be trusted because they were previously involved in a scam token.
What is not valid is attacking an individual's character for an unrelated and (typically) emotionally-charged social issue.
Example: Individual X is not to be trusted because they previously voted in favor of a given abortion, climate change, immigration issue, etc.
I want everyone putting in a good faith effort to have a voice and be heard, so most moderation will be me directly messaging you if I feel it will be helpful. I will (very rarely) delete posts that are clearly not in good faith.
how do we know these lawyers are not byzantine actors? or have other interests involved? when creating a system, its important to get it right. this "board" will have almost all the power to make decisions. what if they suck at these decisions? being a lawyer and creating policy are two separate beasts.
TBH it kinda feels like Hayden has been threatened in some form and he is pushing this.
how do we know these lawyers are not byzantine actors? or have other interests involved? when creating a system, its important to get it right. this "board" will have almost all the power to make decisions. what if they suck at these decisions? being a lawyer and creating policy are two separate beasts.
TBH it kinda feels like Hayden has been threatened in some form and he is pushing this.
@haydenadams - I understand you may be in a difficult position, why cant we "start small" w/ $1 million USD (which is not small by any means - no law firm on the planet requires a $1mm retainer to start)?
What part of @rleshner comments are not proper?
It seems like this is an attempt to re-invent the wheel to personally defend uniswap which I am actually totally fine with but should have direct contact w/ Coin Center first as they have the most experience w/ this. Do any of these lawyers have significant experience w/ effectively implementing crypto policy?
I’m Jake Chervinsky, General Counsel of Compound Labs and one of the proposed committee members for this organization. I strongly support the proposal and I’d like to explain why in as much detail as possible here, as well as address some of the community’s concerns. I’ll start with a summary of my main points and then expand on each; if you have any questions or want me to dig deeper on anything, please ask.
Summary
I’m Jake Chervinsky, General Counsel of Compound Labs and one of the proposed committee members for this organization. I strongly support the proposal and I’d like to explain why in as much detail as possible here, as well as address some of the community’s concerns. I’ll start with a summary of my main points and then expand on each; if you have any questions or want me to dig deeper on anything, please ask.
Summary
The success of DeFi in general, and Uniswap in particular, depends on how effectively we engage with regulators and policymakers over the next 6 to 18 months. If we fail to act quickly and forcefully, the consequences could be severe.
The proposed committee is well-qualified to manage this program, both in terms of skill and experience with DeFi policy and government affairs, and in terms of commitment to the principles of decentralized governance.
Funding for engagement with regulators and policymakers should come from DeFi protocol treasuries at the discretion of decentralized governance. Uniswap can take lead, but other protocols should join as well.
The proposed funding amount is appropriate given the scope and urgency of the task, especially considering how much money TradFi spends on government affairs, and the fact that centralized crypto companies have no incentive to lobby for DeFi.
Programs like this should always operate at the pleasure of decentralized governance, and those involved should always be accountable to the community. This means we, the committee members, must (and will) prioritize transparency.
About Me
I’m a lawyer based in Washington, D.C. with a background in regulatory compliance and government enforcement defense. I started my career with a multinational firm handling anti-money laundering and anti-corruption matters for Fortune 500 clients. After a federal judicial clerkship, I joined a boutique firm specializing in cross-border dispute resolution and white collar criminal defense. I fell down the crypto rabbit hole in 2017 and represented a number of clients in crypto-related matters involving the SEC, CFTC, and DOJ before joining the industry full-time.
I joined Compound as General Counsel in May 2019 after realizing how DeFi can reshape the global financial system for the better. Since then, I’ve focused all my energy on the legal, regulatory, and policy issues surrounding DeFi. I serve as Chair of the Blockchain Association’s DeFi Working Group and as a Strategic Advisor to Variant Fund. I'm a member of the Uniswap community and I’m personally, deeply committed to the success of DeFi as a whole. Achieving the mission of this program is exactly why I'm here in the first place.
DeFi Regulatory and Political Landscape
In my view, regulatory risk is the single greatest threat to DeFi today. Before this year, DeFi received fairly little attention from the government due to its small size; the industry’s perception was that DeFi was “flying under the radar.” But with success comes scrutiny. After the rise of yield farming, the DeFi bull market, and Uniswap’s appearance in mainstream media, those quiet days are over. Regulators and policymakers worldwide are now watching closely. Although some of them understand the benefits that DeFi offers, many others are skeptical about a decentralized financial system that lacks the intermediaries they regulate.
Initial reactions from some regulators have been discouraging. In the AML/CFT arena, policy changes are now being considered that could significantly harm DeFi. For example, the FATF’s March 2021 draft guidance suggested that governance token holders could qualify as regulated VASPs, or that crypto exchanges could be prohibited from allowing withdrawals to non-custodial wallets. Policymakers are also concerned about the risks posed by stablecoins — a critical piece of the DeFi ecosystem — to monetary sovereignty and financial stability. As time goes on, we can expect to hear more questions and concerns about numerous other subjects as well, including the US federal securities, commodities, and tax laws, to name a few.
It’s crucial that we take the concerns of regulators and policymakers seriously. Like it or not, they have an unparalleled ability to hamstring the growth of DeFi, and if we fail to engage, the most likely outcome is a draconian “regulate first, ask questions later” approach which could set DeFi back by years, if not permanently. Luckily, we still have time. Most regulators and policymakers haven’t made up their minds yet, and in the US, some high-ranking positions are still waiting to be filled. But we can’t wait; now is our best chance to have a meaningful impact on DeFi policy before these decisions are made for us without our input. Time is of the essence.
Proposed Committee and Program Strategy
My fellow proposed committee members are among the smartest, most experienced, and most effective advocates for good DeFi policy in the world. I’ve had the pleasure of working personally with nearly all of them and I have no doubt that they’re the right people to lead this effort. From the feedback I’ve seen, the community seems to agree, so I’ll leave this here.
But what exactly will we do with the funds? Although the decision won’t be up to me alone, and my fellow committee members may have other (better) ideas, here’s generally how I think about our strategy and use of funds:
Education. The vast majority of regulators and policymakers don’t yet understand the technical and practical details that distinguish DeFi from TradFi. Without that knowledge, their initial reaction may be to impose the same regulatory obligations on DeFi protocols as they do on centralized financial institutions. In other words, they may mistakenly assume that Uniswap is an “exchange” like any other, implicating all the same risks and requiring all the same regulatory safeguards as Coinbase, et al. That’s wrong. To avoid such an outcome, we need to educate regulators and policymakers on how DeFi works and why its unique properties negate the need for many traditional regulations.
Advocacy. We can’t just educate government officials about the greatness of DeFi and then hope they leave us alone. Instead, we need to advocate strongly in favor of policies that support adoption of DeFi protocols and against policies that restrict access to DeFi or create a regulatory moat around entrenched incumbents. Good advocacy is both reactive and proactive; we need to address regulatory developments as they arise and advance our own policy proposals. Good advocacy is also both government-facing and public-facing; we need to engage with regulators and policymakers while also building consensus within the industry and grassroots support from the community.
Defense. We need to be prepared to take swift action in case of hostile guidance, rulemaking, legislation, executive orders, enforcement actions, or otherwise. It’s hard to predict in advance what form our defensive efforts might take, and hopefully the need won’t materialize at all. Yet, there’s plenty we can and should do now to prepare for the worst. For example, we could commission legal research on defense theories or constitutional protections that may apply to DeFi. Equally important, it’s a huge benefit to have resources set aside and available to allocate quickly in an emergency.
I anticipate the bulk of this work will involve retaining specialists such as researchers, lawyers, lobbyists, organizers, designers, and consultants, as well as making contributions to other aligned organizations and hiring full-time staff for the 501(c)(4). I understand that hiring lawyers and lobbyists may seem distasteful — in a sense, it goes against the ethos of DeFi, which emphasizes opting out of the legacy power structures that brought us to this point in the first place — but as @Marvin put it, this is “what it takes to win.” I prefer to win.
Funding from Uniswap and Other Protocols
Given the importance of engaging on DeFi policy, I believe this program is a valuable use of Uniswap’s resources and a paramount example of how DeFi communities can achieve off-chain goals without sacrificing the decentralization at their core. Uniswap is especially well-positioned to lead this initiative. The issues and strategy that I outlined above are particularly important for Uniswap as a decentralized exchange protocol that allows users to trade an enormous range of Ethereum-based assets, an activity that’s heavily regulated in the traditional centralized context. Uniswap also has the capacity to fund the program thanks to its substantial treasury.
That said, I appreciate the feedback from some community members that Uniswap shouldn’t be asked to fund the entire program on its own, or all in one shot (more on that below). There’s no question that, to be effective, we will need to engage with regulators and policymakers on behalf of the entire DeFi sector, not just Uniswap. For that reason, although I do believe Uniswap is the right “founding protocol” for this program, my hope is that other DeFi communities will see fit to join the effort and allocate additional funds from their treasuries to the 501(c)(4).
Initial and Total Funding Amounts
As far as I can tell, the point of greatest contention within the community is how much funding the program should receive. In my opinion, the size of the request in this Consensus Check is ultimately appropriate given the magnitude of the task at hand. As @sukernik explained, we aren’t proposing to form a startup that can wait to launch a minimum viable product before seeking additional funding. We’re proposing to form a nonprofit that can meaningfully impact policy on the global stage within the next 6 months.
This mission is an expensive one. There are thousands (literally, thousands) of regulators and policymakers worth engaging around the world today. There’s virtually no amount of money that we couldn’t put to good use immediately. Other industries that have above-average success with government affairs — including TradFi itself — spend hundreds of millions of dollars each year to influence policy in the United States alone. Make no mistake, we are the underdogs. In my view, if protocol treasuries can help us level the playing field, we’re obligated to use them.
It's particularly important for protocol treasuries to fund DeFi-specific policy efforts because nobody else will. As of now, centralized crypto companies have a tense relationship with DeFi. While they appreciate the role that DeFi tokens played in catalyzing the bull market, they also see DeFi protocols as competitors. These companies aren’t incentivized to, and indeed do not, dedicate resources toward DeFi policy. Coin Center and the Blockchain Association are both fantastic organizations, but neither focuses exclusively on DeFi as the 501(c)(4) would. If this is to be the only DeFi-specific policy organization in the world, we should fund it properly.
However, I also appreciate that 1M UNI is a significant sum, even if only a small fraction of the total treasury, and that some community members aren’t convinced that the full amount should be allocated in a single vote. With that in mind, I wouldn’t object to a smaller initial grant to get the program up and running, with the expectation that we will request additional funds from Uniswap and other protocols when appropriate. Although it may be difficult to measure our progress objectively over short time periods, I trust that the community can understand and evaluate our work in light of that caveat.
Transparency and Accountability
Transparency and accountability are essential to the success of this program and others like it. For many reasons, decentralized governance simply doesn’t work if the governors don’t have equal access to information about the protocol, including how its funds are being used. My goal as a proposed committee member is to provide as much public transparency as possible, to hold myself accountable to the community in the performance of my role, and to hold my fellow committee members to the same high standards.
@Marvin has already outlined the steps we’ll take regarding community updates, budgeting, and more. Personally, I’ll endeavor to make myself available to answer questions and attend community calls as much as possible.
Conclusion
We're at a challenging time in DeFi's history. Since last summer, we've proved the concept that financial activities more complex than transferring and storing value can be decentralized. As a reward, we're now a subject of attention for regulators and policymakers worldwide. I strongly support this proposal because I believe it will help us advance good DeFi policy, a goal that is essential to Uniswap's long-term success and well worth the cost.
I have an idea.
"Political defense" is a wrong category and it should never be about defending. We're not fighting here. I think protocols should be inclusive of everyone and decisions should be done in a collaborative manner.
I have an idea.
"Political defense" is a wrong category and it should never be about defending. We're not fighting here. I think protocols should be inclusive of everyone and decisions should be done in a collaborative manner.
I propose making it a "Political discussion" and e.g. invite the members of the SEC to become the representatives of USA and participate in governance of Uniswap. Participate in the rightful governance process of Uniswap, that we have here in this very forum.
Why representatives of offchain governments are not posting their opinions here? They should.
I’m Marvin Ammori, the CLO of Uniswap Labs. Since other committee members have commented somewhere publicly now, I figured I would add my voice.
For background, I spent much of my early career as a lawyer fighting for internet freedom and a more decentralized web. I lived in DC for over a decade and was privileged to work on many of the signature internet freedom cases of the era, including the net neutrality fights, some privacy and encryption fights, and some of the copyright/web 2.0 fights. And, while 20/20 hindsight is strong, the truth is we could have lost many of those fights over the internet’s future and were overwhelmingly expected to. But we won most of them.
I’m Marvin Ammori, the CLO of Uniswap Labs. Since other committee members have commented somewhere publicly now, I figured I would add my voice.
For background, I spent much of my early career as a lawyer fighting for internet freedom and a more decentralized web. I lived in DC for over a decade and was privileged to work on many of the signature internet freedom cases of the era, including the net neutrality fights, some privacy and encryption fights, and some of the copyright/web 2.0 fights. And, while 20/20 hindsight is strong, the truth is we could have lost many of those fights over the internet’s future and were overwhelmingly expected to. But we won most of them.
So I saw what it takes to win. In many of these campaigns, I would help quarterback, direct, and allocate funds and resources. I even worked alongside some of the legendary engineers who helped design the initial internet protocols and across party and national lines. I have worked on policy more than most lawyers and on a bigger stage. I have put in 10,000 hours (twice over) on shaping policy and educating policy makers usually against long odds. It doesn’t mean I know everything, but it does mean I learned at least a few things the hard way. And I try to apply that every day in what I do now alongside this incredible community.
A lot of policymaking is surprising, counterintuitive, and completely bizarre. I understand why some people are confused. I also understand why people, like Matt Corva at Consensys, who have devoted so much time over five years in the policy arena, strongly support the proposal.
I support the proposal and think others should. I am reassured for several reasons:
This money will be well-allocated. The concern over “too much” or “too little” money seems to really be a concern that money will somehow be wasted, either through incompetence or (some suggest) nepotism or worse. I know many of the people on the committee and I know they are well-suited to manage this process. There won’t be some mad dash to over-invest or misuse funds. They have expertise, are committed to the growth of this space as evidenced otherwise in their own careers, and are also bound by fiduciary obligations, which cannot be taken lightly (as these folks know). We live in a world of imperfect alternatives, but, if you are going to trust a group, I don’t think there is another group of people I would trust more to make these allocations. (If there is simply no group someone would trust, then that is a different point regarding structure and tactics.)
We are not at the “seed fund” stage for politics. We are more like at the “Series F” stage. For those who think that the size of the proposal alone suggests mismanagement, this is simply (a fraction) of what it costs to win. Politics is sometimes an adversarial game, much like sports or litigation. If you had to beat, say, the LA Lakers at home … you can’t do it on a $2 million dollar budget. There is no point fielding a team of amateurs that will definitely lose, so you have to go big or go home. The top trade association bosses make over $2M each year (it is pretty sickening but there is often much more at stake, and democracy is better than the alternatives). Many of the most persuasive lawyers who lead teams that win these fights earn more than the average professional athlete. The proposed fund here is actually much too small to hire many of those people, but it could support the hiring of more good, hungry junior talent and a few targeted big hires--as needed on specific topics for limited hours--to field a solid team that can win consistently over time. This team could cost-effectively educate policy makers so that the community does not have too many last-minute, rushed, fire-drill, major threats. There will still be some unexpected major threats, and rebuffing those is where much of the budget will go. That cannot be easily predicted. The “seed” stage time for funding crypto policy was long ago; I was a consultant on a project for Coin Center back in 2015 and I remember having the luxury of time and seed stage budgets.
There will be a full-time hire. Someone has suggested we should name a full-time staff member because the committee members are busy. This is a great point. This overhead is necessary and there will be a full-time staff hire for the 501(c)(4) to focus exclusively on this organization and grant proposals. There would be a process to vet, select, interview, and hire the best person for the role. Interviewing the best people, likely in DC, willing to leave their current employers … is not something that could be done publicly. But doing so is probably the best way to identify and select talent.
We should agree to move quickly. The industry has had a bit of a grace period at least in the US. The administration change, appointment process, and hiring have given everyone about a 4 month break since the last major battle in January. This relative quiet was a happenstance … things are not going to stay quiet. Now the new administration is settled in. If this committee were funded today, it would also have to spend weeks hiring an initial staff member, reviewing proposals, analyzing strategy, etc. so that these funds are allocated the most effective way by Fall 2021. So the sooner that process could start, the more likely the industry can get ahead of some issues.
All committee members are strongly aligned with the interests of the Defi industry. Regardless of strategic preferences and tactics, we are all on the same team and striving for a fairer, more accessible, safer future of finance. While the committee does not claim to represent the industry as a whole, the committee does include three head lawyers from some of the world's leading Defi projects who think about and work to advance these issues every day with considerable real responsibility.
So to summarize:
All that said, I agree with many of the suggestions.
I hope people find my views as useful as I have others' and I look forward to continued discussion.
Some clarification:
If you believe a person associated with a proposal is dishonest, lacks the claimed expertise, or has a conflict of interest - there would be a valid case to argue against the proposal on that ground. But you should have some very credible evidence to back the argument up.
Example: Individual X is not to be trusted because they were previously involved in a scam token.
Some clarification:
If you believe a person associated with a proposal is dishonest, lacks the claimed expertise, or has a conflict of interest - there would be a valid case to argue against the proposal on that ground. But you should have some very credible evidence to back the argument up.
Example: Individual X is not to be trusted because they were previously involved in a scam token.
What is not valid is attacking an individual's character for an unrelated and (typically) emotionally-charged social issue.
Example: Individual X is not to be trusted because they previously voted in favor of a given abortion, climate change, immigration issue, etc.
I want everyone putting in a good faith effort to have a voice and be heard, so most moderation will be me directly messaging you if I feel it will be helpful. I will (very rarely) delete posts that are clearly not in good faith.
how do we know these lawyers are not byzantine actors? or have other interests involved? when creating a system, its important to get it right. this "board" will have almost all the power to make decisions. what if they suck at these decisions? being a lawyer and creating policy are two separate beasts.
TBH it kinda feels like Hayden has been threatened in some form and he is pushing this.
how do we know these lawyers are not byzantine actors? or have other interests involved? when creating a system, its important to get it right. this "board" will have almost all the power to make decisions. what if they suck at these decisions? being a lawyer and creating policy are two separate beasts.
TBH it kinda feels like Hayden has been threatened in some form and he is pushing this.
@haydenadams - I understand you may be in a difficult position, why cant we "start small" w/ $1 million USD (which is not small by any means - no law firm on the planet requires a $1mm retainer to start)?
What part of @rleshner comments are not proper?
It seems like this is an attempt to re-invent the wheel to personally defend uniswap which I am actually totally fine with but should have direct contact w/ Coin Center first as they have the most experience w/ this. Do any of these lawyers have significant experience w/ effectively implementing crypto policy?
I’m Jake Chervinsky, General Counsel of Compound Labs and one of the proposed committee members for this organization. I strongly support the proposal and I’d like to explain why in as much detail as possible here, as well as address some of the community’s concerns. I’ll start with a summary of my main points and then expand on each; if you have any questions or want me to dig deeper on anything, please ask.
Summary
I’m Jake Chervinsky, General Counsel of Compound Labs and one of the proposed committee members for this organization. I strongly support the proposal and I’d like to explain why in as much detail as possible here, as well as address some of the community’s concerns. I’ll start with a summary of my main points and then expand on each; if you have any questions or want me to dig deeper on anything, please ask.
Summary
The success of DeFi in general, and Uniswap in particular, depends on how effectively we engage with regulators and policymakers over the next 6 to 18 months. If we fail to act quickly and forcefully, the consequences could be severe.
The proposed committee is well-qualified to manage this program, both in terms of skill and experience with DeFi policy and government affairs, and in terms of commitment to the principles of decentralized governance.
Funding for engagement with regulators and policymakers should come from DeFi protocol treasuries at the discretion of decentralized governance. Uniswap can take lead, but other protocols should join as well.
The proposed funding amount is appropriate given the scope and urgency of the task, especially considering how much money TradFi spends on government affairs, and the fact that centralized crypto companies have no incentive to lobby for DeFi.
Programs like this should always operate at the pleasure of decentralized governance, and those involved should always be accountable to the community. This means we, the committee members, must (and will) prioritize transparency.
About Me
I’m a lawyer based in Washington, D.C. with a background in regulatory compliance and government enforcement defense. I started my career with a multinational firm handling anti-money laundering and anti-corruption matters for Fortune 500 clients. After a federal judicial clerkship, I joined a boutique firm specializing in cross-border dispute resolution and white collar criminal defense. I fell down the crypto rabbit hole in 2017 and represented a number of clients in crypto-related matters involving the SEC, CFTC, and DOJ before joining the industry full-time.
I joined Compound as General Counsel in May 2019 after realizing how DeFi can reshape the global financial system for the better. Since then, I’ve focused all my energy on the legal, regulatory, and policy issues surrounding DeFi. I serve as Chair of the Blockchain Association’s DeFi Working Group and as a Strategic Advisor to Variant Fund. I'm a member of the Uniswap community and I’m personally, deeply committed to the success of DeFi as a whole. Achieving the mission of this program is exactly why I'm here in the first place.
DeFi Regulatory and Political Landscape
In my view, regulatory risk is the single greatest threat to DeFi today. Before this year, DeFi received fairly little attention from the government due to its small size; the industry’s perception was that DeFi was “flying under the radar.” But with success comes scrutiny. After the rise of yield farming, the DeFi bull market, and Uniswap’s appearance in mainstream media, those quiet days are over. Regulators and policymakers worldwide are now watching closely. Although some of them understand the benefits that DeFi offers, many others are skeptical about a decentralized financial system that lacks the intermediaries they regulate.
Initial reactions from some regulators have been discouraging. In the AML/CFT arena, policy changes are now being considered that could significantly harm DeFi. For example, the FATF’s March 2021 draft guidance suggested that governance token holders could qualify as regulated VASPs, or that crypto exchanges could be prohibited from allowing withdrawals to non-custodial wallets. Policymakers are also concerned about the risks posed by stablecoins — a critical piece of the DeFi ecosystem — to monetary sovereignty and financial stability. As time goes on, we can expect to hear more questions and concerns about numerous other subjects as well, including the US federal securities, commodities, and tax laws, to name a few.
It’s crucial that we take the concerns of regulators and policymakers seriously. Like it or not, they have an unparalleled ability to hamstring the growth of DeFi, and if we fail to engage, the most likely outcome is a draconian “regulate first, ask questions later” approach which could set DeFi back by years, if not permanently. Luckily, we still have time. Most regulators and policymakers haven’t made up their minds yet, and in the US, some high-ranking positions are still waiting to be filled. But we can’t wait; now is our best chance to have a meaningful impact on DeFi policy before these decisions are made for us without our input. Time is of the essence.
Proposed Committee and Program Strategy
My fellow proposed committee members are among the smartest, most experienced, and most effective advocates for good DeFi policy in the world. I’ve had the pleasure of working personally with nearly all of them and I have no doubt that they’re the right people to lead this effort. From the feedback I’ve seen, the community seems to agree, so I’ll leave this here.
But what exactly will we do with the funds? Although the decision won’t be up to me alone, and my fellow committee members may have other (better) ideas, here’s generally how I think about our strategy and use of funds:
Education. The vast majority of regulators and policymakers don’t yet understand the technical and practical details that distinguish DeFi from TradFi. Without that knowledge, their initial reaction may be to impose the same regulatory obligations on DeFi protocols as they do on centralized financial institutions. In other words, they may mistakenly assume that Uniswap is an “exchange” like any other, implicating all the same risks and requiring all the same regulatory safeguards as Coinbase, et al. That’s wrong. To avoid such an outcome, we need to educate regulators and policymakers on how DeFi works and why its unique properties negate the need for many traditional regulations.
Advocacy. We can’t just educate government officials about the greatness of DeFi and then hope they leave us alone. Instead, we need to advocate strongly in favor of policies that support adoption of DeFi protocols and against policies that restrict access to DeFi or create a regulatory moat around entrenched incumbents. Good advocacy is both reactive and proactive; we need to address regulatory developments as they arise and advance our own policy proposals. Good advocacy is also both government-facing and public-facing; we need to engage with regulators and policymakers while also building consensus within the industry and grassroots support from the community.
Defense. We need to be prepared to take swift action in case of hostile guidance, rulemaking, legislation, executive orders, enforcement actions, or otherwise. It’s hard to predict in advance what form our defensive efforts might take, and hopefully the need won’t materialize at all. Yet, there’s plenty we can and should do now to prepare for the worst. For example, we could commission legal research on defense theories or constitutional protections that may apply to DeFi. Equally important, it’s a huge benefit to have resources set aside and available to allocate quickly in an emergency.
I anticipate the bulk of this work will involve retaining specialists such as researchers, lawyers, lobbyists, organizers, designers, and consultants, as well as making contributions to other aligned organizations and hiring full-time staff for the 501(c)(4). I understand that hiring lawyers and lobbyists may seem distasteful — in a sense, it goes against the ethos of DeFi, which emphasizes opting out of the legacy power structures that brought us to this point in the first place — but as @Marvin put it, this is “what it takes to win.” I prefer to win.
Funding from Uniswap and Other Protocols
Given the importance of engaging on DeFi policy, I believe this program is a valuable use of Uniswap’s resources and a paramount example of how DeFi communities can achieve off-chain goals without sacrificing the decentralization at their core. Uniswap is especially well-positioned to lead this initiative. The issues and strategy that I outlined above are particularly important for Uniswap as a decentralized exchange protocol that allows users to trade an enormous range of Ethereum-based assets, an activity that’s heavily regulated in the traditional centralized context. Uniswap also has the capacity to fund the program thanks to its substantial treasury.
That said, I appreciate the feedback from some community members that Uniswap shouldn’t be asked to fund the entire program on its own, or all in one shot (more on that below). There’s no question that, to be effective, we will need to engage with regulators and policymakers on behalf of the entire DeFi sector, not just Uniswap. For that reason, although I do believe Uniswap is the right “founding protocol” for this program, my hope is that other DeFi communities will see fit to join the effort and allocate additional funds from their treasuries to the 501(c)(4).
Initial and Total Funding Amounts
As far as I can tell, the point of greatest contention within the community is how much funding the program should receive. In my opinion, the size of the request in this Consensus Check is ultimately appropriate given the magnitude of the task at hand. As @sukernik explained, we aren’t proposing to form a startup that can wait to launch a minimum viable product before seeking additional funding. We’re proposing to form a nonprofit that can meaningfully impact policy on the global stage within the next 6 months.
This mission is an expensive one. There are thousands (literally, thousands) of regulators and policymakers worth engaging around the world today. There’s virtually no amount of money that we couldn’t put to good use immediately. Other industries that have above-average success with government affairs — including TradFi itself — spend hundreds of millions of dollars each year to influence policy in the United States alone. Make no mistake, we are the underdogs. In my view, if protocol treasuries can help us level the playing field, we’re obligated to use them.
It's particularly important for protocol treasuries to fund DeFi-specific policy efforts because nobody else will. As of now, centralized crypto companies have a tense relationship with DeFi. While they appreciate the role that DeFi tokens played in catalyzing the bull market, they also see DeFi protocols as competitors. These companies aren’t incentivized to, and indeed do not, dedicate resources toward DeFi policy. Coin Center and the Blockchain Association are both fantastic organizations, but neither focuses exclusively on DeFi as the 501(c)(4) would. If this is to be the only DeFi-specific policy organization in the world, we should fund it properly.
However, I also appreciate that 1M UNI is a significant sum, even if only a small fraction of the total treasury, and that some community members aren’t convinced that the full amount should be allocated in a single vote. With that in mind, I wouldn’t object to a smaller initial grant to get the program up and running, with the expectation that we will request additional funds from Uniswap and other protocols when appropriate. Although it may be difficult to measure our progress objectively over short time periods, I trust that the community can understand and evaluate our work in light of that caveat.
Transparency and Accountability
Transparency and accountability are essential to the success of this program and others like it. For many reasons, decentralized governance simply doesn’t work if the governors don’t have equal access to information about the protocol, including how its funds are being used. My goal as a proposed committee member is to provide as much public transparency as possible, to hold myself accountable to the community in the performance of my role, and to hold my fellow committee members to the same high standards.
@Marvin has already outlined the steps we’ll take regarding community updates, budgeting, and more. Personally, I’ll endeavor to make myself available to answer questions and attend community calls as much as possible.
Conclusion
We're at a challenging time in DeFi's history. Since last summer, we've proved the concept that financial activities more complex than transferring and storing value can be decentralized. As a reward, we're now a subject of attention for regulators and policymakers worldwide. I strongly support this proposal because I believe it will help us advance good DeFi policy, a goal that is essential to Uniswap's long-term success and well worth the cost.
I have an idea.
"Political defense" is a wrong category and it should never be about defending. We're not fighting here. I think protocols should be inclusive of everyone and decisions should be done in a collaborative manner.
I have an idea.
"Political defense" is a wrong category and it should never be about defending. We're not fighting here. I think protocols should be inclusive of everyone and decisions should be done in a collaborative manner.
I propose making it a "Political discussion" and e.g. invite the members of the SEC to become the representatives of USA and participate in governance of Uniswap. Participate in the rightful governance process of Uniswap, that we have here in this very forum.
Why representatives of offchain governments are not posting their opinions here? They should.
We appreciate the hard work of @hlsbfi in bringing this proposal forward. We think it’s a good start, and wanted to offer some feedback that we think might enhance the idea further.
1. Crypto Native Approach. We agree with the policy objectives of the proposal. However we would encourage the community to consider other, more novel ways of achieving them. Rather than recreating the existing policy infrastructure (or indirectly funding it using the UNI treasury), we think this initiative has the potential to create something unique. In particular, something that is lacking from the current landscape and is uniquely enabled by the underlying technology. In other words, a more crypto native approach.
We appreciate the hard work of @hlsbfi in bringing this proposal forward. We think it’s a good start, and wanted to offer some feedback that we think might enhance the idea further.
1. Crypto Native Approach. We agree with the policy objectives of the proposal. However we would encourage the community to consider other, more novel ways of achieving them. Rather than recreating the existing policy infrastructure (or indirectly funding it using the UNI treasury), we think this initiative has the potential to create something unique. In particular, something that is lacking from the current landscape and is uniquely enabled by the underlying technology. In other words, a more crypto native approach.
What would that look like? For starters, it would formally be instantiated as an onchain DAO, which at a minimum would provide better transparency, tooling, and interoperability with the rest of the DeFi ecosystem. But more important than its technical form, the project would also take on the more collaborative and community-focused ethos that characterizes DAOs and DeFi governance today. It would seek participation from community representatives of every major DeFi protocol. And it would build consensus from these representatives on key matters. We think this type of architecture would lend greater legitimacy to the organization’s decision making and allow it to more credibly speak on behalf of the broader DeFi community.
This “Policy DAO” could still elect leadership and engage in all of the same functions described in the proposal (just in a more transparent way). But it could also do things that existing industry groups (who lack this sort of community-level buy-in) frankly cannot do. For example, you could imagine it doing something like creating and publishing a set of best practices for new projects to follow. This could include things like security practices, code audits, financial reporting, disclosures, user safeguards, and so on. Many of these things are already done by the leading decentralized communities today (see the quarterly reports published by the Yearn and Maker communities as a great example). This would just be a way to formalize those practices a bit further and publish them for everyone to benefit from.
But critically, rather than being dictated by a small few, these practices would be sourced from the participant developer communities, deliberated up through the governance process, and published on an open-source forum like Github for everyone to read. An initiative like this would go a long way towards demonstrating to policymakers a good-faith effort at industry self-governance. It could also meaningfully level-up the development and governance practices of new projects and communities entering the space.
Point being, this is merely an example of something enabled by this type of cryptonative model - there are undoubtedly others. We think the proposal should lean into these aspects, rather than shy away from them. Doing so will allow it to add something both valuable and new to the policy landscape.We’re happy to help the community brainstorm ideas and build an architecture that embodies these principles.
2. Take an Inclusive Approach. Building on the prior point, the strongest form of this initiative would be one that has buy-in from all of the protocol communities that it purports to represent. This doesn’t mean the full list needs to be defined up front, but there could be ways to condition/stagger the disbursal of funds on obtaining some minimum degree of buy-in across the industry. We suspect there would be broad interest from other communities throughout DeFi. Assuming that’s right, this should be brought forward as a coordinated effort across a number of communities to start, and not a unilateral one. We’re happy to help drive those efforts.
3. Brighten the Message. Finally, the initiative should take on a much more positive message! The current proposal feels negative and defensive. For example, referring to it as the “DeFi Defense Fund” or a “political defense organization” is likely to engender hostility with policymakers and undermine those engagement efforts. We would also recommend striking all the references to “political lobbying” and things of that nature. The focus from the get go should be on the positive aspects of DeFi and the ways it’s an improvement over the legacy financial system. This is ultimately a messaging point, but it will go a long way towards determining how the group is perceived. We can also help brainstorm ideas here as well.
We look forward to working with the community on these points.
Jeff Amico a16z
For further important information, please see [https://a16z.com/disclosures/].
@rleshner @haydenadams I am posting here a modified version of what I posted in the Temperature Check group because I believe it is critical for us to advocate for DeFi -- but the proposal has some enormous drawbacks.
Here are the key ones:
1. The budget is 10x more than any other crypto player has needed to deal with similar threats. Where will all this money go?
@rleshner @haydenadams I am posting here a modified version of what I posted in the Temperature Check group because I believe it is critical for us to advocate for DeFi -- but the proposal has some enormous drawbacks.
Here are the key ones:
1. The budget is 10x more than any other crypto player has needed to deal with similar threats. Where will all this money go?
2. The proposal lacks a clear goal, measurable interim objectives and clear criteria for success.. When coupled with a budget that is 10x what other companies have found necessary, where do we actually believe the money will go?
3. The board is not composed of the sort of people we can expect to best advocate for us. It needs to be expanded to include more gray suits and fewer Twitter KOLs.. The problem here is credibility with the government, and the unfortunate aversion to PR and conflicts of interest we will likely encounter when we engage the government.
My Background
Before unpacking what I wrote, I wanted to share a little bit of my background without outing myself.
In short, I have helped several overseas crypto, fintech and tradfi businesses navigate the halls of DC. In most cases, the situation was far more dire than what Uniswap faces. For example, a company may have been facing enforcement for sanctions violations or money laundering issues.
In each of these cases, the company resolved the matters and began a regulatory engagement effort.
The Big Picture
Taking affirmative action like HLSBFI proposes is critically important so that Uniswap and other members of the DeFi industry can avoid the sorts of issues I've seen companies face, and instead build a base of advocates with shared interests. This takes time - and, yes, it takes money, too.
Thinking carefully about how to do this is important - and it does require big brains and big connections.
Unfortunately there are at least 3 key issues with the proposal in its current form. They make me a hard no, and I believe they ought to make you a hard no, too.
1. Budget Size is 10x too large.
I believe the budget size is about 10x too large because I’ve personally interviewed and hired lobbyists and law firms in DC to attack similar issues with a budget of less than $500k.
This was easily achievable because almost every lobbying shop or law firm will offer a package deal for under $100k per year. These “low” rates are possible because the lawyers and lobbyists are already doing most of the work for other clients. In fact, most large Wall Street and DC shops will offer package deals as low as $25k per year.
To right size, I believe Coin Center's entire operating budget was historically about $1m per year. It’s lobbying budget was smaller.
So, what would be done with $5-10m per year?
Which brings me to the next issue...
2. Lack of Concrete Goals, Measurable Milestones and Definition of Success
When budgeting money for a project, it usually makes sense to set clear overarching goals, create measurable objectives and to define criteria for success. That is especially important when the budget is so large ($30m is more than it took build Uniswap, plus Sushiswap, plus Compound ... ) To use an example framework (OKRs):
Objective: Advance awareness of DeFi in DC and begin to identify shared interests
Key Result 1: Drive awareness of Defi by scheduling meetings with the offices of 10 senators and 15 congressman. Budget: 0
Key Result 2: Identify shared interested between the industry and the offices of 10 politicians who appear open to collaboration during initial reachouts. Budget: $5k
Key Result 3: Identify 5 most promising targets from follow-ups to seek further collaboration. Begin discussing ways to work together on shared interests. Budget: $5k
Key Result 4: Engage K Street shop to help guide dialogues with targets. Budget: $10k
Definition of Success: All key results completed and group has decided on draft engagement proposals for the next quarter
Unfortunately, the proposal provides none of this colour right now, so it effectively implies that the money can go anywhere.
In addition, this lack of discipline is what allows the request to be so large! What would the budget look like if we started at zero - and built up each key goal line by line?
3. Board Composition
The board's composition is self-defeating because it mostly comprises Crypto Twitter KOLs. Although I imagine they are well intentioned, they just don't give the right optics to most regulators.
To see this, just imagine that you are a regulator who is charged with enforcing a US sanctions program or runs a group in homeland security. How would you perceive
while you, the hardworking regulator, are given an impossible mandate, a tiny budget, and are afraid to even accept a free lunch?
The standard way to solve this is to stack your organization with revolving door operators who understand how the beast works, and have reputational skin in the game and maintain a relatively low, and conflict-free profile.
For us, I'd recommend adjusting the composition of the board to include at most 2 Crypto Twitter lawyers and otherwise grey suits. This will dramatically increase our credibility.
I believe it is important that everyone recognizes the significance of this proposal.
If you’re here in this forum, you most likely agree with the following:
I believe it is important that everyone recognizes the significance of this proposal.
If you’re here in this forum, you most likely agree with the following:
Despite recent success (technological breakthroughs, financial gain, and social adoption), both of the concepts mentioned above face an existential threat in the form of bad regulation driven by misinformed or corrupted governments.
As DeFi DAO participants, UNI holders are being called on to spend a large amount of UNI from its treasury to mount a defense against this threat. Indeed, the significance of that in itself should not be ignored: I don’t think it is melodramatic to suggest that, should this proposal pass, this is an event that could one day be marked down as a pivotal event in the history of DAOs.
I agree with @Leighton that this is the type of “big idea” that this community should be willing to pay for and I join him and others in support of this proposal. Personally, I believe some of the concerns that others have expressed and that I mentioned in my post in the Temperature Check discussion (I made a new account as to make it clear that I’m speaking on my personal behalf and it won't let me link...) have been adequately addressed:
I encourage others to vote to allocate the requested funds so that we can rise to the occasion and dedicate the resources needed to defend the very idea of DeFi and DAOs.
It would be hard be to draft a better committee than the one proposed here. I hope they take some of these objections made by others, such as @JCP and Robert Leshner, to heart and try to implement solutions to assuage the underlying concerns in both the final crafting of this proposal and the administration of the organization that comes out of it.
With regard to administration of the organization, I encourage the Committee to strive to experiment with cryptonative tools and traditions as much as possible; if only for the reason that an organization advocating for crypto should want to showcase its potential. Some ideas:
I’m excited by this proposal and hope that the DeFi Defense Fund is able to both rise to the challenge we face and live up to its potential as a bridge between policymakers and the DeFi community. Thank you to all those who have engaged constructively in the debate here, it’s been fun to watch unfold.
As I've stated previously, this proposal is a direction that I hope Uniswap (and more DeFi protocols) grow into.
While the intentions of the proposal and all parties involved is positive, I am against this consensus check, for the following reasons:
As I've stated previously, this proposal is a direction that I hope Uniswap (and more DeFi protocols) grow into.
While the intentions of the proposal and all parties involved is positive, I am against this consensus check, for the following reasons:
I strongly believe that a smaller proposal ($1-2m?) should establish the political defense organization, build a team, pilot its activities, and demonstrate success, before requesting additional resources.
Some commenters have rightly asked whether the situation is as urgent as the proposal describes. I think it is, and here are just a few recent developments over the last few months that have brought /will bring additional scrutiny to crypto generally and defi specifically. We are up against a lot:
FATF Draft Updated Guidance dramatically expands the definition of a "virtual asset service provider" specifically to attempt to regulate defi"
Brainerd's comments on "digital private money" and CBDC
Treasury/FinCEN's midnight rulemaking that would have required custodial crypto businesses to KYC unhosted wallets
Colonial pipeline hack fallout: congressional scrutiny (one congressman floated "declaring" crypto unconstitutional) and WSJ op ed / bloomberg op ed call for ban on crypto currencies (latest ransomeware attack yesterday will bring additional scrunity)
Financial times articles: Uni mention: "German and US regulators tighten focus on booming crypto" // "The rise of crypto laundries: how criminals cash out of bitcoin"
The WSJ this morning: "DeFi Is Helping to Fuel the Crypto Market Boom—and Its Recent Volatility: Decentralized finance differs from traditional banks because there is no centralized system. It can be risky."
Love to see the honest discussion here, but keep in mind that ad hominems regarding morality will be moderated. Keep the discussion on the proposal and the idea, not on the character of the individuals involved. If you have concerns regarding an individual's good faith, voice it, but take care to keep it scoped to matters pertaining explicitly to Uniswap governance.
As noted in the post, this would go to a multisig of the proposed committee members which includes the CG at Compound Labs, GC at Aave Companies, GC at dydx Trading, and CLO at Uniswap Labs.
agreed. Uniswap taking the reigns, leading this charge makes total sense.. but the inclusion of other communities is something that will have to be addressed. otherwise it’s strictly a uniswap effort which probably starts looking a lot like lobbying for Uniswap.
but if the intended benefits (and affects) of this will reach us all, wouldn’t including other governing boards in the process probably make a lot of sense?
We appreciate the hard work of @hlsbfi in bringing this proposal forward. We think it’s a good start, and wanted to offer some feedback that we think might enhance the idea further.
1. Crypto Native Approach. We agree with the policy objectives of the proposal. However we would encourage the community to consider other, more novel ways of achieving them. Rather than recreating the existing policy infrastructure (or indirectly funding it using the UNI treasury), we think this initiative has the potential to create something unique. In particular, something that is lacking from the current landscape and is uniquely enabled by the underlying technology. In other words, a more crypto native approach.
We appreciate the hard work of @hlsbfi in bringing this proposal forward. We think it’s a good start, and wanted to offer some feedback that we think might enhance the idea further.
1. Crypto Native Approach. We agree with the policy objectives of the proposal. However we would encourage the community to consider other, more novel ways of achieving them. Rather than recreating the existing policy infrastructure (or indirectly funding it using the UNI treasury), we think this initiative has the potential to create something unique. In particular, something that is lacking from the current landscape and is uniquely enabled by the underlying technology. In other words, a more crypto native approach.
What would that look like? For starters, it would formally be instantiated as an onchain DAO, which at a minimum would provide better transparency, tooling, and interoperability with the rest of the DeFi ecosystem. But more important than its technical form, the project would also take on the more collaborative and community-focused ethos that characterizes DAOs and DeFi governance today. It would seek participation from community representatives of every major DeFi protocol. And it would build consensus from these representatives on key matters. We think this type of architecture would lend greater legitimacy to the organization’s decision making and allow it to more credibly speak on behalf of the broader DeFi community.
This “Policy DAO” could still elect leadership and engage in all of the same functions described in the proposal (just in a more transparent way). But it could also do things that existing industry groups (who lack this sort of community-level buy-in) frankly cannot do. For example, you could imagine it doing something like creating and publishing a set of best practices for new projects to follow. This could include things like security practices, code audits, financial reporting, disclosures, user safeguards, and so on. Many of these things are already done by the leading decentralized communities today (see the quarterly reports published by the Yearn and Maker communities as a great example). This would just be a way to formalize those practices a bit further and publish them for everyone to benefit from.
But critically, rather than being dictated by a small few, these practices would be sourced from the participant developer communities, deliberated up through the governance process, and published on an open-source forum like Github for everyone to read. An initiative like this would go a long way towards demonstrating to policymakers a good-faith effort at industry self-governance. It could also meaningfully level-up the development and governance practices of new projects and communities entering the space.
Point being, this is merely an example of something enabled by this type of cryptonative model - there are undoubtedly others. We think the proposal should lean into these aspects, rather than shy away from them. Doing so will allow it to add something both valuable and new to the policy landscape.We’re happy to help the community brainstorm ideas and build an architecture that embodies these principles.
2. Take an Inclusive Approach. Building on the prior point, the strongest form of this initiative would be one that has buy-in from all of the protocol communities that it purports to represent. This doesn’t mean the full list needs to be defined up front, but there could be ways to condition/stagger the disbursal of funds on obtaining some minimum degree of buy-in across the industry. We suspect there would be broad interest from other communities throughout DeFi. Assuming that’s right, this should be brought forward as a coordinated effort across a number of communities to start, and not a unilateral one. We’re happy to help drive those efforts.
3. Brighten the Message. Finally, the initiative should take on a much more positive message! The current proposal feels negative and defensive. For example, referring to it as the “DeFi Defense Fund” or a “political defense organization” is likely to engender hostility with policymakers and undermine those engagement efforts. We would also recommend striking all the references to “political lobbying” and things of that nature. The focus from the get go should be on the positive aspects of DeFi and the ways it’s an improvement over the legacy financial system. This is ultimately a messaging point, but it will go a long way towards determining how the group is perceived. We can also help brainstorm ideas here as well.
We look forward to working with the community on these points.
Jeff Amico a16z
For further important information, please see [https://a16z.com/disclosures/].
@rleshner @haydenadams I am posting here a modified version of what I posted in the Temperature Check group because I believe it is critical for us to advocate for DeFi -- but the proposal has some enormous drawbacks.
Here are the key ones:
1. The budget is 10x more than any other crypto player has needed to deal with similar threats. Where will all this money go?
@rleshner @haydenadams I am posting here a modified version of what I posted in the Temperature Check group because I believe it is critical for us to advocate for DeFi -- but the proposal has some enormous drawbacks.
Here are the key ones:
1. The budget is 10x more than any other crypto player has needed to deal with similar threats. Where will all this money go?
2. The proposal lacks a clear goal, measurable interim objectives and clear criteria for success.. When coupled with a budget that is 10x what other companies have found necessary, where do we actually believe the money will go?
3. The board is not composed of the sort of people we can expect to best advocate for us. It needs to be expanded to include more gray suits and fewer Twitter KOLs.. The problem here is credibility with the government, and the unfortunate aversion to PR and conflicts of interest we will likely encounter when we engage the government.
My Background
Before unpacking what I wrote, I wanted to share a little bit of my background without outing myself.
In short, I have helped several overseas crypto, fintech and tradfi businesses navigate the halls of DC. In most cases, the situation was far more dire than what Uniswap faces. For example, a company may have been facing enforcement for sanctions violations or money laundering issues.
In each of these cases, the company resolved the matters and began a regulatory engagement effort.
The Big Picture
Taking affirmative action like HLSBFI proposes is critically important so that Uniswap and other members of the DeFi industry can avoid the sorts of issues I've seen companies face, and instead build a base of advocates with shared interests. This takes time - and, yes, it takes money, too.
Thinking carefully about how to do this is important - and it does require big brains and big connections.
Unfortunately there are at least 3 key issues with the proposal in its current form. They make me a hard no, and I believe they ought to make you a hard no, too.
1. Budget Size is 10x too large.
I believe the budget size is about 10x too large because I’ve personally interviewed and hired lobbyists and law firms in DC to attack similar issues with a budget of less than $500k.
This was easily achievable because almost every lobbying shop or law firm will offer a package deal for under $100k per year. These “low” rates are possible because the lawyers and lobbyists are already doing most of the work for other clients. In fact, most large Wall Street and DC shops will offer package deals as low as $25k per year.
To right size, I believe Coin Center's entire operating budget was historically about $1m per year. It’s lobbying budget was smaller.
So, what would be done with $5-10m per year?
Which brings me to the next issue...
2. Lack of Concrete Goals, Measurable Milestones and Definition of Success
When budgeting money for a project, it usually makes sense to set clear overarching goals, create measurable objectives and to define criteria for success. That is especially important when the budget is so large ($30m is more than it took build Uniswap, plus Sushiswap, plus Compound ... ) To use an example framework (OKRs):
Objective: Advance awareness of DeFi in DC and begin to identify shared interests
Key Result 1: Drive awareness of Defi by scheduling meetings with the offices of 10 senators and 15 congressman. Budget: 0
Key Result 2: Identify shared interested between the industry and the offices of 10 politicians who appear open to collaboration during initial reachouts. Budget: $5k
Key Result 3: Identify 5 most promising targets from follow-ups to seek further collaboration. Begin discussing ways to work together on shared interests. Budget: $5k
Key Result 4: Engage K Street shop to help guide dialogues with targets. Budget: $10k
Definition of Success: All key results completed and group has decided on draft engagement proposals for the next quarter
Unfortunately, the proposal provides none of this colour right now, so it effectively implies that the money can go anywhere.
In addition, this lack of discipline is what allows the request to be so large! What would the budget look like if we started at zero - and built up each key goal line by line?
3. Board Composition
The board's composition is self-defeating because it mostly comprises Crypto Twitter KOLs. Although I imagine they are well intentioned, they just don't give the right optics to most regulators.
To see this, just imagine that you are a regulator who is charged with enforcing a US sanctions program or runs a group in homeland security. How would you perceive
while you, the hardworking regulator, are given an impossible mandate, a tiny budget, and are afraid to even accept a free lunch?
The standard way to solve this is to stack your organization with revolving door operators who understand how the beast works, and have reputational skin in the game and maintain a relatively low, and conflict-free profile.
For us, I'd recommend adjusting the composition of the board to include at most 2 Crypto Twitter lawyers and otherwise grey suits. This will dramatically increase our credibility.
I believe it is important that everyone recognizes the significance of this proposal.
If you’re here in this forum, you most likely agree with the following:
I believe it is important that everyone recognizes the significance of this proposal.
If you’re here in this forum, you most likely agree with the following:
Despite recent success (technological breakthroughs, financial gain, and social adoption), both of the concepts mentioned above face an existential threat in the form of bad regulation driven by misinformed or corrupted governments.
As DeFi DAO participants, UNI holders are being called on to spend a large amount of UNI from its treasury to mount a defense against this threat. Indeed, the significance of that in itself should not be ignored: I don’t think it is melodramatic to suggest that, should this proposal pass, this is an event that could one day be marked down as a pivotal event in the history of DAOs.
I agree with @Leighton that this is the type of “big idea” that this community should be willing to pay for and I join him and others in support of this proposal. Personally, I believe some of the concerns that others have expressed and that I mentioned in my post in the Temperature Check discussion (I made a new account as to make it clear that I’m speaking on my personal behalf and it won't let me link...) have been adequately addressed:
I encourage others to vote to allocate the requested funds so that we can rise to the occasion and dedicate the resources needed to defend the very idea of DeFi and DAOs.
It would be hard be to draft a better committee than the one proposed here. I hope they take some of these objections made by others, such as @JCP and Robert Leshner, to heart and try to implement solutions to assuage the underlying concerns in both the final crafting of this proposal and the administration of the organization that comes out of it.
With regard to administration of the organization, I encourage the Committee to strive to experiment with cryptonative tools and traditions as much as possible; if only for the reason that an organization advocating for crypto should want to showcase its potential. Some ideas:
I’m excited by this proposal and hope that the DeFi Defense Fund is able to both rise to the challenge we face and live up to its potential as a bridge between policymakers and the DeFi community. Thank you to all those who have engaged constructively in the debate here, it’s been fun to watch unfold.
As I've stated previously, this proposal is a direction that I hope Uniswap (and more DeFi protocols) grow into.
While the intentions of the proposal and all parties involved is positive, I am against this consensus check, for the following reasons:
As I've stated previously, this proposal is a direction that I hope Uniswap (and more DeFi protocols) grow into.
While the intentions of the proposal and all parties involved is positive, I am against this consensus check, for the following reasons:
I strongly believe that a smaller proposal ($1-2m?) should establish the political defense organization, build a team, pilot its activities, and demonstrate success, before requesting additional resources.
Some commenters have rightly asked whether the situation is as urgent as the proposal describes. I think it is, and here are just a few recent developments over the last few months that have brought /will bring additional scrutiny to crypto generally and defi specifically. We are up against a lot:
FATF Draft Updated Guidance dramatically expands the definition of a "virtual asset service provider" specifically to attempt to regulate defi"
Brainerd's comments on "digital private money" and CBDC
Treasury/FinCEN's midnight rulemaking that would have required custodial crypto businesses to KYC unhosted wallets
Colonial pipeline hack fallout: congressional scrutiny (one congressman floated "declaring" crypto unconstitutional) and WSJ op ed / bloomberg op ed call for ban on crypto currencies (latest ransomeware attack yesterday will bring additional scrunity)
Financial times articles: Uni mention: "German and US regulators tighten focus on booming crypto" // "The rise of crypto laundries: how criminals cash out of bitcoin"
The WSJ this morning: "DeFi Is Helping to Fuel the Crypto Market Boom—and Its Recent Volatility: Decentralized finance differs from traditional banks because there is no centralized system. It can be risky."
Love to see the honest discussion here, but keep in mind that ad hominems regarding morality will be moderated. Keep the discussion on the proposal and the idea, not on the character of the individuals involved. If you have concerns regarding an individual's good faith, voice it, but take care to keep it scoped to matters pertaining explicitly to Uniswap governance.
As noted in the post, this would go to a multisig of the proposed committee members which includes the CG at Compound Labs, GC at Aave Companies, GC at dydx Trading, and CLO at Uniswap Labs.
agreed. Uniswap taking the reigns, leading this charge makes total sense.. but the inclusion of other communities is something that will have to be addressed. otherwise it’s strictly a uniswap effort which probably starts looking a lot like lobbying for Uniswap.
but if the intended benefits (and affects) of this will reach us all, wouldn’t including other governing boards in the process probably make a lot of sense?
As noted in the post, this would go to a multisig of the proposed committee members which includes the CG at Compound Labs, GC at Aave Companies, GC at dydx Trading, and CLO at Uniswap Labs.
This doesn't look very decentralised to me. Who the hell is dydx? They only just launched and why do they get a seat at the table, is it because of their big VC backers? It's all looking very centralised.
I'm not sure what you mean about having other governing boards in the process? Other protocols should have a similar proposal put to a vote. We could work together and Have a collective voice with all major protocols working on the same effort and that would be more impactful than a single voice. Also, could you imaging if UNI "takes the lead" and allocates funds and then similar proposals are brought to other protocols only to be shot down. There could be some considerable backlash and resentment between UNI and other protocols. Other protocols would essentially be freeloading. As mentioned above, UNI could "take the lead" in a vote and no money allocated until other protocols do the same with a vote.
These are really strong points. Thanks for bringing them up @jcp. I can't speak for the other committee members, but here's how I think about these points.
Budget // Reassessment and Evaluation I completely agree with your take about startup funding needing to be milestone-based. The proposal, however, isn't to form a startup. Rather, it's to form a non-profit entity that engages in funding research, individuals, and entities that assist in protecting defi from regulatory uncertainty. In short, I don't think traditional startup wisdom directly applies here.
These are really strong points. Thanks for bringing them up @jcp. I can't speak for the other committee members, but here's how I think about these points.
Budget // Reassessment and Evaluation I completely agree with your take about startup funding needing to be milestone-based. The proposal, however, isn't to form a startup. Rather, it's to form a non-profit entity that engages in funding research, individuals, and entities that assist in protecting defi from regulatory uncertainty. In short, I don't think traditional startup wisdom directly applies here.
I don't have a sense for what the "right" amount of funding for this organization is, but I suspect it will be an amount far larger than what we think it should be. It's possible I'm overestimating the cost, but on this front, I believe it's better to be safe than sorry — if the difference between success and failure is funding, then we should go with the conservative number: 1M UNI.
Team Structure and Payment // Team Buy-In I mostly agree here — people tend to do better work when they're motivated, and fair, performance-based compensation is a good motivator for most people. That said, I don't think this group is "most people."
We're all intrinsically motivated to make defi work in a compliant and regulatory-friendly way, and many of us share a mutual destiny on that front. Reverie, for example, is a company I formed with @derek to work with DAOs. But doing so hasn't been easy, mostly for legal and tax reasons. I am extremely motivated to be on this committee — even with no compensation — because it directly benefits the work Reverie and other DAO contributors do.
What I also like is every member on this committee has significant skin in the game, which in my mind, is the best membership qualifier. The inverse would be far worse: a committee of individuals who sit on the committee primarily for compensation, suffering no downside risk and capturing all of the upside!
Finally, I think having a full-time committee member is an excellent idea. My sense is we can probably form the committee without a full-time member and then recruit/find one if the organization needs to ramp beyond the capacity of the existing part-time structure.
I appreciate the reply. As for item #4 with other projects getting on board. The proposals do not need to pass all at the same time. It could be Uniswap's proposal could be passed first but no fund become available unless 3 out of 5 other protocols also pass it (something along those lines). In other words, the proposal is only implemented once other protocols pass and if they don't then Uniswap's proposal essentially dies with it. This proposal was broached on the community not long ago. It could just as quickly be brought up with the other major protocols.
Thanks for the thoughtful comments, @jcp. I'll address of few of your points and wrap into it some thoughts on other points laid out in responses above:
1. Payment and Commitment
Thanks for the thoughtful comments, @jcp. I'll address of few of your points and wrap into it some thoughts on other points laid out in responses above:
1. Payment and Commitment
Each member of the committee was asked whether he or she would like to participate as a member of the committee with an understanding of the time commitment and responsibilities. Speaking only for myself, the issues that this proposal seeks to address are issues that I deal with on a daily basis, whether in my job as General Counsel of dYdX or voluntarily because of the impact the current regulatory status has on the space. That eliminates the time commitment that it would take to understand the issues. Instead, the time commitment is one that would involve assisting with the proper formation of a 501(c)(4) in addition to properly evaluating uses of funds based on the knowledge that I have and continue to acquire on a daily basis. Thus, while the time commitment is meaningful, my job supplements it in a way that reduces the time commitment as compared to many others who could be part of the committee. The same is true for many, if not all, committee members.
Similarly, getting paid would not change my time commitment as these are issues that are important to me personally as someone who wants to see DeFi grow without the regulatory burdens that have existed and continue to get worse in addition to as General Counsel of a DeFi company who wants to see companies developing DeFi protocols able to do so without the current risks and lack of clarity that exists.
2. Budget / Proof of Work
A request for what is currently $30M is significant. It is very difficult to determine an appropriate budget at the outset but it is clear is that a smaller amount like $5M would not cut it. The scope of the regulatory/political matters that need to be addressed in DeFi is significant. Not only are we talking about risks in US securities laws, commodities laws, AML laws, the OFAC sanctions regime, banking laws, lending laws, and consumer protection laws, we are facing the same risks outside of the US. In some cases, those efforts are coordinated across the US and internationally, such as with FATF. There are other regulatory regimes where that coordination is happening as well but privately. Addressing these issues is no small task and, frankly, requires a war chest. I'm sympathetic to a potential request for a smaller amount than $40M but that will curtail potential efforts, which are multi-year efforts (more on that point below).
3. Reassessment and Evaluation
The efforts that the political defense organization would undertake will not be something that can be assessed over a short time period. Likely the shortest time period to see a real impact, that can be objectively measured, is over a 2-year time period. Certainly, there may be small wins in the meantime, but it would be difficult to measure the success of the organization over less than a 2-year period. So, the question then is whether a reassessment should exist following a period of 2 years or more. That would be a reasonable position to take. I think the proposal contemplates the fact that these types of political/regulatory efforts play out over a long period of time and in a fluid and continuous fashion. It is much harder to scope out small uses of funds for clear deliverables as is the case with the Uniswap Grants Program. Ultimately, this point is a reasonable one that I sympathize with while also understanding the purpose of a commitment that is to be used over 4-5 years.
4. Other Projects
As the proposal outlines, the hope is that other projects will participate in this effort. But, if Uniswap, the most well-funded and best-recognized project in the space, does not show a commitment to it, then it is very difficult to receive a commitment from other projects. Although I'm not sure anyone is in a position to ensure other projects will commit to this effort, I'm quite confident other projects will attempt to participate in these efforts as it is in the best interest of all of DeFi.
With other projects requiring similar proposals to be passed, it is impossible to obtain certainty at this stage that the other projects will be able to successfully pass a proposal. If we wait for them to pass proposals, then we'll have a chicken and egg situation. One project needs to be the first to commit and hopefully bring the others along, and I believe Uniswap is best positioned and likely has the greatest interest in creating an organization of this nature.
5. Motives
Several posts as part of the Temperature Check and here as part of the Consensus Check appear to question the motives of those involved in the proposal or that funds may be used in a way that does not further the objectives set forth in the proposal. First, the proposer, @HarvardLawBFI, will not be receiving any benefit or influence (and the same is true for Harvard itself) from the proposal. I do not see anything in the proposal that even hints at that possibility. Second, the proposal contemplates that a 501(c)(4) be established. To establish a 501(c)(4) a specific purpose needs to be identified and that purpose has been outlined in the proposal (though I suppose the precise language could differ in some ways without changing the gist of it). Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest. So, board members would be exposing themselves to a real risk of liability if they misuse the funds. Lastly, no single board member could take any action on behalf of the organization and I think it is fair to say that, objectively speaking, the board members are incentivized the use the funds in the way it is outlined in the post.
In sum, no proposal is perfect. The DeFi community as a whole faces significant regulatory risks, which include risks as users and token holders, that most people just aren't able to identify and, thus, do not appreciate. There currently are no major efforts to protect DeFi against regulators and incumbents' political efforts, which puts DeFi participants and projects at a huge disadvantage against those regulators and incumbents. While some believe that DeFi can survive regulatory and political attacks, I do not believe that is true for most DeFi projects at this time and, for those that can survive it, there will be a significant impact on users and those governing projects.
Defi is in part an experiment same with Bitcoin and it's working. Governments can't shut down BTC if they tried. If they could then the experiment fails. BTC lives not by the grace of governments but despite them. Similarly, Defi protocols will survive for the same reason. If it could be abrogated by government regulation then there's something wrong with the protocol and its "decentralized" nature. It won't be because we didn't lobby for more favorable regulation. However, that does not mean we want to see unfavorable regulation that makes our lives more difficult. It appears to me that you're asking for too much because we need to hire lobbyists, politicians, and attorneys to write persuasive articles and "strategically" litigate and create favorable legal precedent. Despite referencing the other crypto advocacy groups you make it seem as if they are not doing anywhere close to enough. You're not making the case that these other advocacy groups aren't doing enough and why. You want us to show you the money? Show us the proof they're not doing enough.
y not just use coin center?
do these people have any experience with policy and regulatory?
coin center has done quite an incredible job. the uniswap protocol itself series A was WAY under $30 mm and now were just gonna destroy the uni price for lawyers? i dont think so.
The issue with this proposal is that it’s a general purpose proposal that’s not specifically tied to Uniswap. It’s for the benefit of the entire Crypto space. Some of the people assisting include Compound Labs DYDX Aave. That’s good. But the proposal should be brought to a governance vote for all of these other major protocols (Aave DYDX Compound Maker Yearn) to vote to equally participate in this effort. If it passes for all i’d be open to supporting it for uni if not then I don’t support it.
Also, with the deal making that goes on in politics I’d hate to see photo-ops or press releases showing UNI support based on this initiative for some legislative measure that represents a compromise to what many people think the law should be.
The issue with this proposal is that it’s a general purpose proposal that’s not specifically tied to Uniswap. It’s for the benefit of the entire Crypto space. Some of the people assisting include Compound Labs DYDX Aave. That’s good. But the proposal should be brought to a governance vote for all of these other major protocols (Aave DYDX Compound Maker Yearn) to vote to equally participate in this effort. If it passes for all i’d be open to supporting it for uni if not then I don’t support it.
Also, with the deal making that goes on in politics I’d hate to see photo-ops or press releases showing UNI support based on this initiative for some legislative measure that represents a compromise to what many people think the law should be.
Finally, what issues/gaps need to be filled that the other associations you reference (Blockchain Association, Crypto Council for Innovation, etc.) aren't already addressing? I understand you'd support them but you also mention other organizations. How much financial support are these other organizations getting from other companies compared to what you're asking UNI to allocate? (total figure not just percentage). Where/how did you come up with 1 mill UNI? It sounds like a one time allocation that you "expect to be allocated over 4-5 years." Why do you need upfront funding for 4-5 years as opposed to getting a smaller allocation at first? Then, we can see what you've been working towards and then you can come back to the community for another vote for more funds every year.
Hayden,
I love u, and am your biggest fan.
I am a lawyer and was involved in crypto when FinCEN tried to make all miners and node operators obtain a MSB or else. Coin Center handled this incredibly well and allowed the p2p protocol to thrive in its form today (BTC).
You are a legend, but you are only 26. I dont think you were heavily involved in crypto back then. We all acknowledge this is a threat, but its best to give people w real experience that have successfully done it before AS OPPOSED to just crypto lawyers who also were not around in 2013.
As noted in the post, this would go to a multisig of the proposed committee members which includes the CG at Compound Labs, GC at Aave Companies, GC at dydx Trading, and CLO at Uniswap Labs.
This doesn't look very decentralised to me. Who the hell is dydx? They only just launched and why do they get a seat at the table, is it because of their big VC backers? It's all looking very centralised.
I'm not sure what you mean about having other governing boards in the process? Other protocols should have a similar proposal put to a vote. We could work together and Have a collective voice with all major protocols working on the same effort and that would be more impactful than a single voice. Also, could you imaging if UNI "takes the lead" and allocates funds and then similar proposals are brought to other protocols only to be shot down. There could be some considerable backlash and resentment between UNI and other protocols. Other protocols would essentially be freeloading. As mentioned above, UNI could "take the lead" in a vote and no money allocated until other protocols do the same with a vote.
These are really strong points. Thanks for bringing them up @jcp. I can't speak for the other committee members, but here's how I think about these points.
Budget // Reassessment and Evaluation I completely agree with your take about startup funding needing to be milestone-based. The proposal, however, isn't to form a startup. Rather, it's to form a non-profit entity that engages in funding research, individuals, and entities that assist in protecting defi from regulatory uncertainty. In short, I don't think traditional startup wisdom directly applies here.
These are really strong points. Thanks for bringing them up @jcp. I can't speak for the other committee members, but here's how I think about these points.
Budget // Reassessment and Evaluation I completely agree with your take about startup funding needing to be milestone-based. The proposal, however, isn't to form a startup. Rather, it's to form a non-profit entity that engages in funding research, individuals, and entities that assist in protecting defi from regulatory uncertainty. In short, I don't think traditional startup wisdom directly applies here.
I don't have a sense for what the "right" amount of funding for this organization is, but I suspect it will be an amount far larger than what we think it should be. It's possible I'm overestimating the cost, but on this front, I believe it's better to be safe than sorry — if the difference between success and failure is funding, then we should go with the conservative number: 1M UNI.
Team Structure and Payment // Team Buy-In I mostly agree here — people tend to do better work when they're motivated, and fair, performance-based compensation is a good motivator for most people. That said, I don't think this group is "most people."
We're all intrinsically motivated to make defi work in a compliant and regulatory-friendly way, and many of us share a mutual destiny on that front. Reverie, for example, is a company I formed with @derek to work with DAOs. But doing so hasn't been easy, mostly for legal and tax reasons. I am extremely motivated to be on this committee — even with no compensation — because it directly benefits the work Reverie and other DAO contributors do.
What I also like is every member on this committee has significant skin in the game, which in my mind, is the best membership qualifier. The inverse would be far worse: a committee of individuals who sit on the committee primarily for compensation, suffering no downside risk and capturing all of the upside!
Finally, I think having a full-time committee member is an excellent idea. My sense is we can probably form the committee without a full-time member and then recruit/find one if the organization needs to ramp beyond the capacity of the existing part-time structure.
I appreciate the reply. As for item #4 with other projects getting on board. The proposals do not need to pass all at the same time. It could be Uniswap's proposal could be passed first but no fund become available unless 3 out of 5 other protocols also pass it (something along those lines). In other words, the proposal is only implemented once other protocols pass and if they don't then Uniswap's proposal essentially dies with it. This proposal was broached on the community not long ago. It could just as quickly be brought up with the other major protocols.
Thanks for the thoughtful comments, @jcp. I'll address of few of your points and wrap into it some thoughts on other points laid out in responses above:
1. Payment and Commitment
Thanks for the thoughtful comments, @jcp. I'll address of few of your points and wrap into it some thoughts on other points laid out in responses above:
1. Payment and Commitment
Each member of the committee was asked whether he or she would like to participate as a member of the committee with an understanding of the time commitment and responsibilities. Speaking only for myself, the issues that this proposal seeks to address are issues that I deal with on a daily basis, whether in my job as General Counsel of dYdX or voluntarily because of the impact the current regulatory status has on the space. That eliminates the time commitment that it would take to understand the issues. Instead, the time commitment is one that would involve assisting with the proper formation of a 501(c)(4) in addition to properly evaluating uses of funds based on the knowledge that I have and continue to acquire on a daily basis. Thus, while the time commitment is meaningful, my job supplements it in a way that reduces the time commitment as compared to many others who could be part of the committee. The same is true for many, if not all, committee members.
Similarly, getting paid would not change my time commitment as these are issues that are important to me personally as someone who wants to see DeFi grow without the regulatory burdens that have existed and continue to get worse in addition to as General Counsel of a DeFi company who wants to see companies developing DeFi protocols able to do so without the current risks and lack of clarity that exists.
2. Budget / Proof of Work
A request for what is currently $30M is significant. It is very difficult to determine an appropriate budget at the outset but it is clear is that a smaller amount like $5M would not cut it. The scope of the regulatory/political matters that need to be addressed in DeFi is significant. Not only are we talking about risks in US securities laws, commodities laws, AML laws, the OFAC sanctions regime, banking laws, lending laws, and consumer protection laws, we are facing the same risks outside of the US. In some cases, those efforts are coordinated across the US and internationally, such as with FATF. There are other regulatory regimes where that coordination is happening as well but privately. Addressing these issues is no small task and, frankly, requires a war chest. I'm sympathetic to a potential request for a smaller amount than $40M but that will curtail potential efforts, which are multi-year efforts (more on that point below).
3. Reassessment and Evaluation
The efforts that the political defense organization would undertake will not be something that can be assessed over a short time period. Likely the shortest time period to see a real impact, that can be objectively measured, is over a 2-year time period. Certainly, there may be small wins in the meantime, but it would be difficult to measure the success of the organization over less than a 2-year period. So, the question then is whether a reassessment should exist following a period of 2 years or more. That would be a reasonable position to take. I think the proposal contemplates the fact that these types of political/regulatory efforts play out over a long period of time and in a fluid and continuous fashion. It is much harder to scope out small uses of funds for clear deliverables as is the case with the Uniswap Grants Program. Ultimately, this point is a reasonable one that I sympathize with while also understanding the purpose of a commitment that is to be used over 4-5 years.
4. Other Projects
As the proposal outlines, the hope is that other projects will participate in this effort. But, if Uniswap, the most well-funded and best-recognized project in the space, does not show a commitment to it, then it is very difficult to receive a commitment from other projects. Although I'm not sure anyone is in a position to ensure other projects will commit to this effort, I'm quite confident other projects will attempt to participate in these efforts as it is in the best interest of all of DeFi.
With other projects requiring similar proposals to be passed, it is impossible to obtain certainty at this stage that the other projects will be able to successfully pass a proposal. If we wait for them to pass proposals, then we'll have a chicken and egg situation. One project needs to be the first to commit and hopefully bring the others along, and I believe Uniswap is best positioned and likely has the greatest interest in creating an organization of this nature.
5. Motives
Several posts as part of the Temperature Check and here as part of the Consensus Check appear to question the motives of those involved in the proposal or that funds may be used in a way that does not further the objectives set forth in the proposal. First, the proposer, @HarvardLawBFI, will not be receiving any benefit or influence (and the same is true for Harvard itself) from the proposal. I do not see anything in the proposal that even hints at that possibility. Second, the proposal contemplates that a 501(c)(4) be established. To establish a 501(c)(4) a specific purpose needs to be identified and that purpose has been outlined in the proposal (though I suppose the precise language could differ in some ways without changing the gist of it). Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest. So, board members would be exposing themselves to a real risk of liability if they misuse the funds. Lastly, no single board member could take any action on behalf of the organization and I think it is fair to say that, objectively speaking, the board members are incentivized the use the funds in the way it is outlined in the post.
In sum, no proposal is perfect. The DeFi community as a whole faces significant regulatory risks, which include risks as users and token holders, that most people just aren't able to identify and, thus, do not appreciate. There currently are no major efforts to protect DeFi against regulators and incumbents' political efforts, which puts DeFi participants and projects at a huge disadvantage against those regulators and incumbents. While some believe that DeFi can survive regulatory and political attacks, I do not believe that is true for most DeFi projects at this time and, for those that can survive it, there will be a significant impact on users and those governing projects.
Defi is in part an experiment same with Bitcoin and it's working. Governments can't shut down BTC if they tried. If they could then the experiment fails. BTC lives not by the grace of governments but despite them. Similarly, Defi protocols will survive for the same reason. If it could be abrogated by government regulation then there's something wrong with the protocol and its "decentralized" nature. It won't be because we didn't lobby for more favorable regulation. However, that does not mean we want to see unfavorable regulation that makes our lives more difficult. It appears to me that you're asking for too much because we need to hire lobbyists, politicians, and attorneys to write persuasive articles and "strategically" litigate and create favorable legal precedent. Despite referencing the other crypto advocacy groups you make it seem as if they are not doing anywhere close to enough. You're not making the case that these other advocacy groups aren't doing enough and why. You want us to show you the money? Show us the proof they're not doing enough.
y not just use coin center?
do these people have any experience with policy and regulatory?
coin center has done quite an incredible job. the uniswap protocol itself series A was WAY under $30 mm and now were just gonna destroy the uni price for lawyers? i dont think so.
The issue with this proposal is that it’s a general purpose proposal that’s not specifically tied to Uniswap. It’s for the benefit of the entire Crypto space. Some of the people assisting include Compound Labs DYDX Aave. That’s good. But the proposal should be brought to a governance vote for all of these other major protocols (Aave DYDX Compound Maker Yearn) to vote to equally participate in this effort. If it passes for all i’d be open to supporting it for uni if not then I don’t support it.
Also, with the deal making that goes on in politics I’d hate to see photo-ops or press releases showing UNI support based on this initiative for some legislative measure that represents a compromise to what many people think the law should be.
The issue with this proposal is that it’s a general purpose proposal that’s not specifically tied to Uniswap. It’s for the benefit of the entire Crypto space. Some of the people assisting include Compound Labs DYDX Aave. That’s good. But the proposal should be brought to a governance vote for all of these other major protocols (Aave DYDX Compound Maker Yearn) to vote to equally participate in this effort. If it passes for all i’d be open to supporting it for uni if not then I don’t support it.
Also, with the deal making that goes on in politics I’d hate to see photo-ops or press releases showing UNI support based on this initiative for some legislative measure that represents a compromise to what many people think the law should be.
Finally, what issues/gaps need to be filled that the other associations you reference (Blockchain Association, Crypto Council for Innovation, etc.) aren't already addressing? I understand you'd support them but you also mention other organizations. How much financial support are these other organizations getting from other companies compared to what you're asking UNI to allocate? (total figure not just percentage). Where/how did you come up with 1 mill UNI? It sounds like a one time allocation that you "expect to be allocated over 4-5 years." Why do you need upfront funding for 4-5 years as opposed to getting a smaller allocation at first? Then, we can see what you've been working towards and then you can come back to the community for another vote for more funds every year.
Hayden,
I love u, and am your biggest fan.
I am a lawyer and was involved in crypto when FinCEN tried to make all miners and node operators obtain a MSB or else. Coin Center handled this incredibly well and allowed the p2p protocol to thrive in its form today (BTC).
You are a legend, but you are only 26. I dont think you were heavily involved in crypto back then. We all acknowledge this is a threat, but its best to give people w real experience that have successfully done it before AS OPPOSED to just crypto lawyers who also were not around in 2013.
Hayden,
I love u, and am your biggest fan.
I am a lawyer and was involved in crypto when FinCEN tried to make all miners and node operators obtain a MSB or else. Coin Center handled this incredibly well and allowed the p2p protocol to thrive in its form today (BTC).
You are a legend, but you are only 26. I dont think you were heavily involved in crypto back then. We all acknowledge this is a threat, but its best to give people w real experience that have successfully done it before AS OPPOSED to just crypto lawyers who also were not around in 2013.
This is really important and you are a genius for getting these student groups involved bc thats the future ... but this needs to be handled by OGs w/ deep experience not people that entered the game in 2017-18.
With much love and endless gratitude,
Peter
Leave the gun, take the cannoli.
Love the idea. I think having a Uniswap lead the way is important but there should also be room left for other groups to contribute. I'm a member of the PoolTogether grants committee and I know we would be interested in being a part of this too.
How can you hold someone in high regard that literally works for an organization that plans for you to own nothing and "be happy"?
She needs to be removed and shunned from decentralized finance as does anyone else with associations with the IMF or WEF.
the board? literally this is a decentralized protocol
jake chervinsky im sure is a nice guy but is new to crypto, was not involved in 2013 when it rly mattered... this is a similar situation so u should bring in the people that successfully dealt with it
this literally stinks of kids wanting to make a name for themselves
leave us alone, go raid someone else's treasury.
the board? literally this is a decentralized protocol
jake chervinsky im sure is a nice guy but is new to crypto, was not involved in 2013 when it rly mattered... this is a similar situation so u should bring in the people that successfully dealt with it
this literally stinks of kids wanting to make a name for themselves
leave us alone, go raid someone else's treasury.
EXPLAIN WHY COIN CENTER SHOULD NOT BE DOING THIS?
Agreed, that the DAO has been slow to act.
Thing is, why would we seek to solve the slowness problem by giving $25m of of cash, with no strings attached to the lawyers Uniswap has used in the past and who got us here?
Isn't the slowness to act a result of their failure or inability to execute?
Agreed, that the DAO has been slow to act.
Thing is, why would we seek to solve the slowness problem by giving $25m of of cash, with no strings attached to the lawyers Uniswap has used in the past and who got us here?
Isn't the slowness to act a result of their failure or inability to execute?
Isn't the fact that they seem to be blindsided by the recent CFTC comments a result of their lack of familiarity with futures and derivatives law? Aren't any OFAC issues they face the result of their lack of familiarity with the areas at issue?
Moreover, what have Uniswap's lawyers been doing for Uniswap for the past few months - other than pitching us to give them 1m Uni ... and working for other projects?
To test how much this should cost, I reached out to the market a bit.
I learned that you can hire Consensys's primary outside counsel for securities law lobbying and Bitfinex's primary outside counsel for under $500k/year. @jamico @DCinvestor
Why don't we just hire these firms, who are actually experts and have a proven track record of successfully producing results, for a mere 100k Uni...and actually solve the problems that Uniswap faces?
How is this not a better option than giving 1m Uni to the very people who have gotten us here - and are on the payroll of other projects, will have no accountability to the Uniswap token holders, investors and management and are pretty clearly behaving opportunistically here?
Let's take off the kid gloves, folks.
We can get the same sorts of results as CeFi exchanges by hiring people who will actually for Uniswap for 1/10th the money. They just won't be the guys you heard of on Twitter. They will be actual experts. And they will have actual duties to serve you, the client.
I'm out.
Good luck to all of you. It is now only your money.
There IS a discussion regarding the fee switch and things are starting to move.
I invite you all to the community call on the 16th of June on the Uniswap´s discord channel. Its fun and you can discuss all of your matters live there.
Watching the blitz in Washington on crypto. I have changed my opinion. I am now in favor of lining the pockets of who ever we need. Expand the proposal to be more ambitious. Funds for a free market. This is the cost of doing business. Al Capone knew that paying off all officials, was more profitable long term. :stuck_out_tongue_winking_eye:
Thanks for the reply, @MattCorva-CS. I also agree that it's unlikely this is a front to pay legal fees (there are plenty of other ways for everyone involved to cover them) and speculating about that sort of intent isn't very helpful because it's just not knowable.
What I find so troubling, however, is the governance structure and dynamic.
Thanks for the reply, @MattCorva-CS. I also agree that it's unlikely this is a front to pay legal fees (there are plenty of other ways for everyone involved to cover them) and speculating about that sort of intent isn't very helpful because it's just not knowable.
What I find so troubling, however, is the governance structure and dynamic.
Regardless of intent, the proposal creates (i) a separate organization, (ii) with a separate board, (iii) no ownership by Uniswap's token holders or equity holders and (iv) that works to lobby on behalf of "all defi."
This is definitionally misalinged with Uniswap's equity holders, token holders and management has no accountability to any of them once it is funded. In fact, the grant size is probably large enough to serve as an endowment if deposited into Yearn or a similar yield product.
So why would you do this?
Why wouldn't you create a new entity that is accountable to Uniswap's equity owners, governance token holders and management and fund it like a subsidiary or an oganization that operates on behalf of Uniswap?
For heavy hitters, what are you envisioning, and who do you think would decline to participate if there were funding / accountability milestones (like a corporate general counsel would have for running a litigation or a regulatory reform effort)?
Again, a lot of what strikes me as odd is the total lack of accountability and linkage of budget to needs.
For example, if Marvin were to run this project as a new business unit, wouldn't we expect that he would ask for dedicated headcount, a budget for those headcount, and then submit quarterly requests for budget based on the needs?
For example, I could imagine seeking the following:
Annual Budget
A. Headcount
$600k/year
B. G&A - $100k/year
Total Yearly Overhead - $700k/year
Quarterly Budget
Goal 1 - $200k Goal 2 - $100k Goal 3 - $100k
In this way, there would be routine accountability to Uniswap, you'd still have an annual budget that's 75% of Coin Center's and you'd be able to size and target the budget to realistically and transparently support Uniswap's needs.
Does this sound about right to you?
Put simply: there are people who see the sum as outrageous and there are people who see it as not sufficient enough....These are typical characteristics that such undertaking as this should be its own project funded by every large DeFi stakeholder.
My previous concerns due to lack of clarity have been addressed, and having board members affiliated with other prominent DeFi protocols gives me hope that this will be a collaborative effort.
I now plan to vote FOR this proposal.
My previous concerns due to lack of clarity have been addressed, and having board members affiliated with other prominent DeFi protocols gives me hope that this will be a collaborative effort.
I now plan to vote FOR this proposal.
That said, though it is a small percentage of the treasury, the grant is large in absolute terms. It might make sense to allocate 6-12 months worth of funds initially and have governance reassess budgetary needs in the future. This is especially true given the current parallel discussion on proposal and quorum threshold reductions that is expected to result in a more nimble governance process.
With that said, I’d like to propose a few edits to the existing proposal:
- $1m budget for first year
- Committee members subject to tokenholder approval
- Core team & early access investors abstain from vote
- No WEF involvement
In my opinion, I think these edits would hobble the initial proposals goals to the point that it would make it not worthwhile at all.
My notes:
$1m budget for first year:
Chris rocks! I think what Chris asked are all sensible for questions and concerns.
Character matters, this is just an absolutely absurd statement. 40 million dollars but the characters of the recipient doesnt matter? Are you serious?
Same question for you @rleshner Would you support **exiting funds from the Compound treasury into a new entity that is not accountable to you, the Compound token holders or the Compound board?
Why would you not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by you as the project leader, the VCs who have board seats in your operating company and the token holders?
Same question for you @rleshner Would you support **exiting funds from the Compound treasury into a new entity that is not accountable to you, the Compound token holders or the Compound board?
Why would you not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by you as the project leader, the VCs who have board seats in your operating company and the token holders?
@MattCorva-CS What would Joe Lubin do? Would he create a new entity with you, some other DeFi lawyers and your outside counsel as the board directors and fund it with $30m of ETH, and then exit?
I am still lost here.
Why would you NOT propose concrete goals each quarter, line item budget for them and submit them to @haydenadams and the board (@jamico) and token holders?
Do the regulatory leaders at places like A16Z, Goldman Sachs and Bank of America:
I am still lost here.
Why would you NOT propose concrete goals each quarter, line item budget for them and submit them to @haydenadams and the board (@jamico) and token holders?
Do the regulatory leaders at places like A16Z, Goldman Sachs and Bank of America:
Ask the board / management to set up a new organization that they control and has no legal, financial, or other backstopped accountability to shareholders or manageement
Exit $30m of shareholder money to do it
Frankly, this sounds like exactly the "novel funding structure" that you say is inappropriate.
Why can't Uniswap's lobbying efforts be run like a normal regulatory reform organization within a normal operating company?
Why do you need to set up a separate entity with different controllers and ownership?
Hayden,
I love u, and am your biggest fan.
I am a lawyer and was involved in crypto when FinCEN tried to make all miners and node operators obtain a MSB or else. Coin Center handled this incredibly well and allowed the p2p protocol to thrive in its form today (BTC).
You are a legend, but you are only 26. I dont think you were heavily involved in crypto back then. We all acknowledge this is a threat, but its best to give people w real experience that have successfully done it before AS OPPOSED to just crypto lawyers who also were not around in 2013.
This is really important and you are a genius for getting these student groups involved bc thats the future ... but this needs to be handled by OGs w/ deep experience not people that entered the game in 2017-18.
With much love and endless gratitude,
Peter
Leave the gun, take the cannoli.
Love the idea. I think having a Uniswap lead the way is important but there should also be room left for other groups to contribute. I'm a member of the PoolTogether grants committee and I know we would be interested in being a part of this too.
How can you hold someone in high regard that literally works for an organization that plans for you to own nothing and "be happy"?
She needs to be removed and shunned from decentralized finance as does anyone else with associations with the IMF or WEF.
the board? literally this is a decentralized protocol
jake chervinsky im sure is a nice guy but is new to crypto, was not involved in 2013 when it rly mattered... this is a similar situation so u should bring in the people that successfully dealt with it
this literally stinks of kids wanting to make a name for themselves
leave us alone, go raid someone else's treasury.
the board? literally this is a decentralized protocol
jake chervinsky im sure is a nice guy but is new to crypto, was not involved in 2013 when it rly mattered... this is a similar situation so u should bring in the people that successfully dealt with it
this literally stinks of kids wanting to make a name for themselves
leave us alone, go raid someone else's treasury.
EXPLAIN WHY COIN CENTER SHOULD NOT BE DOING THIS?
Agreed, that the DAO has been slow to act.
Thing is, why would we seek to solve the slowness problem by giving $25m of of cash, with no strings attached to the lawyers Uniswap has used in the past and who got us here?
Isn't the slowness to act a result of their failure or inability to execute?
Agreed, that the DAO has been slow to act.
Thing is, why would we seek to solve the slowness problem by giving $25m of of cash, with no strings attached to the lawyers Uniswap has used in the past and who got us here?
Isn't the slowness to act a result of their failure or inability to execute?
Isn't the fact that they seem to be blindsided by the recent CFTC comments a result of their lack of familiarity with futures and derivatives law? Aren't any OFAC issues they face the result of their lack of familiarity with the areas at issue?
Moreover, what have Uniswap's lawyers been doing for Uniswap for the past few months - other than pitching us to give them 1m Uni ... and working for other projects?
To test how much this should cost, I reached out to the market a bit.
I learned that you can hire Consensys's primary outside counsel for securities law lobbying and Bitfinex's primary outside counsel for under $500k/year. @jamico @DCinvestor
Why don't we just hire these firms, who are actually experts and have a proven track record of successfully producing results, for a mere 100k Uni...and actually solve the problems that Uniswap faces?
How is this not a better option than giving 1m Uni to the very people who have gotten us here - and are on the payroll of other projects, will have no accountability to the Uniswap token holders, investors and management and are pretty clearly behaving opportunistically here?
Let's take off the kid gloves, folks.
We can get the same sorts of results as CeFi exchanges by hiring people who will actually for Uniswap for 1/10th the money. They just won't be the guys you heard of on Twitter. They will be actual experts. And they will have actual duties to serve you, the client.
I'm out.
Good luck to all of you. It is now only your money.
There IS a discussion regarding the fee switch and things are starting to move.
I invite you all to the community call on the 16th of June on the Uniswap´s discord channel. Its fun and you can discuss all of your matters live there.
Watching the blitz in Washington on crypto. I have changed my opinion. I am now in favor of lining the pockets of who ever we need. Expand the proposal to be more ambitious. Funds for a free market. This is the cost of doing business. Al Capone knew that paying off all officials, was more profitable long term. :stuck_out_tongue_winking_eye:
Thanks for the reply, @MattCorva-CS. I also agree that it's unlikely this is a front to pay legal fees (there are plenty of other ways for everyone involved to cover them) and speculating about that sort of intent isn't very helpful because it's just not knowable.
What I find so troubling, however, is the governance structure and dynamic.
Thanks for the reply, @MattCorva-CS. I also agree that it's unlikely this is a front to pay legal fees (there are plenty of other ways for everyone involved to cover them) and speculating about that sort of intent isn't very helpful because it's just not knowable.
What I find so troubling, however, is the governance structure and dynamic.
Regardless of intent, the proposal creates (i) a separate organization, (ii) with a separate board, (iii) no ownership by Uniswap's token holders or equity holders and (iv) that works to lobby on behalf of "all defi."
This is definitionally misalinged with Uniswap's equity holders, token holders and management has no accountability to any of them once it is funded. In fact, the grant size is probably large enough to serve as an endowment if deposited into Yearn or a similar yield product.
So why would you do this?
Why wouldn't you create a new entity that is accountable to Uniswap's equity owners, governance token holders and management and fund it like a subsidiary or an oganization that operates on behalf of Uniswap?
For heavy hitters, what are you envisioning, and who do you think would decline to participate if there were funding / accountability milestones (like a corporate general counsel would have for running a litigation or a regulatory reform effort)?
Again, a lot of what strikes me as odd is the total lack of accountability and linkage of budget to needs.
For example, if Marvin were to run this project as a new business unit, wouldn't we expect that he would ask for dedicated headcount, a budget for those headcount, and then submit quarterly requests for budget based on the needs?
For example, I could imagine seeking the following:
Annual Budget
A. Headcount
$600k/year
B. G&A - $100k/year
Total Yearly Overhead - $700k/year
Quarterly Budget
Goal 1 - $200k Goal 2 - $100k Goal 3 - $100k
In this way, there would be routine accountability to Uniswap, you'd still have an annual budget that's 75% of Coin Center's and you'd be able to size and target the budget to realistically and transparently support Uniswap's needs.
Does this sound about right to you?
Put simply: there are people who see the sum as outrageous and there are people who see it as not sufficient enough....These are typical characteristics that such undertaking as this should be its own project funded by every large DeFi stakeholder.
My previous concerns due to lack of clarity have been addressed, and having board members affiliated with other prominent DeFi protocols gives me hope that this will be a collaborative effort.
I now plan to vote FOR this proposal.
My previous concerns due to lack of clarity have been addressed, and having board members affiliated with other prominent DeFi protocols gives me hope that this will be a collaborative effort.
I now plan to vote FOR this proposal.
That said, though it is a small percentage of the treasury, the grant is large in absolute terms. It might make sense to allocate 6-12 months worth of funds initially and have governance reassess budgetary needs in the future. This is especially true given the current parallel discussion on proposal and quorum threshold reductions that is expected to result in a more nimble governance process.
With that said, I’d like to propose a few edits to the existing proposal:
- $1m budget for first year
- Committee members subject to tokenholder approval
- Core team & early access investors abstain from vote
- No WEF involvement
In my opinion, I think these edits would hobble the initial proposals goals to the point that it would make it not worthwhile at all.
My notes:
$1m budget for first year:
Chris rocks! I think what Chris asked are all sensible for questions and concerns.
Character matters, this is just an absolutely absurd statement. 40 million dollars but the characters of the recipient doesnt matter? Are you serious?
Same question for you @rleshner Would you support **exiting funds from the Compound treasury into a new entity that is not accountable to you, the Compound token holders or the Compound board?
Why would you not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by you as the project leader, the VCs who have board seats in your operating company and the token holders?
Same question for you @rleshner Would you support **exiting funds from the Compound treasury into a new entity that is not accountable to you, the Compound token holders or the Compound board?
Why would you not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by you as the project leader, the VCs who have board seats in your operating company and the token holders?
@MattCorva-CS What would Joe Lubin do? Would he create a new entity with you, some other DeFi lawyers and your outside counsel as the board directors and fund it with $30m of ETH, and then exit?
I am still lost here.
Why would you NOT propose concrete goals each quarter, line item budget for them and submit them to @haydenadams and the board (@jamico) and token holders?
Do the regulatory leaders at places like A16Z, Goldman Sachs and Bank of America:
I am still lost here.
Why would you NOT propose concrete goals each quarter, line item budget for them and submit them to @haydenadams and the board (@jamico) and token holders?
Do the regulatory leaders at places like A16Z, Goldman Sachs and Bank of America:
Ask the board / management to set up a new organization that they control and has no legal, financial, or other backstopped accountability to shareholders or manageement
Exit $30m of shareholder money to do it
Frankly, this sounds like exactly the "novel funding structure" that you say is inappropriate.
Why can't Uniswap's lobbying efforts be run like a normal regulatory reform organization within a normal operating company?
Why do you need to set up a separate entity with different controllers and ownership?
With that said, I’d like to propose a few edits to the existing proposal:
- $1m budget for first year
- Committee members subject to tokenholder approval
- Core team & early access investors abstain from vote
- No WEF involvement
In my opinion, I think these edits would hobble the initial proposals goals to the point that it would make it not worthwhile at all.
My notes:
$1m budget for first year:
Just normal startup lawyers that service ordinary startups cost $1000 per hour. A $1 million dollar budget would give the committee a little under five months of runway for just one person. Once you add in the cost of taxes, accounting, filings, just normal day-to-day business costs for a legal firm, and you're basically done before September. Edit: (I don't know the right amount that should be spent per year, but I think $1m doesn't sound like enough)
Committee members subject to tokenholder approval
I think the Committee should be judged as a group, if this committee thinks it needs these individuals to make the project work, we either support this group of individuals, or don't do it. Doesn't make sense to say, "Yeah let's do it, but oh- you can't use the people you think you need to get it done." They need to have the ability to organize themselves in such a way that they believe they are setup for success.
Core team & early access investors abstain from vote
I understand why this might be a nice provision to add, but I don't get why the folks who might have the best perspective should be prevented from contributing their voting power. Perhaps their voice has an outsized influence, but so have been their contributions, no? I'm also not crazy about creating classes of votes here, if they have access to their tokens, and it was always understood that they could vote, then they should be able to vote. Feels like weird engineering to construct the eligible voters based on the subject of the vote. It's either token holder governance or it's not. (But I'm sure this could be a WHOLE different discussion).
No WEF involvement
Again, why hobble the committee right out of the gate? I'm not an expert on the WEF, but if the experts we empower think it's necessary to work with them, in order to achieve their stated goals, I think we have to empower them and trust their judgement.
As per this comment:
What urgency? Do you know something that we don’t? Is there impending regulation? Have there been talks with regulators? I have not seen anything to indicate that urgency exists to jump into such a huge commitment. If you know something, you (or core team) need to share it.
If there is urgency, maybe they can't share it. That doesn't seem unreasonable. Also reading between the lines, the fact that this proposal is being described in terms as urgent, seems to be a pretty good indicator that, yes, there might be something urgent that can't be spelled out here in a public forum. Maybe it's just someone had dinner with someone, a few too many drinks and something slipped out. That happens all the time. Doesn't mean this is the case here, but it wouldn't be an unreasonable conclusion. Certainly something has propelled someone to ask for $30 million and think that was a reasonable response.
Finally:
I think this proposal should be considered from the pro/con point of view. Whats the risk versus reward calculation here? Clearly the risk is that they abscond with the $30 million and spend it on steak dinners and long weekends in DC hotel suites.
Sure. That could happen.
But the worst case scenario doesn't seem like it has the potential to do any substantial harm to token holders or the Uniswap project at large. Sure we will be pissed they ran off with the money, but them being turning out to be rich scammers hardly makes my life worse if it were to happen. They could liquidate the tokens, drop the price by what, a couple dollars temporarily? Sucks in theory, but doesn't harm us.
So then let's consider how likely that is to happen. These folks are all well known individuals with careers that in their lifetimes could still net many multiples of $$$ more than this proposals value is worth- even though it's worth quite a lot. In the grand Risk/Reward here- doesn't seem likely for them to steal the money.
So the point is: It neither seems realistic they would outright be corrupt, nor that in the worse case scenario would any true harm come to token holders or the protocol.
So then lets consider the other side of the coin:
Let's say we give them this enormous amount of money, and they work hard and fail. Thats the same outcome as doing nothing, so again, no real loss.
But let us say we give them this enormous amount of money, and they are right. We empower them with the trust and tools to do the job correctly, (See my and @monet-supply's posts above for solid accountability tools) and low and behold: It works. They educate policy makers, help create a positive legal environment for DeFi, and now we're on a path towards global success.
The upside here, the reward, is just so massive, that it dwarfs the potential downside. I personally would like to see them use the accountability tools that we have been building for them (All open source) which would empower them with the funds and certainty they need to build a kick-ass team, while leaving Token Holders with the ultimate authority.
Otherwise, I've come around, and I support this proposal and I think we should find a way to set this team up for success: both in our eyes and their own.
Marvin, you make some great points here. Here at Tally we've been building a tool that I think could work perfectly for this situation.
One of your main points (which is very strong IMHO) is that tranching would undermine the funds Effectiveness. So what we we do optimistic governance?
Marvin, you make some great points here. Here at Tally we've been building a tool that I think could work perfectly for this situation.
One of your main points (which is very strong IMHO) is that tranching would undermine the funds Effectiveness. So what we we do optimistic governance?
In this case, Tally has built, for Uniswap via the Grants program, a tool call "Fail Safe" outlined by @monet-supply above. This tool could be deployed such that the legal team would be able to make funding requests directly from a Timelock, which if unopposed, would be automatically released. The design of the Fail Safe is such that we could make the Uniswap Governance itself the entity which would have the power to oppose a payment.
This would be effective because:
The Legal group has certainty on their funding. The funds are earmarked and only can be spent by the legal group. The group knows that if their funding request is not opposed, they will receive their payments of fund.
To oppose a disbursement of funds, it would require a full Uniswap token holder vote. That means the social capital required to oppose a funding request would be equal to that of a full Governance vote. That should give you assurance that the funds are available because I think everyone here is aware of the enormous social capital needed to organize an effective vote that passes.
The Failsafe project is built by Tally, it is OpenSource and paid for by Uniswap. It gives token holders the tool of last resort to intervene should their worst fears come true and the threshold to success is high enough that it would require the very supporters of this proposal to lose faith in the legal teams effectiveness. There is no need to return to governance quarterly to beg for new funds, the legal team can request funds at their leisure + necessity.
Why not consider a compromise like that? It seems like a 2.5m Uni Proposal threshold and 40m quorum would be quite enough to give the legal team certainty they have access to all the funds they need, while also giving token holders confidence that this really is a DAO.
Agreed we need to flip the switch
LPS already hold UNI.
If they dont, they will after they see the switch is going to flip.
While I really like this proposal, I'm personally against creating a legal non-profit (to hold the funds) to do it.
This should be a crypto-native construct, answerable to the DAO token holders.
I understand doing this as a DAO, rather than a non-profit would be hard to do, but if thats the case: then those are the challenges this legal defense fund should solve first.
While I really like this proposal, I'm personally against creating a legal non-profit (to hold the funds) to do it.
This should be a crypto-native construct, answerable to the DAO token holders.
I understand doing this as a DAO, rather than a non-profit would be hard to do, but if thats the case: then those are the challenges this legal defense fund should solve first.
I get the value of creating an organization that lobbies in the defense of crypto/DeFi/etc in general, but I am a practical person, and I would rather see the legal energy go first into creating the structures by which future legal defense funds can successfully operate. Let us dog-food the future first.
EDIT: I would support some sort of compromise here as well. I think it's more important to get something like this to happen, so I am open to compromise.
My goal as a proposed committee member is to provide as much public transparency as possible
My goal as a proposed committee member is to provide as much public transparency as possible
Can you explain why you have not been transparent in your other lobbying efforts and why the community should expect something different now?
Marc Boiron is head of Blockchain Association DeFi group. If Blockchain Association has not allowed transparency and collaboration with the public through now, why would they start allowing it? How will those of you with ties to multiple organizations square your duties to be 'zealous advocates' for those specific organizations with a duty to work in the interests of DeFi in general? Will you recuse yourself every time the interests or rules and policies of your specific organizations conflict with those of DeFi in general?
What if a regulator or legislator would make a compromise for projects that are not backed by VCs but maintains that VC-backed projects too closely mirror the traditional IPO path and must be regulated more stringently? Will you accept the compromise for the good of DeFi even though you represent multiple VC-backed projects and are 'special advisor' to a VC?
What about if a regulator points out the power and influence of Uniswap Corporation over the DAO and suggests that regulation could be lighter if the DAO had lower quorum requirements or if the Uniswap Corporation were dissolved? How will you decide whether it is 'possible' to disclose this information to the DAO? What about the GC of Uniswap Corporation--he will have a huge conflict of interest in this scenario, won't he?
Since nearly all information you receive from and send to regulators and legislators will impact your legal clients, how is it possible that such information will not be subject to atty-client confidentiality duties and that you can share it publicly? How will you separate your advocacy efforts as part of this nonprofit purporting to represent all of DeFi from your advocacy efforts for your specific clients? Is your assumption that DeFi projects are so incentive-aligned that advocating 'for DeFi' is the same as advocating 'for Compound', even though there may be many distinctions between various DeFi projects and Compound on any number of issues? If you agree that there can be conflicts, how will that be navigated considering that you, Rebecca and Marc are all extrinsically affiliated through current and past organizations/relationships? Won't you inevitably be biased toward defending structures and situations that you have previously supported and thus reducing your own potential for liability, rather than admitting to the potential legal flaws with those and working toward new creative compromises with regulators?
What does transparency mean to you? Many have asked empirical questions about the origins and motives for this proposal that have not been answered. Is that something it's 'impossible' for the proposers to be transparent about?
Would you submit draft legislation to the DAO for review/comment before it is submitted to a congressional committee? What about draft no-action letters?
If you were coordinating with specific projects or leaders in DeFi regarding a specific issue, would you disclose that? Will the CEOs of Compound, Uniswap and Aaave have more access to the information and decisionmaking of this non-profit than the core devs of Sushiswap and Yearn?
To what extent is this proposal being supported by VCs and team members who may face personal liability regarding their choices? and don't they have a conflict of interest re: their support, since otherwise they would have to spend (more of) their personal funds on defense?
These are critical kinds of questions that you guys are sweeping under the rug.
To establish a 501(c)(4) a specific purpose needs to be identified and that purpose has been outlined in the proposal (though I suppose the precise language could differ in some ways without changing the gist of it). Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest. So, board members would be exposing themselves to a real risk of liability if they misuse the funds. Lastly, no single board member could take any action on behalf of the organization and I think it is fair to say that, objectively speaking, the board members are incentivized the use the funds in the way it is outlined in the post.
To establish a 501(c)(4) a specific purpose needs to be identified and that purpose has been outlined in the proposal (though I suppose the precise language could differ in some ways without changing the gist of it). Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest. So, board members would be exposing themselves to a real risk of liability if they misuse the funds. Lastly, no single board member could take any action on behalf of the organization and I think it is fair to say that, objectively speaking, the board members are incentivized the use the funds in the way it is outlined in the post.
If this purpose and the related duties are the key (sole?) protection that UNI holders have, then why isn't the purpose being explicitly defined in advance as part of draft charter documents for the non-profit? Why "give us the money first then we'll figure everything else out--don't worry, you'll be protected"? How can you appeal to the fact that 'we'll have a purpose and be accountable for it' but not define that purpose exactly as part of the proposal?
Huge supporter of this initiative (with many solid perspectives - on both sides).
A quick comment on the amount > in the grand scheme the $40M price tag is inconsequential to the overall treasury. There should be checks and balances to that; a smaller grant may indeed provide a bit more comfort. But in the end, the focus on the amount vs. the justification of the activity is probably an inconsequential debate. Big swings will need to be taken for future evolution; this is one of them.
Great timing, this just hit the wire:
https://www.coindesk.com/defi-derivatives-may-be-illegal-cftc-commissioner
Same question for you @blockchaincolumbia Why do you support exiting funds from the treasury into a new entity that is not accountable to Uniswap's board, token holders, etc?
Why not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by Uniswap?
@jchervinsky I think you've done great work for DeFi and should be paid accordingly. But let me ask you a serious question -
Why is it OK for the General Counsel of Uniswap and lawyers who worked for Uniswap as their outside counsel OK to be seeking to remove funds from the Treasury to place them in an entity that they control and has no accountability to Uniswap?
@jchervinsky I think you've done great work for DeFi and should be paid accordingly. But let me ask you a serious question -
Why is it OK for the General Counsel of Uniswap and lawyers who worked for Uniswap as their outside counsel OK to be seeking to remove funds from the Treasury to place them in an entity that they control and has no accountability to Uniswap?
How is this not a conflict of interest far beyond what's permissible in normal corporate law?
@jamico Why don't you just set up a subsidiary or another entity that is 100% owner by Uniswap token / equity holders, reports to @haydenadams and the board and is funded quarterly by Uniswap?
I am not as silver tongued as many of the lawyers here, but I really can't figure out why anyone things it makes sense to exit corporate funds to a new entity that has no relationship to Uniswap.
I absolutely agree with providing a smaller initial grant to see how things pan out. This way it wouldnt be too polarizing for the community as a whole because I have a strong feeling a lot of people will NOT want to hold onto their UNI if they know the prices can get absolutely obliterated by passing sell pressure proposals all the time. It will just not be worth the hassle to hold UNI token if you are to fund everything as a holder with massive amounts..
Like one thing that grinds my gears is that people are not discussing the real value of the token and what it might entail for this proposal. 1M UNI is worth 40M now, but what if in 6 months its worth 200M? What if its worth 10M? What will happen in those cases. Will the OP come for another 30M if the token is worth next to nothing in 6 months?? I mean, its ridicilous how nobody is talking about this. This is why we have to provide a smaller amount first, then see if we require more funding.
Rationale is ok. The amount $40mm is too much. Please give some examples of why we need to have $40mm to be spent on this.
Marvin, dont you think its better to spin this project off as a whole new thing where proper funding can be allocated from every DeFi project?
These are great ideas. Taking a more inclusive and crypto native approach will almost surely help to advance the cause and improve the optics here and with any regulator the group engaged with.
However, most of the concerns raised before have not been addressed.
These are great ideas. Taking a more inclusive and crypto native approach will almost surely help to advance the cause and improve the optics here and with any regulator the group engaged with.
However, most of the concerns raised before have not been addressed.
As Matt Corva wrote (see below), each major bank disclosed about $3m per year on policy spend. This is a lot of money!
However, each major bank operates a far larger, far more complex business than Uniswap -- and faces far more legal and policy issues. They really aren't comparable businesses. Yet they only spent $3m per year.
Why do we think Uniswap needs to spend so much more to handle a much narrower range of issues? " To put it in perspective, upon a quick search, it looks like each major bank discloses approximately ~3MM in policy spend per year, and that’s what is reported. That’s not to say that the number proposed is correct or incorrect, but just to put real life costs to what otherwise might seem like a big number. "
Likewise, as Marvin said, trade association heads are paid more than $2m per year. One example is Robert Cook, the head of FINRA. Another is the current head of SIFMA. Is this the sort of organization we are trying to from?
If so, we probably need a much clearer plan and a large upgrade in talent. The folks who typically take these jobs are former head regulators (Cook was a repeat division head at the SEC) - not young crypto lawyers.
As currently written, the proposal simply exits 1m Uni with no strings attached. This is wildly out of line with how budgets work at the bigger banks and how regulatory campaigns are usually undertaken.
For example, when the large US investment banks lobbied to influence the regulations promulgated under Dodd Frank, they typically needed to get approval of quarterly budgets and KPIs. Project managers and often outside consultants were employed to drive the process. If the results didn't occur, budget would be cut or changed and people would be fired.
Here, what do we have besides a grant of 1m Uni to a small board - without even a clear statement of what success looks like.
How is this OK when it is 10x more money than a typical large bank spends a year on lobbying? Put differently, how do you think Goldman Sachs or Morgan Stanley would evaluate this proposal?
At the same time as I am sympathetic to any lawyer or policy wonk who is fighting for DeFi, this proposal pretty clearly creates significant conflicts of interest for each lawyer involved, as well as HLSBFI. Why are we comfortable with this?
To see this very clearly, suppose that Hayden and 3 of his friends proposed taking 1m Uni from the Treasury to start a DeFi VC fund. They then continued to pitch the project to all of you, and piled on to support it on Twitter.
Then they pushed the issue to a vote and used their influence to exit 1m Uni to a separate fund that they controlled.
Afterwards, they continued to be involved in Uniswap AND to hand out checks from the new VC fund - with no accountability to Uniswap.
Why is this OK?
As you probably guessed, my answer is no because of the conflicts of interest. But I actually think it is worse.
None of the responses from the potential board members have addresses the basic issues of accountability, budget size or conflicts. In fact, none provide any evidence why 1m Uni are needed for this effort or how 1m Uni will be spent. Likewise, none lay out any details on organizational structure, oversight, or staffing (beyond that the group will hire one full time employee).
Moreover, may of the responses just seem disingenuous or irrelevant. For example:
If you had to beat, say, the LA Lakers at home … you can’t do it on a $2 million dollar budget. There is no point fielding a team of amateurs that will definitely lose, so you have to go big or go home. The top trade association bosses make over $2M each year (it is pretty sickening but there is often much more at stake, and democracy is better than the alternatives). Many of the most persuasive lawyers who lead teams that win these fights earn more than the average professional athlete. The proposed fund here is actually much too small to hire many of those people, but it could support the hiring of more good, hungry junior talent and a few targeted big hires–
To put it very bluntly, how is this relevant?
And who, then, are the Goldman Sach's and Morgan Stanley's of the world hiring for $3m per year? And, who are these partners?
Aren't they the right comps .., and the Lakers payroll just a side show?
Actually the project being built by Uniswap Grants right now by Tally, the Tally FailSafe (See above) does exactly what you're talking about- decentralizes the trust. It works as optimistic execution, but ultimately, it is the token holders who have authority over the spending. That solves the concerns in my opinion.
@jamico these are great comments; proposal should not be approved in current form
the urgency is false as every single one of these people already commands millions of dollars through their respective organizations and is already engaged in DeFi lobbying and advocacy...they need to go back and propose a decentralized, non-trust-maximized alternative...
it would solve the concerns but this group has zero apparent interest in using that type of tool and being accountable in that way
With that said, I’d like to propose a few edits to the existing proposal:
- $1m budget for first year
- Committee members subject to tokenholder approval
- Core team & early access investors abstain from vote
- No WEF involvement
In my opinion, I think these edits would hobble the initial proposals goals to the point that it would make it not worthwhile at all.
My notes:
$1m budget for first year:
Just normal startup lawyers that service ordinary startups cost $1000 per hour. A $1 million dollar budget would give the committee a little under five months of runway for just one person. Once you add in the cost of taxes, accounting, filings, just normal day-to-day business costs for a legal firm, and you're basically done before September. Edit: (I don't know the right amount that should be spent per year, but I think $1m doesn't sound like enough)
Committee members subject to tokenholder approval
I think the Committee should be judged as a group, if this committee thinks it needs these individuals to make the project work, we either support this group of individuals, or don't do it. Doesn't make sense to say, "Yeah let's do it, but oh- you can't use the people you think you need to get it done." They need to have the ability to organize themselves in such a way that they believe they are setup for success.
Core team & early access investors abstain from vote
I understand why this might be a nice provision to add, but I don't get why the folks who might have the best perspective should be prevented from contributing their voting power. Perhaps their voice has an outsized influence, but so have been their contributions, no? I'm also not crazy about creating classes of votes here, if they have access to their tokens, and it was always understood that they could vote, then they should be able to vote. Feels like weird engineering to construct the eligible voters based on the subject of the vote. It's either token holder governance or it's not. (But I'm sure this could be a WHOLE different discussion).
No WEF involvement
Again, why hobble the committee right out of the gate? I'm not an expert on the WEF, but if the experts we empower think it's necessary to work with them, in order to achieve their stated goals, I think we have to empower them and trust their judgement.
As per this comment:
What urgency? Do you know something that we don’t? Is there impending regulation? Have there been talks with regulators? I have not seen anything to indicate that urgency exists to jump into such a huge commitment. If you know something, you (or core team) need to share it.
If there is urgency, maybe they can't share it. That doesn't seem unreasonable. Also reading between the lines, the fact that this proposal is being described in terms as urgent, seems to be a pretty good indicator that, yes, there might be something urgent that can't be spelled out here in a public forum. Maybe it's just someone had dinner with someone, a few too many drinks and something slipped out. That happens all the time. Doesn't mean this is the case here, but it wouldn't be an unreasonable conclusion. Certainly something has propelled someone to ask for $30 million and think that was a reasonable response.
Finally:
I think this proposal should be considered from the pro/con point of view. Whats the risk versus reward calculation here? Clearly the risk is that they abscond with the $30 million and spend it on steak dinners and long weekends in DC hotel suites.
Sure. That could happen.
But the worst case scenario doesn't seem like it has the potential to do any substantial harm to token holders or the Uniswap project at large. Sure we will be pissed they ran off with the money, but them being turning out to be rich scammers hardly makes my life worse if it were to happen. They could liquidate the tokens, drop the price by what, a couple dollars temporarily? Sucks in theory, but doesn't harm us.
So then let's consider how likely that is to happen. These folks are all well known individuals with careers that in their lifetimes could still net many multiples of $$$ more than this proposals value is worth- even though it's worth quite a lot. In the grand Risk/Reward here- doesn't seem likely for them to steal the money.
So the point is: It neither seems realistic they would outright be corrupt, nor that in the worse case scenario would any true harm come to token holders or the protocol.
So then lets consider the other side of the coin:
Let's say we give them this enormous amount of money, and they work hard and fail. Thats the same outcome as doing nothing, so again, no real loss.
But let us say we give them this enormous amount of money, and they are right. We empower them with the trust and tools to do the job correctly, (See my and @monet-supply's posts above for solid accountability tools) and low and behold: It works. They educate policy makers, help create a positive legal environment for DeFi, and now we're on a path towards global success.
The upside here, the reward, is just so massive, that it dwarfs the potential downside. I personally would like to see them use the accountability tools that we have been building for them (All open source) which would empower them with the funds and certainty they need to build a kick-ass team, while leaving Token Holders with the ultimate authority.
Otherwise, I've come around, and I support this proposal and I think we should find a way to set this team up for success: both in our eyes and their own.
Marvin, you make some great points here. Here at Tally we've been building a tool that I think could work perfectly for this situation.
One of your main points (which is very strong IMHO) is that tranching would undermine the funds Effectiveness. So what we we do optimistic governance?
Marvin, you make some great points here. Here at Tally we've been building a tool that I think could work perfectly for this situation.
One of your main points (which is very strong IMHO) is that tranching would undermine the funds Effectiveness. So what we we do optimistic governance?
In this case, Tally has built, for Uniswap via the Grants program, a tool call "Fail Safe" outlined by @monet-supply above. This tool could be deployed such that the legal team would be able to make funding requests directly from a Timelock, which if unopposed, would be automatically released. The design of the Fail Safe is such that we could make the Uniswap Governance itself the entity which would have the power to oppose a payment.
This would be effective because:
The Legal group has certainty on their funding. The funds are earmarked and only can be spent by the legal group. The group knows that if their funding request is not opposed, they will receive their payments of fund.
To oppose a disbursement of funds, it would require a full Uniswap token holder vote. That means the social capital required to oppose a funding request would be equal to that of a full Governance vote. That should give you assurance that the funds are available because I think everyone here is aware of the enormous social capital needed to organize an effective vote that passes.
The Failsafe project is built by Tally, it is OpenSource and paid for by Uniswap. It gives token holders the tool of last resort to intervene should their worst fears come true and the threshold to success is high enough that it would require the very supporters of this proposal to lose faith in the legal teams effectiveness. There is no need to return to governance quarterly to beg for new funds, the legal team can request funds at their leisure + necessity.
Why not consider a compromise like that? It seems like a 2.5m Uni Proposal threshold and 40m quorum would be quite enough to give the legal team certainty they have access to all the funds they need, while also giving token holders confidence that this really is a DAO.
Agreed we need to flip the switch
LPS already hold UNI.
If they dont, they will after they see the switch is going to flip.
While I really like this proposal, I'm personally against creating a legal non-profit (to hold the funds) to do it.
This should be a crypto-native construct, answerable to the DAO token holders.
I understand doing this as a DAO, rather than a non-profit would be hard to do, but if thats the case: then those are the challenges this legal defense fund should solve first.
While I really like this proposal, I'm personally against creating a legal non-profit (to hold the funds) to do it.
This should be a crypto-native construct, answerable to the DAO token holders.
I understand doing this as a DAO, rather than a non-profit would be hard to do, but if thats the case: then those are the challenges this legal defense fund should solve first.
I get the value of creating an organization that lobbies in the defense of crypto/DeFi/etc in general, but I am a practical person, and I would rather see the legal energy go first into creating the structures by which future legal defense funds can successfully operate. Let us dog-food the future first.
EDIT: I would support some sort of compromise here as well. I think it's more important to get something like this to happen, so I am open to compromise.
My goal as a proposed committee member is to provide as much public transparency as possible
My goal as a proposed committee member is to provide as much public transparency as possible
Can you explain why you have not been transparent in your other lobbying efforts and why the community should expect something different now?
Marc Boiron is head of Blockchain Association DeFi group. If Blockchain Association has not allowed transparency and collaboration with the public through now, why would they start allowing it? How will those of you with ties to multiple organizations square your duties to be 'zealous advocates' for those specific organizations with a duty to work in the interests of DeFi in general? Will you recuse yourself every time the interests or rules and policies of your specific organizations conflict with those of DeFi in general?
What if a regulator or legislator would make a compromise for projects that are not backed by VCs but maintains that VC-backed projects too closely mirror the traditional IPO path and must be regulated more stringently? Will you accept the compromise for the good of DeFi even though you represent multiple VC-backed projects and are 'special advisor' to a VC?
What about if a regulator points out the power and influence of Uniswap Corporation over the DAO and suggests that regulation could be lighter if the DAO had lower quorum requirements or if the Uniswap Corporation were dissolved? How will you decide whether it is 'possible' to disclose this information to the DAO? What about the GC of Uniswap Corporation--he will have a huge conflict of interest in this scenario, won't he?
Since nearly all information you receive from and send to regulators and legislators will impact your legal clients, how is it possible that such information will not be subject to atty-client confidentiality duties and that you can share it publicly? How will you separate your advocacy efforts as part of this nonprofit purporting to represent all of DeFi from your advocacy efforts for your specific clients? Is your assumption that DeFi projects are so incentive-aligned that advocating 'for DeFi' is the same as advocating 'for Compound', even though there may be many distinctions between various DeFi projects and Compound on any number of issues? If you agree that there can be conflicts, how will that be navigated considering that you, Rebecca and Marc are all extrinsically affiliated through current and past organizations/relationships? Won't you inevitably be biased toward defending structures and situations that you have previously supported and thus reducing your own potential for liability, rather than admitting to the potential legal flaws with those and working toward new creative compromises with regulators?
What does transparency mean to you? Many have asked empirical questions about the origins and motives for this proposal that have not been answered. Is that something it's 'impossible' for the proposers to be transparent about?
Would you submit draft legislation to the DAO for review/comment before it is submitted to a congressional committee? What about draft no-action letters?
If you were coordinating with specific projects or leaders in DeFi regarding a specific issue, would you disclose that? Will the CEOs of Compound, Uniswap and Aaave have more access to the information and decisionmaking of this non-profit than the core devs of Sushiswap and Yearn?
To what extent is this proposal being supported by VCs and team members who may face personal liability regarding their choices? and don't they have a conflict of interest re: their support, since otherwise they would have to spend (more of) their personal funds on defense?
These are critical kinds of questions that you guys are sweeping under the rug.
To establish a 501(c)(4) a specific purpose needs to be identified and that purpose has been outlined in the proposal (though I suppose the precise language could differ in some ways without changing the gist of it). Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest. So, board members would be exposing themselves to a real risk of liability if they misuse the funds. Lastly, no single board member could take any action on behalf of the organization and I think it is fair to say that, objectively speaking, the board members are incentivized the use the funds in the way it is outlined in the post.
To establish a 501(c)(4) a specific purpose needs to be identified and that purpose has been outlined in the proposal (though I suppose the precise language could differ in some ways without changing the gist of it). Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest. So, board members would be exposing themselves to a real risk of liability if they misuse the funds. Lastly, no single board member could take any action on behalf of the organization and I think it is fair to say that, objectively speaking, the board members are incentivized the use the funds in the way it is outlined in the post.
If this purpose and the related duties are the key (sole?) protection that UNI holders have, then why isn't the purpose being explicitly defined in advance as part of draft charter documents for the non-profit? Why "give us the money first then we'll figure everything else out--don't worry, you'll be protected"? How can you appeal to the fact that 'we'll have a purpose and be accountable for it' but not define that purpose exactly as part of the proposal?
Huge supporter of this initiative (with many solid perspectives - on both sides).
A quick comment on the amount > in the grand scheme the $40M price tag is inconsequential to the overall treasury. There should be checks and balances to that; a smaller grant may indeed provide a bit more comfort. But in the end, the focus on the amount vs. the justification of the activity is probably an inconsequential debate. Big swings will need to be taken for future evolution; this is one of them.
Great timing, this just hit the wire:
https://www.coindesk.com/defi-derivatives-may-be-illegal-cftc-commissioner
Same question for you @blockchaincolumbia Why do you support exiting funds from the treasury into a new entity that is not accountable to Uniswap's board, token holders, etc?
Why not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by Uniswap?
@jchervinsky I think you've done great work for DeFi and should be paid accordingly. But let me ask you a serious question -
Why is it OK for the General Counsel of Uniswap and lawyers who worked for Uniswap as their outside counsel OK to be seeking to remove funds from the Treasury to place them in an entity that they control and has no accountability to Uniswap?
@jchervinsky I think you've done great work for DeFi and should be paid accordingly. But let me ask you a serious question -
Why is it OK for the General Counsel of Uniswap and lawyers who worked for Uniswap as their outside counsel OK to be seeking to remove funds from the Treasury to place them in an entity that they control and has no accountability to Uniswap?
How is this not a conflict of interest far beyond what's permissible in normal corporate law?
@jamico Why don't you just set up a subsidiary or another entity that is 100% owner by Uniswap token / equity holders, reports to @haydenadams and the board and is funded quarterly by Uniswap?
I am not as silver tongued as many of the lawyers here, but I really can't figure out why anyone things it makes sense to exit corporate funds to a new entity that has no relationship to Uniswap.
I absolutely agree with providing a smaller initial grant to see how things pan out. This way it wouldnt be too polarizing for the community as a whole because I have a strong feeling a lot of people will NOT want to hold onto their UNI if they know the prices can get absolutely obliterated by passing sell pressure proposals all the time. It will just not be worth the hassle to hold UNI token if you are to fund everything as a holder with massive amounts..
Like one thing that grinds my gears is that people are not discussing the real value of the token and what it might entail for this proposal. 1M UNI is worth 40M now, but what if in 6 months its worth 200M? What if its worth 10M? What will happen in those cases. Will the OP come for another 30M if the token is worth next to nothing in 6 months?? I mean, its ridicilous how nobody is talking about this. This is why we have to provide a smaller amount first, then see if we require more funding.
Rationale is ok. The amount $40mm is too much. Please give some examples of why we need to have $40mm to be spent on this.
Marvin, dont you think its better to spin this project off as a whole new thing where proper funding can be allocated from every DeFi project?
These are great ideas. Taking a more inclusive and crypto native approach will almost surely help to advance the cause and improve the optics here and with any regulator the group engaged with.
However, most of the concerns raised before have not been addressed.
These are great ideas. Taking a more inclusive and crypto native approach will almost surely help to advance the cause and improve the optics here and with any regulator the group engaged with.
However, most of the concerns raised before have not been addressed.
As Matt Corva wrote (see below), each major bank disclosed about $3m per year on policy spend. This is a lot of money!
However, each major bank operates a far larger, far more complex business than Uniswap -- and faces far more legal and policy issues. They really aren't comparable businesses. Yet they only spent $3m per year.
Why do we think Uniswap needs to spend so much more to handle a much narrower range of issues? " To put it in perspective, upon a quick search, it looks like each major bank discloses approximately ~3MM in policy spend per year, and that’s what is reported. That’s not to say that the number proposed is correct or incorrect, but just to put real life costs to what otherwise might seem like a big number. "
Likewise, as Marvin said, trade association heads are paid more than $2m per year. One example is Robert Cook, the head of FINRA. Another is the current head of SIFMA. Is this the sort of organization we are trying to from?
If so, we probably need a much clearer plan and a large upgrade in talent. The folks who typically take these jobs are former head regulators (Cook was a repeat division head at the SEC) - not young crypto lawyers.
As currently written, the proposal simply exits 1m Uni with no strings attached. This is wildly out of line with how budgets work at the bigger banks and how regulatory campaigns are usually undertaken.
For example, when the large US investment banks lobbied to influence the regulations promulgated under Dodd Frank, they typically needed to get approval of quarterly budgets and KPIs. Project managers and often outside consultants were employed to drive the process. If the results didn't occur, budget would be cut or changed and people would be fired.
Here, what do we have besides a grant of 1m Uni to a small board - without even a clear statement of what success looks like.
How is this OK when it is 10x more money than a typical large bank spends a year on lobbying? Put differently, how do you think Goldman Sachs or Morgan Stanley would evaluate this proposal?
At the same time as I am sympathetic to any lawyer or policy wonk who is fighting for DeFi, this proposal pretty clearly creates significant conflicts of interest for each lawyer involved, as well as HLSBFI. Why are we comfortable with this?
To see this very clearly, suppose that Hayden and 3 of his friends proposed taking 1m Uni from the Treasury to start a DeFi VC fund. They then continued to pitch the project to all of you, and piled on to support it on Twitter.
Then they pushed the issue to a vote and used their influence to exit 1m Uni to a separate fund that they controlled.
Afterwards, they continued to be involved in Uniswap AND to hand out checks from the new VC fund - with no accountability to Uniswap.
Why is this OK?
As you probably guessed, my answer is no because of the conflicts of interest. But I actually think it is worse.
None of the responses from the potential board members have addresses the basic issues of accountability, budget size or conflicts. In fact, none provide any evidence why 1m Uni are needed for this effort or how 1m Uni will be spent. Likewise, none lay out any details on organizational structure, oversight, or staffing (beyond that the group will hire one full time employee).
Moreover, may of the responses just seem disingenuous or irrelevant. For example:
If you had to beat, say, the LA Lakers at home … you can’t do it on a $2 million dollar budget. There is no point fielding a team of amateurs that will definitely lose, so you have to go big or go home. The top trade association bosses make over $2M each year (it is pretty sickening but there is often much more at stake, and democracy is better than the alternatives). Many of the most persuasive lawyers who lead teams that win these fights earn more than the average professional athlete. The proposed fund here is actually much too small to hire many of those people, but it could support the hiring of more good, hungry junior talent and a few targeted big hires–
To put it very bluntly, how is this relevant?
And who, then, are the Goldman Sach's and Morgan Stanley's of the world hiring for $3m per year? And, who are these partners?
Aren't they the right comps .., and the Lakers payroll just a side show?
Actually the project being built by Uniswap Grants right now by Tally, the Tally FailSafe (See above) does exactly what you're talking about- decentralizes the trust. It works as optimistic execution, but ultimately, it is the token holders who have authority over the spending. That solves the concerns in my opinion.
@jamico these are great comments; proposal should not be approved in current form
the urgency is false as every single one of these people already commands millions of dollars through their respective organizations and is already engaged in DeFi lobbying and advocacy...they need to go back and propose a decentralized, non-trust-maximized alternative...
it would solve the concerns but this group has zero apparent interest in using that type of tool and being accountable in that way
this is bizarre; the proposal is asking to trust 6 people with $40M worth of funds; of course their character is relevant
Same question for you @lex-node Why would someone support exiting funds from the treasury into a new entity that is not accountable to Uniswap's board, token holders, etc?
Why not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by Uniswap?
There is an important distinction here - lobbying versus facing an enforcement action.
For lobbying, you can hire firms on retainer and push your policy agenda for $1m per year or less. Each firm will probably cost $50-100k per year (according to what I have seen elsewhere).
There is an important distinction here - lobbying versus facing an enforcement action.
For lobbying, you can hire firms on retainer and push your policy agenda for $1m per year or less. Each firm will probably cost $50-100k per year (according to what I have seen elsewhere).
For an enforcement action, the sky's the limit because the fines can be extremely high. However, for a project like Uniswap, you'd realistically just hire one or two law firms to create policies and procedures and to remediate the situation.
This would also cost no more than a few million. What would cost more than that are the fines.
@lex-node Most law school students take a class called "Corporations."
The key innovation behind the corporate is the separation of ownership from control -- i.e., the shareholders own the company, but the board and management directly control it.
@lex-node Most law school students take a class called "Corporations."
The key innovation behind the corporate is the separation of ownership from control -- i.e., the shareholders own the company, but the board and management directly control it.
This leads to the key problem you study in a law school corporations class: how do you regulate the actions of the board (and management) when they are not the owners of the company, and can potentially do things that help themselves, but screw the shareholders?
Usually, the ** bedrock principal is that the board should act on behalf of the owners. In fact, it has fiduciary duties to act that way under Delaware and most state corporate laws.**
Most of the case law you study revolves around this issue. For example, if the chairman of the board wants to take the company private, how do you set up the process? Or, if a member of the board wants the company to do a deal with a related party, how do you regulate that?
The usual answer is through hard and soft regulation, including forming a special committee that does not include the interested board member, securing fairness opinions from banks and accounting firms, and following a number of protective processes to prevent abuse.
For a governance token, this is probably supposed to play out with the members of the DAO or the management listening to what the governance token holders direct.
So, what is going on here?
[Removed picture of HLSBFI saying on Twitter that regulators won't listen to token holders...and positioning themselves as who regulators will listen to]
What is my governance token worth ...
... if an interested party can propose and lead the vote to take funds from the treasury?
... if the people who are directing the funds are opening saying the government will not listen to me - when they they are supposed to work on behalf of me, as a governance token holder?"
Let's get real @haydenadams.
Does HLS Block Fi work for Uniswap governance token holders? Uniswap equity holders? Or for themselves?
How about after 1m Uni are drained from the Uniswap treasury and placed in a separate fund that none of us (including you) have any control over, and is proposed to be created with literally no governance?
This would stink to high heaven under Delaware corporate law. And HLSBFI surely knows this.
Why is it OK here? And what are my "governance" tokens worth?
My very honest answer is "not much" if a delegated voter and a block of interested parties can lead the charge to exit a big chunk of the treasury ...
Reading back over the responses. This comment by Robert is very telling considering Compound Labs General Counsel is on the board for this proposal:
Reading back over the responses. This comment by Robert is very telling considering Compound Labs General Counsel is on the board for this proposal:
It sounds like there is a need for more clarity, which should have been laid out in the initial temperature check. Considering the heavy hitters from different DeFi project's counsel (Aave and compound). Perhaps we should be asking for a "back to the drawing board" to law out more details, timelines, deliverables, and cost breakdown.
I also am finding it a bit confusing as it seems there are several forums going on at the same time for this topic, which is fragmenting the discussions into different places (i.e. dcinvestor's comments in the other posting).
This seems entirely US centric. Uniswap is decentralized and not subject to a single nation state jurisdiction.
edit: It seems my forum privileges have been elevated, so here is the link: https://twitter.com/lex_node/status/1400424404643979267
I am a cryptolawyer and think this proposal could represent a watershed for cryptolaw in, I hate to say it, a bad way. All the lawyers involved are great and have a true passion for DeFi and cryptolaw, but that is not enough. People need to ask tougher questions about this, and I don't agree that the urgency of the legal threat should override critical thinking or discourage urgently trying to achieve similar ends with more decentralized means. There are a lot of great ideas in this thread about how to do that--these should be followed up on and of course should still include the great lawyers who are proposed to work through this non-profit.
edit: It seems my forum privileges have been elevated, so here is the link: https://twitter.com/lex_node/status/1400424404643979267
I am a cryptolawyer and think this proposal could represent a watershed for cryptolaw in, I hate to say it, a bad way. All the lawyers involved are great and have a true passion for DeFi and cryptolaw, but that is not enough. People need to ask tougher questions about this, and I don't agree that the urgency of the legal threat should override critical thinking or discourage urgently trying to achieve similar ends with more decentralized means. There are a lot of great ideas in this thread about how to do that--these should be followed up on and of course should still include the great lawyers who are proposed to work through this non-profit.
I unfortunately cannot post links here (why is that?), but on twitter (@lex_node) I have pinned a thread that I think this community should consider re: evaluating this proposal. Yes, I am an outsider and have no skin in the game on UNI, but I have almost 100% of my skin in DeFi and this proposal purports to be about DeFi more generally. You can find my disclosure of conflicts of interest here-it includes holding SUSHI.
I totally agree with all the points you listed. The lack of clarity and effort on the OP´s side to adress them properly raises eyebrows and suspicion to say the least. But so far, the vote indicates the proposal would pass in a proper vote. So I wonder whats next? What will be the next big proposals that whales will push through? Perhaps it will allocate 50M UNI ASAP without proper clarity, rhyme or reason to some cause which benefits a wide variety of actors having Uniswap pay for it.
The saddest part about all of this is that the core idea of the proposal is good and valid, but the budget part is NOT. And it could be easily solved by having first a smaller amount of UNI allocated. When we see results, the governance can approve a bigger funding round....
These are mostly red herrings, @miller !
1 - FATF guidance largely seeks to regulate digital assets providers in ways that are similar to how it regulates people who handle USD cash. The latest developments have generally been seen as surprisingly favorable to crypto by many insiders.
2 - This is an issue, but it about crypto. Not about DeFi. So we are the tail wagging the dog.
These are mostly red herrings, @miller !
1 - FATF guidance largely seeks to regulate digital assets providers in ways that are similar to how it regulates people who handle USD cash. The latest developments have generally been seen as surprisingly favorable to crypto by many insiders.
2 - This is an issue, but it about crypto. Not about DeFi. So we are the tail wagging the dog.
3 - None of this has been implemented or is generally seen to be implemented quickly, and it is about crypto - not DeFi. Again, we are the tail wagging the dog.
4 - This has nothing to do with DeFi. It is also extremely unlikely that there will be a global ban on crypto and that has never realistically been considered by any US regulator
5 - Yet again, mostly about crypto and not DeFi
6 - Same as 5
no one on this committee besides Larry and Marc has posted their thoughts
Jake Chervinsky also voiced his support https://twitter.com/jchervinsky/status/1399756101541842954
And Rebecca Rettig signaled agreement with Marcs post https://twitter.com/RebeccaRettig1/status/1400074451069378560
This is yet another very good point which remains to be addressed.....A person familiar with the matter should chip in because this is huge
Hey lets not forget to mention the lack of diversity on this board. I can't get behind a political action committee that isn't representing the inclusive nature of Uniswap. Seriously, I would want this to be forward looking and approach individuals who represent different nations, cultures, and ethnicities.
I also see a number of people with connections to Harvard Law. I am certain none of the choices were made based off nepotism, and I am sure they are the "best lobbyists." But why even open ourselves to that criticism? Not even to be cynical, very likely these people are extremely effective at their jobs but it looks to be very clear what is happening.
Hey lets not forget to mention the lack of diversity on this board. I can't get behind a political action committee that isn't representing the inclusive nature of Uniswap. Seriously, I would want this to be forward looking and approach individuals who represent different nations, cultures, and ethnicities.
I also see a number of people with connections to Harvard Law. I am certain none of the choices were made based off nepotism, and I am sure they are the "best lobbyists." But why even open ourselves to that criticism? Not even to be cynical, very likely these people are extremely effective at their jobs but it looks to be very clear what is happening.
Winners and losers will be picked from the Wild West that is DeFi. This is simply a bribe to the right people who know how to effectively lubricate the system. No one knows the gears and levers of Washington more than people from the Bush/Cheney Admin (omitted from Biber's bio). The Whales and VCs who are on the Taxman's chopping block will obviously support this because they need the clarity. I think the "little guy" will continue to pursue a more pure form of DeFi through alternative means if possible.
Honestly I am seeing more merit to this proposal after it has been fleshed out, but I would want some way for the community to have a voice. Or at least some reporting method where feedback could be gathered so our interests are actually being represented.
this is bizarre; the proposal is asking to trust 6 people with $40M worth of funds; of course their character is relevant
Same question for you @lex-node Why would someone support exiting funds from the treasury into a new entity that is not accountable to Uniswap's board, token holders, etc?
Why not set up a subsidiary or another entity that has a direct reporting line - and is funded periodically - by Uniswap?
There is an important distinction here - lobbying versus facing an enforcement action.
For lobbying, you can hire firms on retainer and push your policy agenda for $1m per year or less. Each firm will probably cost $50-100k per year (according to what I have seen elsewhere).
There is an important distinction here - lobbying versus facing an enforcement action.
For lobbying, you can hire firms on retainer and push your policy agenda for $1m per year or less. Each firm will probably cost $50-100k per year (according to what I have seen elsewhere).
For an enforcement action, the sky's the limit because the fines can be extremely high. However, for a project like Uniswap, you'd realistically just hire one or two law firms to create policies and procedures and to remediate the situation.
This would also cost no more than a few million. What would cost more than that are the fines.
@lex-node Most law school students take a class called "Corporations."
The key innovation behind the corporate is the separation of ownership from control -- i.e., the shareholders own the company, but the board and management directly control it.
@lex-node Most law school students take a class called "Corporations."
The key innovation behind the corporate is the separation of ownership from control -- i.e., the shareholders own the company, but the board and management directly control it.
This leads to the key problem you study in a law school corporations class: how do you regulate the actions of the board (and management) when they are not the owners of the company, and can potentially do things that help themselves, but screw the shareholders?
Usually, the ** bedrock principal is that the board should act on behalf of the owners. In fact, it has fiduciary duties to act that way under Delaware and most state corporate laws.**
Most of the case law you study revolves around this issue. For example, if the chairman of the board wants to take the company private, how do you set up the process? Or, if a member of the board wants the company to do a deal with a related party, how do you regulate that?
The usual answer is through hard and soft regulation, including forming a special committee that does not include the interested board member, securing fairness opinions from banks and accounting firms, and following a number of protective processes to prevent abuse.
For a governance token, this is probably supposed to play out with the members of the DAO or the management listening to what the governance token holders direct.
So, what is going on here?
[Removed picture of HLSBFI saying on Twitter that regulators won't listen to token holders...and positioning themselves as who regulators will listen to]
What is my governance token worth ...
... if an interested party can propose and lead the vote to take funds from the treasury?
... if the people who are directing the funds are opening saying the government will not listen to me - when they they are supposed to work on behalf of me, as a governance token holder?"
Let's get real @haydenadams.
Does HLS Block Fi work for Uniswap governance token holders? Uniswap equity holders? Or for themselves?
How about after 1m Uni are drained from the Uniswap treasury and placed in a separate fund that none of us (including you) have any control over, and is proposed to be created with literally no governance?
This would stink to high heaven under Delaware corporate law. And HLSBFI surely knows this.
Why is it OK here? And what are my "governance" tokens worth?
My very honest answer is "not much" if a delegated voter and a block of interested parties can lead the charge to exit a big chunk of the treasury ...
Reading back over the responses. This comment by Robert is very telling considering Compound Labs General Counsel is on the board for this proposal:
Reading back over the responses. This comment by Robert is very telling considering Compound Labs General Counsel is on the board for this proposal:
It sounds like there is a need for more clarity, which should have been laid out in the initial temperature check. Considering the heavy hitters from different DeFi project's counsel (Aave and compound). Perhaps we should be asking for a "back to the drawing board" to law out more details, timelines, deliverables, and cost breakdown.
I also am finding it a bit confusing as it seems there are several forums going on at the same time for this topic, which is fragmenting the discussions into different places (i.e. dcinvestor's comments in the other posting).
This seems entirely US centric. Uniswap is decentralized and not subject to a single nation state jurisdiction.
edit: It seems my forum privileges have been elevated, so here is the link: https://twitter.com/lex_node/status/1400424404643979267
I am a cryptolawyer and think this proposal could represent a watershed for cryptolaw in, I hate to say it, a bad way. All the lawyers involved are great and have a true passion for DeFi and cryptolaw, but that is not enough. People need to ask tougher questions about this, and I don't agree that the urgency of the legal threat should override critical thinking or discourage urgently trying to achieve similar ends with more decentralized means. There are a lot of great ideas in this thread about how to do that--these should be followed up on and of course should still include the great lawyers who are proposed to work through this non-profit.
edit: It seems my forum privileges have been elevated, so here is the link: https://twitter.com/lex_node/status/1400424404643979267
I am a cryptolawyer and think this proposal could represent a watershed for cryptolaw in, I hate to say it, a bad way. All the lawyers involved are great and have a true passion for DeFi and cryptolaw, but that is not enough. People need to ask tougher questions about this, and I don't agree that the urgency of the legal threat should override critical thinking or discourage urgently trying to achieve similar ends with more decentralized means. There are a lot of great ideas in this thread about how to do that--these should be followed up on and of course should still include the great lawyers who are proposed to work through this non-profit.
I unfortunately cannot post links here (why is that?), but on twitter (@lex_node) I have pinned a thread that I think this community should consider re: evaluating this proposal. Yes, I am an outsider and have no skin in the game on UNI, but I have almost 100% of my skin in DeFi and this proposal purports to be about DeFi more generally. You can find my disclosure of conflicts of interest here-it includes holding SUSHI.
I totally agree with all the points you listed. The lack of clarity and effort on the OP´s side to adress them properly raises eyebrows and suspicion to say the least. But so far, the vote indicates the proposal would pass in a proper vote. So I wonder whats next? What will be the next big proposals that whales will push through? Perhaps it will allocate 50M UNI ASAP without proper clarity, rhyme or reason to some cause which benefits a wide variety of actors having Uniswap pay for it.
The saddest part about all of this is that the core idea of the proposal is good and valid, but the budget part is NOT. And it could be easily solved by having first a smaller amount of UNI allocated. When we see results, the governance can approve a bigger funding round....
These are mostly red herrings, @miller !
1 - FATF guidance largely seeks to regulate digital assets providers in ways that are similar to how it regulates people who handle USD cash. The latest developments have generally been seen as surprisingly favorable to crypto by many insiders.
2 - This is an issue, but it about crypto. Not about DeFi. So we are the tail wagging the dog.
These are mostly red herrings, @miller !
1 - FATF guidance largely seeks to regulate digital assets providers in ways that are similar to how it regulates people who handle USD cash. The latest developments have generally been seen as surprisingly favorable to crypto by many insiders.
2 - This is an issue, but it about crypto. Not about DeFi. So we are the tail wagging the dog.
3 - None of this has been implemented or is generally seen to be implemented quickly, and it is about crypto - not DeFi. Again, we are the tail wagging the dog.
4 - This has nothing to do with DeFi. It is also extremely unlikely that there will be a global ban on crypto and that has never realistically been considered by any US regulator
5 - Yet again, mostly about crypto and not DeFi
6 - Same as 5
no one on this committee besides Larry and Marc has posted their thoughts
Jake Chervinsky also voiced his support https://twitter.com/jchervinsky/status/1399756101541842954
And Rebecca Rettig signaled agreement with Marcs post https://twitter.com/RebeccaRettig1/status/1400074451069378560
This is yet another very good point which remains to be addressed.....A person familiar with the matter should chip in because this is huge
Hey lets not forget to mention the lack of diversity on this board. I can't get behind a political action committee that isn't representing the inclusive nature of Uniswap. Seriously, I would want this to be forward looking and approach individuals who represent different nations, cultures, and ethnicities.
I also see a number of people with connections to Harvard Law. I am certain none of the choices were made based off nepotism, and I am sure they are the "best lobbyists." But why even open ourselves to that criticism? Not even to be cynical, very likely these people are extremely effective at their jobs but it looks to be very clear what is happening.
Hey lets not forget to mention the lack of diversity on this board. I can't get behind a political action committee that isn't representing the inclusive nature of Uniswap. Seriously, I would want this to be forward looking and approach individuals who represent different nations, cultures, and ethnicities.
I also see a number of people with connections to Harvard Law. I am certain none of the choices were made based off nepotism, and I am sure they are the "best lobbyists." But why even open ourselves to that criticism? Not even to be cynical, very likely these people are extremely effective at their jobs but it looks to be very clear what is happening.
Winners and losers will be picked from the Wild West that is DeFi. This is simply a bribe to the right people who know how to effectively lubricate the system. No one knows the gears and levers of Washington more than people from the Bush/Cheney Admin (omitted from Biber's bio). The Whales and VCs who are on the Taxman's chopping block will obviously support this because they need the clarity. I think the "little guy" will continue to pursue a more pure form of DeFi through alternative means if possible.
Honestly I am seeing more merit to this proposal after it has been fleshed out, but I would want some way for the community to have a voice. Or at least some reporting method where feedback could be gathered so our interests are actually being represented.
But even absent those changes I would still support this on the grounds above.
I'm in full agreement with Leighton here. I'm voting FOR, but question for those voting against, would it be more palatable if there were a milestone set in place where only 25-50% is disbursed by treasury upfront to set up the 501(c)(4) and getting things off the ground?
For getting other DeFi treasuries onboard, while I think this is a super important precedent to set, I don't want to downplay how difficult this type of coordination across decentralized communities is. This could be a prereq for future disbursement (eg. remaining 50-75%) but we should be acutely aware of the coordination costs (eg. time and effort) as well as judgement/curation (eg. who decides who gets to belong?).
This has been great discourse so far, but let's be careful not to devolve into namecalling and non sequiturs to detract from the overall goals of this proposal.
Very well stated sir.
Its pretty simplistic to write off things as conspiracy theories. Thats a rather easy way to dismiss someone isnt it. The WEF literally said their goal is to have people own nothing. Am I a conspiracy theorist for saying that?
But the cost of 30M is too HUGE no matter the argument. The opportunity cost of it are way too much to justify it by any means. This would effectively mean that we have to sacrifice other proposals which require grants otherwise the sell pressure from all of the proposals combined would utterly destroy the treasury´s value. How is this not even worse than strict regulation??
I feel like you want to promote this sense of urgency to force people into hastily decisions. This is just by NATURE not the right approach to handle such a large sum of money. It does in fact display some elements of nefarious behaviour.
But the cost of 30M is too HUGE no matter the argument. The opportunity cost of it are way too much to justify it by any means. This would effectively mean that we have to sacrifice other proposals which require grants otherwise the sell pressure from all of the proposals combined would utterly destroy the treasury´s value. How is this not even worse than strict regulation??
I feel like you want to promote this sense of urgency to force people into hastily decisions. This is just by NATURE not the right approach to handle such a large sum of money. It does in fact display some elements of nefarious behaviour.
To your second argument, this concerns all of DeFi....why should UNI holders bear the cost for everybody??? Just because you arbitrary decided that it has to happen ASAP? Meaning that UNI holders have to be the lawyer fund for all of DeFi??
You are not reasonable with your proposal and you do not want to compromise....
This proposal is a trojan horse and Im highly suspicious of it. Why is a WEF crypto lawyer involved? Furthermore, why is Harvard involved? Research the WEF, and how their plan is how youll own nothing and be happy. Not my words, theirs.
Personally, I think you should leave and never come back. Hopefully voters do the right thing and vote this down HARD.
This proposal is a trojan horse and Im highly suspicious of it. Why is a WEF crypto lawyer involved? Furthermore, why is Harvard involved? Research the WEF, and how their plan is how youll own nothing and be happy. Not my words, theirs.
Personally, I think you should leave and never come back. Hopefully voters do the right thing and vote this down HARD.
Again, the only thing we should be pushing for is NO regulation at all for at least 10 years. Defi is still in the early stages and any regulation now will kill some of the growth. Governments shouldnt have a problem with this as long as they get their tax revenue which will be plenty.
I think I´ve made it clear in my response that I do not specifically state that the UNI will be sold at once. The argument stating that the amount of dillution could be spread over multiple projects stays. If one proposal does it (grants), its fine, but if you go down the rabbit hole to propose a 20x bigger amount for the next project.....where does that leave us?
Soon, we will have 10 proposals going through all of them arguing that their allocation of UNI is not dillutive. While it might be the case individually, as a whole it will have a significant impact. This is an extremely overlooked variable of your proposal and I urge strong caution.
en you look into who runs Harvard law, and what their religion is, you will realize the Central Banking globalist Cabala NWO has put their best and brightest minds towards the task of destroying the banks competitors which is DeFi and the crypto free world in general. END THE FED!!!
Just to expand on BOR´s thoughts.
Saying that 1M UNI represents only 0,25 % is misleading. The UNI treasury might seem huge when you view its value based on the marketcap, but this is extremely inaccurate estimate of what wealth the UNI treasury currently holds. The real market value what you can get from the UNI treasury is multiple times smaller.
Just to expand on BOR´s thoughts.
Saying that 1M UNI represents only 0,25 % is misleading. The UNI treasury might seem huge when you view its value based on the marketcap, but this is extremely inaccurate estimate of what wealth the UNI treasury currently holds. The real market value what you can get from the UNI treasury is multiple times smaller.
Think of it the same way as Vitalik was only able to get 38M USD for the 2B worth of coins he was donated......
My point is that we do not know how much % of the firepower from the treasury this proposal would take in the end. You can say its only 0.25 % of the treasury, but the selling pressure might result in a much larger, unexpected impact.
When I say there is huge opportunity cost, I have in mind the fact that we already have a proposal which exerts selling pressure on the UNI token´s price. If we add another one which is 20x larger, we might NOT enough room for additional proposals which have inherent selling pressure built into them because the price impact will start being very very palpable.
Therefore, I´d much rather support many more proposals which build on top of Uniswap and want funding to improve it rather than to throw it away on lawyers which is not our sole responsibility anyway. Who said Uniswap has to be the lawyer of DeFi?
Yes, the sheer size of the grant has to be reduced. It doesnt make sense to start with such an exorbitant amount.
I fully agree with electra. This should be a project on its own and not funded by the UNI treasury.
Yes, the sheer size of the grant has to be reduced. It doesnt make sense to start with such an exorbitant amount.
I fully agree with electra. This should be a project on its own and not funded by the UNI treasury.
I feel like the OP is intentionally skipping a large amount of arguments which are against the proposal on purpose. Addressing the budget issue by saying, "Top lawyers are expensive so we have to pay them MILLIONS in fees..." is questionable at the very best. Uniswap is not facing a lawsuit, why do we have to spend so much??? What about the point I raised that UNI is not so liquid right now to be able to ABSORB million dollar selling pressure without a considerable price drop?
We simply cant be building selling pressure on top of the token all the time, we do not have the necessary buying power to back it up. I do not think the OP even realizes how much this proposal would cost when all is done and dusted. The opportunity cost of implementing this proposal could be in the 100s of millions of USD.....
I feel like this is very crucial aspect of the budget because all of a sudden the cost in the absolute terms could become 10/100x larger
With the full form outlined, I will vote NO . This is NOT a responsible use of the treasury funds.
It is good to have a diverse group on the board. From the looks of the professional experience of each member, it looks like there is a broad span of political views: from more conservatives to more liberal. Financial inclusiveness spans all political leaning's.
Regulation is happening for the Defi space, and it is happening quickly. It is best uniswap has a voice in the room. The group proposed here can speak on different area's of the Defi space and ethereum, while also creating bridges to the traditional finance space.
It is good to have a diverse group on the board. From the looks of the professional experience of each member, it looks like there is a broad span of political views: from more conservatives to more liberal. Financial inclusiveness spans all political leaning's.
Regulation is happening for the Defi space, and it is happening quickly. It is best uniswap has a voice in the room. The group proposed here can speak on different area's of the Defi space and ethereum, while also creating bridges to the traditional finance space.
In May (just last month) Michael Hsu was appointed by Janet Yellen as acting OCC (office of the comptroller of the currency) and is a former associate director in supervision and regulation at the federal reserve of governors. He has made remarks of fintech and digital currencies reminding him of the pre-2008 financial crises, has created a sprint team to work on regulating digital tokens, and has designated it his appointment focus, while leaving wall street and tradFi alone.
I trust the nominee's designated out in this proposal to be better advocates and more knowledgeable about the potential of the Ethereum ecosystem, than those "sprinting" to regulate a nascent technology.
But even absent those changes I would still support this on the grounds above.
I'm in full agreement with Leighton here. I'm voting FOR, but question for those voting against, would it be more palatable if there were a milestone set in place where only 25-50% is disbursed by treasury upfront to set up the 501(c)(4) and getting things off the ground?
For getting other DeFi treasuries onboard, while I think this is a super important precedent to set, I don't want to downplay how difficult this type of coordination across decentralized communities is. This could be a prereq for future disbursement (eg. remaining 50-75%) but we should be acutely aware of the coordination costs (eg. time and effort) as well as judgement/curation (eg. who decides who gets to belong?).
This has been great discourse so far, but let's be careful not to devolve into namecalling and non sequiturs to detract from the overall goals of this proposal.
Very well stated sir.
Its pretty simplistic to write off things as conspiracy theories. Thats a rather easy way to dismiss someone isnt it. The WEF literally said their goal is to have people own nothing. Am I a conspiracy theorist for saying that?
But the cost of 30M is too HUGE no matter the argument. The opportunity cost of it are way too much to justify it by any means. This would effectively mean that we have to sacrifice other proposals which require grants otherwise the sell pressure from all of the proposals combined would utterly destroy the treasury´s value. How is this not even worse than strict regulation??
I feel like you want to promote this sense of urgency to force people into hastily decisions. This is just by NATURE not the right approach to handle such a large sum of money. It does in fact display some elements of nefarious behaviour.
But the cost of 30M is too HUGE no matter the argument. The opportunity cost of it are way too much to justify it by any means. This would effectively mean that we have to sacrifice other proposals which require grants otherwise the sell pressure from all of the proposals combined would utterly destroy the treasury´s value. How is this not even worse than strict regulation??
I feel like you want to promote this sense of urgency to force people into hastily decisions. This is just by NATURE not the right approach to handle such a large sum of money. It does in fact display some elements of nefarious behaviour.
To your second argument, this concerns all of DeFi....why should UNI holders bear the cost for everybody??? Just because you arbitrary decided that it has to happen ASAP? Meaning that UNI holders have to be the lawyer fund for all of DeFi??
You are not reasonable with your proposal and you do not want to compromise....
This proposal is a trojan horse and Im highly suspicious of it. Why is a WEF crypto lawyer involved? Furthermore, why is Harvard involved? Research the WEF, and how their plan is how youll own nothing and be happy. Not my words, theirs.
Personally, I think you should leave and never come back. Hopefully voters do the right thing and vote this down HARD.
This proposal is a trojan horse and Im highly suspicious of it. Why is a WEF crypto lawyer involved? Furthermore, why is Harvard involved? Research the WEF, and how their plan is how youll own nothing and be happy. Not my words, theirs.
Personally, I think you should leave and never come back. Hopefully voters do the right thing and vote this down HARD.
Again, the only thing we should be pushing for is NO regulation at all for at least 10 years. Defi is still in the early stages and any regulation now will kill some of the growth. Governments shouldnt have a problem with this as long as they get their tax revenue which will be plenty.
I think I´ve made it clear in my response that I do not specifically state that the UNI will be sold at once. The argument stating that the amount of dillution could be spread over multiple projects stays. If one proposal does it (grants), its fine, but if you go down the rabbit hole to propose a 20x bigger amount for the next project.....where does that leave us?
Soon, we will have 10 proposals going through all of them arguing that their allocation of UNI is not dillutive. While it might be the case individually, as a whole it will have a significant impact. This is an extremely overlooked variable of your proposal and I urge strong caution.
en you look into who runs Harvard law, and what their religion is, you will realize the Central Banking globalist Cabala NWO has put their best and brightest minds towards the task of destroying the banks competitors which is DeFi and the crypto free world in general. END THE FED!!!
Just to expand on BOR´s thoughts.
Saying that 1M UNI represents only 0,25 % is misleading. The UNI treasury might seem huge when you view its value based on the marketcap, but this is extremely inaccurate estimate of what wealth the UNI treasury currently holds. The real market value what you can get from the UNI treasury is multiple times smaller.
Just to expand on BOR´s thoughts.
Saying that 1M UNI represents only 0,25 % is misleading. The UNI treasury might seem huge when you view its value based on the marketcap, but this is extremely inaccurate estimate of what wealth the UNI treasury currently holds. The real market value what you can get from the UNI treasury is multiple times smaller.
Think of it the same way as Vitalik was only able to get 38M USD for the 2B worth of coins he was donated......
My point is that we do not know how much % of the firepower from the treasury this proposal would take in the end. You can say its only 0.25 % of the treasury, but the selling pressure might result in a much larger, unexpected impact.
When I say there is huge opportunity cost, I have in mind the fact that we already have a proposal which exerts selling pressure on the UNI token´s price. If we add another one which is 20x larger, we might NOT enough room for additional proposals which have inherent selling pressure built into them because the price impact will start being very very palpable.
Therefore, I´d much rather support many more proposals which build on top of Uniswap and want funding to improve it rather than to throw it away on lawyers which is not our sole responsibility anyway. Who said Uniswap has to be the lawyer of DeFi?
Yes, the sheer size of the grant has to be reduced. It doesnt make sense to start with such an exorbitant amount.
I fully agree with electra. This should be a project on its own and not funded by the UNI treasury.
Yes, the sheer size of the grant has to be reduced. It doesnt make sense to start with such an exorbitant amount.
I fully agree with electra. This should be a project on its own and not funded by the UNI treasury.
I feel like the OP is intentionally skipping a large amount of arguments which are against the proposal on purpose. Addressing the budget issue by saying, "Top lawyers are expensive so we have to pay them MILLIONS in fees..." is questionable at the very best. Uniswap is not facing a lawsuit, why do we have to spend so much??? What about the point I raised that UNI is not so liquid right now to be able to ABSORB million dollar selling pressure without a considerable price drop?
We simply cant be building selling pressure on top of the token all the time, we do not have the necessary buying power to back it up. I do not think the OP even realizes how much this proposal would cost when all is done and dusted. The opportunity cost of implementing this proposal could be in the 100s of millions of USD.....
I feel like this is very crucial aspect of the budget because all of a sudden the cost in the absolute terms could become 10/100x larger
With the full form outlined, I will vote NO . This is NOT a responsible use of the treasury funds.
It is good to have a diverse group on the board. From the looks of the professional experience of each member, it looks like there is a broad span of political views: from more conservatives to more liberal. Financial inclusiveness spans all political leaning's.
Regulation is happening for the Defi space, and it is happening quickly. It is best uniswap has a voice in the room. The group proposed here can speak on different area's of the Defi space and ethereum, while also creating bridges to the traditional finance space.
It is good to have a diverse group on the board. From the looks of the professional experience of each member, it looks like there is a broad span of political views: from more conservatives to more liberal. Financial inclusiveness spans all political leaning's.
Regulation is happening for the Defi space, and it is happening quickly. It is best uniswap has a voice in the room. The group proposed here can speak on different area's of the Defi space and ethereum, while also creating bridges to the traditional finance space.
In May (just last month) Michael Hsu was appointed by Janet Yellen as acting OCC (office of the comptroller of the currency) and is a former associate director in supervision and regulation at the federal reserve of governors. He has made remarks of fintech and digital currencies reminding him of the pre-2008 financial crises, has created a sprint team to work on regulating digital tokens, and has designated it his appointment focus, while leaving wall street and tradFi alone.
I trust the nominee's designated out in this proposal to be better advocates and more knowledgeable about the potential of the Ethereum ecosystem, than those "sprinting" to regulate a nascent technology.
en you look into who runs Harvard law, and what their religion is, you will realize the Central Banking globalist Cabala NWO has put their best and brightest minds towards the task of destroying the banks competitors which is DeFi and the crypto free world in general. END THE FED!!!
Am seeing a lot of conspiracy theories - would be nice to keep the discussion factual and on topic. As noted in the post, this would go to a multisig of the proposed committee members which includes the CG at Compound Labs, GC at Aave Companies, GC at dydx Trading, and CLO at Uniswap Labs.
en you look into who runs Harvard law, and what their religion is, you will realize the Central Banking globalist Cabala NWO has put their best and brightest minds towards the task of destroying the banks competitors which is DeFi and the crypto free world in general. END THE FED!!!
Am seeing a lot of conspiracy theories - would be nice to keep the discussion factual and on topic. As noted in the post, this would go to a multisig of the proposed committee members which includes the CG at Compound Labs, GC at Aave Companies, GC at dydx Trading, and CLO at Uniswap Labs.
Just normal startup lawyers that service ordinary startups cost $1000 per hour. A $1 million dollar budget would give the committee a little under five months of runway for just one person. Once you add in the cost of taxes, accounting, filings, just normal day-to-day business costs for a legal firm, and you’re basically done before September. Edit: (I don’t know the right amount that should be spent per year, but I think $1m doesn’t sound like enough)
Just normal startup lawyers that service ordinary startups cost $1000 per hour. A $1 million dollar budget would give the committee a little under five months of runway for just one person. Once you add in the cost of taxes, accounting, filings, just normal day-to-day business costs for a legal firm, and you’re basically done before September. Edit: (I don’t know the right amount that should be spent per year, but I think $1m doesn’t sound like enough)
CoinCenter's budget has been $1m/year for quite some time. Why does this fund need a budget that is 5-6x that of CoinCenter?
I think the Committee should be judged as a group, if this committee thinks it needs these individuals to make the project work, we either support this group of individuals, or don’t do it. Doesn’t make sense to say, “Yeah let’s do it, but oh- you can’t use the people you think you need to get it done.” They need to have the ability to organize themselves in such a way that they believe they are setup for success.
Fine, then the WEF involvement should disqualify this entire panel. There is zero reason that this committee should involve any politiclly controversial figures.
I understand why this might be a nice provision to add, but I don’t get why the folks who might have the best perspective should be prevented from contributing their voting power. Perhaps their voice has an outsized influence, but so have been their contributions, no? I’m also not crazy about creating classes of votes here, if they have access to their tokens, and it was always understood that they could vote, then they should be able to vote. Feels like weird engineering to construct the eligible voters based on the subject of the vote. It’s either token holder governance or it’s not. (But I’m sure this could be a WHOLE different discussion).
Core team & early investors can conceive a proposal, propose it, then vote it into existence without any community involvement. This completely negates the idea of decentralization. If they want to continue to participate the way that they are, then they should just admit that this is not a decentralized governance process.
Again, why hobble the committee right out of the gate? I’m not an expert on the WEF, but if the experts we empower think it’s necessary to work with them, in order to achieve their stated goals, I think we have to empower them and trust their judgement.
"Experts"? There are no experts here. WEF has a stated goal to execute a "Great Reset" of society and is highly political. There is zero chance that WEF will be acting in the best interests of tokenholders. Their stated goal is to act in the best interests of "the world". That is not at all conducive to this capitalist experiment.
Really, what a coincidence. The same author has on the same day also published that early on Tuesday the World Economic Forum published a "white paper [which] is meant to act as a toolkit for regulators looking to understand the decentralized finance sector." Article here This same author noting that "The WEF does not intend to recommend specific policy actions for regulators, however. The document said it is more focused on describing what issues DeFi may address, as well as draw attention to certain areas on which regulators may need to catch up." According to yesterday's WEF's announcement, it is "The result of an international collaboration among academics, legal practitioners, DeFi entrepreneurs, technologists and regulatory experts, the report provides a solid foundation for understanding the major factors that should drive policy-making decisions." and, although DeFi may, "according to its proponents", be promising, nevertheless "DeFi raises considerations related to consumer protection, loss of funds, governance complexities, technical risk and systemic risk. Significant incidents involving technical failures and attacks on DeFi services have already occurred. Moreover, questions remain about the actual extent of decentralization of some protocols – and associated risks, e.g. for manipulation – and whether DeFi is more than a risky new vehicle for speculation that may open the door to fraud and illicit activity."
According to the proposal we are discussing here, the 7th member of the non profit's Committee is " 1. Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF." Her picture is one of three figuring at the onset of the report. One can say she has had a pivoting role in it. But taking a closer look, one sees that the majority of the proposed BD members are somehow related to the WEF's relevant report(s). Specifically: Jake Chervinsky, General Counsel of Compound, is a content contributor. of the just publicized WEF's report.
Really, what a coincidence. The same author has on the same day also published that early on Tuesday the World Economic Forum published a "white paper [which] is meant to act as a toolkit for regulators looking to understand the decentralized finance sector." Article here This same author noting that "The WEF does not intend to recommend specific policy actions for regulators, however. The document said it is more focused on describing what issues DeFi may address, as well as draw attention to certain areas on which regulators may need to catch up." According to yesterday's WEF's announcement, it is "The result of an international collaboration among academics, legal practitioners, DeFi entrepreneurs, technologists and regulatory experts, the report provides a solid foundation for understanding the major factors that should drive policy-making decisions." and, although DeFi may, "according to its proponents", be promising, nevertheless "DeFi raises considerations related to consumer protection, loss of funds, governance complexities, technical risk and systemic risk. Significant incidents involving technical failures and attacks on DeFi services have already occurred. Moreover, questions remain about the actual extent of decentralization of some protocols – and associated risks, e.g. for manipulation – and whether DeFi is more than a risky new vehicle for speculation that may open the door to fraud and illicit activity."
According to the proposal we are discussing here, the 7th member of the non profit's Committee is " 1. Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF." Her picture is one of three figuring at the onset of the report. One can say she has had a pivoting role in it. But taking a closer look, one sees that the majority of the proposed BD members are somehow related to the WEF's relevant report(s). Specifically: Jake Chervinsky, General Counsel of Compound, is a content contributor. of the just publicized WEF's report.
Other Content Contributors are: Nic Carter, Partner, Castle Island Ventures, USA Tarun Chitra, Chief Executive Officer, Gauntlet, USA Ann Sofie Cloots, Slaughter & May Lecturer in Company Law, University of Cambridge, United Kingdom Jacek Czarnecki, Global Legal Counsel, Maker Foundation, Poland Brendan Forster, Chief Operating Officer, Dharma Labs, USA Katharina Gehra, Chief Executive Officer, Immutable Insight, Germany Andreas Glarner, Partner, MME Legal Tax Compliance, Switzerland Jordan Lazaro Gustave, Chief Operating Officer, Aave, United Kingdom Siân Jones, Senior Partner, XReg Consulting, Gibraltar Daniel Kochis, Global Head of Business Development, Chainlink Labs, USA Joyce Lai, Member, New York Angels; Founder, NewTerritories.io, USA Urszula McCormack, Partner, King & Wood Mallesons, Hong Kong SAR Fabian Schär, Professor for Distributed Ledger Technology/Fintech, University of Basel, Switzerland Lex Sokolin, Head Economist and Global Fintech Co-Head, ConsenSys, United Kingdom Teana Baker Taylor, General Manager, UK, Crypto.com, United Kingdom
Content Reviewers of the WEF report include another 2 of the proposed Committee members (Marvin Ammori, Chief Legal Officer of Uniswap Labs and Sheila Warren, "Deputy Head, Centre for the Fourth Industrial Revolution, World Economic Forum, USA"). Others are: Marcos Allende Lopez, Technical Leader, LACChain, Inter-American Development Bank, USA Sebastian Banescu, Senior Research Engineer, Quantstamp, Germany Matthias Bauer-Langgartner, Technical Specialist, FCA Innovate, United Kingdom Nicolas Brügger, Senior Policy Adviser, State Secretariat for International Finance, Switzerland Jehudi Castro Sierra, Digital Transformation Adviser, Office of the Presidency, Colombia Charles Dalton, Software Engineer, Blockchain, Crypto, and Digital Currencies, PayPal, USA Maxim Galash, Chief Executive Officer, Coinchange, Canada Oli Harris, Vice-President, Goldman Sachs, USA Kibae Kim, Principal Researcher, Korea Policy Centre for the Fourth Industrial Revolution, KAIST, South Korea Netta Korin, Co-Founder, Orbs; Founder, Hexa Foundation, Israel Ashley Lannquist, Project Lead, Blockchain and Digital Currency, World Economic Forum, USA Caroline Malcolm, Head, Global Blockchain Policy Centre, Organisation for Economic Co-operation and Development, France Rob Massey, Tax Blockchain, Crypto and Digital Assets Leader, Deloitte, USA Paul Maley, Global Head of Securities Services, Deutsche Bank, United Kingdom Xavier Meegan, Blockchain Intern, ING, Netherlands Michael Mosier, Acting Director, FinCEN, USA Michael Oh, Director, Office of Financial Innovation, FINRA, USA Sam Proctor, Chief Executive Officer, Genesis Block, USA Lane Rettig, Core Team, Spacemesh, USA Richard Rosenthal, Risk and Financial Advisory, Banking Regulatory Specialist, Deloitte, USA Lukas Staub, Senior Legal Adviser, State Secretariat for International Finance, Switzerland Christoph Simmchen, Legal Counsel, Gnosis, Germany
A closer look reveals that this report was not created by the WEF alone, but "in collaboration with the University of Pennsylvania, an initiative of it which crowdfunded a billion. There is also a so-called companion report (called: DeFi Beyond the Hype) just published in May, with Lead Author being David Gogel of dYdX. The BD of the proposed non profit includes the attorney "Marc Boiron , General Counsel of dYdX Trading. That WEF -UniPenn 'companion report' was also reviewed by, among others, proposed BD member Sheila Warren (World Economic Forum).
Maybe the proposed members of the Committee, who contributed to these DeFi global regulation inspirations, might wish to share their views about the relevance of the WEF's papers with the present proposal.
In my view, as long as it is even conceivable that millions would just flow out of Uniswap, "to start with", also inspiring thoughts about getting extra sums from other DAOs, we're going to see a much more "relevant" journalistic coverage, especially as the time approaches for voting the proposal. The latter, as I understand, is already considered as voted for. Which would make a great case study. This bulk of information might also answer some concerns about what could be expected to go wrong.
Urging Governments and regulators to take measures (or participating in such efforts) and then proposing oneself as the 40M solution to "defend" the space from regulation is, to put it lightly, of concern.
We understand that $30M is not insignificant. As mentioned above, we anticipate that this will be allocated over 4-5 years.
We understand that $30M is not insignificant. As mentioned above, we anticipate that this will be allocated over 4-5 years.
$6-8m per year is outrageous for a new project like this. If you want to make this palatable, make it year-by-year and start with $1m.
What urgency? Do you know something that we don't? Is there impending regulation? Have there been talks with regulators? I have not seen anything to indicate that urgency exists to jump into such a huge commitment. If you know something, you (or core team) need to share it.
Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest.
What incentive does a member of the World Economic Forum have to work in the best interests of UNI holders? And what commitment do UNI holders have that this organization will put their needs ahead of all others in DeFi?
With that said, I'd like to propose a few edits to the existing proposal:
Blockchain@Columbia supports the overall direction of the proposal though there are numerous changes and specifications that we would like to see in the final proposal for the on chain vote.
Hi all,
I'm loving the thoughtful discussion on this topic. Overall, it seems like there's fairly strong consensus that Uniswap should fund outreach and advocacy. Protocol participants face an uncertain and potentially hostile legal environment, and educating policymakers could help avoid damaging conflicts down the road.
Hi all,
I'm loving the thoughtful discussion on this topic. Overall, it seems like there's fairly strong consensus that Uniswap should fund outreach and advocacy. Protocol participants face an uncertain and potentially hostile legal environment, and educating policymakers could help avoid damaging conflicts down the road.
But it seems there's less consensus over the amount of funds requested, and the oversight structure. The 1 million UNI requested would represent the largest DAO expense to date, and after approval Uniswap governance would have no direct control over the use of funds. Uniswap governance could approve incremental funding in smaller amounts, but there's some concern that a minimally scoped initiative would be less effective or risk running out of money before fulfilling its mandate.
One potential solution is to add an oversight mechanism to the distributed UNI, allowing governance or an appointed admin to revoke funding if necessary. At Tally, we've been working on a project funded through Uniswap grants to enable this sort of direct on-chain oversight: Safeguard.
This mechanism is highly configurable, and can support a variety of approval flows to suit the needs of governance. I think Safeguard could offer the best of both worlds for committee funding:
I'm happy to answer any questions, and look forward to further discussion on this important topic! :slight_smile:
A report about the allocation of funds on the part of those proposing the project, a "sample statute" to be commented on by the community, a tax expert's opinion, as well as answers to several questions (I asked many in the -actual- consensus check, which have remained unanswered) should be given to the community. An expert report about what might be the impact on the value of Uni and on the situation of the community and its members, should be considered absolutely necessary before any such project passes. For instance, in some jurisdictions, entities funding non profits may have to declare their members. If that was happening in US too, the choice of a non profit for this work could be considered a huge gateway to control whats happening here. Anything that may affect our rights and obligations should be fully scrutinized. I really don't understand the lightness with which this is being promoted so far. Last, If 1M uni can fly from Uniswap's budget "just like that", because a part of the community lobbied and have their way to impose stuff on the rest, I (and I guess many others too) might conclude that it "does not feel very decentralized here", or even think this is exploitative, manipulative and unsafe, and fly away.
One of the political committee's proposed members has clarified that it will take 2 years to see results. I'd say 1, if a coordinated action with sufficient funds and committment is in place. But. Acting like in a few weeks things will be different if today the specific proposal is voted, is undermining the community's intelligence. It is urgent to discuss the matter and take it seriously. Not to hastily decide on vague proposals for putting in place intermediaries for intermediaries -which requires huge and, up to the present, unjustified sums.
Good post, thanks for writing Jake. This is exactly the type of explanation I think is valuable to include in a proposal like this from the get go. In particular, I'm glad you enumerated some of the specific legal threats you expect to see in the next 6-12 months and injected some of your knowledge about the legal landscape here.
In terms of planning and budgeting, I think it would be helpful to enumerate even more of the specific legal issues this group expects DeFi to encounter over the next year. In tandem, it would be helpful to outline an expected budget to be spent fighting for each specific issue. If we plan to encounter, for example, a ban on sending tokens from exchanges to non-custodial wallets, then what does this group think is required to fight against it? What would it cost to hire lawyers, consultants, etc. to sufficiently defend against this issue? For other expected issues? This kind of outline, though it obviously won't be perfect, would make me feel much more confident in this proposal.
Dear Colleague Everyone here has agreed that DeFi needs an organized effort to "educate" lawmakers and governments (not just one Government) about DeFi, in a manner that will prevent overregulation and protect the DeFi ecosystems. Education might be a smarter way to put it, given that lobbying may not be a tax deductible activity (however, if lobbying is underneath education, then it may be considered what it is and not what it proclaims). From what can be understood, in response to the well-founded fear that if things are left to their own fate, there may be a crackdown or overregulation or bad regulation of DeFi, it has been proposed here that a US-based non profit is created, with a fixed committee as BD, in which, if this is voted, you will participate. It has been explained that since the US is an important country for the "fate" of DeFi, the efforts are going to be concentrated in the US. To that end, a 1M Uni fund will be "set aside" (sic) for "educative" plans and, in fact, for lobbying and precautionary activities, including -but not necessarily- legal ones. The time-frame of spending the sum and achieving the goals (which remain to be further clarified) is 4-5 years. For other members, the first results would need 2 years to be seen. For you, it would take about 6 months for the first tangible results to become visible and able to be assessed. However, you also admit that "it may be difficult to measure our progress objectively over short time periods". There is no breakdown of the proposed non-profit's activities meaningfully presented. The best effort so far is contained in your above post. Also. No "sample statute" of such a non profit has been uploaded, so that it becomes more clear what kind of provisions you have in mind, in regard to governance, decision making, transparency and accountability. So, up to this point, those of us who follow with interest this discussion, have to guess. A lot of issues are in this manner evading the realm of actual scrutiny This lack of clarity on the part of the proposal, in regard to critical aspects of the project, still rigidly undermine the discussion. You say
-"how much transparency is possible"? (or, let me put it differently: how much transparency is "not possible"?). You saying "as much transparency as possible" implies that at least "some" transparency is not possible. -nothing clear has been said about "transparency and accountability" -how, specifically, do you intend to guarantee it? -what are the "same high standards" that you and the other (proposed) committee members will be bound by?
I'm not against the idea of funding a political defense of DeFi, or even spending a large amount of money to do so. But I'm worried that the supporters and commenters above are rallying support for the general idea rather than this specific implementation. Most of my pushback here is around how this will be executed if passed, and I don't think the points I posted above have been adequately addressed.
On the funding side, it's true that funding a non-profit is not the same as funding a startup or even a grant. However, the idea of accountability and assessment applies to any kind of organization. It's very possible for us to approve a budget and fund it one year at a time while getting progress updates on the work being done by this committee. I think anyone planning on starting an effective non-profit would be comfortable with that process.
Completely disagree with you about this, and considering it has NOTHING to do with Uniswap I'd ask you to leave this culture war stuff out of the discussion.
Just normal startup lawyers that service ordinary startups cost $1000 per hour. A $1 million dollar budget would give the committee a little under five months of runway for just one person. Once you add in the cost of taxes, accounting, filings, just normal day-to-day business costs for a legal firm, and you’re basically done before September. Edit: (I don’t know the right amount that should be spent per year, but I think $1m doesn’t sound like enough)
Just normal startup lawyers that service ordinary startups cost $1000 per hour. A $1 million dollar budget would give the committee a little under five months of runway for just one person. Once you add in the cost of taxes, accounting, filings, just normal day-to-day business costs for a legal firm, and you’re basically done before September. Edit: (I don’t know the right amount that should be spent per year, but I think $1m doesn’t sound like enough)
CoinCenter's budget has been $1m/year for quite some time. Why does this fund need a budget that is 5-6x that of CoinCenter?
I think the Committee should be judged as a group, if this committee thinks it needs these individuals to make the project work, we either support this group of individuals, or don’t do it. Doesn’t make sense to say, “Yeah let’s do it, but oh- you can’t use the people you think you need to get it done.” They need to have the ability to organize themselves in such a way that they believe they are setup for success.
Fine, then the WEF involvement should disqualify this entire panel. There is zero reason that this committee should involve any politiclly controversial figures.
I understand why this might be a nice provision to add, but I don’t get why the folks who might have the best perspective should be prevented from contributing their voting power. Perhaps their voice has an outsized influence, but so have been their contributions, no? I’m also not crazy about creating classes of votes here, if they have access to their tokens, and it was always understood that they could vote, then they should be able to vote. Feels like weird engineering to construct the eligible voters based on the subject of the vote. It’s either token holder governance or it’s not. (But I’m sure this could be a WHOLE different discussion).
Core team & early investors can conceive a proposal, propose it, then vote it into existence without any community involvement. This completely negates the idea of decentralization. If they want to continue to participate the way that they are, then they should just admit that this is not a decentralized governance process.
Again, why hobble the committee right out of the gate? I’m not an expert on the WEF, but if the experts we empower think it’s necessary to work with them, in order to achieve their stated goals, I think we have to empower them and trust their judgement.
"Experts"? There are no experts here. WEF has a stated goal to execute a "Great Reset" of society and is highly political. There is zero chance that WEF will be acting in the best interests of tokenholders. Their stated goal is to act in the best interests of "the world". That is not at all conducive to this capitalist experiment.
Really, what a coincidence. The same author has on the same day also published that early on Tuesday the World Economic Forum published a "white paper [which] is meant to act as a toolkit for regulators looking to understand the decentralized finance sector." Article here This same author noting that "The WEF does not intend to recommend specific policy actions for regulators, however. The document said it is more focused on describing what issues DeFi may address, as well as draw attention to certain areas on which regulators may need to catch up." According to yesterday's WEF's announcement, it is "The result of an international collaboration among academics, legal practitioners, DeFi entrepreneurs, technologists and regulatory experts, the report provides a solid foundation for understanding the major factors that should drive policy-making decisions." and, although DeFi may, "according to its proponents", be promising, nevertheless "DeFi raises considerations related to consumer protection, loss of funds, governance complexities, technical risk and systemic risk. Significant incidents involving technical failures and attacks on DeFi services have already occurred. Moreover, questions remain about the actual extent of decentralization of some protocols – and associated risks, e.g. for manipulation – and whether DeFi is more than a risky new vehicle for speculation that may open the door to fraud and illicit activity."
According to the proposal we are discussing here, the 7th member of the non profit's Committee is " 1. Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF." Her picture is one of three figuring at the onset of the report. One can say she has had a pivoting role in it. But taking a closer look, one sees that the majority of the proposed BD members are somehow related to the WEF's relevant report(s). Specifically: Jake Chervinsky, General Counsel of Compound, is a content contributor. of the just publicized WEF's report.
Really, what a coincidence. The same author has on the same day also published that early on Tuesday the World Economic Forum published a "white paper [which] is meant to act as a toolkit for regulators looking to understand the decentralized finance sector." Article here This same author noting that "The WEF does not intend to recommend specific policy actions for regulators, however. The document said it is more focused on describing what issues DeFi may address, as well as draw attention to certain areas on which regulators may need to catch up." According to yesterday's WEF's announcement, it is "The result of an international collaboration among academics, legal practitioners, DeFi entrepreneurs, technologists and regulatory experts, the report provides a solid foundation for understanding the major factors that should drive policy-making decisions." and, although DeFi may, "according to its proponents", be promising, nevertheless "DeFi raises considerations related to consumer protection, loss of funds, governance complexities, technical risk and systemic risk. Significant incidents involving technical failures and attacks on DeFi services have already occurred. Moreover, questions remain about the actual extent of decentralization of some protocols – and associated risks, e.g. for manipulation – and whether DeFi is more than a risky new vehicle for speculation that may open the door to fraud and illicit activity."
According to the proposal we are discussing here, the 7th member of the non profit's Committee is " 1. Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF." Her picture is one of three figuring at the onset of the report. One can say she has had a pivoting role in it. But taking a closer look, one sees that the majority of the proposed BD members are somehow related to the WEF's relevant report(s). Specifically: Jake Chervinsky, General Counsel of Compound, is a content contributor. of the just publicized WEF's report.
Other Content Contributors are: Nic Carter, Partner, Castle Island Ventures, USA Tarun Chitra, Chief Executive Officer, Gauntlet, USA Ann Sofie Cloots, Slaughter & May Lecturer in Company Law, University of Cambridge, United Kingdom Jacek Czarnecki, Global Legal Counsel, Maker Foundation, Poland Brendan Forster, Chief Operating Officer, Dharma Labs, USA Katharina Gehra, Chief Executive Officer, Immutable Insight, Germany Andreas Glarner, Partner, MME Legal Tax Compliance, Switzerland Jordan Lazaro Gustave, Chief Operating Officer, Aave, United Kingdom Siân Jones, Senior Partner, XReg Consulting, Gibraltar Daniel Kochis, Global Head of Business Development, Chainlink Labs, USA Joyce Lai, Member, New York Angels; Founder, NewTerritories.io, USA Urszula McCormack, Partner, King & Wood Mallesons, Hong Kong SAR Fabian Schär, Professor for Distributed Ledger Technology/Fintech, University of Basel, Switzerland Lex Sokolin, Head Economist and Global Fintech Co-Head, ConsenSys, United Kingdom Teana Baker Taylor, General Manager, UK, Crypto.com, United Kingdom
Content Reviewers of the WEF report include another 2 of the proposed Committee members (Marvin Ammori, Chief Legal Officer of Uniswap Labs and Sheila Warren, "Deputy Head, Centre for the Fourth Industrial Revolution, World Economic Forum, USA"). Others are: Marcos Allende Lopez, Technical Leader, LACChain, Inter-American Development Bank, USA Sebastian Banescu, Senior Research Engineer, Quantstamp, Germany Matthias Bauer-Langgartner, Technical Specialist, FCA Innovate, United Kingdom Nicolas Brügger, Senior Policy Adviser, State Secretariat for International Finance, Switzerland Jehudi Castro Sierra, Digital Transformation Adviser, Office of the Presidency, Colombia Charles Dalton, Software Engineer, Blockchain, Crypto, and Digital Currencies, PayPal, USA Maxim Galash, Chief Executive Officer, Coinchange, Canada Oli Harris, Vice-President, Goldman Sachs, USA Kibae Kim, Principal Researcher, Korea Policy Centre for the Fourth Industrial Revolution, KAIST, South Korea Netta Korin, Co-Founder, Orbs; Founder, Hexa Foundation, Israel Ashley Lannquist, Project Lead, Blockchain and Digital Currency, World Economic Forum, USA Caroline Malcolm, Head, Global Blockchain Policy Centre, Organisation for Economic Co-operation and Development, France Rob Massey, Tax Blockchain, Crypto and Digital Assets Leader, Deloitte, USA Paul Maley, Global Head of Securities Services, Deutsche Bank, United Kingdom Xavier Meegan, Blockchain Intern, ING, Netherlands Michael Mosier, Acting Director, FinCEN, USA Michael Oh, Director, Office of Financial Innovation, FINRA, USA Sam Proctor, Chief Executive Officer, Genesis Block, USA Lane Rettig, Core Team, Spacemesh, USA Richard Rosenthal, Risk and Financial Advisory, Banking Regulatory Specialist, Deloitte, USA Lukas Staub, Senior Legal Adviser, State Secretariat for International Finance, Switzerland Christoph Simmchen, Legal Counsel, Gnosis, Germany
A closer look reveals that this report was not created by the WEF alone, but "in collaboration with the University of Pennsylvania, an initiative of it which crowdfunded a billion. There is also a so-called companion report (called: DeFi Beyond the Hype) just published in May, with Lead Author being David Gogel of dYdX. The BD of the proposed non profit includes the attorney "Marc Boiron , General Counsel of dYdX Trading. That WEF -UniPenn 'companion report' was also reviewed by, among others, proposed BD member Sheila Warren (World Economic Forum).
Maybe the proposed members of the Committee, who contributed to these DeFi global regulation inspirations, might wish to share their views about the relevance of the WEF's papers with the present proposal.
In my view, as long as it is even conceivable that millions would just flow out of Uniswap, "to start with", also inspiring thoughts about getting extra sums from other DAOs, we're going to see a much more "relevant" journalistic coverage, especially as the time approaches for voting the proposal. The latter, as I understand, is already considered as voted for. Which would make a great case study. This bulk of information might also answer some concerns about what could be expected to go wrong.
Urging Governments and regulators to take measures (or participating in such efforts) and then proposing oneself as the 40M solution to "defend" the space from regulation is, to put it lightly, of concern.
We understand that $30M is not insignificant. As mentioned above, we anticipate that this will be allocated over 4-5 years.
We understand that $30M is not insignificant. As mentioned above, we anticipate that this will be allocated over 4-5 years.
$6-8m per year is outrageous for a new project like this. If you want to make this palatable, make it year-by-year and start with $1m.
What urgency? Do you know something that we don't? Is there impending regulation? Have there been talks with regulators? I have not seen anything to indicate that urgency exists to jump into such a huge commitment. If you know something, you (or core team) need to share it.
Once that purpose is specified, board members have a duty to act with care and in the best interest of the organization and remain loyal to its purpose, as opposed to acting in their own interest.
What incentive does a member of the World Economic Forum have to work in the best interests of UNI holders? And what commitment do UNI holders have that this organization will put their needs ahead of all others in DeFi?
With that said, I'd like to propose a few edits to the existing proposal:
Blockchain@Columbia supports the overall direction of the proposal though there are numerous changes and specifications that we would like to see in the final proposal for the on chain vote.
Hi all,
I'm loving the thoughtful discussion on this topic. Overall, it seems like there's fairly strong consensus that Uniswap should fund outreach and advocacy. Protocol participants face an uncertain and potentially hostile legal environment, and educating policymakers could help avoid damaging conflicts down the road.
Hi all,
I'm loving the thoughtful discussion on this topic. Overall, it seems like there's fairly strong consensus that Uniswap should fund outreach and advocacy. Protocol participants face an uncertain and potentially hostile legal environment, and educating policymakers could help avoid damaging conflicts down the road.
But it seems there's less consensus over the amount of funds requested, and the oversight structure. The 1 million UNI requested would represent the largest DAO expense to date, and after approval Uniswap governance would have no direct control over the use of funds. Uniswap governance could approve incremental funding in smaller amounts, but there's some concern that a minimally scoped initiative would be less effective or risk running out of money before fulfilling its mandate.
One potential solution is to add an oversight mechanism to the distributed UNI, allowing governance or an appointed admin to revoke funding if necessary. At Tally, we've been working on a project funded through Uniswap grants to enable this sort of direct on-chain oversight: Safeguard.
This mechanism is highly configurable, and can support a variety of approval flows to suit the needs of governance. I think Safeguard could offer the best of both worlds for committee funding:
I'm happy to answer any questions, and look forward to further discussion on this important topic! :slight_smile:
A report about the allocation of funds on the part of those proposing the project, a "sample statute" to be commented on by the community, a tax expert's opinion, as well as answers to several questions (I asked many in the -actual- consensus check, which have remained unanswered) should be given to the community. An expert report about what might be the impact on the value of Uni and on the situation of the community and its members, should be considered absolutely necessary before any such project passes. For instance, in some jurisdictions, entities funding non profits may have to declare their members. If that was happening in US too, the choice of a non profit for this work could be considered a huge gateway to control whats happening here. Anything that may affect our rights and obligations should be fully scrutinized. I really don't understand the lightness with which this is being promoted so far. Last, If 1M uni can fly from Uniswap's budget "just like that", because a part of the community lobbied and have their way to impose stuff on the rest, I (and I guess many others too) might conclude that it "does not feel very decentralized here", or even think this is exploitative, manipulative and unsafe, and fly away.
One of the political committee's proposed members has clarified that it will take 2 years to see results. I'd say 1, if a coordinated action with sufficient funds and committment is in place. But. Acting like in a few weeks things will be different if today the specific proposal is voted, is undermining the community's intelligence. It is urgent to discuss the matter and take it seriously. Not to hastily decide on vague proposals for putting in place intermediaries for intermediaries -which requires huge and, up to the present, unjustified sums.
Good post, thanks for writing Jake. This is exactly the type of explanation I think is valuable to include in a proposal like this from the get go. In particular, I'm glad you enumerated some of the specific legal threats you expect to see in the next 6-12 months and injected some of your knowledge about the legal landscape here.
In terms of planning and budgeting, I think it would be helpful to enumerate even more of the specific legal issues this group expects DeFi to encounter over the next year. In tandem, it would be helpful to outline an expected budget to be spent fighting for each specific issue. If we plan to encounter, for example, a ban on sending tokens from exchanges to non-custodial wallets, then what does this group think is required to fight against it? What would it cost to hire lawyers, consultants, etc. to sufficiently defend against this issue? For other expected issues? This kind of outline, though it obviously won't be perfect, would make me feel much more confident in this proposal.
Dear Colleague Everyone here has agreed that DeFi needs an organized effort to "educate" lawmakers and governments (not just one Government) about DeFi, in a manner that will prevent overregulation and protect the DeFi ecosystems. Education might be a smarter way to put it, given that lobbying may not be a tax deductible activity (however, if lobbying is underneath education, then it may be considered what it is and not what it proclaims). From what can be understood, in response to the well-founded fear that if things are left to their own fate, there may be a crackdown or overregulation or bad regulation of DeFi, it has been proposed here that a US-based non profit is created, with a fixed committee as BD, in which, if this is voted, you will participate. It has been explained that since the US is an important country for the "fate" of DeFi, the efforts are going to be concentrated in the US. To that end, a 1M Uni fund will be "set aside" (sic) for "educative" plans and, in fact, for lobbying and precautionary activities, including -but not necessarily- legal ones. The time-frame of spending the sum and achieving the goals (which remain to be further clarified) is 4-5 years. For other members, the first results would need 2 years to be seen. For you, it would take about 6 months for the first tangible results to become visible and able to be assessed. However, you also admit that "it may be difficult to measure our progress objectively over short time periods". There is no breakdown of the proposed non-profit's activities meaningfully presented. The best effort so far is contained in your above post. Also. No "sample statute" of such a non profit has been uploaded, so that it becomes more clear what kind of provisions you have in mind, in regard to governance, decision making, transparency and accountability. So, up to this point, those of us who follow with interest this discussion, have to guess. A lot of issues are in this manner evading the realm of actual scrutiny This lack of clarity on the part of the proposal, in regard to critical aspects of the project, still rigidly undermine the discussion. You say
-"how much transparency is possible"? (or, let me put it differently: how much transparency is "not possible"?). You saying "as much transparency as possible" implies that at least "some" transparency is not possible. -nothing clear has been said about "transparency and accountability" -how, specifically, do you intend to guarantee it? -what are the "same high standards" that you and the other (proposed) committee members will be bound by?
I'm not against the idea of funding a political defense of DeFi, or even spending a large amount of money to do so. But I'm worried that the supporters and commenters above are rallying support for the general idea rather than this specific implementation. Most of my pushback here is around how this will be executed if passed, and I don't think the points I posted above have been adequately addressed.
On the funding side, it's true that funding a non-profit is not the same as funding a startup or even a grant. However, the idea of accountability and assessment applies to any kind of organization. It's very possible for us to approve a budget and fund it one year at a time while getting progress updates on the work being done by this committee. I think anyone planning on starting an effective non-profit would be comfortable with that process.
Completely disagree with you about this, and considering it has NOTHING to do with Uniswap I'd ask you to leave this culture war stuff out of the discussion.
Blockchain@Columbia supports the overall direction of the proposal though there are numerous changes and specifications that we would like to see in the final proposal for the on chain vote.
We will be voting for this consensus check as we are looking forward to seeing this alterations to this proposal. If such changes don't occur then we will be voting against this proposal during the on-chain vote.
The space has become large enough that serious regulatory scrutiny is already occurring and is likely to intensify. Uniswap should take the lead as the preeminent project in the space though not without buy-in from other major projects. Building a positive relationship with informed regulators and legislators is essential to the longevity and success of Uniswap, defi, and crypto in general.
Good post, thanks for writing Jake. This is exactly the type of explanation I think is valuable to include in a proposal like this from the get go. In particular, I'm glad you enumerated some of the specific legal threats you expect to see in the next 6-12 months and injected some of your knowledge about the legal landscape here.
In terms of planning and budgeting, I think it would be helpful to enumerate even more of the specific legal issues this group expects DeFi to encounter over the next year. In tandem, it would be helpful to outline an expected budget to be spent fighting for each specific issue. If we plan to encounter, for example, a ban on sending tokens from exchanges to non-custodial wallets, then what does this group think is required to fight against it? What would it cost to hire lawyers, consultants, etc. to sufficiently defend against this issue? For other expected issues? This kind of outline, though it obviously won't be perfect, would make me feel much more confident in this proposal.
Aside from that, my biggest remaining concerns are the all-at-once allocation of capital and the lack of a full-time hire responsible for administrative overhead. If this group committed to a full-time hire and started with an initial allocation of capital to cover the first 6-12 months of operation, I'd probably be in support. Without all of those changes, I'm still firmly against, though I think all of your reasoning behind this group's motivations is spot-on.
Dear Colleague Everyone here has agreed that DeFi needs an organized effort to "educate" lawmakers and governments (not just one Government) about DeFi, in a manner that will prevent overregulation and protect the DeFi ecosystems. Education might be a smarter way to put it, given that lobbying may not be a tax deductible activity (however, if lobbying is underneath education, then it may be considered what it is and not what it proclaims). From what can be understood, in response to the well-founded fear that if things are left to their own fate, there may be a crackdown or overregulation or bad regulation of DeFi, it has been proposed here that a US-based non profit is created, with a fixed committee as BD, in which, if this is voted, you will participate. It has been explained that since the US is an important country for the "fate" of DeFi, the efforts are going to be concentrated in the US. To that end, a 1M Uni fund will be "set aside" (sic) for "educative" plans and, in fact, for lobbying and precautionary activities, including -but not necessarily- legal ones. The time-frame of spending the sum and achieving the goals (which remain to be further clarified) is 4-5 years. For other members, the first results would need 2 years to be seen. For you, it would take about 6 months for the first tangible results to become visible and able to be assessed. However, you also admit that "it may be difficult to measure our progress objectively over short time periods". There is no breakdown of the proposed non-profit's activities meaningfully presented. The best effort so far is contained in your above post. Also. No "sample statute" of such a non profit has been uploaded, so that it becomes more clear what kind of provisions you have in mind, in regard to governance, decision making, transparency and accountability. So, up to this point, those of us who follow with interest this discussion, have to guess. A lot of issues are in this manner evading the realm of actual scrutiny This lack of clarity on the part of the proposal, in regard to critical aspects of the project, still rigidly undermine the discussion. You say
-"how much transparency is possible"? (or, let me put it differently: how much transparency is "not possible"?). You saying "as much transparency as possible" implies that at least "some" transparency is not possible. -nothing clear has been said about "transparency and accountability" -how, specifically, do you intend to guarantee it? -what are the "same high standards" that you and the other (proposed) committee members will be bound by?
Another issue is that you also do not address the concern of many that the amounts requested are outrageously high. Statements such as "this mission is an expensive one" and that "other industries spend hundreds of millions each year to influence policy" are not sufficient. The fact that the proposal explicitly stated that it indents to influence US policy (which many did not agree with, given the nature of DeFi) contradicts the statement that "there are thousands of regulators and policymakers worth engaging around the world today". While I would of course agree with the latter, as I have stated in other comments above, the discrepancy between the launching goals and the extension of the scope of the proposed Committee's work and funding (from US to global, that is, almost 200 times wider) might create an ambiance of distrust. It is, again, crucial that you define the project better. Because, if 1M is seen as a lot for influencing regulation in the US, it may seem for working, in parallel, in 200 jurisdictions. Noone would object if 5.000 UNI were used to influence lawmakers in a country. But 1M just for the US has aroused the objection reflexes in many.
Many other concerns have not been addressed. Such as why the proposed committee cannot have a strong consultative role. Why it has to play the intermediary in the allocation of funds, alienating them from Uniswap's treasury even before the action to be taken becomes concrete. Also, whether the BD will be porous or "closed". Transparency and Accountability issues. How to keep a decentralized character in it. The "representative of DeFi" role is also very concerning. It is also not easy to see why putting aside 1M uni to a non profit is "what it takes to win". Is it because someone said so? Also, tax concerns have not been answered. If giving these funds to a non profit may endanger seeing up to 35% of these sums end up in the Government's treasury in the form of taxes, which could be averted if Uniswap paid who the Committee suggested it should pay, then why on earth would a non profit need to play the role of distributor of funds? Have you ensured that a huge sum of UNI will not end up being used in taxes, via the materialization of this proposal?
It should most probably be considered a given that everyone here wants to see DeFi protected and thrive. As I see it, instead of struggling to achieve regulation -while there is no consensus that there must be any at this infant stage of DeFi- that will be time-sensitive and can be subjected to change (therefore needing a constant outflow of funds -theoretically to infinity- to "stay DeFi friendly"), the true protection of this field is ultimately a question of preparing to set the red lines about how far governments -all governments- can go in regulating our economic freedom and our rights, including and primarily our participatory rights. I believe some experts in fields related to the latter should be part of the proposed Committee.
I'm not against the idea of funding a political defense of DeFi, or even spending a large amount of money to do so. But I'm worried that the supporters and commenters above are rallying support for the general idea rather than this specific implementation. Most of my pushback here is around how this will be executed if passed, and I don't think the points I posted above have been adequately addressed.
On the funding side, it's true that funding a non-profit is not the same as funding a startup or even a grant. However, the idea of accountability and assessment applies to any kind of organization. It's very possible for us to approve a budget and fund it one year at a time while getting progress updates on the work being done by this committee. I think anyone planning on starting an effective non-profit would be comfortable with that process.
My biggest concern here is actually coordination, and I think the risk here is being underestimated. I've seen many multi-sig wallets and committees fall victim to sluggish movement and lack of attention by their members, even when those members were prominent DeFi founders and employees. There's always an initial excitement to get funding and become a signer, but several weeks later, it becomes burdensome even just to gather signatures for a single transaction. The reality is that busy people will experience an attention deficit when forced to do multiple demanding jobs at once, and that's my main concern here.
One remedy is to appoint a full-time member of this committee whose job it is to manage the overhead of evaluating funding applications, documenting decisions, and coordinating consensus with other members. Another safeguard would be to get a commitment from each member of this committee that they will not join any other similar committees over the next 4 years to ensure that they have enough attention for this work.
The red flag for me is that over 24 hours into this proposal and after much discussion, no one on this committee besides Larry and Marc has posted their thoughts or participated in this discussion. I actually wonder if some members of the committee have read the comments here. This is a practical concern.
If you can't make the effort to participate in proposal discussion when you stand to gain $40M of funding, will you make the effort 2 years into this committee, when the workload of evaluating grants has increased tenfold? Or when there's a multi-year bear market that makes other opportunities look more exciting?
I agree with all the supporters above that generally, it's a great idea to use treasury funds to defend the DeFi industry. It's worth spending a lot of money to do so, and we should keep proposing things here until something like this happens. But my primary concern is making sure that if we do this, we all but guarantee that the funds we allocate are used effectively. I think it makes sense to build that into the structure of this committee.
I stand by my recommendations above and am voting against this proposal unless several of these changes are made.
There are a few things I don't like about this proposal:
It is still very loosely defined for how much money is being requested. There is no check-in with governance to assess progress and request more funds.
This should not JUST be funded by Uniswap governance. This is essentially a public good for DeFi and I believe any DeFi protocol that wants to considered as a leader in this space should be expected to contribute.
There are a few things I don't like about this proposal:
It is still very loosely defined for how much money is being requested. There is no check-in with governance to assess progress and request more funds.
This should not JUST be funded by Uniswap governance. This is essentially a public good for DeFi and I believe any DeFi protocol that wants to considered as a leader in this space should be expected to contribute.
What I like about this proposal:
The authors are dreaming big! For months I've heard people say "Uniswap has xxx huge treasury, what should they do with it?", this is 1). big thinking, 2). legitimately needed and 3) backed by the right people.
The amount of UNI being requested is not crazy. The request is for 1 million UNI, let's remember the initial liquidity mining rewards were 5 million. Typically, DeFi WAY over pays for capital and way underpays for everything else. If we are willing to give 5 million UNI to people farming and selling the token why is 1 million for ensuring the perpetuity of the industry crazy?
The committee is very solid. People who are questioning the integrity or alignment of this group have not been in DeFi very long.
I believe this proposal is needed. I can't post links or images here but look at Jake Chervinsky comments on it (proposed committee member and Compound Labs GC). Jake said,
"The days of DeFi flying under the radar are over. Policymakers worldwide are paying attention. Now's the time to allocate resources to education & advocacy, & this is the right way to do it."
Let's read between the lines here. It's safe to assume Jake knows a lot of public and non-public information about the regulatory environment surrounding DeFi. Jake isn't prone to hyperbole. He isn't saying "the days are coming to an end" he is saying, "it's over". Right now our risk with this proposal is probably that it is too late not too soon.
Also, Uniswap GC is on the committee, do you think they would've joined if they felt this wasn't needed?
Summary: I'll vote for the proposal. I'd like to see the proposal adjusted to include:
But even absent those changes I would still support this on the grounds above.
Circling back to my point about proof of work and transparency. A few people have stated that this kind of work has longer feedback loops, and that it would be hard to prove success before several years have passed. I want to push back against this by pointing out that it's not so hard to create a slightly more structured roadmap, fund a few initiatives, and then simply report on that progress. Even that level of work and reporting would be better than nothing, and enough to show effective management.
Though people have mentioned above that DAOs and non-profits have transparency built into their structure, I'd prefer to get some of that transparency and reporting before funding an organization with $40M.
Circling back to my point about proof of work and transparency. A few people have stated that this kind of work has longer feedback loops, and that it would be hard to prove success before several years have passed. I want to push back against this by pointing out that it's not so hard to create a slightly more structured roadmap, fund a few initiatives, and then simply report on that progress. Even that level of work and reporting would be better than nothing, and enough to show effective management.
Though people have mentioned above that DAOs and non-profits have transparency built into their structure, I'd prefer to get some of that transparency and reporting before funding an organization with $40M.
Strong agreement with @berlemeans surrounding his point #2. Additionally, even though I'm not an expert on costs here, I think his points on costs are worth noting.
Most importantly, I echo @rleshner's concern regarding the precedent set here if this goes to formal proposal and passes a vote in the next week or so. To pass this so quickly despite how many specific concerns have been brought up would prove that the UNI treasury can be spent on short notice by any group with brand names and a directionally correct big idea.
Many people above are stating that this is the general kind of thing we should be funding, and then leaping to the conclusion that it's time to fund this right now, before addressing the details. However, the details really matter here, and we want to get this right. If there were 3 separate groups all proposing the same thing, we'd obviously start comparing the details of their plans. But for some reason, since there's only one proposal for this general idea, many have decided it's time to pass it right away.
My sense from this thread is that everyone agrees this kind of committee is worth funding. In addition, everyone seems to agree that the members of this committee are some of the most qualified to do so. Therefore, it seems like the next step would be collaboratively hammering out some of these details before moving to a formal Yes/No vote.
With just a few more weeks of work to address the top concerns above and come up with a detailed plan that accounts for them, I'm confident we could get to a place where many of the No votes become Yes votes. But to pass this in the current state feels really premature, and detrimental to Uniswap governance by means of the precedents it sets.
I'd like to point out that most members of the proposed committee still have yet to participate in the discussion in this thread.
Has anyone made sure that the 1M UNI allocated to a US-based non profit will not be taxed, leading to up to 350.000 UNI placed in the US GVT's pocket? Why is an intermediary needed to just hold and re-allocate the funds? Why cannot UNISWAP fund lobbying and legal defense activities directly, upon proposal of a committee trusted by the Community and/or via its Grants? I am not familiarized with US tax law, but have good experience with non profits in Europe, having helped dozens get instituted and properly registered. A quick look at the applicable legal framework, though, raises questions. https://www.irs.gov/charities-non-profits/proxy-tax-tax-exempt-organization-fails-to-notify-members-that-dues-are-non-deductible-lobbying-political-expenditures In my view, it would be optimal that any non profit related to Uniswap be rather "poor" and have an enhanced, but purely consultative and not decisive role about where expenses for political and legal defense go. Uniswap could then allocate sums directly where needed. Political and legal defense are necessary. Including (and primarily) preventive political and legal work to protect DeFi from disproportionate interference and regulation. This is the only thing there seems to be consensus on. Therefore a fund for an expert impact assessment of how this can be done in an optimal manner should precede the 1M Uni (or whatever sum) proposal for a non profit with a fixed BD which would attempt to influence "the right" regulation in the US (btw, not everyone agrees there should be any intense mobilisation to initiate -any- DeFi regulation at this point).
The proposal outlines that these funds are anticipated to be allocated over the next 4-5 years, so it wont have the same dilutive effect of selling 1M UNI all at once, which we agree would be a problem. We think it is important that the board has enough to work with so they can react quickly to regulatory threats without being hamstrung by the long governance process for every decision they make.
Couple points from me:
Couple points from me:
I do support how you expanded on the idea and like that a lot of DeFi protocols are included in this.
Dear HarvardLawBFI As I had commented in your twitter account before you uploaded this note here, it would be much more relevant to create a new product (we named our project for something similar DeFiDefense) that the DeFi community would potentially embrace. A great number of NFTs of this product could be distributed to the lawyers working on it (instead of actual payment). They would thus be working for and on it while creating it, and have a vivid interest in seeing it grow. The wider community would more easily accept and "adopt" it this way. If those working on it do not do a decent work, it will fail (along with their reward for it). Moreover, it should not be just a small group of people doing this. Rights litigators (iNGOs too) should first be well informed about it (educated) and then take part. For many reasons, which we can explain in detail. So, one point of objection is: -Why UNI? UNI (and others) could fund it, if they think it is of worth. But it would stand a far better chance if it was a distinct project. Other points are: -The lawyer's (let's call it "DeFi defender's") group should be clearly distinct from the lobbying one. Lobbyists are not stricto sensu defenders. There is an issue here -if not an ethical one, then one of "aesthetics". -Why just US people? A group should cover many jurisdictions, and continents. Why not make it, to start with, an iNGO (that also seeks consultative status with the UN and regional monitoring mechanisms)? -Why only "technical" people in the steering group? There should be diversity. For sure, there is a strong absence of civil, political and economic rights strategic litigators in your proposal, which in my view undermines the whole proposal. It is primarily such a group that should and has, in some jurisdictions- start building up a DeFiDefense. Because it is economic freedom and related (fundamental) rights that will ultimately have to be defended. Before you tackle, legally, a technical inconsistency in a law, a new law may be enacted spoiling your litigation. It is fundamental rights' litigation -and especially on a supranational level- that may halt the governmental apetite for a coordinated suppression. You can consider this as a given. So, already, a few experienced (in litigation before the UN and supranational Courts and tribunals, because this is where the game will finally be played in case of Governmental crackdown) strategic litigators are preparing on how to respond to an imminent suppression of crypto. It will primarily be a matter of fundamental rights and it will have to take into account the consensus and adoption of DeFi, at the point this happens. However, preferably, the legal work that should be undertaken would be "preventive", quietly creating precedents in different jurisdictions, that will be hard to undo when the Governments potentially decide to crack down on DeFi. Such work is already late. -The costs you mention are extreme. Also, they should not be taken on by UNI alone, but by DeFi community more generally
TIP: Harvard (Kennedy) School had a very nice course on "Leading non violent movements for social change". I believe some among those who took the course would love to be engaged in "peeling the onion" of resistance to the adoption of DeFi, coming up with a series of different tactics and strategies for defending DeFi in time, consolidating and mainstreaming the revolution that DeFi represents... Maybe, as Harvard students, you could discuss with the Kennedy School whether they can inform former students about the opportunity to participate in something like this. I bet many among them would engage pro bono or with minimal cost.
Dear HarvardLawBFI As I had commented in your twitter account before you uploaded this note here, it would be much more relevant to create a new product (we named our project for something similar DeFiDefense) that the DeFi community would potentially embrace. A great number of NFTs of this product could be distributed to the lawyers working on it (instead of actual payment). They would thus be working for and on it while creating it, and have a vivid interest in seeing it grow. The wider community would more easily accept and "adopt" it this way. If those working on it do not do a decent work, it will fail (along with their reward for it). Moreover, it should not be just a small group of people doing this. Rights litigators (iNGOs too) should first be well informed about it (educated) and then take part. For many reasons, which we can explain in detail. So, one point of objection is: -Why UNI? UNI (and others) could fund it, if they think it is of worth. But it would stand a far better chance if it was a distinct project. Other points are: -The lawyer's (let's call it "DeFi defender's") group should be clearly distinct from the lobbying one. Lobbyists are not stricto sensu defenders. There is an issue here -if not an ethical one, then one of "aesthetics". -Why just US people? A group should cover many jurisdictions, and continents. Why not make it, to start with, an iNGO (that also seeks consultative status with the UN and regional monitoring mechanisms)? -Why only "technical" people in the steering group? There should be diversity. For sure, there is a strong absence of civil, political and economic rights strategic litigators in your proposal, which in my view undermines the whole proposal. It is primarily such a group that should and has, in some jurisdictions- start building up a DeFiDefense. Because it is economic freedom and related (fundamental) rights that will ultimately have to be defended. Before you tackle, legally, a technical inconsistency in a law, a new law may be enacted spoiling your litigation. It is fundamental rights' litigation -and especially on a supranational level- that may halt the governmental apetite for a coordinated suppression. You can consider this as a given. So, already, a few experienced (in litigation before the UN and supranational Courts and tribunals, because this is where the game will finally be played in case of Governmental crackdown) strategic litigators are preparing on how to respond to an imminent suppression of crypto. It will primarily be a matter of fundamental rights and it will have to take into account the consensus and adoption of DeFi, at the point this happens. However, preferably, the legal work that should be undertaken would be "preventive", quietly creating precedents in different jurisdictions, that will be hard to undo when the Governments potentially decide to crack down on DeFi. Such work is already late. -The costs you mention are extreme. Also, they should not be taken on by UNI alone, but by DeFi community more generally
TIP: Harvard (Kennedy) School had a very nice course on "Leading non violent movements for social change". I believe some among those who took the course would love to be engaged in "peeling the onion" of resistance to the adoption of DeFi, coming up with a series of different tactics and strategies for defending DeFi in time, consolidating and mainstreaming the revolution that DeFi represents... Maybe, as Harvard students, you could discuss with the Kennedy School whether they can inform former students about the opportunity to participate in something like this. I bet many among them would engage pro bono or with minimal cost.
As a strategic litigator with thousands of representations, many of which condemning different countries, also trained in system dynamics and non violence (yes, one of those you would suspect their services cost heaps of money), I inform you that I would help in any such initiative pro bono or contribute to the making of a new asset with these characteristics, as long as it respects the ethos and aims of decentralization, and as long as it leaves a clear and big space for litigating DeFi related issues as a matter of fundamental rights, and no space at all for internal or external manipulation of the community. Good luck.
I will probably vote against this proposal for the following reasons.
For the current stage of this project, I believe the budget is exorbitantly high. Before supporting a proposal of this scale, I think it would be worth seeing a lot more proof of work.
I will probably vote against this proposal for the following reasons.
For the current stage of this project, I believe the budget is exorbitantly high. Before supporting a proposal of this scale, I think it would be worth seeing a lot more proof of work.
A classic lesson from startup investing or even the early ICO era is that projects should be funded in correlation to their progress thus far, then given more funding as they prove their ability to use the capital to fuel success. This project requests a massive lump sum of cash despite not having done significant work besides writing a proposal.
The Uniswap Grants Program was initially funded for only 2 quarters, and subject to reassessment and renewal after that amount of time. For a program with 10x the budget, I'd expect to see the same: evaluation after some initial period to determine if this is a success worth continuing.
I think it would make a lot more sense to move forward with a structure similar to the beginning of the Uniswap Grants Program: provide a smaller initial budget to fund this work for 2 quarters, then fund it at a larger scale based on the progress up to that point.
Additionally, this proposal anticipates that these funds will be allocated over 4-5 years, but there is no formal structure in that regard. Even with full approval, I'd hope to see these funds distributed over time, not sent all at once.
This proposal anticipates that the compensation across the entire committee combined will not exceed $150K, and the proposal positions this as a benefit. I see this as a huge weakness.
In my experience, committees and multi-sig wallets can experience coordination problems when signers are not properly incentivized to participate. In the case of this proposal, I believe the problem is compounded by the fact that most members of this committee have demanding full-time roles that demand their attention, and where they are paid and assessed by their organization.
For me to support this proposal, I'd prefer to see a different team structure. First, I would like to see at least one full-time, paid lead of this committee who is responsible for organizing and building consensus when funds need to be allocated.
Second, I'd actually prefer to swap out some members for legal experts who have more time on their hands to dedicate to this effort. It's hard for me to imagine that people with some of the roles above will have the spare time available to read applications, evaluate talent, and allocate $27M dollars worth of funds effectively.
The proposal states that all of the members listed have expressed their willingness to be on this committee. Do they actually want to be on the committee? What's their level of excitement?
I'd like to see every member of this committee commenting here on the forums and describing their motivations and plans for this group. Again, a committee with 1M UNI worth of funds should consist of members who are determined to use that capital effectively.
For me, it would also be helpful to see writing or other work these members have done related to DeFi's legal defense.
These are my initial concerns with this proposal. I believe there are significant structural changes that should be made before this moves forward.
I will edit post. I wanted to say that 1M UNI won't get this proposal far. I am not suggesting Uniswap governance should dedicate more funds.
Good call out and thanks for posting, I missed Rebecca's tweet. I had seen Jake's but wish more thoughts were being posted in this actual discussion.
Perhaps it would be helpful to gather all relevant tweets and have them somewhere in this thread to provide this kind of context.
That all being said, I'm happy to adjust / clarify the wording in my post to reflect that members have tweeted.
The two major concerns we see so far are 1) 30M is a lot of money to begin with, and 2) Uniswap shouldn't need to pay for this initiative on their own.
Blockchain@Columbia supports the overall direction of the proposal though there are numerous changes and specifications that we would like to see in the final proposal for the on chain vote.
We will be voting for this consensus check as we are looking forward to seeing this alterations to this proposal. If such changes don't occur then we will be voting against this proposal during the on-chain vote.
The space has become large enough that serious regulatory scrutiny is already occurring and is likely to intensify. Uniswap should take the lead as the preeminent project in the space though not without buy-in from other major projects. Building a positive relationship with informed regulators and legislators is essential to the longevity and success of Uniswap, defi, and crypto in general.
Good post, thanks for writing Jake. This is exactly the type of explanation I think is valuable to include in a proposal like this from the get go. In particular, I'm glad you enumerated some of the specific legal threats you expect to see in the next 6-12 months and injected some of your knowledge about the legal landscape here.
In terms of planning and budgeting, I think it would be helpful to enumerate even more of the specific legal issues this group expects DeFi to encounter over the next year. In tandem, it would be helpful to outline an expected budget to be spent fighting for each specific issue. If we plan to encounter, for example, a ban on sending tokens from exchanges to non-custodial wallets, then what does this group think is required to fight against it? What would it cost to hire lawyers, consultants, etc. to sufficiently defend against this issue? For other expected issues? This kind of outline, though it obviously won't be perfect, would make me feel much more confident in this proposal.
Aside from that, my biggest remaining concerns are the all-at-once allocation of capital and the lack of a full-time hire responsible for administrative overhead. If this group committed to a full-time hire and started with an initial allocation of capital to cover the first 6-12 months of operation, I'd probably be in support. Without all of those changes, I'm still firmly against, though I think all of your reasoning behind this group's motivations is spot-on.
Dear Colleague Everyone here has agreed that DeFi needs an organized effort to "educate" lawmakers and governments (not just one Government) about DeFi, in a manner that will prevent overregulation and protect the DeFi ecosystems. Education might be a smarter way to put it, given that lobbying may not be a tax deductible activity (however, if lobbying is underneath education, then it may be considered what it is and not what it proclaims). From what can be understood, in response to the well-founded fear that if things are left to their own fate, there may be a crackdown or overregulation or bad regulation of DeFi, it has been proposed here that a US-based non profit is created, with a fixed committee as BD, in which, if this is voted, you will participate. It has been explained that since the US is an important country for the "fate" of DeFi, the efforts are going to be concentrated in the US. To that end, a 1M Uni fund will be "set aside" (sic) for "educative" plans and, in fact, for lobbying and precautionary activities, including -but not necessarily- legal ones. The time-frame of spending the sum and achieving the goals (which remain to be further clarified) is 4-5 years. For other members, the first results would need 2 years to be seen. For you, it would take about 6 months for the first tangible results to become visible and able to be assessed. However, you also admit that "it may be difficult to measure our progress objectively over short time periods". There is no breakdown of the proposed non-profit's activities meaningfully presented. The best effort so far is contained in your above post. Also. No "sample statute" of such a non profit has been uploaded, so that it becomes more clear what kind of provisions you have in mind, in regard to governance, decision making, transparency and accountability. So, up to this point, those of us who follow with interest this discussion, have to guess. A lot of issues are in this manner evading the realm of actual scrutiny This lack of clarity on the part of the proposal, in regard to critical aspects of the project, still rigidly undermine the discussion. You say
-"how much transparency is possible"? (or, let me put it differently: how much transparency is "not possible"?). You saying "as much transparency as possible" implies that at least "some" transparency is not possible. -nothing clear has been said about "transparency and accountability" -how, specifically, do you intend to guarantee it? -what are the "same high standards" that you and the other (proposed) committee members will be bound by?
Another issue is that you also do not address the concern of many that the amounts requested are outrageously high. Statements such as "this mission is an expensive one" and that "other industries spend hundreds of millions each year to influence policy" are not sufficient. The fact that the proposal explicitly stated that it indents to influence US policy (which many did not agree with, given the nature of DeFi) contradicts the statement that "there are thousands of regulators and policymakers worth engaging around the world today". While I would of course agree with the latter, as I have stated in other comments above, the discrepancy between the launching goals and the extension of the scope of the proposed Committee's work and funding (from US to global, that is, almost 200 times wider) might create an ambiance of distrust. It is, again, crucial that you define the project better. Because, if 1M is seen as a lot for influencing regulation in the US, it may seem for working, in parallel, in 200 jurisdictions. Noone would object if 5.000 UNI were used to influence lawmakers in a country. But 1M just for the US has aroused the objection reflexes in many.
Many other concerns have not been addressed. Such as why the proposed committee cannot have a strong consultative role. Why it has to play the intermediary in the allocation of funds, alienating them from Uniswap's treasury even before the action to be taken becomes concrete. Also, whether the BD will be porous or "closed". Transparency and Accountability issues. How to keep a decentralized character in it. The "representative of DeFi" role is also very concerning. It is also not easy to see why putting aside 1M uni to a non profit is "what it takes to win". Is it because someone said so? Also, tax concerns have not been answered. If giving these funds to a non profit may endanger seeing up to 35% of these sums end up in the Government's treasury in the form of taxes, which could be averted if Uniswap paid who the Committee suggested it should pay, then why on earth would a non profit need to play the role of distributor of funds? Have you ensured that a huge sum of UNI will not end up being used in taxes, via the materialization of this proposal?
It should most probably be considered a given that everyone here wants to see DeFi protected and thrive. As I see it, instead of struggling to achieve regulation -while there is no consensus that there must be any at this infant stage of DeFi- that will be time-sensitive and can be subjected to change (therefore needing a constant outflow of funds -theoretically to infinity- to "stay DeFi friendly"), the true protection of this field is ultimately a question of preparing to set the red lines about how far governments -all governments- can go in regulating our economic freedom and our rights, including and primarily our participatory rights. I believe some experts in fields related to the latter should be part of the proposed Committee.
I'm not against the idea of funding a political defense of DeFi, or even spending a large amount of money to do so. But I'm worried that the supporters and commenters above are rallying support for the general idea rather than this specific implementation. Most of my pushback here is around how this will be executed if passed, and I don't think the points I posted above have been adequately addressed.
On the funding side, it's true that funding a non-profit is not the same as funding a startup or even a grant. However, the idea of accountability and assessment applies to any kind of organization. It's very possible for us to approve a budget and fund it one year at a time while getting progress updates on the work being done by this committee. I think anyone planning on starting an effective non-profit would be comfortable with that process.
My biggest concern here is actually coordination, and I think the risk here is being underestimated. I've seen many multi-sig wallets and committees fall victim to sluggish movement and lack of attention by their members, even when those members were prominent DeFi founders and employees. There's always an initial excitement to get funding and become a signer, but several weeks later, it becomes burdensome even just to gather signatures for a single transaction. The reality is that busy people will experience an attention deficit when forced to do multiple demanding jobs at once, and that's my main concern here.
One remedy is to appoint a full-time member of this committee whose job it is to manage the overhead of evaluating funding applications, documenting decisions, and coordinating consensus with other members. Another safeguard would be to get a commitment from each member of this committee that they will not join any other similar committees over the next 4 years to ensure that they have enough attention for this work.
The red flag for me is that over 24 hours into this proposal and after much discussion, no one on this committee besides Larry and Marc has posted their thoughts or participated in this discussion. I actually wonder if some members of the committee have read the comments here. This is a practical concern.
If you can't make the effort to participate in proposal discussion when you stand to gain $40M of funding, will you make the effort 2 years into this committee, when the workload of evaluating grants has increased tenfold? Or when there's a multi-year bear market that makes other opportunities look more exciting?
I agree with all the supporters above that generally, it's a great idea to use treasury funds to defend the DeFi industry. It's worth spending a lot of money to do so, and we should keep proposing things here until something like this happens. But my primary concern is making sure that if we do this, we all but guarantee that the funds we allocate are used effectively. I think it makes sense to build that into the structure of this committee.
I stand by my recommendations above and am voting against this proposal unless several of these changes are made.
There are a few things I don't like about this proposal:
It is still very loosely defined for how much money is being requested. There is no check-in with governance to assess progress and request more funds.
This should not JUST be funded by Uniswap governance. This is essentially a public good for DeFi and I believe any DeFi protocol that wants to considered as a leader in this space should be expected to contribute.
There are a few things I don't like about this proposal:
It is still very loosely defined for how much money is being requested. There is no check-in with governance to assess progress and request more funds.
This should not JUST be funded by Uniswap governance. This is essentially a public good for DeFi and I believe any DeFi protocol that wants to considered as a leader in this space should be expected to contribute.
What I like about this proposal:
The authors are dreaming big! For months I've heard people say "Uniswap has xxx huge treasury, what should they do with it?", this is 1). big thinking, 2). legitimately needed and 3) backed by the right people.
The amount of UNI being requested is not crazy. The request is for 1 million UNI, let's remember the initial liquidity mining rewards were 5 million. Typically, DeFi WAY over pays for capital and way underpays for everything else. If we are willing to give 5 million UNI to people farming and selling the token why is 1 million for ensuring the perpetuity of the industry crazy?
The committee is very solid. People who are questioning the integrity or alignment of this group have not been in DeFi very long.
I believe this proposal is needed. I can't post links or images here but look at Jake Chervinsky comments on it (proposed committee member and Compound Labs GC). Jake said,
"The days of DeFi flying under the radar are over. Policymakers worldwide are paying attention. Now's the time to allocate resources to education & advocacy, & this is the right way to do it."
Let's read between the lines here. It's safe to assume Jake knows a lot of public and non-public information about the regulatory environment surrounding DeFi. Jake isn't prone to hyperbole. He isn't saying "the days are coming to an end" he is saying, "it's over". Right now our risk with this proposal is probably that it is too late not too soon.
Also, Uniswap GC is on the committee, do you think they would've joined if they felt this wasn't needed?
Summary: I'll vote for the proposal. I'd like to see the proposal adjusted to include:
But even absent those changes I would still support this on the grounds above.
Circling back to my point about proof of work and transparency. A few people have stated that this kind of work has longer feedback loops, and that it would be hard to prove success before several years have passed. I want to push back against this by pointing out that it's not so hard to create a slightly more structured roadmap, fund a few initiatives, and then simply report on that progress. Even that level of work and reporting would be better than nothing, and enough to show effective management.
Though people have mentioned above that DAOs and non-profits have transparency built into their structure, I'd prefer to get some of that transparency and reporting before funding an organization with $40M.
Circling back to my point about proof of work and transparency. A few people have stated that this kind of work has longer feedback loops, and that it would be hard to prove success before several years have passed. I want to push back against this by pointing out that it's not so hard to create a slightly more structured roadmap, fund a few initiatives, and then simply report on that progress. Even that level of work and reporting would be better than nothing, and enough to show effective management.
Though people have mentioned above that DAOs and non-profits have transparency built into their structure, I'd prefer to get some of that transparency and reporting before funding an organization with $40M.
Strong agreement with @berlemeans surrounding his point #2. Additionally, even though I'm not an expert on costs here, I think his points on costs are worth noting.
Most importantly, I echo @rleshner's concern regarding the precedent set here if this goes to formal proposal and passes a vote in the next week or so. To pass this so quickly despite how many specific concerns have been brought up would prove that the UNI treasury can be spent on short notice by any group with brand names and a directionally correct big idea.
Many people above are stating that this is the general kind of thing we should be funding, and then leaping to the conclusion that it's time to fund this right now, before addressing the details. However, the details really matter here, and we want to get this right. If there were 3 separate groups all proposing the same thing, we'd obviously start comparing the details of their plans. But for some reason, since there's only one proposal for this general idea, many have decided it's time to pass it right away.
My sense from this thread is that everyone agrees this kind of committee is worth funding. In addition, everyone seems to agree that the members of this committee are some of the most qualified to do so. Therefore, it seems like the next step would be collaboratively hammering out some of these details before moving to a formal Yes/No vote.
With just a few more weeks of work to address the top concerns above and come up with a detailed plan that accounts for them, I'm confident we could get to a place where many of the No votes become Yes votes. But to pass this in the current state feels really premature, and detrimental to Uniswap governance by means of the precedents it sets.
I'd like to point out that most members of the proposed committee still have yet to participate in the discussion in this thread.
Has anyone made sure that the 1M UNI allocated to a US-based non profit will not be taxed, leading to up to 350.000 UNI placed in the US GVT's pocket? Why is an intermediary needed to just hold and re-allocate the funds? Why cannot UNISWAP fund lobbying and legal defense activities directly, upon proposal of a committee trusted by the Community and/or via its Grants? I am not familiarized with US tax law, but have good experience with non profits in Europe, having helped dozens get instituted and properly registered. A quick look at the applicable legal framework, though, raises questions. https://www.irs.gov/charities-non-profits/proxy-tax-tax-exempt-organization-fails-to-notify-members-that-dues-are-non-deductible-lobbying-political-expenditures In my view, it would be optimal that any non profit related to Uniswap be rather "poor" and have an enhanced, but purely consultative and not decisive role about where expenses for political and legal defense go. Uniswap could then allocate sums directly where needed. Political and legal defense are necessary. Including (and primarily) preventive political and legal work to protect DeFi from disproportionate interference and regulation. This is the only thing there seems to be consensus on. Therefore a fund for an expert impact assessment of how this can be done in an optimal manner should precede the 1M Uni (or whatever sum) proposal for a non profit with a fixed BD which would attempt to influence "the right" regulation in the US (btw, not everyone agrees there should be any intense mobilisation to initiate -any- DeFi regulation at this point).
The proposal outlines that these funds are anticipated to be allocated over the next 4-5 years, so it wont have the same dilutive effect of selling 1M UNI all at once, which we agree would be a problem. We think it is important that the board has enough to work with so they can react quickly to regulatory threats without being hamstrung by the long governance process for every decision they make.
Couple points from me:
Couple points from me:
I do support how you expanded on the idea and like that a lot of DeFi protocols are included in this.
Dear HarvardLawBFI As I had commented in your twitter account before you uploaded this note here, it would be much more relevant to create a new product (we named our project for something similar DeFiDefense) that the DeFi community would potentially embrace. A great number of NFTs of this product could be distributed to the lawyers working on it (instead of actual payment). They would thus be working for and on it while creating it, and have a vivid interest in seeing it grow. The wider community would more easily accept and "adopt" it this way. If those working on it do not do a decent work, it will fail (along with their reward for it). Moreover, it should not be just a small group of people doing this. Rights litigators (iNGOs too) should first be well informed about it (educated) and then take part. For many reasons, which we can explain in detail. So, one point of objection is: -Why UNI? UNI (and others) could fund it, if they think it is of worth. But it would stand a far better chance if it was a distinct project. Other points are: -The lawyer's (let's call it "DeFi defender's") group should be clearly distinct from the lobbying one. Lobbyists are not stricto sensu defenders. There is an issue here -if not an ethical one, then one of "aesthetics". -Why just US people? A group should cover many jurisdictions, and continents. Why not make it, to start with, an iNGO (that also seeks consultative status with the UN and regional monitoring mechanisms)? -Why only "technical" people in the steering group? There should be diversity. For sure, there is a strong absence of civil, political and economic rights strategic litigators in your proposal, which in my view undermines the whole proposal. It is primarily such a group that should and has, in some jurisdictions- start building up a DeFiDefense. Because it is economic freedom and related (fundamental) rights that will ultimately have to be defended. Before you tackle, legally, a technical inconsistency in a law, a new law may be enacted spoiling your litigation. It is fundamental rights' litigation -and especially on a supranational level- that may halt the governmental apetite for a coordinated suppression. You can consider this as a given. So, already, a few experienced (in litigation before the UN and supranational Courts and tribunals, because this is where the game will finally be played in case of Governmental crackdown) strategic litigators are preparing on how to respond to an imminent suppression of crypto. It will primarily be a matter of fundamental rights and it will have to take into account the consensus and adoption of DeFi, at the point this happens. However, preferably, the legal work that should be undertaken would be "preventive", quietly creating precedents in different jurisdictions, that will be hard to undo when the Governments potentially decide to crack down on DeFi. Such work is already late. -The costs you mention are extreme. Also, they should not be taken on by UNI alone, but by DeFi community more generally
TIP: Harvard (Kennedy) School had a very nice course on "Leading non violent movements for social change". I believe some among those who took the course would love to be engaged in "peeling the onion" of resistance to the adoption of DeFi, coming up with a series of different tactics and strategies for defending DeFi in time, consolidating and mainstreaming the revolution that DeFi represents... Maybe, as Harvard students, you could discuss with the Kennedy School whether they can inform former students about the opportunity to participate in something like this. I bet many among them would engage pro bono or with minimal cost.
Dear HarvardLawBFI As I had commented in your twitter account before you uploaded this note here, it would be much more relevant to create a new product (we named our project for something similar DeFiDefense) that the DeFi community would potentially embrace. A great number of NFTs of this product could be distributed to the lawyers working on it (instead of actual payment). They would thus be working for and on it while creating it, and have a vivid interest in seeing it grow. The wider community would more easily accept and "adopt" it this way. If those working on it do not do a decent work, it will fail (along with their reward for it). Moreover, it should not be just a small group of people doing this. Rights litigators (iNGOs too) should first be well informed about it (educated) and then take part. For many reasons, which we can explain in detail. So, one point of objection is: -Why UNI? UNI (and others) could fund it, if they think it is of worth. But it would stand a far better chance if it was a distinct project. Other points are: -The lawyer's (let's call it "DeFi defender's") group should be clearly distinct from the lobbying one. Lobbyists are not stricto sensu defenders. There is an issue here -if not an ethical one, then one of "aesthetics". -Why just US people? A group should cover many jurisdictions, and continents. Why not make it, to start with, an iNGO (that also seeks consultative status with the UN and regional monitoring mechanisms)? -Why only "technical" people in the steering group? There should be diversity. For sure, there is a strong absence of civil, political and economic rights strategic litigators in your proposal, which in my view undermines the whole proposal. It is primarily such a group that should and has, in some jurisdictions- start building up a DeFiDefense. Because it is economic freedom and related (fundamental) rights that will ultimately have to be defended. Before you tackle, legally, a technical inconsistency in a law, a new law may be enacted spoiling your litigation. It is fundamental rights' litigation -and especially on a supranational level- that may halt the governmental apetite for a coordinated suppression. You can consider this as a given. So, already, a few experienced (in litigation before the UN and supranational Courts and tribunals, because this is where the game will finally be played in case of Governmental crackdown) strategic litigators are preparing on how to respond to an imminent suppression of crypto. It will primarily be a matter of fundamental rights and it will have to take into account the consensus and adoption of DeFi, at the point this happens. However, preferably, the legal work that should be undertaken would be "preventive", quietly creating precedents in different jurisdictions, that will be hard to undo when the Governments potentially decide to crack down on DeFi. Such work is already late. -The costs you mention are extreme. Also, they should not be taken on by UNI alone, but by DeFi community more generally
TIP: Harvard (Kennedy) School had a very nice course on "Leading non violent movements for social change". I believe some among those who took the course would love to be engaged in "peeling the onion" of resistance to the adoption of DeFi, coming up with a series of different tactics and strategies for defending DeFi in time, consolidating and mainstreaming the revolution that DeFi represents... Maybe, as Harvard students, you could discuss with the Kennedy School whether they can inform former students about the opportunity to participate in something like this. I bet many among them would engage pro bono or with minimal cost.
As a strategic litigator with thousands of representations, many of which condemning different countries, also trained in system dynamics and non violence (yes, one of those you would suspect their services cost heaps of money), I inform you that I would help in any such initiative pro bono or contribute to the making of a new asset with these characteristics, as long as it respects the ethos and aims of decentralization, and as long as it leaves a clear and big space for litigating DeFi related issues as a matter of fundamental rights, and no space at all for internal or external manipulation of the community. Good luck.
I will probably vote against this proposal for the following reasons.
For the current stage of this project, I believe the budget is exorbitantly high. Before supporting a proposal of this scale, I think it would be worth seeing a lot more proof of work.
I will probably vote against this proposal for the following reasons.
For the current stage of this project, I believe the budget is exorbitantly high. Before supporting a proposal of this scale, I think it would be worth seeing a lot more proof of work.
A classic lesson from startup investing or even the early ICO era is that projects should be funded in correlation to their progress thus far, then given more funding as they prove their ability to use the capital to fuel success. This project requests a massive lump sum of cash despite not having done significant work besides writing a proposal.
The Uniswap Grants Program was initially funded for only 2 quarters, and subject to reassessment and renewal after that amount of time. For a program with 10x the budget, I'd expect to see the same: evaluation after some initial period to determine if this is a success worth continuing.
I think it would make a lot more sense to move forward with a structure similar to the beginning of the Uniswap Grants Program: provide a smaller initial budget to fund this work for 2 quarters, then fund it at a larger scale based on the progress up to that point.
Additionally, this proposal anticipates that these funds will be allocated over 4-5 years, but there is no formal structure in that regard. Even with full approval, I'd hope to see these funds distributed over time, not sent all at once.
This proposal anticipates that the compensation across the entire committee combined will not exceed $150K, and the proposal positions this as a benefit. I see this as a huge weakness.
In my experience, committees and multi-sig wallets can experience coordination problems when signers are not properly incentivized to participate. In the case of this proposal, I believe the problem is compounded by the fact that most members of this committee have demanding full-time roles that demand their attention, and where they are paid and assessed by their organization.
For me to support this proposal, I'd prefer to see a different team structure. First, I would like to see at least one full-time, paid lead of this committee who is responsible for organizing and building consensus when funds need to be allocated.
Second, I'd actually prefer to swap out some members for legal experts who have more time on their hands to dedicate to this effort. It's hard for me to imagine that people with some of the roles above will have the spare time available to read applications, evaluate talent, and allocate $27M dollars worth of funds effectively.
The proposal states that all of the members listed have expressed their willingness to be on this committee. Do they actually want to be on the committee? What's their level of excitement?
I'd like to see every member of this committee commenting here on the forums and describing their motivations and plans for this group. Again, a committee with 1M UNI worth of funds should consist of members who are determined to use that capital effectively.
For me, it would also be helpful to see writing or other work these members have done related to DeFi's legal defense.
These are my initial concerns with this proposal. I believe there are significant structural changes that should be made before this moves forward.
I will edit post. I wanted to say that 1M UNI won't get this proposal far. I am not suggesting Uniswap governance should dedicate more funds.
Good call out and thanks for posting, I missed Rebecca's tweet. I had seen Jake's but wish more thoughts were being posted in this actual discussion.
Perhaps it would be helpful to gather all relevant tweets and have them somewhere in this thread to provide this kind of context.
That all being said, I'm happy to adjust / clarify the wording in my post to reflect that members have tweeted.
The two major concerns we see so far are 1) 30M is a lot of money to begin with, and 2) Uniswap shouldn't need to pay for this initiative on their own.
The two major concerns we see so far are 1) 30M is a lot of money to begin with, and 2) Uniswap shouldn't need to pay for this initiative on their own.
To address a tangential concern here, the board is excited and extremely supportive of this proposal. For example, see Jake Chervinsky's tweet. We anticipate you will be able to hear more of their specific thoughts soon.
Furthermore, this Uniswap board can and will condition the release of these funds on matching contributions from other platforms. For example, if the board decides to fund a project, they can condition their contribution on recieving a commensurate amount from other platforms that will benefit from their action. One of our board members is the Chief Legal Officer of Uniswap (Marvin Ammori), and as someone primarily interested in the success of Uniswap, he would not allow freeriding beyond what is necessary.
Lastly, we can always adjust after the fact. We think given the urgency of the situation it is best to get funds in the hands of people who can protect us as quickly as possible, and adjust as needed going forward.
We are trying to address as many concerns as we can, and we appreciate your participation.
The two major concerns we see so far are 1) 30M is a lot of money to begin with, and 2) Uniswap shouldn't need to pay for this initiative on their own.
To address a tangential concern here, the board is excited and extremely supportive of this proposal. For example, see Jake Chervinsky's tweet. We anticipate you will be able to hear more of their specific thoughts soon.
Furthermore, this Uniswap board can and will condition the release of these funds on matching contributions from other platforms. For example, if the board decides to fund a project, they can condition their contribution on recieving a commensurate amount from other platforms that will benefit from their action. One of our board members is the Chief Legal Officer of Uniswap (Marvin Ammori), and as someone primarily interested in the success of Uniswap, he would not allow freeriding beyond what is necessary.
Lastly, we can always adjust after the fact. We think given the urgency of the situation it is best to get funds in the hands of people who can protect us as quickly as possible, and adjust as needed going forward.
We are trying to address as many concerns as we can, and we appreciate your participation.
