yaoe commented 5 years ago

Request for Nest membership and funding (#99)

Team name: COALA

Proof of concept / research whitepaper: https://github.com/aragon/nest/issues/99

Burn rate: $25k initiall payment + $20k / every 2 months

Legal structure: COALA (non-profit organization)

Team and roadmap https://github.com/yaoe/nest/blob/master/grants/coala/team.md https://github.com/yaoe/nest/blob/master/grants/coala/roadmap.md

Proposal

Aragon Nest Proposal: Bridging the Gap Between DAOs and the Physical World

The purpose of this project is to find ways for DAOs to be able to interact with non-blockchain based actors, i.e. governments, companies and communities that operates in the physical world, and which are subject to specific jurisdictions. To do so, there are two possible approaches:

Creating legal structures for DAOs: One way is to extend the scope of existing regulatory frameworks to recognize DAOs as legal entity. See e.g., Malta’s proposal of giving legal personhood to DAOs, or to a lesser extent, Delaware’s initiative to allow blockchain-based companies to be registered as standard companies. However, this approach has a series of drawback in that this means reducing a DAO to an existing legal entity, e.g. a company or corporation, which simply mediates its operations through a blockchain, but nonetheless needs to comply with all traditional legal requirements (e.g. director or board of directors, being registered in a particular jurisdictions, etc.)
Bridging the gap between DAOs and the physical world: An alternative way is to maintain the alegality of DAOs but providing some kind of “avatars” for them to interface with the legal world. This means creating a “legal API” between blockchain-based systems and the legal system, that will enable entities from the physical world to interact with these entities according to specific rules. The goal here is not to map DAOs to existing legal concepts, but rather to provide a bridge between the blockchain world and the legal world, without requiring one to subject itself to rules of the other.

With this project, we want to focus in particular on the second approach, in order to provide new ways for DAOs governed by code to interact with the physical world governed by laws. To do so, we will try to analyse the current regulatory framework in key jurisdictions and devise specific interfaces that will facilitate interactions between these two worlds, with a minimum amount of friction. We will identify the most favorable jurisdictions in which these interfaces can be built, and we will elaborate possible techno-legal frameworks that will constitute the DAOs’ “legal API”. The legal API will account for a variety of ‘functions’:

Identity: How can DAOs be referred to in the physical world, if they are not recognized as a legal entity? Do we need to create a legal avatar or can we refer to them as an object ?
Legal qualification: How do we avoid DAOs from falling back into the default qualification of a “general partnership”, which might imply legal liability to all of its members? Can we design the DAO in such a way that it automatically acquire another qualification, or do we need to create a specific protocol or legal entity to act as the avatar of the DAO?
Property rights: How do we ensure that the assets owned by the DAO are actually recognized as such, and that they can acquired and transferred legitimately between differents types of actors (DAOs and non-DAOs) ?
Contracts: How can DAOs enter into a contractual transactions with a non-DAO entity, or with another DAO? How can these contractual provisions be enforced? What kind of arbitration or alternative dispute resolution systems do we need to devise for it?

Scope of Work

We anticipate undertaking and completion of this project will comprise at least one year (September 2018-September 2019) and require the participation and contribution of key experts across a variety of domains and jurisdictions with requisite legal background, technical knowledge, creativity and ability to implement a sound and holistic social and technical vision, within the legal, economic and cultural constraints of the physical world. We anticipate the entire project will require, for the duration of the year (1) legal research from experts based in relevant legal jurisdictions and (2) technical research to inform the design of the legal API. These research efforts will be intensive in the initial six months as the team maps the topology of blockchain-based systems and how they currently map within existing legal systems. The first six months will require at least two full-time researchers/coordinators, working with a diverse qualified body of external experts, lawyers and researchers on a continuous basis. We also anticipate that such initial research will require team review and feedback in the form of in-person workshops to enable cross-pollination across diverse areas of legal research and technical design. We anticipate that at least six workshops will be required at a minimum during the year-long project term (approximately once every two months). Based on the results, feedback and iteration of the research and design process during the first six months, the remaining six months of the project will be focused on the formal specification of the legal API, design implementation, and pilot experimentation with our partners.

Grant size: $145 000

Use of funds

Research track: one full-time and one part-time persons working for the duration of the project (one year) to collect all relevant information on an ongoing basis regarding the regulatory frameworks in the selected jurisdictions and cataloguing all relevant legal reforms and statements issued by oversight and regulatory authorities around the world.
Development track: one full-time and one part-time persons working for the duration of the project (one year) to coordinate the work of multiple experts around the various attributes of the ‘legal API’ (identity, legal qualification, property rights, contracts)
Workshops: We will organize a series of research workshops with the COALA community comprising relevant legal, technical and subject-matter experts in order to elaborate the legal API. We plan on organizing six research workshops for the duration of the project (approximately one every two months).
Pilots: Theory is important, but things that work in theory do not always work in practice. We will finds DAOs willing to experiment with our legal API to get real-world feedback on its viability. We will learn from these DAOs’ experience and improve the API on an ongoing manner.

Subdivision of funds

$54,000 for 1.5 full-time employees ($3,000 / month) for the research track and development track $36,000 for compensating individual expert contributions who will work with our full-time employees in order to carry on legal research and elaborate the legal API (estimated $3,000 / month) $36,000 for 6 research workshops ($6,000 / workshop expenses : flight, accommodations, food) $19,000 as a 15% administration fee for COALA Foundation (coordination and internal costs)

Grant contract

Initial Payment: $25,000 Recurrent payment: $20,000 per workshop. Each workshop will be organized around a specific deliverable. At each workshop, we will present the work we have done so far, collect and integrate feedback, and then collaboratively sketch out the work to be done for the next deliverable at the next workshop.

Proposed Research Workshops and Deliverables

Kick-off Workshop: October 2018 (Web3 - Berlin) - $25,000 -- > Kick-off meeting

Workshop #1: November 2018 (IGF - Paris) - $20,000 -- > Topology of legal domains

Workshop #2: December 2018 (India) - $20,000 -- > Legal API - Legal qualification

Workshop #3: January 2019 (AraCon - Berlin) - $20,000 -- > Legal API - Identity

Workshop #4: March 2019 (Colombia) - $20,000 -- > Legal API - Contracts

Workshop #5: May 2019 (Ann Arbor, MI) - $20,000 -- > Legal API - Property Rights

Final Summit: September 2019 (Boston w/IC3) - $20,000 -- > Launch of the Legal API

Legal structure

Legal Structure: funds are to be paid to COALA Foundation (a 501(c)(3) non-profit organization incorporated in Delaware, U.S.A. and non-profit organization incorporated in Paris, France).

All work under the COALA Foundation will be released under Creative Commons - BY - SA

Team

Coordinators: Primavera De Filippi (20% - 1 day /week) Constance Choi (20% - 1 day / week) Hired personnel: Full-time position: Greg McMullen Part-time position: Carla Reyes Experts: Fennie Wang, Benedikt Schluppi, Christopher Wray, Anja Blaj, Gian Boescher, Vincent Mignon, Tom, Rick Dudley, Peter Todd, Joseph Poon, Iris Weizmann, Henning Diedrich, Karl Floersch, Vlad Zamfir, Michele Finck, Christoph Jentzsch, Jutta Steiner, Harald Steiber, Brett Scott, Diana Stern, Nate Walker, Ryan Singer, Evan Schwartz, Aaron Wright, Bjorn Wagner, Trent McConaghy, Amor Sexton, Joshua Fairfield, Emin Gun Sirer, Anuj Gupta, Griff (Giveth)

CLAassistant commented 5 years ago

All committers have signed the CLA.

mariapao commented 5 years ago

Hi @yaoe thank you for submitting this interesting request for funding!

We have reviewed it and are very excited about this project. We love that you are focusing on the second approach. We need this! Also, we like that the project has two tracks: one for research and another one for development. We agree with you that theory is important, but you said it right: things that work in theory do not always work in practice. Especially regarding subject-matters like this one. And this is the reason why we are interested in research as long as it is part of the potential solution, which in this case is the legal API. We are not interested on legal research per se.

We have a few questions/comments:

Could you elaborate a bit more on each deliverable? What is it exactly that you will be delivering with each deliverable? For example, in the deliverable number 1: topology of legal domains or deliverable number 4: contracts? We do understand what you are aiming at with each "function" but what is each deliverable composed of? This will help us understand the scope of work of the project.
The way you approach the identity function seems like it is the same as the legal qualification function. I don't see the difference between the two. And so deliverables 1, 2, 3 are more or less part of the same "function"? Am I understanding correctly?
The current hired team is made of 1.5 full time persons. I imagine they are going to be focused on the research track? What about the persons focused on the development track? Are you planing to hire them later on?
Regarding the workshops, is there a particular reason to have 6 of them and in those different cities? We understand the importance of having in-person meetings but at the same time we are thinking that the cost (and time) of flying the team to India, for example, can be saved and those funds (and time) can be used for paying for more team members so we have the solution in less time (everybody needs this solution now ;)). We need to be very cost and time efficient. Most of the teams work remote and it works. Cross-pollination can happen online too. We are not underestimating the importance of in-person meetings but there maybe a possibility to find a better balance?
Is it feasible to find a way to reduce the timeline of the project? The reason is that everybody needs this solution yesterday ;). Can the two tracks, research and development, work on parallel? For example, it maybe that there is not need to have 6 months of only research. I'm just thinking out loud. One year seems to far away, DAOs on mainnet are imminent!

yaoe commented 5 years ago

Hi Maria,we have revised the document to reflect the changes of venue for the workshop, plus we have integrated the answers to your questions, copied below. Could you please let us know if that's okay or if you need us to submit these via github?Thank you and looking forward to your answer ! Aragon Proposal - Google Docs.pdf 201KB Download Aragon Questions: 1. Could you elaborate a bit more on each deliverable? What is it exactly that you will be delivering with each deliverable? For example, in the deliverable number 1: topology of legal domains or deliverable number 4: contracts? We do understand what you are aiming at with each "function" but what is each deliverable composed of? This will help us understand the scope of work of the project.

Topology of legal domains (1)
Identification of all the critical areas in which there is a fundamental discrepancy between the traditional rule of law (how legal frameworks work) and the rule of code (how blockchains work): e.g. incorporation rules, property rights, contract law, kyc requirements, liability, etc.

This topology will identify existing gaps between current legal frameworks and blockchain-based technologies, which can and will be filled with the legal APIs that we plan to develop.
Legal API - Legal classification (2)
Investigating the various legal forms in which DAOs can be structures to be recognized in the legal world: e.g. general partnership, unregistered association, registered company, etc. and the criteria that must (or must not) be met in order for the DAO to fall into one category rather than the other. This work will enable DAOs to proactively self-select into forms that will be recognized by the legal world to its advantage, rather than automatically collapse into the category that government actors will ascribe to them by default.

We will map the various legal mechanisms and structures available today to the forms and objectives of today’s DAOs, analyze the pros and cons of various organizational structures and how they optimize for certain objectives of DAOs.
Legal API - Identity / Gateways (3)
Identify ways to create an “avatar” for DAOs that have NOT been incorporated into a legal entity: eg. creating a legal gateway acting as an interface between the legal world & the blockchain space, or establishing a “router” that legal persons can interact with, and that would dispatch all transactions to the appropriate DAOs or other ways that we have not yet thought of.
Legal API - Contracts (4)
Investigating the legal validity & enforceability of smart contracts; identify existing solutions to bridge the gap between legal contracts & smart contracts (e.g. Common Accord, OpenLaw, Legalese, Lexon, etc.); identify the possible forms of alternative dispute resolution systems that can be implemented in order to avoid relying on the traditional judicial system and execute force.

Build the legal translation tools or avatar structures that enables code-based execution and agreements to map to legal rights and dispute mechanisms in the physical world.
Legal API - Property Rights (5)
Investigating the discrepancy between traditional property rights (defined by law) and blockchain-based property (defined by code), and how can the owner of blockchain-based assets can be recognized as the legitimate owner of such assets in the physical world?

Build legal translation tools that enables code-based forms of property delineation (key control, multisig custody) to assert property rights in the physical world (physical custody, titles, deeds).
Launch of the Legal API (6)
Prototype and test the legal APIs with projects that would like to implement the legal APIs.

Launch !
1. The way you approach the identity function seems like it is the same as the legal qualification function. I don't see the difference between the two. And so deliverables 1, 2, 3 are more or less part of the same "function"? Am I understanding correctly?(see above)

Deliverables #1-3 represent the underlying premises on which the other deliverables will build upon: * The topology of legal domains (#1) is a preliminary research necessary intended to map the different domains of law that DAOs will have to interface with in order to operate and interoperate with entities in the legal realm. The goal of this research is to identify the necessary gaps that the legal API will try to bridge, i.e. the actual functions of the API.

the legal classification (#2) investigates the relationship between the internal governance structure adopted by DAOs and the way in which they will be understood and classified by the legal system. It will identify the various steps that DAO deployers or members must undertake, in order for a DAO to defend itself against certain automatic categorization (e.g. general partnership) that may otherwise be ascribed to it by the legal system;
The identity / gateway (#3) is intended to identify and enumerate the different “avatars” or “gateway” that DAOs might avail themselves of in order to interface with the legal realm.
1. The current hired team is made of 1.5 full time persons. I imagine they are going to be focused on the research track? What about the persons focused on the development track? Are you planning to hire them later on?

See above. The work is mostly related to research, which might include the elaboration of technical specs or the drafting of legal language, but no software development. The research team will architect the gateways and avatar structures, with the help of the external domain experts from the COALA community, as necessary. 1. Regarding the workshops, is there a particular reason to have 6 of them and in those different cities? We understand the importance of having in-person meetings but at the same time we are thinking that the cost (and time) of flying the team to India, for example, can be saved and those funds (and time) can be used for paying for more team members so we have the solution in less time (everybody needs this solution now ;)). We need to be very cost and time efficient. Most of the teams work remote and it works. Cross-pollination can happen online too. We are not underestimating the importance of in-person meetings but there maybe a possibility to find a better balance?

We cannot solely rely on remote conferencing as the format for mapping or architecting these complex systems. We have been organizing these workshops for 4 years now and we believe our format is the most adequate to ensure the highest productivity and quality of outcomes. We will work asynchronously on particular areas of research, with COALAs accountable for specific tasks between workshops, but it is critical to meet in person to build and architect the logic of these systems. We will hold these workshops in areas accessible to the COALA community (e.g., urban hubs like New York or Berlin) and in tandem with other events that people are already attending (e.g., Devcon, Aracon). We understand the urgent need for solutions today, and will work both asynchronously and at maximum speed as the time for the underlying research allows. 1. Is it feasible to find a way to reduce the timeline of the project? The reason is that everybody needs this solution yesterday ;). Can the two tracks, research and development, work on parallel? For example, it maybe that there is not need to have 6 months of only research.

The research is the basis for the enumerating the architecture of the gateways and avatars, so these will work in tandem with the other. Our schedule has been accelerated to a 6 months timeline for completion of the project.

Primavera De FilippiChargée de recherche, CERSA | CNRSFaculty Associate, Berkman-Klein Center | Harvard UniversityBio - Twitter - LinkedIn - COALA - Plantoid - TEDxNew book release:Blockchain & The Law The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination, distribution, forwarding, or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited without the express permission of the sender. If you received this communication in error, please contact the sender and delete the material from any computer.

On Sat, Oct 20, 2018 7:22 PM, mariapao notifications@github.com wrote: Hi @yaoe thank you for submitting this interesting request for funding!

We have reviewed it and are very excited about this project. We love that you are focusing on the second approach. We need this! Also, we like that the project has two tracks: one for research and another one for development. We agree with you that theory is important, but you said it right: things that work in theory do not always work in practice. Especially regarding subject-matters like this one. And this is the reason why we are interested in research as long as it is part of the potential solution, which in this case is the legal API. We are not interested on legal research per se.

We have a few questions/comments:

Could you elaborate a bit more on each deliverable? What is it exactly that you will be delivering with each deliverable? For example, in the deliverable number 1: topology of legal domains or deliverable number 4: contracts? We do understand what you are aiming at with each "function" but what is each deliverable composed of? This will help us understand the scope of work of the project.
The way you approach the identity function seems like it is the same as the legal qualification function. I don't see the difference between the two. And so deliverables 1, 2, 3 are more or less part of the same "function"? Am I understanding correctly?
The current hired team is made of 1.5 full time persons. I imagine they are going to be focused on the research track? What about the persons focused on the development track? Are you planing to hire them later on?
Regarding the workshops, is there a particular reason to have 6 of them and in those different cities? We understand the importance of having in-person meetings but at the same time we are thinking that the cost (and time) of flying the team to India, for example, can be saved and those funds (and time) can be used for paying for more team members so we have the solution in less time (everybody needs this solution now ;)). We need to be very cost and time efficient. Most of the teams work remote and it works. Cross-pollination can happen online too. We are not underestimating the importance of in-person meetings but there maybe a possibility to find a better balance?
Is it feasible to find a way to reduce the timeline of the project? The reason is that everybody needs this solution yesterday ;). Can the two tracks, research and development, work on parallel? For example, it maybe that there is not need to have 6 months of only research. I'm just thinking out loud. One year seems to far away, DAOs on mainnet are imminent!

— You are receiving this because you were mentioned. Reply to this email directly, view it on GitHub, or mute the thread.

mariapao commented 5 years ago

Hi @yaoe during AraCon I spoke to Contance and Greg about this application and how it was going to be updated to link it to a living use case. I'm going to close this PR for the moment to give you guys time to work on the new version of the application.

aragon / nest