Traditional tax principles treat many pooled smart contracts and decentralized autonomous organizations as entities. It’s hard to determine what kind of entities they are, who their equity holders are, and how they are supposed to pay taxes, file tax returns and information reports. This article examines the problems with treating smart contracts a... See more

Without a specific idea of the good to build towards, the financial interests of large tokenholders have become over-represented in protocol governance. In our view, this constitutes a centralization risk.

When anyone can create an entity that materially organizes the flow of value across borders, what can national regulatory regimes do to stop them? What will this do to labor and environmental standards? I can see massive benefits as well as grim consequences.

But, if you read the previous section, you know that there’s a catch: while the value of a protocol’s token is meant to reflect the success of the protocol, it’s very difficult to design a token that actually captures the full breadth and nuance of the protocol’s goals. And the price incentive built into tokens leaves them especially vulnerable to ... See more