On The Brink with Castle Island - Dennison Bertram (Tally) on the Future of DAOs (EP.415)

Episode Date: April 12, 2023

Dennison Bertram, the co-founder and CEO of Tally, returns to the show. In this episode we discuss: Dennison's career in the crypto industry from exchange founder to founding Tally. How to frame DAOs from a total addressable market perspective. What types of companies and industry categories would be better served as DAOs. Best practices in managing DAOs. The regulatory landscape for DAOs and how state LLC regulations could factor into future legislation. How Tally works with leading DAOs. To learn more about Tally visit their website and follow Dennison on Twitter. See also:  On The Brink, Dennison Bertram and Raf Solari on Reforming DeFi Governance (March 2021)

On today's episode, I sat down with Denison Bertram, the co-founder and CEO of Talley. Talley is a software company that works closely to improve the workflows of distributed autonomous organizations. There's a ton going on in the world of Dows, and I wanted to have Denison back on the show to discuss the latest developments in this fast-growing category. I think you'll enjoy this one, so without further ado, here is my conversation with Denison Bertram. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them where the guests on this podcast are solely their opinions

and do not reflect the opinions of Castle Island Ventures. Guest and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees,

will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to. to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy with a new round of quantitative easing. You've printed a couple trillion dollars and all of a sudden people start to worry.

So out of this worry, we have something called the Bitcoin. Bitcoin. Dennis and welcome back to the podcast. I'm excited to have you on. We have been going for 20 minutes and we just turned it on. So I wish we were recording all of this chat about Bitcoin and Ordnals. You're a fascinating, I appreciate you joining the podcast. Thanks. Thanks for having me back on. It's pleasure to be back. And we're excited to be investors in Talley, and I want to talk a lot about DAUs.

But before we do, I mean, you've had a fascinating career in the crypto space. We'd love to just hear what got you excited in the first place and then a little bit about the path that you had to founding Talley. I've been in the crypto space for a long time. I founded the first or one of the first Bitcoin exchanges in 2012 in the Czech Republic called Buy DTC. I really did that because I had read the Satoshi White Paper and, and, you know, and, you know, And it really stuck with me immediately at the time I was an artist.

I read it and watched what happened with everyone in 2008. And it was just so clear to me. Interestingly enough, at the time, I had a very different opinion on Bitcoin. I really saw Bitcoin as the money of the machines, which is right now feeling quite relevant. I haven't thought about it for a long time because the original Bitcoin crowd had a little bit of a different ethos and a little different interest. I really thought, oh my God, this is amazing because money is the only human concept that you can't natively transmit over the internet. I can send you a letter and say, hey, Matt, I love you, and you're on the other side of the world and you read my love letter and you will feel love.

You feel love. So I can transmit love this human concept over the internet. But if I send you an email and say, oh, by the way, here's $100, and I just do dollar sign 100,000, well, the human concept the money is a human concept, but actually I have not sent you $100. So I really felt, wow, Bitcoin is making this human concept something that actually is accessible to machine. Because even if machines one day love, they can send love back and forth on the machine love ladders, but they still couldn't send money. So Bitcoin is like, oh, you can finally send money.

So that is what really got me excited. I had originally reached out to the folks who were building proof of existence back in 2013. NFTs on Bitcoin. It was a little bit too early for that. through a counterparty master coin world, and a whole bunch of jazz, and then drifted out for a little while, and came back in 2016-ish,

and went on to work for Open Zeppelin as their first developer advocate, and I found it something called DAP Hero, which was basically a lot like third web today, but it was just too early. There weren't these generalized builders out there yet. And then went on to found Talley, which is a Dow cooling platform.

And Talley was really a brainchild of the fact that I used to sit in an office with my co-founder, Rafael Solari, in Crypto-Nyc, which was this hotbed of the New York-based crypto activity at the time, co-working group. And we would talk about DAUs. We saw the Dow itself. We saw Aragon, Maker. At the time, all these projects would come in and do their ICO pitch promo thing, and they would come in by lunch and we'd all listen to them their spiel.

And at the time, it was, okay, DOWs, these decentralized organizations, This feels like the future, but it didn't really seem like there was an application for it yet. Aragon at the time was making this pitch for these digital organizations, and it really felt why. There were a lot of people trying to do stuff like that, represent stuff as tokens and work and reputation. But underlying all of it, there wasn't really anything particularly valuable that they were governing, more or less. Maker is different because they became a maker. But it felt too early. Fast forward a few years and created compound Governor Alpha, and it felt very different because they were using a Dow to actually govern a smart contract system that made money and protected a large amount of value.

Oh, this is what Dow's are going to be for. They are going to be for managing these internet native, these blockchain native systems that really require someone to pull the level. but they need to do in a centralized way because you look at Maker, you realize that these organizations, even though they're smart contracts in code, are incredibly political. You also need DAWS as this rule of last resort for solving political disagreements, an incredibly neutral and a universally accepted final way, because otherwise you have to go sue someone, but this really brought that problem. So we saw that and we realized that, okay, now is actually the time to build tools to make these things work.

because at the time was complicated. It's only gotten more complicated. And so we started building Talley to be this platform where you could really run and manage successfully a Dow from one or two people to millions of people. And I think we've been very successful in that journey. There's still obviously a long way to go. But we've gone from the early days

where there's just compound and then there was UNISOP and then there's Gitcoin to now there's hundreds of DAWs on Talley. We support particularly just the governor framework, which is the spiritual successor of compound government. governor's alpha. There's compounded governor alpha, then they did governor Bravo. Then we and then worked with Open Zeppelin to standardize it into the Open Zeppelin governor standard. And that's actually now really become the primary Dow framework on the internet, frankly, in the Ethereum world specifically. And it protects and governs over nine billion dollars in assets today. There's

hundreds of thousands of voters. It's really quite enormous. People use it to control all different systems from huge defy protocols to NFT projects, Nouns as a governor for. So it's really been a wild ride. Obviously, a lot of bumps there because it's a really nascent space, but it's going up. So it's been very exciting. It's been a fascinating trip. I think about just the history of the cryptocurrency space and decentralized money is just such a huge market, a decentralized operating system for launching applications. It's just an unbelievably large market. But then when I think about DAOs, I think about how big is the market for just companies and for work. And so where do you see this going, I guess? Is this going to be the type of

vision, this type of world where people wake up and decide which Dow they want to work for in the same way that Uber and Airbnb sort of shifted the nature of how you can make money? Could this be the same type of phenomenon? Three responses to that, and I'll share all of them so don't forget them. Uber and Airbnb should be DAWs. I used to think of. them as corporations and now I think the opportunity is even larger. So first one is I used to think this as digitally native corporations for digitally native organizations. I still generally believe that, but I think it's gotten much bigger. I think that DAWS, the application and innovation of DAWS is really going to be on the order of the joint stock corporation, the Dutch East India company in and of

itself, just that size of magnitude where years in the future, maybe hundreds of years in the future people will be studying corporate history and they'll see stock corporation, they'll see LLC's corporate personhood, and they'll see Dow's. Ideally tally someone there, but hundreds of years in the future. In that regard for a sense of like the opportunity is, I think the opportunity is the corporation. How big is corporation? How many corporations are there? How much value is in there? How much money they spend? That number is with many big T's. The opportunity there is enormous. But I actually think the opportunity is actually larger than that on scale, because not only is it, if you think about, okay, in the future, some people say everything will be a Dow. And I think in some ways that may be true, because it is making an organizational structure just in how people organize together. And the Dow structure itself, we'll see how legally things pan out. The Dow structure itself scales really well. It scales from two people to a condo, to a block association, to a neighborhood, to a city, to a state, to an entire organization. So I think there's a lot of scale there, but there's an entirely new class

of digitally native infrastructure that needs to be governed. And that's an entirely new concept. Things like Bitcoin are public infrastructure. And they are run by private individuals and companies all over the world. And they don't exist in any one legal jurisdiction. They exist on planet Earth. There's even Bitcoin nodes in outer space. Bitcoin is a infrastructure network that exists outside the planet. We need structures like Dow's to actually be able to manage these organizations together. You certainly will see that in terms of look at Nexus Mutual, which is a decentralized insurance company where members are contributing funds to it to cover people's claims, insure risk,

etc., etc. So beyond that, though, we have things like Arbitur, these layer twos, where they're actually building public infrastructure for compute, just the ability to do. compute. That's enormous. That's massive. We already see the transition information technology, whatever, blah, blah, blah. That revolution has already been cleared us for a long time, but we're on the cusp of this public infrastructure revolution, where your data exists in vast, zero-knowledge-proof networks that span the entire globe, and all of your information is in there, and it's all impossible to decrypt, and it's all protected by privacy. There's

all these different characteristics to it, which is really incredible. This is going to be such an enormous amount of new innovation that you can't use the corporate structure for. I think in the early days of DAO's, people could make this argument of, yeah, what could you do with a Dow that you can't do with a company? Well, you can't govern private, trustless ZKE zero-knowledge-proof networks. You can't do that. It's a global thing. What are you going to do? Enfor some law in Denmark for someone who's lives in South Africa? What about those Bitcoin satellites? Who's going up there to serve them a notice? So actually, we have finally found something that the corporate structure can't do. So the opportunity really gets even larger when you think that first there's a general partnership. There's just people.

Then they got the stock corporation, and that was better than that. And now Dow's are better than that. Each circle contains the one below. Where we go from here is up into the right in terms of application and growth and all that. And then my other point was Airbnb and Uber, which there was a great post that someone on Twitter had put up, and I don't remember who, so I apologize to them, but they had a great example of why decentralized systems are so important for human freedom, and they were talking about how the world is actually centralizing everywhere, and we don't notice it. And their example was 10 years ago, 20 years ago, if you were in New York and you needed to go somewhere, you stood on the street and you held out your hand and you hailed a taxi. And a taxi came over. And if you

had a bad experience, you do the classical New York thing, yell at one another, maybe little fisticuffs and then you'd move on. And the next day, you'd hold out your hand and you'd get another taxi. But today, you use Uber. And if Uber decides that you are a persona non grata, that they don't want you as a customer, you cannot hail an Uber in New York City. But you also can't hale an Uber in Detroit or in New Delhi or in South Africa or anywhere on planet Earth. So actually a single corporation in a matter of a small number of years actually now has the ability to cut you off from hailing a taxi anywhere on this entire planet. Same thing with Airbnb. If Airbnb decides that they don't want you as a user, you can't stay anywhere in anybody's couch or anyone's house

anywhere on planet Earth. Obviously, you can go knock on the door and say, hey, can I stay on the couch? I'll probably tell you no. But suddenly you're cut off. So these are actually two services that actually should be doused. Because if you think about it, this network of people willing to drive you from point A to point B is public infrastructure. That belongs to the nature of our human connection between all of us. Yet one company has the central power on that. And you as a user, you as an employee have zero recourse to it. In a Dow structure, you'd have something where people could actually voice their concerns. They would actually have some power in that structure to say that, hey, this isn't fair, this isn't right.

We want to change this policy. We want to change that policy. But you can't do that with something like Uber and Airbnb. And more than that, you're also bound to the jurisdictional requirements of Uber and Airbnb. You bring up some fascinating points. To pull on the thread a little bit around Uber and some of these centralized companies, One of the things that is really beneficial to being a centralized company is the ability to just go really fast into scale. For better or worse, Travis was able to scale that thing to unbelievable heights because it was a commanding control type of economy.

So I'm curious what the best in class DAOs that are using your platform are doing in order to actually just push product fast. Definitely high level pushing product fast. I don't think anyone will add that to the list of things DAOs are best at. that's for sure. Truthfully, I do think that that is mostly an organizational challenge problem. Dow's very early. We're still at the stage of everyone puts their finger in the pie. And that is messy and complicated.

It's definitely too many cooks. We do have organizations, though, that are putting power to do certain things and responsibility to do certain things in smaller working groups that are more effective. A team that just recently decentralized was Arbitrum. They have built an enormous ecosystem, product. They did their launch on Talley. We're really looking forward to what they bring to the ecosystem. But then you see other teams out there that continue to build and innovate, such as E&S or Uniswap. Now, you can argue that they aren't as efficient, and I don't think I would

really push back on you on that. It's very different when you do own a corporation and that you can make changes by Edict. But there's a natural imbalance between the relationship of corporations to human good and dows to human good. One of the more recent corporate innovations in the IRL world is the B corporation. You'd have a corporation where you have a duty to your shareholders to maximize profit. And if you were in a situation where the maximizing profit required something that was, for example, environmentally unsound, your shareholders could hold you liable for not doing something ecologically bad simply because it would maximize their profit.

the corporate structure is designed around this idea of maximizing profit. So B corporations have this statement of, yeah, you want to maximize profit, but there are social benefits that we have to prioritize as well and hold in balance so that if you decide not to burn the forest, shareholders don't sue you. It's a little bit similar, I think, with corporate structures today, because DAOs are going to get much better at this over time as they figure all these pieces out. But with corporations, there's also this idea of moving fast, which is important to maximize market share to maximize success, maximize money. But I think over time, we're going to see things maybe develop first as corporations,

arbitram, optimism, they start as corporations, where the end goal, though, the end state is public infrastructure. So then we see the transition over. So it's hard to really pull out some example of someone building a dissonable. centralized organization that's actually building faster than a VC-back startup. That also speaks to the scale, right? There are some DAOs where there are only a few members. There's one DAO that we created called Content Guild, which originally we created a Talley as a way of outsourcing our content creation. And they're small. They're about 15 people, mostly non-tally folks, maybe about

four Talley folks in the Dow and maybe about 10 or 15 non-talli folks. And what they do is they just create content around Dow. They're always writing about Dow's. They're organizing virtual conferences, and they're very efficient because they're a small group of people and they're aligned in the goal. And the goal is actually something that's very feasible. They don't need some rigid structure. So I think we'll also see productivity as a function of goal or tasks. And we will see Dow's as being an evolutionary state to the structure, which may start as an IDEA, LLC corporation, Dow, when it comes to time of moving on. I think there's a term around exit to community where an organization rather than selling. You couldn't really imagine an L2 that has

billions of dollars in it and they serve hundreds of thousands or millions of users. You can't imagine them just selling it to IBM. You can't imagine I'm going to build an L2 and then sell it to IBM. And now you belong to IBM. First of all, you'd lose all the users. People would lose their shit and just disappear. So there's also a competitive nature of people feeling ownership at the systems that they use. But for people who create those organizations, how do you exit? How do you finish your period of working on this thing? In that, you can't sell it to IBM. So in that, you open it to the community ownership, and then it's really part of the community's role to steward it into the future where maybe the hard work has been done. But I think we'll see more efficient organizations

in the future as well. Other non-DOW rappers have figured this out. Ocean Spray is a cooperative and it's not the guy in the cranberry bog is making the decision on what color the next package should be for the new product launch. Vanguard is a community-owned type of structure owned by its shareholders as well. So I think over time it's just a matter of who gets to be in the kitchen to make certain choices and how do you scale that? And I'm sure you're seeing that on a Dow to-to-Dou basis as well.

Not only do we see that on a doubt-to-dap basis, this goes pretty central to one of the things I believe, and I tell people, how you distribute governance power in the beginning is very, very important. And a lot of teams have this idea of use the service, you've provided liquidity, and you get tokens, which is fine. But I make this joke around how you're riding a bike, you get hit by a car, the ambulance takes you to the hospital, and now you should get hospital governance tokens because you provide you. your body is liquidity to it and you should govern the hospital. That doesn't make any sense. Now, there is value to giving everyone who comes in a token. Everyone who provides liquidity, everyone ever swapped, everyone who bought an NFT, get some tokens. There is value in that, lining membership, aligning your user base, lining your customer. But I think teams should think very long and hard about the gradation of how you distribute token. If someone's actually in the

source code for six months before you launch, the difference between the upper bound of what people receive and the lower bound should be, in my opinion, enormous. Right now, the difference just isn't enough. If you are proven contributor in X, Y, or Z way, whether it's in this organization or another organization, your weight should be vastly higher than somebody who just came by left a million dollars on the protocol for a few weeks. In addition to that, I think we should start moving up a bit, something that a lot of people talk about the plutocratic nature of token voting. And I think they miss the point that most systems that use token-weighted voting aren't really designed to be one-person, one-vote democracies in the first place. If you build a system that's decentralized for only the banks and rich people, it's still decentralized.

Just for banks and rich people. Rich people and banks have the same trust issues as regular people and everyone else has. building a system that allows banks to trustlessly deal with one another and know that they have a system for managing political disputes is just as valuable as a system that serves everyone on earth with one person, one vote. And what I think we will see more is, or what we should see more is, if you are companies that run validators or sequencers or some real component, real primary component of this infrastructure, I think you should get way more governance power. In many ways, you should say, I think, and people may disagree with me on this, but the thing is, if you have some public infrastructure that's very complicated, the people who are making the day-to-day decisions should really be experts, really motivated and really focused on working

on this. And maybe there's people, this is why governor is so great because you have a delegation system, so you can have small people flowing their voting power up, but you should just distribute it differently. So you do have more effective institutions that look, more like co-ops, that look more like these industry association, where, yes, for the cranberry growers every now and then have some really huge blow up and fight with ocean spray management.

I'm sure that happens now then, and they're forced to the table and they bargain and negotiate, and then they all move forward because their interests are still generally aligned. Everyone knows that the cranberries need to get squished into the juice, but they do need some structure for navigating that. I think we'll see more of that in Dow's. I expect so. I hope so. That's going to bring the efficiency that you're talking about with something like Uber,

because you could imagine you think a lot about the coffee cooperatives, where a cooperative serves maybe 100 or 1,000 farmers in a region, and that cooperative represents them to Starbucks or whoever's coming by the coffee. Regular farmers, they're farmers. They don't have any real leverage or basis to show up in Starbucks board meetings like directly. Now, they could en masse if there was something that really, really critically bothered them enough. But it's fine to create organizations of organizations, filter at each level, what granularity of decision making, what speed and executive nature of decision making

do you really need at that point? Representative governance, this is very functional. And also sanity saving. I can't vote on everything every day, especially stuff that I don't really know anything about? I don't know how to run a hospital. Why should I decide whether or not we invest in backup generators? It would be so silly. I don't think you really need backup generators. My power doesn't go out. Generators are too expensive. There's a lot of lessons just from democracy itself in that way. You don't have to recreate the wheel. It's a really interesting time from a regulatory perspective, because on one end, you've had probably teams that have just taken advantage of the word DAW to try to put things that are probably illegal securities offerings under a wrapper and just

call it a DAO that have pulled some of the more credible DAOs into the crosshairs, I would say. So there's a lot of negative things happening. On the other end, you have these states that are putting in frameworks, which seems to be very bullish. How do you think about just the two sides of the regulatory pendulum right now? The permissionless nature of the word DAW means that there's a lot of good actors and a lot of bad actors who all hide under the same umbrella. And sometimes, especially considering where our regulators and legislators are right now in their learning cycle, that difference isn't always something they really care about. Those are novel structures. Crypto is novel technology. You look at Elizabeth Warren's anti-crypto army, and it's

disheartening because this is someone on the left who you would imagine would support a future where we can bank the unbanked and we can provide more permissionless financial institutions. And yet, somehow, it's not really a secret how there's been a lot of very bad actors who've exploited the system at scale. They've come to believe that all of this is bad. So it doesn't really matter that it's a wolf. It's just the whole flock shouldn't be under the accent. And it's very short-sighted. It's also very short-sighted for just innovation in America in general. Sometimes you get depressed over how anti-innovation sometimes your lawmakers can be. It's just the nature of how populace these arguments on both sides of the aisle have become.

You do have organizations that call themselves Dow's and are not Dow's. I and I think most of the folks that tally are strongly in the opinion that having a multi-sig that has five different people who might all be the same person as a signer on and then using some off-chain voting solution or polling or discord or whatever, isn't actually a Dow and isn't really fair to call a Dow. And unfortunately, some large organizations use this setup. I'm private. I chide them on this because it allows the negative actors to say, well, we're just doing the same thing as big, legitimate thing over here. So you should trust us. And a lot of people don't have time to understand the ins and outs of absolutely

everything. So this is complicated technology. And they trust them and then they get rug because these people are bad actors. And some of the legal cases that are going on right now, I think the courts are grappling with the fact they're using this novel technology, these novel mechanisms, but they're clearly doing something wrong and they're using this as a way to hide. And maybe at the time they thought they just were trying to hide from their users,

but then in the end, maybe they're just really trying to hide from the government. And you can't really hide from the government. You can't hold the government to anything. You can do essentially whatever decides to do. So that's bearish. On the other side, there's a lot of people see opportunity in this future. And you look at folks building new regulatory frameworks, new legal guidelines for decentralized organizations. And they see the value.

There's the Wyoming Dow Law. Vermont has one. Utah is working on one. I was just at the Dow Harvard conference where I was on a panel and spoke. They were working on a Dow model law. There's this one woman, Prima Vera Di Philippi, from Kuala, and they are an organization of academics, and legal scholars who are actually creating a Dow model law to help educate regulators and help actually build a framework

for creating this regulatory equivalence for Dow structures in the existing legal world and help them write good laws. So we see this happening, which is very bullish. We see Marshall Islands has this public-private partnership with my Dow where Dows can register to become nonprofits, and then they have legal liability over the whole organization. And we see this happening other places.

as well in Switzerland, I think there's some other considerations in other nations around the world. So people do recognize that there is a new organizational format that offers a really brand new perspective and opportunity. They are working on it. Utah, Vermont. They have their own political spectrum. But if you think that we could get New Hampshire and Wyoming, two very, very different sides of the political sphere. If both of these sides can say, hey, you know, we think that there's actually a new corporate entity here, a new kind of design for organizations, that's incredibly exciting. That really shows that the people who are really willing to experiment and really push forward can find common ground here. If nothing else, they could agree on Dow's. And that really

opens up the opportunity. Okay, well, what legislation do we need? What should we be working on? Obviously, there's a lot more needed. We have a big PR problem with crypto in general. Thank you to all the bad actors, many of whom hid under, not many, but some of them hid under the term Dow. There's certainly more folks out there who have done nefarious things, cheated people out of the money and stuff like that under Dow's. I'm quite optimistic about it, but there's certainly choppy waters ahead and head wins ahead. But once we get past that, you can imagine maybe a year or two, it's quite obvious that this type of Dow model law is a functional way of doing it, you see the growth of these organizations just really take off. There's some discussion at the state legislature level, even in Massachusetts here,

where I live around a Dow law. And I cannot wait to see what Elizabeth Warren thinks of that, but luckily she won't have a vote on that one. That's the other interesting things. States compete with one another. They want these organizations incorporated in their jurisdiction, And that would really change the nature because the federal government to come into a state and say, no, you can't run this little incorporation that you want. It's a very different thing. Obviously, you're not going to be able to, yeah, I'm a Boston Dow. We're selling unlicensed securities. That's never going to fly.

But the government does need to clarify for us what is not securities. So we can clearly say, hey, I would like to run my condo association as a Dow and everyone gets a token. and please clarify for us that these are not securities. Get the structural engineers, make sure our building doesn't clap. We do need clarity. There actually is a Boston Dow, side note. I don't know if you knew about this, but we mostly just talk about Dunkin' Donuts

and complain about it as little as with Warren, but it's a non-financial Dow so far. There's donuts, so it sounds like securities. Well, Edison, besides what you guys are building from an infrastructure for Dow's perspective, what are the other needs of Dow's that you think are underserved, right now. What are the categories that get you really excited? There's a number of things that get me excited here. There's from different sides. One is serving the projects that Dow's, so these are the

layer twos, these are the large, hyper-scale public infrastructure needs of the future. But then that's also the things that serve me and you in a Dow. I participate in Dow's. Maybe I want some limited liability protection for that. I participate in Dow's every day. I want health care. I want 401K services for me as a participant in it. Because years and years and years ago, New York is something called the Freelancers Union, which is kind of like a union for a freelancer. Assistant on Saturday, you do this, you do X, Y, and Z

should join together in this union so you could just get health insurance. Dow's need things like this. The people who work in Dow's need things like this. We need better accounting tools for paying taxes. We need better tools for saving our money. We need better just wallets, as crazy as that sounds. Like, we need better wallets. All the tooling to make this work needs,

the whole C has to really rise up at the same time. Atali, we're mostly focused more on really helping large, hyper-scale public infrastructure things be decentralized and helping people keep them accountable and understand them very well. But there's an entire world, I think, of really real world touching products and services that DAOs need beyond the legal clarity to just help them incorporate DAOs, help them be paid from DAOs. These type of things that today are very nebulous and unclear. There's simple things. Is your member of your DAO on the OFAC control list?

Ah, who knows? What does that mean for you? Boston Dow, and there's one guy from North Korea. This is his time as a BU international student. You all going to jail because you bought them a donut? I hope not. But as it stands today, you have no idea. We just at the mercy of someone's populist political campaign to say,

we got them, everyone. Matt Walsh, terrorists at large, accused of sending $3.99 and Duncan donut bites. These gift cards, man. Yeah, they'll get you in trouble. You take your treasury and you say, all right, we're closing the Dow. Everyone gets to get their money out. I know we made a profit because we did a spaghetti cookoff and everyone gets an extra $2 back for their Boston Dowel.

token. Well, it raises an interesting point around just KYC in DOWs. Before we started recording, we were talking about Utah having an LLC framework that actually allows for anonymous participation. I wonder if that will be a thing for DOWs. Quite possibly. I definitely think that DOWs would benefit from being able to prove their members are maybe not something. I don't think I'm super supportive of the future where we KYC everyone, and that's plain to seat everyone. I definitely don't mind KYCing to your Dow that you're not a bad actor, that you aren't in North Korea, that you have sufficient insurance and legal liability protection. I could imagine zero knowledge service where you could come and say, hey, I'm just testing

that I do have health insurance and I do am this, and I am an accredited individual. investor and I can't receive dividend payouts of DAOs do something crazy like that. I think that that would be extremely useful. Although, of course, lots of people will be like, that's not the spirit of DAO's. Yes, but it's not for everybody. Right now, you don't have that tooling. So if you even wanted that tooling, you don't have it. And people will say, yeah, but we shouldn't even support that tooling. Look, if we want to go buy a farm together in Montana and turn it into our hippie cow farm and we each want to own a little piece of it, you might want a K-Y-C each other. And that's a totally reasonable thing to do. You all have guns out there with your cows. You need to know who all these people are.

That's a reasonable thing to ask. If you're going to buy a condo in New York City, it's a reasonable thing to ask to at least say, hey, we don't have to know who you are, but we have to know that you are actually somebody who's not the same person as all the rest of us. because you'll never know otherwise if it's a Dow of a million people where it's just you and one person with a million other account. So I think tools like that are important, are very useful. It won't be useful for everything. If you want to build the next tornado cast,

you probably don't want anything like that. But for these organizations to be able to expand and do new cool things that could also be used by the folks that don't want anything to do with the state or regulation, we do need to have the option for us to say, hey, if I do want to build a DAO of just parents who want to build a co-op school together and we want to know that no one is a pedophile and been in jail before, I think it's a reasonable thing to say, could I have some sort of ZK, zero knowledge, proof service that accredits us? So stuff like that, I think is very important.

For other things, maybe it doesn't matter to know who you are. Maybe these anonymous LLC structures might work. But we want to do it in such a way that it's not just shits and giggles. You can do all this legal engineering and have this great structure and then maybe some judge just throws it all out. And that's not going to be helpful either. We want something that any regular judge will look at. Yeah, this is clearly this thing. It's good to go.

We don't want to be trusting all these different legal structures that people are building that match the letter of the law, but which a judge might see for the first time, see a rat's nest of how these things connect and just assume that you're, doing something nefarious. We want it to feel like a regular LLC. We want it to feel like a regular C-Corp where it's just, okay, we get to the point where Dow's boring in the legal system means we've made it. I agree. Well, I think that's a great place to leave it. It's a category that is endlessly fascinating. You're definitely on the front lines of it. So appreciate you joining us today on the podcast, Edison. My pleasure. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit Castle Island.V.C. To listen to all of our

podcast episodes, please go to On the Brink-Podcast.com or just click on the tab in our website. Thanks for listening.