The tangent of code and law: Spin up legal containers on blockchain in 1 second for 1 dollar (DAI)

hello hi so my name is Hannah I I think you have an opposition leader here in Taiwan who's called Han alright isn't there the guy from the South is Nick ham as well yeah thank you for being here also today we heard some you know some of the hard lifting that metallic and the team are doing on the protocol level we heard some other talks about icos and so on this time I think we've got to do something slightly different we're gonna we're gonna actually set up a company a real world company whilst we here together and so we built basically a way for people to what we call spin up legal containers at the push of a button so I have a 8 slides or so and then we're gonna run a little demo let me just get my slides open here ok so a little bit about about ourselves so I've kind of been around from the early days of etherium and as you can see I'm a bit older than most of you here and we have been helping a lot of people in the crypto and the blockchain space to set up legal entities and so our main proposition is basically that we help you incorporate companies and and and why the need to still incorporate companies because we feel like people realize that when they start with a project very soon they discover that actually there is no way of continuing to work just informally without having the protection of limited liability because ultimately if you do stuff in the real world you will incur liabilities and you better make sure you incorporate somewhere you still need that that tangent basically with the real world jurisdiction so so we're doing this in you know a number of jurisdictions we're doing this in Hong Kong Singapore United States the UK some of the Offshore's like Cayman Islands with you love ICO work sto work out of Cayman Islands and so over summer a couple of months ago actually we started to think hey you know this is a big boring market it's a lot of analog work and filing and so on isn't there a way to compress the time and the cost of setting up a legal entity and so it's very much overlaps I think with some of the work that Aragon is doing one of the sponsors today we'll hear about later and also colony and we like both a lot in that they helped to layer the creation of an organization with technology and with blockchain you want to think about autonomous as that first mile you know bridge towards an entity that lives on blockchain we actually concern ourselves about making it easier to incorporate a real-world entity that is licensed somewhere at least registered somewhere and so we have been spending some time with the last months trying to figure out you know why why can't be this this whole legal thing where we're still working with share certificates in paper form and so on why can't we make that a lot cheaper why hasn't technology actually reached that industry yet and so then you actually discover that this there's just blockers as real-world blockers in the way and so what one one blocker is I think a blocker that we all encounter every day it's called inertia people are used to do things in certain way and they're a bit afraid of new technology and they kind of go home but what if these high priests of the legal profession are not longer involved will they still be a legally valid entity if we do this on blockchain and then the second block review quickly encounter and anybody doing stuff in defy will experience that as well is that you often have vested interest in monopolies in the case of company incorporation I'm not familiar with Taiwan for instance but I'm pretty sure that you to have a government sanctioned registry where you have to file for the incorporation of a company it's the same in the United States it's the same in Hong Kong it's the same in Cayman Islands it's the same in Singapore you have monopolies from a state that basically says if you want a birth certificate for your company the only entity that can issue that is a government sanctioned entity so how do you get round those blockers how can you actually compress both the time to incorporate and the cost of incorporation and I kind of think that we cracked it and the way we cracked it I've been thinking about an analogy and I think the best analogy is D is in vitro fertilization it's basically test-tube babies so what we came up with is a smart contract cascade where via forgive me the word but the insemination of a certain amount of cryptocurrency in this case die you let the baby grow in the test tube and the baby is basically the company and so you make it easier for people to spin up a real entity so D the sequence would be that frenzies vitalik I can look over there that vitalik were to send one die so the equivalent of one u.s. dollar to a smart contract in this case it's called Auto corporate it via the name server that smart contract is gonna generate an actual a new smart contract that contains the operating agreement of a new LLC in this case this would be an LLC in in Delaware okay and so what we're actually doing here is we are replicating the due process that has to be followed in the real world in the analog world in order to form a company but we're compressing the time and the cost of doing so so this is basically the moment where it can all go wrong because I'm going to try to demo this to you and and just to make sure that it works faster we have done this on Rob stone for now okay and see as I said this is typically where it goes wrong I see I'm not connected to I'm on cross link Taiwan so which one okay okay close your eyes guys hmm okay there we go so basically the first thing you have to do is the same with babies you need to give them a name so you need to come up with a name for your company if you have a project anybody of you who wants to spin up a company we'll probably first start with a name so what we've done is we built a very simple API with a database of names of Delaware LLC's in the United States by the way Delaware is the biggest jurisdiction in the world half a billion companies a year are being set up in Delaware and so let's say we were to choose a name that you want to call your company Citibank we'll check if it's available and guess what it's not available because there is a company called Citibank LLC already in Delaware but say we want to call our company something else for instance water bottle you know water water LLC because you're selling water bottles ah good news that company is actually available is this visible at all because I know it's a little bit dark I can zoom in a little bit but the the short of the story is that you get a confirmation that the name is available so you can basically call your baby water bottle what do you do next next you're gonna have to connect your meta mask soon you'll be able to work also with your hardware wallets and so on so we're connecting metal masks here so far so standard this is not what it should be doing okay this is already connected it is effectively going wrong in sacrifice fingers playing up a little bit here okay so we're doing this again water bottle is still available by the way I don't know if you can see but you actually immediately get a registered address in Delaware so that's the service that we provide because the only requirement you have to incorporate in Delaware is that you actually have a registered address there this is not stable here I think it's the internet connection so let me go back to we did test this before it worked all right and it seems the Internet is playing up okay so I'm back on the other Wi-Fi now maybe we do that again I apologize so it's good that we can blame it on the internet but I do actually think it is the Internet but now it seems to be fine mmm not sure no it seems like it's keeping on do something here try this once more guys and if not I'll just walk you through it it's one of these things it seems like my browser keeps on refreshing right somehow which one turn the shield down Thanks yeah let's see no I don't think it's gonna do it well this is obviously a bit embarrassing but we did try this before I'm not quite sure what's going on it seems everything is falling apart but essentially let me let me just walk you through the sequence what what would happen here is that you would connect your meter mask you would basically this is basically the sequence you would basically send that dye transaction to the auto core but eat smart contract the auto Cortot eat smart contract is basically that incubator that spins up a new smart contract and that new smart contract is effectively the operating agreement of your company so the first owner of the company and this is probably the the key legal breakthrough that we have achieved after many back-and-forth with the council in the United States the key legal breakthrough is that a company doesn't have to necessarily be owned by a physical person we have it actually confirmed that you can own a company through the the a wallet a cryptographic wallet that you control and so the way you manage to compress the time of spinning up a company is by having instead of an owner sign some certificate of formation of an LLC that it is by signing the transaction that you control a wallet that controls a smart contract for the company now you'd say you know what what's the point here well the point is that this is probably an on-ramp towards bigger things and and this is where lots of work has been done also by other teams in the community to look at for instance what's next on the funding side how can we also automate the funding we now have an own chain company with a real world legal rapper can we now also automate the funding and I think it's gonna be Louise from Aragon who's gonna show us a little bit the solution that they have engineered there there's also government stuff that you can start smart contract defying so although we are only addressing at this stage the first mile problem of getting a real-world wrapper around your project or even your smart contract you can actually see this grow into a fully automated and governing your company there's a lot of documentation on Auto Corp that autonomous to come for those who want to dig into some of the the legal questions that this is not throwing up for instance there is often questions on kyc there's often questions on is this actually a limited liability company do I have an actual company so I'm more than happy to take any questions right now if we still have some time thank you thank you very much for your sharing do we have any questions from the audience if you do have questions please raise your hand yes I do gentle meta back it's actually not a question but more of a testament because I used I started a company on autonomous about three years ago yeah thank you it was amazing okay great it was registered in Singha in Singapore yeah so so we've been around and as I was saying I do this more for the love of God in the crypto community we've set up a lot of very visible names we don't name clients but I think a lot of the bigger names in the community have set up companies with us so we're kind of a sad bunch in that we just love this puzzling out the jurisdictions and what works better for our clients it's really as a result of this work that we got to the frustration of my goodness does this always have to be so analog and we think that you can actually compress it in time and cost and that give it another couple of years and we're gonna see companies being spun up directly on chain but still with that requirement because that's not going to go away if you want limited liability you're gonna have to have that real-world wrapper and and anybody who does stuff here with smart contracts and so on I'd like to maybe put one no proof of caution is that you do want to have a company eventually to do the same because otherwise your effort may be seen as unlimite liable for whatever could go wrong and so that's just a reason why you want to quickly even wrap a single smart contract into a limited liability company for instance thanks for the testimony thank you very much that's the kind of questions we like to receive by the way anybody else yes please can you say that again for the more you feel ridges LLC in the other way yes you get the text ID right well actually it's a very good point to raise you don't at least you don't to get the birth certificate for your company to get your company incorporated you don't need a tax idea and this is why we actually do love the United States because there is no kyc involved whatsoever when you set up a company in contrast with a lot of countries for instance in Europe you need to have a notary involved which is a total pain right but the notary is effectively that sort of person who needs to check on who you are in Singapore in Hong Kong you need to basically disclose who you are with attested documents that you are who you are before you can incorporate the United States because of tradition what have you you basically have to declare who you are you could actually incorporate a company United States saying that you're Mickey Mouse you can there's no check whatsoever on your identity which is why this works in the United States and we believe it's going to work in some other places outside as well only at the point that you start doing real-world stuff for instance opening a bank account will you be asked by the system to attest to your real world personality so we are perfectly fine to have you spin up a company where the owner is effectively a wallet address the public address you know of your of your wallet yes actually my question is the company's tax ID you don't need it at the moment of Inception of incorporation but later the line if you want to open a bank account you want to start hiring employees you want to build it as a real operational entity you will need a tax ID in the United States by the way just on this anybody who wants a tax optimized vehicle and is not from the United States or lives in the United States should have a good look at the LLC because it's actually very good from a tax perspective but you can come and see me afterwards if you want to hear more do we have any more questions from the audience nobody else have any questions no good stuff I can try again maybe I just close my browser and do it all over again one second we still have some time now shall I know the Saiga each sure know where she's de Leon being all shook finish it nice and I know miss him John so it's like a shark I'm gonna have me I want to let them all and calm the internet connection about how he did now unless I get each her noise the video I shall seek a panel discussion you got thought halfway or me out how long does semantics generally you get high fives it's searching your cement outside and seeing in the finish down okay so let's see if this works now so we're spinning up water bottle again we're connecting a meter mask I close the browser may have to enter my password for my meter mask I should look at my developer here in the room so I can blame somebody for this okay let me do this now No maybe there's something that we yes it is actually yeah it keeps on doing the same look well you have well we'll see if we can devote to anybody who wants to see it life or flying outside but thanks very much for your attention appreciate it how's your hand [Applause]