Decentralized Ownership and Assets on Chain - Scott Fitsimones

uh who here knows what these are raise your hand okay that's how i know you're og crypto um no just kidding but so for the uninitiated these are unisocks this was a pair of socks released by uniswap labs in 2019 two and a half years ago the idea was they minted 500 sox tokens um and you know they basically said anyone who buys these socks tokens they can either you know keep their token or they can burn it and we'll mail them an actual pair of physical socks in the mail anywhere in the world and you know i think i think it started as like 15 for a pair of socks and then um i think in like 2020 it was like 300 and i had a friend say wow that's pretty expensive for socks um and today it's 90 000 for a pair of unisox and so some people might see this as some sort of crazy marketing stunt or what you have it um maybe some people think these socks are you know so amazing they're worth 90 000 but at the end of the day i think there is a deeply fascinating thing here around this was one of the first experiments in assets on chain where you have this token that promises you a real asset upon doing something upon burning the asset upon burning the token but what we've learned is you know interacting with the meat space we call it is quite hard right so for example let's say um you know you purchase a pair of unisocks you burn your token um and you know first we have the oracle problem how do we know that pair of socks actually got delivered what if you actually got the pair and you actually want two pairs so you say oh i lost it in the mail i need another pair and we don't really have a great oracle so until the you know postal service is using blockchain now when you go off chain we just don't know so the oracle problem is this really tough uh information problem but then we have the problem of bad actors and that is the uh enforcement problem so for example let's say we have somebody who is packaging and sending out the socks and they decide they really really like the socks and they decide they're going to keep the uni socks for themselves and they're going to swap out your unisox with i don't know say sushi socks and instead they send you the pair of sushi socks and you get them in the mail and you know they seem they seem all right but they're a pretty close replica of the original yuna socks but maybe they just don't feel the same they don't feel exactly right so you know you have this problem of bad actors and enforcement and you know now you need to have some sort of court system rectify i didn't get the pair of socks i was promised and you know you have these centralized marketplaces like you know ebay and stuff that try to solve this with disputes remediation courts and so all this stuff is really really hard and crypto but luckily um sorry so you know i think the main point here is that there's really hard it's really hard to trust each other and coordinate if we can't verify that you know systems are deterministic and that you know there is justice there are just systems it really creates this like trust and coordination problem so that's why today we're going to talk a little bit about dow laws uh dao laws have the potential to be this bridge between meat space and the metaverse um and the first dow law was passed in the state of wyoming um and you know the wyoming dow law i think was passed around uh it became effective like less than six months ago so it's very new um you know lots of uh interesting things to you know try um and here's kind of a look at how it works so the dow law is very similar to an llc right it basically says um you know you can start an llc and the llc is governed by a dow so you have this you know dao wrapper and the cool thing about this is llc's are already very good at interacting with real world things right so you know llcs can enter into contracts llcs can buy and own property so llc's are already this very battle tested vehicle um and dows are you know less battle tested so that's where things start to get interesting so we're going to take a look at one reason the wyoming dow law is very cool you know when people ask why is the wyoming dao law special this is one of the first things i point to it's hard to read but it says you know the public identifier of a smart contract that can you know manage and operate the decentralized autonomous organization and for us uh you know we put in our ens domain you can put in any ethereum address and you know the promise the great promise of this dow law is you know one of the first examples of code is law it's basically saying we will recognize whatever is going on in this smart contract as a source of truth so if you say that you know john owns this piece of land and has this share of voting and all these things this is you know codified in your smart contract so you know for for city dao we're wrapping up an operating agreement that will specify kind of how the dow works and operates and you know it can be amended by members of the dao and the address will be you know here um another really cool thing about these dial llc's is you know they can be member managed or algorithmically managed and you know i think this is actually a controversial part of the law right where it's like how is it algorithmically managed and i think you know algorithmic management is kind of this um you know this uh i would say aspirational thing where you know we aspire to build these organizations where like you know there's a deterministic set of rules anyone can you know uh put up a vote try to get something funded if this then that basically a series of if statements that happen um and so yeah now you know we'll talk about a couple interesting uh examples of daos so you know city dao um you know we basically purchased 40 acres of land in wyoming collectively using this wyoming dow law and you know kraus house is basically purchasing a basketball team um collectively and then you know constitution dao basically raised 40 million dollars in seven days to try to buy an original copy of the us constitution um and you know to dive a little bit more into how city dow did it um you know we basically set up a wyoming dow llc in july right when the law became effective um we you know we pooled a cryptocurrency and ended up purchasing 40 acres of land that doubted a bunch of you know diligence like scouting for different pieces of land and ended up settling on this parcel of land um and i think there's a better picture of it here so the parcel of land we bought is near the city of cody wyoming which fun fact is near where kanye west's ranch uh is so uh when we would go to kodi they would say oh yeah like kanye's been here kim sits there and his security detail's here and um you know so uh he's definitely been around the area but this land is probably 40 uh five minutes away from kanye's ranch and 45 minutes away from yellowstone and it's as you can tell a very barren rural piece of land this was a test drive of the wyoming dow law and i think something interesting to point out is i think a lot of the crypto has kind of had this promise for a long time of like tokenizing assets right like we're going to tokenize uh you know like properties tokenize uh all these different things um and i think that's that's not exactly what's fueling the wave of daos i think the wave of daos is really fueled by this idea of like asset owning communities right is this idea that a community will collectively you know govern uh a bank account i think one person described dows to me as group chats with bank accounts right and it's people making choices over you know what the dao is going to buy what the treasury is used for and while no individual owns like you know the piece of city down land uh you know individuals have governance rights over uh you know city dallas activities um and you know another cool example is pleaser dao where they basically purchase the uh one and uh only copy in existence of once upon a time in shaolin which is a wu-tang clan album um and uh they're the only ones who can listen to it um and so yeah another interesting point is kind of ownership as uh being a bundle of rights where you know people people say you know okay well if if you don't really own the thing then you don't you know you don't own the thing um and i think that it's interesting to like think of ownership more as a spectrum where like if you buy a house in denver um i'm guessing it's likely going to be zoned for single family uh this is like some urban planning nerd stuff but like you know you can't build a skyscraper on it right like likewise on the city down land you know you can't build a oil refinery on the city of land it's not zoned for that they're not gonna let you um so you know the point is like ownership is kind of the spectrum of like what rights you get to participate and use these assets um so kind of to recap the dow laws um you know i think they have the potential to be this bridge between the crypto and real world um there they can kind of set the stage for code as law um and enable decentralized ownership communities um but we should also kind of mention the risks and say you know you know it's it's not always like smooth sailing and the dow laws are new and untested um so you know i think it's important to acknowledge that like these dow laws are very unproven in the courts right like the promise is that some judge will look at your smart contract which is crazy right like i'm imagining just a judge like looking at a smart contract like reading uh and you know um i i really you know hope that's how it works out but there's that possibility especially in other states for example that are like well we don't recognize this random wyoming organization um and then there's some kind of lacks of clarity around like what does it mean if it's algorithmically managed how do we respond to certain uh events uh if like uh you know if members need to respond to urgent events by some deadline um so you know there's there's all kinds of things to be aware of um and then to kind of talk about some next steps for city dow uh i mean as a dow it is like you know there's no like concrete road map but um some interesting projects in the works um you know one is finding parcel one um so we bought that first piece of land you saw in cody wyoming that one is called parcel zero it was really a test run very like the cheapest piece of land you can possibly buy in wyoming um parcel one is supposed to be a much more desirable parcel of land where citizens can start you know building uh you know uh camping like potentially living on the land um the parcel one project another uh kind of concept is like the city out embassy where like citizens vote for you know where um we like uh whichever city gets the most votes we basically buy some sort of like co-working space type hangout spot uh and then you know something i'm also really excited about because it ties all the way back to the beginning with unisocks is you know the nft land standard right where it's like how do you actually encode land on chain um and like represent its ownership so like as an idea you know as a concept basically you'd have some like geojson that says like you own this piece of land um you know these are the terms of your ownership um you know who actually owns it it's just this ens address um yeah and you know i think some of the reasons the assets on chain are going to be really disruptive and very very cool um one is interoperability with d5 um and so like does anyone know like the largest assets that most americans own there's two yeah house what's the second one yeah correct so house and car and it's like both of these are the largest assets americans own and you know people take home equity loans and they you know use this capital to empower them to do things but you know until you know we can use real assets and operate with the real world um i think it's going to be hard for you know crypto to like benefit more people and kind of break beyond um you know where it is um and then you know the verifiability of like knowing you know you own this piece of land it is deterministic it is in this ledger um i think it's a really exciting potential and then you know depending on uh you know gas fees uh potentially lower transaction costs just kidding it will certainly be lower transaction costs uh compared to you know tens of thousands of dollars for a broker fee to you know purchase some assets um and i wanted to end with a post from kanye west um this was on his instagram recently people have been hitting him up asking him to do nft collabs he says my focus is on building real products in the real world don't ask me about an nft and i think this is a pretty you know it's a pretty like good message and i see it as a wake-up call um you know i think a lot of people see nfts as you know this vehicle that can only be used for you know speculation or art or something i think it's a wake-up call to crypto and to us to start tackling taking on the real world um and you know this is from the erc 721 nft standard like the first thing they mention in their bullet point is you know physical property houses right like they saw a use case for this um and you know i think it is up to us we have this massive opportunity to bridge the online and offline worlds and kind of create more opportunities for people um so with that thank you very much [Applause] and yeah if you want to get involved in city dial here are some links yeah thanks