EthCC 2: Qianchen yu

so good afternoon everyone okay I think our technical issues has been solved today I'm going to talk about the legally compliant Dao for the next 50 minutes and please allow me to introduce myself my name is Chen gel my friends call me Q I'm working at validity labs as ad app developer we're a team of 18 based in took doing some blockchain education also the app development as well as research if you're interested in our messaging protocol there will be a talk later as well um so I'm going to repeat a story first or a story that all of you I'm pretty sure that you know so once upon a time there is a brilliant idea trying to make a new way like new form of collaboration and governance on Chang and then came up with a white paper in 2016 successfully sealed $150,000,000 phones and together with a name of the product called the Dao and you all know the consequence about that the result of the the end of the story well made a fork be with you and then we also learned something including don't claim the victory too early and then complicity is always the enemy of the security as well as it's better always better to have friends in the legal system but let's be serious so what are the the main problems I was seeing here and what are the takeaways that we can learn from that so for a developer the thing that we the least thing we want to see is actually to see the our protocol hacked but the word thing could be received calls from lawyers every day so it gives us actually the the lengthy paper from SEC gives us a another perspective to look at our product and the legal person in a legal way so what could be the problems that we run into in in the in the view of a lawyer so first of all it could be the liability the theorem account does not equal to the juridical person as already you may already know that's the reason why we have a lot of researchers on how could we incorporate identities into our adapts also due to well based on the activities you have of your product you might just wake up on another day have another pile of documents you need to fill because you need to fulfilled some license requirements including Bank Act some liquidity Octonauts and also how can we deal with the problems that we face later if a any kind of activities or proposals we have in the Dow got filled in the execution like so meaning the link between what happens in the digital world with the real world not to mention other lessons we also learned about the fairness the capability of the design and the technical apart like the security work which isn't one of them the biggest lesson we have here so the question comes to a long one but it comes to how can we run this disruptive and enfin technology concept together with the law with all the clauses and articles that have been existed for decades or even for centuries there are mainly two options first one is to adapt our law system so that they accept our new technology there are people working on that I mean for a very democratic countries we expect to see the implementation at least in the next decades but another way around another workaround is actually to see if it is possible to adapt our our application to fit into the legal framework and that is the reason why we came up with this experiment together with the leading law firms in Switzerland because we want to experiment the second approach how can the Dow the concept of Tao fits into the legal framework and we actually pick up the Association instead of a general term of organization to start our experiment why association it is not only because the Association is one of the simplest form of organization that could find with the least clauses in the Swiss civil law but also because it does have a lot of challenges for the profit for profit or nonprofit organization or associations they want to seek disruptive solutions for especially digitalized solutions for therefore them and our project our experiment called DAA which just in short for decentralized autonomous Association together with our partner Mme we are working on this bare minimum MVP that could be fully completely legally compliant I just give you a general overview of all the features we have so first of all we do need there are members in the Association so we include the membership management and let's just go through it we also have the association management being able to array brand association if necessary we also allows members like eligible members to create and vote for proposals settle all the proposals upon the criteria was set up in up front and importantly we have this form of General Assembly which is actually required by the law and last but not least we also have the opportunity to interact with other digital associations we or other accounts on the chain and I was just going I'm going to dive into some of the key features that enables us to be legally compliant the first one it's the real management it seems to be easy that we are just managing a list of accounts but actually there is a fundamental difference from our projects to other well from other other dowels or general lifestyles because these accounts are managed in the way that for example we need a delegate which is a president of the Association but for other dau applications now most of them if you held a token then you could be a member you could have different roles but we don't know we don't use the token based system to manage the Association in order to be complying with the law and also because we have the special rule rows of one delegate and other members are managed based on their account address we need also these two at least two white listeners to basically cope with the role management and when we want to have these special roles being incorporated into our association we actually need a voting and election mechanism which is quite funny because we use this continuous spelling basically means that we do not allow to hide in the Association so if I want to be a delegate and my friends as well then we all work constantly run into ties and then actually this process will well will be endless because we do not allow this ham apartment style of management and another example of how we manage the proposals as I already mentioned eligible members could create and vote for proposals and then like we also reinforce the responsibility by askings I'm joining like enforcing them to joining this General Assembly which could be happened on chain or off chain and other than that I think you already seen the the voting flow could be similar which is actually similar to other other dowel style applications that we create a proposals and then we vote upon the proposals and we conclude the proposals but there are some specialized while specific proposals that requires a specific voting period or the period of intervals between these votes due to the restriction of the law and one very interesting feature is that it's the dissolving of association when it's necessary so normally if a smart country deployed on change when at least forever on chain but for Association in the real world the problem is that we could clear a bankruptcy of any kind of entity and we also could be able to just dissolve the Association therefore we need to manage the edge cases of handling the disciplines if at the same time some management of the accounts of the membership this part has some changes and there are some conflicts and the lower part of the the slide actually shows the the articles the the the clauses that our legal partners prepared just for this project we can also go through some a detailed processes including how a member could be added into the Association which is actually quite lengthy that we need while this person for sure it needs to be voluntarily wants to join into the Association hopefully nobody forces them and so by making such a kind of request go through a couple of chats that you probably cannot see clearly but I'm going to distribute this slide later on Twitter so a this person needs to first of all a membership and then the magic white Lister's will come and check these proposals Oh such kind of membership requests not only once but twice and then finalized the membership request by paying the annual fee that you're most of most probably already seen like if you were part of a club or Association you're gonna have to do the same so we just move what's happening in the real world on the chain and to make a proposal also we're gonna have like basically three steps by initiating our proposals having multiple checks of the eligibility the duration and the initiator what is legible not and allow allowing other members to vote on the proposals and for some certain kind of proposals like voting for the new delegate it actually needs to be happened during the General Assembly but for the rest we could just let it go according to the conditions that we put up front and the solution of the solution architecture of our projects although it's like a bare minimum per experiment that we're doing but it also involves quite kind of like different functions like 26 ish smart contracts in here unfortunately this project it's not complete yet we still have a lot of unclear questions just give you a gist of how it goes concerning the GA concerning the the management of the accounts it's an endless list but we would like to listen to how you feel about this project and we'll also welcome any contributors who are interested in this project to join us and Bute and take this experiment all together and welcome if you have any questions and please also contact us [Applause] yeah I want to I want to come back to the process of accepting new members how do we make sure that the same physical person doesn't apply twice for a membership how can you how can this system work without decentralized identities yeah because you mentioned a physical person so it's we could only in our work current status we can only guarantee a an account cannot apply twice but the problem linking with a natural person this can be solved that way we actually isolated this problem apart from our project because there's like like an independent research on the identity issues apart yep so we basically just put it apart any other questions did you get to this end of this experiment and realize it was a terrible idea trying to fit basically decentralized systems into not just any law but Swiss law which is incredibly conservative and arcane and and throw your hands up and realize that you were just creating software that implements Swiss law rather than decentralized systems is that was the conclusion at the end or in the middle of your experiment we we actually started with the Swiss law because first of always based in Switzerland and actually Swiss law that regulates the association or organization are generally quite welcoming to I mean there's no there's not a lot restrictions and do you have any particular perspective seems to be just one fundamental issue which is that law requires named people to be responsible parties who basically can be sued whereas decentralized systems in that regard really try and do anything but that yeah that seems to be a tension you can't really like you know we try to find a middle ground in a way that we keep the decent we keep the management style in a decentralized way by enforcing this democratic proposal voting and decisions mechanism but we do need this legal representative which is actually the delegate in in our particular experiment to be to hold this liability of the Association as it's required by the Swiss law so it's kind of like we meet in the middle ground in a moment yeah hello I made of my first experiments on the subject in 2016 and 2017 I made a company in Delaware because Delaware company law permits creating all kinds of contracts of course including smart contracts so I I have to return to the previous speaker over there that you don't really need to have personal information anywhere in many jurisdictions because you could be sued you you could be personally sued if there is a limited liability company only if there's crime civil matters you have to sue the company itself so so so there is not really a need for personal information in this sense because well if you make crime 10 then it's your fault and you will be prosecuted but if that's a civil matter then the company will be liable so you talked about KY Singh and whitelisting members that doesn't prevent an illegal act or enacted the results in an insurer of the person so where does the liability come is the Dow liable that the DA a libel is the president liable it's the member so I ability lie in the Swiss view or in your opinion in this context if I understand your question clearly because I'm very sorry that the noise prevents me from listening clearly so the KYC process so is that like mentioning like linking the natural identity with the accounts I mean I didn't really hear your questions clearly is it the president whose kyc this is the person who made a proposal resulting like well how does the Swiss love you the liability of the daa yeah so um for example actually the the way we do this kyc like process it's it's like having a mini Dow because we uses the white Lister's we need a minimum to a while Lazarus to does this to do their jack off trying and then come back with your decision and then this pool of white listeners could be extended into ten and then we also could adjust like at least three out of these ten people or five out of 20 people depending on the particular quorum that we prior to reach this kind of consensus among these small mini doll in order to allow the other members joining into our world da hi thanks for the presentation I just wanted to know if you thought of upgrade mechanisms or if if you need to update can you manage system manage it and thanks if you look at our code currently we don't have this this upgradable thing written in code but it it could be done because right now a lot of things are hard-coded just for the experiment purpose but the upgradeable credibility it's accomplished in a way that the smart contracts are linked in in a library and then the contracts like the addresses are linked in the way that could be a chain to be could be changed by proposals so once the proposals of changing such library like Tolley clerk how to settle the status how to settle a proposal that people agree on such change that we can change the address to another library the host logic so it's just to take that a bit more crystallized example for example say that the votes for changing the membership onboarding process for example how does that adapt to like this formalized process of you know it has to be white listed this way and that way what if the dog decides to change or decides to change it to a bounty based accession system for example or whatever there are a lot of there are things that could be updated or updatable and then there are things are not unfortunately because of the restriction due to the law and then the structure and the mechanism of using the white letters and to allow people joining us DAA is unfortunately part of the thing that is restricted by law yeah but for example as I mentioned before like the Tully clerk and how we settle down a proposal this part could change yeah thank you very much [Applause]