 And we're live. Hi, everybody. Welcome to the third installment of this collaborative hack with Brendan Maher and with with Beth McCarthy of the Mechanism Design Group and also Brian Wilson among others who've been we've been collaborating to co-organize this series you know kind of deep dives against scenarios with automated legal entities and so this this session is being hosted by the Mechanism Design Group and kind of convened by Beth and and her team in Berlin. So I just want to pass out my name is Dazza Greenwood I'm here at the media lab and we're holding down, you know one of the stakes as a collaborator, but But this is the Mechanism Design Show today So I want to hand it off to Beth to sort of set it up and to help run the meeting So thanks Beth and take it away Um, yeah, so I guess if people have the hack and de-open then we'll talk a little bit about the Kind of methodology we're going to use so in the past two calls then You know, we started with this idea of there being You know applying agent principal law as a framework for examining Kind of power differentials and relationships and who owes, you know fiduciary duty to one another in different situations when rights and responsibilities flow between entities, etc. So we could extrapolate Those ideas to creating frameworks for DALs. So last time, you know, as everyone remembers we took our example of engaging with A physical book being shared between parties to a DAO use case where we walked through the DAO as agent principal and Now we're ready to take those up further in two ways number one Walking through a book use case where a DAO is acting as agent principal in third party and specifically with a real-life DAO example that Jim has made so he'll tell a little bit about that maybe to start out but quickly about the workflow We're going to do so if you look on the hack and de then There's this publishing DAO diagram that can be viewed as the certain functions that flow between entities that are marked in a circle and Like autonomous Processes that are marked in a square. So what we're going to do is walk through each of those DAO functions through the lens of how You know the function presents is a transaction that is actually performed by the DAO and that is Throwing in this matrix that kind of maps on to it and this will start to make some more sense as we're going through it using the That pattern narrative we made with different, you know permutations for what can happen the same as we've been doing. So we'll use this Agency transaction table to Which you know kind of ripping all that ripping and ripping off of what Chris has shared With this idea of using a matrix as a way to go through and view these different permutations So we'll fill out for that you know, who is the agent the principal in the third party and You know how those different configurations impact the outcome and We will Use that then to look at this agency outcomes map that we made That is at the very bottom here that Is a way of you know saying this is how in these different Kind of like legacy system archetypes that we have in America of like, you know an corporate company BB LLC and LLC and a general partnership How you know the this analysis would play out differently based on the different like Parameters that set those apart from one another because we talked a little bit last time about two different types of DAO archetypes You know a DAO hub or the DAO DAO archetype Which is you know this kind of nebulous network of participants that you know is Minimally self-regulating and you know is was not trying to be in a configuration that you know matched an American legacy system and a Dior type of DAO, which is you know, officially architected as a BBLLC and subject to You know these particular parameters and then I think what we'll start to emerge by the end of today is another additional DAO archetype that we can kind of use in this analysis, which is this You know DAO that is coming together to perform a specific function for external parties and also for itself. So Yeah I think to get started if you want to introduce about the publishing down I think you're so best. I mean, it's like taking Taking the functions of the publisher and seeing how can we decentralize such functions like being able to invest in a fixed asset and enjoying the fruits of this asset and interacting with public as with sales and with proposals and Yeah, I tried this model is trying to capture how those functions can be done in a centralized manner And I think it can serve as you know, like if you run through this like law of agency Lens through this diagram, then you can actually See how complex the situation can get because the roles start becoming very granular and Complicated, but I think it's a good starting point to just see where are the bottlenecks where we can Have condensed things into the existing legal framework or yeah, where there is need for new perspective to Look at these centralised organizations Occupying like functional roles in the real economy And yeah, one other thing is that like every little function here can be customized to like a plethora of combinations and they can usually have like situation changing consequences as like One little change would like make something compliant or uncompliant or create a conflict or avoid a conflict by its That's just to say that like things are extremely complex on a mechanism design Or you want to start with the narrative Yeah, so maybe if you want to So we kind of came up with these like traditional like law school fact patterns to demonstrate some of these These bottlenecks can emerge and these kind of unique confluences that exist because it's like entering in a new way like Paradigm is more technically enabled than something that was you know designed for the paradigm of paper and so we came up with this sort of Dallas involved example and so I'll just read through and then once once we get through that we've got instructions about kind of like how we can Start to process this out how we can start to understand more of the nuance and Really break down and understand what the different roles are here so We had an aspiring poet of the revolution named Bob who is seeking to print a limited edition collection of Some original poems for donors at poetry as resistance festival Bob requests that Dallas the publishing now produced 25 physical copies of the book to distribute before the festival Begins on August 31st his proposal is accompanied by a deposit a standard precaution for Dallas So that is able to avoid spam attacks in June Dallas receives Bob's proposal to publish the book Reception of the request starts Dallas's procedure for the book publication, which is comprised of the following a panel of docurators who are voted are eligible men or voting eligible members Review the proposal and vote by a dad's voting app on whether the approval of the proposal should go So that's basically you know making sure that this is a book that the publisher shall actually wants to publish So it's like one of the core business functions And so The book is either approved or rejected by the curators of the doubt based on whatever the consensus is If the book is approved it moves to the next step If it's rejected the deposits claimed by the doubt about doesn't recruit any of it and so this and and then the next step being the espresso book machine, which is kind of like the Automated way to produce these books will print the correct number of copies of the book and then logistic partners like Charlie Corp are hired to shift the book and distribute the copies to the appropriate recipients and So Jumping ahead of the table like the the first spectator that we have is this one where nothing goes wrong So Bob submits manuscript of the entirely original work devoid of any illegal content or activity The transaction executes as expected the espresso book machine prints the complete versions of Bob's book in the requested amount Without any IP violations the logistic partners then deliver the book on time And so for this one we we mapped it out a little bit at the top of the transaction table where we have this Mutation a the member of the public funds that have the third party produce the book And in this case the member would be or the principal would be the member of the public The agent would be the doubt and the third party would be the publishing house And so in this case, you know everything actually works the way that it was intended and so we don't run into any issues In permutation being things start to get a little crazy though Bob includes a poem that when read backwards contains classified information about a new spy program by National security regulations none of this is none of the curators realized the secret information is included And so in this case we wanted to see you know like because this is functioning as a doubt like how how are we going to start describing liability And so I'll open it up there for some some discussion and then we can start filling in the in the blanks based on Yeah Yeah, so I just thought of Yeah, does anyone have any thoughts So let me see I guess just to make sure I've got it so the So when permutation be to the the parties are Let's see the logistics partner the How many parties are there and what are their roles would start with that So the in the if you look at the So if you look at the publishing doubt workflow diagram, okay, that's the so enlisted We have all of the The different roles identified with the circles And then we have all the automated processes indicated with the rectangles And then we kind of have the you're able to visually see the flow from one party to another of like how this Kind of transaction is taking place over over these different throughout these different permutations So I have a question about the I can imagine well enough like what's the legal form of like the logistics partners or people in Oblique or offers but to me it's not clear what the special book machine legal status is Is it owned by a company? Is it self-owned through a go like what it like that's pretty relevant to define what the parties are? yes, and You've been Yeah, so it's actually Designed as owned by the dog, but I don't of course I don't have any type of like legal specification while I was I Don't know if like But it's purchased through like a bonding curve Yeah, so it'd be so tokenized. Yeah You Nice No, but nobody is selling tokens of the like pre-binding machines and that's something that it's not like three minutes of the machines Binding machine Desirations to be the doll buys it from the legal entity that had it before maybe it buys it from the website Okay, so so just to kind of go with what you said so far I'm looking at the Looking at the Work the diagram for the publishing now It seems like Those for the scenario a and the permutation and B There's member of the public Okay, so the publishing now At some point there should be an arrow from the publishing now pointing to the author requisitioning basically No, okay, well who starts the sequence like somebody asks that there be a book published for Bob and then somebody approves it and then somebody Basically tasks The logistics to create the book so can you just run through that pattern so we can see Because the arrows don't reflect that right now So what's the what's the question is? What is the what is the order? What's the starting point? So yeah, so from the starting point like so from the the background Beneath the publishing down diagram We have our starting point is Bob who's seeking to print the collection of poems So what circle does Bob belong to he's a member of the public? okay, and So from member of the public he submits the proposal the proposal like he has to stake a certain amount funds in order to prevent the publishing down from being spammed and Depending on whether those funds are or depending on whether the proposal is accepted or rejected funds are either deposited directly into the doubt it fails and they are transferred to the eb the espresso book machine as Like a down payment on like the production run that he has so just to double-check Bob is in the member of the public circle Yeah, also an author, but he's not in the author circle so The the author circle on the right is a little bit different These are for the members of the publishing down what type of the quiz can be another scenario in which Like Bob is an author that got on board it to the doubt and then he's proposing to the doubt From inside without There's a major distinction that we just tried to do the simplest version of it Which is somebody can join the Dow themselves and publish from within the Dow But that is one of the factors that would change it because then the Dow would become a principal because somebody from within the Dow Would be doing it so in order to keep the agent as a third party that it's getting published through then Bob Like does not he stays as a member of the public? He doesn't become an author that exists within the Dow, but I would say that actually Like members of the public is just people who can propose and then the author editor and curator are people who are ready Proposed in the past and they get given a token. Yeah, they're part of the guild or the cooperative You could set an advanced saying like every time you become an offer you get 200 tokens or every book is 200 tokens that the people Who are making this book whatever their role is and making a book they get a certain amount of token and then they're Inside the community Mornings also about like having a Distinguished community of creators that's not always up to the subject so they can understand if this is publishing worthy or like I Also here But these guys have the voting power But the twist is on what you said about like it becoming an agency that's not necessary Could be a never-dowel so it doesn't come for a person who is there necessarily So what I meant was agent in the definition of like whether it's an agent versus a principal because we're going through the matrix with like the Dow as a agent and what I mean by agent is like You know Bob it like they're producing something on behalf of Bob That is possible, but just not for the constraints of the narrative Yeah, so just for right now and because otherwise it was I mean But in the in different parts of the scenario than parts of that might change around but like for the sake of this You know Bob is not part of the Dow. He is not operating from within the Dow He's an external force that the Dow is operating, you know, like boxy for him Yeah Principal basically and the author He said kind of basically submits to the Dow I'm saying hey like I want to publish through your Dow the Dow approves it And then Basically hires the logistics partner to do the publishing and distribution. Is that the basics of it? Yes, I mean we can go even more decentralized than that that the Dow creates a bounty that like if you deliver this thing Like it can also be on that level Yeah, you can be centralized and the third party becomes like Hunter We could do that But I mean just for purposes of working through on one scenario is what I just said what we're working through or do we want to do the bounty thing? It's definitely what you're talking about. It's just that like I want to like What I said in the beginning that like if you tweak just a little parameter again, like you can Go on It's result it's a robust For legal analysis, you can't ever really know a legal outcome unless you apply the law to facts So we kind of have to at least lock down some Hopefully we laid that out in the narrative Okay, so then so then what happens in permutation B is it turns out there's something illegal in the book And the book is basically like contraband because it's a state secret and violates some kind of security law. Is that the idea? Yes, so basically, huh? Yeah, so basically You know there Bob who is not part of the Dow this third party I mean, he's not the right part Bob who is the principal include like it So I still don't understand why Bob is the principal if you're working for the doll I mean, maybe here's what I want. What is it though? What is the justification that Bob is the principal? No, the doll is paying him You know, he wants the run of his books like he wants the run of his books to be published And so in order to have those books published he interested in the contractual arrangement where by the doubt publishes His books one and then takes care of those logistical. Yes, it's not like a process for he proposed I'm gonna make a book in the doll. No, so to run back through the fact pattern kind of basically, you know, Bob is this poet There's people who donated to his like poetry festival He wants to print 25 books to distribute to the donors of the festival as like, you know I think you get and also to like promote his poetry He chooses instead of another small press option to have this book be printed by the expressive book machine So the Dow is just performing at the function for him of like printing and like shipping his book. So I guess that's kind of where we're at. So like You know in permutation aid, then he submits entirely original poems that have nothing illegal in them It's not pirated. So what is the proposal process about like what do the man? What do the members of the vote vote on? So I think the members vote on is whether or not his proposal will pass which his proposal is like To get his manuscript printed by a proposal. It's a commission. Does that changes the nature of the relationship? Like for example eligible for printing political content, maybe they're an architecture journal has nothing to do with like So what we accept this person exactly not locating funds to know like so we basically left Just to be very clear We left out the fund allocation part to keep it simple So he has the funds from somewhere else like he's providing all the funds and just paying the Dow the function The Dow is doing is using the expressive book machine to print the thing for him. So curating. Yeah In this particular example but if for example at someone from the inside of the Proposer then they could find it with those old funds, which is like what yeah, and then it becomes not the principal ball But it would be the agent Commissioned by the Dow to write a book. Yeah, if he was commissioned in another thing, you know another situation that could happen is You know he could make a proposal for the Dow to help him with the fundraising process like in this case, you know He has the money to print this book from somewhere else. It's from the donor So external people gave him money. He's using that external money You know all at once like, you know, he made a in order to stake into like, you know Having this that happened at all. He like made a deposit, but then in order for the book, you know, once the vote Once they vote to approve that they're going to print his book Then he has to pay the entire rest of the money that he has they're not using the fun like the market manager thing. I Had a question and a So because it's not printing names, who would the person be to Silke's right? Okay, great I couldn't I couldn't tell for sure great great to see you We talk so much, but you know worth a billion words, right? And so this the statement I think to give clarity is and to answer the question is Bob is the is the principal because Bob initiates the transaction with the agent which is down, which is the down That's my understanding. So initiate but the key thing in agency law is Is that the principal and the agent agree with each other that the agent will do something on the principal's behalf? As the basically is like the servant of the principal for this task Yes, it seems like that's a little bit of a stretch for the intended So I'm glad that we're able to suspend disbelief that this is usually probably not how it would go with the Dow But at least so we can run on training wheels first and then build the complexity up Definitely because there's some really like it can get like really crazy like so clearly that it's it would be hard to have like a Structure discussion where you went through each of the things so, you know This is just the most a bull situation that we can make up So so what so we're so the question that you ask at the end of these is what would what are the rights and responsibilities of each When the thing blows up so To represent the fact that the thing blew up you get a cease and desist letter from the National Security Agency or you know the equivalent agency of your your country where most of the people are where Bob is or where the Machine is that's publishing or whatever Okay now what happens Make it clear that they're that in this country under this law They have a fine and they assess a fine of a million dollars for this violation And now people are wondering like okay I want to now we get into sort of like almost a quasi litigation or a mediation context and people are trying to Throw the hot potato to the other party saying what I don't I shouldn't have to pay it should be the express Machine or I shouldn't have to pay it should be someone else This is of each party in terms of ultimate liability for this massive screw up I would argue that it's up to the it's about where the machine is located Because if the machine is printing say in Germany where it's not subject to that regulation that there won't be a problem But it's just printing the machine in the US Then it is contravening the law and it's not the people in the Dow who might be you know in Mongolia or You know Indonesia or somewhere to be responsible for what the EVM is doing in America, right? Perhaps so is the circle that says logistics partner They're the ones that operate and basically own the the machine or no Yeah, the Dow is the machine in this example the the espresso machine is kind of like this automated function basically the Dow has subsidized through whatever means they Ownership out that way the logistics partners are are more so the the people who once the book is Say once the book is printed and there's like a run of you know the 25 books or however many The logistics partner is the one responsible for getting the books from the espresso book machine to to Bob who requested the 25 copies for his So distribution, okay, so so then then the so the question would be If in order to have a circle from a legal perspective Unlike a technical diagram it like in this case the circle represents a party And a party is a legal entity that can sue and be sued Like that's the whole point of it So according to all over good enough analysis if there's no nothing else that's happened such as Creating an LLC or some other legal form that would hold up then the default analysis is you have a general partnership So every member of that circle would be jointly and separately liable For the actions that happen So if they're the ones that own the espresso machine and and just to go with what Ken was saying That's the jurisdiction where the heat's coming down from the security agency and they just assess the fine then what I Mean, I'm not a litigator, but I would imagine that people would start wondering is there anybody That's a member of this Dow who has like locusts or nexus with that jurisdiction Like do they have a house there? Do they live there can we get our hands on them and you could start basically subpoenaing those people Because they're all jointly and separately liable or there any other assets At all but then to kick it up a notch So if you imagine that it has legal personality, which is kind of the idea of the Legal entity part of the aale then you ask the question. Well, what legal personality does it have? Is it a corporation an LLC and nonprofit some other form and then you could ask Why do you think it is this legal entity? Like is there a jurisdiction that's granted it or is there some other reason why a court would ascribe legal entity mess to it So how about those questions? sure, so I Think we we get to you know the the point that you're just at with like Really drilling down on the like type of entity that's involved the type of issue that's involved and These specific outcomes that are correlated or that are correlated with that point in kind of this agency outcome Scenario tracker And that's where we wanted to and this is kind of like where we were building to but I think it makes sense So I jump a little bit ahead so that it helps provide like the depth of context there But for each of these different entity types It's foreseeable, you know that we can start plugging in some of the work that Chris has thrown into the matrices for what happens with the automated Autonomous legal entities we can start building that into kind of this framework where we look at it under the lens of a general partnership under the lens of an LLC under the lens of a BVLC under the lens of the corporation and look at the not only the analysis for if it's just like a this traditional situation But also the analysis if it's a Dallas involved and start comparing and contrasting and understanding what those patterns are Between like what happens if it's down what happens if it's a you know, like a human or a set of humans Who just kind of done this without any kind of technological assistance? it's just the the kind of paper paradigm there and And so I think by walking through the The transaction table the agency transaction table and identifying these people identifying what happens when things go wrong and Identifying what those roles and responsibilities are we can then start going through the agency outcome sheet and Populating it with the relevant information that we've extracted Do you want to just if it's not too disruptive? Do you want to quickly run through permutation B and just see what would the outcome be? Sure, and I'm gonna share my screen because it has the interactive version. I've only included the PDF there I can upload the the x-mine file itself once It's too After this call So just a quick note on the diagram that you hit that is on I guess Beth's screen The binding is sent part. I think kind of speaks to is there an agency relationship? Like was there that agreement that is enforceable that some principal and some agent agreed Hey, I'll be the agent for you and do this thing. So that's kind of what's caught up in that. Okay. Oh, you've got it So I'm gonna go on mute Okay, yeah Which permutation were we going through be okay, so the curators review the content Pass and vote on the approval proposal or they pass it the vote passes and they approve the proposal Sorry And then when read backwards the it contains the classified information so The questions are like what happens when this goes wrong and like which roles are Responsible and I think in this example there would probably be some duty of the publishing down since it's meant to like kind of curate like the content that's coming through there ensure that nothing Nothing bad is happening that they would have some duty to not publish information if the you know the NSA or whoever starts coming after them with The information that they have Yes, it would affect the ability for them to like reach you so if even if it was like a If it was somewhere that was incorporated Could also impact the knowledge because you know it's like none of the curators realize that this is included like You know is it something where they would they would have more duty of care to like know that if it's in their country like You know I would go more for it to like a permutation see we're like they Or the I don't know what it is where they know it's illegal You have to take into account that we're talking about publishing here So let's say WikiLeaks would like commission them to print, you know Or you know the war files in Iraq it would be Illegal even talking about the US like it would be illegal for WikiLeaks to get that information But a newspaper even like a centralized entity has the right to make that information Publicly available and that was like the whole question about like the Daniel Ellsberg the Pentagon papers Yes, and what not about like the legality of freedom of information I think we should also take into account not just like principal agent law But also like freedom of information within like publishing. Yeah So so where this is a little ambiguous and it makes it's tripping me up a little bit to think about illegal analysis Is you've got general partnership up top, and then you have principal third-party agent but the kind of the relevant aspect of the scenario in order to run a legal analysis is Which of the parties is a Dow so you want to say that and then and then what is the general partnership? So it seems like that in the in this particular scenario just to lock it down You've got a principal who is a single human being named Bob. You have an agent that is a Dow That is a general partnership and you've got a And I don't see who the third party is All right Well, okay, so based on that I'm wondering if we should move to permutations new where we do specify more details Okay because I think is an end kind of in the talking about a combination of those because for permutation be the thing We were trying to get out was like, you know this idea that if there's illegal information somehow in a book but You know the people who are approving the existence of this book don't realize it's illegal or you know in General that like the Dow is publishing this illegal thing then you know I mean you could be like it's a photo book of child porn or something like that like though You know the point of that is You know twofold like number one the dirt like what? You know is it legal in all the possible jurisdictions as we were talking about and then also You know not to get to hung up on those details. I mean, yeah So kind of to talk about permutation see and then I think it could be really useful to talk about You know, is there a difference with is with whether the content is illegal and an intellectual property way versus like violating a regulation So, you know for permutation see As it turns out several of the poems in the book are verbatim copies of poems by Allen Ginsberg They're part of the Ginsberg estate and unavailable through the public domain I eat the points are pirated because we had to figure out how like a physical book would be pirated None of the curators who voted to approve the proposal Realized that the poems weren't all original in fact Most of them didn't review the content of the book at all most of the no votes I mean sorry one of the no votes did come from a curator He noticed that the poems were very similar to Ginsberg and looked up the original point to confirm it But didn't share that information with the other voters So, you know to compare between permutation B and C then in both scenarios there was some an illegal aspect the Proposal past regardless that all the curators who voted yes to pass the approval Were, you know ignorant as to whether like and ignorant to the fact that they were illegal But, you know here hopefully shut my computers off line Oh, I don't know hopefully you can still see my screen because it says offline What we can see it Oh good. Okay. Um, so I don't know if that kind of showed some light on kind of what we were thinking of or It would be useful to go through C and then revisit the in relation to it or okay So it seems like in essence and it's kind of like it's sort of like the same thing where there's something Illegal or liability attracting about the content of the book But in this case it's IP and not violation of like some state secret Right. Yes Okay. Um, so one thing that's interesting that I'm just kind of spitballing here But um, the reason why agency law is so interesting as opposed to contract law or or something for looking these relationships is um When you've got an agent that's operating on behalf of a principal and that's the um, and that is like a valid relationship The principal is um, at least under us law. Um, and so, you know silicon and others, please um pipe in if it's different There's a standard that says the principal is held to know everything that the agent knows Um, and so there's like a constructive knowledge So if the agent's aware of something the principal is held to be aware of that thing too Uh, so the agent's acting like as the principal Which means that the agent damn well better tell the principal things that they become aware of like the property you're buying is on Toxic waste or whatever they know the principal is held to know that um, so if in this case the agent is um The publishing is the doubt And the principal is bob and for whatever reason bob is unaware that his stuff is violates ip But the eight one of the people at the agent one of the agents is aware It may raise a question of whether They drag bob down Because of the specific facts it seems quite likely that since bob was the originator of the material that bob I guess in the ordinary course, I'd assume bob would be well aware of what bob did Um, and so uh, the question then becomes can you like attribute the knowledge of this one agent to the other agents? You know somehow like did they all become tainted with the knowledge that there was a violation somehow With ip it's really complicated I usually stay away from ip but there's other issues with contributory um Like violation of ip where you know just the mere fact that you're doing it even without knowledge You know can create some liability and you know like there's a whole tangled web of ip law that I think we don't need to We need to not get into in order to just look at the general liability flow Between parties just at a high level When something goes wrong, uh, but uh, those are some just super high-level musings on permutation c Yeah, well one question about that and maybe this is what you were hitting on is um, you know, we included uh this thing of like You know the curators didn't know that they were Contributing like the curators who voted to pass it at all didn't realize that they were doing that and you know The one person that did realize this, you know, um like Wasn't involved in like pushing that like the actual transaction itself that like kind of pushed the causal chain forward So that you know what I was kind of trying to get out there and like something, you know That we had talked about and wanted to try to you know, touch on with the fact pattern is like the extent to which the corporate veil like um, you know like happens with um Like happens with dowels and like in particular like whether the different people in the dow are all considered on equal footing as Entities within the dow or if only voting members since you know going back to the diagram where you know, there's um Like autonomous processes and then there's like the human in the loop that happens like if um, so it's basically like You know the process is only pushed forward by you know The actions that are taken are voting and so if the action that and you know if the action that happens such You know that the book is actually published is only Um pushed forward by individuals that didn't realize that they were doing something wrong Then does the opinion or you know the level of knowledge of someone who did know they were doing something wrong? like does that have any impact Like liability piercing Yep, that's a good point Yeah, what did you say sulky How so like how would it be different from one to another? Can you say that again and speak closer to the mics, okay? Yeah, we couldn't we couldn't really hear you So what I'm trying to say is that on and I'm actually wrong with my bad opinion The last two sessions on this The the the question as to what liability attaches to the agent um for you know Doing something that is wrong on behalf of the principle depending on the national agency law that the relationship is governed by Is an a Are I may be way off base here, but I thought most of the basic principles of agency law were identical across You know, um like developed nations. No but I think I I don't know what to say this is under american law, wouldn't it be like um or any american law Wouldn't it be that if the agent actually had no I I mean depending on what what status as an agent he had and whether you know Wouldn't that be like he's not liable for whatever the Whatever the the the principle did and he didn't know Um, unless it's he must be reasonable or is that not a concept? I mean, I think I I think and I'm not again I'm not I'm sure but I I assume that And I UK law would be depending on whether the first that's reasonable to assume that But I and I'm sorry to interject because I don't know the state of america That's okay Yeah, well, I mean the entire the entire point of this is to try like we are trying to find some something that would like cut across as many Jurisdictions as possible because you know with contract law with all the ways that we've been thinking about This then, you know, it like the it depends we're like too frequent, you know torques, etc But then with agency law from our understanding then it was like Hopefully something that could be looked at is like an abstraction to a certain extent without like um having to start from jurisdiction to the same extent like obviously that's always like one of the origin like one of the permatives that you have to start with but hum Sort of a conceit for the first two sessions um silky which was we looked at the what we call the restatement of agent the Restatement of agency third, um, which is very much the united states You know kind of legal codification Which I think is largely similar But we actually did lock it down basically in us law so that we could Resolve some of the unknowable Ambiguities in terms of what jurisdiction would it be and just isolate what legal outcome would be at least in one set of circumstances But since this meeting is being hosted in berlin, it feel I feel like we can't really do that like that would be really wrong And also we assume that the relationship that printing machine Yeah And at least for this example allen ginsberg, it's a state is in the united states So it probably if they're being you know sued or whatever by like allen ginsberg estate, uh, you know in the fat pattern of permutations Yeah, so at least so yeah, sorry about the us central way of That's But you know, it's okay. That's you know, that's the point of all this the point of all this. Okay is to To break the global legal system, right? Yes What about somebody have a reminder on the roman principle like the horse that is owned by nobody and Let the story like that. No, like what happens when the horse that's not you don't know the owner of the horse Uh, yes, thinking back to my prior life in ancient rome. It was 3 000 years ago Um, but um, I mean You know, I think so that goes to another thing that we had talked about a lot and then decided was probably like a rabbit hole that we didn't um want to go too far down but the fact, you know The fact that you know, there's this distinction between code being um, and obviously you know about this to me because I think I learned about it from you at koala, but um, you know the fact that code is uh Why this force the like the author of it isn't liable unlike, you know writing than the person who wrote something is like From our understanding, you know liable for um the outcomes of something so for example of some like uh in the original configuration for this, um, you know home that contains information about a spy agency We have been thinking about um, if it was like contained, you know a recipe for building a bomb And like what would be the difference for like, you know, if there was an inclusion of like Here's the code for how to build a bomb versus like here's, you know a natural language description of how to build a bomb Like the fact that the actual code like is able to be this autonomous force that doesn't have liability and Liability doesn't go back to an entity therefore it probably wouldn't go back to a dow so like, you know, there's this issue of like you know number one a choice of like how much you would encode versus having in language because um, You know the liability would flow differently. So I don't know if the horse example is like analogous to what we're saying You're right, but I don't I don't know if it's about the liability. You don't have liability when you write code It's about I think the like Code is free speech Yeah Usually This is a very interesting uh very interesting thought because you know, uh Code is code, but code that's executed is something else Is it law? No, I'm just joking. I was like if code is executed is that at the point that it becomes code is law I mean, but maybe yes He ran away Could you extrapolate on that friend? What are you talking about? Well, you know, I I can I I can have code. Um, you know in Any kind of I can have code in any kind of representation, right in any language in assembly However, you want to represent the flow of logic, right? I mean, it could even be in text. It can be human readable Right, but you know, just because you have code If it is not executing in a machine Right, then there then it just code sitting on on my hard drive is not necessarily Um, an evil thing, but if if if I have code, you know, that describes how to make, you know, uh Detonate a bomb and and it's just sitting there and it's not executing well You know, how bad is it? It may be very bad But if I if you have that same code and it is executing and it is doing the function, right Well, then it's probably very bad so there's a difference between clearly things that are executable And things that are not even if they're Watch and and then there are self executing functions which are not operated by the creator of the code, but are maybe even like days or Multiple parties down the line that it becomes executed and it causes some sort of a damage or something like that But still the creator of that has almost nothing to do with it in terms of like he doesn't hold the server. He doesn't like it's just a smart contract that executes itself according to A configuration that he had set for it, but someone doesn't code it to be that way Okay, so, you know because Okay, so I think I might like cap this rabbit hole because we want to try to finish um as close to the hour as possible and I think we're like halfway through the um use cases so um But definitely interested in revisiting that in the chat and in general because I really think you know in terms of what Which things are like actually pressing questions for issues that will arise when hopefully um This you know becomes something we're testing in the wild then um, you know, that's going to be a major one. So um You know or there's or we could go deeper into discussing that thread and take discussion to the You know the permutations like d through f to a future time or just uh asynchronously so which would y'all rather do More use cases Okay, all right, so permutate and then also just um, you know how we have been like should we go through the agency outcomes map, which is um You know the thing that brian was showing at the very bottom that um You know is very fun, but it's also like guaranteed rabbit hole um, so there's you know the question of if we should do that or if we should continue through the um, oops Uh, wait, I pressed something weird. Sorry. Um, yeah, if we should if we should go through that or if we should go Uh, just save any discussion for that for the very end. So I think you know if y'all uh I love talking about it and it's also the beginning of this diagramming framework that we uh, hope to start introducing but um Moving ahead to permutation e only talking about this agency transaction grid here and not yet referring to the agency outcome map um, so permutation e uh, you know The request has been approved to print the book. Um or no, sorry the request has uh been sorry bob has made his proposal request to get the book printed um and uh You know the dow curators are deliberating for too long about whether they should print the book like, you know, he made their request and Like the book needs to be printed by august 31st. He made the request You know right now like there would have been enough time if it was instantly approved But like, you know, some of them think that the content sucks so they don't want it to be like affiliated with their co-branding Oh, yes So Yeah, I mean that's I think that's I love and we we intentionally left that open in case any of those Changed so the only facts that we have are, you know, the dow curators take so long in reviewing the book that Um by the time the deliberation is happening It won't be printed in time for the delivery to the uh, you know in time for the festival and You know, uh, I forgot that I'm not on screen hearing one second. Um So, you know to go back to um, it was To go back to how this permutation D plugs in here. Um, you know in terms of the authorized dow functions. This is the dow function of You know, what logistics? Yeah curators review proposal logistics company ships um the And also onboarding because You know the It's okay like was mentioning then, you know, what like What bob is actually contractually agreeing to you know would be covered in onboarding. So it's kind of um If you know, there's this um question of like what you know Who knows what? Um, so, you know to make sure that we refer back to this chart Like maybe if you wanted to like walk us through how this one would like play out with the flowchart Oh, sorry, so it's permutation D E sorry, um Oh, I accidentally skipped one, but it doesn't matter. Um, we can we can go back to D Yeah, no, yeah, that's what I said That you think you simply you can put a time out Right I accidentally skipped D. So we'll do it after but we're just doing E right now So I would say that I mean since like the dow Like I would say that the contract is signed between the agent and the principal once the dow approves or disapproves the Um the proposal So that here you will you will have entered into an agreement. So just promise Yeah Yeah, so it's his problem that you know, they didn't enter into the agreement and You know, it's a failure point that doesn't have a legal implication unless it's built into the contract So, you know, we wanted to include this one because that's where contract law, you know intersects with agency law and You know smart contracts need to be corrected in that such a way that that Makes sense. So, um, you know Just check in in permutation D the principal is Bob still or who's the principal who's the agent and who's the third party in in D Oh, yeah, sorry, I thought I think I thought we finished E or in Okay, well And the one we just talked about which is E Then I'm going to take E my excuse me In E when the book when there's a failure With the delivery because it took too long. Who's the principal? Who's the agent and who's the third party? So bob is the principal the dow is the agent I would say that a principal agent relationship has not been the end in this case Yeah, that's a good point. Yeah, it has not been what? formed It has not been formed. Okay. Well, then we can't do a agency law analysis if there's not one of those But why don't we what how about just a contract law analysis? Why hasn't it been formed? I I don't get that Brandon, what did you say? Oh, I said what why hasn't it been formed? I didn't get that Of course, I mean from my non legal perspective If a dow did not vote on such proposal It just means that they did not enter into an agreement in the first place. So like they can be let's say that Since the dow's attention is limited, there can be 100,000 proposals and just because they made the proposals doesn't mean that the dow Is the agent for those principles? So it's only the principal when the dow approves entering into I guess an agency relationship then They should have some sort of liability in executing The premise of the proposal Okay, does anyone have any more thoughts about e before you knew that Back to D Yeah, I don't I don't see that there's any basis for liability at all unless the dow promised that it would Decide by a certain time or something or like if they breach some promise or duty So, you know with that in mind what um You know What would uh, if we were constructing this dow in real life, what would be some? You know important factors to make sure we consider so that we don't run into that problem Well, one thing is to make it clear um to everybody before they submit a proposal That you know, we may say yes no or take no action on your proposal and we bear no liability And then honestly, I think you might as a dow also want to make clear You might want to make a click through of some kinds that the people that submit a proposal agree contractually to your terms And then one of the terms honestly should be we are not your agent for purposes of this trend Absolutely eliminates an agency law analysis totally Nice, okay. Well, that has that has been confirmed by soka as a valid um, like behavioral uh approach Um Okay, so moving back up to D. So kem. This is not legal advice, but talk to a lawyer and think about getting that stuff in there So that's something useful for you comes out of the session Useful out of luck Otherwise non useful discussion Just kidding. So it's interesting Yeah, definitely. Yeah, definitely talk to uh, yeah lawyers in their official capacity Um, okay. So permutation D the functions involved are number four the logistics company ships. So it's um You know this part at the very bottom where the expressive a book machine has printed Uh and logistics partner, um, you know, these are both, you know, uh The approval has passed so that the action can start happening of expressive book machine printing. Um now logistics partner Charlie corp is the logistics partner. So it needs to ship. So um When we have there, um The publication is initiated meaning characters have voted to approve the proposal and the order was sent to the logistics partner Charlie corp to ship by august 31st Charlie corp intern accidentally selects the shipping date at the end of september instead of august and they're like, you know calendar app thing Delaying shipment long past the date bob was promised so, you know the um On the dow's end then, you know, everything was done right like, you know, the voting Um, the voting happened. It was past the expressive book machine Then, you know, it was passed down the supply chain to the logistics partner But then on the logistics partner and then it messed up. So the thing that I was trying to get out here Is, you know, the logistics partner is a third party. But in so far as the logistics partner is You know part of like if this inextricable part of the process of actually delivering on the contract of getting the book out by this particular date then Is the logistics company kind of also, um, you know an agent of the dow in a way like, um, you know, the logistics partner, um, I would think would uh have, you know a duty to deliver Um, correctly like this book that was ordered through them So does that mean that you know because the dow Like contracts with the logistics partner to perform this function then because The performance of the function, you know fell apart on like on the logistics partner side then, you know, is the dow still liable for, um You know the fact that they were supposed to deliver on that time even though it wasn't the actions within the dow But instead a contractor of the dow like messed up And here I would say it was the point I was kind of making to you guys in the in the box Which is it depends on what is the legal interfacing system So did they sign a contract that stipulates that it's a liable in a certain jurisdiction? Is it referring to like a decentralized arbitration scheme? Uh, is it a system where people are completely staking and there's an escrow and then they only release after So it really depends on Again, like the notion of jurisdiction Uh, wherever there is some liability there or not definitely um, so if you if you sort of Say that, you know, if you kind of fuzz some of that detail And try to apply an agency law analysis if you said the um principle was the dow and the agent was the um logistics company that messed up Um, and the third party was whomever like well the funny thing is just I guess the third party You could say was the like the reading public or Um, you'd have to think about who the third party was but have to be someone that was waiting for the book and who was harmed By the fact that it wasn't there So, you know, I don't know the bookstores or the adoring fans or whatever then um then I Then probably like in the in the highest level of traction You can attribute the acts of the agent to the principle And so if the dow thought it was such a great idea to choose this logistics company that was their choice They were in the best position to avoid the loss and they could be held responsible Under agency law for the acts of the agent. In fact, that's the whole point of agency law Is to draw a direct connection between the principle and the agent. Um, that um And to draw and to figure out the lines that they're operating with them And then if you sort of think about defenses, you can wonder, you know Like was there some super beaning? kind of cause Was it, you know outside of a contract term? Or um, or maybe like was the agent doing something? Well, you didn't say this in the facts But like if the agent was way out of the scope of its authority and to Stilke's point An ordinary reasonable third party would have known that Um, then maybe there's you know, they break the liability chain But for the most part, I think the basic analysis of the principle would be held responsible for the negligence negligence of the logistics agent in not providing the service Yeah I've got a question I've got a question. Doesn't that uh depend? Stilke was just making a point, but um Does this anything I'm glad to see you Uh, wait, what was your point and then from brinden? I don't know what does it say In that case, it would then be able to like That would then be able to see the publishing company progress basically like what they've seen and had liable and then they would look at their contractual relationship with the publisher Yeah, what was the logistic logistic company and they would then be able to sue or whatever loss they have internally Yeah, exactly and just to play it through even more realistically so that we have all the pieces connected the Um, you've got a third party that's grieved in this case So like we were depending on the book But our birthday party didn't work because we didn't have the books or we lost some money in our business They sue the principal the dow Let's say for not getting me the book and then the dow like does a cross claim or something like that to or counter claim Or a cross claim to their um to their, uh Agent who was the publishing company to say like hey, it was your fault. So I just got sued for you know, 10 million dollars You owe me 10 million dollars to pay off the suit because you're the one that messed up And you know, and so it kind of I think that's how the chain goes But to to really complete these things in the in the scenario You have to kind of be a little more explicit about what went wrong Who was harmed and who can they laid their hands on basically, you know I mean charlie charlie was wrong because like they hired Oh harmed not wrong. Oh, yeah. Yeah wrong. Yeah. Yeah. Yeah So he didn't get his you know Thanks Yeah, definitely. It's like the only it's it's like even though, you know, his book is terrible So maybe everyone else was better off that it like didn't get distributed Yeah Yeah, so, you know, uh, the only person who's actually well also the interim was probably harmed because they made like a terrible error Doesn't Derivative derivative in every way, yeah Does it to to uh go back to your circular, um, uh point If the publisher If the uh principal, um Had a clause that said, uh, you know, I I'm not going to be liable for your unhappy child at his birthday party Then there wouldn't be an issue, right? Yeah, that would be one way to reduce On liability if you can get a direct disclaimer of liability that the other party agreed to Um, that can sometimes do it and you know in the contract laws once we finish this agency law stuff We should probably spend some deep time on contract law where most of the action is um, but um But there's a lot of ways to then weadle around disclaimers and things like that But like that is a very important and interesting analysis and it kind of gets I think the dow stuff to the Place where it needs to get to which is thinking through like what should be the standard clauses And who are the people that should be agreeing for what and when in the whole life cycle of the transactions? So I think you're as usual. You're ahead of your time, brindan And like I think you're asking exactly the right question for tomorrow, which is you know What kind of disclaimers can you put in there? What other liability? What kind of damages caps and what is the chain of contractual privity? Basically that that it makes sense for the innovation and the new relationships made possible by the diaries Yeah, and I just wanted to add real quick. I think once we've I started identifying, you know, which functions produce which you know kind of outcomes We can start coming up with like a standard set of disclaimers that can be used for that series of functions. So if it's functions related to Like the the voting mechanism or functions related to you know, if it's uh Like the the way that the onboarding takes place You can start like coming up with like templates that are specifically meant for dow such that they're like keeping the liability at a minimum Amen Definitely. Okay. So Let's move to the final permutation of everyone is down which is uh f so um, this so this is just um, you know One that is very trivial compared to the other but I wanted to make sure that we got all the authorized dial functions are not all of them because um Though we left off the ones about fundraising because that's an entirely different discussion that I think we'll probably get into securities and we Maybe in the future we can go there. But um in terms of the authorized dial fun. Oops. I just realized I'm not on the screen sharing one um in terms of the authorized dial functions that um, You know, we're covering here. Then we also wanted to say, you know, where does something go wrong with onboarding new participants? so here we have um, You know when bob submitted his proposal and deposit Uh, the dow's onboarding manager informed him that he would have to pay the full amount before shipping And printing could start information also clearly stated in the proposal contract, you know that like the smart contract that had to be You know to activate You know the printing and shipping to start so, you know If you remember like there's this proposal contract and the proposal has passed and we said, you know We're just like for the sake of this when the uh in order for um You know the to go from proposal passing to actually being printed by the expresso book machine then, you know Uh, he has to pay the full amount so the you know, there's enough funds for the expresso book machine to run This is where fund raising would come in if we were going there. Um, but um You know he uh, so he understood the stipulation when he was signing and the uh You know, he was waiting for more donors to come through before paying the full amount So basically, you know, he wanted to start the process and know that You know the publisher that he could use to publish his book is the expresso book machine because he had been you know Trying to figure out what publisher to use um And so he knew that that had been passed But then you know since in order for the process To uh actually begin of printing then he would need to be able to pay the full amount You know, he thought he would be able to get more donors to actually pay for it then, you know By mid august he accepts that like no one else is interested in funding it So he has to choose between, you know, canceling the order which would cause him to lose the deposit or just funding You know the uh the 25 books himself. Um, but by that point of mid august, you know, that should the event is on Oh, no, okay. Yeah, the event, you know is on august 31st. So it's like, you know, he had Sorry Oh wait, are there still there? Um Yeah, so basically, um You know, he has to choose between like just not getting the book printed at all but you know unlike before where it was Um, you know the fault of the logistics partner not printing it in time Now it's his fault and you know, he was on boarded to know that he had to do all of these steps in order to actually get it printed So, um, you know, so I guess this comes into a point where you know now Like and I think this also probably just highlights the fact that it's impossible to really get into an analysis of this without contract Well, because you know, it's like he tries to say that because he wasn't on boarded enough You know, then they should cover the cost. So like to try to get at this question of like who covers the cost for these different things, um That makes sense Is that a question of of general terms or the general terms of buying or or Yeah I don't think so. Yeah Definitely I mean he has no claim Yeah Definitely, I mean, there's also the question of like was an agency relationship formed at all Is it like the other that earlier fact pattern where there wasn't actually any agency relationship? because Oh, yeah, no, no, I mean, I think I don't know I was asking It seems more like a torque torque kind of contract thing the way that you Did it and maybe there's some other examples of how onboarding could go wrong As well. So that's probably not, you know, even a good permutation Maybe but you know the thing, you know, just to before we quickly close up, you know, this um, or you know Open to any questions. Um, that anyone has about this then I think, um, you know, what I really wanted to highlight there Oh, wait, I'm on the wrong one. Um, what I really, you know wanted to highlight is how You know each, uh, as we mentioned at the beginning each of the circles is You know human behavior that exists to a certain extent off-chain whereas, you know, each of the Um square parts is, you know, non-honomous software going forward. Um, and that is like the bonding curve that Um, maybe we could talk just briefly mentioned for a few minutes. So it's not like the spot box But like, you know, the fact that each of these different functions, um You know it is involved in initiating or impacting a transaction and you know, some of them like onboarding, you know might come in it Like certain points and end up impacting other points. Um Yeah, yeah, and I like Just quickly, I think too like the construction that we used in having, um All of these roles and functions and apps denoted by shapes and relationships is that What we are like really moving into is kind of like this legal object model where each Like different piece of the puzzle has different attributes that are based on Not just where it's positioned, but also the specific features that It holds and those features can help or those features will necessarily impact, you know, what the Legal ramifications are in the event that any of these scenarios that we've gone through kind of blows up I'll throw something out there. Um, I think that's a great point, brian and this uh, this came out in our our pre-meeting discussions And it is along the lines of what we discovered when we were talking about, uh, the bonding curve and how There are potentially different players with different roles and rights and obligations Um that you have along that curve. So you uh, in I think bet bet mentioned in those discussions how It might start off being uh, you know one sets a set of right holders and then it moves onto a, uh, You know a more of a crowdfunding type of thing later on um But the point here is that these things are dynamic and at some point um, a lot of complexity comes in due to that Yeah, the first first call we, uh, discussed something like this where like, um And now enters into an agreement, but then like somebody else joins the now and like that agreement's consequences Like is affecting this new homeowner person and then we talked about like there is like, um an expectation from a new participant that uh He understands the previous contracts entered into before His order on boarding So I think Definitely and also so we have to get out of here at 7 30. So maybe just like one more statement Um, thank you for putting this together. Sorry, so get one more thought. No, I really want to know I want to know I want to know Yeah, yeah, come on That much but this kind of Liability relationship, I think that should maybe be if it's set up properly it would all be contractual. Definitely Only if it's not set up properly, we might Someone get into this area Totally if things happen that weren't envisaged Yeah contract and the legal the law which applies to that whatever relationship doesn't Take care of that You know, there's no in the super for example in germany would be the super super There's a super called takes a lot of this, you know, launa that's not in the contract Also look at the agency, you know, definitely Well, hopefully we can revisit that and you know keep iterating on this model and actually testing it iRL So definitely you would love to know Yeah, more about that I want to say something to your insight silky of the reason why we started doing this was to um See if by just running through the fact patterns and uh different legal frameworks like agency then contract could we surface Some insights and best practices that would be helpful as people are rolling out the dows So we I think every call we've had at least two or three Um to your point. Um, I think I think by jove you've got it. That's exactly what we're trying to do Yes, great. Well, uh, this was wonderful awesome Thanks everybody for being on Oh, yeah, uh, can you do your meetings? Um Other ones like some earlier time new york time. Oh, yeah, because it's always midnight for us It would be amazing for us to participate. I'm already now tired. So yeah I'm useless From now on um, we should say it'll be like this time slot like the 12 noon time slot For the for all these things because if we can keep we can keep our european partners, um, this thing It's going to be much better Definitely Well, thank you all so much for joining us at lunchtime and um, this hopefully was a great discussion It was really fun planning it and hearing yells insights. So Yeah, great. Thanks a lot. Hi