 We're live. Hi, I'm Dazza Greenwood at the MIT Media Lab, but more relevantly heading the Boston Legal Hackers Group, which I'm cooperating now with Brendan and Beth, who I'll ask to introduce themselves in a moment, and also with MIT's upcoming computational law report, Brian incoming managing editor to introduce himself in a moment, and then everybody who's going to be joining us as contributors in this volunteer open source kind of hack session to help unravel the legal and business and technical issues and options with respect to automated legal entities and applying an agency law kind of lens to shed some light on the roles and relationships and the rights and responsibilities of parties when one or more of the actors is an automated or autonomous legal entity, and in particular, we've got a lot of expertise in distributed autonomous organizations, DAOs, these blockchain creatures, and so that'll probably go to kind of a varietal of automated and autonomous legal entity for the purpose of this discussion. We've got a HackMD up and running where we can curate our notes, but I would like to just ask if Beth and Brendan and Brian introduce yourselves as the sort of co-convener of the session, and then we can go right down the list of all the other contributors and then get our open the hood and get right into the HackMD and get jamming. So thank you for hacking with y'all, and Beth, you want to get us started? Sure. I'm Beth, I'm a co-founder of Dow and Q&A, and I lead Mechanism Design Working Group that co-produces this call. So yeah, excited to talk about DAOs. Well, my turn. Hi, all. My name is Brendan Maher. I'm an MIT Media Laboratory alumnus. I was at the Media Lab in 1995-98, and I have been involved in distributed and autonomous systems going back to that time. And I certainly, you know, putting together a lot of this and with all of you, I have to say, this is just awesome. We're really trying to solve some really, really, really hard problems here, and we have a lot of challenges ahead of us, but this is a very exciting time. So I'll go next. My name is Brian Wilson, and to kind of what Brendan was saying about like solving these new challenges, one of the things that I'm going to be doing starting in the fall is working as the managing editor of the computational law report. And one of the things that some of the challenges that I'm going to be doing. Which computational law report was that? The famous ricey computational law report. What was that? You dropped out. Can you say it again? Yeah, if you clicked as a screen, he had the logo right there. No, but so the MIT Media Lab, I'll be able to be a visiting researcher at MIT Media Lab when we're launching the MIT Computational Law Report, which is reimagining the way that an academic journal, academic report can function. And so like a journal, we'll have a section for traditional media, but unlike the common construction of a journal, we're also going to have a space for rich media. So that could be data visualizations, it could be podcasts, games, lectures, even working group, Google Hangouts calls. And then we're going to have another section for reproducible media. So that could be anything from that could be like a data set with a set of challenges and kind of like goals and outcomes where we can have this measurable quantifiable way of analyzing these challenges in law. And so that's that's who I am. And that's what I'm working on. All right, welcome. So why don't we just go right down the list. And what I've got in order of appearance on my screen at least is Christopher, then it looks like Diane and Kurt and then Kristin. And then let's get moving. Christopher, welcome. Hi, yeah. Chris Ray, an English lawyer, co-founder of Ethereum, working on various legal technical interfaces for distributed autonomous organizations. And yeah, very, very excited to get stuck into these these challenges. I was on mute. Thanks, Christopher. Welcome. And Diane, can you say yes, you're faint, but audible. Sorry, I'm in transit here, but I wanted to, yeah, so I'm Diana Stern. I'm a lawyer and a legal innovation designer on the R&D team at Baker-Hawk Sublet. And my focus area is on smart contracts, blockchains and digital identity. Excellent. Thanks. I'm glad that you're with us, Diane. Kurt. Hi, I'm Kurt. I actually started with this group a little bit ago, but I dropped off the earth for things. But I am a US-based attorney as well. I particularly am focused on corporate governance issues in blockchain technologies and the apportionment of liability and incomes from their various groups you can establish on a blockchain. Beautiful. Welcome. And Tristan. Hey, everybody, I'm Tristan. I've been working on this question of how to merge DAOs with legal entities, particularly in Wyoming. And I'm about to incorporate a series LLC that has a thousand and one children, which are all tied to a DAO and then trying to like sell those off to people as like pre-made companies. And yeah, that's what I'm up to. That's very interesting. Now, Tristan, before you go back on mute, that project that you're working on with a thousand and one, I guess, Dalmatian DAOs, is that going to be any part of that open source or reusable or something? Yeah, I'm planning on making an open law template so that way people can sort of just plug away with making the operating agreement. And then the rest of it, it's just arrogant DAOs, so it's pretty OK. Thank you. It's very exciting stuff there. It indeed it is. And so with that, why don't we crack open this HackMD file? Does everybody have access to that? It's in the chat window and also in our Telegram group. I'll try to do a screen share myself so we can get in there. Boom. Here we go. Present to everyone. There. OK, can folks see this? So I encourage you not look if you're elaborating. Don't look at the YouTube or the video screen, but look actually at the file and then log in so that you can add your that you can actually type away with us and we can do this in a very collaborative fashion. And I also suggest probably it's best to kind of stay on mute when you're not talking. But I would really like it to hear from everybody several times during this call. So consider this like a weapons free zone here and just just like speak up and contribute early and often, please. OK. OK. So I'm going to take silence as a scent in this case. OK, and I see some nodding there. So that's good. All right. So. OK, so where are we at? OK, so if you go down to line 20 line 11, which I'm scrolling down to, we've got some kind of the basics of some some of the topics we thought would be good to focus on in the context of those scenarios. And we should probably actually could I ask somebody for help in just digging the three scenarios out and dumping them in the current notes? That would be really helpful, but if someone's going to do that, just say that you're doing it so that we don't get like five minutes. Anybody are you talking about the scenarios that are like lines 42 to 42 to like 60? Yeah, but minus all of the notes to just the pair of scenarios, I think. OK, I think that is lines 42 to 57. OK, lines 42. OK, so let's just scenario, I'll just like that. See, well, the problem with seeing the line, pushing it down. I did. You mind just talking in there? Yeah, I can do that. OK, thanks. So with these scenarios, I think what we want to do is focus on number one, so called binding a sense that's basically just enforce the signature to or contractual ascent, which can be expressed in various ways. It actually doesn't have to be signature. You know, it could in some circumstance be verbal or, you know, a biometric or any sound symbol or process executed or adopted by a party with the intent to authenticate or be bound by some record. Record is in the broadest sense, some like information or data. And it's typically a contract, but it could be other things such as notably agreement between a principal and an agent to form an agency relationship also requires like an explicit like an actual ascent. And so ascent is one of the things we want to kind of probe here. See, and I think Brendan had actually raised a number of good questions, which maybe you can pop into. Maybe you can pull those, Brendan, from the telegram group and put them in there. But you ask questions like what is the basis for establishing when some threshold or, you know, state has been can trigger what we would, what the law would deem and a enforceable expression of ascent or he said it's something like that. Like, could it be a number of nodes? I think you said or some, you know, quorum of people voting. But I think we've got some questions around that. The scope and type of authority. So that's basically mostly explicit authority and implied authority or the two that would probably want to play out and see what could, you know, what can go haywire when innocent third parties are relying on implied authority that wasn't really intended by a principal. That's the typical fact pattern there. And that brings us very neatly to when things go terribly wrong. So one of the remedies that parties have and a stopper usually based on detrimental reliance by some innocent third party that, you know, has done that has clean hands or is operating good faith is one of the kind of conditions that can allow a court, for example, to to take action like preventing a party from asserting rights that it would otherwise have or not taking an action, like not delivering the book or the money, for example. And so it's a so-called equitable remedy. And so line 37. So, hey, Brendan, could I ask you or anybody to dig into the telegram channel and and take the specific questions that you've written in prep for tonight until just dump them into line 37 so we can I think we just use them as a hit list. If somebody else could copy that thing I posted with the nodes because I'm on two different systems. Yeah, I can I can do it. Thank you. I wonder what are the similar. Oh, here we go. But probably just take it from things like how much steak do you need down to should I was put up steak as a whole? And then maybe cut it off before maybe this is biting off. But I don't know. I don't know if you saw, but my internet is pretty bad at my house, because I'm in Berlin, so it's like. I might. Yeah, I might be cutting out a lot, but I'm going to try to listen. Um, so FYI, if it's coming through weirdly on my end. OK, you sound great so far. Incidentally, Brian, I'm I'm just kind of well, since I was there, I just I'm doing it myself. OK, sorry, I couldn't paste it in. I didn't know that it was getting it reformatted, I guess. Um, it's through the lens of oh, wait, did you already his scope of oh, here we go. All right, got you. Boom is now putting up where did it go? Oh, perfect. OK, good. So let's see. We've got the scenarios. So let's just play through them. Well, actually, let me take a moment before we play through this. Now, let me ask everybody, Tristan, Kurt, Diana, Christopher chiefly, any questions or comments or ideas at this point before we just kind of mechanically go through this process? Nothing at the high level. My intern filled me in on what you guys discussed last time. So I think I'm fairly up to speed. Great. That's Kurt, Tristan, Diane. I'm I'm along for the ride. I'm in an airport, so I'm just going to listen in. OK, OK, thanks, Diane. Christopher is probably making a cup of tea. Oh, I'm I'm happy. I'm I'm ready to ready just to leap straight in. OK, great. Here we go. OK, so scenario one, third party accepts. Wait, that's not scenario one. Accepts payment plan. That's totally not scenario one. Um, OK, so I think scenario one's supposed to be the simple base case of what was that scenario one? Third party delivers book to agent. No money changes hands. Agent delivers book. Oh, that's right. We monkeyed with it during the course of hacking last time. So OK, well, let's just make this scenario one. So third party, it's it's already got some wrinkles in it, but third party accepts a payment plan. OK, so first in the beginning, like, let's say Alice is a principal agrees that Bob will be the their her agent and they will go to Charlie, the bookseller and and Bob, the agent and Charlie, the bookseller, agree to a payment plan to purchase a book. And by book, I don't mean like a license of digital content, but I mean like all right entitled to a good. So like first think first sale doctrine. So Alice would should acquire if this is successful, complete like fee simple title to the book. So she can do whatever she wants. She can burn it. She can sell it. She can turn it into a garment, just whatever she wants. Third party delivers the book to the agent. No money changes hands. Agent delivers book to principal. Principal fails to pay after first installment because. She so I guess Charlie is a she claims agent had no authority to bind her. Oh, yeah, she because she is the principal. So Alice claims is going to make that Alice. Alice principal principal claims agent had no authority to bind her to a payment plan. OK, so let's start with why don't we just start with the principal being the. Scenario one, I'm going to say principal. Alice is a doll. Boom. OK, does that change the analysis in any way? Well, first of all, what is the analysis? Just as a reminder, anybody here that's like, especially like a current lawyer, it would be the best of all, I am not a current lawyer. But I dimly remember from law school and law practice and then thumbing through the restatement of agency. Third recently, that that on the ordinary case, the the agent would be authorized to bind Alice to contract for the payment of the book. And that unless we hear other facts like Alice explicitly said, you're limited to a thousand dollars or the market value is about a thousand dollars. And the agent did a ten million dollar contract or something that would really put the third party on notice that there is no authority. Then then then the then the contract between Alice and excuse me, between Bob and Charlie would be binding against Alice. And that would be based on the implied authority, like an ordinary reasonable bookseller under these circumstances would naturally and like reasonably assume that that Bob had the authority to to make a payment plan. And so if we start with just for the starting point, we're just assuming that the correct answer to this and that we had all the facts to support it was that Alice would lose in court, like Charlie's rights and against Alice would include enforcing this contract for a payment plan against her. Like if we say that's the starting point, then is anything different if Alice is a Dow and basically engages Bob to be the Dow's agent to go into the market, find the rare book, purchase it? Yes. So two things. One, yeah, that's that's pretty much the analysis of principal agent in this case. I will say that the fact that agent delivers the book to the principal, presuming principal accepted delivery, you would also, even if there were no explicit contract, you would also be able to claim a sort of quantum merrow it argument, which is like an implied contract because, you know, by accepting the book, it's some acknowledgement on the principal part that they wanted the agent to give them that book. So that's sort of like the most solid proof of that. In terms of how this would change, if the Dow is a principal, it wouldn't so much change the principal agent relationship so much as it would change or will create a nuance on the flow of liability so right now, Dow's default to general partnership. So, you know, in this case, if this leaves the agent out of pocket, agent wouldn't just be able to claim against those and voted in favor of the statement plan or those who accepted the book, even if it was just one person as a part of that Dow. And let's say the Dow is a thousand people, one person accepted that book, that one person is holding that book. But that one person accepted the book on behalf of the Dow. So the agent would, if the agent is out of pocket in all of this, would be able to claim against the entirety of the Dow jointly and severally. So, you know, if the person who cooked the book destroyed the book by accident or intentionally and then otherwise had absolutely no money, the agent or, you know, the third party who can't get their payments if the agent said if them would be able to claim against the other participants in the Dow, even if those participants in the Dow voted against it. Just a clarification, because I'm a slow diaper. The first, what was the first principle that you said? If assuming that someone in the Dow accepted the book, then what was the sound of the Latin or something? Oh, the quantum marijuana. So quantum marijuana is before we get to assessing the liability of the Dow, quantum marijuana is let's say there's no proof that the principal wanted the agent to propose a payment plan, that the principal wanted to do any of this. Right. There's just no proof. The sheer fact that when the agent delivered the book, the principal accepted it, it would be an argument for an implied contract. So this is just saying, like, absent the evidence of, you know, I mean, presumably this is the Dow, so presumably there would be evidence. But I'm just saying it's sort of that fact that you can really hang your hat on. OK, may create an implied contract. Exactly. OK. Contract that is enforceable. So I think we should assume that there's acceptance of the book by the principal just to make a great clean face and then play it. So then let me. So I think that's an excellent start. It's not that you said that part. So based on that, what what design requirements or implementation and kind of guidelines can we imagine that would prevent this kind of anomalous outcome occurring, like such as to ensure maybe the right kind of security lockdown or other procedures or approval chain needed so that acceptance of the book would be what would be intended by by those participating in the Dow. Sure. So I feel like there are many, many ways to tackle that. Just sort of the knee jerk, though, is that when the when the agent delivers the book, the agent like sends an electronic message that they delivered the book and to whom they delivered this book. And then that person would need to confirm delivery of that book, you know, in a 24, 24 hour window or 24 hours in advance of delivery or some time or contemporaneous with delivery, that probably would be difficult in some cases. And this way you would be creating a record delivery and acceptance along the terms of the contract that was previously decided upon. So you have a record of that as well. So the I'm sorry, again, I'm a little bit of a slow typer. I like what you were saying while it was washing through my head. But it's because we just go through it again. If I bet, yeah, yeah, so this is mostly for the agents benefits. So the agent doesn't get left holding the bag. But the what what would happen is so, you know, you know, the principal, the Dow, in this case, has some communications with agent, you know, please deliver me this unique book. You know, and we are willing to spend this much money on it. Agent sends back proposed terms. Principal says, yes, we like those terms, go get us booked. So agent goes gets booked and now must deliver it to the principal. And so when the agent goes to deliver it to the principal, it's ultimately going to be a human being who's like, you know, the Dow itself can't like hold, you know, certainly a physical book. Um, so, you know, it must there must be some person or some group of people who are accepting delivery on behalf of the Dow. So then when the agent goes to deliver the book, the agent then makes a makes a record with the with the Dow, saying like, I on, you know, on this date at this place, I deliver the book to these members of the Dow and they accept it. Um, and so by invoking those members who accepted, they get a notification saying, or like a task saying, you know, is this true? And if they say yes, then it will be deemed accepted by the Dow. And so now the only thing left is the Dow to perform. It's part of the contract, which is, uh, make the payments described in the payment plan. Okay. So to read that back to you, um, the main things I, um, kind of drew out from, um, your kind of written list that could be described in ways that I would call engineerable, um, are, um, that, um, to number one, make sure that the, um, authority granted that the agent is quite explicit, like, you know, in a written thing. And then to number two, um, define the relationship such that, um, if anything, you know, irregular happens, unanticipated, like, like a payment plan, let's just say it didn't come up in their initial authorization, that the, um, instruction to the agent is discussed and to go back to the principal at that point to seek, um, like, um, a decision on that and further instruction, like, yes, no regarding payment plan. And, um, at some point in their defining the circumstances that are deemed accepted of the book, so that they align to what, um, the DAO is ready for, uh, in terms of, um, um, controlling its own liability for the consequences of accepting the goods. Is that basically what you said? Yeah, that's correct. Um, and so I guess then to just add a little bit of nuance just to fully address what you said, it was, you know, this is assuming that the agent was given, you know, the parameters by which to get this book, um, uh, like, you know, what the DAO is willing to do to, to obtain it. And so if the agent comes back with a plan, a payment plan, or some other form of, or, you know, payment for this book, um, that is outside the scope of agent's instruction, then when agent, like, goes to deliver the book, um, you know, they have to say, you know, did you do it in line with our plan? Yes, now? No? Okay, what is the plan? And if there is a plan, then principal, the DAO delays acceptance until it has voted on whether or not it will accept that plan. And if it decides not to accept that plan, then it should deny physical delivery, um, and then deny the agent, and you know, in that case, the agent overstepped his bounds, the principal is not going to honor it. And so because the agent overstepped his bounds, principal is not going to honor it. But third party, relying upon agent is having the authority to make the steal is why third, that's why agent is holding this book, then agent is liable for the price of that book, because agent did not have the authority. Now the third party can still seek it jointly and severally against principal and agent. But then the principal, in this case, DAO, is going to have subrogation rights against the agent to make it whole. So it, like, works itself out. Okay. Outside authority. So, um, so in the spirit of, um, because you know, this is, it's the legal thing is to, you know, add further nuance to the wrinkle. So you added a few clarifications, and it sort of forces me to add a couple more, I think, but tell me, everybody listen, tell me if this sounds right to you. So it sounds like, um, what, in order to make that the way that you're describing it, I would call it like a well structured legal deal, you know, where the authorization is pretty, um, complete, correct, and, um, and, you know, coherence, uh, to start with, for the agent, but also the third, so the wrinkle here with agency law, those, would the third party have been on notice of these niceties, or not, and if not, would they be able to claim, um, implied authority, um, by the agent to accept something that would therefore change, um, the legal result and actually make the principle viable. And the reason I wanted to bring that up is because it seems like to make, to lock down the, um, process you just described, which by the way, sounds about right to me. You'd want to engineer a system where you get basically the third party in some kind of more direct privity, uh, and, um, with information flow coming from the principle. And like one direct, one way I can think to do that is to require as part of the protocol, the negotiation that the agent show, uh, documents basically to, or provide a link where the, where the third party can read what the authorization is, and that some, um, had this agent from the third party that they've read that and that their offer is contingent upon that, would, would lock it completely down so that the agent, the authorized action you said, it would be the agent who would be liable and not the Dow. Does that sound about right to you? Yeah. I mean, and I think that, you know, in terms of like delivery of that sort of information in a way that's not just like a print out on a piece of paper, right? You could say, you know, the, the Dow, the Dow has a private key. Um, the private key can be used to sign things upon, you know, 51% vote of the Dow or whatever you want to do in specific scenarios. Sign it, right? And then there's the public key and the other side is the public key and they can unlock it and see that the Dow approved it. Um, the, I mean, I think that would be great, but in the case of, um, like no documentation, right? Just like, Aidan shows up at bookseller's door, says like, this Dow wants to buy this book and, you know, I have the right to make this payment plan on their behalf. I mean, so one, I mean, the bookseller, you know, it would probably be something of an idiot to make, to make, give, give this person credit in terms of like what a payment like credit in terms of payments. Um, so I mean, it's kind of their fault, but the, you know, presuming that the, it seemed reputable and not like, you know, just on effects and circumstances sort of thing, which very nebulous I know. Um, but if it seemed, you know, it had all the indicia to the bookseller of this was a legitimate transaction. Um, I'm legitimate, like this is a legitimate party on the half of this principle, and I'm going to make, make this payment and it turned out to be false for whatever reason, whether it was the agent's fault or the third party's fault, whatever the, or the principal's fault. Um, then the third party would have right make itself whole against jointly and severally, uh, the agent and the principal. And this is because of that implied and then, or in the other case, apparent authority of the agent. Um, but what's going to happen is, is if the, if the third party then goes against the principal in this case, right, to the Dow, and they seek to be made whole, what would happen is the Dow and the agent would be defendants, but then the Dow would have a cross claim against the agent, um, for payment because it's basically the agent's principal. Um, so it's like, it's like, okay, you know, join some reliability between the two of us, but then once we get down to between the two of us, it's your fault. Um, so it's a double step process in that case. And that's really only for if it gets kicked up into litigation. I mean, you know, on sheer fairness grounds, uh, you know, that would seem to be how it would change. Anyway, that helpful, does that answer the question? I think so. Uh, and just to, just to be super clear, what would the cross claim be? The cross claim would be, um, agent, you had no authority to bind me to this and therefore you would, it was, it's your fault that I'm liable here. Um, so you need to make me whole for having made me liable. Got it. Okay. That lines up. So this is like first year application of agency law. Yeah, no, it's a great impact business association. Yeah, exactly. Okay. Um, very good. So let me hear from, um, uh, Christopher and or Tristan for a moment. Um, any thoughts, um, on, on any of that kind of just first sweep of analysis of trying to apply agency law to the scenario when the principle is a doubt? Yeah, I mean, so far I'm, I'm reasonably confident that this is in line with, um, agency under English law. Um, I'm obviously being careful not to, um, not to introduce a different set of terminology. Um, I don't think that's, that's too helpful. But, um, you know, I think there's a, so far there's an exact mapping. Um, so I, I don't see, um, I don't see any difference in the analysis, um, under English law. I mean, if, if, if something crops up where I think it might be framed differently under an English law, then I'll, um, um, I'll start noting it down, but kind of marking very clearly that this is a, this is potentially just an English law concern. Beautiful. Um, thanks. Tristan, I know you want to mostly kind of lurk and listen, but if you'll permit it, um, any reflections on, on how this matches what you're trying to do in Delaware or your general take on things. Okay, Tristan is getting a latte, and that is fine. Um, okay, so, um, Beth, Brian, Brendan. Calling on people is like the same as right? Yeah, my, my internet is pretty bad, so I can only hear about half of what y'all are saying. Um, but, uh, yeah, that is my main problem right now. Desi, you're on mute. Oh, sorry, so, um, to Tristan and Beth, both of whom are saying they're having some technical issues, and it sounds like they're, you know, hard to follow the voice. If you look in the HackMD file, um, like look in that, um, we've been keeping careful notes of. Okay. The question is just, um, any questions or comments or ideas at this point. So, I've got one, um, and it's to something that, um, uh, that Kurt had pointed out, and that you had made a note of in line 27 specifically. Um, it's, like, in corp, it's, it's, like, looking at the ways that you can, like, legally engineer, um, this sort of compliance into the DAO itself. And so, you, you talk about incorporate, incorporating a reference to things, like private signing keys. Um, I think generally, you know, I think that can be generalized to, like, just incorporating reference to certain oracles, or maybe, like, specified as references to certain oracles, um, because it could be, you know, something built into the DAO, or it could be something that the DAO relies on. Um, and then, um, kind of, like, building from there, it's, like, if, I feel like there would be a way to, kind of, like, programmatically through some sort of, like, smart contract, create, like, an escrow sort of situation where there is a, you know, where there's a parent authority, there's that actual, you know, there's kind of questions, but where there's actual authority, you know, there are no questions, and you can, like, clearly see that the, you know, the agent is, um, operating within the, uh, you know, scope of that arrangement that's set up. So, I think, um, that was the only thing that I had, really. I like that idea a lot. I think escrows could be a great way to sort of ensure our, like, to really hedge against risk of, you know, for the problem of, like, the contemporaneous, like, all right, do, can I do this? Can I not do this? By having it clearly set aside, um, which is a lot easier to do with a blockchain system than it is in traditional systems, I think can be leveraged, uh, to a great advantage. Yeah, I just wanted to add that, um, I really like the design measures, section, and, um, like, explicitly framing it that way, and, uh, in that part, then, um, yeah, I really, um, I think it's useful how, you know, with what Kurt was saying about, um, the difference of this being on blockchain, then you're able to not only have a record, you know, that it happened, but also of people saying that they understood the parameters to go through, like, you know, in an off-chain system, then it's hard to have, like, a record of comprehension. So, um, to go to one of the problems we're kind of talking about, planning this call, then there was, um, you know, I was asking what if, um, someone in the DAO has, you know, a greater knowledge than someone else, like, should they be expected to know the average amount or how is that resolved, you know, with firms and stuff, and, you know, I think that, um, this kind of provides an extra layer of, like, um, you know, you can get really specific with, um, just, you know, how much you want to make sure that people, like, have completed each part, understand what they're supposed to do on the next part, and then if, you know, someone tries to go back and say, like, these issues of intention, then there's this, like, ongoing validating feature that everyone is, like, sharing the same idea of what's happening, like a, you know, collective version of reality that's ongoing. Okay, um, maybe needed for this. So, maybe it'll help with lawsuits, you know, and also, you know, kind of just establishing this idea of a record of intention that, um, I'm, you know, starting to learn from people in Europe that intention plays a very different role in common law than, um, you know, an American law of torts, and so, you know, if the less assumption we're having to make about intention as possible and these kind of, like, international, like, crypto jurisdictions, then, um, you know, then there's able to be, uh, you know, maybe less nuance based on case law, et cetera. Okay, um, I, am I on mute? No. Okay, so I added a couple of things, um, in light of the last couple of comments online, like, around, um, 29 through 30, so on the escrow thing, it sounds like there's a lot of hell-yazz on escrow, um, so I just made a special note of that, and then on 30, um, I added, basically, Beth's emphasis, um, about the usefulness of, at, like, key points in the transaction, um, creating a record, um, that, um, that the relevant parties have, you know, like, um, been apprised of and understood and agreed to certain key terms, and then I added a little note that, you know, that in order to achieve the dream of, um, automated transactions that can operate, you know, in non-manual ways, but still get expected results, the definition of such an automated transaction in UEDA, Uniform Electronic Transactions Act, and I think that comes to us from, um, uh, the unsetral, um, model on, on, um, electronic commerce, uh, and it's also in the U.S. Federal E-Sign Act, and I think it's generally, it's a general principle, is that the, the, the transaction occur, um, in, in a way that, um, has no, um, human review or approval, and nonetheless, at its conclusion is, is a bind, contractually binding. Um, so to get to that phase, but also balance with the, I guess I'd call it risk management measures of making sure that everyone knows what their intended roles and relationships and rights and obligations are, um, some way to more in a more standard way express those key terms that people are agreeing to at key moments. It seems like would be needed, so that you don't just have a kind of blindly clicking next, next, next, um, and, and shocking everybody with the result of the transaction later. Does that make any thoughts on all that? Um, well I know that like Chris Ray and I have talked before about the idea of, you know, a trustless interaction that's not just trustless in a security way, but also, you know, trustless in terms of like, um, you know, a lot of times points to failure are like incompetence or he can express this more articulately, but, um, you know, uh, then you're able to show, like, not only that a system is, you know, proceeding in a way that's, um, not being hacked, but also that it's like operationally proceeding, um, the way that it is supposed to or the way that it's represented as, so like, um, you know, the same as there would be the a trustless function, um, like being able to apply that throughout all the logistics of, like, organizing in the human systems of DAO's. Okay. Any other comments or, um, contributions at this point before we kind of power forward to the next scenario? Uh, sidebar, unfortunately I'm going to have to drop off for a quick second because I have to do a business call, but I will be right back on afterwards. Okay, great. Thanks. Come back. Okay. All right. Kurt's quite the superstar who found Kurt. Who knows? Probably Brendan. Um, okay. Yeah. Let's see, so scenario two, let's power forward. So it's the same as scenario one, except the thing that went terribly wrong is that the, um, third party did not, oh, hey Brendan, you're back. Hey. Yes. You know, I have to say, this is such a hot topic that you guys put my phone into a thermal meltdown and I've had to keep it in the freezer. I've never had that before. Anyway, so I do have two comments. Oh, actually one comment and one question. And the question, um, it was for, it was, um, let me see my notes here. So the, the, actually the comment is on, uh, oracles. Kurt raised the question very interestingly how there's a different nature to oracles when they are delivering things, uh, physically. It's a kind of a different way that we think of oracles. And I think we should make note about that. I think there's something fundamentally different about thinking of, of an oracle as, as a, you know, physically physical delivery mechanism of sorts. I don't know. I'm not really sure. There's probably something there. Yeah. It's like, uh, an oracle is natively physical and a lot of this is natively digital. And so it's like resolving the fundamental, like, temporal, uh, inconsistency or disparity. The other, the other comment, a Brendan, before you go to the next, next comment, just a thought on this is, even in the, what I would consider the simple case of having a, like a sale of good, as opposed to licensing, you know, digital information or a service or something. Still in today's world, you can design it so that oracles are the authoritative force, and like, so in a supply chain, for example, or in just modern e-commerce, you know, you can look to things like, uh, API from FedEx or UPS to see, like, was delivery accepted if so, you know, you know, take these actions and have, you know, kind of cascading, you know, sequences of actions that occur. So the authoritative force, so it is possible to somewhat decouple, even physical delivery from, from changing legal states and, and trigger events, and then to sort of connect them in ways so you're still getting the right results. So I just wanted to highlight that, but, sorry, you had another, you had another point for me. I, I want to just further that by saying that is very interesting in the sense that you can all, you could almost imagine that those, those, the, you know, if you want to stick with delivery, those, you know, what if those are autonomous systems in themselves, acting, I mean, not to complicate things here, but, you know, it gets to be very interesting. And I'll leave it at that. The other comment I had real quick was, was, Daz, that you had made the statement, I think it was you, about third parties being unnoticed. Was that you, I'm not sure, but that is really an important construct, the, the, the unnoticed part, but what is salient, I think about it in our discussions is not so much the, you know, what the term means, but that it is, I think what we also need to do in this exploration is look, look for the other things that are like unnoticed, they're, they're not, you know, they're not as big chunks of things as we were talking about with, ascent or unstoppable, but there, there's, there's smaller abstractions that capture a lot of stuff, right, unnoticed captures a whole lot of stuff. And I think we also want to be looking for these smaller, I don't even know what to call them at this point, but, but they're pretty important. Yeah, so just a quick note on that. So typically in the law we kind of break down different types of notice and sometimes specific types are needed in order to be valid. One type is actual notice. So that's like an example of that is like, you know, like the classic, like TV, like, you know, like legal procedural drama, here's somebody shows up, let me see if I can talk, okay, get a prop. Somebody shows up and it pretends to be the pizza delivery person and then they hands like the subpoena or something to the, you know, to the protagonist or antagonist on the show and they say, you have been served. Ah, and then they check their box and off we go to court or whatever. That's like actual notice or like, you know, we could let someone sign for delivery and like, you know, now we've got a record that they've been served. The other one is, constructive notice. And so, you know, we get into that when, well, like one of the classic cases, you know, we don't really know how to reach the person. We know we have an abandoned property. We print something in the newspaper of like the five counties around and that the property is in and we give them three months and at some point we just assume that this person was on constructive notice or we print things in like the federal register, the government's going to take some action. We have these sort of like portals to people on constructive notice. And then a similar sort of a blur of that is you send somebody a letter but you didn't get return receipt except, except evidence. We have these legal constructs like the mailbox which presumes that somebody, if you send something through US mail, the recipient is presumed to have received it within something like three business days. It's a rebuttable presumption so they can whatever have an affidavit or like there's a photo of my box or they can offer some evidence that they never did receive it. But anyway, those are some flavors of notice and there's actually a whole group, a subgroup of people that are working with law at MIT.edu for years now working on the open notice project trying to get more traction on how Google notice can be validly and enforceably delivered electronically. And shockingly in 2019 almost 2020 we're still not there yet but I think you've identified a big one asking about the permutations of notice and how we can apply it meaningfully within fully automated systems. Okay, any other observations or question or comments at this point before we kind of crush the second scenario? Maybe just a quick comment. I think the so the I think the one example that you had was like the quiet title and the court like, you know, post something in a newsletter. I think that's technically judicial notice instead of constructive notice. Constructive notice should be like the mailbox one though. That's right, yeah. Yeah, stay corrected. That's just yours. There's actually several other kind of flavors and permutations of notice that we uncovered. We've got to get a repository that identity. Yeah. Which I can dig out if that's if we kind of end up going down that. It is. It's a can of worms. Yeah, can of worms rather. Worms slightly less repulsive than rats I suppose. And they also make good bait. Okay. So let's power through the next scenario. So the next scenario is the same as above except that the third party which is Charlie the bookseller took the money but they never delivered the book to the agent. And so the question is now. Anyone want to take a shot at it? And let's see for the moment that we still have Alice as the principal who is now. Anything different at all in the analysis? Well, so doesn't the question necessarily become like what changes now that, you know, it's not. I'm trying to think of how to think about this. Well, I have I have an idea. So it could be the fact that like this question that I brought up about, you know, does it, does it is the Dow represented differently in terms of, you know, liability than individuals in the Dow. And here since it's about like the actual flow of money instead of, you know, intention, I guess, that's kind of showing the same thing that it's more significant because you're able to see like exactly who the money was flowing through. If you trip within the multi-seg, right, so then you have a record of like, you know, the specific agent where the, you know, where the link was broken. So you then would be able to go within the Dow in a way that you would, that the Dow would otherwise be providing protection against. You see what I mean? Like there's a record of the individual's actions within the Dow. Yeah, it kind of like traces who is liable at the different points of the transaction almost. Yeah. You know, there's another complication here. You got the floor. So, you know, I've been hearing some, how do I say this? You know, there are these ideas that you could have KYC that you can know you can know the other person on the other end of the wire is up to, up to snuff or spec with KYC, et cetera, but still not know their identity as the other party in the transaction. Maybe I'm going down the wrong path here, but sorry. I mean, you know, I'm just saying, you know, Beth and Brian, you were talking about how there's always this trail that you can follow, right? You can always follow the money. And that's true if you have a system where you can, where you have it set up so that you can always follow the money, right? But if you're doing something where the money is actually, you know, crucified, you know, like in, beam or some other protocols, you may not actually be able to follow the money so easily. Sure. And I think in this example, too, so like kind of to that point, you know, where it becomes less clear, you can set it up so that you at least, if you, if you don't have the money that's being tracked, you can track like the rights, like where the rights are going. So like if you, you have a, you have a breach of a delegated contract, right? So the, there's like a, the principal who has the initial contract with the agent and then the agent and this third party engage with each other, like under like a lot of the third party beneficiary rules, you know, the, the principal will still be able to cover or will still be able to go after the third party for those with the same like rights for the same for the book itself in this case. Interesting. At least that's what I'm reading right now. Are you there to have them? Did we lose them? I don't know. That's a, oh no, I just saw him like flash out. Oh wait, maybe he's back. I lost the connection. I'm back. And amazingly, it didn't kill the broadcast. Thank you, Google. That's awesome. So I think I missed some of whatever happened, but I added the last known to me contribution on line 36 on that was sort of Beth's initial thought like, or some version of what her thought was. Yeah. Thank you. Yeah. And so the only thing that we kind of came across after that was the idea that under, you know, when it becomes less clear, like where the money is flowing. So if you can't actually trace everything in like a transparent and verifiable way, the legal framework that you would use to kind of evaluate who owns what and in this case, in the scenario to example, it would be like, so what rights does the principal have against the third party? And the under like delegation law, the principal would be able to go after the third party the same way that the agent would because they're in that privity of contract. So that would be, you know, I think the Dow, like looking at that as a Dow, you know, like if the Dow has that sort of legal representation that legal persona, the legal persona is going to be able to go after the third party in the same way as the agent might. Sounds right. Yeah, that's interesting. Yeah. So speaking of who can go after who for what you went and how. So in scenario two, we've got the Charlie didn't deliver the book. Oh, I thought that's the one that we were on. Yeah, right. And so but so then I guess like a specific question I have is like let's say that the principal, like let's say the agent, you know, was happy to be hired for some amount of money to buy a book. And they got the commission or whatever, but they totally didn't sign up for like three years of litigation against, you know, bookseller. Like they're done with their contract now. They got that they did their best. They did whatever they could to be on their control that the bookseller didn't do anything. And they created the enforceable contract. So the principal can sue the third party. How does a Dow, if Alice is a Dow, what action would the Dow take in order to enforce its rights against the third party? Things I'm thinking now are like number one, like is there some alternative dispute resolution being that that would be unbinding as against Charlie the bookseller. If not, could that be constructed as part of the transaction to make these things go well? You look at escrow and things like that could be preventative like has been mentioned. But like if they have to go to court, then does the Dow, does a Dow in order to be a full first class participating member of our civilization need to know how to create a relationship, a client-lawyer relationship with legal counsel and hire a beginning attorney to file the papers and then start a suit? Does the Dow have correct what is the legal personality of the Dow and what is the decision making around litigation management for the Dow? And maybe a reserve fund or insurance or whatever else needed to take those powers out. It's a pouring mess, I would say. What did you call that? I call that playing through what? Client-legal what? The name of the relationship is a lawyer-client relationship. And it's those people who are lawyers can speak to that a little bit, but it's a magic moment when the world was one way before that moment and you could just go about your life and you know like watch TV as a person. If you're a lawyer before that moment it doesn't really matter what the other person says or does or thinks, but then if you take if certain things happen you've created a lawyer-client relationship and then when that happens whole new game you don't have all these fiduciary duties and confidentiality and zealous advocacy and you need to represent them a whole bunch of things like that. But what would be the methods and mechanism? What would be appropriate procedures and practices for a Dow to be able to actually be represented and to enforce the trites in a court of law if need be. If only it's a threat that they could to bring people to the table for negotiation or mediation or arbitration. Like how could that all So has this ever happened? Not to my knowledge but maybe when Diane and you know Kurt and other people get on. I mean has anyone ever heard of this? I haven't heard of it yet. Well so I know in working or so in the meetings that I had with Steve Tenden and Max Guinado and Malta last week they were talking about the that idea of like what it means to have a legal entity and like what can count as being a legal person and they're very much like figuring out what that looks like for Malta. But the concept that they kind of came up with is that this sort of existence is going to exist on a spectrum from like if you think of a spectrum as being from zero to 100 this will be like from there's like some middle ground between one and 99 where it's you know partially autonomous partially you know not and at zero it's not autonomous and at 100 it's like fully autonomous and so it's like everything in between one and 99 is going to be set up to where there's some you know legal representation that's actually a person and so you're going to have that taken care of I think in in the context that we're looking at where it's like 100 you know that that is like a entirely new kind of like wrinkle on this challenge which makes it you know really interesting and I think you know one way that you could look at doing that is by having something defined defining like you would have to have what the what the contours of a legal that legal person are and then you'd also have to probably get into some sort of sophisticated arrangement with the the lawyer like you would do with the business if the if you have like a corporate council or something like that where the the councils the council of the business not the council of any of the individuals within the business okay so I was going to write that down I wanted to make a couple comments about that which is part of the reason why when Brendan and I were talking one time like over beers I think and burgers about I remember that about like the weird exactly that odd kind of friction in in terms of like spectrum of basically like 100 permutations of edge cases at this point in reality like uh how things fit what one of the there's a second access of beyond the um zero to 100 access that you're describing of um called the full automation versus partial automation and autonomy but including you know stuff like even in the loop or manual blend of data processes and that the other access is one that I think is terribly important here and it's basically what is the scope of the entity that what is the scope of the system is the word I would use that we want to postulate is fully automated and so the narrowest possible scope that I that I as a starting thought um surmised could still be everyone should could agree is completely automated and economist would be like just the legal entity itself but all of the oracles with the accounting firm and the lawyer and the people like the agents going out and buying books all manual processes making an ownership and control systems basically you could have that 100% automated but um but say out of the skills of this of this but that's out of the scope of the system of automation and that still would be a few systems of governance and management and you know decision-making and you know some other kinds of stuff you know meetings like there's still a few components in that narrowest scope that we need to be integrated completely and engineered to be you know like a holistic automated autonomous entity but then as you start bringing on more interconnected systems like you know lawyer like legal.io or some system like that yeah in theory could could with apis be set up in a way where you could in an automated way retain council and and provide the council the right direction and approvals and feedback and so forth through protocols and have like different decisions about why you chose certain people based on the data and stuff like that yeah exactly so I guess I wanted to just suggest that we could probably can probably should for purposes of trying to make good progress on something that could be prototyped and you know played with even before the fall try to imagine the narrowest possible scope of something that is approaching the 100 degree mark that would still be a legal entity and and then to be very explicit about what's out of the scope and how this entity interconnects with the inputs and the outputs basically to all the other processes sure should we go well let me see Brian or Brendan or or Beth if your connection will do it does anyone mind taking us through scenario three so I can like kind of take up the notes that we just said well actually yeah Brenda might be better walking through it but I can kind of help guide the discussion but if you want to lay out the yeah the scenario Brendan okay so if I correct me if I'm wrong but the way I remember it it would be that it's the same as the other scenario except the book is stolen and it would the question is stolen by who is it stolen by the agent yeah I think I think that was the case Brian yeah exactly the agent is grounded with the book or the money or both so the question the larger question then becomes how does this make a difference if the if the principal is a doubt and that's actually really interesting because one point one thing that comes to mind of course is if he stole the book there are questions of how do you know he stole the book I guess it wasn't delivered but what if well the question the question of how you know is kind of goes back to what I was bringing up about there being you know this record of like being able to check off kind of every point in the chain and especially you know if you have set up in a way of a multi six you can track the payments as well then you're able to have you know each section of it marked off as like yes it was delivered yes the payment went through this person so then there can be no question you know because obviously if it was stolen then they'll be like you know did somebody within the Dow steal it or was it stolen you know on the agent side like you know who was it that you know did this and then you'd be able to just directly go in and see like this is where you know the chain of handover fell apart so this has to be the point in which you know it was either stolen from somebody or that person you know concealed it and stole it themselves sure and to that point Beth I think you could almost like you could set up the the type of escrow that like is needed so that it it shifts from being whoever it shifts dynamically with like each like different handoff that takes place so you know in the first handoff the escrow is between you know the the principal and the agent and then when the agent gets the money from the principal it goes back to the principal so that you could you could almost design that trust into the system so that it never actually has the so that the funds at least never have the ability to kind of be stolen without violating this escrow and you know knowing exactly like who is liable for that if that makes sense yeah and that can prove collusion as well so you know unlike you know off-chain systems where you know number one it would you know sometimes it's impossible with the physical object because remember we're talking about a physical object here not stealing a digital license which would be a different discussion but also interesting but you know like in a normal situation unless you know you find the book or whatever are able to track it physically in some way you can never really you know be sure of like at what point the transaction got lost that then here you can also you know track that and the points of failure so you can be like okay like you know the same pattern happened as before between these same addresses so like it must be you know either a collusion within the Dow or a collusion with you know a third party which is also yeah I don't know if the scope of authority thing comes in to that at all but not so much I don't think because like the the scope of authority will never include the agent committed a fraud and a crime against the third party and the and the principal and so I think in this case we're talking about how would agency law apportion the risk of loss between a principal and a third party when the agent defeated the security and risk management measures and nonetheless it's bonded with the money and or the book if we assume that there's prudent processes like it's frozen things but somehow nonetheless you know savvy and you're the agent all the ways been swearing no collusion no obstruction you know and everybody's like agreeing with that and then oh my god you wake up one day and crap it like took all the money and all the stuff and now we got this hot potato between the third party and the principal so if you'd sort of assume that they defeated the best practices then who's left holding the bag and how is the risk of loss resolved that's scenario three Brendan okay I've got a question and the question it has to do with this and it has to do with the fact that it has to do with the fact that the question is for the Dow how do we know whether it's the Dow that is having a claim against the third party or the individuals in the Dow or those individuals that are staking or what about my reputation points I mean what if what is you know what is at stake is in part not monetary but some you know abstraction of something of value that is non-monetary in itself right so so you get all these other layers of who gets to make a claim with the Dow and other types of actually new kinds of maybe it's new kinds of claims I mean you know is it you know if if if the booksellers runs off with the book how does that affect my reputation points or the agent in this case yeah or yeah or for the or for the agent or or right or for individual members of the Dow mm-hmm right um well I should probably just say on behalf of everybody here welcome back Kurt see your head man yeah yeah um so if I if I'm following along correctly and please correct me if I haven't so first off in terms of the the other the other parts you know in terms of like the the reputation points or anything else I think that would just largely get lumped into you know a loss like there has been a lot of redressable loss like if you were to come to a court there would be some way for the court to make you whole um with with uh with an action right um so so I think on that one it just sort of would all get lumped in in terms of the agent you know defeating the system and basically screwing the third party and the principal um the same rule applies as the one I described earlier as the agent acting outside the scope if if the um if the third party had no reasonable reason to suspect that the agent was up to no good then the third party has a claim against both the agent and the principal so in this case we're going to assume that the agent you know has gone to ground agent is not findable then what's going to happen is the third party is going to seek recovery against the principal in this case the Dow and the Dow again because it's a general partnership you know it makes the analysis very easy but it sort of screws everybody because what's going to happen is is you're going to have you know a court is going to say it's like okay you know the book was worth a thousand dollars you know uh then now now our booksellers out a thousand dollars and you know let's say a hundred reputation points as a result of this I don't know how that would happen but let's just say it is um so what's going to happen is that the court's going to say um okay Dow you must pay um the this bookseller a thousand dollars to make the bookseller hole on this account and Dow you can seek um you know an action against the agent but it's not the booksellers responsibility to be able to find the agent the bookseller can be made whole from the Dow and Dow is now your problem to go find agent and if you can't well then you know you shouldn't have picked that agent like sorry um and then as well because the Dow is going to be a general partnership um that liability is assessed jointly and severally among all the owners of the Dow so they're all responsible for coughing it up I like so if the Dow is underfunded doesn't have enough in it then those principles are going to have to put their own money in um to pay it to pay that fine um now for the reputation point um obviously that this is going to be a new new sort of thing that the court is going to deal with the specifically but you know if there's some way to transfer reputation points from you to them the court's probably just going to order you to do that um if there's not a way to do that then the court is going to have to assign monetary value to that reputation point and how the court does that I mean you know shrug you would have to wait for the actual case and the particular judge and the particular lawyers and all of that you know fun stuff that will pay those litigation attorneys very well excellent so one of the things I got from your analysis Kurt which is um I think very actually um clarifying to me um and once you said it it seemed quite obvious but it was that um well when you've got an agent that's absconded with the book and the money let us say in a sense it's very simple analysis because um the bookseller has provided the goods and the value to the agent who is selected by the principal so they clearly have relied to their detriment on um on actions that um the principal set in motion like it was the principal selected that agent and bears responsibility like that's the essence of agency law they bear responsibility for the um for foreseeable actions by the agent and one of these actions could be that the agent would commit a crime and go to ground and they're and we don't know where they are by contrast if you look at it from the perspective of the of the seller I'm sorry of the principal like well why couldn't the principal get their money somehow from the um third party well I mean the it doesn't kind of make sense if you look at who like and the principal I was think the principal PLE I was thinking about legally was um is which party was in the best position to have prevented the loss well you know the seller could do nothing about it really they just did the the thing that was presented to them according to the way it was presented but the principal was the one that set this in motion and at least arguably had some control over the conduct and behavior of the of the agent and so it doesn't kind of make any sense for the for the bookseller to then to lose the book and pay the money and so so I think your your rundown of what how it would operate under ordinary agency law sounds exactly right to me and what were you a prosecutor or something in a previous life or no no no I was never a prosecutor I have I have successfully never been in a courtroom even for myself and I intend to keep it that way fantastic okay so any other any other thoughts on on the on the situation where you've got an agent well actually why don't we play them out individually so you've got the agent that absconded with the book but the third party got the money in that situation it seems to me like it's a different dynamic but the result seems to me the same as the previous analysis tough luck for the principal absent other circumstances and then if we play out the final permutation where the bookseller I'm sorry the the agent took the money but provided the book I assume what ought to operate there well that's a good question like either the court would require or some ADR process would require or negotiation that the principal give the book back and they don't have the money or would allow the principal to keep the book and then the seller doesn't have the money which way would that cookie crumble it would depend I would think I would think on the circumstances because yeah right you can make you can make this so right in in all of these cases you have an innocent third party right third party is not third all third party is doing is you know holding themselves out as someone who sells books and then someone came along to whom third party could make a sale and third party wish wish to do it right so so in that case like that's that's sort of what's making it easy as third party is this sort of legally speaking is in a static position so in this case if the third party sits there and says you know all sales are final I never want to refund I like I never want back my thing like you just owe me money then you know the third party could assert that claim now you know if that's hard to do if if that's just sort of nonsense like you know like the agent never really had authority in the first place and the principal didn't really want the book and you know this were to wind itself into a court the court might just be like hey man take your book back and call it done right now practical considerations are probably going to make the guy take his book back because he'd be staring at a large litigation budget or even if he did ADR he would still be staring at a large expenditure right certainly in proportion to the value of the goods but you know let's assume the goods are very high and then he's going to do that but if they were to seem administratively and unfeasible the court might just say like hey take your book back but if it does then they're going to say you know okay principal like you need to come up with this money you know again sort of the same analysis does that make sense did I answer the question I think so so what's the legal result the legal results the legal result is like a good lawyer it depends most likely most likely the legal result is going to be that the principal has to pay the third party in dollars for the book but you know in this case you know it's sort of more to do with our example than to do with the actual case because it's like a book a physical object that you can easily return and there's no corresponding loss and value as a result of its return the court could just say and the war the parties could just agree it's like all right here you know you can have your book back if this were a sort of a different scenario right where it services so like you can't you can't just return services then it would be dollars or if it was like some something of value that lost value as a result of the first transfer and then either couldn't be transferred back or would lose even more being transferred back and the court would would compensate for that loss right like it's all about making this innocent party whole as if they were not in whatever way screwed yeah and then it's for the principal and the agent among themselves to figure out you know who bears that liability so it's like it's it's more or less the way the way a court would view it is like okay let's get the innocent party out of this picture as soon as possible whatever we can do to get them out let's do that right um and then one third party is whole it's like okay principal and agent one one of you or both of you fuck this uh or sorry mess this up you know the you know it's now for us to decide how much each of you bear responsibility right because like let's say you know let's let's change the scenario slightly where you know principal so it's a dow right and so you have multiple members of the dow and they're giving conflicting instructions or you know they they think they're giving very clear instructions to their agent but the agent is misinterpreting them for you know good reasons like not not not for nefarious ones for good reason or like the the message of the scope of authority and what they're supposed to do is garbled in some way and then on top of that agent this whole time was looking to embezzle some amount of money or to pocket some amount of money in this transaction illicitly and so you know they they took this sort of jumble or this this uncertainty in the instructions pleaded to their advantage so they could then sort of hoodwink this third seller this third party well so you know a court might say it's like okay you know agent was up to no good for sure but like principal you pretty clearly gave agent conflicting instructions that created like sort of the guys of of the agent's actions because of course not going to know that the agent was intending the whole time to do this right so therefore you know principal you know your 20% at fault agent your 80% at fault and between the two of you you need to come up with with that so so anyway that's how that would shake some proportional liability or damages or something like that exactly exactly and in this case right we're saying that the agent was pretty clearly acting in bad faith but the principal while not acting in bad faith was basically so bumbling about it that you know it would be unreasonable to let them off the hook entirely would include proportional damages split among the principal and third party okay so that wait a second before you leave this Pete damn I can't type I feel like everyone's watching me type even though you're not third oh my god that's painful okay there we go so any other kind of questions comments ideas on scenario three which we think we kind of crushed but anything else before we move on Kurt I had a comment on your comment sure I think what you said was pretty interestingly awesome you know particularly the the garbled message part it seems like there's you know potentially a lot more room for things to get messed up in these kinds of these kinds of systems yeah exactly that's you know just dealing day in day out and I think we all are know what it's like to deal with like especially electronic communications even between people right um it can be can be tough because you miss all the context of both hand gestures tone and all sort of all those fun things and so yeah like what to do in the case the message is garbled I think it will have to I think a lot of it will come down to a case by case basis but you know we're preparing for that I think would be helpful yeah here here okay so so we I think we kind of did what we set out to do once through there's a there's sort of a fork in the road now we could declare victory and just you know like hang up we could try to do it the same thing again but put the Dow in the role of the agent and or the principal and see if anything's different so you know like I have an idea to set up a service of Dow or like a five or Dow that goes around and does things for you like find rare books or whatever or I have an idea to do be a bookseller and we actually do have somebody in the group that wants to create a publishing site who's the publishing guy Brendan that would be Jen yeah right so so maybe one of the things they publish is like rare books and they print them or whatever and so anyway that's one thing we could do is just run run through the analysis with the Dow in a different position and the other thing I guess we could do is we've got I feel like before we do that I should just read off Brendan's other questions see if we got them if that's okay so hearing no objection we've got oh right so double double check that we kind of touched on the I guess the mechanisms for expressing binding assent the scope of authority I think we dealt with and the the dynamics of estoppel and detrimental reliance I think we have dealt with that a lot is the scope of authority defined by stake or node status we haven't talked about that yet or votes or something if someone is an imposter how does this affect transactions and estoppel ability if how does detrimental reliance relate to transactions relate to agency transactions of the doubt that should be that was a okay speech recognition problem there of the dow as a whole as individuals should dowes put up stake as a whole to disincentivize detrimental reliance of individuals lots of question marks so any thoughts on any of those kind of queries from Brendan before we kind of decide what to do next I think legally speaking you know a lot of you know mean none of this is like necessary um I mean you know I'm grouping them obviously this is that's a relevant to question number two but the in terms of providing greater security among the participants in the doubt so remember the they are all jointly and separately liable um so because they're all jointly and separately liable like let's say let's say I'm joining the dow right and and um to join the dow that cost me a hundred dollars I I had to give them a hundred bucks but then there are other people who have like far greater economic stakes in the dow um they might want me to put give them a hundred dollars but then pledge you know another fifty dollars that's um you know if I screw something up and they all and and on behalf of the dow so we're all now held jointly and separately liable because of an action I did um you know they because what what a general partnership is is um all the partners are agents of the partnership um so they're now going to all seek restitution against me and so they could require that I put up some form of security the security deposit to ensure that if if it's a judge pursuing some predefined term that it's my fault um that they can make an immediate claim against that security rather than come try to track me down because I might run away um so I think that's that would be very helpful in alleviating some of the fears um and then in terms of uh the I think the is the scope of authority defined by the stake or node status I think that's really interesting um right because and this is sort of one of the things I've been working on with BBLLCs is um you know you create this management layer but there's no reason that the managers have to manage every element right you can say it's like okay we have this group of people and this group of people you're in charge like let's say let's say we have our Dow or BBLLC doesn't really matter um and it's um a thousand freelancers and why have they joined together because they want to share common expenses so you know they're going to have some real estate or some leases and maybe a few cities they're going to have some expenses there maybe they share some staff or whatever so you can say it's like okay you know this group of people holding staking this token right have control over our real estate stuff so they're the ones who sign for us they're the ones who approve it and everyone else just relies on that now if they screw it up they're the ones that are liable and you know they're the ones who are liable because they're holding this token and then the same would go for like the hiring and firing of people who are like common common assets of the group right so I think I think that one is that that question is actually a real rabbit hole is where that ultimately winds up um or non manager okay I'm kind of trying to keep up here members would rely on the what do you call the people in charge like managing members or something yeah so like you would say managing members right but like you can or in in the case of an LLC with multiple of them you'd say the board of managers um but there's no reason you can't get specific right you the board the the board of real estate like the the board of real estate managers right the board of hiring managers so like you can get more specific there's nothing to borrow it okay so so just going forward with that um with that chain of thought what I'd like to suggest on a line number 77 is good practice would be to construct the you know governance and management organization to support and reflect the anticipated decisions and like operations to be conducted right yeah right so let's say you have a real estate broker right and the real estate broker is going to be the agent of the Dow to find them a new space to lease um if that real estate broker says like okay I have authority from like the board of uh hiring right it's like well then no you you're clearly acting outside the scope of your authority they can't give you that authority that's not in their purview you would need this broker to say it's like I have the authority to do this from the real estate board of managers because they're the ones who can do it and you know because they're going to have a special token or special something to identify them versus everyone else um you know that broker can point to their authority deriving from the place it's supposed to come from it's this way this way you know especially when you're talking about a thousand owners uh you know you can clearly say whether or not this person got the authority from the right people yep um and so I mean in um corporate law and definitely in government practice something I remember it's putting details about a lot is identifying where the signatory for the organization and what are their approvals like so in purchasing you can have some people that can purchase anything that's like repair maintenance and operations of the five hundred dollars they can go to staples or press buy or whatever we don't care but other people can make certain decisions around partnerships other people are consigning off on press releases other people or whatever that do things to the sec um and there's approval chains and workflows for all that stuff and it is like it's like you know usually three ring binders a lot of them to to go through that and that's not like by accident like every one of the pages and every one of the binders is a result of blood being spilled like metaphorically by stuff blowing up legally in the past and so they start to document these policies and procedures and and practices um so maybe just like a little bit of that thinking in like a the right robots about txt file or agent dot txt file or something when it looks you know like who who are the people in the organ what are their what's their private key or the signing key for that subgroup in a multi-sig wallet the scope of authority that they have and what's the scope of authority you as an agent have maybe some of that ought to be very visible to third party first try to express in line uh seventy uh seven and it's progeny and I just saw Tristan's head pop on so and you just off is this the moment are you gonna do it yes yes so I do have a little to add on this so Aragon is starting to roll out a system called agents and these are sort of acting managers that have authority from the now to execute a set of smart contracts I imagine that this will eventually be expanded so that there will be well defined manager roles that also were able to execute a set of types of legal contracts as well so I'm just seconding this notion I think it's going to become more and more explicit and I guess my one of my things I'm concerned about is like if in a large like entity a large Dow you still don't want people doing things that they're not supposed to do and like how do you have some amount of like overwatch to prevent people spending money that on a vehicle or something right and I think that internal policing is sort of like the other side of this where you can have systems where legal contracts before they are executed by the Dow they can be proposed by one of these managers and then it might be selected to be like reviewed by some random other members of the Dow who have perhaps enough stake and over they're taking some of the responsibility that this looks all right and by doing it having that sort of random selection you can decrease the amount of pollution that way you don't just have network within the larger Dow conspiring to perform actions that shouldn't have been allowed Tristan and I'll just leave it at that for the for the agents you know that you were describing what what are some of the functions that they'll have sorry I missed that the agents can do what no I was just curious if you if you could describe a little bit more like the functions that they'll have is it just kind of like a technical administrator or is it more of like you know they're the like legal and accounting people as well right now they're just focusing on using it to define to narrow down which smart contracts can be executed but one way that we could think about this is like the smart contracts being executed by open law so that way you can have a manager that does have permission to execute legal contracts on behalf of the Dow and like there's there's a clear you know ledge like a record of the that authority being granted to that user okay so can you tell me if I got this right Tristan I want to just read you what I got on online 7D 8 that Aragon is going out quote agents and quote soon this may provide capabilities for more explicit ways about stuff like authorization and maybe even like approvals or like notification for stuff perhaps legal contracts can be proposed by a manager and a process we could require that it be reviewed by other members for example with adequate state and who would take responsibility to approve such proposals and that would result in the enforceable contract did I gather you correctly yeah it does you got the key points thank you okay sweet that is very very sweet is your if you have any sense of when that's going to roll out and how can people that are happy play with it and where um I think it's very close to as being released I'm it might have already been I haven't been following it the past few months I I think the the task is just integrating those smart contract permissions with a legal framework as well a legal permissions I think that still remains to be done okay awesome um I would you use something like that for the Wyoming corporations or is this mostly for more like LLCs I I don't imagine using it for my initial one I think this is for when I'm I'm more ready to make a complex now I think I'm just going to play around with the hypocrisy until I get a better sense of things yeah and last question Tristan have you read the book Accelerando no I haven't but I've had someone else recommended to me yeah dude you gotta you gotta gotta gotta read it because um well you're talking about like a thousand nested corporations um you're gonna love Charles uh Stross's whole depiction of that and he plays a scenario in a way that's really thoughtful and thought and like good ideas then he also does the masterful almost like lawyer trick of messing it up spectacularly and seeing where the where you know all the chips so I think you'd enjoy it but it also might be useful to you um okay so any other comments on um on any of the questions raised by Brendan um I think we dealt with our alliance a lot yeah I guess the only other thing I would personally ask would be um it matters um a lot whether the now is a I'd call it like a general partnership general partnership or a LLC or kind of cooperation of some type in terms of individual liability like members um because you know joint and several liability for partnership um joint and several which means everyone's individually potentially liable for the entire amount of of any screw up by the death um and you don't you have a liability limitation that stops that legal entity for corporations and LLCs um so okay so then we ask can anybody think of anything that would be different um if you if the now we're in position of the agent or if the Dow is in the position of the booksellers maybe you're not going through methodically yeah that I'm just going to pause you for a second because uh I'm really fading over here in Berlin it's just like but I'm here so I'm going to jump off but I really look forward to watching this part and looking at the notes if y'all do talk through it okay so Beth can you tell us before you hang up what you've agreed to kind of like incubate like a third session as part of your mechanism design group is that right um yeah so actually the example we're about to go through right now with the um you know the switching it around so that the Dow is um what I guess yeah anyways in this scenario it would be both both of them but also looking at digital entity so next next week when Brian is in Berlin um on Tuesday at 6 p.m. our time which is noon New York time then um we're gonna take our learn from today and walk through those with an example for um a publishing Dow model and hopefully it'll um you know number one eliminate some of the stuff we're talking about with a real example and go a level deeper into um kind of the different implications for a digital and physical book so um really hope that people can tune in on that as well maybe a lunch or to watch after and yeah I'm really looking forward to having kind of a real life session and um yeah see what uh been able to have some of the people that are usually in the middle of the night here um so yeah bringing together some different voices here here um so well maybe this is a good good time to to wrap up and um it's so since it seems like the one of the other key permutations uh we've kind of got a meeting set up for um and uh with with a whole publishing video um any objection to sort of wrapping where we're at now I see it is eight o'clock so we're kind of two hours and three minutes into it it's good okay that sounds good thumbs up is is not deemed a motion to adjourn which is a hearing no objection great let's let's consider this um hack session successfully completed and thanks again everybody that um that um had to jump off and people that are watching and participating online and uh and see and so join us in Beth's mechanism design group Wednesday of next week 12 p.m. Tuesday oh Tuesday well that's important hold on let me yeah so we'll share the information in the chat uh Tuesday Tuesday Tuesday yeah if you if you're in Berlin then um please come through so can you set up a hangout or something so we can all play yeah so we'll definitely send a hangout and all that information okay great um and otherwise do you all on telegram so thanks everybody good night have a good one wow