[majormajor]

So it's a contract but "with code"/"with crypto"?

I don't understand why you'd prefer to work in a structure governed by contract-written-as-code compared to contract-written-as-anything-else. Seems like you could put any arbitrary set of rules in a regular contract too.

[m_ke]

Because it can be enforced without being tied to a specific jurisdiction, expensive lawyers and army of accountants.

Imagine a company the size of Google/Alphabet organized in a similar way to something like https://dxdao.eth.link/#/, where employees have more say in what they work on and don't have layers of expensive management.

Or a Y Combinator or a DAO of indie hacker businesses working as a cooperative, investing in new products, sharing resources, etc.

Or an open source alternative to Uber / Seamless / Instacart where users can vote and bid on features and reward contributors who implement them. I'm sure a product driven by customers and makers would look a lot different than the exploitative middleman businesses that dominate tech at the moment.

[zepto]

> Because it can be enforced without being tied to a specific jurisdiction, expensive lawyers and army of accountants.

How exactly can it be enforced without using the law?

[cinquemb]

Because the code determines how funds can/or not flow from one address to another and is viewable by everyone by default.

[zepto]

Yes but the code doesn’t do anything to make users comply with agreements.

[cinquemb]

The users cannot do anything with the funds outside of what is dictated by the contracts, and there are various forms of incentives for executing specific contract actions for varying amount of actors.

I.e. if you want to borrow stablecoins against ones assets on aave, you must deposit up to 150% (and the limits of how much one can borrow are up to 100% of the value of the assets) of those assets and they will be liquidated if you do not pay back the debt before its due.

There more complex examples than this. Law doesn't stop people from breaking laws or not upholding contracts in the same way that code on the evm doesn't force users to interact with it (people break laws and get arrested after the fact and get liquidated all the time).

[zepto]

Ok, so it makes sense that you can build certain financial derivatives out of it.

However, there is no explanation of how you build an ‘organization’ out of this.

> Law doesn't stop people from breaking laws or not upholding contracts in the same way that code on the evm doesn't force users to interact with it (people break laws and get arrested after the fact and get liquidated all the time).

Agreed. However this Subthread is a follow on to this earlier comment from another commenter:

“Because it can be enforced without being tied to a specific jurisdiction, expensive lawyers and army of accountants.”

And it seems like you are saying this isn’t true.

[rgbrgb]

There's the enforcement aspect that other commenters mention, but what's maybe more relevant to the OP is that every member's contract is open source. You know exactly what everyone is making and the mechanism for making decisions at the governance level is totally transparent by design.

[poetaster]

Must admit it's the first positive framed use I've read. Reminded me of the GPL as my contract with other GNU guys. Sort a.

[k__]

I think, the fact that those contracts are enforced by themselves is the USP here.

It removes overhead that made a huge amount of rules prohibitly expensive and slow in the past.

[majormajor]

But we're not talking about scams here, as far as I can tell. Contracts aren't being thrown aside and blatantly ignored. Just misunderstood, possibly even exploitative, rules. Or in the case of "go forward" comp like in the article, it's really just a negotiation thing, more than a contract thing.

Exploitative, deceptive, or otherwise malicious contract rules are still possible, here, no? I have a hard time imagining an automated code checker that is smart enough to figure out "this is a more risky investment based on how the rules are set up!" in a way that a paper contract couldn't be similarly analyzed.

After all, a public company is about as decentralized as it gets - decentralized enough that most of the owners have basically zero individual power compared to the people appointed to run it - and there have been plenty of shenanigans in those over the years (which is why they now have a lot of regulation as a result).

Is this effectively just "corporations, now with less regulations because we haven't yet seen the ways this particular form can be used maliciously?"

Consider "hollywood accounting" - if the smart contract says "profit is split 60% to 40% between the two of us" but I'm in a position to choose to classify expenses and various other costs in a way that means "profit" gets computed in the system as X instead of 5X, what happens?

[k__]

I'm not talking about scams.

It's just that some things don't make much sense if they are actively managed by people. Like liquid voting rights instead of CEOs etc.