[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.

[cinquemb]

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

There's not a one size fits all of what being a DAO is (and many people bicker about those calling themselves a DAO when they may not be[0], and some protocols are more decentralized on day one than others), maybe this can help you understand some of what's going on by some of the examples listed [1] and the various actors (there are non financial DAO's not talked about here).

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

It is true to the degree that for the positive/negative incentives to take place -- “a specific jurisdiction, expensive lawyers and army of accountants” -- are not needed like they are with centralized organizations who incorporate in a particular jurisdiction.

[0] https://nitter.42l.fr/josephdelong/status/143272844148131841...

[1] https://vadymnesterenko.medium.com/participants-in-a-defi-pr...

[zepto]

Sure, but the point is that there is no mechanism for building ‘organizations’. Nobody is explaining how to build anything other than financial derivatives.

This is useful, but really just an optimization on finance as usual.

[cinquemb]

> Nobody is explaining how to build anything

Because people can write whatever contracts they want that allow of group users to execute actions. The contracts do not need to have any financial incentives at all.

No one tells people how to build/run a company (and neither does the law in any particular jurisdiction, though they may set some boundaries, just like the evm sets a different sort of boundaries), people come up with their own methods for doing such and spread/share those methods with others.

[zepto]

> No one tells people how to build/run a company (and neither does the law in any particular jurisdiction, though they may set boundaries,

This is essentially false. Corporate law, labor law, contract law, IP law, Tax law, and other legal disciplines do a lot to tell people how to build and run companies in every jurisdiction. If you don’t obey them, the state will impose liabilities by force.

> just like the evm sets boundaries)

This is a completely false comparison. Boundaries set by the evm are nothing like legal boundaries.

> people come up with their own methods for doing such and spread/share those methods with others.

Can you think of an example outside finance, where someone has build a company as a DAO instead of using legal incorporation?

[cinquemb]

> Corporate law, labor law, contract law, IP law, Tax law, and other legal disciplines do a lot to tell people how to build and run companies in every jurisdiction.

If you fork uniswapv2 code and deploy it on chain, it enshrines a bunch of rules that essentially tell one how they can interact with it in the same way these laws do.

People have to come up with these things, turn them in to law (or code), while also varying by jurisdiction (and highly susceptible to selective enforcement unlike code the executes the same way thru the evm) that people break/exploit those rules all the time that go against whats stated in them (people can hack contracts whose logic isn't tightly defined).

> Boundaries set by the evm are nothing like legal boundaries.

I'd say they are far superior than legal boundaries at enabling consistent and transparent interactions between people to the degree that some groups of people decide at using them vs incorporating in any jurisdiction at all like they may have in the past.

> Can you think of an example outside finance, where someone has build a company as a DAO instead of using legal incorporation?

If you are seriously interested, look here[0] (which is not a comprehensive list)

[0] https://coopahtroopa.mirror.xyz/_EDyn4cs9tDoOxNGZLfKL7JjLo5r...