CS 352B/LAW 1078: Blockchain Governance
Spring 2024
Note: These are required for those that have not completed CS 251, LAW 1043, or have equivalent background in the blockchain space
The first class introduces some of the topics in the course by examining a particular DAO: MakerDAO, which operates through the MKR governance token. Maker DAO had been very successful DeFi application, and its history illustrates many key issues of DAO governance, a major topic in the class. In addition, it is at an important transition point both with respect to operation and governance. As a mature project, it is facing many dilemmas that are or will be prominent for other DAOs.
The class includes an overview of the different DAO forms, common governance and institutional frameworks as well as current challenges. We will look at:
1. Protocol DAOs
2. Investment DAOs
3. Social DAOs
4. Public Funding DAOs / Impact DAOs
6. Industrial DAOs (DePIN)
7. Network State DAOs / Sovereign DAOs
This class introduces the technical underpinnings of DAOs, including smart contracts and blockchain voting on the Ethereum Virtual Machine (EVM) tech stack. We will discuss the role of the ERC-20 token standard in representing blockchain votes, popular on-chain voting frameworks such as Compound's Governor Bravo, and compare on-chain voting and off-chain voting solutions for DAO governance.
During the fourth class, we will begin our consideration of DAO governance with a focus on delegation. Examining delegation requires consideration of participation and "the wisdom of crowds," both of which have a prominent place in the discussion and design of DAO governance.
During the fifth class, we will consider quadratic voting, quadratic funding, participation-based governance, and composite systems. Some of the assigned material on quadratic voting and quadratic funding has a degree of technical economics in it. A primary goal is to understand the core idea of both quadratic voting and quadratic funding. The technical presentation may require some effort, but it is the best way to gain a clear and rigorous understanding of the ideas.
During the sixth class, we will look at mechanism design and its connection with DAO governance. First, we will consider examine voting methods from a mechanism design perspective. Then we will look at a more market-focused mechanism that operates through sequential auctions for temporary control.
The seventh class session is an overview of the securities and commodity regulations that apply to DAOs. The material is voluminous, and we will proceed by going through an explanatory slide deck in class rather than relying on a heavy reading assignment. Proceeding in this way is especially appropriate with respect to U.S. regulation. Widely divergent approaches are possible, and it is not clear what the U.S. regulatory framework will look like a year from now.
This class considers the legal challenges and risks of DAOs that operate without deliberate legal structures. What are the primary benefits of introducing a legal structure? What are the drawbacks of introducing a legal structure?
This class considers how DAOs, including unwrapped DAOs, maintain commercial and labor relations and resolve disputes with or without resort to the legacy legal system, including on-chain dispute resolution and oracle mechanisms. This class will include a 30-minute presentation by Yann Aouidef, VSR at Stanford CodeX, and longtime researcher at Kleros.io.
This class introduces the most common legal structures chosen to support or wrap DAOs, their advantages and drawbacks, including new legislative initiatives to better cater to DAOs in various jurisdictions. The last 30 minutes of the class will include a presentation by David Kerr, co-author of the Wyoming Decentralized Unincorporated Nonprofit Association Act of 2024.