I fully support this proposal. It’s critical to adopt a builder-first approach. This effort can’t be delegated to mercenary experts who stand to gain from a protracted fight in closed-door sessions.
On the contrary, the values of openness, transparency, and decentralization are DeFi’s greatest defense to traditional regulation and should be front-and-center when regulators and politicians interface with DeFi communities.
This is so important, and I would take it even further. I’d like to see this collaboration grow into a full-blown self-regulatory effort. Ideally, the collaboration between Yearn, Curve, and LeXpunK (and other communities) should result in thoughtful, actionable self-regulatory guidance for the decentralized economy at large.
To date, the efforts of activists in this area have been mostly reactive. Lawmakers or regulators float some flawed rule, and the decentralized community scrambles to make it “not fatal”.
Rather than letting the agents of the status quo take the first shot, we should be drafting the rules. Unlike other self-regulatory bodies or policy think-tanks, this collaboration would be driven by broad consensus of builders and users—not a star chamber of experts with dubious incentives.
At this point, the legitimate objectives and priorities of lawmakers and regulators are well-known. It’s all over the talking points: protecting investors from hidden risks, collecting taxes, avoiding obvious criminal activity, etc. We know the days of being “left alone” are over, so the task at hand is to make reasonable compromises on terms that we can live with.
The proposal covers the necessary tools to do this effectively:
- Builders and users with deep domain knowledge of how the decentralized economy actually works.
- DeFi-friendly lawyers with deep domain knowledge of the legacy rules and a reasonable budget for enlisting other experts, purchasing access to lawmakers, etc.
- A fair and reliable mechanism (LeXpunK_DAO) for hosting debate and establishing community consensus around thorny issues.
Decentralized finance should be the proving ground for application and improvement of these self-regulatory rules and testing them against real-world experience…before they become laws on the books.
After 20+ years of conducting all sorts of negotiations as a transactional lawyer (often on behalf of the TradFi giants), my experience is that the best way to get your adversary to concede is to make it very, very easy for them to agree with you. Specifically, give them a way to concede their position without doing any work or feeling like they lost anything.
If we do this correctly, lawmakers will work from the foundation we build for them, and everyone comes away with mutual respect intact and goodwill for the next time we need to work together.