Opinion: Raks Sondhi, CEO of Freedx
Integrated, unlimited and programmed ecosystems control with the rules made for simple and fixed financial systems, a fundamental challenge.
Last year alone, decentralized financing platforms (Defi) was held 60 billion dollars The value of closed encryption assets in its protocols. However, most of the judicial states still lack a clear definition of decentralized autonomy (DAO). This confusion is to slow innovation and undermine the credibility of organizational institutions.
Long legislators still assume that there is a central actor for licensing, auditing or calling. However, DAOS intentionally is unanimous, and smart contracts work independently and can move the assets of Onchain without permission.
Although American organizers have begun to target protocols under the current securities laws, the courts are struggling to determine whether independent programs can be considered a responsibility. Old organizational tools were not designed to oversee systems that develop in actual time. These challenges have prompted organizers all over the world to try to approach the new encryption organization.
Universal, Markets in encrypted buttons (Mika) It tries to provide a unified framework for organizing in the European Union, to the point of restricting the use of symbols such as USDT from Tether (USDT) That does not comply with its criteria. In the United States, the Futures Trading Committee brought the Securities and Stock Exchange Committee Legal procedure against Dow Participants and Defi protocols. Some American states, like WyomingEven the laws to give Daws a kind of company status.
However, these efforts appear very limited and depend on the enforcement of business retroactively, which leads to a chilling effect where the builders are hesitant to move forward, the capital sits in lethargy, and the regulations in chase cats and mouse that do not benefit anyone or does not solve the actual problem. They slowly patching holes in a very dynamic space and develop.
Program control through compliance compliance
How do we stop chasing? The answer lies in a kind of political solution. Instead of trying to contain decentralized technologies in traditional legal systems, we need a new, authoritable and programming policy structure such as technologies that need to be supervised. We must build the compliance layers directly in the code and include the organizational logic within the infrastructure infrastructure.
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Just as financial tools now consist of inter -operating units, the lending protocol should be able to connect specific compliance units to suit their judicial needs. The DAO Ministry of DAO should be able to self -report when it occurs. Stablecoin should be able to apply sanctions lists through zero knowledge guides or onlachhain, etc.
Some projects are already developing ingredients to maintain privacy and ONSAIN. Other projects are to build square structures to match the regulatory demands. Even central exchanges explore the ONChain compliance bars that can apply to decentralized protocols.
Legal clarity is the key to the full DEFI capabilities
From the market point of view, complied compliance has the ability to remove risks, and attract both new investors and users. Legal clarity from the inclusion of policy directly in the infrastructure would reduce the enforcement gap and enhance consumer protection.
For developers, it opens the ability to compose regulatory systems, allowing them to choose from judicial templates as they do the user interface components, and adapting their own code base to meet the advanced policy. No more guessing whether your DAO code is safety, no more questioning whether the protocol is subject to reporting requirements, and less dependence on the costly legal interpretation.
Although the policy-code looks very useful, programmable policy has its own risks. As with any other connected environment, the code can be used. We must wonder what will happen when the compliance unit is at risk, crashes, or become old. Governance, security and promotion remain necessary, but democratic control is a column on Blockchain technology. It should not mean that the regulation of the code should not be removed from general accountability, as this will reduce confidence and transparency, which increases the pushing of the web3 area of the prevailing adoption.
We are at a crossroads, either re -imagining the intersection between Defi and the law or allowing the gap between organization and innovation without permission to expand. One path leads to comprehensive, effective and transparent financing governed by the rules that everyone can see and understand.
The other path leads to gray markets, chaos of implementation and capital journey.
Policy must develop normally and adapt to new structures, logic and ecosystems. This opening key is software controlling software.
Opinion: Raks Sondhi, Executive Director of Operations at Freedx.
This article is intended for general information purposes and does not aim to be and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
