The Future of Corporations in the Age of Blockchains

Jeremy Allaire: Hello and welcome to The Money Movement, where we explore the issues and ideas driving this brave new world of digital currency and blockchains. Really excited for this week's show. We've got some great guests that I'm going to talk about in a minute, but I want to contextualize a little bit first. We've talked a lot about global macro issues, how that relates to stablecoins and digital currency.

I know a lot of the discussion around cryptocurrency in general and stablecoins specifically is around the currency side of this, what does this do to the world of currencies, central bank currencies, nonsovereign currencies, and has to do with, "Are we creating a new payment system? What are these innovations?" Obviously, we think that's really critical and important. I think when we talk about the blockchain part of this, the implications are far more profound.

Part of what I wanted to do today is, really dive deeper into some things that we touched on in a couple of the earlier episodes with other guests, which is, how can this technology be used for reconstructing the very nature of corporations, what role can this technology play in reshaping how governance happens among collaborating people, among collaborating entities, and really thinking about the technology disruption that's happening right now, this public infrastructure that's being built out as allowing for really fundamental innovations in microeconomic institutions.

In economics, you've got macroeconomics and you've got microeconomics. Microeconomics is the theory of the firm. I think for the first time in a really long time, we have a technology that's global, that allows us to reconceptualize the very essence of what corporate forms are, how they can be constructed, how they can be governed, how individuals and society at large can interact with them. That's really exciting. We use this early metaphor of the transformation of modern capitalism, where innovations like the joint-stock corporation were created and then ways in which financial markets or capital markets could exist, ideas like shareholder, capitalism, et cetera, all grew out of this.

It feels like we're accelerating into a new world, a world of global digital corporate forms, that are actually created in software and mediated by blockchains. Today, we're joined by three really exciting individuals, thinkers and innovators including economics professor, Jason Potts, and the innovative cofounders of two really important projects, Luis Cuende of Aragon and Aaron Wright of OpenLaw. We're going to be exploring the future of corporations in the age of blockchains. To help us frame the big picture ideas here, I'm very pleased to welcome Professor of Economics and Director of the Blockchain Innovation Hub at RMIT University, Professor Jason Potts. Welcome, Jason.

Jason Potts: Thank you, Jeremy. Good to be here.

Jeremy: I really appreciate you joining us Australia time. I'm very impressed and I think all the viewers here are going to be thrilled with your willingness to do that.

Jason: It's just like getting up for an early morning flight. It's good to be here.

Jeremy: That's fabulous. Well, thanks. Jason, I know you've been exploring really foundational ideas for how corporate forms might evolve in the blockchain era. There's a lot in that sense and what that means. You've been really exploring these ideas. Maybe talk to us for a moment about your journey in getting there and what some of those high-level thoughts have been.

Jason: The basic question we've been asking ourselves is not just what sort of new products are we going to see in an economy and consequence of blockchain and cryptocurrencies but what is this going to do, what is this technology going to do to the structure of the economy. Economists have long been thinking about this from the perspective of what we call transactions costs. This question of the economics of governance through all economic activity takes place in firms or markets or in governments.

The determination of where it takes place is a function of the cost of organization, the cost of information, the cost of using markets, and as we think as well, the cost of trust. Since the Industrial Revolution, what we've seen is that most industries and most economies are made up of some things get made in firms because firms have scalar economies and they can exploit the advantages of management and organization and hierarchy to do things very efficiently. Then other things are coordinated in markets because markets are very, very good at using distributed information and coordinating with price mechanisms.

Then governments do other things where you've got market failure, where you've got externalities, like pollution or other sort of things that markets or firms aren't very good at coping with. As of high-level view on this is that for the first 250 years of modern capitalism, we've had firms, markets, and governments as the coordinating devices. Now, we've got blockchains.

What this means is that some of the activity that used to take place in firms, markets, and governments will move to blockchains. The question is how much on what margins and why. As of our view of this is that this pushes more activity into markets. Large corporate hierarchical firms will start to shrink and disaggregate into smaller forms. Some of the activities that governments used to do will also shift to blockchain. We'll end up with effectively a more market-oriented, smaller firmed, more agile, and more globally distributed economic structure, and that's an enormous transformation.

Jeremy: In many ways, what you're describing is, we have this arc of the internet. We've got the past, whatever you want to say, 30 years, and it's connected everyone everywhere, and it's a decentralized system. It's allowed for greater degrees of communication, coordination. Mobile devices, obviously, have unleashed, in some ways, more distributed forms of collaboration and corporate interaction.

We had this layer of the internet already driving us, accelerating this new arena, but there's been this missing piece, which is, how do you create the substance of what a corporation is in software that is enforceable in software that can work on the internet. It feels like the theoretical evolution that you're seeing and the technological evolution that's happening with this public blockchain infrastructure, it's really allowing us to, as you said, rethink where coordination happens, how it happens, where value exchange happens. It's like really this fundamental restructuring of the substrate of what economic activity is.

Jason: The internet gave us communication and it really dramatically lowered the cost of communicating just in a peer-to-peer sense and around the world. What blockchain has given us as the layer on top of that, is the industrialization of trust itself. It enables us a party to trust a counterparty without knowing them. In a lot of ways, what corporations were doing was facilitating a nexus of contracts or nexus of trust where you could trust all of the parties within the organization but not those outside. You had to use lawyers and regulation contracts and other sorts of mechanisms to get trust between corporations or between business partners, but within them, that was a zone of trust, but that was expensive.

You have a huge amount of organizational infrastructure to create and manufacture that trust. What blockchain does is essentially enable parties and counterparties to trust or just to have true verifiable records of the facts before them they're dealing with, which essentially pushes markets inside corporations. It lowers the cost of dealing. What that means is that we should expect to see that the fragmentation modularization of organizations into smaller forms be not under the effect of that trust. The industrialization of trust, it's what has happened with this technology. That's going to lead to a new types of economic organization and patterns of organization that take advantage of that new lower cost of this input into business.

Jeremy: This gets to this question of, we have these legal frameworks, we have equity in Delaware corporations or in a Singapore corporation or relatively consistent to somewhat consistent common law around some of those things around the world. You have the rights and entitlements, and then you have a whole set of record keeping and enforcement and so on. Do you envision that the new entirely digital forms will come into place that in some ways are more trustworthy than those established legal systems and that are just enforced by machines on the internet?

Jason: Yes. I think this is exactly what we're going to see, Jeremy. What is being replaced here is essentially this idea of a nation-state jurisdiction where within this zone of the nation-state there's a uniform body of laws and contract and enforcement mechanisms. Instead, when we've got software-mediated internet networks platforms, these platforms can be as big or small as they need to be. There's no role to scale issues with that. They can also be multiple. They can overlap. They could be built publicly. They could be built privately. They could be built in public private partnerships. They could be very specific for purpose and they could be layered and stacked on top of each other.

What we'd actually have, again, is the industrialization of the layer of corporate governance so that the platform layer upon which corporate governance usually works. This is what smart contract entrepreneurs are able to build now. Now, the question is, who builds these? Is it the tech companies? Is it the social media companies? Is it law firms? Is it regulators themselves? The answer is probably all of the above. We'll get to see who builds the best ones. In essence, it's not just that the firm chooses. It's the two parties to the contract who need to choose the same platform. Once they do that, we've got a world of effectively private ordering law.

Now, incredibly, that was more or less what we had back in the Middle Ages with a lot of the trading empires and true trading parties would choose which jurisdiction they're going to contract in. Again, it's a huge opportunity for industrialization and potential huge productivity gains that can come from rebuilding the legal and contracting infrastructure, not just of nations but of regions and the entire world.

Jeremy: Yes. I think individuals who want to collaborate, contribute labor, create things, exchange value. If there's a direct way for them to participate that safely in entrustment wise fashion where value exchange can happen and that's enforceable in auditable known ways, but on a global internet platform, that's, obviously, really, really exciting. What do you see three, five years out from now? You've seen the arc of this technology. We seem to be at an inflection point with COVID and the acceleration of digitalization. Where do you see this in three or five years?

Jason: Look, I think we've come a very long way in 10 years. We've come from the very first cryptocurrency through smart contracts through a lot of experimentation on these platforms. The thing about what COVID gave us was a massive acceleration of adoption and not just that but a coordinated adoption. Everyone did this at once. We've got a lot of experimentation just happened. What we're seeing with a lot of governments taking up central bank digital currencies and other sort of very accelerated digitization processes. I think it's going to accelerate this.

To me, the big one is trade regions. I think the entire world trading order has just been disrupted. I don't think it will rebuild in the same way and the opportunities for it to rebuild on a digital platform rather than through the WTO negotiated trade regions. I think that's the most exciting thing we've got right now. We've got the technological capabilities to do that. I think there's going to be a lot of demand to rebuild trade platforms and supply chains in a far more robust and lower cost way. My bet is that trade regions will look very different and they'll be based upon digital trade regions and blockchain based trade regions and, to me, that's hugely exciting.

Jeremy: A lot of smart people getting together on the internet to figure it out.

Jason: As they always have.

Jeremy: As they always have. Jason, this has been a really excellent conversation. I really enjoyed the work that you and your colleagues have published. I think there's really important stuff. I think more and more attention is clearly going to be put on this restructuring of the microeconomic layer and then how that plays out into these broader economic arrangements. Thank you so much for joining and look forward to keeping in touch, Jason.

Jason: Thank you for having me, Jeremy.

Jeremy: Absolutely. Economic theory and this broader thinking is also obviously right now meeting transformative technology and the rubber meets the road with building this in practice. I think, arguably, one of the most innovative projects in the world that is doing that right now is Aragon. Joining us to discuss all of this is Luis Cuende, co-founder of Aragon. Welcome, Luis.

Luis Cuende: Thanks for having me, Jeremy.

Jeremy: Look at you with your nice audio setup. I'm a little jealous. That's pretty nice.

Luis: We work remotely for years. This is not new for us.

Jeremy: Excellent. I tried to upgrade my--

Luis: Nice.

Jeremy: Cool. Well, awesome. Thank you for joining. I've been really excited about and a fan of what you guys are up to. I think people who are active in this space, in this industry, may know Aragon, but I think there's a lot of people who are tuning in and coming up to speed on what's happening with digital currency, what's happening with blockchains. Let's start with the basics. What is Aragon? Give us a couple of minutes on what it is that you're building and maybe, obviously, with the context of the introduction with Jason. Obviously, there's some connectivity there to these ideas.

Luis: Yes, definitely. The reason we co-founded Aragon in the first place was because we saw these smart contract platforms as being extremely powerful ways to organize people across the world at scale. Basically, we thought this smart contracts can be put in a way that people can create their organizational structures very easily. Basically, as you would put together Lego blocks to create a big structure and adapt to whatever you want to build. Aragon is the leading DAO platform. DAOs are this concept that I just commented on. This concept that you can create organizations that are extremely flexible, extremely open, and they are powered by code, ultimately.

The interesting thing for me and the the way that I'm trying to define the DAOs and what really and how really they are different from traditional internet communities is because the DAOs and cryptocurrencies and the smart contracts give us this ability to actually attract and incentivize new contributions to pull funds over the internet with no friction whatsoever. Then for large groups of people to govern these funds together and actually take action. The way I've been thinking about it is with the first web in the '90s, people were able to actually write stuff and blog posts and publish them into the internet. Then we had Web2. With Web2, people were able to also comment and discuss on those blog posts, that content. Then, now, we have Web3. Web3 allows for those people to not only be able to discuss stuff but actually make it happen. There's a lot of chatter on Twitter. There's a lot of chatter in social media, but actually very few of that chatter actually creates something tangible in the world.

Jeremy: If you want to be part of an organization and you can join that organization and it's not just like a Facebook group. It's actually like an organization where there's decisions that are made and there's governance and there's voting and there's money, which is like what a corporate form kind of is. You can do that. It's not like some hosted platform by building on public blockchains. You're building something. It exists as a machine enforceable infrastructure that anyone can interact with. They're not paying for a service like a hosting service. It's a corporate form on the internet that you can control entirely as a community.

Luis: Exactly. I think the simplest example is you're going to have Telegram groups and people discuss there, but what if you give them a piggy bank. What if you give them incentives so that people have to be members of it. Then if the group becomes valuable and things they can sell those like tokens or memberships and profit from that. It's a bit of incentives and governance, all in one. I hope one day we can arrive to that literally like a Telegram group becomes an organization.

Jeremy: Yes. I think, obviously, you guys have evolved a ton and you're moving at a really good pace as a project. It's really cool. These building blocks, when I think about a corporation, you've got membership in some way. You have individuals. You need to have a way to have voting around issues. You've got a bunch of building blocks that, basically, allow you to assemble a corporate form out of smart contracts and pretty self-service too. What are the building blocks that you guys have today for setting up one of these types of digital organizations?

Luis: One of them is tokens. Tokens are, basically, whatever meaning you give to them. Usually, they mean membership in the organization. They serve the purpose of also aligning incentives so that, usually, community want these tokens to become valuable, and then everyone in that community, basically, appreciates with a value. There's tokens that is voting. Actually, the funny thing with voting is that it sits in the middle, but people actually don't like to vote that much.

The way I've been trying to look at it lately is that voting may be the new like. If we make it easier and easier, then it will actually become the new like. Then there is stuff and obviously like finance and fund management. The cool thing about these DAOs also is that they can participate in DeFi protocols. They can actually do a stab with the funds very easily and earn deal, participate in a staking networks, and so that is very powerful.

Jeremy: You have these building blocks, people, and create these things. It's trust minimized, but there's also trust there because you know who's participating, and they can make decisions together. Then this treasury, that's the other big thing when you think about what is a corporation. It's tokens like equity, influence voting, decision making, but then oftentimes, that voting and decision making is on top of a treasury.

The beautiful thing, I think, is that you guys, like you said, you're able to plug into DeFi. You're able to support stablecoins. I think you guys support a number of stablecoins, but the ability to move dollar value into one of these to-- You have an individual maybe who is-- They're getting paid out of the Treasury for work they've completed and people can vote that, "Yes, the work is completed", or other things like that. How are you bringing together the innovation of stablecoins with Aragon, digital organizations, built with Aragon?

Luis: Yes, it's been a world changing for us, like we used to, and we still with our own product for everything. For example, even payroll concern, one of our DAOs that we have in our team. People used to have their payroll in ether. Ether used to flip to it so much depending on the multiple more made money or lose money. Stablecoins changed all of that. I think it is so important because ultimately, DAOs want to reward people for their work. That is the whole point and you cannot do that in tokens that fluctuate drastically.

Jeremy: Yes, totally. I think there's these bigger concepts and we touched on that with Jason when we got started. If the joint stock corporation and the legal frameworks around that have defined modern capitalism, what's going to define this new digital age? Do you think it's going to be these new decentralized, internet-driven, distributed organizations like what you guys are enabling?

Luis: Yes, definitely. I think Internet communities have been already there for a while. I think given them this unprecedented power to actually take action, managed real funds, and govern all of those together are going to give them a completely new scale. You will look at problems like climate change. It is very hard for a single actor, or company, or even nation, or state to tackle these problems. If we had this supranational totally global, very low barrier to entry structures, we might have a shot to actually solving these problems.

Jeremy: I think obviously it raises really profound questions, and I think a lot of times one of the first things people say, "If I'm involved in this and someone steal something, or does something wrong, or breaks a covenant, we have courts in the real world." Now, granted, enforcing something in a foreign jurisdiction in this highly globalized way is difficult.

I know last week, we had Clarus on talking about their decentralized arbitration system. You guys are also really being thoughtful about how can communities self-govern? Do we evolve to a world of decentralized justice system, online courts that are really specific to these digital organizations, and the activity that's happening in them?

Luis: Yes, exactly. The way we look at it is also not even as a standalone product that's something that plugs into the organization itself. You can basically have an organization in which you define like an English written agreement. Then that agreement also complements the smart contracts because there are a bunch of things that you cannot encode in computer code. Humans are very complex machines. This court enables for stuff like that. It can be used for stuff like content moderation. Can be used for adding items to lists.

We are running our president campaign in which we have different Aragon apps that are eligible for some rewards. Then these are on our court. Our own court is basically deciding which ones to get in or not into a list. It is like baby steps. I don't think it's ready to totally replace a courtyard yet, or it will probably not be for the next few years, or God knows if it will be, but it is really promising.

Jeremy: When eBay and Amazon and Alibaba were little sites where people were trading things, we didn't think that they would take over the entire global supply chain so got to start somewhere. It's really exciting. Maybe last item which is for projects in the world today, or companies in the world today, what are some concrete ways that they could begin tapping into this and using it? If you want to share an example or two, that'd be awesome.

Luis: Yes, definitely. I think more than companies, its communities. I think companies can also choose DAOs like we ourselves is DAO. Communities are super interesting. For example, there's this virtual world in VR called Decentraland that is owned by its users, and they have this DAO that they use so the users absolutely govern everything in the platform. It's extremely helpful.

One thing that I've been also involved with is called help out. The idea is to allow for people to create very small, localized help squads of volunteers and supervisors who are able to donate funds, and also receive donations all over the internet, and then give those donations to people in need. The idea is that you don't need to wait for these big, slow-moving nonprofits to actually take action.

You can like 1000 decentralized organizations bloom that actually tackle these problems in a very small scale. I think online communities are wonderful. I think we're moving towards a world where there's going to be more and more communities with the unemployment we have right now, and the need for meaning of a civilization, I think communities are the way to go.

Jeremy: I love it. It's so exciting, Luis. Really appreciate you joining us to share your vision and share where you guys are at and we'll be tracking it really closely, and wish you really continued success, and we'll talk really soon, Luis. Thank you so much.

Luis: Thank you.

Jeremy: These on-chain corporate forms, on-chain economic communities, this is, I think, a really breakthrough idea and I think there really is inevitability to it. I also think that we need to connect the dots between our existing systems of governance and law, and these open and machine-enforced worlds of smart contracts on blockchains. Joining us to explore the connection between real law and blockchain contracts is Aaron Wright, who is the co-founder at OpenLaw and professor at Cardozo Law School. Welcome, Aaron.

Aaron Wright: Hey, thanks so much for having me, Jeremy. Great conversation so far.

Jeremy: Yes, let's keep it going. [laughs]

Aaron: Yes. Maybe to kick it off, OpenLaw, really, the whole purpose of our project is to connect those dots. This is, I think, an issue that's been long understood by those that were thinking about blockchain technology, and even before that, the cypherpunks that really kicked off this entire ecosystem. There's only so much like Luis mentioned that you can embody in code.

There's other rights, risks, covenants, reps, and warranties which have legal significance, which are important. They manage risk. They in our minds need to sit alongside these code base provisions and open laws tooling that enables you to do that in a hyper generic way. Since contracts in our minds are at least the dark matter of the commercial world. They sit everywhere and are poorly understood except by a small group of people.

That's what we've been able to do. Build a set of tooling where you can have things like representations and warranties, covenants, manage risk in different ways, bake in arbitration and dispute resolution provisions, and have that sit, and closely be coupled with the code base provisions that may be managing an organization, may be managing a commercial transaction, et cetera.

The nice thing, at least in the US, and probably most of the more advanced parts of the world, these hybrid contracts that have code and natural language provisions should be enforceable. If things go wrong, and that doesn't always happen, but it sometimes happens. It should be able to get administered and mediated either through online dispute resolution systems like what Luis was describing or by a traditional court. I think that's important because that enables us to not only have this ecosystem serving itself, but it enables this ecosystem to scale and begin to impact the traditional legacy world. That's what you've been fascinated with.

Jeremy: I'm totally fascinated this concept of machine enforced contracts but also mirroring the constructs of "real world contracts." It's totally fascinating. An interesting dimension to this, I think is, when using analogies, like we moved to things like DocuSign, people move from like, "Okay, we have this long thing. It's this contract, and now we can actually sign it. It's a digital contract." This is taking it obviously to the completely next level, but it wasn't possible to do that before. We didn't have a public infrastructure where you could have machine enforced business provisions that actually could affect things like the movement of money or decisions or things like that.

This public blockchains really, obviously, are like the breakthrough here in smart contract infrastructure, the breakthrough, but is this the natural progression where we go from paper-based fully human mediated in-person physical things into this intermediate digital form, is this the logical conclusion, we're now going truly natively digital even at the substrate of actually the contracts themselves?

Aaron: Yes, I think absolutely. That's what brought me into this space. I've been fascinated with this notion of computable contracts, and Ethereum, and was fortunate enough to play a small role helping to launch Ethereum. From the beginning, I think, many of the folks that were launching and supporting Ethereum recognized that it's great to have this foundational trust layer where you could settle assets. It's great that you have tools to potentially pull assets, but you need also this digital contracting level and layer in order to really rebuild this global commercial stack.

In my mind, there's really three pieces when folks think about smart contracts. There's the base Ethereum level. There's a Ricardian contracting system, which is open law, which is a way to digitize agreements. Then there's the data feeds or Oracle's that come in. It's that stack that I think folks are thinking about when they think about all these efficiencies that can happen to basic commercial transactions.

Jeremy: Maybe helping folks new to these ideas. The Ricardian contract are these fundamental agreements. With open law, you basically are creating a library of clauses, of terms that are the building blocks of Ricardian law, and you're letting people assemble those into code so that they've essentially taken a contract and they've assembled the actual mechanics that are reflected in the traditional Ricardian contract into code that is then deployed online.

Aaron: Then it sits seamlessly with a smart contract code, which is the software that runs on Ethereum. The scripts that run on Ethereum that can move around assets, can create assets. These are things that lawyers do today. When creating a token, a lawyer today actually creates assets, they'll create stock certificates, they'll embody rights for intellectual property. Software can do a bit of that, but you still need to manage disputes, manage downside risks. That's what, at least right now, traditional agreements are the best at.

Maybe in 50 years, if we want to go way out in the future, that may not be the case, but I think for now, we still need some of those natural language provisions to sit alongside of them. We've been able to do that in a lot of different contexts. I think the headline is also most of the major markets in the world are not based on assets. They're, actually, just contracts that are getting traded back and forth. As we build this ecosystem, and as we build this stack, we'll hopefully be able to bring efficiency and also create new types of marketplaces for these types of arrangements.

Jeremy: Tying back to some of the earlier discussion, we can see these new global digital corporate forms that start to exist that people can freely interact with and collaborate with that are nation, state independent that exists on chain, that exists on the internet, people give value, get value. If you layer in this enforceability and agreement layer, it really starts to get pretty powerful.

Aaron: Yes, absolutely. We've been exploring that concept and implementing that in a project called the LAO. For folks that have been in the blockchain ecosystem for a while, they'll vividly remember a project called the DAO, which was a venture capital fund that was running on Ethereum, where they only use smart contracts to manage the pooling of assets, some of the voting mechanisms to deploy capital, and it was spectacular. It launched with I think a limited ambition, but everybody loved it, raised something like $55 million at the time. Would be a tremendous amount of aid today, given the appreciation of ether, but it ran into technical and legal issues.

The nice thing today, because there's been so much innovation in this space, the technical issues have been mostly solved. We've been able to streamline the core base smart contracts, so that you're able to pull capital, deal with governance related questions like voting, and also accept into this treasury like you described it before, Jeremy, assets from another organization. We've wrapped that using OpenLaw's tooling with legal agreements to deal with a number of the legal challenges that were apparent and also raised by the US government.

We're able that means in the US to begin to explore DAOs in ways that comply and square with US law, and can hopefully begin to expand and experiment and grow this ecosystem, and hopefully in a responsible way.

Jeremy: It's very, very cool. I guess one question that relates to some of the work that Aragon is doing and Clarus who we had on last week. Where do you see decentralized arbitration models or decentralized arbitration models or online courts that are built on blockchains, how do you see that evolving, is that going to evolve in parallel, is there a really clear intersection with the work that you're doing?

Aaron: On the open law side, we put together something called Optima open court. What that does is it uses our tools, so that you can embed into any agreement and arbitration provision that also has smart contracts that can deal with and mediate that process. I think one of the most underappreciated things about blockchain is the fact that you can use dispute resolution and have an arbitrator settle the dispute. That's radically different from how that happens today. Even if you have a private arbitration, the arbitrator can render a decision, but you'd have to go to a physical court in order to enforce that arbitration.

Really, for the first time in history, we're able to begin to take some of the raw power that courts have in terms of enforcement, and represent that in a digital form. That means that people have, for the first time, at least in theory, the ability to begin to administer disputes completely outside of the existing judicial system. Due to the laws that we have in place in both the US and in most other major countries, the decisions of those arbitrators can be enforced. It's going to be hard for that to unwound. I think this is a fertile area.

I think the demand for it is probably not there yet just because usually people fight not over small dollar amounts, but large dollar amounts, and outside of a few significant trades or significant economic activity, people are not yet ready, I think, in massive volumes to use these systems. If we talk in 10 years, I have a feeling that we'll be talking a lot about these types of structures.

Jeremy: We're all interested in the various tipping points in adoption here, as we're very focused on stable coins and their interaction as a new global payment and settlement model. What do you think the tipping points are for this kind of implementation of law?

Aaron: I think we're getting there. I think a lot of the activity we seen with blockchain technology right now is building up core market infrastructure, building tools to make stable coins, which decrease volatility, building basic market infrastructure, projects like compound resembling a basic money market account, seeing derivatives and options and other forms of financial infrastructure that's necessary so that traders can manage risk. I think that's why DAOs are so important. It's really great to be able to trade assets, but to do something productive, you need to pull capital and deploy it.

To your point, before we've seen with every significant era of industrialization, and Jason touched on this too, some innovation in terms of organizational forms, I think that blockchains will present a new one called the DAO. It's just a different architecture of how we're engaging in commerce. That's going to result in a different architecture for an organization. This is not just with the joint stock company, but also with railroads. We saw railroads emerge, and due to the way that railroads were built, lawyers and business folks developed preferred stock. Now, preferred stock is an incredibly important part of the corporate landscape. We saw oil shocks and expansion of global finance lead to LCs or a flatter structure, which enable people to pool capital. I think DAOs are really the flattest structure potentially that we can imagine. I don't think it's just going to lead to smaller organizations but also massive global organization.

Jeremy: Yes, for sure. Now, with the internet, we have perfect ability to coordinate in terms of information exchange. Now, economic coordination is the next logical thing here. Everything we're talking about is essentially reinventing economic coordination for the digital age, for the internet. There's the governance side and there's the movement in storage and market infrastructure side. These are all truly building blocks. Well, Aaron, this is great. I don't know if you have any final comments, but it's super exciting where you're working on, super impressed.

Aaron: Thank you so much for having me.

Jeremy: Excellent. You're welcome, Aaron. We'll talk very soon.

Aaron: Great.

Jeremy: All of this is, obviously, very, very exciting. We were literally talking about and seeing in front of us the building blocks for a future economic system. I think without a doubt, all of these things are accelerations of a deeper, more full digitalization of the world. There's talk these days about the pandemic economy and how it's giving years of acceleration in terms of how corporations operate digitally. I think the logical evolution here is it's going to accelerate the development of a completely new infrastructure for how economic coordination happens. I think we've touched on these analogies to the early web. Unlike the web of information, this is the internet of value. I think the impact is likely far, far greater.

Really good discussion this week. Next week, we've got an episode. We're going to be diving into international movement of value, international payments moving value between markets, between currencies. They're all stablecoins in that. It's one of the major promises of blockchains. We're seeing that really start to play out with stablecoins these days, connecting things like USDC and other stablecoins to other currencies connecting into the existing financial infrastructure and making value movement happened in the same frictionless, low cost, secure way that we have with information exchange today. Until next week, stay safe as stay informed and we'll see you.

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