Hmm, I am not sure I am following you. Just to clarify:
(i) AAVE, UNI, operate entities that maintain rights over the code.
(ii) The token runs independently from this entity; it is not related to it.
(iii) This entity simply develops open-source code; it doesn’t run it.
Pal, I’ve explained above why Uni doesn’t enable the trading of synths tied to regulated assets, and it’s precisely because they follow the legal strategy you’re proposing.
AAVE is just not even a comparison.
I understand you’ve had input into this proposal and feel invested in the outcome, but you need to zoom out for a second.
GMX is true anon defi, breaking the fucking rules. You can’t put a square peg in a round hole.
0xtanler, with all the respect, this sounds so cool, indeed, but it is not true. It is a crypto-meme. Contributors are not anon for a powerful enough agency; maybe Satoshi was, that’s it. There is a reason why all big crypto projects operate using companies, even Ethereum.
What you are suggesting is for contributors to be personally liable for any legal issues, which is not an option. There were over 7 lawyers involved in some way or another to form this proposal and coming ones.
But you would like for GMX holders to vote against it - that is fair. So, could we hear your solution (as a lawyer, I suppose?) so the contributors can be shielded and be personally safe, and for GMX to operate and protect itself in the real world by signing documents without an entity?
As a GMX holder this seems risky, not thought through, and will likely impact GMX price and protocol performance negatively. GMX needs to consider its community (or explain more to them) before doing something like this. I’ve listed a few questions that I think will help the community to make an informed decision:
Which jurisdiction do you propose to incorporate in and why?
How are you thinking about GMX / GLP token risk in that jurisdiction (and others)?
Have you received a legal opinion? If so from who? Will you be sharing any legal opinion with the GMX community?
Is GMX going to be licensed to provide consumer facing securities (like a CFL or similar)?
Who will be the shareholders and directors of this new legal wrapper?
I am very interested to see how the team manages to pull this off. I think the community deserves ongoing and detailed information regarding the changes that are being made. This proposal is vague.
This is a fantastic move by GMX and much needed. I strongly support the DAO’s right to protect our dev’s (and community’s) intellectual copyright via a business license. LTFG.
Huge yes from me and think this is really good foresight from the GMX team.
Protect your amazing and innovative products, while encouraging collaboration, seems like a great decision.
I have similar concerns as Ultan but I can’t agree with this argument. This “true anon chad” meme is nice for CT but it is larping, not a serious talk. We saw with Tornado - even freedom of devs can be at stake.
So, number one priority should be the protection of the devs. Because, without that, why would they continue to work on GMX?
But, Utan’s other point was imo valid. This one:
GMX is great because of this characteristic. But, there is a reason why other projects don’t have them and that reason is not only VCs greed. It is reasonable to assume that these three thing could attract regulators and provide them attack vectors.
So, to conclude, my advice to the team would be to provide more clarity on what is their plan to evade this obvious risks?
I very much understand the concerns raised regarding censorship by @0xtanler, but I think we need to see the bigger picture here. We need to be aware of that the protocol has reached a size where the legal protection of both intellectual right, but especially legal protection for the team, is crucial for further growth. Might it come with some risk / censorship “attack vektors”? Maybe, I can not judge this, as I am not a lawyer by any means and would leave this over to qualified persons. This is exactly what a legal entity can work with. Just declining and not playing by the rules will work for some time and until a certain size. Everything beyond that need proper legal management.
We should see this as a step to grow the protocol to its full potential. The core team need to be able to working on the development and get access to the necessary resources to protect them and our common interests.
I am therefore very much in favour of this long-overdue step
I’m happy to add my opinion as a US attorney with European background. #notlegaladvice The proposal does in no way create a pathway that did not exist before for governments to impair in any way the functionality or processes of the gmx platform or DAO, or even the devs. The proposal is limited to establish a legal entity for IP protection and potentially handle development activity if such activity is funded / approved by the DAO. Therefore, even if the legal entity (labs) was forced to “shut down” (which would be challenging to say the least) or in any way impaired there is no impact on the protocol itself. It appears that all concerns or questions I see arise from unfounded fears and being ill-informed about the actual structure or assumed impact of any legal entity being formed in connection with the protocol. In terms of liability protection for developers I would agree it also has benefits, but moreover it allows Labs to attract talented devs and perhaps provide more incentives for contributors to remain dedicated to gmx. The main benefit, however, is that the entity will allow for protection of code and intellectual property. Without an entity it would be impossible to enforce intellectual property rights or allow the transfer of such rights to the DAO, particularly at a time where the legal rights of decentralized organizations have yet to be formally recognized in most jurisdictions. I will also post this in the governance forum, but it is important for people to recognize the intentionally limited nature of the entity and that it does NOT (even hypothetically) impair censorship resistance of the DAO or GMX protocol itself.
With respect to whether GMX would like to become compliant within all jurisdictions it operates in - that is a whole different topic but a legal entity as limited as Labs is proposed to be is not going limit the options or choices the dao can make in the future… but it’s a bridge we will have to cross one day - with or without Labs.
Please do share your opinion on this. Think it would be valuable for everyone to hear (with the obvious caveats that it’s not financial advice or legal advice, etc).
This is a fantastic proposal! Really support it.
I understand some concerns from some commenters over censorship and centralised failpoints. However, from my understanding of this proposal and the seperation of Labs and DAO, these concerns should be mostly alleviated. What i mean by that since DAO will still control the smart contracts they can be built in a trustless and permissionless way. Remember, smart contracts are immutable and as such very much censorship resistant at their core.
In addition, the seperation between Labs and DAO has given sufficient room to still allow governance to have final say, as always. Also remember that even the interface app.GMX.io will be IPFS hosted, making it also censorship resistant.
The huge benefits I see here are that the Legally recognised Licensing will allow GMX as a whole and especially the core contributors to protect their work from simple forking or vampire attacks. The great thing here is that the DAO still retains the right to permission its use for whatever use is voted.
The second benefit is that this gives a lot of stability to core contributors, both from the reason I mentioned above but also from the fact a legal entity opens up the doors to more recognised employment contracts and other such benefits. Of course, this includes regulatory and legal protection which is always an important consideration. This benefit definitely cannot be understated to retain/attract talent and, after recent developments in the story of Tornado, is overall something that we have to be considerate of for our hardworking core contributors <3
the first is providing some protection for contributors, which seems most are supportive of, as the number of contributors grow it is difficult to ensure that everyone is anon, and there are times when agreements e.g. for audits require a counterparty, it is useful to have an entity for these
even within the entity, i believe the plan is for contributors to remain anon, as much as possible
the second point is licensing of the code, as @xhiroz has mentioned, GMX DAO is granted full usage, in a worst case scenario where the entity is shut down, i believe the main effect to GMX DAO is that it may be more difficult to apply the licenses then
otherwise, the labs entity does not affect the censorship resistance of the platform, if parts can be shutdown they can be shutdown even without the existence of the labs entity, if our goal is for full decentralization the work should be on removing any of those parts, so this is in my view unrelated to the existence of the labs entity
main question on licensing would be whether GMX DAO wants to have some intellectual protection over the code developed for its use
Exactly. There is very clearly a need for an entity. No disputing that.
The dispute is whether the software GMX Labs publishes is protected under a business license a la Uniswap or not - something only a minority of crypto projects do.
The safer option seems to be that the products GMX Labs build are published for unfettered public use and GMX Labs retains no legal or IP claims to the tech.
I wish it wasn’t the case, but monopolosing control of the platform and evading regulations are diametrically opposed goals.
I wish it wasn’t the case, but monopolosing control of the platform and evading regulations are diametrically opposed goals.
i believe it is two separate issues here as well, licensing to deter usage not authorized by GMX DAO and ensuring that the platform is censorship resistant
for censorship resistance, once the code is deployed it cannot be removed from the blockchain
given this, it is also possible for other anon projects to fork / deploy the code, and we similarly would not be able to censor it or remove it from the blockchain even with a license
the license if voted in would just be a deterrence on usage not authorized by GMX DAO, it does not change the censorship resistant aspect of things
I appreciate the detailed response here on the legal impact, and the benefits of clearing up GMX’s legal framework moving forward to keep the protocol growing overall. One question I have on censorship resistance:
Most Contributors to the GMX Protocol shall conduct their involvement through Labs. They will be vesting any existing intellectual property they control as part of this process.
Does this not present an attack vector for state actors like the SEC to subpoena GMX to reveal the identities of contributors on the payroll, say hypothetically involved in the synthetics contracts? My worry here is less about the implications of shutting down the legal entity, than with the chilling effect on GMX’s freedom to innovate. It essentially presents a larger attack surface. If I’ve got this chain of reasoning completely wrong (and I’m not a lawyer so that’s likely), please feel free to correct me.