DAOs are coming into their own. Ethereum’s broad vision has not just been about an underlying token which powers decentralization applications, but also about re-orienting how digital communities organize. With DAOs, individuals from every background, creed, and location can easily work together, stripping away hierarchy in favor of smart contracts and full transparency.

In 2019, MolochDAO brought new life to the DAO ecosystem. Through an elegant smart contract design, MolochDAO helped rebirth the vision of DAOs from the fiery depths of “The DAO” towards the original vision of DAOs sketched out in the Ethereum Whitepaper.

Last year, the OpenLaw team, Ameen Solemani, and people from Metacartel helped evolve and extend the initial MolochDAO smart contracts releasing Moloch v2. This upgrade enabled multiple token support, “guildkicks” to remove unwanted members, and “loot” to issue non-voting shares still entitled to financial distributions. The upgraded contract was built with “venture” and similar for-profit, investment transactions in mind, allowing for more effective swaps and control over tokenized assets and membership.

The MolochDAO v2 extensions fueled a new wave of experimentation with DAOs, aiming to revive experiments with on-chain pooled investment communities. For example, using Moloch v2 and legal contract wrappers provided by OpenLaw, we were able to bridge the legal grey area between the crypto world and the real world and summon five DAOs, with a growing roster of DAOs poised for release.

The LAO, which kicked off these DAOs, and its larger network (Flamingo, Neptune, MUSE0, AlienDAO) has grown tremendously over the last year. The LAO went from $0 in ether contributions to over $30m with a decentralized group of members helping to support over 65 projects. FlamingoDAO, which has over $12m in assets and has acquired over 1,300 NFTs over the past several months and NeptuneDAO has over $22m in assets and closed one hour after it launched.

Outside of our efforts, we’ve seen an explosion of other DAOs focused on managing DeFi and NFT protocols. To put that into context just over a year ago there were tens of millions of dollars in DAOs and thousands of people participating in these new structures. Today, there are billions of dollars being managed by DAOs with tens of thousands of people participating, working, or supporting DAOs. The era of DAOs is truly underway.

Introducing the Tribute DAO Framework

DAOs have made great progress, but in many ways, DAOs are still in their infancy. It’s incredibly expensive to run a DAO, existing DAO frameworks often are designed as walled gardens, and existing treasury management solutions rely on a handful of multi-sig signers creating centralization and regulatory risks. The Tribute DAO Framework aims to address these shortcomings, building on our experience of running successful DAOs.

With the Tribute DAO framework, building and managing DAOs is easier through a modular architecture that is:

• Customizable via adapters and extensions,
• Upgradeable even after the DAO’s launch,
• Closely integrated with Snapshot to enable gasless voting,
• Customizable on the UX side, and
• Lower cost, using an optimistic rollup that facilitates smart contract executions.

When viewed as a whole, these enhancements mean that development teams can work together to build DAO-related tooling that will benefit all teams in the Ethereum ecosystem and do so in a way that doesn’t bind a team or project to a single centrally maintained dapp, UX, set of signers, or walled garden.

As the growing number of participants in DAOs know, there is no “one-size-fits-all” for managing any organization, let alone a DAO. DAOs need components that can be assembled like Lego blocks to fit the needs of the organization and its membership.

Unpacking the Tribute DAO Framework

These improvements are due to the Tribute DAO framework’s upgradeable and modular design. The framework honors the simple, readable code of the initial two versions of Moloch DAOs, while also being more adaptable by using a library of modules that require less repetitive auditing. The codebase is open, extensible, and building adapters for DAO-specific use cases is straightforward.

For security and adaptability purposes, the Tribute DAO Framework draws from hexagonal architecture, explicitly separating out contracts to provide layered access to DAO state changes.

The framework separates logic between core contracts and different external adapter and extension contracts that can be launched and added as DAOs grow and select new operations.

A DAO Registry smart contract tracks all the state changes of the DAO. The external world (e.g. RPC clients) only can access core DAO smart contracts via adapters, never directly. And, every adapter contains all the necessary logic and data to update/change the state of the DAO in the DAO Registry contract directly or via an extension. As a result, an adapter tracks only the state changes in its own context and extensions isolate the complexity of state changes from the DAO Registry contract and simplify the DAO’s core logic.

Extending a Tribute DAO

Indeed, the real power of Tribute DAO is its ability to be easily extended by any development team, like DeFi’s “money legos.” Extending a Tribute DAO is as simple as adding another lego block. There is no need to build an entire DAO framework or to rely on other DAO implementations that rely on expensive and complex smart contract designs that have added cost and potential security issues.

Using adapters and extensions you can quickly add new capabilities to the DAO while reusing the core contracts, which enable us to easily assemble new and customized DAOs.

For example, out of the box Tribute DAO will have:

Coupon Onboarding: a way to onboard upcoming members to a Tribute DAO without the DAO paying the gas costs. A DAO creator produces and signs “coupons” to be issued to a particular ETH address for a specified number of tokens in the DAO. These coupons are then redeemed by the assigned ETH address, and once redeemed the tokens are issued directly to the ETH address.

TributeNFT: Any member or potential member can now provide as tribute a standard ERC-721s in exchange for the DAO’s internal tokens with this adapter. If the NFT is accepted by the existing Dao members, then internal units/tokens are minted to the potential member which submitted the NFT.

ERC20 Extension: Membership interests in a DAO can be ERC20 tokens. This extension allows the owner of the units to view their holdings in wallets such as MetaMask. By default these tokens are only transferable to other members in the DAO, but members of the DAO can vote to make these tokens transferable to any ETH address. This allows for members of DAOs to freely float their units on an exchange such as UniSwap.

We believe that there is a range of other adapters that could be useful for DAOs and Ethereum based software projects, including adapters to:

• Interact with outside oracles like Chainlink
• Facilitate swaps on Sushi or Uniswap
• Create staking pools for a DAO’s native assets
• Take out loans on Maker, Compound, or Aave from a member vote
• Tap into Liquidity pools on Uniswap or Balance
• Deposit assets into Yearn or Idle
• Facilitate the sale of NFTs using protocols like Zora
• Upgrade a Gnosis SAFE and summon a Tribute DAO
• Work on UX so members only interact with the DAO through meta transaction, meaning that only the DAO pays for the execution

Building a DAO Stack

What’s more, the Tribute DAO framework is closely integrated with Snapshot, enabling DAOs to engage in low-cost governance voting and soon lower-cost smart contracts executions from a snapshot-based vote (assuming there is no evidence of fraud). We’re beginning to work closely with Collab.Land to bring DAO-based voting and DAO actions to various different platforms, like Discord and Telegram.

The Tribute DAO Framework covers Moloch v2 features and is feature compatible with Moloch v2. Those already in the Moloch DAO community should be familiar with the utility of these adapters, such as `ragequit` and `guildkick` to remove guild capital and members, respectively, as well as the escrow function of member proposals in `onboarding` and pull pattern of `withdraw` for payments.

Deploying a Tribute DAO

To learn more about the Tribute DAO framework, check out our tutorial where you can learn how to:

• Install and configure the development environment
• Deploy your own DAO
• Setup the Tribute UI dApp to interact with your DAO

If you follow the tutorial, you will be able to create and deploy a DAO to the Rinkeby network and will be able to invite your friends to play with the DAO using our dApp.

Creating an Adapter and Extension

Once you set up your DAO, you can learn how to add new features by following these additional how-tos:

• Creating an adapter
• Creating an extension

As an example, we prepared two simple adapters that extend Tribute DAO using the: withdraw and onboarding adapters as base logic.

These adapters were able to quickly extend Tribute DAO to make it easy for users to claim tokens related to a DAO, handle NFTs in the DAO’s GuildBank, and integrate Chainlink as an oracle for a financing proposal.

No more need to manage these functions with a third-party solution or through a multisig — all of these tasks can be easily managed via members of a DAO.

Join Us

We’re at the tip of a much larger iceberg with DAOs. We hope the Tribute DAO framework will evolve to help the DAO ecosystem grow in a more sustainable and collaborative way.

Hit us up if you’re interested in learning more about the Tribute DAO framework, have development ideas, or have any technical questions. And, if you want to build an adapter or extension for a particular use case, you can make a pull request or create an issue in Github.

You can send us a note at hello@tributedao.com or join our telegram or discord, or follow us on Twitter for updates, or explore Tribute DAO docs at https://tributedao.com.

Assets exist and power this world because there are clear terms, embodied in legal agreements, which bring each asset’s rights and obligations to life. So far, however, this has been a half-life under the practices of our collective legal and accounting systems. The same goes for the world of digital assets. In order to give any digital asset real-world significance, the rights and obligations must be memorialized in natural language.

The advent of trust technology that uses cryptography and distributed databases to securely store data to represent currencies and other digital assets, with fidelity, have now opened radical opportunities for legal drafting on computable terms that can execute and settle financial objectives. Early prototypes on OpenLaw have demonstrated how anyone can use code to help execute their business obligations with code, scripting financial settlement on public blockchains like Ethereum.

OpenLaw has now refined our tools to allow anyone, both coders and non-coders, to go even further and farther. Using OpenLaw, you now can do what banks and other agents cannot: issue high-fidelity, purely digital, legal-enforceable assets that can be fractionalized and plugged into computable strategies. This allows parties to settle automatically in complex transfers, such as making payments to entire workforces, anywhere in the world, with a single signature on a simple legal template.

This isn’t sci-fi. This kind of legal engineering has become easier than ever using OpenLaw software. Iterating on development and research over the last year, we can now seamlessly remix traditional (‘dumb’) contracts into smart, yet deceptively simple “legal legos” that computers can read and act on, exactly as stated, in prose even the most conservative judge can understand. Legal commitments stored and programmed in this manner are ideal assets, as they can interact in online marketplaces and move between borders as seamlessly as email, with predictable actions on state changes.

Today, we are introducing OpenLaw’s ‘Reusable Clauses,’ a curated set of templates, to make this new standard in legal drafting approachable, while protecting the rights and obligations of digital assets.

Computable Legal Assets

A short clip shows how Reuseable Clauses can be combined to document terms and split a digital dollar five ways in one transaction

Squared at these fundamentals and applying them to the legal realm, OpenLaw has been hard at work constructing standard methods on Ethereum and software to deploy and manage digital assets related to any conceivable legal agreement, “Computable Legal Assets” (“CLA”). In the earlier days of formulating compatible legal and code scripts, CLAs were largely the domain of experts, or produced to order by teams of lawyers and coders for narrow use cases on closed systems.

Now, after recent upgrades to our public template library and Ethereum blockchain interfaces, we have compressed this exotic scripting process and made it far more accessible: in mere minutes, and today, anyone can use OpenLaw to take their traditional agreements and turn them into living CLAs that execute exactly as programmed without needing to learn how to code or even markup legal terms.

Fully integrated, the Ethereum blockchain serves to further optimize the performance of OpenLaw agreements from day one, by not only allowing our users to have a common source of truth about executed commitments, but to also have distributed, durable financial and accounting programs for these assets. As demonstrated further below, due to their computable nature, CLAs themselves serve to execute financial obligations without banks or other deal intermediaries, drastically lowering legal transaction costs.

To name a few useful OpenLaw CLA protocols that have been refined for everyday business use cases or PET protocols:

• Payments in any digital token to satisfy the transfer of goods or services, in a lump sum, batches, to many addresses in one transaction and/or on a schedule;
• Escrows of ether or digital tokens with release logic programmed by underlying agreements and with related protocols for on-chain arbitration; and
• Tokenization of securities or commodities as security (ERC-1404/2222) and/or standard (ERC-20) digital tokens with integrated legal record stamps. Unsurprisingly, these issued assets can also be wired into Payments and Escrows on OpenLaw.)

In the past, OpenLaw and its energetic community have birthed many of these digital assets, protocols and methods, and our public library holds a range of legal and business programming templates, from basic employment agreements to long-form Delaware incorporation documents, with many samples of business-ready Ethereum integrations.

Ahead of the launch of The LAO, OpenLaw boasts a roster of curated CLA components for our public library. While anyone can still build their own CLAs from scratch using our template markup for legal prose and Ethereum smart contract calls, OpenLaw Reuseable Clauses make such advanced legal engineering for common deal patterns utterly accessible.

Imagine typing no more than a word to execute a smart contract transaction. For example, just typing ‘Money’ to transform your typical Asset Purchase Agreement into a template that sends digital dollars anywhere in the world to settle payment obligations. It’s literally that simple, and no hard coding necessary.

Legal engineering in this fashion is not only apparent, possible, but highly probable — especially since it doesn’t require a CS degree.

Reuseable Clauses Library

Our starter list of Reuseable Clauses for CLAs on the OpenLaw public library is briefly illustrated below. We have also included hyperlinks to the base templates that are maintained, audited, and rapidly upgraded in the public community library. Among other benefits, using Reuseable Clauses for deal drafting allows users to have confidence that they are using the latest standards in legal and code scripts on the market.

To begin, just combine a legal prose clause, such as:

• [[Terms: Clause(“Standard Agreement”)]],
• [[Terms: Clause(“Offer”)]], and
• [[Terms: Clause(“Invoice”)]]

with any of the following Reuseable Clauses to get started creating a smart legal agreement that executes on the Ethereum blockchain:

Payments

We have created the following Reuseable Clauses to invoke payments in stable digital tokens, including tokens that accrue interest passively using other protocols:

Stablecoin:

[[Money: Clause(“Pay DAI”)]]

[[Money: Clause(“Pay USDC”)]]

Interest-bearing:

[[Money: Clause(“Pay CHAI”)]]

General:

[[Money: Clause(“Pay Token”)]]

Airdrop:

[[Money: Clause(“Airdrop Token”)]]

Escrows

We have created the following escrow programs for business deals that call for locking funds for a duration or other contingencies, starting with ether (Ξ) and a generalizable template for any digital token (ERC-20):

[[Escrow: Clause(“Escrow Ether”)]]

[[Escrow: Clause(“Escrow Token”)]]

Tokenization

We have consolidated and produced feature-complete templates for issuing digital tokens for utility and/or securities using the well-documented OpenZeppelin, TokenSoft, and atpar open-source token implementations:

[[Token: Clause(“Issue Token”)]]

[[Token: Clause(“Issue Security Token”)]]

These are core legal engineering building blocks that can launch any agreement and business process into Web 3.0. No time like the present to optimize. Get started today on our public law library and execute advanced blockchain programs with legal templates in seconds: https://lib.openlaw.io/

About OpenLaw

OpenLaw is arranging the world’s commercial transactions. Using OpenLaw, anyone can more efficiently engage in commercial transactions, all while leveraging next-generation blockchain-based smart contracts. To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

Bitcoin changed the world by introducing the first peer-to-peer digital payments system. With the launch of Bitcoin, no longer did people need to rely on a centralized bank, company, or another intermediary to administer transfers of payment or value — they could rely on the Bitcoin network.

Bitcoin was radically different from other payment and digital asset platforms. It was open source, radically transparent, and available on an equal footing to all. These characteristics helped the Bitcoin ecosystem grow, over the past 10 years, moving from obscure mailing lists and chat rooms to corporate c-suites and the hallowed halls of universities and central banks. Yet, Bitcoin and more generalized platforms like Ethereum are only a piece of the technology needed to rebuild the commercial world. The task of rebuilding cannot be simply accomplished solely with a blockchain that manages and accounts for digital assets, supported by smart contracts to create a basic system of digital property rights.

Additional tooling is required — tools that do not just track, transfer, and account for digital assets, but also to structure those relationships in a way that works with the fuzzy logic that governs human relationships. Indeed, cypherpunks and other Web0 pioneers, like those who were a part of the Xanamix community, have long recognized this simple fact, postulating that the future of the Internet would not just require the world wide web, e-money, and an e-rights systems, but would also require a protocol to create Ricardian contracts or legal agreements that are both human and machine-readable.

These Ricardian contracts will help fill in the gaps for commercial transacting, acting as a form of dark matter to address contingencies that are not readily translatable into the cold logic of software. These machine and human-readable contracts create legal weight for digital assets and also enable parties add in fuzzy concepts like heightened responsibilities if used to create organizations (what lawyers roughly refer to as fiduciary obligations), future-looking promises (like representations and warranties) and have provisions that help structure and create enforceable dispute resolution procedures that may be needed if code goes awry or there is some other breach.

The Launch of the Internet of Agreements.

Over the past several years, OpenLaw has built the first fully robust Ricardian contracting system, helping to bring to life the vision of earlier smart contract pioneers. The OpenLaw protocol enables individuals to create, build and execute Ricardian contracts en masse.

But, OpenLaw was not conceived as a centralized Ricardian contracting system. Instead, much like Bitcoin, the team at OpenLaw has been building towards a release of the first peer-to-peer contracting system and the creation of the first true Internet of Agreements.

As a next step in the creation of the Internet of Agreements, OpenLaw will soon be releasing the OpenLaw Node, which will eliminate the need for parties to rely on a centralized data server. With the OpenLaw Node, individuals and organizations can send and execute encrypted versions of agreements without having that information pass through a centralized server. Each organization running an OpenLaw Node will be connected to a network, allowing for templates, signed contracts, and even potentially legal workflows to be rapidly shared with other members’ of the network.

By connecting OpenLaw Nodes, OpenLaw will create a resilient, open, and extensible network for the creation and management of agreements. If an organization’s server crashes, contractual data will still be accessible because it will have been saved and transferred collaboratively across multiple nodes. Organizations will also have the ability to manage the status of all of their agreements without the need to traverse multiple websites to access a document draft.

Check out the video below to see an example of how an organization can share an agreement on its own instance.

OpenLaw’s tools build dynamic processes to create networks between users. With OpenLaw, we’re reimagining the way parties can enter and execute a legal agreement. With our OpenLaw Nodes, we are creating a network of open-source agreements that are accessible in a peer-to-peer fashion, just like music files were back in the mid to late 1990s. Integration with secure scuttlebutt allows us to get closer to this vision.

About OpenLaw

OpenLaw is arranging the world’s commercial transactions. Using OpenLaw, anyone can more efficiently engage in commercial transactions, all while leveraging next-generation blockchain-based smart contracts. To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months

OpenLaw’s new Forms & Flow streamlines the creation, management, and approval of contracts. With Forms & Flow, lawyers and companies can save time and needless expense and even export data related to their agreements into internal or third-party systems.

Contracts are the “dark matter” of the commercial world — you don’t necessarily see them, but they’re there. They structure transactions, support markets, protect secrets, and secure and outline important financial and creative rights.

Despite the pervasiveness of contracts, the time and expense to create legal agreements have not gone down. For example, it’s estimated that the cost of processing a basic procurement contract is $6,900 dollars and often times takes weeks — if not months or years — to finalize.

At OpenLaw, we believe that we can do better and have built new tooling — OpenLaw Forms & Flow — to streamline the entire documentation generation process, including:

• collecting information needed to generate agreements,
• incorporating outside data feeds and blockchain-based oracles like ChainLink (think: supply chain, for example)
• building approval processes, uploading supporting documentation, and
• exporting data from contracts to third-party services like Google Sheets.

Check out the full walkthrough of Forms & Flow here:

With Forms & Flows, OpenLaw users can now create personalized and customized workflows to manage the lifecycle of any agreement (or even entire sets of agreements). Streamline, share, and improve the cumbersome legal drafting processes and make the contracting process less costly.

For example, many Service-Level Agreements (SLAs) require the legal team (whether in-house or firm) to talk to the business/sales side to capture that information to set the services rendered by each party to an agreement. Moreover, there may also be a term limit for the services rendered. With Forms & Flows, in-house attorneys can standardize the SLA, permission access to certain portions of the agreement to be filled out (i.e., details on the services), automatically e-mail the business side to fill out the information and then be the last in line to approve or make changes to the document. If there is a specific term limit (i.e., 6 months) on the contract, the lawyer and business-side can all be notified with an e-mail alert without having to rely on clunky excel spreadsheets to maintain the lifecycle of a contract.

Putting together and capturing information into a contract just became a lot easier. Make your contact creation and approval process powerful and easy with OpenLaw’s Forms & Flow.

To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

Using OpenLaw, anyone can more efficiently engage in commercial transactions through cutting edge legal automation tooling, all while leveraging next-generation blockchain-based smart contracts. For background, smart contracts can be thought of as prescriptive scripts that can facilitate and execute commercial agreements between parties, for example an escrow script. OpenLaw brings the human-readable contract form that wraps these prescriptive scripts, or smart contacts.

“We chose to work with Reynen Court to help bring the bleeding edge of technology to law firms and give lawyers the ability to play with this emerging technology,” explains Aaron Wright, CEO of OpenLaw, “We’ve heard a lot of discussion around blockchain technology, OpenLaw is a tool to facilitate the use of technology while elevating the role of legal automation in conducting legal work.”

Reynen Court has assembled a team of experts in enterprise software, cybersecurity, and cloud-native computing technologies. Reynen Court has launched a beta version of its legal app platform for a select list of its backers, which currently include 19 major firms, to be followed later by a public launch. OpenLaw is now available to the team.

One Reynen Court member firm, Latham and Watkins, recently used OpenLaw’s legal automation tool to generate Convertible Notes. For more information on this, please refer here: https://www.lw.com/news/consensys-latham-announce-convertible-note-generator-for-startups-powered-by-openlaw.

“We are excited to welcome OpenLaw as a featured product on our platform. Smart contracts are changing the very nature and scope of the work lawyers do, and ConsenSys clearly is leading innovation in this important new arena,“ said Reynen Court Founder and CEO Andrew Klein.

About OpenLaw

OpenLaw is a blockchain-based protocol for the creation and execution of commercial systems. Using OpenLaw, financial institutions and startups can more efficiently engage in the end-to-end commercial process in a highly secure and efficient manner, all while leveraging next-generation blockchain-based smart contracts. To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months. www.openlaw.io

About Reynen Court

Reynen Court LLC enables law firms and corporate legal departments to speed their adoption of AI and other new technologies. The Reynen Court platform combines a solution store for legal technology with a powerful control panel that makes it easy to adopt and manage modern cloud-based software applications without having to trust firm or client content to the rapidly growing universe of vertically integrated SaaS providers. The platform also lets firms manage subscriptions and provisioning from one place and provides valuable telemetry and enhanced interoperability between and among third-party applications. Founded by serial internet entrepreneur and former Cravath, Swaine and Moore associate Andrew D. Klein, Reynen Court is supported by a broad consortium of nineteen of the largest global law firms. Clifford Chance and Latham & Watkins serve as co-chairs of the Reynen Court consortium and are also investors in the company. Paul Weiss serves as vice chair of the consortium. More at www.reynencourt.com

Despite being a core concept in the blockchain space, the term “smart contract” is often misunderstood. For many, the term “smart contract” conjures up images of a dynamic legal agreement that reads and writes information and rapidly transfers payments between parties. However, as implemented on Ethereum, and as famously noted by Ed Felten the noted Princeton computer scientist: “smart contracts are [often] not contracts and not smart.”

Indeed, today, Ethereum based smart contracts can be thought of as persistent scripts (or a stored process) that perform an action, or set of actions, once a certain condition has been met. As initially described by Nick Szabo in the late 1990s, they have the ability to serve as “a set of promises, specified in digital form, including protocols within which the parties perform on these promises.”

Szabo’s definition and the current implementation of smart contracts center on the fact that they embody promises between parties, which are specified and performed by a computer protocol (most often a blockchain). The term was not meant to describe a fully-fledged legal agreement or the vision of what for many smart contracts represent.

Creating Actual Smart Contracts

How do we move the Ethereum world from just smart contracts that aren’t particularly smart to fully-fledged dynamic agreements that enable people (from around the globe) to efficiently transfer value and manage risk? The answer lies in a second related concept introduced by Ian Grigg in 1995 — the ricardian contract.

A ricardian contract is a digital agreement “that defines the terms and conditions of an interaction between two or more peers, that is cryptographically signed and verified. Importantly it is both human and machine-readable and digitally signed.” As recognized by Grigg at the time of conception, “[b]y unifying all information in a program-readable file,” Ricardian contracts create “enhanced potential of smart contracts,” by extending the number of use cases where smart contracts can be deployed.

The power of both smart contracts and ricardian contracts is further enhanced through the use of data feeds (oftentimes referred to by developers as oracles). Oracles can augment the utility of a smart contract and resolve any details that may not be known at the time the smart contract is written. For example, a past or present exchange rate and be embedded into the contract to provide accurate and seamless execution, without the need for human interference.

The “Smart Contract Stack”

When viewed as a whole, the popular concept of a “smart contract” actually involves three separate concepts, which can be conceptualized through the following schemata:

This “smart contract stack” is the key to deploying blockchain-based use cases in the commercial context. With this stack, the benefits of blockchain can be realized (i.e., secure, trustless, peer-to-peer) and we can start memorializing the rights and obligations between the parties in a human-readable way by turning them into software and incorporating outside data feeds, which automatically execute the transfer of digital assets secured by a blockchain.

OpenLaw, ChainLink, and The “OLE Stack”

Over the past several years, we’ve witnessed the birth of the first fully robust smart contract stack. OpenLaw brings the vision of ricardian contracts to life, providing the tools to fulfill the initial vision that Ian Grigg set out several decades ago. Using OpenLaw, you can create a human-readable contract where both parties are able to understand the arrangement they are executing and have a signed record of the legal terms. When combined with Ethereum-based smart contracts and third-party oracle providers, like ChainLink, we truly have dynamic legal agreements that are understandable and executable, but responsive to any present, past or future real-world events.

For example, think of a derivative interest swap agreement. Parties can cryptographically sign a derivative contract using OpenLaw’s tools, trigger smart contracts on signature that pull digital assets into a smart contract-based escrow system that incorporates outside data related to interest rates to trigger transfers of payments between parties and post escrow into a smart contract. This off-chain oracle is programmed specifically to verify the transaction and enforce the agreement, thereby then sending the funds from escrow to the beneficiary.

With the OLE stack, many of the use cases that entrepreneurs and other blockchain developers have dreamed about can be built — and built at enterprise or production-grade. OpenLaw turns these digital assets from bearer instruments to legally recognized assets and permits parties to manage risk and turn underlying transactional information into tradeable data. Chainlink makes it feasible for these contracts and commercial arrangements to act and react based on outside events or data feed, increasing the speed and flexibility of existing commercial relationships. And Ethereum-based smart contracts handle the transfer of assets.

The OLE stack is the “killer app” of a blockchain and will help build a world of low cost, efficient, and peer-to-peer transactions. Together, these three technologies are building out the vision of smart contracts and the future of the commercial world.

About OpenLaw

We’re arranging the world’s commercial transactions. Using OpenLaw, anyone can more efficiently engage in commercial transactions, all while leveraging next-generation blockchain-based smart contracts. To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

Bitcoin was released in the shadows of the 2008 financial crisis, creating the first truly global peer-to-peer electronic payment system. Through the use of cryptographic primitives and the proof of work consensus algorithm, the world was able to interact with a global payments network free from central bank control, with the aim to create a more inclusive and decentralized financial system.

Bitcoin’s initial vision has matured over the past decade with Bitcoin, Ethereum, and other blockchains providing an array of tools that enable a great degree of financial inclusion, stripping away the need for high remittance fees with low-cost transfers of digital assets.

Bitcoin and Ethereum’s vision of low-cost asset transfers offers a tremendous opportunity to expand the reach of financial services, including to the 1.7 billion people globally who lack access or are restricted from traditional bank accounts or other savings mechanisms.

The Evolution of Savings Accounts

Today savings accounts generally are structured as interest-bearing deposit account held at a bank. People use these accounts to park their cash to save for short-term needs and emergencies and they can be easily liquidated without any tax implications. We’re also pretty familiar with other saving vehicles like 401(k)s which puts part of an employee’s paycheck into retirement via an employer — allowing employees to invest a piece of their paycheck before taxes are taken out to save for retirement

These financial tools are often cumbersome and opaque and difficult for people to manage, without financial knowledge or experience. More concerning, they are unavailable to those without traditional banking relationships, depriving families and individuals with the ability to build wealth over the course of their lifetimes.

With Ethereum and advances in decentralized finance, we’re beginning to see new tools that may update the way people save and earn interest on their salaries, democratizing access to important and fundamental savings tools that are universally available. For example, through Compound’s recent v2 protocol update, the development of cTokens enables individuals to earn a stable salary and interest, all in the same financial instrument. Think of it like a savings account as a coin.

Painting the Future of Savings

At OpenLaw, we can show what the future of savings may look like. Previously, we used an Employee Offer letter to show how people could be paid in real-time, with U.S. federal income taxes turned into code. By codifying law into code, we were able to start imagining a more efficient future where an employer can pay an employee in ether every minute, eliminating the costs of payroll processors or the need for other centralized intermediaries in the process, while at the same time decreasing the tax gap and the needless waste of resources associated with tax compliance.

By incorporating cDAI, we can show how an employee can get paid by an employer in real-time while saving funds at the same time.

As seen in the above video, OpenLaw can bring to life the real-world application of cDai by giving those that are unbanked the ability to understand the legal side of the financial transactions they are entering into. Servicing the unbanked is one step in the process, but financial inclusion and preparation once banked includes a financial future where everyone is well-prepared.

About OpenLaw

OpenLaw is a blockchain-based protocol for the creation and execution of commercial systems. Using OpenLaw, financial institutions and startups can more efficiently engage in the end-to-end commercial process in a highly secure and efficient manner, all while leveraging next-generation blockchain-based smart contracts.

To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

The future of the commercial process in DeFi is powered by OpenLaw. OpenLaw integrates MakerDAO’s Dai stablecoin to create smart financial transactions and others on OpenLaw Finance.

One of the reasons that the US Dollar supplanted gold as a global standard is because most global contracts are denominated in U.S. Dollars. For blockchain-based digital assets to achieve their vision of serving as a global, universal available “currency,” a digital asset must not only be stable, but also be primarily used to settle commercial transactions in both the financial and non-financial realms.

In the Ethereum community, great strides have been made in solving stability issues with native protocol level assets, like Ether. These “stablecoins” hold out the hope of making blockchain-based commerce transactions more accessible to parties that may be reluctant to expose themselves to token-based price volatility in commercial transactions.

The first and major stablecoin to emerge is MakerDAO’s Dai, which achieves stability by being tied to the value of underlying digital assets. Today stablecoins are primarily used for margin trading of digital assets, but that is just the beginning. With OpenLaw Finance, stablecoins can be used to settle real-world transactions and can be denominated in contracts.

To that end, we’ve integrated Dai into OpenLaw Finance to show how Dai can be used as the medium of exchange for legally compliant tokenized securities, fixed income products, tokenized real estate, and smart derivatives. As a result, anyone can now manage their blockchain-based financial transactions using OpenLaw’s open-source tools. Dai can continue its path towards achieving a status as a global currency.

OpenLaw Finance “Smart” Transactions Using Dai

Below is an example of how anyone can create a “smart derivative” such as an interest swap agreement. For some background, an interest rate swap is an agreement between parties to exchange interest payments for another over a set period of time (such as a fixed or floating interest rate).

Kapwing

Using OpenLaw’s markup language, we were able to take a generic interest swap agreement and then automatically calculate payments using Dai based on the notional amount, the actual number of days, and interest rates. The recurring and fixed payments were represented in functions found in an Ethereum smart contract, giving the parties the option to receive payments under the agreement in Dai every minute, day, week, month, or year.

Dai brings utility to “smart derivatives” such as an interest swap agreement and gives users the ability to settle real-world transactions without friction and volatility. “As a medium of exchange, Dai can be used in a variety of ways,” said Greg Di Prisco, Head of Business Development at MakerDAO“In the same way that the US Dollar is a standard currency in global financial contracts, we believe that Dai can be a standard currency of financial contracts on the blockchain”

OpenLaw opens the door for a more streamlined and efficient traditional financial system. “OpenLaw Finance offers a customizable and flexible platform to create and manage any financial transaction involving digital assets and Dai.” says Aaron Wright, co-founder and CEO of OpenLaw.

The OpenLaw Finance platform not only enables the creation and execution of smart derivative transactions, but it also allows parties to generate and manage security tokens, fixed income products (like bonds and other debt instruments), commodities like carbon credits, and others.

OpenLaw, along with MakerDAO’s Dai, gives anyone the ability to generate and manage the issuance of tokens in financial transactions, integrate stablecoins, and plug into Ethereum-based exchanges. This advances traditional financial institutions' ability to improve their processes and integrate blockchain-based solutions for their clients.

About OpenLaw

OpenLaw is a blockchain-based protocol for the creation and execution of commercial systems. Using OpenLaw, financial institutions and startups can more efficiently engage in the end-to-end commercial process in a highly secure and efficient manner, all while leveraging next-generation blockchain-based smart contracts.

To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

About MakerDAO DAI

MakerDAO is a decentralized organization dedicated to bringing financial stability and transparency to the world economy. Its purpose is to create an inclusive platform for economic empowerment.

MakerDAO enables the generation of Dai, the world’s first unbiased currency and leading decentralized stablecoin. Dai eliminates volatility through an autonomous system of smart contracts called the Maker Protocol and decentralized community governance. MakerDAO strives to unlock access to the global financial marketplace for all.

OPENLAW IS OPERATING ON A TEST ENVIRONMENT. NO SECURITIES OR VIRTUAL CURRENCIES ARE CURRENTLY GENERATED FROM OR EXCHANGED ON OPENLAW FINANCE.

Today we’re offering a sneak peek into OpenLaw’s forthcoming integration framework. Once released, any third-party service can be incorporated into an OpenLaw agreement, including third-party e-signature platforms like DocuSign and third party oracle services, like ChainLink, in a snap.

OpenLaw transforms legal agreements into structured computable files — data objects that can be read from, written to, or interacted with. As a result, legal agreements no longer need to be trapped in dusty filing cabinets or hard to parse Microsoft Word Files or PDFs. They can operate like software.

To extend the usefulness of OpenLaw, we’re previewing OpenLaw’s new “integration service,” which gives contracting parties the ability to register and interact with any third party service. We show how OpenLaw can be easily extended to handle electronic signatures provided by the popular service DocuSign.

As shown in the above video, using our integration framework, we were able to register DocuSign as a third party service for electronic signatures by filling out a simple form.

Once integrated, parties can sign the agreement using DocuSign and can automatically trigger the execution of smart contracts as part of their agreements. With this functionality, the expressive power of smart contracts takes another step towards the mainstream. With a routine email from DocuSign, parties can trigger smart contracts and incorporate third party oracles services, such as Chainlink, to build next-generation legal agreements.

This is just the beginning. Integrating other e-signature solutions into OpenLaw (like HelloSign, Adobe, etc.) becomes a simple task. And developers can read, write, and pull various information from an OpenLaw agreement and port that information into third-party systems (e.g., ERP Systems, Excel, Google Sheets)

OpenLaw’s Integration Framework

The process of registering a third party service into OpenLaw’s Integrator’s API is straightforward. The first step is to access the Admin tools of your instance and click on the Integrators Service tab. At the moment, we are offering integration into “Common and Signature” services as part of our framework. “Common” is any service that can perform any external computation (i.e., CoinMarketCap) and Signature, any service that performs some electronic signature services. Both third party services are then verified in the OpenLaw Virtual Machine.

For the DocuSign example, we ran DocuSign locally by using the DocuSign java client where we then sent a request to sign on DocuSign (via email). The responses from DocuSign are then sent back to OpenLaw VM. The ‘type signature’ has a specific ABI (which can not be changed by the user) and a service of the address.

Each external service must provide a public endpoint secured with a shared secret which will be used by the Integrator’s API to send requests to this service. In order to call an external service for e-signature one can use a new variable type declaration: ExternalSignature(serviceName: “DocuSign”) in the agreement. It will trigger the email DocuSign signature notice, as one would typically use when leveraging the DocuSign service.

Once both parties sign the agreement via DocuSign, the signatures are propagated to Integrator’s API and then stored in Openlaw VM and smart contract calls declared in the agreement are executed.

DocuSign was a great first step to test or integration framework — however, as mentioned, it can extend beyond e-signature solutions. Through this easy plug-and-play framework, we can think about integrating with other third party services. These third-party services range from both traditional legal technology, such as e-signature platforms, and blockchain-centric applications, like oracle services, which can be seamlessly woven into any legal contract.

We’ll have this integration framework available for administrators of private instances in the near future, but if you have any questions, comments or suggestions on potential integrations — we’d be happy to discuss. Just shoot us a note!

Join the Movement

We’re arranging the world’s commercial transactions. Using OpenLaw, anyone can more efficiently engage in commercial transactions, all while leveraging next-generation blockchain-based smart contracts.

To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

Ethereum holds out the potential to serve as the commercial operating system for the globe. Launched only five years ago, Ethereum is rapidly emerging as the spine for a streamlined financial system where existing financial products can be structured and administered more efficiently. Despite the downturn in prices, Ethereum’s growth has accelerated over the past two years. We’ve seen the birth of stable coins, like DAI, and the threads of more advanced financial products like those provided by Dharma and Compound. Ethereum-based trading platforms are beginning to mature, like 0x and Uniswap, creating composable financial legal blocks that enable assets to flow more seamlessly between parties. And decentralized oracles like Chainlink are moving to mainnet, holding out the hope of inputting real-time data into commercial relationships and creating new, more efficient means of commercial transactions.

Traditional finance, of course, has noticed. An increasing number of banks and other “fintech” startups are exploring the use of blockchain technology through the issuance of their own stablecoins and a host of pilot programs ranging from J.P. Morgan’s stablecoin to SWIFT’s instant GPI payments.

The blockchain-world and traditional finance are on a collision course with new tools and approaches rapidly painting a picture of what a more democratized and streamlined financial system could look like — one that is more efficient, transparent, and resilient.

Blockchains Made Legal

OpenLaw is the missing piece between the crypto world and traditional finance, providing easy to use tools to build legally compliant blockchain-based deals and structures. Today, lawyers architect financial transactions, and OpenLaw enables them to port those transactions to the world’s financial operating system — Ethereum.

Using OpenLaw’s robust set of open source tools, anyone can manage the entire process of building blockchain-based financial transaction. You can create tokenized assets, tie them to legally binding agreements, pull data related to the transaction, and manage the lifecycle of the agreement. Just how legally compliant exchanges, like Coinbase and Gemini, helped catapult blockchain from the fringes of the Internet to presidential tweets. OpenLaw increases the range of possible blockchain-based applications by enabling tokens to represent real-world rights and obligations in a way that complies with existing financial systems. It’s blockchain made legal.

Introducing OpenLaw Finance

With our release of OpenLaw Finance, we’re taking one step further towards the future of finance. OpenLaw has spent the past year modeling a range of financial products for the blockchain era, including: syndicated loans for the Loan Syndication Trading Association (LSTA), complex credit facilities, tokenized real estate, smart derivatives, tokenized carbon credits, and even M&A escrow relationships.

We’re bringing these early efforts together into one comprehensive offering, enabling anyone using OpenLaw Finance to create and issue security tokens, fixed income products (like bonds and other debt instruments), create smart derivatives, and tokenize commodities like carbon credits. OpenLaw Finance is plugged into 0x’s blockchain-based decentralized exchange to quickly list tokens and has also deployed some basic AML/KYC related tools to ensure that only whitelisted addresses (or addresses not appearing on a blacklist) engage in financial transactions.

Our new vertical is a leap beyond what exists in the market today — with existing blockchain-based financial platforms primarily focused on a narrow swath of the financial services industry (like real estate or security tokens), even though the act of creating and sending a token is about as exciting as sending an email in mid-1990s.

Our initial offerings have some sample transactions, but OpenLaw Finance is infinitely extendable. Adding a new transaction or deal to OpenLaw finance is a snap. We provide generic tools to expand the types of deals involving digital assets.

Importantly, OpenLaw Finance also is not just about blockchains. All of the transactions on OpenLaw Finance are seamlessly tied to binding legal agreements and can be output as structured data (JSON objects), enabling issuers and other professionals to more readily build liquidity by providing the essential substrate to traders and other buy-side firms — data.

Example Transaction of OpenLaw Finance

By way of example, in the video below, we demonstrate how OpenLaw Finance can be used to create and issue tokenized stock on a vesting schedule. Using a simple form, you can create an ERC-20 token for any legal entity authorized by a binding legal document (a board authorization). Once signed by relevant parties, the tokens are automatically generated and placed into a smart contract-based escrow account, managed by the secretary of the company.

Tokenized stock can be transferred with a legally binding restricted stock grant to any recipient on a vesting schedule — all managed via a smart contract. The smart contract automatically releases the stock from escrow to the recipient on a pre-programmed schedule.

Once the tokens are transferred the entire cap table related to the transfer of tokenized stock is managed via a blockchain and can be viewed in real-time on OpenLaw Finance. We create a dynamic list (and associated pie chart) showing each transfer and the amount of stock that has been fully vested.

Once generated, any tokenized stock can be automatically listed on a 0x exchange, enabling the token to be instantaneously traded. Parties can submit orders to buy or sell the underlying token. Token marketplaces can be created with a click.

OpenLaw Finance is Flexible and Customizable

The above is just one example of the types of transactions that can be built and orchestrated via OpenLaw Finance. The platform can be customized and is designed to be composable and flexible, providing the tools for anyone to create and manage transactions involving digital assets.

With OpenLaw Finance, you also can plug-in a variety of exchange software, identity services, hardware/software wallets, and even different oracle providers (like Chainlink) to build a variety of financial products.

Below is a rough overview of how the various pieces of OpenLaw fit together.

OpenLaw Finance Going Forward

The release of OpenLaw Finance is just the beginning. Over the next several months, we’re going to incorporate Ernst & Young’s Nightfall, enabling private token transactions using zero-knowledge proofs. With this integration, every transaction on OpenLaw Finance will be private and managed in a peer-to-peer manner between parties all on mainnet Ethereum. We will also integrate one or more custodial solutions, such as BitGo or Trustology, and begin to partner with various different blockchain projects to create tools for their members (stay tuned).

Token generation, legal processes, and managing commercial workflows are foundational to the success of the burgeoning token economy. OpenLaw’s ease and flexibility in integration can connect other critical components such as identity, custody wallets, exchanges, and oracles, makes OpenLaw a conduit to connect various DeFi projects and assist with the commercial processes, getting us closer in fully realizing what open, transparent financial system can look like.

About OpenLaw

OpenLaw is a blockchain-based protocol for the creation and execution of commercial systems. Using OpenLaw, financial institutions and startups can more efficiently engage in the end-to-end commercial process in a highly secure and efficient manner, all while leveraging next-generation blockchain-based smart contracts.

To learn more about OpenLaw, check out our site and documentation for an overview and detailed reference guides. You can also find us at hello@openlaw.io or tune in in our community Slack channel. Follow our Medium and Twitter for further announcements, tutorials, and helpful tips over the upcoming weeks and months.

OpenLaw is operating on a test environment. No securities or virtual currencies are currently generated from or exchanged on OpenLaw Finance.