The ghost of Joe Kennedy smiles.*
From Mark Helfman at Data Driven Investor
Earlier this week, the US government charged well-known crypto exploiter Avi Eisenberg with commodities fraud and market manipulation for his attack on Mango Markets, a DeFi platform.
Maybe posting your crimes on Twitter is not the best idea?
While I can never condone somebody knowingly committing a crime, I’d like to propose we make Avi’s actions legal for DeFi protocols (not legacy finance) — with a catch.
A proving ground for financial experiments
If you want to have robust, automated, decentralized financial protocols, you need people to test, stress, and undermine those protocols. How else will you know whether they’re safe or where their vulnerabilities lie?
Testnets, audits, and bounties only go so far. They can’t replace actual usage by thousands of users in a real-world context.
DeFi protocols have no complaint desks. You can’t sue a smart contract. The world’s governments have no regulatory framework for global, open-source computer code that runs at scale without restriction.
What if we create a global DeFi sandbox, with incentives and rewards for creating and destroying financial models before releasing them into the wild? Or, releasing them into the wild with clear disclosures and perhaps a “gate” (e.g., authentication for wallets to segregate money/contracts within the sandbox from money/contracts in the real world)?
Let’s throw in a two-year safe harbor period — or even government grants — for experimentation on DeFi protocols and algorithmic stablecoins.
What about a robust privacy framework to go along with it? Disclaimers on front-ends, websites, and messages delivered to connected wallets before executing transactions?
As long as participants know what they’re getting into and the inevitable failures do not harm the wider financial system, maybe we should give predators, speculators, and engineers a way to fool around with the technology IRL without fear of arrest or triggering a wider financial crisis.
As iron sharpens iron, so one person sharpens another....
In 1929 he and some other rascals got together to run the .com of the day, Radio Corporation of America.
What a run it was! The pool picked up $5 million in ten days. My BLS inflation calculator says that's a bit over $60 million today (although the PBS special linked below says $100 million).
When the question arose as to who should manage the pool the answer was easy. Who better than the specialist in the stock, Michael J. Meehan! PBS did a good job on their show "The Crash of 1929", even interviewing Meehan's grandson. Here are some of my links, Senate Hearings (4 page PDF), 1948 SEC chief counsel memo on the Act of '33 (5 page PDF), Colliers story on the early SEC.
In 1934 Joseph Kennedy was appointed the first commissioner of the S.E.C.
