The “Intent of Code” is Law

The Promise of Code-is-Law

The single most compelling feature of Code-is-Law is the removal of any room for dispute. All contractual terms are laid out by the code, which will be executed faithfully assuming there is no censorship. This gives all parties strong guarantees and predictability, except where there are bugs (differences between the expectation of parties using the code and what actually runs).

The Chaos of Free Form Contracts

Free form contracts, aka what we have used for thousands of years, are subject to all manner of subjective and unpredictable enforcement. Everything from establishing the validity of signatures, to the definitions of words, to the very validity of the terms, is subject to debate. This makes them very expensive to enforce and gives the governance system unlimited power.

Ricardian Contracts

A Ricardian Contract specifies both free-form terms as well as code terms. The EOS community is currently debating if and how to enforce the free-from terms. These terms include things like required disclosure of block producer ownership and certification of facts under penalty of perjury. Others want new terms to regulate everything similar to how government regualtors do.

Need for Objective Boundaries

Users of the EOS blockchain need some guarantees from the community in order to feel safe and secure. If everything on the blockchain is subject to mob-rule, then no one is safe. If the community does not have strong, objective, organizing principles, then everything is subject to interpretation and becomes unpredictable and arbitrary. The ensuing debates and conflict can tear a community apart.

Enforcing Ricardian (Subjective) Terms

The purpose of the Ricardian contracts is to document the intent of the parties and provide evidence of intent in the event of a bug. If a Ricardian contract includes terms that cannot possibly be evaluated and enforced by the code then it is outside the jurisdiction of the block producers and community arbitration to evaluate and enforce.

Lost & Stolen Keys

The purpose of private keys is to generate objective proof-of-ownership. If we cannot rely on signatures alone then we must rely upon identity and subjective interpretations of intent. This will open up an unsustainable level of disputes and new kinds of fraud and/or injustice.

ECAF Opinions

The very first disputes brought before ECAF are in relation to a scam registration website that provided users with fake public/private key pairs. Due to technical limitations, even users who used hardware wallets on Ethereum fell prey to the scam. While the community has objective proof of the original owners of the Ethereum addresses, these individuals fell prey to the scam site because they didn’t use the official eos.io website nor follow the official instructions.

How to Enforce Arbitration orders in event of Key Theft

In a world where protocol-level dispute resolution is limited to fixing bugs in code, how does one protect against fraud and theft of keys? The answer is to opt-in to a banking Ricardian contract which controls the tokens on behalf of their owners. Transfers within the smart contract are subject to dispute resolution where the contract-appointed arbitrators have the power to reverse transactions and freeze tokens. Withdraws from the banking smart contract are subject to a 3 day delay after which they cannot be reversed.

Proposed EOS Constitution Referendum

  1. The Intent of Code is Law where intent is documented by code, Ricardian Contract, user interfaces, and actual use.
  2. If there is a dispute on intent of code, then intent shall be determined by a super majority vote of elected producers or an arbiter mutually agreed to by the parties to the dispute and enacted by producers. A super majority may, at their discretion, freeze a contract during an active dispute until such time as code to fix the contract is available. The parties to the dispute must produce proposed replacement code. The producers may charge a fee and/or place other requirements on the parties to the dispute. A super majority is defined as 2/3+1. Ricardian contractual terms that cannot be enforced by properly functioning code are beyond the scope of the producers authority to evaluate and enforce.
  3. At no time shall elected block producers freeze or modify contracts that are operating as intended.
  4. Contract developers are not liable for damages caused by bugs in the code. All Parties are responsible for auditing the code and the Ricardian contract before use.
  5. All service providers who produce tools to facilitate the construction and signing of transactions on behalf of others shall present the full Ricardian Contract terms of this Constitution and other referenced contracts.
  6. No Party shall have a fiduciary responsibility to support the value of the EOS token. The Parties do not authorize anyone to hold assets, borrow, speak, nor contract on behalf of EOS token holders or the blockchain collectively. This blockchain shall have no owners, managers or fiduciaries.
  7. A Ricardian Contract is deemed accepted when a transaction is incorporated into the blockchain.
  8. Parties voluntarily consent for all other Parties to permanently and irrevocably retain a copy, analyze, and distribute all broadcast transactions and derivative information.
  9. This Constitution may be executed in any number of counterparts, each of which when executed and delivered, shall constitute a duplicate original, but all counterparts together shall constitute a single agreement. Use of the blockchain shall constitute consent.
  10. This Constitution may be amended by a vote of the EOS token holders that attracts no less than 15% staked vote participation among tokens and no fewer than 10% more Yes votes than No votes, sustained for 30 continuous days within a 120 day period.

--

--

--

Cofounder of Block.one, Steemit.com, BitShares.org, and author of More Equal Animals — the subtle art of true democracy.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Binance Smart Chain Pools on Polkastarter

Metaps Alpha Partners with Sorare to Drive Digitalization of the Sports Industry Through Blockchain…

MediBloc signed MOU with Wellcare Clinic

Premium Blockchain Platforms of 2022

Much Multichain, So Marketplace, Very NFT, Wow. [UPDATED]

Anmol Network Ambassador Program

Blockchain as the Next Evolutionary Step of the Open Source Movement

Beginners Guide to Data Economy Index($DATA)

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Daniel Larimer

Daniel Larimer

Cofounder of Block.one, Steemit.com, BitShares.org, and author of More Equal Animals — the subtle art of true democracy.

More from Medium

UMA looks forward to joining ETHPortland

Hathor Wallet security best practices

Introducing Humanity Cash — The role of community currencies in a more resilient economy

OhMy Partners with MixPay to Accept Cryptocurrency Payments