yevvvy 🇺🇦🇺🇦🇺🇦

The Overton Window has been smashed. If everything is now legal[1], many startups will try raising funds by issuing tokens as explicit cryptoequity. As context, the SEC distorted the market for the last decade by forcing founders to obscure the obvious analogy between tokens and equity. But there is nothing *morally* wrong with moving equity from spreadsheets and NASDAQs to blockchains. Indeed, from a *technical* perspective it’s far better to represent equities onchain. You can hold them in a wallet, price them with an API call, and track them on an explorer. You can also easily issue dividends, execute buybacks, and manage vesting schedules. And from a *financial* perspective, there is no contest between the global market of crypto investors and the local market of any given city. But that shouldn’t mean short-term behavior. Founders can (and should) implement lockups, drag along, cosale rights, and the like. All these conventions align long-term interests of investors and founders. You could get there by using AI to translate a typical Series A package into a set of smart contracts. And exchanges should step up to help retail by clearly identifying assets that implement long-term, value-aligning lockups. At least, that’s the responsible game plan for using new technology to fund actual companies. I hope we use our powers responsibly, and will fund projects in this space as we gain more legal clarity. But we may *finally* enter the long-overdue age of the cryptoequity. [1]: Obviously this is a rhetorical overstatement. It’s not literally the Purge. But as with the uncensoring of X, there is an enormous range of new things that is now apparently permissible to do — some good and some bad. And a risk-tolerant community will surge into that space to explore what’s possible. This is one of the downsides of regulating by enforcement. All the SEC did was shoot at good people rather than make good rules. Perhaps the moment was simply beyond their capabilities, and the regulation will de facto fall to the crypto exchanges. In other words: we don’t yet have rule-of-law. All we have is rule-of-code. And that may be how it lands up.