Pedro Heitor de Araújo retweetledi
Game theory teaches: never enter a game you haven’t studied, never reveal your strategy until the incentives are locked, and never play to be liked, play to make the rules irrelevant by building leverage.
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Pedro Heitor de Araújo
1.2K posts
Pedro Heitor de Araújo
@pedroheitor_eth
techlaw, cryptolaw and gambling law at @bicharaemotta / code and law enthusiast / legal engineer
Katılım Ocak 2021
324 Takip Edilen350 Takipçiler
Pedro Heitor de Araújo retweetledi
Congratulations on the new podcast!
@HesterPeirce: “The beauty of the technology is that it allows you to disintermediate so that peers can transact with one another directly or through the intermediation of technology. And that's really powerful in our markets because intermediaries have sometimes been the source of problems, right?” 👏
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Pedro Heitor de Araújo retweetledi
Pedro Heitor de Araújo retweetledi
Udo Seckelmann, Pedro Heitor e Raphael Cvaigman publicam artigo sobre Prediction Markets no Brazil Journal.
No artigo, os autores exploram como os Prediction Markets estão movimentando uma nova indústria multibilionária e impulsionando importantes debates regulatórios, com foco na discussão sobre o enquadramento jurídico desses mercados como derivativos.
Leia o artigo na íntegra:
braziljournal.com/opiniao-predic…
#bicharaemotta #gamblinglaw #PredictionMarkets
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I agree. Although progressive decentralisation is essential for many projects — not least because no protocol is born fully decentralised — its encouragement must be grounded in objective and verifiable criteria. Otherwise, the concept is easily gamed and risks becoming nothing more than a smokescreen.
I see progressive decentralisation as something that should be structured within a safe-harbour mechanism, designed to incentivise the gradual evolution of protocols over a defined period (for example, 3 years), subject to the achievement of clear and measurable milestones. During this interval, it would make sense to apply a more flexible, disclosure-based regime; however, if the project fails to meet the predefined milestones by the end of the period, it should be required to seek authorisation as a VASP, precisely because it has failed to decentralise.
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I hear a lot about 'progressive decentralization' but 99% of the time it is just can-kicking and excuse-making
if really mean it, back it by 'credible commitments'
an example is the way Ethereum built the 'difficulty bomb' in from day 1...sure, it was a bit gimmicky because it was possible to change and did change, but it added enough cost/friction to changing that it made the 'future PoS transition' commitment much more credible
I don't believe in progressive decentralization claims unless paired with a credible commitment...
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Pedro Heitor de Araújo retweetledi
if you are even slightly bullish on something like canton, you don't know the bare minimum of blockchain 101 'basics'
watch this @aantonop video, it couldn't be explained more clearly
I have never heard a single person who is bullish on these types of fake-decentralized models intelligently refute a single one of the points @aantonop makes here
youtube.com/watch?v=SMEOKD…
YouTube
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Excellent clarification on the BRCA. The independent control criterion, as articulated by FinCEN, is the appropriate standard for distinguishing sufficiently decentralised protocols from on-chain CeFi.
My concern lies in the risk of classifying early-stage DeFi developers as money transmitters, given that there is typically some degree of indirect control or custody over users’ funds (via admin keys or multisigs). Decentralisation is a spectrum, and many projects do not launch as decentralised systems due to technical iteration and PMF considerations.
Absent a safe harbour that recognises and incentivises progressive decentralisation, nascent projects remain exposed to premature classifications and regulatory discretion. I have designed a safe harbour framework along these lines, should you wish to discuss it.
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[NEW] Today, the DEF team published a myth vs. fact resource on the Blockchain Regulatory Certainty Act
The BRCA is good policy, and its inclusion in market structure is a red line for the industry for good reason.
Below: we debunk common misconceptions about the BRCA. 👇
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@malekanoms True. Moreover, in the context of public blockchains, these intermediaries would no longer control the underlying infrastructure — which, as we know, is one of the main sources of their market power, alongside the competitive advantages created by regulation.
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@pedroheitor_eth Not just that, but it amounts to inferior replication of TradFi in every way. Corporations don’t need fake blockchains to do 24/7 trading or whatever. And fake blockchains are inferior to traditional databases.
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Sorry to interrupt the love fest over this NYSE announcement, but this reads like vaporware and yet another corporate fantasy masquerading as innovation.
I am happy to be proven wrong, but everything they've put out so far leaves out all the crucial details:
- Which chain?
- What programming language or VM?
- Which stablecoins?
- What jurisdictions? Will it be domestic or global?
- Will the tokens be permissioned, permissionless, or some hybrid?
- What will be the fees and economics be - ICE is a for profit entity
- Why do we even need this when we have DeFi?
The fact that they are seeking regulatory clarity makes the lack of details even more suspect - regulators would need all of these questions answered for approval.
The NYSE is a centuries old institution that owes its entire existence to laws and regulations that guarantee its profits and success. The success of every person who works there, and every cent of its profits, stems directly from this highly centralized and oligopolistic architecture, one built around core principles like delayed settlement that don't exist in crypto.
Tokenization represents a radically different architecture. It requires different skills and business models to be useful. It changes things.
It is highly unlikely that a TradFi firm like the ICE succeeds at both. It would be great for society if they did, but that's usually not how things work.
Those of who have been in crypto for more than a cycle have heard this story before. It always ends the same way. The suit simps will be disappointed yet again.
Simon Taylor@sytaylor
🚨 BREAKING: NYSE announces new tokenization platform. Here's what they're building: A completely new trading venue with: • 24/7 operations (no market hours) • Instant settlement (not T+1) • Stablecoin-based funding (not bank wires) • "Tokens natively issued as digital securities" Not retrofitting the existing exchange. Not adding blockchain to the back office. An entirely new venue. --- Think about what this means: NYSE will run two exchanges. The old one: 9:30-4:00 EST, T+1 settlement, bank wires. The new one: 24/7, instant settlement, stablecoin rails. They're not choosing between traditional and digital. They're operating both in parallel. --- How does this compare to others? Everyone else is building infrastructure to tokenize existing assets: • DTCC tokenizes existing custodied securities • State Street tokenizes MMFs and ETFs • Nasdaq amends rules for tokenized trading alongside traditional NYSE is building a new way to bring equities on-chain AND the venue to trade them. This puts them in competition with Figure's OPEN and Superstate. Native digital issuance. Native digital trading. --- Tokenized stocks enable a world where: • Settlement happens on-chain • Custody lives in wallets, not DTCC • Trading never stops • Capital formation happens in stablecoins The question for every institution: Are you digitizing your existing business or building the business that replaces it? NYSE just answered: both. --- #fintech #tokenization #infrastructure #digitalassets #stablecoins
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Yes. All signs suggest that the technology is finally reaching a level of maturity at which we no longer need to make major trade-offs between decentralisation and adoption.
I see Ethereum in a relatively privileged position in this context. It has achieved a high degree of decentralisation across multiple dimensions and can now redirect more energy towards apps, user experience, communication, and institutional adoption. Of course, important adjustments still need to be made, as Vitalik has pointed out, but the infrastructure side is sufficiently solid and resilient to support high-value economic activity.
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Adoption without decentralization is useless.
Decentralization without adoption is useless as well.
The building out of the decentralized web will forever be a tug-of-war between the two goals, going back in forth in focus (with the complainers not far behind.)
How quickly people forget the eulogies about Ethereum all throughout 2023 to early 2025 because it hadn't done enough for adoption.
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loving the honesty here, but it's important for readers to pause and not gloss over the admission of centralization and compromise of protocol neutrality on multiple fronts.
said by anyone else, i reckon ethereum folk would have been in an uproar, yelling about how ethereum is still the best most greatest super duper decentralized blah blah protocol out there.
2026 is the year i hope people stop white washing ethereum for the sake of better comms and marketing.
we're not solana, aight?
let's be real, take the L, and move on.
vitalik.eth@VitalikButerin
2026 is the year that we take back lost ground in terms of self-sovereignty and trustlessness. Some of what this practically means: Full nodes: thanks to ZK-EVM and BAL, it will once again become easier to locally run a node and verify the Ethereum chain on your own computer. Helios: actually verify the data you're receiving from RPCs instead of blindly trusting it. ORAM, PIR: ask for data from RPCs without revealing which data you're asking, so you can access dapps without your access patterns being sold off to dozens of third parties all around the world. Social recovery wallets and timelocks: wallets that don't make you lose all your money if you misplace your seedphrase, or if an online or offline attacker extracts your seedphrase, and *also* don't make all your money backdoored by Google. Privacy UX: make private payments from your wallet, with the same user experience as making public payments. Privacy censorship resistance: private payments with the ERC-4337 mempool, and soon native AA + FOCIL, without relying on the public broadcaster ecosystem. Application UIs: use more dapps from an onchain UI with IPFS, without relying on trusted servers that would lock you our of practical recovery of your assets if they went offline, and would give you a hijacked UI that steals your funds if they get hacked for even a millisecond. In many of these areas, over the last ten years we have seen serious backsliding in Ethereum. Nodes went from easy to run to hard to run. Dapps went from static pages to complicated behemoths that leak all your data to a dozen servers. Wallets went from routing everything through the RPC, which could be any node of your choice including on your own computer, to leaking your data to a dozen servers of their choice. Block building became more centralized, putting Ethereum transaction inclusion guarantees under the whims of a very small number of builders. In 2026, no longer. Every compromise of values that Ethereum has made up to this point - every moment where you might have been thinking, is it really worth diluting ourselves so much in the name of mainstream adoption - we are making that compromise no longer. It will be a long road. We will not get everything we want in the next Kohaku release, or the next hard fork, or the hard fork after that. But it will make Ethereum into an ecosystem that deserves not only its current place in the universe, but a much greater one. In the world computer, there is no centralized overlord. There is no single point of failure. There is only love. Milady.
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I believe that freedom and efficiency go hand in hand. They are not opposing forces, as is often suggested. Without efficiency, it would be virtually impossible to overcome the network effects created by habit and the convenience of traditional financial applications. After all, in stable and well-structured economies, why would someone abandon their banking app to use crypto if there are no clear advantages — such as near-instant settlement, lower costs, atomic composability, higher yields, and continuous, 24/7 operation?
Conversely, the freedom provided by the resilience and neutrality of decentralised chains is a decisive factor for institutional adoption, particularly in an increasingly polarised and unstable world. That same freedom is also essential for individuals and businesses that have been censored, excluded, or that simply do not have the luxury of placing full trust in their domestic financial systems...
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crypto is not just a 'technology', it makes almost no sense when divorced from cypherpunk values
yet some of the richest & most influential believe it's completely possible and desirable to divorce it from those values
they view it as just 'rails'
very strange....
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I have not read the specific section of the CLARITY Act that addresses this issue, but, based on the summary provided, it appears that lawmakers drew inspiration from the concept of independent control articulated by FinCEN in its well-known Guidance, subsequently refined by the industry itself — as illustrated, for example, in @RebeccaRettig1 article on AML/CFT in DeFi.
The international literature converges in the same direction (FATF, OECD, Shär, Schuler, among others), which, in my view, is methodologically sound.
I have been advocating a similar approach for the regulation of DeFi in Brazil: where there is independent control over users’ funds — understood as the unilateral ability to move, block, or suspend assets — the parties involved in the protocol should be treated as VASPs. Conversely, in the absence of such control, the protocol should be regarded as sufficiently decentralised for regulatory purposes.
In addition, I propose the adoption of a safe harbour mechanism aimed at fostering the progressive decentralisation of early-stage projects.
Should this dividing line be adopted as set out in the proposed text, the outcome would be highly beneficial, providing a clear and functional criterion to guide Brazilian legislators and regulators, drawing on the precedent established in the United States. Great work.
Bill Hughes 🦊@BillHughesDC
The new Senate Banking draft of market structure just was published and here is where ChatGPT says it draws the regulatory perimeter when it comes to self custody interfaces (This is quick - a deep dive is required): This is the crux of this bill — and the answer is yes, it really does protect non-custodial web interfaces, but only up to a very sharp line. Here’s the clean way to understand it. ⸻ The bill creates a three-layer stack The bill doesn’t say “wallets good, websites bad.” It says: There are three legally different things: 1.Protocol layer Smart contracts, blockchains, bridges, DEX contracts 2.Control layer Who can stop, change, route, or custody transactions? 3.Interface layer The website or app users click on Regulation attaches only if control exists. ⸻ When a web interface is PROTECTED A web interface is legally treated as mere software if: •It does not hold user funds •It does not control private keys •It does not have authority to approve, block, reorder, or reroute transactions •It does not have discretion over execution •It does not act as an agent for the user In that case, even if the website: •Shows prices •Builds transactions •Suggests routes •Broadcasts transactions •Charges UI fees …it is legally a non-custodial publisher of software, not a broker or exchange. That covers: •Uniswap web UI •1inch •MetaMask swap UI •Non-custodial bridges •Wallet-embedded DEXs They are statutorily carved out of financial regulation. ⸻ When a web interface becomes REGULATED The moment the operator has control, it flips. If the website operator can: •Hold assets •Move funds without user signature •Batch or net trades •Route orders through proprietary liquidity •Pause, censor, or reverse transactions •Decide whether a transaction executes then the interface becomes a: Broker / dealer / exchange even if it still uses blockchains underneath. That captures: •Coinbase •Binance •Robinhood Crypto •Custodial bridges •Hosted wallets •CeFi yield platforms ⸻ The key test CLARITY uses The bill’s rule is basically: Who has the power to make the transaction happen? If the user’s private key is the only thing that can move funds → protected If the website operator can move or stop funds → regulated The web UI is irrelevant by itself. Control is everything. ⸻ Why this is a real safe harbor CLARITY doesn’t just say “we won’t regulate you.” It says agencies may not re-classify non-custodial interfaces as intermediaries just because they: •Are popular •Earn fees •Look like an exchange •Are easy to use This blocks the SEC/FinCEN theory that: “If users trade through your website, you’re an exchange.” Under CLARITY: “If users trade through their own keys, you’re software.” ⸻ Bottom line Yes — the bill really does protect non-custodial trading interfaces. But it mercilessly regulates anything that: •Touches custody •Touches execution •Touches control That bright-line is what makes the bill powerful.
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Not by chance, in Ethereum’s Yellow Paper, Gavin Wood argues that the system would constitute an implementation of CryptoLaw, insofar as smart contracts, by deterministically automating the performance of contractual obligations, reduce the need for trust between the parties and, consequently, the scope for contractual default, thereby enhancing legal certainty.
This idea, however, does not appear to have been fully realised to date. In practice, smart contracts are predominantly used as the back end of dApps. The question, therefore, is whether, with the expansion of tokenisation, this use case will finally reach its full potential—for example, through structures such as DvP or PvP…
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how I see cybernetic law and the way it intersects with cypherpunk goals:
-->libertarianism views contract law as legitimate (the State has a legitimate role to enforce voluntary private agreements, e.g. sale of private property)
-->cypherpunk is (mostly) libertarian
-->crypto has a legitimate role in replacing/supplementing the role of the State in helping enforce contract law ; using protocols, you can reduce counterparty risk by creating un-breachable agreements! this reduces transaction costs, fraud risks, litigation risks, etc.
basically, taking the voluntary private contract parts of law and enshrining them in protocols is cypherpunk!
enshrining "regulations", OTOH, is fascistic (again, except to the extent they are truly opt-in and don't have negative externalities to the un-regulated protocols)
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Zcash replicates, in digital form, the core properties of cash — fungibility, privacy, transferability, and security — combined with programmed scarcity, in line with Bitcoin. The result is genuinely private internet-native money.
The open question is whether adding privacy-preserving programmability should be the next step. If so, its impact could mirror HTTPS on the web: a trust layer unlocking new use cases and scale.
If HTTPS unlocked e-commerce, what could programmability unlock for Zcash?
Bullish.
mert@mert
Literally the most well articulated zcash / private crypto money thesis i have ever seen fungible, quantum resistant (soon), private — all zcash properties mentioned highly recommend you take a few seconds, reiterates all of our points well
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Exactly. I would only add that the high tax burden and the growing complexity of the tax system — whose levies, in general terms, increase year after year to finance an inefficient allocation of resources by the State — significantly deteriorate the business environment, creating a chilling effect on investment, innovation and entrepreneurial activity, with direct adverse consequences on productivity and economic growth.
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@ltgnba @EdwardKonings Incompetent and dated models of management, predominance of zombie firms in the economy due to ineffective bankruptcy laws, crushing bureaucracy, bad infrastructure, one of the worst justice systems in the world and low R&D depth
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The big problem with Brazil's growth is that there has been no productivity growth since 2014, and demand is exceeding potential growth.
It's demand-driven growth, and this growth fuels a cycle of rising interest rates that suppresses itself in the long term. This is something that tends to be reversed.
Robin Brooks@robin_j_brooks
Emerging markets are facing stagnation, but Brazil is a bright spot. After a terrible period from 2014 - 2020, its growth has recoupled with the US and it's definitely out of its growth slump. There are many things Brazil could do better, but it's growing! robinjbrooks.substack.com/p/when-will-br…
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Pedro Heitor de Araújo retweetledi
We need more rugged individualism, not less.
Build on the frontier. Be independent. Decentralize power. Accelerate civilizational progress. Celebrate economic freedom.
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Hence the importance of measuring the degree of decentralisation in order to determine the applicability of regulatory regimes. Only sufficiently decentralised systems—that is, those in which no central agent or coalition holds unilateral and discretionary power to access funds or control the use of the protocol—justify the application of a more flexible regulatory regime, in contrast with traditional financial regulation, as sufficient decentralisation reduces the asymmetries and vulnerabilities that have historically underpinned such regulation.
As no project is sufficiently decentralised from inception, the adoption of safe harbour mechanisms is necessary to enable an appropriate regulatory transition. These are the core premises of the book I am writing on the regulation of DeFi in Brazil.
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one side of crypto: not your keys, not your coins...self-sovereignty. . .censorship-resistance...immutable commitments. . .unconfiscatable...DAOs where assets are actually controlled directly by voters. . . own your assets and do wtf you want with your own money
other side of crypto: oracle-referencing thing that refers to some other thing that is a claim on some other things. . .custodial stablecoins with no redemption rights. . .tokenized stocks with no stocks. . . rugs. . .proxy upgradeability authority held by some dev's EOA. . ."L2s" that are mere multisigs. . ."vaults" that are just hedge funds with an onchain deposit box. . . "DAOs" that are just LLCs managed by some guys. . .
we popularized the word "rug" on top of systems built to enable un-ruggability. . .
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Pedro Heitor de Araújo retweetledi
“Study microeconomics, game theory, psychology, persuasion, mathematics, and computers.”
- @naval
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Pedro Heitor de Araújo retweetledi
