Tokenisation has made substantial technical progress, yet tokenised securities remain peripheral to mainstream capital markets. This paper argues that the central problem is not whether distributed ledger technology can record and process issuance, transfers, pledges or lifecycle events. It can. The harder question is whether the resulting instrument is institutionally usable: capable of being held, settled, financed, serviced, risk-managed, reconciled and relied upon by issuers, investors, dealers, custodians, central securities depositories, auditors and market authorities. The paper develops a market-structure framework distinguishing four levels of record: technical state, operational record, authoritative market record and market utility. Technical state is what the ledger says. The operational record is what a platform or institution administers. The authoritative market record is the record that market actors can rely on for entitlement, transfer, custody, collateral and asset servicing. In legal language, this often corresponds to the legal register or account record; the broader market term is used here because capital-market adoption depends on more than formal legal validity. Market utility asks whether the instrument creates economic value at scale. The paper introduces the concept of Institutional Finality: the condition in which a financial record is not only technically valid, but relied upon across the full capital-market chain. Institutional Finality is broader than settlement finality. Settlement finality asks when a transfer is irrevocable and unconditional. Institutional Finality asks whether the relevant record can be used without bespoke reconciliation or exceptional explanation by the institutions through which markets operate. The paper analyses a recurring architecture in which a distributed ledger platform seeks to operate the primary digital record while an incumbent market infrastructure participates as access layer, validator, custodian, investor central securities depository or distribution channel. Such arrangements raise a record-authority problem: if the incumbent must enforce ledger state, the ledger has market-infrastructure consequences; if it need not, the ledger remains an operational record rather than the authoritative one. The paper labels the unstable form of this arrangement borrowed trust: a configuration in which the platform claims master-record status while the incumbent supplies institutional credibility without acquiring institutional control. The paper proposes a collateral-recognition test: where an asset is pledged or locked on-ledger, will the institutions controlling transfer, custody and settlement prevent inconsistent disposition of the asset? If yes, the ledger has genuine market effect. If no, or if the answer is uncertain, the tokenised asset may be useful for workflow automation but has not achieved Institutional Finality. The conclusion is asset-class specific. Tokenisation is most credible where it is anchored in an accountable record operator and where the authoritative record can be redesigned without disrupting established market infrastructure. Funds, loans and private credit are therefore more natural early candidates than mainstream bonds or listed equities. For mainstream securities, distributed ledger technology may add substantial value as workflow, lifecycle and collateral infrastructure, but claims to master-record status require a much stronger institutional and economic case.
Oracles have become a foundational component of decentralized finance and cross-chain systems by enabling smart contracts to consume external data such as price feeds, timestamps, and event confirmations. However, oracles are fundamentally limited to validating facts and cannot determine whether a transaction or state transition is legally, contractually, or behaviorally permitted. As regulatory regimes such as the European Unionâs Markets in Crypto-Assets Regulation (MiCA) impose enforceable obligations on token issuers, service providers, and infrastructure operators, this limitation creates a critical enforcement gap. This paper introduces a Logic Validation Layer (LVL), implemented via the Crystal Validatorâą, which enforces jurisdictional, behavioral, and policy-based constraints directly within token execution paths. By separating factual data delivery, cross-chain transport, and logic enforcement into distinct architectural layers, the proposed model enables deterministic compliance without sacrificing interoperability, composability, or performance. The paper argues that while oracles remain necessary, logic-level validation has become unavoidable for regulated cross-chain finance.
Decentralized finance has built fixed-rate and yield-bearing instruments, but not a fixed-income architecture in which duration and convexity arise endogenously from continuously updated collateral-policy logic. Every existing protocol that expresses rate sensitivity either imports it from a traditional financial asset, derives it from an automated market maker price curve, or constructs it as a synthetic derivative position. None generate rate sensitivity endogenously from on-chain collateral architecture. This paper shows that a deterministic collateral release schedule defined on a state-aware policy surface is sufficient to endow an on-chain debt instrument with computable modified duration and asymmetric rate sensitivity by construction. We introduce the Amortizing Collateral Bond (ACB), a crypto-native debt instrument whose financial characteristics emerge from collateral policy architecture rather than from any imported traditional finance instrument. The ACB's modified duration is derived analytically from its release schedule and a protocol-implied discount rate. Asymmetric rate sensitivityâthe property that the instrument loses more from rate rises than it gains from rate declines, analogous to the convexity profile of a mortgage-backed security holderâarises from two state-machine-enforced mechanisms: a prepayment option that compresses price appreciation when rates fall, and regime-dependent release schedules that extend duration when rates rise. Neither requires a counterparty or clearing house to enforce the option schedule. We further introduce the Prepayable Vault with Embedded Callable Option, which makes the convexity compression explicit and parameterizable, and Duration-Tranched Vault Certificates, which generalize the structure to multi-tranche pools tranched by rate sensitivity rather than credit quality. In Stage 2, we generalize the discount rate from a protocol-implied single rate to a composite on-chain rate index constructed from observable lending, staking, and funding marketsâenabling multi-maturity duration computation and an empirical low-correlation claim against the Treasury curve. We show that this composite index admits a term structure adequate for duration analysis across maturities, and argue that its structural drivers are distinct from those of the Treasury yield curveânot as a portfolio-level diversification claim, but as a property of the rate surface itself. The empirical correlation between the two surfaces is low over the 2022â2024 period; we are explicit that this independence is structural rather than permanent, and that it degrades as institutional capital integrates the two surfaces. We engage directly with the market-readiness constraintsârate surface liquidity, hedging ecosystem development, and the adoption sequencing problemâand frame the contribution honestly as a proof of existence for crypto-native fixed income rather than a complete market design. The paper further introduces the Collateralized Amortizing Obligation (CAO)âa crypto-native structured vehicle with duration-stratified Senior, Mezzanine, and Equity tranches enforced by a deterministic waterfall. The CAO is not a tokenized collateralized mortgage obligation (CMO) or collateralized loan obligation (CLO): its collateral is entirely on-chain, its tranche duration profiles are computable from the policy surface architecture, and its return drivers reference a rate surface with structurally distinct drivers from traditional finance (TradFi) rate markets. Full issuance mechanics, atomic settlement, and the Convexity Swap as the Equity tranche hedging instrument are developed in Paper III. The architecture developed in Paper I is the necessary prerequisite. A well-defined, continuously updated policy surface is the precondition for any of these instruments to be constructible. What follows shows what becomes possible once that precondition is met.
The legal nature of tokens, cryptographic assets recorded on distributed ledgers and capable of performing multiple economic functions simultaneously or successively, remains one of the most contested and consequential unresolved questions in contemporary financial law. The dominant regulatory response, principally the application of securities law analysis through the investment contract test established in SEC v W J Howey Co , has generated a body of case law characterised by inconsistent outcomes, pervasive uncertainty, and perverse incentives to structure token offerings so as to fall outside the regulatory perimeter. The property law, monetary law, and contractual rights frameworks each capture an important dimension of the problem, but none is adequate, standing alone, to provide a comprehensive and coherent account of the legal nature of tokens across the full range of contexts in which that question arises. This article advances the thesis that the persistent attempt to assign a fixed and singular legal nature to tokens is both theoretically unsatisfactory and practically counterproductive. It is theoretically unsatisfactory because it seeks a degree of ontological stability in an asset class whose defining characteristic is functional versatility; it is practically counterproductive because it produces regulatory arbitrage, legal uncertainty, and market fragmentation. The appropriate response, it is submitted, is a dynamic functional typology: a framework that determines the legal nature of a token by reference to the economic function it performs at any given moment in its lifecycle, payment, investment, access, governance, or representational, and that assigns legal consequences in property, contract, insolvency, and regulation accordingly. Drawing on doctrinal analysis, comparative law, and normative legal theory, the article establishes five economic functions as the organising categories of the framework, proposes four criteria for the identification of the operative function in any given case â the reasonable expectations of the acquirer, the observable economic characteristics of the token, the degree of decentralisation of the network, and the stage of the token's lifecycle â and demonstrates the framework's application to the principal categories of token and to the hardest contested cases, including non-fungible tokens, algorithmic stablecoins, decentralised autonomous organisations, hybrid tokens, and decentralised finance protocols. The comparative analysis examines the regulatory frameworks of the European Union (MiCA), the United States (the Howey test and the proposed FIT21 Act), the United Kingdom, Switzerland, Liechtenstein, Singapore, and Japan, demonstrating that the functional approach is not merely a theoretical construct but the direction in which the most sophisticated legislative initiatives are converging. The article culminates in the articulation of a five-stage Dynamic Classification Framework, comprising preliminary identification, function determination, consequence assignment, lifecycle monitoring, and reclassification, supported by a Dynamic Classification Matrix that maps the legal consequences of each operative function across property, insolvency, and regulatory dimensions. Two regulatory safe harbours are proposed: a transitional safe harbour for issuance-stage tokens and a decentralisation safe harbour for tokens that have achieved sufficient network decentralisation. The article further proposes a token register as the international harmonisation instrument through which the framework's outputs are made publicly accessible across jurisdictions. The framework is designed to be jurisdiction-neutral and compatible with the principal existing legislative architectures, including MiCA, MiFID II, the UNIDROIT Principles on Digital Assets and Private Law, and the UK Law Commission's recommended data object category. Note: A slightly shorter Spanish version is currently under review for the edited volume "Los bienes digitales", led by the PRIVATECH Observatory, Universidad Externado de Colombia.
This Article proposes a novel legal framework, the Coin-to-Company ("C2C") model, that reconciles the structural and governance innovations of blockchain-based organizations with the substantive requirements of U.S. securities law through categorical separation and complementary use of established regulatory exemptions. The model addresses a fundamental tension in digital asset regulation, which is how to enable broad-based community participation and decentralized governance through token distribution without triggering securities law compliance obligations, while simultaneously creating compliant pathways for value realization through traditional corporate equity structures. Rather than attempting to resolve this tension through novel legal theories such as relying on indefinite concepts of âsufficient decentralizationâ or temporal transformation of securities, the C2C model maintains clear categorical distinction between tokens distributed as utility or community instruments (the âcoinsâ) and equity securities issued through established exemptions by a traditional operating company. Tokens never represent investment contracts; equity never dilutes token utility. The model achieves this through: (1) a dual-organization structure familiar in crypto comprising: (a) a US LLC with C Corporation tax election (âLabsCoâ or âDevCoâ) for business operations and equity issuance; and (b) a decentralized autonomous organization (a âDAOâ) that is strictly used for token holder community organization, related IP assignment, and token owner advocacy for project participation and guidance, which may optionally be organized around a legal entity such as an association or foundation: (2) a permissionless token locking mechanism offered by DevCo that functions as technical identity infrastructure and eligibility credential that grants no corporate rights explicitly per the DevCoâs operating agreement; (3) documented pathways for locked token holders to petition the company for equity under a company administered plan and approved pathway such as: (a) Regulation D pathways for equity sales to accredited investors; (b) Reg S; (c) Reg CF/A for crowd-sales; or (d) Rule 701 pathways for compensatory equity grants to advisory contributors, intellectual property providers, and employees; and (4) DevCo shareholders use locked tokens to perform corporate functions such as voting on major corporate matters. Locked token holders may also participate in voting, but only identified shareholdersâ locked token votes are binding for purposes of DevCo actions. The model is particularly timely given regulatory developments signaling acceptance of token-security distinctions. The proposed Responsible Financial Innovation Act recognizes decentralized governance systems and âancillary assetsâ while creating clear commodity jurisdiction for digital assets. The current SEC Chairman Paul Atkinsâ Project Crypto framework, as being coordinated with the CFTC, proposes distinguishing digital commodities, digital tools, and digital collectibles from securities based on functional characteristics rather than form. This Article demonstrates that the C2C model, by carefully operationalizing these distinctions through documented legal structures, provides a defensible, immediately implementable framework for projects seeking to build token-based communities while maintaining regulatory compliance and enabling institutional capital participation.
Decentralized Autonomous Organizations (DAOs) represent a novel organizational paradigm operating across multiple regulatory jurisdictions without traditional legal personhood, exposing participants to significant liability and enforcement risk. This study constructs a comprehensive quantitative taxonomy of regulatory frameworks applicable to DAOs, analyzing 72 operational entities across seven jurisdictional models and examining enforcement actions from fiscal years 2024-2025. We formalize the regulatory compliance burden as a multi-dimensional optimization problem, model liability distribution as a function of governance participation and token holdings, and derive metrics for securities classification risk and anti-money laundering exposure. Data aggregated from Wyoming DAOLLC/DUNA implementations, UK Limited Liability Partnership proposals, Malta ITAS certifications, Swiss Foundation structures, and the emergent Harmony Framework reveal that DAOs without legal wrappers exhibit 3.2Ă higher expected liability costs and face 4.7Ă greater regulatory enforcement probability. The proposed four-tier classification system-Unregistered Protocol DAOs, Operational Wrappers, Foundation Structures, and Hybrid Multi-Jurisdictional Entities-accounts for 94% of observed variance in regulatory outcomes. Regression analysis indicates that legal personhood recognition reduces member-level risk exposure by 68% while imposing median compliance costs of $127,000 annually. Securities enforcement data from 2024-2025 demonstrate that DAOs distributing governance tokens without exemption frameworks face prosecution rates of 23%, compared to 2.8% for legally structured entities. This framework provides a tractable model for jurisdictional selection, compliance architecture design, and governance mechanism optimization under regulatory uncertainty.
The accounting architecture for digital assets has developed unevenly. Under both IFRS and U.S. GAAP, recent technical activity has concentrated mainly on the holder-side of crypto-assets, while issuer-side token transactions remain fragmented across analogies to financial instruments, revenue contracts, loyalty programmes, provisions, and, in practice, non-recognition. That fragmentation is no longer tenable. Web3 issuers, centralised platforms, fintechs and traditional enterprises are now using tokens not only as fundraising devices, but also as access rights, governance mechanisms, customer-retention instruments, and promotional distribution tools. This paper develops a principles-based issuer-side model that separates token arrangements according to their economic substance rather than their technological form. The proposed framework proceeds through five decision gates: âą (i) whether the token creates a contractual claim or residual interest within IAS 32 / IFRS 9; âą (ii) whether it embodies an enforceable promise to transfer goods, services or network access within IFRS 15; âą (iii) whether it grants a material right in a loyalty or rewards structure; âą (iv) whether a promotional airdrop creates a substantive stand-ready obligation; and âą (v) whether the token is, in substance, a governance-only digital right with no continuing issuer obligation. The paper argues that minting alone is ordinarily not a recognition event, that internally generated treasury tokens are not issuer assets, that governance tokens are not equity absent the IAS 32 residual-interest test, and that utility and loyalty tokens ordinarily create contract liabilities rather than immediate revenue. It also proposes a more disciplined treatment for promotional airdrops, together with journal-entry mechanics, disclosure requirements, market illustrations and a bridge to CPC and U.S. GAAP practice. The objective is to provide an auditable, globally usable foundation for the accounting of token issuance by issuers rather than holders.
It is a fictional legal case that examines the emerging field of dispute resolution and accountability in the field of decentralized finance (DeFi). This story is contextualized by a hypothetical scenario where the Aetherium Judicial Network (AJN) an arbitration machinery comes as an organic piece to blockchain designs. It is established on the background of the flash-loan scam destroying a socially minded DeFi lenders protocol, within the doctrine of Code is Law, and in comparison, to the dominant paradigms of the law of contracts, equity, and good faith. The manuscript offers a deeper question by placing the conflict in a decentralized autonomous ecosystem as such actions that can be legally represented as legally valid, but as a strategic manipulative act, are a violation of trust in systems deemed to be trustless. The story rethinks the ills committed by the DeFi participants not as code bugs or market manipulations, but as actions that weaken the socioeconomic pillars of society in general, through adopting a covenantal conception of good faith and fair dealing, and economic interference torts and using ancillary protocols. The decision of the Crypto-Court supports a new model of non-custodial resolution that can be described as reputational penalties and protocol-based restitution, thus, demonstrating the way justice can be served without violating blockchain immutability. Finally, this paper promotes a hybrid system of governance that balances algorithmic determinism and human conceptions of justice, which also preempts a future of financial law based on the decentralized adjudication.
Decentralized Autonomous Organizations (DAOs) face inherent institutional conflicts between their decentralized governance structures, tokenized incentive mechanisms, and rigid global regulatory frameworksâwith the U.S. regulatory landscape (SEC, OFAC, FinCEN) emerging as the most stringent and impactful. In 2024, 7 U.S.-based DAOs were subject to SEC investigations (aggregate penalties of $12.8 million), 18% incurred FinCEN sanctions for OFAC-sanctioned address interactions, and 68% of Base chain DAOs were denied institutional capital due to inadequate compliance documentation. Grounded in institutional economics (regulatory adaptation theory), RegTech principles, and blockchain traceability, this study proposes a âthree-dimensional compliance adaptation frameworkâ for DAO governanceâintegrating a regulatory rule engine (quantitative alignment with U.S. rules), automated on-chain audit report generation (transparency assurance), and dynamic governance optimization (securities risk mitigation). Drawing on the development of the âDAO Shield Proâ system and empirical testing across 7 representative U.S. Base chain DAOs (3 AI-focused, 2 meme-based, 2 investment-focused) over a 6-month period (MarchâAugust 2025), the framework achieves: (1) a 67.9% reduction in average compliance risk scores (from 3.8 to 0.98), (2) a 45.6-percentage-point increase in U.S. institutional investor participation (from 7.8% to 53.4%), (3) a 100% SEC regulatory inquiry acceptance rate, and (4) a 64.2% reduction in monthly compliance labor costs (from $19,200 to $6,870). This research fills critical gaps in DAO compliance scholarship by providing a theoretically rigorous, technically actionable, and empirically validated solution tailored to U.S. regulatory requirements (SEC Howey Test, OFAC sanctions screening, PCAOB auditing standards). It advances the field by quantifying ambiguous regulatory rules into executable on-chain logic and delivers a replicable paradigm for global DAO regulatory adaptationâstrengthening U.S. competitiveness in the Web3 ecosystem and unlocking an estimated $42â$58 billion in latent institutional investment.
Distributed Ledger Technology (DLT) as a principle of corporate governance represents an institutional shift of the law of the firm. Once relegated to academic theorizing and cryptocurrency, DLT now forms institutional infrastructure with a nascent market of tokenized real-world assets (RWAs) surpassing $33B at the close of Q4 2025. This paper analyzes how DLT intersectors three pillars of management - Strategic, Operational and Financial - in conjunction with Transaction Cost Economics (TCE) and Agency Theory that also coincide with inextricably lower baseline costs of trust and coordination. Strategically, Decentralized Autonomous Organizations (DAOs) and Intellectual Property Non-Fungible Tokens (IP-NFTs) are increasingly at the forefront of governance and R&D-related compensation structure. Operationally, smart contracts govern supply chains at near-real time with the Global Shipping Business Network (GSBN) going live with container tracking implementations and the FDA implementing pilot programs for near-instant visibility into temperature-controlled shipping needs. Financially, treasuries and debt instruments are increasingly tokenized to allow firms to harness an illiquidity premium while equitizing their working capital. Ultimately, this research concludes that the international financial architecture is bifurcated as high-stable assets transition to permissioned DLTS while high-velocity assets remain in public programmable spaces.
Abstract The socio-economic developments and the volume of Decentralized Autonomous Organizations (âDAOâ) are increasing day by day. However, debates in the field of law regarding the DAOs are still vigorous. One of the most crucial issues pertaining to DAOs is liability, which is related to their legal nature. Hence, this work first briefly reveals the current liability regime of DAOs within the context of the current landscape of German and Turkish Company Law. Particularly ordinary partnerships, joint-stock companies and limited companies will be examined. Then, the new liability regime for DAOs will be proposed, as a part of the recommendation of a âNew Codeâ. Finally, this work will be concluded with the outcomes and recommendations.
The intersection of non-fungible tokens (NFTs) and decentralised autonomous organisations (DAOs) highlights two transformative, yet divergent, applications of blockchain technology. NFTs focus on establishing unique digital ownership, emphasising individuality and exclusivity, while DAOs represent a collective governance model based on community-driven decision-making. This dynamic mirrors the contrasting personalities in The Odd Couple , symbolising the challenge of balancing uniqueness with collective action. Despite their differences, NFTs and DAOs are increasingly integrated in innovative ways, enabling new forms of collaboration and legal challenges. This chapter explores how NFTs and DAOs coexist, examining their legal structures, governance mechanisms and practical applications. Ultimately, it asks whether these two concepts are truly an âodd coupleâ or a symbiotic pairing that is redefining ownership, governance and digital interaction.
The financial world is at the crossroads, and digital monies, decentralized privacy, and asset tokens recreate centuries-old constructs. Blockchain options are challenging conventional clearing houses as never before, by operating outside of the set parameters. This article examines the complex interaction of old-world clearing systems with new-fangled, crypto settlement mechanisms, deconstructs prickly issues and precious opportunities facing Central Counterparty Clearing Houses. The cryptocurrency environment has developed different settlement methods, but advanced investors are eager to have safe and regulated access to digital assets. Its essence is that blockchain promises to render bypassing middlemen through direct transactions a reality, but, in the meantime, it poses a threat to current systems and presents a new way to envision clearing. This article shows how new clearing corporations can help solve the problem of finance, and even support better market performance and transparency along with stability alongside key protections because innovative hybrid enterprise models can actually become a bridge between old-fashioned finance and digital networks and even increase their reliability, integrity, and stability in the long-term future.
K. Vamshee Krishna, Ganesh Udara, Geethika Maison, Joshmika Katepaka
Blockchain technology has emerged as a transformative approach for secure legal document management, offering key advantages such as transparency, immutability, and enhanced security. This study presents a detailed examination of blockchainâs application in managing legal documents, aiming to modernize and streamline traditional document workflows. The paper begins with an in-depth discussion of blockchain fundamentals, highlighting its decentralized structure, cryptographic safeguards, and consensus protocols. The proposed system follows a well-defined methodology: applicants first submit their credentials, which are authenticated by educational institutions. These verified credentials are then stored in the InterPlanetary File System (IPFS) for decentralized file handling, while only their cryptographic hashes are recorded on the blockchain. This approach reduces storage costs and improves scalability. To evaluate performance, the system was tested using multiple consensus algorithms, including Proof of Work, Proof of Stake, and Practical Byzantine Fault Tolerance. Results indicated that Proof of Stake delivers the best balance between speed and security. A functional prototype demonstrated notable improvements enhancing verification accuracy, reducing processing time, and minimizing manual intervention making the process far more efficient than conventional methods. The system achieved a transaction throughput of 1000 transactions per second and an average confirmation time of 5 seconds, significantly boosting efficiency for institutions and employers verifying credentials. Additionally, a comparative analysis with traditional methods showed superior performance in terms of security, speed, and costeffectiveness, supported by tamper-proof validation and reduced fraud risk. This research not only strengthens the trustworthiness of document verification but also paves the way for future innovations such as cross-chain interoperability, AI-powered fraud detection, and mobile-based verification, enhancing both accessibility and operational excellence in academic credential validation
This paper presents an analysis of the legal regulation of smart contracts in Switzerland and the United King-dom â two leading countries in the field of digital technologies. The study examines the key approaches to the formation and execution of smart contracts, their place within the law and legislation, as well as their in-fluence on the development of IT technologies. The central issue in regulating smart contract-related relations lies in the ambiguity of their legal nature and the lack of regulatory provisions in legislation, particularly in the Civil Code of the Republic of Kazakhstan. Special attention is given to legislative initiatives in both coun-tries. The research shows that Switzerland has successfully integrated blockchain technologies into its legal system through the adoption of specialized legal frameworks. In contrast, the United Kingdom emphasizes the adaptation of common law to the challenges of the emerging digital economy. The article compares the two countriesâ approaches in the definition and application of smart contracts, their legal status, taxation is-sues and data protection. In Switzerland, this is the Law on Distributed Registries (DLT Act), and in the UK, the recommendations of the Law Commission of England and Wales. The paper also focuses on security is-sues (cyber threats and data protection), potential risks and the cross-border use of smart contracts. A com-parative analysis of both jurisdictionsâ approaches is presented, along with their potential for further devel-opment, including participation in global standardization initiatives. In conclusion, the authors underscore the necessity of establishing international legal standards for the effective and secure use of smart contracts.
Tokens are a specific category of digital assets and their diversity, value and significance for the economy continuously grows. Considering their legal nature, tokens are digital representations of a certain right or value incorporated in a form of dataset on the distributed ledgers (DLT). The subtype of tokens often called payment tokens are in the scope of the analysis - these tokens have their intrinsic fluctuating value and can be used for bartering (such as bitcoin). Even though they are widely used in commerce, their civil law status is unclear. In the absence of rules regulating their status, it is necessary to analyse them in the context of general civil law rules to determine whether they could be an object of a subjective rights. Specifically, in this context, it is analysed whether the payment tokens belonging to a deceased person can be a part of the estate and, consequently, whether the heirs (as well as other persons) could obtain and exercise any rights over these assets.
Aleksandar StojanoviÄ, Marta AliÄ, Brigitta Cafuta
Proof-of-Work (PoW) is a consensus mechanism used by some decentralized cryptocurrency systems as the basis of transaction agreement among independent network nodes, without the need for a central authority. It requires computational time and energy to discourage malicious activities such as double spending and manipulation of the distributed ledger. This article provides an overview of the application of PoW from a Decentralized Finance (DeFi) systems perspective and its effectiveness in supporting decentralized transactions and asset management. In addition, recent advances in enhancing scalability and reducing energy consumption are discussed to address concerns regarding the efficiency and sustainability of PoW. Drawing on recent research, this article identifies several basic criteria that can serve as a foundation for understanding and anticipating future trends for the role of PoW within decentralized finance systems.
The financial sector in the 21st century is experiencing a revolution. The major disruptor is decentralised finance (DeFi) which leverages emerging blockchain technology to eliminate the need for centralised financial institutions and empowers individuals with peer-to-peer digital exchanges. DeFi is underpinned by cryptoassets such as bitcoin, ether, and non-fungible tokens (NFTs). As DeFi offerings have become increasingly sophisticated, important legal issues have arisen. One such issue is whether the law is appropriately positioned to recognise and give effect to the use of cryptoassets as collateral in lending arrangements. The lack of legal certainty at present poses a substantial risk to market participants who are, for the most part, transacting blindly. This article, therefore, addresses the applicability and comparative suitability of New Zealand's Personal Property Securities Act 1999 (PPSA) to cryptoasset collateral, using the recent Singaporean case of Chefpierre as a test case. It argues that the PPSA is generally better positioned than English (Singaporean) secured credit law to respond to the emerging use of cryptoassets as collateral. Nevertheless, the challenges posed by cryptoasset collateral necessitate legislative change; in particular, change to the PPSA's perfection requirements and priority rules. After reviewing and analysing recent legal developments in the United Kingdom and the United States, this article proposes that a number of bespoke rules and concepts designed to respond to cryptoassets be introduced into the PPSA.
In recent years, the development of Solidity smart contracts has been increasing rapidly in popularity. Code cloning is a common coding practice, and many prior studies have revealed that code clones could negatively impact software maintenance and quality. However, there is little work systematically analyzing the nature and impacts of code clones in solidity smart contracts. To bridge this gap, we investigate the prevalence, evolution, and bug-proneness of code clones in solidity smart contracts, and further identify the possible reasons for these clones' occurrences. With our evaluation of 26,294 smart contracts with 97,877 functions, we have found that code clones are highly prevalent in smart contracts. Additionally, on average, 32.01% of clones co-evolve, indicating the need for careful management to avoid consistency issues. Surprisingly, unlike in traditional software development, code clones in smart contracts are rarely involved in bug fixes. Finally, we identify three main factors that affect the occurrences of clones. We believe our study can provide valuable insights for developers to understand and manage code clones in solidity smart contracts.