A Legal Engineer's Guide to a "Fair Launch"

# A Legal Engineer's Guide to a "Fair Launch" ## Part 1 - What is it? ### What is fair? First off, one of the points that comes up eventually in a discussion of the "fair launch" phenomenon is this question: "what does fair mean anyway?" This is not what we're here to discuss. It is too deep a philosophical rabbithole. What is worth mentioning is the notion of "fairness" exists. This is the part that matters. People have built in detectors for fairness. If someone says to you "that's not fair" you just kinda know what it means. We're not here to fight out what is actually "fair." As legal engineers we start from the assumption that this is what legal systems are for: the fair adjudication of disputes. The law is, historically, the manifestion of the efforts of people to get a more fair shake. It has its issues, but it's best we've built so far and the records are mostly public. Through this lens, we're taking a look at the recent "fair launch" movement. ### What is a "fair launch?" As we see it, the "fair launch" movement is an attempt to launch coordinated projects in the most "fair" way. I'll take that to mean nothing more than "a way of doing X that sets off fewer fairness detectors." Traditionally, we do this with things that look like companies. The whole thing is "fair" if only because a core group of contributors shares in the value created by the project. In this sense the "fair" argument tends to be around the allocation of the spoils of that value capture. Within companies, people also accrue the power to guide the future of the company. Voting rights. Governance. Whatever you want to call it. None of these are new things. But, novel ways of handling their administration have been few and far between until the emergence of blockchain tech. Shareholder meetings are not a new thing, but I've never attended one, although I've owned stock my whole adult life. Ultimately the superpower of blockchain is a matter of reducing coordination overhead, and facilitating collective action. With this overhead exponentially lower, we can start to test some new stuff, with things like SushiSwap, $YAMS, $YFI, and HausDAO as examples of recent experiments. So, "what is a fair launch?"" Eh, it depends. What follows are some of our thoughts on what a fair launch looks like, and some of the applicable discussions and examples that have come up in LexDAO channels in recent weeks. Here's a look at some of the things we think matter when figuring out how to arrange your dominos. ## Features of a "Fair Launch" **1. Community Ownership of Value 2. Community Governance 3. Contract Finality 4. Insurance/Locked Liquidity 5. Codified Project Milestones** ### 1. Community Ownership of Value Let's assume that every project is producing or capturing some kind of value. Whether it's coordination of human time or yield. This value should be distributed to the maximum number of actors reasonable. This might look like a public company, with a board, etc. or it might be something different. There are cool new experiments emerging every day. At LexDAO we **are** one of those experiments, endeavoring to find the best way to share the value of legal engineering [as a nonprofit cooperative](https://github.com/lexDAO/LexDAO-Constitution/blob/master/LexDAO-Constitution-v01.md). (We'll cover a bunch more experiments later in this series.) ### 2. Community Governance As alluded to above, there are is a real opportunity for reinvention, and reapplication of old tools that work quite well. Where your projects falls will depend on the scale, and the value you propose to capture. Broadly, notions of maximum decentralization demand something like: This governance power should be as broadly distributed as posible among those incentivized to **sustain** the project. At LexDAO we are organizing as a co-op. Our governance decisions are made by guild members only. One member. One vote. ### 3. Contract Finality This is a new one, born of months of LexDAO conversations on the topic. We're going to cover this is a whole different separate post. But this is where it falls in the pecking order. Functionally, the finality of a contract is a look at how enforceable that contract is on all possible fronts. We call it "proof of finality." (Stick around for part 2 😎) ### 4. Insurance/Locked Liquidity If something of value is in motion to facilitate any sort of decentralization event, that value should be insured, or should pass through a non-custodial intermediate. No party should have the power to manipulate delivery of promises or assets by simply refusing to process a given transaction. If someone is raising liquidity, no single actor should be able to unilterally grab all or a portion of that value. How diffused should this be? That will depend on the specific goals if the project. ### 5. Codified Project Milestones Whenever possible, project milestones should be well articulated, and as automated as possible. For example, tying disbursment of production funding could be programatically tied to associated code commits. ## Next Up Part 2 - A Look at Finality. Part 3 - $SUSHI, $YFI, and others. ## Want to join the conversation? Join LexDAO. Have your own thoughts on what makes a "fair launch"? Jump into our [Discord](https://chat.lexdao.org) to jump right in. Like we said, LexDAO is an open cooperative. Anyone can join and start working with us to craft conversations like these ones. If you'd like to get this stuff in your inbox, [sign up here](https://https://lexdao.substack.com/welcome).