DAOs and DeFi are a crucial part of the cryptocurrency universe. The decentralized structure of the field, however, has been raising concerns in the minds of regulators such as the SEC. Chairman Gensler, for instance, explicitly spoke about Decentralized Finance [DeFi], stablecoins, and crypto-lenders being potential targets for greater regulatory scrutiny a few days ago.
To protect the DeFi community, the Yearn Finance community has floated a new DAO proposal to “defend” DeFi. This proposal seeks to maintain an independent status from “Silicon Valley venture capital funds,” some of which are already facing regulatory music.
The builder-first DAO, spearheaded by crypto-centric legal group LeXpunK, launched a “builder-first legal activism DAO” which will be an army of lawyers working “in the crypto-spirit.”
The proposal noted,
“We believe that cryptolaw should be done in the crypto spirit. If DeFi communities want to show regulators, lawyers, and politicians what is special about DeFi, then Orwellian-named trade associations and non-profits staffed by D.C. insiders are not the best way to go.”
“Instead, we should present ourselves as we are–as DAOs, as token communities, as builder communities,” it concluded.
First hinted at back in June, the group also claims that the “true calling of lawyers is to join with BUIDLers, HODLers & DEgens” in the crypto-industry. As of now, it has two other members from the DeFi world – Yearn Finance and Curve Finance. Both of these projects will be responsible for raising $2 million.
Split equally, this amount will help “bootstrap a new community of lawyers and builders working side-by-side to legitimize and protect shared creative values” of the DeFi space.
Yearn Finance CEO Andre Cronje, the man who co-authored this proposal, reacted strongly to Gensler’s aforementioned speech. In a recent tweet, he had stressed on the importance of the proposal garnering wider support within the community.
After watching Gensler, we are underfunding this by 1000x, can't stress how important this is, please support! https://t.co/XQMhriUDDI
— Andre Cronje (@AndreCronjeTech) August 3, 2021
Gensler isn’t alone, however. CFTC Commissioner Dan Berkovitz, for instance, recently opined that DeFi is “squarely incompatible with the policy of mandatory intermediation.”