Code isn’t law but actually much better

Code is law is one of the foundation myths of early web3. Marked by a deep mistrust in state institutions after the 2008 financial crisis, this mantra seemed to promise a new era of crypto-anarchic libertarianism.

Now, more than 10 years after, what is left? With some relief, the latest executive order signed by President Biden was celebrated by some crypto enthusiast. But shouldn’t anybody in crypto care at all about old-fashioned facilities like executive orders?

It seems that crypto’s promise to get rid of intransparent and centralized lawmaking has completely disappeared into thin air.

Weaponized Code

The original claim of Code is Law sometimes felt a bit like a threat. When I once lost a domain on ENS because I had not renewed it in time, I had to buy it back on Opensea, no matter that I owned the brand.

It meant that everybody basically was an outlaw who just had to put up with everything which was allowed by “code”. Remember “The DAO”-hack? It was strongly disputed if this was a robbery — after all, the hacker had only used a regular function of the software.

Voluntarism is the answer

But there could also be a very different — and positive — notion of Code is Law. It is grounded in the fundamental right of freedom of contract. Any two parties can contractually agree that the settlement of the agreement will be done by software code. Especially, they can mutually waive the right to appeal. Through their voluntary character its actually much more elegant than the original brute force method.

By law and contract, two parties can agree that Code is Law

This is not a myth. We know of first state institutions who have officially approved such agreements. Check out our blog post on new legal models in insurance!

This post was created with Typeshare