It all makes a lot of sense, just afraid this would make CRV and veCRV a security and bring a lot of pain to everyone, more than non enforcing IP rights.
Should be checked by a law firm in the USA imo
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Completely agree this can be part of any analysis of the best path forward. Probably should also include making strategic decisions about the best structure for ownership of IP within the Curve ecosystem going-forward.
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Expectation:
You: “Judge, this cat on the internet rewrote my smart contract code and it violates my IP”
Judge: “Jail!!!”
Reality:
You: “Judge, this cat on the internet rewrote my code and it violates my IP”
Judge: “Oh, the same code for an asset that’s most definitely an unregistered security in the US? Do you’ve a money transmission and a million other licenses required to be compliant btw? And who’s this 0xc4ad deployer; surely your own team larping as anon to avoid regulatory scrutiny?”
Anon cat, meanwhile: doesn’t give a fuck, simply operates out of a jurisdiction that’s not the US, deploys your own code (not even rewrite) using ether routed through tornado cash, even worse, sets fees explicitly to 0 and forks out the unnecessary tokens with each pool setting their own fees
I know OP has good intentions (and makes valid points why VeCRV holders should be concerned) but this is disappointing to say the least. But maybe that’s on me for hoping crypto will always remain punk, either way I strongly think this license enforcement stuff is a turn off for most talented programmers who’re “in it for the tech”. Would Satoshi and Hal contribute to Curve if they were around? I think not.
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Obviously I disagree with anon-cat on his conclusion (and also disagree with his concern about whether Curve lacks adequate licenses).
BUT, I think his answer rationally and cogently sets forth the “Against” side of this topic.
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Happy to see what the larger community thinks, this is a crucial discussion that we can’t keep delegating for later so thanks for bringing it up.
In addition to my post, the other point just comes down to “Do we want to kick the hornets nest (the US, cats on the internet who can afford to not care) by setting a precedent?”. When I think of curve’s moat, I don’t think of incomprehensible math or the IP stuff, it’s always been the team who I trust to iterate rapidly to blow out any competition out of the water (see: uniswap v3). The same team the other forks lack if/when an exploit happens + someone has to fix it at 3 am in the morning.
Also the deeply rooted DApp integrations (yearn et el) and it’s hard not to see how the license can come in the way: https://twitter.com/curvefinance/status/1404682025563533312?s=21
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The best thing we ever did in regards to Swerve was when we started to ignore them; I think likely that’s the best course of action here. The only reason one should fear copy-cats is if you fear they may be more competent.
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Is the code owned by the DAO or is it owned by Michael Egorov and the DAO has a perpetual license for use? Might seem like a small detail but in the latter case, I think Michael would have to be the plaintiff, not Curve.
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Also, we should encourage friendly forks which can benifit veCRV holders 
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Excellent question and exactly the sort of issues this proposal would aim to lock down. The license document on github suggests it’s owned by Curve, not an individual. But under US law an exclusive licensee can also bring an infringement claim so the own/exclusive licensee topic may not prove critical. Either way, these sorts of issues need clarity, focus, and, when appropriate, legal enforcement.
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good point made here.
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Even if legal action is possible (I’m not convinced it is at this point), I’d prefer it be the last option. If we can work with Saddle to share ownership with veCRV or even poach their developers, I’d rather go that route. Might also be an unlikely strategy, but I prefer a strategy that appears more collaborative and aligned with the values of the DeFi community.
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Agree with the sentiment here - it’s important for Curve to establish a defensible position against IP infringement.
However, the power it yields should be used sparingly - getting embroiled in legal battles can become extremely distracting for the protocol/DAO. Also Curve should act from a place of strength, as the intellectual moat (and community) it has built up around the IP can’t just be forked.
Most competitors will go the way of Swerve, and other fork-dramas (Uni-Sushi) have not ultimately hurt the forkee (e.g. since June 1, 2.4MM Uniswap swaps vs. 142k Sushi swaps) and created more industry competition (healthy).
TL;DR This is smart, but only if used wisely.
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I think this is delusional, ill-advised, and destructive to our brand.
We stand to do much better by being collaborative; composability is tantamount to Curve’s long term success.
There’s no legal cure that would be material for Curve, especially in light of future anon forks.
We should be focused on V2, expanding the suite of pools, and ensuring we’re generating value for CRV and veCRV holders.
There are hundreds of pools and metapools that we’re missing that could double or triple our volumes.
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Absence of litigation is a typical representation in a lot of VC agreements. This won’t work for token-based transactions, but where VCs are investing in a traditional company with equity / terms sheets, etc. If timed right, it could derail their deal. Generally, well-written angrygrams from lawyers usually have a chilling effect on deal making for many VCs who reject dozens of good opportunities for every one that they invest in. Why go for the dirty shirt when there’s a clean one over there? So even for the token-based transactions, if a copy is sent to the VC in advance of the deal, it could slow things down at least.
I’m not sure putting the litigation / proposal up for DAO is the right strategy though. Some governance structure should be investigated, but legal strategies that can be seen by the adversary are bound to fail.
What I would also say is watch what Uniswap do - there’s already a uniswap v3 clone on the BSC.
This won’t eliminate the clones, but it’d at least discourage certain types of them in certain jurisdictions.
Clearly there are lots of other issues identified that need to be investigated, notably the concept of whether this would raise more problems than it solves (e.g. would that turn CRV into a security for US law purposes, which is a more complicated matter than I actually pretend understand). But those can be researched as a next step before proceding further.
It also requires a different skill/knowledge set and mentality than authoring the next version of Curve, negotiating with other protocols around different types of pools, and other value added activities. That can be outsourced and should not detract from those.
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Just want to reiterate this point because I believe it can’t be said loud enough:
This is definitely delusional. I’ve developed software & chased after some IP for it. It’s almost completely unenforceable except for copyright infringement. And copyright infringement is primarily only enforceable if it’s a direct copy (in whole or in part). The “infringer” (saddle) who triggered this nonsense definitely did not copy the code in whole. Based on a cursory review it wasn’t copied in part either.
TL;DR you’re chasing your tail. Chase after improvements to the protocol & stop acting like TRAD BANK.
I really appreciate your insight that this issue and ongoing dev are totally separate questions which would not detract from each other in terms of time/attention. To me that’s the beauty of a DAO: people and resources from different perspective collaborating for a better project than anyone could ever do solo.
Under the Howey test, a cryptocurrency would be considered an “investment contract” (which is included in the U.S. definition of “security”) when there is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. The most recent guidance published by the SEC (Framework for “Investment Contract” Analysis of Digital Assets) indicates that the SEC would potentially view a cryptocurrency as a security if there is a somewhat centralized or coordinated group making significant decisions and managerial efforts that impact the success or failure of the cryptocurrency. Under this framework, most cryptocurrencies fall in the “security” bucket unless it is very decentralized, its intended functionality is largely realized, and/or there is no expectation of profit.
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Don’t get me wrong, curve and its team are awesome, but this is pretty lame. If curve wants to maintain its lead, it should innnovate.
By way of background, I’m an attorney working in the DeFi space and also a veCRV holder so I’m absolutely not biased (pulls tongue from cheek). I’ve worked as an attorney for multinationals in the tech sector for over 20 years so I know my way around this type of issue. Perhaps that makes me more inclined to look at this as a hard-nosed business choice.
I’ve voted in support of the proposal but this is obviously a complex issue that goes beyond the psycho-babble and Deleuzian fever dream that passes for legal analysis in this industry. Full disclosure: I frankly care less about the ideological purity of ETH or DeFi maxis or the laughable spoutings of their libertarian offspring - we’re not going to take on global behemoths and FI titans and win on their turf with that approach. That leaves us with 2 pragmatic options. We either:
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desparately hold onto the idea that we are professional revolutionaries in the midst of perpetual revolution. (spoiler alert: Lenin is dead, along with a few others); or
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try the more modest approach recommended by the Fabians - gradual, modest reform from within the structure being reformed. Still revolutionary but with a nice haircut and table manners.
If you’re concerned with my reference to far-left theorists to frame this discussion, you’d be well advised to ask why. Who knows, perhaps there are more than a few closet Marxists amongst us. In any case, we can learn something from these thinkers. Like, what really happens after the DeFi revolution is over and the blood has been hosed away? We’re basically left with the same power structures as before, mutated to adapt to the new historical reality. For a recent example, see: Arab Spring, Feb 2011.
Applying all of this to the OP, he accepts the basic tenets of intellectual property law and the traditional legal system. That’s a good start.
If one accepts intellectual property, and, a priori, property and ownership structures, then there is only one legitimate response that keeps an eye on the long-term ramifications. And that is to initiate legal actions to protect that property. Property-Violence: the necessary bedfellows. And if you are hoping for some natty software or smart contract to solve this problem? Nation-states will never allow smart contracts to replace their monopoly on the threat of violence that underpins all litigation and legal enforcement. There is no easy, bloodless, drone strike to solve this problem. We’ll need to get up close and risk having blood on our hands.
This isn’t just about protecting IP against start-ups or competing DeFi platforms - those minnows will die as soon as the pond dries up. It’s about installing boundaries and electric fences to slow down the greybacks who are about to enter this territory, predators who will patent and trademark the living crap out of everything they find, forcing existing DeFi teams to submit. Any aggressive litigation by Curve now will make them think twice. In fact, why not flex some muscle and take down several nonsensical copycats?
If you feel queasy about this, you’re in the wrong game. This isn’t personal - it’s business. While we’re at it, save some money to take on the regulators too. Want to know what shuts them up and makes them think twice? I good spanking in the appellate courts. They’re our regulators. We pay their wages. We scrutinise their actions and budgets. They have limits that are within our reach.
Meanwhile, let’s learn from the large FIs: start taking down some small offenders and build a rep that tells the market: mess with us at your peril. This tip-toeing and dancing around regulators and third parties that is endemic in crypto is not working. It’s time to step up the game.
en bref: We have a war-chest and should use it to protect Curve’s legitimate business interests. That includes IP. Let’s extend our horizons beyond bull and bear markets. It’s time now for some tough business logic to kick in before we get chewed up and spat out by something bigger up the food chain.
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Hi Anon-cat/all
Firstly-this response is not legal advice, just commentary from an IP consultant. I am not a solicitor.
One thing to recall here is that copyright relates to expression. If I copy code without permission line by line that is normally infringement. If I look at the output from some code and write a new and different program to create the same output my code will be a new expression and my expression and (as I likely cannot see the original code) it will be my code. (It still might infringe a patent if I execute it though). That is one intangible asset - the copyright.
However IP involves a lot more. I regularly perform IP audis for software companies - software companies have code, proprietary know-how, registered and unregistered trademarks, data, databases, software which incorporates registered or registered computer implemented inventions, contracts, relationships, processes etc. All these assets have value which needs to be managed.
So there is a lot more than copyright for Curve and other DAOs (and other crypto firms) to consider.
As to the is Curve a security question that is a separate regulatory question and the answer will be yes or no.
But if the question is should crypto companies protect their IP in my opinion the short answer is yes, if you are a for profit organisation.
The choice to enforce is a different question. Does Curve have budget for that? Victory is not certain and litigation investors are like VCs - choosy. They will certainly want clarity on who owns any infringed code - is that known?
For profit companies are constituted to make profit. It is OK to be non-profit but most companies and their investors are looking to profit. So it is important to look after the intangible assets otherwise they will leak out. There are ways to stop leakage.
Happy to discuss IP issues with any crypto DAO or firm looking to sort out its IP strategy.
This looks like a good discussion.
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