Yesterday, Connor Spelliscy and Holmes Wilson argued that the cryptocurrency industry is confronting an existential crisis. In Part 2 of this Defiant Essay, Connor and Holmes issue a call to action and lay out a primer for mobilizing the community to rescue the movement from regulation that could significantly impede, or even cripple, the crypto industry. .
The crypto industry has huge advantages over other information technology industries. Our organizational tools, capital, and passionate grassroots support (from highly connected retail investors and early adopters) enable us to run substantial education and advocacy campaigns. Historically, new entrants were nowhere near as well-equipped to advocate for their technology and were overwhelmingly outmatched by incumbents.
The following are some ways to mobilize these inherent advantages to achieve political safety:
- Fund Crypto Public Goods Tech
Funding and promoting initiatives that highlight the crypto industry’s potential for good helps improve the narrative for crypto among policymakers and regulators. That increases the likelihood they will progressively adopt a more favourable outlook for crypto and provide support for crypto advocacy organizations.
These initiatives should also be demonstrably helpful for the non-crypto public.
Potential Next Steps
Support existing public good grants programs
Fund public goods work in crypto through third-party platforms like Gitcoin, Open Grants, and clr.fund.
Create your own public goods grants program
Create a dedicated grants program that funds projects that accelerate crypto public goods technology. This is likely more appropriate for an organization with more resources, but groups like Uniswap, Compound, Aave, the Interchain Foundation, and the Ethereum Foundation have grants programs which, at least in part, support these initiatives. For instance, your grants program could support projects that are providing public goods that could not be provided without crypto.
Projects that rely on crypto-incentives to help reduce the digital divide, provide equitable access to financial services, and increase corporate transparency are all worthy. These projects must be capable of making a material impact and being relied upon to convince the public and policymakers of that scale of impact.
Draft, or fund drafting, of reports on crypto projects
Draft periodic reports on crypto initiatives that highlight the crypto industry’s potential for good, which can be used for public relations by crypto projects and advocacy organizations. These reports could focus on clear potential for impact without having to point to actual impact.
- Fund Think Tanks and/or Activism Groups
Think tanks fund and promote research concerning topics related to one or more social policy, political strategy, or economic theory, while advocacy groups participate in activism focused on similar subject matter that could include lobbying and organizing grassroots campaigns. Many organizations operate both as think tanks and activism groups. Some are specific to blockchain while others have broader focuses.
Examples specific to blockchain include:
- Coin Center is the leading US non-profit focused on the policy issues facing cryptocurrency networks.. They do this by producing and publishing policy research from respected academics and experts, educating policymakers and the media about blockchain technology, and by engaging in advocacy for sound public policy.
- The DeFi Education Fund educates policymakers around the world about DeFi and advocates for policies welcoming of DeFi and decentralized governance. It was funded by a $20M grant of UNI via a Uniswap treasury proposal.
- Smart Contract Research Forum is a community that showcases cutting-edge blockchain research and thoughtful peer review.
- DAO Research Collective accelerates DAO functionality by procuring and open-sourcing research foundational to effective DAO operations. This organization has so far been funded by Uniswap, Compound, and Aave grants programs as well as the Ethereum Foundation.
Non-crypto specific organizations that are also supporting crypto initiatives:
- Electronic Frontier Foundation is a non-profit leader in defending digital privacy, free speech, and innovation. EFF started fighting against misguided crypto legislation when campaigning against the New York Bitlicense in 20141, worked in coalition to fend off state-level crypto regulation in California2, and was heavily involved in the recent fight over the infrastructure bill3. The organization also has a team of lawyers working to defend rights through the court system. You can become an EFF member as an individual or companies can apply to become organizational members.
- Fight for the Future is a grassroots activism group that fights to protect and expand privacy, autonomy, and freedom online. They focus on large-scale public campaigning and have been behind the largest online protests ever—such as the protests to stop the SOPA/PIPA site-blocking bills in 2011 and pass US and EU net neutrality rules in 2014/2015—channeling internet outrage to win public interest victories that at the time were widely thought to be impossible. They played a major role in mobilizing individuals to contact their senators during the Infrastructure Bill fight in the Senate.
Potential Next Steps
Support these initiatives directly
You can make donations and, depending on the organization, you may be able to have some input as to how your funding is used.
Support these initiatives through third-party organizations
You could support these initiatives through a third-party organization like Gitcoin, which is considering doing a funding round specific to crypto advocacy groups.
Incubate your own initiative
While this would be a much heavier lift, you could build your own think tank or advocacy group that prioritizes the research most important to the policy positions of your organization.
- Fund and Participate in Industry Associations
Industry associations are founded and funded by organizations in a particular field, generally in order to advocate for their collective interests. There is some overlap between the work done by industry associations and think tanks, the key difference is that industry associations have member organizations, which typically govern and direct the association. Prominent industry organizations in blockchain include:
- The Blockchain Association has been the most active industry and lobbying association in the US. Its membership includes many of the leading projects, exchanges, and VCs in blockchain, like Uniswap, Compound, Aave, DCG, Optimism, Filecoin, USV, Grayscale, etc.
- INATBA is the largest blockchain industry association in Europe and maintains close ties to the European Commission. Its membership includes both blockchain and non-blockchain companies, like Aave, Fireblock, Interchain Foundation, Ledger, Fujitsu, Accenture, etc.
- Proof of Stake Alliance focuses exclusively on obtaining legal and regulatory clarity for staking; at the moment it is in litigation with the IRS over tax treatment of staking rewards. Their membership includes Tezos, Bison Trails, Polychain, and the Interchain Foundation.
Potential Next Steps
Join one or more industry associations
Decide on which organizations to support and ideally identify someone at your project to be responsible for maintaining relationships with these organizations, so you get the most out of your membership. Consider also forming a branch of an existing industry association in your jurisdiction.
Start your own industry association
Organize an industry association of organizations that has values and interests that align with your own. To do this effectively is a significant undertaking so for the most part organizations find it more efficient to join an existing association.
- Directly Encourage Community Participation in Advocacy
Policymakers can be heavily influenced by vocal individuals and organizations based in their constituencies. A recent example is the Infrastructure Bill campaign run by groups including Fight for the Future, the Blockchain Association, and Coin Center to encourage and provide tooling for US citizens to call their respective senators and encourage them to support pro-crypto positions. While the campaign was ultimately unsuccessful in stopping the anti-crypto language from being inserted into the bill, it precipitated 40,000+ calls to senators and demonstrated to policymakers that crypto was a material issue for their voters.
Other examples of similar campaigns include anti-SOPA and Save the Internet. The anti-SOPA campaign was organized by a similarly broad range of organizations including Google, Mozilla, Reddit, Wikipedia, Electronic Frontier Foundation, and Human Rights Watch, in response to the introduction of anti-piracy legislation that could have limited free speech on the internet. These organizations helped mobilize their users by, among other things, blacking out their websites for periods of time to create awareness of the potential impact of the SOPA bill. Google collected more than seven million signatures from Americans for its anti-SOPA petition. The campaign was successful and the SOPA bill was not passed.
Save the Internet was organized by a broad coalition of media, consumer and internet groups to preserve some protections for net neutrality in the US. This group was composed of dozens of organizations ranging from conservative to libertarian to liberal, including the Gun Owners of America, MoveOn.org, and the American Library Association. It obtained 1.9 million signatures for petitions to defend net neutrality and is credited with playing a significant role in stopping AT&T’s 2006 attempt to erode net neutrality rights in the U.S.
Potential Next Steps
Develop a strategy for how your organization could engage your users to participate in advocacy supporting crypto. Your organization could execute on a strategy now, or develop a strategy to be deployed in situations like the introduction of a bill potentially damaging to the crypto community. Your organization could develop the strategy alone, or with other organizations with similar interests.
For instance, during the recent effort to stop the expansion of the definition of “Broker” in the Infrastructure Bill, organizations like Kraken alerted users of the need to support advocacy efforts directly. The key is having a capacity to notify and mobilize the largest part of your audience directly in a way that’s authentic, thoughtful, and fits with your organization’s product or platform. Asking all your users to call Congress with an email or in-app notification is an amazing feat, but doing it in a thoughtful way that creates an interesting story can achieve a better result.
- Lobby Directly
Lobbying is any attempt by individuals or private interest groups to influence decisions of regulators or policymakers. While the practice has some negative associations, in many governments globally it’s a fundamental part of the process for rulemaking. Policymakers and regulators have an abundance of varied subjects to learn about quickly so, without assistance from industry, they will overlook or misunderstand some of that subject matter, particularly when it’s as complicated as crypto.
In the context of lobbying for crypto in the United States, crypto organizations generally hire lobbyists to connect those organizations with relevant policymakers, regulators, and their staffs to (1) educate them on crypto and (2) encourage them to champion policy or regulations that support the industry or a subset of the industry.
Potential Next Steps
Learn more about this process from those with experience; speaking with industry associations in the jurisdiction where you’ll be lobbying is a good place to start. Some of them will be able to help coordinate your lobbying efforts, or connect you with lobbying firms best suited to help with your particular issues.
- Support a Defend Crypto Fund
Help create a “Defend Crypto” fund which helps fund the defense of projects and teams against inequitable prosecution from regulators. The initiative would be designed both to provide support for those in the industry who have been targeted by regulators and to help create legal precedents favourable to the industry, which will ultimately help protect other crypto projects and teams.
Potential Next Steps
To our knowledge, no such fund currently exists. If you’re interested in contributing resources to start one, reach out to Connor Spelliscy (@c_spelliscy on Twitter).
- Support an individual member-backed crypto rights group
Help support an individual advocacy association like that proposed by Ryan Selkis, the co-founder and CEO of Messari, where members are individuals rather than organizations. These groups can often take more aggressive positions given they do not represent particular organizations. These kinds of organizations can also help mobilize voters at a greater scale than industry associations if they have a sufficiently broad membership.
Potential Next Steps
Help build this organization or simply join as a member once one is built.
Conclusion: Act now
We have laid out a perspective (as activists and operators with deep experience in crypto and public policy) on why crypto is at risk until it achieves regulatory safety, and what steps can get us there.
Arguments and evidence are the most important tools in this campaign. Contrary to popular belief, navigating the political system is much more about debate, reason, and writing than overt or implicit bribery. The most valuable use of money is not buying politicians. Rather, it is making sure as many brilliant and persuasive people as possible are working full-time, in a coordinated way, to build powerful arguments. But if your supporters’ arguments are less convincing than those of your adversaries, you are unlikely to succeed. People in power are smart, skeptical, and busy. At some point in the struggle, you or someone on your side actually gets to talk to some of them, and in those moments you must be wholly convincing or you are sunk.
On the flip side, here’s what it looks like when you haven’t achieved political safety: a zombie-esque nightmare. Once a party, a Congressional coalition, or government agency decides “something must be done” and formulates a bad proposal that would destroy or hobble some piece of your ecosystem, you can perhaps kill it once but it will keep coming back, again, and again. The cycle of incoming antagonistic regulation becomes a relentless yearly barrage that can wear down even the most well-organized coalitions in a battle of attrition.
This nightmare state is where the cryptocurrency community is now. It does not have strong basic arguments adapted to a range of audiences, and a range of depths. Its public support is fractured, with strong support but also strong opposition. You can ignore knee-jerk crypto haters on Hacker News and Twitter when building your products, but in the political sphere they are an impassioned counterweight to crypto and that matters. Crypto does not have broad intellectual support, even within the tech and security community.
The political work is not done. Crypto is not safe. Regulatory threats will keep coming, unabated.
The only way to escape this political fragility is to identify the primary threats to crypto and decentralization that must be made politically untenable for a zone of safety to exist, and allocate the resources to the political work to make that happen. This is what VCR manufacturers did in their battle with film studios. This is what activists and the traditional tech industry have had to do time and again.
Now the crypto movement faces the same political challenge. We have all the advantages we could ask for. We cannot do anything but take it on. Let’s build.
Connor Spelliscy is the founder of the DAO Research Collective and the co-founder of the Blockchain Association, the leading industry trade association in crypto.
Holmes Wilson is the co-founder of Fight for the Future, an organization of artists, activists and technologists that advocates for technological freedom.
To read Part 1, Crypto Endangered: Confronting An Existential Threat, please click.
Authors’ note: This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services.
Thanks to Aya Miyaguchi, Derek Slater, Jelena Djuric, Josh Stark, Mike Ference, Scott Moore, Rainey Reitman, Ryan Selkis, and Sam Vance-Law for reviewing and providing feedback on our paper.