Just as cryptographic “primitives” are the building blocks of cryptographic protocols, legal primitives will be constructed out of current legal systems, transformed into code, and integrated into blockchain smart contracts, says Aaron Wright, law scholar and pioneer of “law-on-the-blockchain.”
Aaron, Associate Professor at the Cardozo School of Law at Yeshiva University, New York City, unleashed a so-called tweet storm today, expanding upon the concept of “legal primitives” and what they will mean for the crypto industry and beyond, explaining , explaining that:
1/ Blockchains will support not only cryptoeconomic and financial primitives, but also legal primitives. Legal primitives streamline existing commercial transactions and will power new emergent forms of commercial activity and arrangements over the upcoming decades.
— Aaron Wright (@awrigh01) October 3, 2018
In trying to illustrate for the lay reader what exactly a coded legal primitive is or will be, Aaron explained that primitives:
are well established, generic building blocks designed to do one very specific task in a highly reliable fashion”; and in a legal context, “[c]ommon legal primitives deal with basic commercial activity — termination, arbitration, escrow, vesting, payment, etc. They are commercial and legal building blocks that help folks manage risk in a responsible way”, adding, “[t]hey will not go away in a blockchain-based world.
Aaron has been considering the interaction of law and decentralized cryptography for years. In a 2015 academic paper, he and his co-author speculated that “the deployment and mainstream adoption of [blockchain technology] may require a shift in the way we perceive the role of law”.
“To regulate society, laws may need to be directly embedded into code or laws may need to shape social norms, structure markets, and influence architecture design in order to incentivize the proper deployment of decentralized organizations”, they stated.
These ideas returned today, with Aaron proposing that “[w]ith financial and legal primitives, agreements will increasingly turn into lego blocks. Both will be assembled and combined to build complex commercial transactions”.
OpenLaw, co-founded by the Yeshiva professor, is building an open protocol layer for precisely this purpose. The protocol will allow legal logic to be written in blockchain-understandable logic and incorporated into any Ethereum-based smart contract.
