crypto

What Crypto Can Learn from Public Companies

It may seem counter intuitive to say that there is a lot the crypto space can learn from traditional public equity markets. After all, the legacy financial system – with its opacity, its tendency toward oligarchy and monopoly, and its clear inefficiencies – is one of the main spheres crypto entrepreneurs are attempting to disrupt. But the fact that blockchain technology has the capacity to effect transformative change does not mean it has nothing to learn from its antecedents.

The features of the modern joint stock company were developed over many decades of trial and error through very painful mistakes. The crypto and blockchain space can do well to learn from these lessons and selectively adopt features that make sense in order to avoid making the same mistakes. Many of the features were developed to balance the competing interests of operators and investors, i.e., giving operators enough freedom to take risks and create a profitable business while at the same time giving investors/shareholders some control and oversight.

Shareholder voting and the establishment of a board of directors are also valuable features. Public companies are, in many ways, quite decentralized, although this is not coded into their DNA as it is with blockchain enterprises.

Governance power is actually distributed between the operators and shareholders. Shareholders convene on a regular basis to vote on essential matters related to the business, including whether to pay out dividends and whom to appoint to positions of top leadership. This leadership – usually comprising a board of directors that elects a chairman – is tasked with installing officers to run the business’s day-to-day operations on behalf of the larger pool of stakeholders. Leadership is ultimately responsible to the shareholders, who can remove directors.

Throughout the entire organization, the rules and processes governing the running of the business are transparent and clear to all participants. This organizational structure makes a lot of sense and provides some protection to investor stakeholders. This feature (or at least something similar to it) has been and could be implemented in token platforms to provide investors with some protection and control.  

Beyond governance, the operation of many of these companies is also surprisingly decentralized. Consider the fast food giant McDonald’s, which has a market cap of over $120 billion. Its logo, the golden arches, is recognized around the world and Chicken McNuggets and Big Macs are familiar from San Diego to Shanghai. But McDonald’s owns and operates fewer than 20% of the restaurants that bear its trademarks. Instead, the vast majority are operated as franchises. Under this model, the corporation establishes certain guidelines for the overall business – such as, for example, the recipe for french fries and the layout of stores. But the stores themselves are owned and operated by individual entrepreneurs who are better suited at managing the day to day operations and understand the unique echospace of their locations.. This decentralized model allows McDonalds to focus on big picture strategy while off loading the day to day operations to the franchisees, ultimately creating a much more successful and adaptable brand. Indeed, not all McDonalds are the same around the world.  Each market has its own unique needs and considerations. Its economic example can be instructive when designing token economies and establishing an efficient and productive split of responsibility and control based on each participant’s strengths and weaknesses.

Clearly, blockchain offers many advantages over traditional technologies and businesses. But that should not blind us to the hows and whys of the historical evolution of enterprise governance. Successes on the part of public companies can be written into code and used to make business much more efficient, if we do it right.  It is even more important that these features be considered early on in the crypto space because they need to be programmed into the token or smart contract from the beginning.

To learn more about Sagewise, please visit sagewise.io or follow the company on FacebookLinkedIn, and Twitter.

Meet the Sagewise Team: Founder Amy Wan

Amidst the many product announcements, user stories and other important milestones we will be posting here over the coming months, we want to make sure we take time to introduce the team behind Sagewise. Ultimately, the success of a project comes down to the skill and dedication of the people behind it, and Sagewise has one of the strongest teams in the blockchain space, along with particular expertise in the legal sphere. In this post, we highlight the Founder of Sagewise, Amy Wan.

Amy founded Sagewise in 2018 after realizing the potential chaos that could arise from smart contract disputes. Her interest in smart contracts stems from her legal background and her experience in the crypto space; the intersection of these two passions formed the foundation of the Sagewise concept. As an attorney, Amy has served as a Partner at a boutique securities law firm and General Counsel of a fintech company. She has also authored numerous publications, including the Bloomberg Law guide to ICOs and chapters of the LexisNexis’ Private Equity Guide. Amy was named one of the “Top 10 Women to Watch” by the ABA Journal in 2014, one of 18 millennials changing legaltech by Law.com in 2018, and recognized as a top woman in legaltech by the ABA Legal Technology Resource Center in 2018. She also co-founded Legal Hackers LA, a recurring meetup for practitioners, students, educators and entrepreneurs to explore new ideas related to legal practice and entrepreneurship.

In 2015, Los Angeles Business Journal named Amy a Finalist for Corporate Counsel of the Year. She is also a Senior Contributor to Crowdfund Insider. Prior to her legal career, she served as a Presidential Management Fellow specializing in international trade and regulatory affairs at the U.S. Department of Commerce, U.S. Department of State, and U.S. Department of Transportation. A thought leader in the space, Amy frequently speaks at conferences and events, events including SXSW, PLI, ACMA, and blockchain conferences. Topics she has discussed have included SEC regulation of ICOs and the security/utility token question; crypto self-governance; optimal structuring of token economics; flaws in current models of smart contracts; and the regulatory environment for post-ICO businesses. She received an LL.M. from the London School of Economics and her JD from the University of Southern California.

Amy is passionate about crypto and believes she can leverage her unique background to bring positive change and real solutions to the space. Blockchain remains a brand new technology, and as it grows over the coming years, smart contracts infrastructure will assume and exponentially more important role in everyday business transactions. Making sure those contracts do the jobs they are supposed to, that they fulfill their promise of making markets smoother and safer, is the mission of Sagewise and its founder.

Sagewise at Cyrpto Invest Summit

Dat Nguyen, VP of special projects, and amazing Amy Wan impersonator, speaking about IP considerations for blockchain startups (article mistakes Dat Nguyen as Amy Wan):

“And according to Wan, you should act fast when filing a patent. IP owners have one year to file a patent after disclosing a new product or technology, and Wan said white papers — a popular form of preliminary documentation in the blockchain industry — most definitely count as an IP disclosure.”

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Crypto Lawyers Explain How to Keep Your ICO Legal at Crypto Invest

Sagewise’s Vision to Build the Safety Net for Smart Contracts

Last month, we announced the launch of the Sagewise SDK. This marks a major milestone in the development of our business and the safety of the blockchain ecosystem overall. It is a step towards achieving our long-term vision of providing an infrastructure to address the inevitable issues that will arise around smart contracts. In this post, we want to provide a little more information about this vision and and our plan to achieve it.

Although most participants in the blockchain space probably don’t realize this, many smart contracts have errors or oversights in their code bases that will lead to significant problems for their businesses and for users down the road. Even if the smart contract code is perfect, situations inevitably arise that could not have been predicted by the developers writing the contract. Since 99% of people cannot audit (much less read) a smart contract’s code for themselves, they have no way of confirming the quality of a product other than trusting the word of a developer.

This situation is bound to lead to errors and misunderstandings. Over the coming weeks, we will publish a series of blogs outlining theoretical situations that can arise from such problems. Crucially, there is currently no way to resolve disputes arising from an error in a smart contract. The fact that the contracts are “smart” and automatically execute based on pre-set requirements can actually exacerbate disputes if the contract is not correctly constructed. Because the blockchain space remains so young, many parties remain unaware of the existence or the potential magnitude of this issue.

Sagewise’s vision is to build a fully-functioning plugin solution that allows smart contract users to achieve their true transactional intent, including the ability to resolve the disputes that will inevitably arise around smart contracts as they are bound to arise from any form of human interaction. Sagewise can “freeze” a smart contract in place while disputes are mediated. It can devise a number of forms of resolution depending on the preferences of the parties involved and on whether dispute resolution was built in to the original contract. Our goal is to provide peace of mind and the expectation of an equitable outcome for blockchain transactions – a toolkit to make sure smart contracts are doing their jobs. The safety net provided by Sagewise is intended to grow into a full suite of capabilities that will be indispensable as the crypto space expands. Disputes around token offerings are a problem; disputes around smart contracts that underpin entire supply chains are a crisis. We are building a platform that addresses the enormous future of blockchain, a future in which broad mainstream adoption is a reality and the integrity of contracts is paramount.