This episode explores the frontier of innovation in disclosure and regulatory compliance in DeFi (decentralized finance). DeFi is the term for a collection of new financial products and services based on blockchain technology. They are accessible to anyone with an internet connection and they're largely owned and maintained by their users rather than centralized intermediaries. Prime examples are NFTs (Non Fungible Tokens), DAOs (Decentralized Autonomous Organizations), and DID (Decentralized Identifiers). The DeFi market is still small but it has seen 6x growth in the past two years and is on a meaningful trajectory. This growth and the distributed architecture make DeFi an important new area of regulatory scrutiny.

Chris Brummer has considered these developments and sees an opportunity to leverage the technology of these innovative organizations to re-imagine disclosure compliance. We begin the episode with the current state of regulatory oversight and supervision in DeFi and then discuss some of the novel aspects of the organizations before outlining the ideas he has laid out in a new paper Disclosure, Dapps and DeFi. NFTs and DAOs present a novel policy question for disclosure because much of the material information required to participate in an informed way is already available to technologically sophisticated actors on blockchains. This could argue for an approach where the framework developed is transposable to securities law but would emphasize shorter, crisper disclosures typically associated with consumer protection law. Tune in to hear some creative thinking about the intersection of DeFi and regulation.