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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-003",
   "identifier": "kaal:claim:3396542-003",
   "text": "The authors propose that insurance underwriting be operated by a Decentralized Autonomous Organization in which cryptocurrency tokens function as claims on the future cash flows of the underwriting business.",
   "abstract": "Insurance products can be optimized with emerging decentralized technology. We propose the use of cryptocurrencies as claims on future cash flows of an underwriting business operated by a Decentralized Autonomous Organization (DAO).",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-004",
   "identifier": "kaal:claim:3396542-004",
   "text": "The reputation tokens of the underwriting DAO are separate and distinct from the cash currency that insureds use to pay premia; the two must not be conflated.",
   "abstract": "It is important to note that the reputation tokens are separate and distinct from the cash currency that the insured use to pay their premia.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-005",
   "identifier": "kaal:claim:3396542-005",
   "text": "Tokens in the proposed DAO function as reputation because an agent's proportional token holdings will grow over time only if that agent follows sound and successful underwriting practices.",
   "abstract": "We will refer to these tokens on occasion as reputation tokens as an agent's proportional holdings of these tokens is likely to increase over time only if the agent were to follow sound and successful underwriting practices.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
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   "text": "Insurance premia are treated as revenue of the entire DAO rather than of the underwriters who wrote the policy, and are shared among DAO participants; consequently the value of a token is a function of the DAO's expected future cash flows.",
   "abstract": "Instead, the premia are treated as the revenue of the entire DAO and shared among the DAO participants. Thus, the value of the tokens is a function of the expected future cash flows of the DAO.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
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   "identifier": "kaal:claim:3396542-008",
   "text": "Because newly minted reward tokens go only to agents who stake tokens on policies, passive holders are diluted over time, which pushes agents toward active underwriting while still permitting passive investment.",
   "abstract": "Thus, the total number of tokens grows over time. This implies that \"passive\" agents who hold the tokens purely to receive a share of future premia will find their proportional ownership in the DAO decrease over time.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
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   "identifier": "kaal:claim:3396542-009",
   "text": "The design requires underwriters to stake or encumber tokens against each policy they underwrite, and those encumbered tokens serve to secure the underwriters' promises.",
   "abstract": "Fourth, the design requires the underwriters to \"stake\" or \"encumber\" an appropriate number of tokens against each policy they underwrite. These tokens in effect serve to secure the promises of the underwriters.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
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   "@type": "Claim",
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   "identifier": "kaal:claim:3396542-010",
   "text": "The number of tokens an underwriter must encumber is set by a preset formula whose objective is to make the value of the encumbered tokens sufficient to meet any claim arising at any point in the policy's life.",
   "abstract": "The number of tokens to be encumbered is based on a preset formula with the objective of ensuring that the value of the encumbered tokens is sufficient to meet any claims that may arise at any point in the life of the policy.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
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   "@type": "Claim",
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   "identifier": "kaal:claim:3396542-011",
   "text": "If underwriters decline to reclaim their encumbered tokens, that breach is resolved by selling the encumbered tokens, plus additional freshly minted tokens as needed, in an auction open to current DAO participants and to outsiders wishing to join.",
   "abstract": "In such a case, the encumbered tokens, along with additional freshly minted tokens as needed, would be sold in an auction. All current DAO participants as well as outsiders interested in joining the DAO may bid for the tokens in this auction.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "mechanism",
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   "@type": "Claim",
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   "identifier": "kaal:claim:3396542-012",
   "text": "A breach by the underwriters of a policy does not amount to a default by the DAO, and under normal market conditions a well designed DAO should experience very few breaches if any.",
   "abstract": "Note that a breach by underwriters on a policy does not imply a default by the DAO. Under normal market conditions, a well-designed DAO should experience very few breaches, if any",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-013",
   "identifier": "kaal:claim:3396542-013",
   "text": "A breach occurs only when the underwriters concerned believe that the value of their encumbered tokens is less than the payment they would have to make in order to reclaim those tokens.",
   "abstract": "Under what circumstances would a breach occur? It would occur only if the underwriters concerned believed that the value of these tokens is less than the payment they need to make in order to reclaim the tokens.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "failure",
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-014",
   "identifier": "kaal:claim:3396542-014",
   "text": "Breach by underwriters will in general happen only after a dramatic shift in the DAO's future prospects, such as a sharp decrease in expected future revenues or a sharp increase in expected payments on outstanding policies.",
   "abstract": "In general, this will happen only if there is a dramatic shift in the future prospects of the DAO, such as a sharp decrease in expected future revenues or a sharp increase in expected payments on outstanding policies.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "failure",
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-016",
   "identifier": "kaal:claim:3396542-016",
   "text": "Unlike prior token research, the purpose of issuing tokens here is not only to raise capital but also to give owners the opportunity and incentive to develop the DAO's business.",
   "abstract": "Another key difference is that in our study, the purpose of issuing tokens is not only to raise capital but also to provide the owners the opportunity and incentive to develop the business of the DAO.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
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  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-017",
   "identifier": "kaal:claim:3396542-017",
   "text": "The value of a token is not uniform across tokens: it depends on whether the token is currently encumbered and, for encumbered tokens, the sooner the token is expected to be released from encumbrance the greater its value.",
   "abstract": "In general, the sooner a token is expected to be released from encumbrance (by the policy on which it is staked terminating due to either a payout or reaching maturity), the greater its value.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
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   "@type": "Claim",
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   "identifier": "kaal:claim:3396542-018",
   "text": "The DAO design requires that the value of the tokens staked on a set of policies be large enough to cover the maximum possible liability on those policies, which in turn imposes a minimum condition on the premium charged.",
   "abstract": "The design of the DAO requires that v1 should be large enough to cover the maximum possible liability on the M policies against which these tokens are to be encumbered. We will later derive a condition on the premium",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "steady state model with constant M and p"
   ],
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   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-019",
   "identifier": "kaal:claim:3396542-019",
   "text": "Because the total supply of tokens grows at a constant rate each period, the value of individual tokens depreciates over time.",
   "abstract": "Note that as the total number of tokens is growing at a rate of ρ per period, the value of individual tokens will depreciate over time.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
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    "token supply growing at rate rho per period"
   ],
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   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-021",
   "identifier": "kaal:claim:3396542-021",
   "text": "The DAO is insolvent when the present value of expected cash flows from new policies falls below the expected cash outflow on currently outstanding policies, and in that state the value of a token is negative.",
   "abstract": "The DAO will be insolvent if the value of the DAO becomes negative - in other words, if the Present Value (PV) of expected cash flows from new policies is less than the expected cash outflow from currently outstanding (old) policies. If the DAO is insolvent, the value of a token will be negative.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "condition",
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   "is_failure_mode": true,
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  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-022",
   "identifier": "kaal:claim:3396542-022",
   "text": "A sufficiently large negative shock to the number of policies issued per period drives the value of the DAO negative and renders the DAO insolvent, so falling new business volume is a principal insolvency channel.",
   "abstract": "Thus, if ε0 is sufficiently negative and large in magnitude (i.e., if there is a sufficiently large decrease in M), then the value of DAO will become negative and the DAO will become insolvent.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "failure",
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   "is_failure_mode": true,
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    "Mt follows a random walk",
    "one time large decrease in M"
   ],
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  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-024",
   "identifier": "kaal:claim:3396542-024",
   "text": "In the DAO structure, provided an adequate token encumbrance system is in place, each agent is individually responsible for the payouts on the policies that agent underwrote, so the burden of holding adequate capital shifts from the entity to each individual agent.",
   "abstract": "each agent is responsible for meeting the payouts on the policies they have underwritten. Consequently, the burden of maintaining adequate capital falls on each individual agent",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "mechanism",
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    "a good system ensures adequate tokens are encumbered per policy"
   ],
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   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-026",
   "identifier": "kaal:claim:3396542-026",
   "text": "The burden of maintaining sufficient liquidity to meet claims does not rest on the DAO but on the individual underwriters that make it up.",
   "abstract": "We note that the burden of maintaining sufficient liquidity in order to meet claims is not on the DAO, but rather on the individual underwriters that make up the DAO.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "mechanism",
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  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-031",
   "identifier": "kaal:claim:3396542-031",
   "text": "In the proposed design, bad business decisions by one underwriter need not impact other underwriters or the DAO, because losses from underestimating the insured risk fall purely on that underwriter so long as the staked tokens cover the claim.",
   "abstract": "If a certain underwriter makes the mistake of underestimating the risk of the insured event, the losses will be suffered purely by the underwriter as long as the value of the staked or encumbered tokens covers the claim.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "value of staked or encumbered tokens covers the claim"
   ],
   "source_pdf_sha256": "ce2bda03a0b788ea3e7747f02c3c351ef7c808a41150d5cda34767bbe98800c0",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-033",
   "identifier": "kaal:claim:3396542-033",
   "text": "The design's innovative features stem from tokens serving several purposes at once: as reward for risk taking and as a substitute for both reputation and capital.",
   "abstract": "In sum, many of the innovative features of this design stem from the fact that the tokens serve multiple purposes: as reward for risk- taking, and a substitute for reputation and capital.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "design",
   "confidence": "argued",
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   "scope_conditions": [],
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   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-034",
   "identifier": "kaal:claim:3396542-034",
   "text": "Trust requirements in the DAO are minimized by appropriately designed economic incentives rather than by intermediary reputation or regulation.",
   "abstract": "The need to trust is minimized by appropriately designed economic incentives.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
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  },
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-035",
   "identifier": "kaal:claim:3396542-035",
   "text": "The governance rules of the DAO can be set up so as to ensure that minority token holders are appropriately protected.",
   "abstract": "The governance rules of the DAO can be set up so as to ensure that minority token holders are appropriately protected.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
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   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396542-038",
   "identifier": "kaal:claim:3396542-038",
   "text": "What the authors call a breach on a particular insurance contract does not necessarily imply any losses for the consumer, so underwriter breach and consumer harm are decoupled in this design.",
   "abstract": "Thus, what we are referring to as a breach on a particular insurance contract does not necessarily imply any losses for the consumer.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542",
   "datePublished": "2019",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [],
   "source_pdf_sha256": "ce2bda03a0b788ea3e7747f02c3c351ef7c808a41150d5cda34767bbe98800c0",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3652481-011",
   "identifier": "kaal:claim:3652481-011",
   "text": "DAO developers are themselves subject to path dependencies that undermine the evolution of decentralized DAO designs, because the communication structures of the developing organization invariably shape future designs.",
   "abstract": "DAO developers are also subject to path dependencies which undermines the evolution of decentralized DAO designs. The communication structures in organizations will invariably influence future designs.",
   "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481",
   "datePublished": "2020",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "530b3a40c244aeca2eb4c53f4c9b4d6b2962bd6be9f92b4ebe17139c17f4c0e0",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782201-023",
   "identifier": "kaal:claim:3782201-023",
   "text": "The re entrancy programming bug was not the 2016 DAO's most serious problem; the system would eventually have failed more spectacularly because it was designed poorly on other levels.",
   "abstract": "But that technical design flaw was not its most serious problem. The system would have eventually failed more spectacularly, because it was designed poorly on other levels.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "bedf7bcfbb7a9b0112b5848cb0d941b1d41f330dafeee0143a30ff5e8aa53700",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782201-024",
   "identifier": "kaal:claim:3782201-024",
   "text": "Because voting power in the 2016 DAO could be purchased, the exact cost of destroying it was calculable, and had it lasted longer than a month someone would eventually have amassed the money to arbitrage its trivial governance structure.",
   "abstract": "Voting power could be purchased, so we know precisely how much money it would cost to destroy the RWOQ DAO. If it were more successful, and lasted longer than a month, someone would have eventually amassed the money to arbitrage the trivial governance structure.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "governance systems in which voting power is purchasable"
   ],
   "source_pdf_sha256": "bedf7bcfbb7a9b0112b5848cb0d941b1d41f330dafeee0143a30ff5e8aa53700",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782203-002",
   "identifier": "kaal:claim:3782203-002",
   "text": "Building effective and efficient DAOs requires three things together: a secure and meaningful reputation system, maximum bureaucratic transparency through a dynamic governance structure, and coherent transcendental values for long-term stability.",
   "abstract": "In this chapter we argue that building effective and efficient DAOs requires a secure and meaningful reputation system, maximum bureaucratic transparency through a dynamic govern- ance structure, and coherent transcendental values for long-term stability.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "DAOs with open membership to anonymous individuals worldwide"
   ],
   "source_pdf_sha256": "ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782203-008",
   "identifier": "kaal:claim:3782203-008",
   "text": "Impossibility results establish that no static set of rules can eternally sustain a DAO, which is why DAOs must be set up to run with a dynamic set of rules from the very beginning.",
   "abstract": "The impossibility results show we can never design a static set of rules which will eternally sustain a DAO. But that just means we need to set up DAOs to run from the beginning with a dynamic set of rules.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "fixed toolsets and fixed rule sets"
   ],
   "source_pdf_sha256": "ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782203-031",
   "identifier": "kaal:claim:3782203-031",
   "text": "Charging admission to a DAO disincentivizes defection because the sunk cost of joining makes cheating expensive when rejoining would require paying again, a mechanism the authors identify as costly signaling that works better the more cheaters the surrounding environment contains.",
   "abstract": "First, we can disincentivize defection/betrayal by charging admission to the DAO. With the sunk cost of joining, it is more expensive to cheat, since then it would be expensive to rejoin even if members could be anonymous. This is described as costly signaling.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203",
   "datePublished": "2021",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "anonymous membership",
    "environments with many bad actors"
   ],
   "source_pdf_sha256": "ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782203-036",
   "identifier": "kaal:claim:3782203-036",
   "text": "Paying contributors in reputation tokens rather than fees, and then distributing all fees as a periodic reputation weighted salary, defeats the sockpuppet attack because splitting a holding across many accounts yields exactly the same share of fees.",
   "abstract": "A periodic reputation-weighted salary will distribute all fees the DAO earns to all members. Individuals who perform tasks that bring fees to the DAO will be rewarded with reputation tokens, not the fees. Members who own more reputation tokens share in a larger percentage of the fees.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203",
   "datePublished": "2021",
   "claim_type": "design",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "anonymous DAOs with multiple accounts per member",
    "all DAO fees pooled and shared"
   ],
   "source_pdf_sha256": "ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782203-039",
   "identifier": "kaal:claim:3782203-039",
   "text": "Because the Folk Theorems rule out a perfect reward system, the design goal for a DAO should be reduced to making it easier for members to help the group than to hurt it, with members themselves incentivized to police bad actors to protect their own profits.",
   "abstract": "From the Folk Theorems, we know we cannot set up a perfect system. The best we can hope for, is to design a system which makes it easier to help the group than to hurt it.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203",
   "datePublished": "2021",
   "claim_type": "design",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "leaderless DAOs with anonymous members",
    "no external enforcement available"
   ],
   "source_pdf_sha256": "ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782203-040",
   "identifier": "kaal:claim:3782203-040",
   "text": "Sharing all fees with all members eliminates the incentive to review a product favorably because its sponsor paid a large fee, since a single expert reviewer cannot be cheaply bribed when the fee is distributed across the whole membership.",
   "abstract": "Since all fees are shared with all members, this eliminates the incentive to positively review software just because a company sends a big fee.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203",
   "datePublished": "2021",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "review DAOs where fees are pooled and shared by reputation weight",
    "randomly assigned reviewers"
   ],
   "source_pdf_sha256": "ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782205-024",
   "identifier": "kaal:claim:3782205-024",
   "text": "A sophisticated governance system is required for a decentralized organization to adjust effectively to market changes and to maintain stability.",
   "abstract": "A sophisticated system of governance is required to effectively adjust to market changes and to main- tain stability.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "asserted",
   "is_failure_mode": false,
   "scope_conditions": [],
   "source_pdf_sha256": "5ba52c63e81019b6867fb29c4a50821ff574e510d79b31b8ce9f4c726a0ebc71",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782210-039",
   "identifier": "kaal:claim:3782210-039",
   "text": "Reputation is not merely an option for a DAO that holds power or value; it is absolutely essential, and for DAOs built to make money ideology alone is not enough to maintain long-term stability.",
   "abstract": "For DAOs that are built to make money, ideology is im- portant to maintain the long-term stability of the organization, but ideology is not enough.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "DAOs devoted to profit or holding power",
    "distinct from purely altruistic ideological organizations"
   ],
   "source_pdf_sha256": "9cc531ab239f6266c8aeddcc8e54f4c06029c44e825444bee137bbcc0c9d0a8e",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782210-042",
   "identifier": "kaal:claim:3782210-042",
   "text": "Self-executing, self-regulating smart contracts between anonymous parties in an open system create a near perfect zero-sum situation unless the DAO also includes reputation.",
   "abstract": "Self-executing, self-regulating smart contracts between anonymous parties in an open system, create a near perfect zero- sum situation—unless your DAO also includes reputation.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "open systems",
    "anonymous counterparties",
    "code-is-law smart contract execution"
   ],
   "source_pdf_sha256": "9cc531ab239f6266c8aeddcc8e54f4c06029c44e825444bee137bbcc0c9d0a8e",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782217-003",
   "identifier": "kaal:claim:3782217-003",
   "text": "The choice of historiography is a design choice about the architecture of higher order information storage, and because deciding what is true is the judicial function, historiography is effectively the architecture of judicial governance.",
   "abstract": "The choice of historiography is the design choice of the architecture of higher- order information storage. The purpose of the judicial branch is to finalize information storage, to decide what is true. The architecture of history, historiography, is the ar- chitecture for judicial governance.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217",
   "datePublished": "2021",
   "claim_type": "definitional",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [],
   "source_pdf_sha256": "358779557d8e7dcd101720ca0fad90b9146d24f1c7c03909eb431fcf1fb7e103",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782217-004",
   "identifier": "kaal:claim:3782217-004",
   "text": "Any reliance by a DAO on a centralized feature creates a centralized point of failure that threatens the survival of the organization and renders the system technically centralized despite its decentralized appearance.",
   "abstract": "Any time your DAO relies on a centralized feature, that is a centralized point of failure that is a threat to the survival of the organization. That means the system is technically centralized.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "DAOs with any centralized dependency, including oracles"
   ],
   "source_pdf_sha256": "358779557d8e7dcd101720ca0fad90b9146d24f1c7c03909eb431fcf1fb7e103",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782217-010",
   "identifier": "kaal:claim:3782217-010",
   "text": "An oracle DAO must filter its network so that the average member is correct at least slightly more often than incorrect; once that filter holds, larger and more decentralized networks converge on the truth more quickly and more certainly.",
   "abstract": "So an oracle DAO needs to filter its network to guarantee the average member is correct, at least slightly more than they are incorrect. Then the larger and more decentralized the network becomes, the quicker and more certainly it will converge on the truth.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "average member better than chance",
    "no systemic bias"
   ],
   "source_pdf_sha256": "358779557d8e7dcd101720ca0fad90b9146d24f1c7c03909eb431fcf1fb7e103",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782217-039",
   "identifier": "kaal:claim:3782217-039",
   "text": "Long run stability of a decentralized organization requires the momentum gained from a clear history, but momentum is not sufficient: if the system is not moving toward a healthy and productive goal it will not last long.",
   "abstract": "To keep a decentralized organization stable in the long run, they need this mo- mentum gained from a clear history. But momentum toward what purpose? If the system is not moving toward a healthy and productive goal, it will not last long.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "long run survival of decentralized organizations"
   ],
   "source_pdf_sha256": "358779557d8e7dcd101720ca0fad90b9146d24f1c7c03909eb431fcf1fb7e103",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782217-040",
   "identifier": "kaal:claim:3782217-040",
   "text": "The most important aspect of a decentralized organization, and the feature that ultimately determines its long term success, is the group's set of transcendental values.",
   "abstract": "The most important aspect of a decentralized organization, the feature that ultimately de- termines its long-term success, is the group's set of transcendental values.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "asserted",
   "is_failure_mode": false,
   "scope_conditions": [
    "long term success of decentralized organizations"
   ],
   "source_pdf_sha256": "358779557d8e7dcd101720ca0fad90b9146d24f1c7c03909eb431fcf1fb7e103",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782220-005",
   "identifier": "kaal:claim:3782220-005",
   "text": "A maximally effective set of unifying values integrates opposing values rather than choosing between them, because the purpose of unification is to bring together individuals holding different perspectives.",
   "abstract": "The point of unifying people is to bring together individuals with different perspectives. A maximally effective set of unifying values will achieve the seemingly impossible feat of integrating opposing values.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220",
   "datePublished": "2021",
   "claim_type": "design",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [],
   "source_pdf_sha256": "f0bf1e80c6da60a6f8ba20630562bdf1dab171ccb5267f497dc0b815113cde99",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782220-018",
   "identifier": "kaal:claim:3782220-018",
   "text": "A perfectly democratic society would require complete transparency even though most societies draw the line well short of it, so a DAO should specify explicitly where it places the boundary between bureaucratic transparency and secrecy.",
   "abstract": "complete and full transparency in every governmental action, but a perfectly democratic society requires complete transparency. This is an abstraction, but a DAO should clearly specify where their values lie, and where they would draw the line between bureaucratic transparency and secrecy.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220",
   "datePublished": "2021",
   "claim_type": "design",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "perfectly democratic ideal treated as the limiting case"
   ],
   "source_pdf_sha256": "f0bf1e80c6da60a6f8ba20630562bdf1dab171ccb5267f497dc0b815113cde99",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3799320-018",
   "identifier": "kaal:claim:3799320-018",
   "text": "A DAO needs a legal wrapper to represent it, because a DAO cannot by itself rent an office or sign a contract that can only happen on paper.",
   "abstract": "A DAO needs a legal wrapper representing the DAO in the sense that a DAO cannot rent an office or sign a contract that can only happen on paper.",
   "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320",
   "datePublished": "2021",
   "claim_type": "condition",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "DAO operations that touch the real world"
   ],
   "source_pdf_sha256": "c3dff852f2d3f04718c829a24189309a7db4d92d84f6045d3d4f562d87c03e63",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3808852-017",
   "identifier": "kaal:claim:3808852-017",
   "text": "DAO developers are subject to path dependencies that undermine the evolution of decentralized DAO designs, because the communication structures of the organizations that design systems invariably shape future designs.",
   "abstract": "DAO developers are also subject to path dependencies which undermine the evolution of decentralized DAO designs. The communication structures in organizations will invariably influence future designs.11",
   "citation": "Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "31e91158fdeefebc2f0be54ebf89751f7cdd4c89ecea932888f5ba9be6b1caba",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3949098-004",
   "identifier": "kaal:claim:3949098-004",
   "text": "Kaal stipulates the core proposition of reputation as capital: once meaningful decentralized reputation is established, reputation can be used to remove the need for a capital base and for capital requirements.",
   "abstract": "In essence, once meaningful decentralized reputation is established, reputation can be used to remove the need for capital base and/or capital requirements.",
   "citation": "Wulf A. Kaal, Reputation as Capital – How DAOs Upgrade Finance (2021). SSRN: https://ssrn.com/abstract=3949098",
   "datePublished": "2021",
   "claim_type": "definitional",
   "confidence": "asserted",
   "is_failure_mode": false,
   "scope_conditions": [
    "meaningful decentralized reputation has been established"
   ],
   "source_pdf_sha256": "04297905564a6092b2db7640561f58fd374d3114c79527357bad09d11b909819",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3981021-013",
   "identifier": "kaal:claim:3981021-013",
   "text": "Charitable giving has to be fully transparent and hosted by a group of charity experts who have hands on experience fostering common good outcomes directly, rather than acting as an intermediary or sponsor.",
   "abstract": "The basic concept of the CHARITYxDAO derives from the basic insight that charitable giving has to be fully transparent and hosted by a group of charity experts who have hands-on experience in fostering common good outcomes directly – not as an intermediary or sponsor.",
   "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021",
   "datePublished": "2021",
   "claim_type": "normative",
   "confidence": "asserted",
   "is_failure_mode": false,
   "scope_conditions": [
    "the CHARITYxDAO design premise"
   ],
   "source_pdf_sha256": "9d8bc78d119c780c96c89ce3e820f4ac8b037d39b3ade59feb4e40d46b048288",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3981021-021",
   "identifier": "kaal:claim:3981021-021",
   "text": "Decentralized evolutionary and dynamic governance forms the foundation of the CHARITYxDAO community values and core beliefs, and decentralized governance is what provides cohesion and longevity in the DAO.",
   "abstract": "provides the necessary decentralized evolutionary and dynamic governance that forms the foundation of the CHARITYxDAO community values and core beliefs. Decentralized governance provides cohesion and longevity in the CHARITYxDAO.",
   "citation": "Wulf A. Kaal, How Decentralized Autonomous Organizations Optimize Charitable Giving (2021). SSRN: https://ssrn.com/abstract=3981021",
   "datePublished": "2021",
   "claim_type": "design",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "DAO communities adopting decentralized dynamic governance"
   ],
   "source_pdf_sha256": "9d8bc78d119c780c96c89ce3e820f4ac8b037d39b3ade59feb4e40d46b048288",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/5887242-008",
   "identifier": "kaal:claim:5887242-008",
   "text": "Separating internal on-chain governance from external legal relations maximizes decentralization while preserving real-world enforceability, thereby avoiding the fatal centralization that undermined earlier DAO concepts.",
   "abstract": "This duality maximizes decentralization while preserving enforceability in the real world, avoiding the fatal centralization that has undermined earlier DAO concepts.",
   "citation": "Wulf A. Kaal, The UDLC DAO Operationalizing a Continuously Evolving Universal Digital Law Codex Through Weighted (2025). SSRN: https://ssrn.com/abstract=5887242",
   "datePublished": "2025",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "4e5c2e2b4304af6d22e0b0939b1fddeabcf091e19a1b00b7bfccf77cbd6280c5",
   "status": "current"
  }
 ],
 "description": "49 claims in the published works of Wulf A. Kaal carry the concept tag 'dao-design'. Derived node: a roster, not an adjudicated definition."
}