(For the next 30 days, I’m going to share 3 reflections every day).
i.
Here’s a question I’m asking myself. Admittedly, with some degree of aversion, as the answers may reveal some uncomfortable truths about my motivations, limitations, and general self perception — What are the lessons I should take from the bull run of 2021?
This is invoked by @buccocapital’s tweets:
I’ll leave my answer for the next edition of this newsletter (perhaps a good reason to subscribe). For now, I’ll just jot down a few of the second order questions that emerge:
What are the types of businesses that are worth building vs not?
What are the assumptions we have to scrape and refactor as we leave a world of zero interest rates?
What do you do when everyone around you is making (or looks like they’re making) generational wealth outcomes by doing things that defy logic?
What’s the right link between pragmatic opportunism/flexibility, and playing the long game with a definite vision?
How can I do a better job of escaping self deception, and being ‘less wrong’?
Finally, the object level question: What’s the new crypto thesis?
My answers to all of these are deeply intertwined with how I spent my 2022, how my vision of achievement/pursuit is changing, and broader concepts on the ‘meta game’ (h/t Peter Zakin).
ii.
Taking a turn towards what I’m doing now — I just wrote down a few lecture notes from my Trust Law modules, and it invoked a few thoughts:
a) On Programmatic Trusts
The general idea with a trust is that you’re creating a new ownership structure for an asset. There’s the Trustee, who holds the legal title to the assets, and the Beneficiaries, for whom the governance of the assets is done for the benefit of. There are many interesting ways in which a Trust can be structured; and lots of constraints on how to do so legally. For example, there’s a case from the 90s that nulled a a Trust because it had too many beneficiaries; there were 2m+ people who could be considered to be beneficial owners. This was seen as ‘administratively infeasible’.
I’m interested in the potential for tools that unlock new design spaces for ‘trust’ like ownership/benefit structures. Two examples from the latest crypto cycle that I think we could learn from, and point to a broader idea of ‘Programmatic Trusts’ are:
→ Terra0: a self owned forest. In this concept, the Forest is a coded entity which uses smart contracts to decide (a) how much it should sell of itself (b) how to refunnel that into replanting and more land purchases to continually grow the surface area of the forest. Basically: Imagine if the paperclip maximiser was the Amazon Rainforest. I’m intrigued by the idea that the Forest Mandate can also become a personification of the ‘Purpose Trust’ (a trust that benefits a purpose as opposed to a person). This could be the equivalent of giving governance/operational steroids to ‘nature’ like ownership entities.
→ Airdrops can distribute benefits at near zero marginal cost. It could be argued that Sovereign Wealth Funds are operated in trust for the citizenry (the beneficial owners). I wonder what new ways of distributing *SOME* of the benefits for SWFs could like like. What does an airdrop or ‘do X for rewards’ process look like, which adds value to both the SWF, participants, and citizenry?
Ultimately: What does a drag and drop set of patterns for programmatic trust creation look like? What could this enable?
b) On Property Records:
Trusts have a specific cultural cache in our culture, a la ‘Trust Fund Kids’. They play a key role as structures for the preservation of generation wealth - and, the obfuscation of ownership. The most striking example of this that I personally came across was reading about the use of trust companies in Gibraltar to create a set of trusts that would own a holding company that would purchase a professional football team in the UK. The trusts didn’t require public registration of the beneficial owners, so only the Trustee and the company’s Board would be publicly accessible.
This is one of several anecdotes I’ve read recently that point to the less legible, far more private world of ownership of the assets that underly the world’s economy. Trusts play a key role here — and I wonder: What does the toolkit for economically understanding the landscape of trusts look like? What does this reveal about general wealth distribution, which public records don’t? Where are the hidden pockets of wealth, for which we don’t have good models?
iii.
Facebook’s Red Book
I love these images from Facebook’s Red Book:
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That is all for this first edition!