The Regulation of Stablecoins – Solicitors Journal 20.11.23

The UK’s approach to the regulation of stablecoins

In this article, Jeremy Barnett considers the new proposed regulation or crypto assets, looking in detail at the FCA and Bank of England discussion documents. He concludes that the proposed regulation is necessary as he has a healthy skepticism about stablecoins in general and feels strongly that there must be a new mandatory accounting standard that requires compliance with strict reporting requirements so as to protect consumers and the market in general

The full article was written for the Solicitors Journal and is available by clicking here.


JudicialTech supporting Justice: The impact of AI on the judiciary, courts and justice

Jeremy Barnett1, Fredric Lederer2, Philip Treleaven1, Nicholas Vermeys3, John Zeleznikow4

1University College London, 2William & Mary Law School, 3University de Montreal, 4La Trobe University

This is a summary of a full paper available on SSRN by clicking here.

The rapid adoption of new forms of AI and emerging technologies in courts is transforming criminal and civil trials and can be beneficial to all stakeholders. However, the use of Judicial algorithms raises existential issues around the future of the legal system, not least ‘can/should computers replace or merely supplement Judges’ decisions?’

We recognise that there is an explosive growth in LawTech, but wish to concentrate on the use by the Judiciary (and those conducting tribunals and ADR) where unfairness may arise.

We define JudicialTech as Artificial Intelligence (AI) and emerging technologies’ systems for Judges, courts and other forms of dispute resolution. JudicialTech is about supporting the Judiciary, enhancing access to Justice, and potentially increasing fairness in the Judicial system. However, the introduction of new technology needs to be controlled by the Judiciary, to maintain public confidence in the legal system and Rule of Law.

We consider the following stages of the Judicial process.

  • Litigation advice – recommender systems for locating relevant legal firms/counsel and to forecast the chance of success in a civil or criminal case.
  • Trial preparation – pre-trial discovery and evaluation of documents.
  • Judicial guidance– legal analytics tools to analyze documents and to provide insights on courts, Judges, lawyers, law firms, and parties.
  • Pretrial negotiations – negotiations taking place in all forms of litigation, either formally or informally.
  • Digital courts and tribunals – providing digital technology for all stakeholders to access information remotely, as well as communicate and collaborate online.
  • Judicial algorithms – AI algorithms used to support the Judges, courts and tribunals.

JudicialTech is impacted by a range of issues: firstly, by proactive, technologically augmented, policing; secondly the increasing use of digital evidence (e.g., CCTV and social media); thirdly misleading or inaccurate legal submissions being prepared by generative AI; fourthly the rise of sophisticated algorithms and avatars; fifthly, public debate around algorithmic bail and sentencing decisions; finally, the impending explosion and industrialization of cybercrime, in particular crypto-frauds which are often based in remote offshore locations with jurisdiction and regulatory uncertainty (Treleaven et al, 2023).

We recognize that there could be benefits especially with regard to access to justice and ‘levelling the playing field’ if AI becomes commonplace but have concerns around certain forms of unregulated Judicial algorithms negatively impacting the Rule of Law. We consider the advantages and disadvantages.  Of particular concern is the concept of the ‘Robo Judge’ so in the paper we consider the question ‘Can/Should computers replace Judges?’

As a conclusion, we make recommendations around JudicialTech innovation.. The paper recognizes that there is clear scope for the Judiciary to use emerging technology to support their decision making and to create efficiency savings, which in turn can promote access to Justice. Claims that algorithmic decision-making is ‘better’ in terms of reduced bias and increased transparency, risks erosion of the principle that legal decisions should be made by humans.

  • Knowledge-transfer – raising awareness amongst stakeholders of JudicialTech AI and emerging technologies. This might involve workshops, or a web portal presenting JudicialTech products.
  • Experimentation – working with universities and startups to develop JudicialTech proof of concept (POC) systems. This can be a great source of research projects for both law and technology students.
  • Predictive analytics – the use of AI algorithms to analyze massive amounts of information covering litigation advice, trial preparation and Judicial analytics.
  • Sandboxes – provide a JudicialTech testing environment where new or untested technologies and software can be trialed and monitored securely.
  • Tech sprints – essentially hackathons, coding events that bring programmers and other interested people together to drive innovations.
  • Horizon scanning – detecting early signs of potentially important developments through a systematic examination of potential threats and opportunities, with emphasis on new technologies.

The principal recommendation of the paper is that

‘to protect the Rule of Law, there should be a presumption against the use of Judicial decision-making algorithms in conventional criminal and civil litigation unless the technology has completed a robust appraisal and testing regime which must be supervised by the Judiciary’



The Authors

Jeremy Barnett is a practicing Barrister specializing in fraud and regulatory law. He is Honorary Professor of Algorithmic Regulation at University College London.

Fredric Lederer is a Chancellor Professor of Law and Director of the Center for Legal and Court Technology and Legal Skills at William & Mary Law School. He is a former prosecutor, defense counsel, trial judge, and court reform expert, a pioneer of virtual courts.

Philip Treleaven is UCL Professor of Computer. Twenty-five years ago his research group developed much of the early financial fraud detection technology and built the first insider dealing detection system for the London Stock Exchange. (Treleaven is credited with coining the term RegTech.)

Nicholas Vermeys is Professor at the Université de Montréal), the Director of the Centre de recherche en droit public (CRDP), Associate Director of the Cyberjustice Laboratory, and a member of the Quebec Bar.


Using blockchain and IOT as an underlying data protocol to automate the Real Estate Sector: PIM

It has long been thought that digital technologies could be harnessed to break the cycle of litigation that is endemic in the construction industry. In 2006, the paper E-legal services, Dew and Barnett set out an architecture that could be used to automate an AI enabled mediation process which envisaged a high level service based network for dealing with situations where negotiation had broken down and the parties resolve to go to law. [E-Legal Services].

In ‘Algorithmic Dispute Resolution: the Automation of professional dispute resolution using AI and Blockchain’, Barnett and Treleaven divided dispute resolution into consumer ODR [Online Dispute Resolution] Judicial ODR where there is a hearing but outside the courtroom and Corporate ODR where the technology is used to manage the resolution of contractual disputes that may emerge from multi-partner projects or financial transactions such as major property developments. The CBC [Construction Blockchain Consortium] was established at the Bartlett Faculty of the Built Environment, UCL to investigate the potential for such innovative use of ‘deep tech’ but concluded that there was not yet sufficient appetite in the construction sector to abandon the current preference for litigation in a dysfunctional market.

Professor Alan Penn however identified the potential of blockchain technology to encourage collaborative behaviour in the construction sector because of what is known as the Panopticon effect, described by the philosopher Jeremy Bentham, where a prison can be designed so that one guard can see into every cell, but no individual prisoner knows he is being watched (now made possible by cctv). Through this seemingly constant observation and knowledge that all data would eventually be disclosed, society could be altered as people anticipate that good behaviour will be

rewarded and bad behaviour will inevitably be exposed. [Ethic Explainer: the Panopticon] [UCL the Panopticon]PIM search fire safety

In 2020 RPL set up a new consortium to consider the use of emerging ‘frontier technologies in the Real Estate Sector at UCL, called ‘Digital Disruption@BREI’.

Research conducted by the consortium identified a desire to consider the use of deep tech for a number of potential related uses including the automation of regulation and ESG design building management operation and investing. As it became apparent that there is a hidden value in the data, the potential benefits in establishing a collective approach to the collection of data itself fosters a climate of collaboration which results in ‘dispute avoidance’ which was the subject of a break out group in the second workshop conducted by the consortium.

Conflict avoidance is about planning and the adopting proactive approaches such as risk analysis, use of risk registers and seeking to avoid escalation by speed of resolution. It is anticipated that the collection and verification of critical data by consensus as used in the UCL Peal demonstrator (below) gives all parties the opportunity to identify ‘pinch points’ at an early stage, and resolution of such issues, rather than ‘kicking the can down the road’ and encouraging substantial and expensive litigation in due course.

Use Case: Newcastle Helix Smart City project

The Newcastle Helix project [Helix]  is Newcastle’s flagship development and the only city-centre quarter of its kind in the UK. It was designed as a ‘living laboratory by its partners, the Newcastle City Council, Newcastle University and Legal & General. The city boasts the largest implementation of IoT sensors in Europe with over 1000 in Newcastle and Gateshead, measuring 60 indicators from air quality, to biodiversity and flooding. These sensors make 2000 observations every minute and to date have collected over a billion observations to date.

Data science is one of the cornerstones of Newcastle Helix. Across the development are facilities to support businesses looking to capture and mine data or collaborate with specialists to gain insight through the data they have. Almost £100m funding has been achieved in data research. The vision now is to use data to help improve the lives of citizens, boost the region’s economy and create opportunities for businesses to collaborate around smart cities.

There are number of elements to this project including:

The National Green Infrastructure Facility [NGIF] –

Observations and findings are being used to inform decisions around sustainable drainage systems and green infrastructure, to prepare for extreme weather events an expected impact of climate change. Linked with a national network of Urban Observatories across the country, ‘big data’ analytics provided by the sensors installed around the city.

Research projects include.

  • Study of green roof approaches, blue roof and urban agriculture
  • Demonstration of climate change adaption options
  • Investigation of the role of green walls and living walls in urban flood management
  • Testing surface water management infrastructure
  • Study of internal smart devices to manage water use more sustainably within a building
  • Understanding surface water drainage infrastructure including pipes, drains, water storage and water filtering
  • Testing runoff controls for the movement of water through streets
  • Running a series of ‘what-if’ experiments and scenarios and gathering data for effectiveness studies.

The Urban Sciences Building [USB]

The Urban Sciences Building (USB) is an exemplar of world class research and education in computing, digital technology and engineering. It is demonstrating best practice for ‘digitally enabled urban sustainability’. 

Situated on a site that was once a colliery and later the Scottish & Newcastle Brewery, it is transforming this area in the heart of Newcastle into a thriving quarter for research, business and innovation. Newcastle University has brought together cutting edge areas of research and education in computing, energy, water, digital urban sensing and infrastructure to discover solutions for global challenges. It is producing the next generation of leaders for the digital age. 

Completed in summer 2017, the USB is driving critical programmes of research and innovation working with stakeholders in government, business, industry and communities. It is revolutionising how cities will look, behave and interact within their environment to improve life for communities and create opportunities for sustainable economic growth.


The USB contains one of the world’s leading schools of computing alongside a series of innovative research labs to inform urban infrastructure, industry and policy, and provides an evidence base to be used by city planners and future developers. No other building in the world draws together these types of facilities in an integrated way. The building itself is a lab for innovative research that has wide applications for business, industry and urban communities. 

Containing over 4,000 digital sensors, ( computing technology is embedded throughout the structure, making it one of the most monitored and high-performance buildings in the country. The USB and surrounding area underpins research to make urban centres more sustainable for future generations. The building is designed for teaching, laboratory research, events and testing real-time smart technologies for urban sustainability. Research at the USB is working with stakeholder partners to address global challenges for cities including: • environmental sustainability • quality of life • security • sustainable economy.

The Urban Observatory [The Urban Observatory]


Newcastle University’s Urban Observatory (one of six current Urban Observatories and lead institution) utilises the paradigm of Internet of Things to gather data from sensor on many urban metrics including flooding, air pollution, traffic flows, pedestrian counts and even the behaviour of bees so that informed decisions can be made as we develop our cities for the future. With 70% of people living in cities by 2050, this work is vitally important to ensure that informed decisions can be made to protect the environment as urban areas are developed. It specifically addresses the “smart city” challenge through computer science and engineering challenges (how, what and where to sensor, data management and comms, cybersecurity) and how these new data can inform policy and practices through close working relationships with city stakeholders e.g. understanding the implications of congestion charging across spatial and temporal scales and the impacts on different sectors.  Ultimately the goal is to support evidence-based decision making and to understand the efficacy of interventions.  The Urban Observatory in Newcastle is Europe’s foremost IoT testbed and real-world urban sensing environment (

Funded in partnership with UK collaboration for Research and on Infrastructure and Cities (UKRIC), the Observatory is the largest deployment of sensors in the UK and the largest set of open environmental data in the world.


The Biosphere [The Biosphere]


The Biosphere Newcastle is a specialist facility tailored to the commercialisation of life sciences and innovation, research and development in the North East of England’s regional and economic capital. A home for ambitious companies within life science and innovation, research and development. A 90,000 sq ft purpose-built facility with both commercial laboratory and office space. 


Ambitious plans for a multi-million pound regional ‘COVID’ hub – the first of its kind in the country – have recently  been unveiled by Newcastle Hospitals and Newcastle City Council. Serving the North East, north Cumbria, Yorkshire and Humber, the laboratory will deliver high-volume, rapid turnaround of COVID-19 tests, with the capacity to process up to 80,000 tests a day if needed.


As well as creating an integrated system for increased testing and tracing – which will include a new lab based in Gateshead – the hub will also include a specialist innovation lab at the Helix site in Newcastle, tailored to develop new approaches for the next stage of COVID science and beyond. This will place the region in a strong position to prepare for future infectious disease risks.

National Innovation Centre for Data [National Innovation Centre for Data]

The National Innovation for Data was funded by £15m from central government and £15m from Newcastle University. It aims to transfer practical data skills into the workforce of private and public sector organisations and open access to a vibrant data ecosystem.

Case studies include;

  • In 2017, LKQ, a Fortune 500 corporation, embarked on a project with the National Innovation Centre for Data to help it discover valuable insights into the company’s data.
  • Connected Energy specialises in technology systems for grid decarbonisation. They analysed data from second life EV batteries to predict future capacity and monitor battery systems and recommended methods of validation of data.

The District Energy Centre

A centralised energy system that will explore emerging energy technologies.

Use Case RPL/UCL Estates Pearl Project  [UCL Pearl]

PEARL (Person-Environment-Activity Research Laboratory) — UCL’s first net-zero carbon in-use building — is a unique, urban prototype laboratory for the creation of fullsize environments to test how people use infrastructure and cities. The UK Collaboratorium for Research on Infrastructure and Cities (UKCRIC) is the basis for the UK Government’s investment in PEARL. UKCRIC is a set of new laboratories currently spread amongst 14 universities in the UK, designed to enable innovative research to drive the investment of £600bn in infrastructure in the UK over the next 50 years. PEARL will be the UCL element of the UKCRIC facility.

Opened in 2021, this unique facility explores the ways in which people interact with their environment. It allows researchers to engage with the public to discover what activities people want or need to do, and the ways in which the environment helps or hinders them. From this knowledge researchers will then be able to apply and test the ways in which the environment can be designed to enable people to live with a greater quality of life. At approximately 4,000sqm, and 10m high, this unique, reconfigurable lab has been designed for multi-scale research into access and mobility in its broadest sense, from navigating kerbs in wheelchairs to observing people flow in, off and within transport to improve train design and maximise space inside aircraft. The facility encourages the local community to engage with the research as participants.


PEARL will study interactions at a micro-scale, such as brain activity, skin response, mass-distribution in the foot, or emotional responses. The physical displacements of people in response to environmental design (what they see, touch, hear, smell or feel) or to dynamic conditions (such as explosions, instructions or exogenous movements) will also be studied. In turn, the effects of design on people will be studied — capacity, flow, behavioural responses — or the effectiveness of therapies (e.g. remediation of locomotory, eye or hearing conditions) in the course of a person’s daily lived activities, and to research in detail the impacts of the environment on stress, contentment, fear, safety, and other perceptions, (e.g. fairness, culture, inclusion, or navigation).

PIM for UCL Estates.

PEARL was a UCL Estates Project which was built using a stage gateway project management system. As Blockchain is a state transition machine, RPL concluded that the best way to collect all relevant data through the construction of the project and record and validate each stage, was to design a workflow which recorded every relevant document and decision in real time, into the blockchain.


On top of this authenticated data base, RPL designed a search engine which allowed the owner of the dataset (here UCL Estates) to identify all relevant data around any topic, including file notes, emails, plans and records of meetings which had been independently verified by the entire project team.


Each stage gateway was reduced into 6 or 7 steps where the Project Officer circulated minutes and documents for the next stage gateway review. Every team member was provided with all relevant information and had to confirm in the stage gateway meeting that they had seen every relevant document (having had the opportunity to upload new material that had been overlooked).


It is therefore possible to identify not only that every document has been seen and approved by all parties, it is possible to identify when that approval and verification took place. This was called PIM (Project Information Modelling) TM as it is the next logical extension to BIM (Building Information Modelling) where the BIM dataset can be used to inform detailed search into relevant questions that may arise during complex litigation.


In this way, for the first time, all relevant data from a construction project has been retained in the blockchain for use in automated compliance, regulation and litigation that may arise in future.

PIM front end image.

PIM Fire Safety seach 

PIM approvals

For further information or a live demo please email

What Exactly is Web 3? DigitalBytes November 2022


What exactly is Web 3.0? – open protocols developed the internet and undoubtedly its evolution has been remarkable. Web 1.0 paved the way for many of the internet’s essential assets and platforms, the second generation of the web, branded Web 2.0, witnessed the growth of centralised systems allowed by closed protocols and the decentralised web, or Web 3.0, is a hot topic. One of the most significant components of Web 3.0 is the importance of the best use cases.


What exactly is Web3?


Web3 (or Web 3.0) is the next generation of the World Wide Web, enabling a faster, more personalised and interactive immersive user-experience via decentralised networks. Web3 was first used by Gavin Wood, who helped develop the Ethereum blockchain. Artificial intelligence, the semantic web and machine learning are just a few of the technologies fuelling Web3’s evolution. Furthermore, the blockchain Web3 use cases show how cryptographic security is built into Web3 to ensure user data is safe. Of no surprise is that the types of institutions which dominated Web1 and Web2 are likely to be different from those institutions that drive Web3. However, despite this is, given the money that Meta (renamed Facebook) and Microsoft are spending on Web3 ($100billion and $69billion respectively), it appears that some of today’s tech giants can also see the opportunities that Web3 offers.


Evolution of the web



Source: Fabric ventures


Features exclusive to Web3 are included in the list below:

  • Web3 is accessible because it incorporates readily available open-source software
  • Users and service providers do not require authorisation from centralised regulating entities to use Web3 networks
  • Engaging in private and public settings without needing trusted third parties is another powerful feature of Web3 applications
  • Importantly, Web3 also provides ubiquity which guarantees internet accessibility regardless of place, time or device. For instance, IoT technology can facilitate access to internet services via various intelligent devices besides voice assistants.


Top use cases of Web3

Web3’s defining characteristics demonstrate its capacity to alter the online user experience. Is Web3 limited to revising UX components in web applications and services? In contrast, the top Web3 use cases illustrate a distinct narrative:


  • Decentralised autonomous organisations (DAOs)

DAOs are decentralised systems where a central authority cannot alter the rules. Furthermore, DAOs ensure they are independent by using smart contracts to count votes and make decisions automatically.


The decentralised autonomous organisation is a prime illustration of Web3’s ‘on-chain’ governance. DAOs grant the idea of joint governance to the digital world by putting specific rules into smart contracts. DAOs should be considered one of the most promising uses of Web3 because they have the ability to be used as a model for how organisations are managed. Vitalik Buterin, founder of Ethereum, gives his thoughts on DAOs: “When decisions are concave, relying on the wisdom of the crowds can give better answers,” adding, “In these cases, DAO-like structures with large amounts of diverse input going into decision-making can make a lot of sense.”


  • Metaverse

The metaverse is unavoidable amongst the numerous entries for significant Web3 use cases. The metaverse offers an infinite virtual universe, a three-dimensional internet with embodied content that users may navigate as digital avatars. Essentially, you will be on the internet instead of seeing it on your computer. The metaverse employs several Web3 concepts to provide immersive and compelling user experiences. The metaverse advocates open access for all users and places total control of user experiences in their own hands. An open, shared and decentralised virtual environment is crucial to accepting the metaverse as one of the leading Web3 use cases. However, the metaverse is not yet a reality, and traces of the technology may be seen on other platforms. Facebook, Microsoft, Epic Games and many other tech and commercial giants have recognised the importance of Web3 concepts in various metaverse applications.


  • Digital infrastructure and privacy

Complete transparency is the most prevalent concern in present blockchain networks. There are blockchain Web3 application cases suited to privacy and digital infrastructure improvement. There are already a wide variety of cryptographic tools that enable data to be kept private, such as zero-knowledge proofs, homomorphic encryption and cryptographic blinding. As one of the most excellent Web3 use cases, digital infrastructure enhancements depend on the security of user information. In addition, Web3 has increased the design freedom for apps with enhanced privacy. Given the numerous data breaches in Web2, data safety is undoubtedly one of the most significant features of numerous Web3 use cases. Now Web3 can provide the right platform for gaining access to various data-protection apps. Furthermore, regulatory compliance might be enhanced by the Web3 use cases for privacy and advancements in digital infrastructure. Privacy layers can assist consumers in overcoming their reluctance to provide personal information to a blockchain application or service. So, Web3 will play a major part in making it easier for blockchain networks to comply with regulations, potentially without a lower risk manner. However, Web3’s security is not fool proof and protecting data must be paramount for those who incorporate Web3 technology – or they risk clients’ assets being hacked.


  • Blockchain games

Blockchain-based games are a real-world Web3 example, enabling users to own and trade in-game objects. Blockchain games are one of the most significant responses to, “what is Web3 used for?”, since they were the first Web3 apps. Blockchain-based games are a promise for the future of gaming and have the ability to create new virtual worlds and economies with Web3 concepts. NFTs distribute avatars, tools, experience points and upgrades in blockchain-based games. On secondary markets, players can sell NFTs for real money and move assets from one game to another. Play-to-earn models emphasise blockchain-based games in real world Web3 application cases. Axie Infinity is an excellent illustration of Web3 ideas in real-world gaming since, at one stage, it was had over 2.7 million different users per month playing its on-line game.




  • Decentralised finance

Utilising decentralised apps for financial services is a novel notion. Decentralised apps are software programs that have a series of smart contracts attached to them. Protocols, also known as smart contracts, assist in specifying the unique features of decentralised apps. DeFi now offers alternatives to conventional financial services such as crypto lending and borrowing, whereby crypto owners may acquire loans using their cryptocurrency as collateral. Payment blockchains are an additional important feature of Web3 use cases in DeFi. The use of payment blockchains could significantly enhance existing payment systems. For instance, cryptocurrencies can distribute aid to individuals without bank accounts. An example of a blockchain-powered payment is BitPesa, used in countries such as Kenya, Nigeria and Uganda, and is reportedly growing 20% month-over-month.


  • Creator economy

Creator economy is a prominent Web3 use case. Developers, artists and musicians connect directly with fans in the creator economy. Web3 allows creators to collaborate without intermediaries. Token Traxx is a good example of how Web3 is being used in the music industry. NFTs are a significant feature of the creator economy in real-world Web3 use cases. Additionally, high-profile NFT sales have empowered creative economies. Web3’s creator economy use case can let creators sell directly. Followers can also own the creator’s work exclusively, increasing their investment. Royalties are another benefit of NFTs in creator economy use cases. Smart contracts track secondary sales and royalties for NFT owners. Most importantly, NFTs are verifiable digital assets, enabling various applications outside creator economies.


So, Web3 is helping to create DAOs, the metaverse and DeFi, whereby transforming existing on-line experiences. Some Web3 use cases have had an impact, but others are still being developed. DAOs and DeFi are certainly active Web3 use cases and the metaverse is still growing. Web3 uses examples to demonstrate how Web3 concepts may improve data interchange, asset ownership and financial transactions. It may well prove prudent to study Web3 since its impact could have far reaching implications for business and society as a whole.



Digital Bytes has been written carefully to bring attention to developments in the Blockchain and Digital Asset sectors, but readers are recommended to take professional advice before taking any action based on any of the links and information above. TeamBlockchain Ltd does not take any responsibility for any action that may or may not be taken, loss or gain on receiving this edition of Digital Bytes.

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DAOs in the financial services sector: By Jonny Fry

DigitalBytes November 2022

The term ‘decentralised autonomous organisation’ (DAO) refers to a new type of legal structure in which no single leader or board of directors is responsible for making decisions. DAOs are popularised by crypto enthusiasts for their bottom-up style of operation which arguably offers greater transparency as procedures and rules are codified using technology, such as smart contracts. The day-to-day management of a DAO is much more collaborative in style, less autocratic and, in theory, less subject to poor individual executive decisions.

Decentralisation is a crucial aspect of digital assets and digital currencies which themselves are dispersed across numerous computers, networks and nodes rather than under the command of a centralised organisation such as a government or bank. Virtual currencies are established to take advantage of decentralised structures thus providing their users with greater anonymity, improved levels of transparency and security in their transactions than is possible with conventional assets. In 2016, a group of developers was inspired by the decentralised nature of cryptocurrencies to create the concept of a DAO. One of the goals of a DAO is to make it easier to offer more transparency and to ensure that the organisation is less susceptible to fraud, bribery, duplicity, etc, in terms of the way that an organisation is managed. However, a DAO is only as good as its initial structure and ethics – i.e., can a small group have a disproportionate impact on any of the ongoing decisions and on the DAO’s participants?

Financial markets – decentralised v traditional

(Source: Stably)

Advantages of DAOs

A few scenarios exist where an organisation or group of people could aspire to adopt a DAO structure, with advantages of this management style being:

· decentralisation: individuals, rather than a central authority outnumbered by its peers, make decisions that influence the organisation. By distributing decision-making power amongst many users, a DAO eliminates the need to rely on the decisions of a single person (e.g., the CEO) or a small group of people (Board of Directors).

· participation: when employees have a voice in their employer’s decisions, they can feel more invested in the organisation. A DAO enables token holders to vote, burn tokens or utilise them in ways they think are beneficial for the company, even if these individuals do not have much voting power.

· publicity: votes cast inside a DAO are recorded (typically on a blockchain) and made available to all members. This hopefully encourages users to act in a more responsible and ethical manner, as everybody can see their votes and selections. The intention of this added transparency encourages voters to engage in matters that are good for their reputations and discourages them from doing something that will harm the community.

· community: the DAO model facilitates co-operation amongst individuals from different locations as members may connect with other members from any site via an internet connection.

DAO constraints

Despite their promises, DAOs are not without flaws. Setting up or operating a DAO incorrectly might have devastating effects. The DAO structure has the following restrictions, including:

· speed: one vote may be sufficient for a public corporation to decide on a particular action or course of action. Every participant in a DAO has one voice. Taking into account time zones and priorities outside the DAO necessitates a lengthy voting session.

· education: parallel to the time ‘crunch’, a DAO must inform a much larger audience of impending entity behaviour. Compared to the stakeholders of a DAO (who can have varying levels of knowledge and understanding of initiatives, incentives or access to resources), a single CEO can easily remain up to date on corporate developments. Whilst DAOs have the potential to unite individuals from all walks of life, one of the biggest challenges they face is ensuring everyone learns to work together and grows as a team.

· apathy: non-voting of shareholders is a real challenge for quoted companies. As reported by the Investors Chronicle in the UK, Mark Northway, a ShareSoc director, states: “We think that only between 1 and 6 per cent of individuals’ shares get voted at the moment.” There is no reason why members of a DAO will be more actively engaged with ongoing decisions.

· DAOs have a high potential for inefficiency: it is easy for a DAO to spend more time talking about changing things than actually accomplishing them. The necessity of co-ordinating larger numbers of people increases the risk that a DAO may become mired in mundane administrative activities.

· security: blockchain resources on any digital platform have the inherent risk of hacking. Votes and choices made inside a DAO need considerable technical skills in order to be implemented – without them, they may be invalid. If users cannot trust the organisation, they may abandon it. DAOs may be abused, treasury reserves taken and vaults emptied – even with multi-signature or cold wallets.

How can DAOs help banks?

DAOs can help banks solve common issues and simplify internal operations by shifting to the blockchain. Banks are extremely centralised, making them vulnerable to corruption, fraud and mismanagement. DAOs’ decentralisation, openness and security might serve to solve these challenges. Distributed ledger technology (DLT)-based DAOs for banks and financial institutions can provide safe and efficient services without physical infrastructure. DAOs’ transparency and decentralisation might ensure banks and financial organisations are more responsive to clients and, with the transparency offered by a DAO, this may help to restore trust in firms in the financial sector. A report from Ernst and Young found that. “24% of respondents identify PayPal, a FinTech, as the most-trusted financial brand — more than double the figure of the closest bank.” The COVID-19 epidemic has undoubtedly accelerated banks’ digital transformation and many banks are now using fintech to solve issues. So, DAOs can also benefit customers.

DAOs and their effect on financial institutions

If DAOs become common, they will significantly impact how banks and other financial institutions are run. The financial services sector is becoming more and more digitised. An example of this is NuBank, the largest ‘neo’ bank in the world with 45+million customers. DAOs can help rebuild trust in financial institutions and putting DAO governance ideas into banks could be the missing link that combines technology and traditional financial institutions. Furthermore, DAOs can help banks expand into untapped sectors and types of customers. Banks, for example, do not take enough action to meet the needs of the remittance industry. Banks could reach these people with new services and products by using the transparency offered by a DAO structure.

Is there a way that advisors and investors may benefit from DAOs?

Investment management and client-advisor interactions will likely change as a result of DAOs. Smart contracts can make it easier for investment managers to track performance, make sure rules are followed, distribute income payments or return capital. By doing so, advisors will have more time to focus on providing additional value to their customers. DAOs offer the ability for all investors/clients to have a say and, in a strange way, it could be argued that DAOs are not actually new but a return to a more collaborative style of managing organisations – not dissimilar to co-operatives, credit unions, mutual insurance companies and building societies (these such organisations were run by members for the benefit or the members). As the cost and complexity of compliance rises, could DAOs indeed been seen by regulators as an alternative way for some parts of the financial sector to be fashioned? It is rather ironic that the DAO movement, sparked by a desire to move away from a centralised structure, could find a champion in regulators, who tend to be highly centralised as they typically like to be able to hold individuals to account!!


Welcome to TeamBlockchain

Jeremy Barnett to join panel on Crypto as new Asset Class for CMS event in Luxembourg

Jeremy Barnett has accepted an invitation to join a panel discussion by CMS Luxembourg at their event on November 10 2022 entitled

‘Will blockchain finally disrupt the full funds value chain in 2023?’

To register to attend the workshop by Teams, please follow the link on below

Will blockchain finally disrupt the full funds value chain in 2023?

Unlocking opportunities in funds tokenisation, investment in crypto assets and secondary markets

10 November 2022 

We are pleased to invite you to join us for this conference, by CMS and LHoFT, on how Technology, more specifically blockchain, is about to transform the investment funds industry.

Notwithstanding the high expectations, pioneering projects have faced difficulties due to a number of reasons including lack of clarity on regulations and a limited number of sector participants being ready. This may soon change. It seems that all pieces of the puzzle will come together in 2023 and finally unlock the opportunities.

We are delighted to have leading speakers and delegates at all levels of the fund value chain such as TokenyLetzTokenOpportunity, CaceisQ  Securities, NordicNinja VCArchax and Montis.

The event promises to be an exciting opportunity to meet in person and hear and discuss how the current use cases and upcoming changes may finally lead to the long-awaited digital transformation of the funds industry.  Don’t forget to register either to attend in person or join digitally following the link below.

Event details

10 November 2022

17:30 CET

19:00-21:00 CET

LHoFT (This event will also be available online)If you have any questions, please contact us.

Keynote by the LHoFT
Funds tokenisation 
After a short briefing by CMS experts, we will go over recent use cases with our panelist from Tokeny, LetzToken and Opportunity and we will also address challenges ahead in terms of investors’ appetite
Funds investing in Cryto-Assets such as Cryptocurrencies or NFTs
After a short briefing by CMS experts, we will discuss the coming MICA Regulation and what it means for crypto as a new asset class within the investment funds industry. Our panelists from Caceis, Q Securities and NordicNinja VC will give us the opportunity to explore the topic from both an asset manager and a service provider perspective.
Secondary transactions and distribution aspects
After a short briefing by CMS experts, we will explore the great potential of new market places which will foster secondary transactions within the crypto space and may thus disrupt the way funds are being distributed and traded among investors. We will notably here the view of Montis and Archax on this topic.
Closing & Networking drinks
CMS fund experts, speakers and all the attendees will have the opportunity to join the coctkail reception just after the conference

LHoFT – 9 Rue du Laboratoire,
1911 Luxembourg

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New Text Book: Artificial Intelligence Law & Regulation. edited by Charles Kerrigan

Charles Kerrigan from CMS has recently published one of the first Legal Text books on Artificial Intelligence. The book has been written by a distinguished team and covers Legal issues, various industiral sectors, Human AI and Technical/Consulting.

The chapter on Automation and fairness is written by the UCL team of Emre Kazim, Adriano Koshyiama, Jeremy Barnett and Charles Kerrigan and deals with the concepts of Fairness, when to Automate and Benchmarking or Detecting and Assessing Discrimination.

CRE Exchange: 4 ways Web3 will impact Commercial Real Estate

As the real estate world settles into Web2, Web3 is crashing down like an avalanche. Here are 4 ways Web3 will change commercial real estate.

First (and for us rookies), what is Web3?

Intro to Web3

Web3 is the next evolution of the internet. Centralized applications and software-driven operations dominated Web2. Internet companies such as Facebook, YouTube, Google, etc. created massive platforms to collect, store and redistribute data. They owned that data and provided it back as content, recommendations, result sets, and many other use cases. Web3 is based on an internet that is open, trustless, permissionless and secure. Data is decentralized and no longer stored within one entity but rather distributed using advanced algorithms, AI and networks. Every computer becomes a part of the internet. Creators own their data and exchange it via smart contracts and tokens. This will expand the role and value of data plays in the global business and personal landscape.

Now that you have some background, here are the 4 ways Web3 will change commercial real estate.

Web3 Impact on Commercial Real Estate

1. Micro Ownership

Smart contracts on the blockchain created the opportunity to fractionalize ownership. The ability to own 0.00000001% of a property or portfolio opens the door to more investors than ever before. Investors can place their capital in all sorts of global assets via a laptop, crypto wallet, and internet connection.

Once a purchase is made and the transfer confirmed by the blockchain, the ownership is enforced by a distributed open ledger. The ledger eliminates the risk of fraud and creates proof of ownership. At sale or reinvestment, smart contracts manage all outflow of capital. These smart contracts automatically airdrop payouts into investors’ wallets.

2. DAOs (Decentralized Autonomous Organizations) replace Fund Managers

Existing fund managers have a naturally wide moat. A fund requires a high amount of capital to purchase properties and portfolios. Most commercial real estate firms first obtain capital from high net worth individuals or family offices. As the firm grows and experiences a successful track record, they may choose to raise a larger round of capital into a fund structure. The firm raises money from institutional investors, such as endowments, pensions, and other public funds. These fund managers spend years developing relationships to receive that capital. They then invest the fund money into real estate. The fund manager keeps a percentage of the total fund as a fee before paying out investors in a waterfall structure.

Web3 creates an opportunity for investors to easily bypass the traditional fund manager.

In a DAO, you no longer have a central authority making all key decisions but rather each member holds voting and decision rights on proposals. Members may create unique DAOs for each investment strategy, geography, or other groups. This provides the investor more autonomy to invest dynamically by specific property or portfolio. DAOs collect capital from all members via cryptocurrencies and can move as a collective to invest that money in physical real estate. With the margins of the middlemen removed, more profits are shared by the collective DAO.

3. Data Monetization in Web3

Data has always been a key asset in building a successful real estate business. Individual investors use data to calculate metrics such as the cap rate or IRR on properties and investments. Large companies spend thousands of hours (or dollars) obtaining data. Third-party research companies make a fortune by gathering and owning data and then selling it to interested parties.

As we transition to Web3, data creators now have a way to earn revenue. Anyone who created data on properties can claim ownership of that data. Assessors physically walking around the building may own the data they create. Permit records, parking information, HVAC unit numbers, and thousands of other valuable data points are waiting to be recorded or stored. Once documented, this data is free from the silos of historical data aggregators charging hundreds and thousands of dollars per year.

Once the data is stored and validated on the blockchain, the original owner of the data has a way to share in the upside from sale of that data. The blockchain will always tag the license (and royalties) of the data creator.

When commercial real estate firms push their data to the blockchain, they can immediately monetize their gold mine of data. Prospective buyers may be interested in utilities, rent or other data about your property. This assumes that real estate firms already have access to their data in a centralized data warehouse. We envision a world in which real estate firms can sell not only physical structures and land, but also the data that the property generated. Overall, Web3 will not only make the acquisition and disposition process smoother through smart contracts, but it will also enable data monetization for commercial real estate owners.

4. Digital Real Estate AND Commercial Real Estate

Creating a true digital twin of your property allows the sale of digital real estate separate from the physical property. We are not far from where the metaverse overlaps with the physical universe. You cannot rent the same unit twice, but what if you could limitlessly rent the metaverse version of your units or properties?

Further, data-driven advertisers are prime buyers of screen space within buildings. For example, most offices now come equipped with several screens. Whether it is a 65-inch flat-screen in a conference room or a small screen on the outside of shared spaces, marketing companies may pay a fortune to rent out the “billboard” space inside of commercial (and residential) real estate buildings. They would be most interested in buildings where they could have direct knowledge of the demographics of their audience. Via NFT tokens and smart contracts, companies could lease their unused screen time to marketing companies to show ads. If done correctly, this could be a huge opportunity within millions of properties across the globe.


Innovation happens fast. We are in the early stages of Web3. Some new technologies will fizzle out, but the ones that survive have the potential to impact us in the way that Google is synonymous with “search”. Now is the time to start putting the pieces in place to get ready for the future.


If you’re interested in learning how we can help you prepare for Web3, reach out at

Nuveen Global Insight. ‘European alternatives: Will single-family housing eclipse multi-family in the European rental market?’

Digital Assets in the SFR Real Estate Market


RPL is a consultancy that specialises in the use of DLT in the Real Estate Sector. We manage a research consortium at the Bartlett School of Sustainable Construction which is called ‘Digital Disruption at UCL’ that has conducted workshops and research into the use of data to automate improvements to ESG characteristics and safety of Real Estate.

PIM – Project information Modelling

RPL worked with UCL Estates to design a platform which it calls PIM which stands for Project Information Modelling. This is a method of capturing and verifiying critical data through the construction phase of a building. In principle the system uses a gateway method of project management and gains the agreement of all parties that the data set is accurate and complete at the conclusion of the construction phase.

The pilot was conducted at the UCL PEARL laboratory construction project that was completed in 2021.

Entrance to UCL PEARL in Dagenham

Stage two of PIM is to extend the use of DLT technology to the collection and verification of current data in the building, so that it can be relied upon by third parties and used to automate improvement. For example, research has shown that owners of large property portfolios can not look at their entire estate to demonstrate that their fire safety certificates have been obtained and are up to date. The use of PIM over the portfolio will give Estate owners a unique ability to view and search across a reliable, current and verified data set which can be used for management decision making.

Research conducted by the consortium found that despite the introduction of the Building Safety Bill 2022 which will introduce severe penalties for owners of buildings who do not introduce Fire Safety and other regulatory procedures, the need to introduce systems such as PIM is not currently sufficiently acute for Landlords to adopt new technologies in the near term.

The SFR Market

In 2021 RPL conducted a workshop entitled DeFi for Real Estate: The Mechanics of Decentralised Trust which explored the potential for use of Web 3 technologies in the Real Estate market, which is the second largest global market behind FinTech, but currently has little or no traction.

A single-family home is a property built (or existing) for the rental market to service families or individuals looking for additional space or specific home needs. It is a form of build-to-rent (BtR) that focuses on 30 to 45 year olds with young families. It is tailored more to the needs of this customer base, unlike most BtR multi-family housing (MFH) flats that appeal to singles and young professional couples.

Nuveen, who are one of the main sponsors of the Digital Disruption conclude in their recent report

‘Changing consumer preferences and working habits post pandemic have spurred interest in SFH. While still a nascent sector in the U.K. and the rest of Europe, the success of the concept in the U.S. implies it could quickly evolve into an institutional asset class.’

The conclusion of the workshop was that there is great potential for use of the wide ranging distributed technologies in this market. Real Estate capital is currently managed in large unwieldly funds which deal in the sale and development of substantial assets. It is clear that if the large pools of institutional capital that are now forming in the digital asset space can be deployed in the global Real Estate sector then a major realignment will occur.

In order to break into this market, RPL concluded that the sector that shows most promise is the SFR [Single Family Residence] or Buy To Rent market as it is being known in the UK.

The PAD token

RPL have therefore concluded from extensive research that there needs to be a ‘carrot and stick’ approach to the collection of critical safety and ESG data. Financial incentives need to be awarded to tenants, contractors and engineers and a mechanism designed to make it simple to upload critical data by means of a mobile phone ‘app’.

RPL will introduce the PAD token, which is funded by savings generated by the use of digital assets by foreign students to pay rent in the building rather than the use of credit cards, thus creating a token reward pool that can be used to reward good behaviours. For example, tenants who pay on time, participate in projects to improve the environmental characteristics of the development and agree to allow their data to be collected and analyised can build their own ‘renter profile’ which can help them when they move on to new buildings in the future.

The collection of data allows the Landlord to view the entire dataset to see for example the entire maintenance record of each flat in a development and make appropriate management decisions. It is also anticipated that critical energy use data can be collected by the introduction of IOT devices so that modelling can be conducted to improve performance of the building.

This process creates a cycle of value where the collection of data facilitates the ability of the property owner to improve the safety, ESG chacateristics and the actual value of the asset.