Primavera De Filippi, Morshed Mannan & Wessel Reijers
92 Geo. Wash. L. Rev. 1229
Blockchain-based systems, by virtue of their technological features, present challenges to the rule of law. These systems work in a transnational and decentralized fashion, often with pseudonymous user identities, executing code autonomously without the possibility of coercion by any single operator. This Article argues that blockchain-based systems challenge the rule of law by means of a move toward the rule of code. First, it examines the analogy between the rule of law and the rule of code by distinguishing them from the rule by law and rule by code. This analysis evaluates the extent to which the technical features of blockchain-based systems make them particularly difficult to regulate by traditional legal means, contrasting the example of the Decentralized Autonomous Organization Attack with the newer example of Tornado Cash. Second, this Article identifies ways in which lawmakers can respond to the rule of code within a global, pluralist, and polycentric legal system. After distinguishing on-chain and off-chain governance, this Article builds on Lessig’s four modes of regulation to offer two pathways for regulating blockchain technologies: the regulation-by-code approach, which aims to impose legal responsibilities and liabilities on operators of blockchain networks, and the regulation-via-governance approach, which uses legal pressure points to influence the social norms that govern blockchain communities.
