<u>Introduction</u>
DApps are global from the beginning, but people and companies are local, subject to local jurisdictions. Cardano and any DApps will need to integrate with a complex web of regulation to bring economic identity to one billion global digital citizens. Regulation needs to be consistent, transparent, accountable, and reusable. The rules should be made digital; Law-as-Code, not Code-as-Law.
We aim to establish a shared platform for Law-as-Code/Rules-as-Code to set the standard for reusable open-source Regulation-as-Code (RAC). Our platform will enable Cardano DApps to integrate with and update different regulations from countries across the globe consistently. This is a first step in the process to consider the rules themselves being stored on chain for immutability, audit trail, etc, creating further community/citizen trust and confidence, i.e.; "Proof of law". A platform anyone can use, contribute to, and rely upon for RAC.
In establishing the platform, we will create easy to follow documentation. We'll guide anyone to help add new regulations to the platform from their jurisdiction. We'll work to unify international treaties (such as FATCA/AML/CTF requirements). The RAC platform will make the development and conformance to regulation far more efficient and transparent for teams. Reduce the potential for inconsistent regulations across the Cardano universe and enable jurisdictions to build upon others' work quickly. Pioneering and leading the ecosystem of where humans and machines are users.
As Cardano Community Hubs establish themselves, well-documented processes, libraries of examples and common code will increase the speed of deployment for new Cardano engineers, developers and designers in developing countries.
In jurisdictions where there are high levels of corruption, and variation in the interpretation of regulations are commonplace, the platform will provide the means to create greater transparency, traceability to law, and appealability.
<u>Why it's important</u>
We know from experience that often, in many countries, internal business systems in government departments do not distinguish the legal rule (legislation/regulation) from operational rules, and this conflict means operational rules can contradict the law. A simple business example of how this solution can help ā a government/nation's Tax authority exposes tax-law-as-code to industry, leading accounting/ERP software providers, i.e.; SAP, Xero, Quickbooks, etc, who are then able to simply integrate with the authority's RAC APIs for 'always current, always relevant, always lawful' verifiable access to tax laws.
Critically, the same disconnect between legal rules and operational rules in developing countries often leads to deeply unjust outcomes for the most vulnerable. It allows space for corruption.
RAC will help here too, provide a means for communities to test government decisions against the law, for better access to social justice, connecting regulators and their systems back to the place where they get their authority from ā the people.
It supports the principles of modular architecture and decentralisation for Cardano DApps ā enabling more than just an encoding of regulations, but encoding of the test suite for regulations.
It reduces cost and complexity for DApp developers and individuals, businesses and institutions. Right now, each time a rule is changed, 3rd party business systems, government, industry, or otherwise, need to go through an expensive onerous software release/change management process.
It also supports the principles of common/shared platforms and "whole of government" architectures for many developed digital nations/jurisdictions, (e.g.; Australian gov policy/framework: <https://www.dta.gov.au/whole-government-architecture>) as well as enabling developing nations to start with equity, transparency, inclusive accountability and human and machine-readable code in the foundations of their RAC.
ā¢ Greater consolidation of law/rules
ā¢ Greater consistency of law/rules
ā¢ Greater access of law/rules
ā¢ Less fragmentation of law/rules
Starting from a logic model, with an interdisciplinary, multicultural approach, co-drafting in both natural and computer languages creates new opportunities for monitoring and appealing.
Finally, it provides a resource for Cardonians in Community Hubs (in developing and developed nations) to adopt. In particular, those focused on reducing corruption and building trustless systems, will find it easier to communicate with governments and demonstrate their value proposition using the platform.
The platform will support their pitch to institutions that they are currently missing a valuable opportunity to create traceable, trustworthy, and equitable application of legislation across systems. With examples of solutions in hand, they will be able to ask questions such as; How do you audit in real-time? What does the citizen need to appeal the decision? What are the checks, balances, and oversights? How would you know if your system is helping or hurting people?
<u>Addressing the challenge</u>
This solution is a critical foundational service to enable the scaling of development teams, to deliver registry solutions, globally. It puts regulation in reach of new developers, programmers, engineers, designers and other team members adopting block-chain based solutions and reduces multiple costs creating DApps that impact social/financial inclusion and economic development.
A common/shared open-source RAC platform will enable poor nations to open, share and easily interpret law/rules around said themes such as property registration, medical and vaccination, elections voting, licensing & certifications, etc.
The deliverables for this RAC platform establishment project will begin to address the challenge immediately, providing the means for regulations to be used and reused in foundational registry solutions. They include:
ā¢ MVP Open-Source RAC platform for anyone to use, preloaded with examples which are globally applicable.
ā¢ Documentation and how tos for the Cardano community to codify the laws and rules they need to comply with in their DApps.
ā¢ Whitepaper on RAC platform utility and applicability to Web3 communities and registry solutions.
ā¢ At least one exemplar DApp: open-source MVP based on RAC addressed in the project. We are able to confirm a domestic exemplar ā a public-facing app for vulnerable people to understand their legal eligibility to help build confidence in registering for and getting what they are entitled to, in collaboration with a social services organisation (Citizens Advice Bureau). An exemplar from elsewhere in the Project Catalyst community, working in collaboration with communities such as WADA, LATMO, ETH is to be explored further. Initial discussions point towards a second exemplar being 75% likely.
<u>Challenges and risks</u>
The first community project that uses the RAC platform might have its own challenges which create a risk for the success of platform building, so we will mitigate that by ensuring the first regulations we codify are needed by more than one Cardano project.
This exemplar from the community may well be likely to face the same challenges identified below. Risk can be mitigated in a number of ways to be explored, e.g.; limit scope, chose legislation which is more straightforward or mirrors a domestic example closely, work with a community with similar structures and institutions to Aotearoa, New Zealand.
The risk of getting the encoding wrong is not a new risk for this project as it exists for the DApps themselves, but we have lawyers in the team who are involved in the coding process to mitigate the risk of misinterpretation. We could still get it wrong, but weāll build test cases to continuously test the system and rules. As the community which uses the platform grows, documenting these learnings will provide the foundations to improve the practices and processes and grow the community capabilities continuously. As Gandhi said, āFreedom is not worth having if it doesnāt include the freedom to make mistakesā.
Push back from anyone who says that encoding rules will cause a problem will be mitigated with a range of recent examples of the fact that actually they are all encoded already in some way shape or form, inconsistently. Examples will show that subordinate decisions or automation often, unintentionally, ignores legislation and operational policies where they have not been encoded to be reusable by people and machines. There are often multiple interpretations, multiple implementations, and no ability to know whether or not you've gotten the rules right, whether youāre INSIDE government and regulated entities or out.
The domestic exemplar "your legal rights" service will grow public confidence and improve the support available to our most vulnerable and create a greater appetite and requirement for departments to ensure explainability in their systems. We expect departments to not like this much, but we have full legal backing that a community interpretation of the law as code is no less authoritative than a departmental interpretation because only the source legislation is authoritative.