ShapeShift DAO Releases Decentralized Mobile App

The DAO’s app will connect DeFi but doesn’t quell fears of regulation

article-image

Source: DALL·E

share

key takeaways

  • The app provides biometric protection for wallets and allows users to claim yield in-app
  • “Without a legal entity wrapper, there’s going to be a risk of liability in the same way that the Ooki DAO token holders are alleged to be liable,” a crypto lawyer said

The decentralized trading platform ShapeShift is releasing a mobile app connecting chains and assets from across DeFi.

ShapeShift’s app connects DeFi wallets and tokens with a seamless interface. But some fear regulation — rather than technology — could be a thorn in the DAO’s side.

With its app release, ShapeShift is tossing its hat into the multichain ring to become DeFi’s go-to protocol.

“Our vision of the DAO is to support all the wallets, all the chains and all the protocols. There’s not an interface that does that yet,” Willy Ogorzaly, head of decentralization at ShapeShift’s foundation, said.

ShapeShift’s app has a sleek user interface with a Robinhood-like portfolio value graph displayed prominently on the home page. The app provides biometric protection for wallets and allows users to claim staking yield in-app, a feature that is new to ShapeShift, Ogorzaly told Blockworks.

The app code is open source, and the ShapeShift foundation currently only runs back-end node infrastructure, with the goal of completely decentralizing in the future.

Early Bitcoin adopter and ShapeShift co-founder Erik Voorhees announced ShapeShift’s move to decentralize in 2021, writing at the time the protocol would outsource “regulated activity to an immutable decentralized protocol” by having its code integrate decentralized exchanges, such as 0x protocol.

Notably, the project uses Thorchain to allow trades between native bitcoin — not a wrapped variety subject to custodial risks — and other supported chains.

Loading Tweet..

Voorhees is no stranger to the regulatory microscope, and he expressed pride at the principled approach the DAO was taking, including offering services without know your customer (KYC) checks.

“[ShapeShift has] been harassed by a litany of government agencies hell-bent on controlling and surveilling how allegedly free peoples interact economically,” he tweeted in a thread announcing the new app.

DAO governance uncertainty

Shapeshift launched a governance token, FOX, in July 2021 and established a token voting governance model.

But as the crypto world awaits a decision in the CFTC’s case against Ooki DAO, some in the space are questioning whether ShapeShift’s decentralization can shield the protocol, or its DAO members, from regulation.

Loading Tweet..

ShapeShift’s position is the DAO does not engage in regulated activity because it outsources trading to decentralized exchanges (DEXes), and no one will control the DAO once the foundation winds down, so regulation shouldn’t be a concern.

“ShapeShift is a DAO and has no registered entities in any jurisdiction,” chief information security officer Michael Perklin said in a Telegram message.

Added Ogorzaly: “The DAO doesn’t have any legal entity.” 

But some legal experts are doubtful of ShapeShift’s position, as US regulators show a willingness to take legal action against centralized and decentralized protocols alike.

“There’s no ability to not register with the CFTC or SEC and take the position that because there’s no entities, everything is decentralized, that you can engage in those activities without liability,” Mike Selig, a crypto and Web3 lawyer at Willkie Farr & Gallagher, said.

Other crypto lawyers are going to bat for DAOs. Most recently, the venture capital firm Paradigm weighed in on the CFTC’s course of action.

In Selig’s eyes, a DAO’s best option is creating legal wrappers that define who is liable for regulation. Otherwise, liability could shift unpredictably outward.

“Without a legal entity wrapper, there’s going to be a risk of liability in the same way that the Ooki DAO token holders are alleged to be liable,” Selig said. “These are low-hanging fruits for regulators.”

Additional reporting by Macauley Peterson.


Don’t miss the next big story – join our free daily newsletter.

Follow Sam Bankman-Fried’s trial with the latest news from the courtroom

Tags

Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Blockworks’ Digital Asset Summit (DAS) will take place March 18-20, 2024 at The Hilton London Metropole. Why London? Momentum.  London has become one of the world’s hottest crypto hubs.  Innovation is thriving, new institutional investors are flocking in, and regulators like […]

recent research

l1 cover.png

Research

This analysis focuses on financial metrics for general-purpose L1 blockchains. In many ways, L1s should be viewed as an entirely new asset class more comparable to digital economies than traditional businesses. L1s are the core infrastructure enabling the creation of new-age businesses like onchain protocols.

article-image

Bloomberg Intelligence analysts expect ether futures ETFs by VanEck, Bitwise and ProShares to launch as soon as Monday

article-image

CommEX took over Binance’s operations in Russia this week after Binance left the country due to a mismatch with its compliance strategy

article-image

Fireblocks said its goal is to expand its tokenization capabilities

article-image

Liquidator Teneo in a statement said that Zhu had been arrested and charged

article-image

To get back to our subculture roots, crypto needs to extricate itself from a poisonous dynamic: Our reliance on X

article-image

The ‘internet of blockchains’ listed a series of next year’s priorities in a lengthy developer-focused document