The rise of smart contracts has sparked a wave of innovation, facilitating the creation of web3 sectors such as tokenization, decentralised finance (DeFi), and Decentralised Autonomous Organizations (DAOs). However, DAO-based smart contract development is fundamentally centralized as it takes place in isolated off-chain environments under centralized entities, actors, processes, platforms, and actions. This paradox fundamentally undermines a DAO’s primary value of transparent governance, decentralized risk management and fault-tolerant operation.
A recent report deconstructs the problem from economic, technical, and security perspectives to arrive at a fundamental limit for DAOs and DeFi under current smart contract publication and governance systems. How this systemic blocker places an upper limit on the DeFi market cap and public blockchain utility is analyzed using traditional finance (TradFi) as a comparison point.
Finally, a recent breakthrough is described in the form of a purely on-chain smart contract protocol called Pairwyse, enabling fully on-chain DAO governance, rights management, bylaw systems, and general peer-to-peer and DAO-to-DAO smart contracting. This report concludes by examining the transformative potential of Pairwyse based on smart contract use cases made possible by Pairwyse’s paradigm shift to on-chain manufacturing and governance of DAOs.
The top core feature of Pairwyse is that instruments can be proposed by users and invoked by DAOs through no-code on-chain deployment of smart contract building blocks and low-code human readable on-chain customizations.
The idea is that legacy Solidity (Ethereum smart contract programming language) smart contracts cannot read each other’s code. They can only interact via calling functions and reading variables, but all the information outside of that is invisible. With the multilayered metaprogramming approach each Solidity Smart Contract can read the entirety of its peer, writes Akiva Dubrofsky, CEO of Akiva Capital Holdings and inventor at Pairwyse.
“When we spoke with advanced Defi protocols issuing capital products on-chain they told us that Solidity is not *expressive* enough to issue their products on-chain,” he writes in reply to questions from Finadium. “Meta-programming is a much more expressive approach that allows for fewer lines of code to express more logic. This feature is how DAOs can issue more advanced products on-chain.”
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