IP in DeFi: Copyright Licensing for Tracer DAO

Protecting and enforcing intellectual property ( IP ) rights, particularly copyrights, is a discussion which is beginning in the DeFi industry. Some members of the community support the exercise of copyrights to protect the economic incentives for projects to continue innovating; while other members find that logic antithetical to the open-source culture of DeFi, and the broader blockchain industry.

Tracer DAO is committed to the growth of DeFi. It is also committed to supporting the industry as a whole by keeping its innovations open-sourced. Tracer DAO currently uses the The GNU General Public License v3.0 ( GPLv3 ) license for its already-deployed code.

Open-source licensing

Historically, DeFi projects have opted to open-source the IP in their works via the use of open-source copyright licenses, such as The MIT License, GPLv3 or similar. Generally speaking, these licenses allow third parties to copy, paste and commercialise code developed by software developers for a certain DAO, provided that the third party complies with some peripheral obligations; for example, inclusion of the original license, attribution, keeping the code open-sourced, waiver of patent protections, etc (depending on the license).

Arguments for open-source licensing

Open-source licensing in DeFi allows third party teams to fork and re-use code, leading to:

  1. heightened industry competition;
  2. expedited development processes;
  3. more accessible (ie, less expensive) start-up phases;
  4. teams focussing on complex and unsolved problems, rather than solved ones; and
  5. regular and iterative innovation.

Considering these outcomes, it is clear that open-source licensing has played a key role in the rapid growth of DeFi seen in recent years.


Uniswap Labs launched its Uniswap v3 contracts alongside a Business Source License ( BSL ). The BSL prohibits reproduction and commercialisation of associated code for a set timeframe. Uniswap Labs chose a timeframe of approximately 2 years for Uniswap v3. The rationale for this time-delay is to enable entities investing in software development to avoid their code being immediately forked and deployed by competitors.

Arguably, Uniswap Labs upholds the values of an open-source community by making its code freely readable. However, some open-source maxis did not appreciate Uniswap Labs using copyright law to periodically prevent other teams from competing against and building upon Uniswap v3.


The copyright license used by Curve DAO prevents the reproduction and commercialisation of its code. Unlike the BSL used by Uniswap Labs, Curve DAO’s license does not limit the timeframe of this prohibition.

Despite that, numerous third party projects have forked Curve DAO’s code for their own competitive projects. As a result, the legal enforcement of Curve DAO’s IP rights is currently being considered in this Curve Improvement Proposal. Interestingly, at the time of writing, 68% of Curve DAO members are in favour of the IP rights being enforced.

Arguments against open-source licensing

Open-source licensing reduces the economic incentives for software development entities to invest in creating innovative code. In DeFi, many entities are spending years and millions of dollars to create code that is immediately freely usable by free-riders who might then allocate resources to business development, marketing or further development.

Non-open-source licenses in DeFi (like Curve DAO’s) permit third parties to learn from and audit associated code, while preventing third parties from reproducing identical or similar material in competition. Arguably, time-delayed open-source licenses (like Uniswap Labs’) provide a middle ground: allowing for code to be freely used only after its creator has had a chance to commercialise it.

What do you think?

We want to hear the Tracer community’s thoughts on the copyright licensing approach for future Tracer DAO contracts, particularly Perpetual Pools and Perpetual Swaps. What other licenses have you seen used? What form of license do you believe is most appropriate?


Firstly, since I specialise in IP/IT/ID law, rather than make suggestions, I’ll craft a framework to give context around the discussion.

The basics should be Lessig book, Code and Other Laws of Cyberspace. A gross summary is we have at least 3 mechanisms to minimise friction
a) culture lore - stuff like netiquette, the customary governance practices (eg voting) and protocol debates (wref IETF RFCs)
b) common law (or civil codification) … when the dispute gets beyond civility and you need independent judgment, this is where most people are comfortable and the Anglo-Saxon doctrines of real property were shoehorned onto intangibles and hence we have this current hodgepodge of categorical rules for patents, trademarks, copyright, secrets etc
c) commercial lure … market mechanisms using behavioural economics to guide or penalise the activity of actors. This has been given a new lease of life with tokenomics

So whilst the 3 cases Jack brings up

  • ShushiSwap vampire mining
  • Curve-Saddlesore unauthorised translation
  • IPmaximalist position such as standards essential patents
    all are reference points in what the DeFi industry as a whole considers the “norms” of doing business

Jack has put forward the compromise of a time-limited trade-secret CC-BY-ND which reverts to CreativeCommons - GPLv3 as one path that meets internal business objectives and conformance to wider business practices.

There may be others.

PS. I’d note for record, the USPTO uses 18 months after filing before publishing so what is being achieved here is a defensive quasi-patent. Also meets requirement of FinCEN as software development house rather than money services business so legal liability is constrained.


My opinion here is largely guided by my perception of morality.

Ideas are copied not stolen, they are information not property. Copying of ideas does not justify violence. Idea ownership is enforced by the state so it is accomplished through violence.

Apart from this is credit and citation. Claiming credit for another’s ideas is stealing through fraud, not copying. Credit is property. While I generally don’t support the use of force, I am open in this regard.

So to conclude with my suggestion that is as far as my morality allows: A licence that allows anyone to copy ideas if they clearly and prominently give credit to Tracer. Debatable what is reasonably prominent , but mandating 10% of the UI real estate be dedicated to a Tracer advertisment that Tracer community designed could arguably be fair. If they want white label, then a proposal to the DAO regarding how much TCR to burn could allow it, for example, 10% of their revenue.


Agreed. If decentralization and what we’re doing with DAOs and DeFi are matters of principle, then I think it’s a clear answer: Open-source is the way.

There was recently a fork of Olympus who dedicate 33% of its earnings back to OHM. I think finding ways to incentivize that kind of sharing is a better way than enforcing IPs.


This is actually a voluntary research sharing agreement where the forker played nice and decided that the R&D deserved 33% of ???gross earnings??? … however, this is only if the person plays nice. The whole point of the white-list that Circle implemented was to coax LP to use their community approval process. If you don’t have a strong bargaining position (which is what the traditional courts with patent rights) then what happens in adversarial scenario where it is a blatent free-riding ripoff?


This can be double-edged … is Tracer endorsing that channel “partner” or is it merely protecting its reputation (aka brand) by permitting Tracer DAO(r) to signal some type of code “quality” (wref Intel). Your point about UI real-estate is intriguing …


Checked the thread again. 33% of revenue/profit is returned to OHM. 33% of gross earnings would be pretty crazy, admittedly. https://twitter.com/danielesesta/status/1433597864781955074

Regarding adversarial scenarios… .hmm. Would that be something like Bitcoin Cash or Sushi?
I assume that there will be projects who copy-ride and try to offer the same or altered products, but from what I’ve seen the general fallout is not that it hampers the original platform/project/etc, such as Bitcoin or Uniswap.

Additionally, in the case that a DAO copy-rides the code and ignores whatever requirements we have, how would you proceed? The adverserial DAO is unlikely to care and would probably continue building while Tracer would need to allocate resources to enforce the license breach.

I think Ryan is on to something better with the UI real estate and white-labeling.


I see 4 main challenge areas for the whole ecosystem, which can provide some guidance on approach - for IP and for other issues:
1 - Governments/Authority/Regulation
2 - BIg Money/Ownership/Condensed Control
3 - Scammers/Quick buck/Social Licence to Operate
4 - DAOs and Dreamer/Purposecentric Disruption/Decentralised X via Democratised Y

All parties are valid - because they exist. The challenge and chaos DAOs are going to experience over the next few years/decade can not be underestimated - resources (human not capital), image, regulation, platform access, etc - means any advantage available has to be seriously considered. And currently Government and Regulation can be powerful disincentives to the other 2 challengers.

Obviously some principle conflicts - but abandoning the incumbent system and its benefits just because you disagree with it - is not always the most effective way to change the system right?

Big money has a stranglehold on the success of any issue of token cash flowed projects - if you dont play with the whales its hard to play at all. The next 5 years is going to see an almighty skill crunch of epic proportions, imagine what is going to happen as defi plus all the deX’s go mainstream, more VC money flows in behind more projects, other solution spaces are migrated to the blockchain, imagine the tsunami demand for skills across the world?

Sorry - off topic - but connect. The solution will come from some private, but also largely from the government with skill programs, with national education roadmaps etc.

So - my 2sats worth is - open IP is great - but sometimes if this means the unestablished and nascent developers of IP get bounced by the established big players with the very IP they build to change the world and deliver on their purpose - then I say be pragmatic and enjoy some IP protection until critical mass is met.

A time base exclusionary period? With a common purpose override?


we also have the doctrine of moral rights which conceptually allows a architect for church to refuse it being turned into a whorehouse. However, the US does not recognise moral rights its more a European thing. Some F/Lossers have tried to add riders onto the OSS to assert that their code should not be used by dictatorial govts or military but in practice, enforcement becomes an exercise of the Golden Rule. Whales is a different problem because they rely on thin markets and sometimes crazy timing attacks to get their way.

IP has historically relied on the judicial system as last recourse but whilst the creaky wheels of justice grind finely, they grind slowly in that trying to self-help tactics in a flash attack could be technically unlawful.

1 Like

ShushiSwap was a parasital vampire mining but not adversarial … the latter is usually used for economic attacks like that flash-loan relying on retarded oracles and stuffing the mem-pool with low-value transactions so they got the liquidated assets at undervalue. Poly-network is probably the biggest attack $800M with suspicion that there were insiders involved. So the range of bad actors are

  • lamprey which suck blood (liquidity pools)
  • sharks which smell leaky code (even at mining level) and front-run to exploit
  • whales which just throw weight around in thin markets

I;m sure new economic torts will come forth as nothing is easier than unjust enrichment where the assets are in plain sight


There are some great ideas being floated around here, what a pleasure to read.

Intellectual property rights within a DeFi framework are conceptually difficult to align (evidenced by the broad range of ideas being posited in just this thread).

I’d be curious what others think, but I am of the view that the intellectual property model depends on the fundamental driver, is it: (1) to foster community growth; or (2) to enable Tracer to capitalise on its work. By the looks of it, it is a combination of those two, but which way does the pendulum swing more prominently?

I suspect that the Uniswap model is the most appropriate within current paradigms. Allowing for a period of uninterrupted use does allow Tracer to benefit from its own hard work. While still allowing for broader community utility down the track.

In combination with a Uniswap model, perhaps third parties could obtain early use rights during the prohibition period through an application process, with a series of public preconditions that need to be satisfied before the use of source material is granted. This would: (1) foster a maturation of the project teams using the code; (2) allow Tracer to control the release, subject to the public preconditions; and (3) ensure that Tracer is compensated for its hard work (in whichever form that takes, in-kind, advertising, tokenisation, etc).

The preconditions for early use would need to be settled, interested to hear other people’s thoughts on what they could look like.


This isn’t remotely in my ballpark, so take it for what it’s worth.

  1. Institutional appetite for DeFi applications is growing- there’s a great article in the AFR today on Vanguard using DLT to update pricing for $1.6 billion worth of indexed products. I get the philosophy underpinning much of DeFi is to broaden access to underserved markets, but if one of the whales (to use @drllau parlance) exploits overly generous terms of use for tracer products only to entrench their preponderance long term, how does that bode well for the democratisation of finance?

  2. Are there ESG minimum standards that the Tracer community wants to bake into its products? Notwithstanding its overlap with inherently subjective values, it may be relevant to accommodate ESG standards in a discussion about the author/developer’s moral rights.

1 Like

If you can answer the question; “what would Tracer Dao willingly sacrifice itself for” then you have found the edge condition which can guide much of the conversations and answers to these type of questions. And this is no means a clean question or answer; the DAO is made up of many different people, with many different values, objectives, and needs. While practical, the governance mechanism of voting to resolve a position loses a lot of individuality along the way - by design. I am new to participating in the Tracer conversation, so I do not know the makeup. Hopefully, the community has many opportunities to confirm the alignment of shared purpose before such a dramatic question is proposed!

Significantly the DAO has to take care to maintain a social license to operate. A Declared Principle of Tracer is that they are Innovation Maximalists; to act totally contrary to a principle is a dangerous area for a DAO without captured members and with a desire to grow and attract contribution.

Referencing angus_mycelium - What is the Purpose synthesis of 1) foster community growth & 2) enable Tracer to capitalise on its work? How do you align the two objectives, what is the common purpose? This is what turns the “sacrifice” from above to a “contribution”?

This is a question of where are the control volume edges of the “community”? If another entity was to captitalise on the work of Tracer - and that delivered on the Purpose of Tracer Dao - then isnt that fostering community growth? You effectively have expanded the community to include this entity?

Maybe more is the question is how the individual members of the DAO are rewarded by different copyright mechanisms? How their proximate capital-intensive needs are met? Their primary purpose sets of looking after themselves, providing for their family, for their more proximate communities, in cross tension to the purpose of the wider community they are involved in? This then is the individual-versus-the-community dilemma - we all need to put food on our tables, and many of us would like to enjoy the fruits of our labour and passions in addition to making the world a better place; ie a nicer home environment, a more comfortable financial situation, the ability to share an Avacado smash with friends at lunchtime at our favouritie cafe.

What is the Elegant Solution which aligns both of those Purposes?

Participants who share the Purpose, also hopefully share the Purpose that promotes open innovation - which other than for the Tony Starks of the world; the rich and self-sufficient inventors - means being able to capitalise on their work and investment of time ingenuity capital to some degree, while not stagnating innovation and expression of the solution in the community of choice. A NFT-like ingenuity royalty call each time IP used/deployed/minted/etc, with consequential inherited royalty mechanism?

Can we reframe intellectual property rights from one of being of “Use”, to one of being a “Participant of Choice” in a Solution Community? The IP is governed by the solution community, if you want to utilise the IP, then you join the particular solution community, and that means agreeing to the participation agreements of that community; with a primary one of following practices that the community has agreed delivers on the purpose of the community? A cohesive set of agreements that govern attribution, economic participation, sharing of consequent innovation, economic incentives guidelines, etc. Add an “at-stake” mechanism that promotes adherence to agreements, allowing a frictionless uptake and integration of IP without a bottleneck approval processed?

Can this not lead to an optimization of the capitalization of the IP for both the community and the individual? Open, generative, respectful, transparent, self-regulated; maintaining a dynamically stable system for long-term sustainable development and capitalisation.

The Big Money, the Scammers, from my previous post, those who are cross-purpose (drllau lampreys, sharks and whales) - who choose to operate outside of community policy envelopes, can be addressed via the current mechanisms, of traditional IP protection mechanisms. And in this way, the community can enjoy the best of both worlds? The involuntary enforcement world, and the voluntary participation world?

A paradox exists for any organisation which is building for a decentralised future while relying too heavily on a centralised IP enforcement mechanisms. It is like making a bet that Bitcoin will be worthless in 20 years, with the payout to be in BTC!!!

The danger is - trying to control something that can not be controlled - it is illusionary - you can not lock IP up in a shed or behind a chainwire fence. IP is largely uncontainable, ethereal, and costlessly reproducible. Membership of communities is real, governable; you can control membership and exposure to the value of future ingenuity. The value of responsible membership to these solution communities will increase as First Mover Advantage > transforms to > First Exposure Advantage. The future of intellectual property? A royalty ecosystem/marketplace for people and organisations [long and short] on {Ingenuity and Utilisation}?

A Perpetual IP Pool anyone? :smiley: :smiley: :smiley:

  1. For governance voting you can copy a rule from a insurance mutual that no more than say 5% of any single controlled governance block counts (with some headaches in defining control)

  2. as for defi products the basic smart contract code is GPL but you can put in incentives to participate in DAO governance like Curve did in modifying Aaragon voting to implement white-black lists … you don’t want to get into shitbooks and being locked out of voting. I saw provision in participation agreement that TCR can be grabbed back from wallets (how?) so its a credible threat

  3. however, you do want lots of porpoises (purpose driven subDAOs) so need to offer glimpse of how they can grow to be whales

1 Like

I’m a strong believer in the open source way for commercialisation of software, as we build the future of the industry not just for today’s minds, but the minds of those to come to learn from and build greater things on top of. However, when you see scenarios play out where certain countries are powerful enough to create their own potentially credible blockchain ecosystem under the control of their governmental structure, with a power to impose that to a large enough population, in essence creating network effects by legislation that allow a blockchain ecosystem to flourish, you have to pause and think what would happen if the IP freely shared with the community became part of that ecosystem, and would that be something the DAO would be happy with, and how can we protect the IP created in community from being used outside the scope of the community without breaking the principles of open source the community is founded upon. In essence, the DAO structure itself I think gives part of the answer for protecting the IP while allowing the open-source nature and spirit of software development here to flourish. GPL3 and most other acceptable open-source licences allow attribution and re-release of modified code as part of the terms and conditions, but most times gives little or no censorship to who may use the code, and I believe as well does not prohibit a fee structure to be added on for these modifications, just that the source code must also be part of the release in addition to binaries (I haven’t read its modifications in awhile so I may be wrong here, please correct me if I am). The DAO structure of today didn’t exist when these were written, but I believe if sufficient educated legal minds (which I am not one of to be clear) were to work on the wording, an acceptable addendum to the GPL or MIT licence terms can be made for a DAO vote to be included as part of any team or project wishing to leverage the code-base for re-use in any “for-profit” initiative. This would mean the requestor must first hold an eligible number of DAO votes as stake to be able to submit this proposal, or get the delegation of sufficient members to foster the proposal to the DAO for voting, which can be a first pass filter if the principles of the proposition do not align with the DAO community values. This future-proofs the IP in the young industry which is still writing and re-writing rules of engagement for business in many ways, without opposing innovation on the code or work done by possibly disincentivizing opportunities for rewards of useful contributor team(s) other than the attribution for doing so that current open-source licensing gives. The proposal structure may seem a little “ad-hoc” but this allows for flexible variations in the usage I believe, with a filter at the proposal stage preventing overwhelming the community voting mechanisms with multiple frivolous variation requests. It also allows flexibility in IP to a license that sets terms and conditions beforehand, so doesn’t allow amendments that might be mutually beneficial to other commercial projects such as “right of first refusal” conditions if the DAO believe the usage and modifications that result may be useful as part of the core stack, or may become subject to an adversial competitor’s acquisition and usage. Thoughts here? (Again, I’m not an IP or legal mind, so may have many flaws in this thought process others have already considered by not suggesting this here)


you make a very sound argument … in fact doesn’t need to be country sized b4 exploitation occurs …

The Steem-over hostile action shows how money/power can swallow up communities … censorship resistance is hard … and with no legal identity doublehard

There was a backlash on Steemit too. The social network—largely run by Tron developers now since most Steemit team members had quit—changed the terms and conditions to forbid mention of any other network. The day after Hive launched, Sun downvoted a single post about Hive by so much that it showed as a $370 downvote (normally downvotes come to around $1) hiding it from view. Subsequently, any post about Hive was hidden from the site


1 Like

Somewhere, someone, somehow is piling up the blockchain patents. This is like a nuclear trigger as whoever is the first to assert, everyone else will pull out their knives … This is just one sign that the Aus Patent Office has (relunctantly) allowed one so perhaps the arms race is already on.

1 Like

I agree with much of the good commentary already provided on this point, but would add two points:

  1. IP does not bring actual protection, because it is not enforceable against DAOs. However, as pointed out, if a protocol protects their IP for a period of time other’s might still honor that, as was done with UniV3. I am in favor of such short term protections, especially when building something new.
  2. This all comes down to competitive pressures and moats. Imo for the products Tracer is developing, there are better moats than IP, such as liquidity, community and brand.

So to summarize, I don’t think it matters that much but having short term protection might make some sense whilst we build up our moats. Open source all the way though, we are building on the shoulders of giants and should pay our respects to the community by honoring its traditions. Good discussion though, very well written initial topic!


This has been an incredibly interesting conversation and will underpin Tracer DAO’s v1 approach to Tracer Factory contract copyright. Thanks to all who have contributed so far.

For the Tracer Perpetual Pools contracts, launching today, Tracer DAO will work with @drllau an IP/IT/ID specialist) on a commercialisation framework which will be governed by Tracer DAO members.

Tracer Perpetual Pools copyright strategy

At a high level, the Tracer Perpetual Pools copyright strategy is:

Step 1: Creative Commons CC BY-NC-ND

As of today (15 September 2021), the Tracer Perpetual Pools contracts have been published to GitHub with a Creative Commons CC BY-NC-ND license, which, generally speaking, allowing others to download the works and share them with others as long as they credit Tracer DAO, but they can’t change them in any way or use them commercially.

Read more about the CC BY-NC-ND here: https://creativecommons.org/licenses/

Step 2: Commercialisation framework governed by Tracer DAO, based on the Lambert framework

In the coming two weeks, @drllau will work with Tracer DAO members, including contributors to this thread so far, to develop a fit-for-purpose commercialisation framework for Tracer Perpetual Pools, based on the Lambert toolkit (Tracer’s Framework). Tracer’s Framework will allow Tracer DAO to negotiate and approve “collaboration” or “consortium” agreements (depending on how many parties are collaborating) with parties (both DeFi and TradFi) who would like to use the Tracer Perpetual Pools contracts. Ultimately, these agreements will become revenue sharing agreements, research and development (R&D) cost sharing agreements or consortia agreements, depending on the circumstances.

We envisage that Tracer’s Framework will allow:

  1. Third parties to approach Tracer DAO requesting the right to be a “participant of choice” (to use @jme’s language) by using standard forms which stipulate financial contribution, project plan, etc). Based on this discussion, the financial contribution might be 10-33% royalty based on revenue or profit. Importantly, the necessary financial contribution will be decided by Tracer DAO on a case-by-case basis;
  2. Tracer DAO to approve that participant of choice via proposal; and
  3. Legal agreements to be generated and, where feasible, recorded on chain (including black/grey listing for bad actors).

The Lambert toolkit is designed as an R&D sharing arrangement between copyright originators, collaborators and operator/optimisers (eg, if Perpetual Pools are ported to another chain) drafted in accordance within the laws of England and Wales. Accordingly, the Tracer Framework will be compatible with the existing Tracer DAO Participation Agreement. I will let @drllau follow up with further information about the simplified Lambert toolkit for copyright licensing and its applicability to Tracer DAO’s commercialisation steps.

Read more about the Lambert toolkit here: https://www.gov.uk/guidance/university-and-business-collaboration-agreements-lambert-toolkit

We believe that this two-step model aligns with the sentiments of @Dour_Scotsman, @dahlberry, @ryan.mycelium, @angus-mycelium, @nissan and @Robdog.

In short, we want other people to easily be able to negotiate to use Tracer DAO’s contracts and we want Tracer DAO’s members to be involved in that process. I seem to be echoing @nissan here.

Tracer Perpetual Pools, like all future Tracer Factory contract types, will be owned by Tracer DAO. We believe that it is both the right and responsibility of all Tracer DAO members to decide the appropriate uses of those contracts.

We look forward to hearing your thoughts on the above. Moving forward, Tracer DAO’s copyright strategy will remain subject to Tracer DAO governance.


Honestly surprised this thread did not think about Tokenizing IP agreement contracts as an NFT is one way to bridge DeFi/Copyright industries

NFT’s can be more than art-pieces, they are an effective cryptographic tool to create a one-of a kind tokens to cryptographically prove that the contract created at a point of time said the following rules regarding the IP. Also lessens the drama of tampering of licences via changing the wording without approval of all parties.