[sinecure]

The cleanest and easiest use case I see for crypto is just optimizing the whole securities issuance and fund management legacy system. For my business in alternative investments if I want to raise money for a project with a Regulation D offering I need to spend a lot of time and money jumping through hoops and dealing with numerous financial institutions.

The typical flow of information, effort and money goes like this: the sponsor (me) creates the investment opportunity under Regulation D of the SEC ruleset with the help of some securities attorneys, a managing broker dealer (SEC compliance) signs off on it and circulates it to broker-dealers via selling agreements, then, wealth advisors who are registered with those broker-dealers can sell our offering to their clients, those clients then fill out a subscription agreement and send their money to a third party called a transfer agent, the transfer agent takes in the agreements and cash, logs all the details about the investor and manages the payment of distributions with a mixture of direct deposit and paper checks, and generates tax documents via mail, these distributions and tax documents then go to the financial custodian of the asset for each investor.

This process involves 8 to 10 different parties, multiple financial institutions and reams of paperwork. The cost of capital is approximately 11% using this method.

I dream of the day that I can offer a tokenized security on the blockchain, that is held by the investors themselves in their wallet, with distributions paid with USDC directly to their wallets. The reduction in cost would be incredible--all we need is the legal framework to allow it.

[notafraudster]

But on a fundamental level you're not describing a technical hurdle, you're describing a social-policy hurdle. Like, wouldn't you agree that if there was policymaker will to make this process more efficient, it could be more efficient without a blockchain?

Suppose that blockchain did not exist but that securities law did not require you to consult securities attorneys to "create the investment opportunity". You would have an efficiency gain by cutting out the attorneys.

In particular I think about your "dream": you dream that in lieu of paying people with a mixture of direct deposit and paper checks, you could pay them with an electronic currency; but presumably at least some of the people being paid with paper checks want to be paid with paper checks (if not, you'd presumably pay them all with direct deposit) and while securities law probably doesn't let you disburse via Paypal or Venmo or any other electronic account transfer, if it did, doing so would be approximately the same as USDC, right?

It seems to me to make a sustainable case for blockchain, you need to basically say assuming the exact same regulatory posture and the exact same degree of technical laziness in terms of automating steps not currently automated, would blockchain make it better?

[peyton]

A standardized set of smart contracts would solve the problem. I think you’re thinking about payment methods.

[robin_reala]

But why bother with blockchain in that case? What you’re describing is a legal solution centralised by the government, and any hash tree with work in a non-distributed situation.