Because Assembly is a social good project.

The SEC declared that Bitcoin and Ethereum are not securities. That’s true for Bitcoin, but it’s not really true for Ethereum. In fact, I think one of the challenges the SEC created for itself was declaring that Ethereum was not a security. In effect, the SEC said that Ethereum has become so ubiquitous, essentially operating as the currency of Web3, that it has magically evolved past a currency. BTC basically rests on the gold analogy. It’s the too-big-to-fail argument for digital assets.

But Ethereum was security. This was never hidden. Vitalik said, ”I am proud to have helped set the precedent of small [premises] being legitimate. It’s an appalling idea that people operating boxes burning huge piles of electricity are somehow the only ones who should be allowed to gain from crypto seignorage revenue.”

However, this is not a criticism of Ethereum, Vitalik, or anyone related to the Ethereum project. Although it might be of the SEC. Rather, the point is that Bitcoin was released uncontrolled and unhindered to the masses https://bitcoin.org/bitcoin.pdf.

That’s a nonprofit. Yes, there’s a wallet with a substantial amount of BTC in associated with Satoshi that was recently activated. And individuals claim to be Satoshi. But to the best of the world’s knowledge, so far at least, BitCoin was launched without investors or equity value growth-seeking.

This means a clear path to avoid SEC securities regulations exists: No equity holders means no Howey test. That’s a nonprofit. Nonprofits can generate income and even be profitable.

There are rules, of course. They must fall under one of the charitable definitions of 501(c)3 or some other related tax code (e.g., 501(c)4). But there are models out there. Mozilla is probably the most successful one. And that’s the model that Assembly is seeking to emulate right now.*

The Mozilla Model

Mozilla generates revenue through payments from Google for search results in its browser. Basically, Mozilla sells user (search) data to be used in Google advertising. There’s a funny move of money between the corporation and the Foundation. But that’s the crux of it.

An added benefit for Google is that Mozilla helps keep anti-trust regulators in check by having an open-source nonprofit entity that is healthy and active, even if it’s not dominant. See Microsoft Internet Explorer Anti-Trust history to learn more about how regulators can create opportunities for upstarts (Google/Chrome) through investigations alone.

In any case, Assembly is seeking to emulate The Mozilla Model. Specifically, a forking of the 501(c)3 status: “The [Mozilla] Foundation supports the existing Mozilla community and oversees Mozilla’s governance structure.” Assembly wants to do the same, just for a decentralized oracle network.

This is possible because Assembly’s purpose is to become democracy’s operating system. Like The Mozilla Foundation, which “works to ensure the internet remains a public resource that is open and accessible to us all,” Assembly wants to make government data open and accessible to all.

*This might change depending on development and funding needs and opportunities.

Last updated