It turns out that ‘The Brooklyn Project’ of Ethereum startup ConsenSys is out not just to help the world with tokenization but also to change how tokens are addressed. That became visible recently at Fluidity Summit in Brooklyn when Pat Berarducci, the Co-Chair of this project, shared the idea that “utility tokens” term should be replaced with “consumer tokens” instead. To make a strong case Pat also went on to give a formal definition of consumer tokens and why such a change would make sense.
The idea was discussed at recently concluded Fluidity Summit in Brooklyn by ConsenSys Deputy General Councel Pat Berarducci and Aaron Wright of OpenLaw. Both of them shared a framework developed by the members of Brooklyn Project, and according to the framework document:
“These principles are intended to provide a basic framework for long-term oriented behavior and to help establish trust between the initiators of consumer token projects, their collaborators, their customers, and the public at large.”
On the topic of consumer tokens, the document defines that they’re tokens whose “features do not include equity ownership, a predominant interest in a fund, passive-earned dividend rights, or other characteristics of a financial instrument.”
Aaron Wright said in support of this definition that the term “consumer token” better describes the features of utility tokens (i.e. collectibles, cloud storage etc.) in comparison to the term being used currently.
Moving further, the document claims that Brooklyn Project aims to facilitate a crucial discussion regarding both centralized and decentralized tokens, especially because decentralized tokens fit less seamlessly into existing legal and regulatory frameworks. Despite that, however, they encounter the same problems faced by traditional legal entities and financial markets – the problems of trust, fairness, cooperation and safety. Therefore, The Brooklyn Project aims to facilitate a collaborative, community-wide discussion about regulation of both these token standards so the current trust deficit can be ameliorated.
In the end Pat Beraducci said:
“Ultimately we see a future for effective, decentralized, self-regulatory structures. Most people in this industry, they really want to do the right thing.”