There are many false dawns and false prophets in crypto, but I will be keeping a close eye on this. People interested in tech and investing should check out this thread. Here are my first thoughts + a summary of a new asset class: Initial Litigation Offerings (ILOs) https://twitter.com/kevinsekniqi/status/1338510581742047237

Ava Labs, makers of the Avalanche blockchain network, are creating something known as an ILO-Initial Litigation Offering. They are providing a new model for how lawsuits are funded, beginning with an imminent ILO for
a California lawsuit seeking an award of up to $1bn in damages

Billions of $ are "invested" each year into lawsuits. These investors, mainly rich folks and specialist finance shops, "bet" money that a defendant suing a plaintiff will win their case and be awarded $. In return for funding the defendant's legal fees, investors get a of this

Although litigation funds appear to have been returning averages as high as 40% in recent years ( I know), this asset class has largely been out of reach for retail investors due to long wait times to payout, illiquidity of funds, and ostensible legal and operational complexity

With the launch of ILOs, this could change. You and I could use a blockchain like Avalanche to "buy" fractional shares in the payout of a lawsuit. If the lawsuit succeeds, shareholders would get paid their due. The shares would also be liquid, since they are tokenized on

a blockchain. Depending on the blockchain, this could allow easy trading across the Internet. This solves the ticket size problem deterring smalltime retail litigation funders and it also solves the liquidity issue. At first glance, it appears a very exciting development in the

world of fintech. Otherwise mundane things are increasingly becoming tokenized and financialized in cool ways. Consider the rise of fractional real estate ownership platforms, or ISAs which are effectively tradable financial assets representing an entity's future income.

Going forward, I believe that anything which represents a legal or financial claim on an asset will see attempts to unbundle and financialize it. VC funds, revenue based financing agreements, you name it. Blockchains provide a a convenient tool to accomplish this. However...

There are many concerns and uncertainties to be aware of. First of all is the legal engineering. At the end of the day for ILOs, payments made by defendants will be made in fiat money. The legalese needs to hold up in order for that to be distributed fairly to token holders

Broadly speaking, legal engineering is the Achilles heel of many blockchain ideas. We could tokenize my mortgage on Ethereum, but if I stop paying you rent, no cop or court is going to evict me when you run to them saying I violated the terms of your ERC-20 token.

If a cryptocurrency is to have a bearing on the world outside its blockchain, there need to be legal or physical enforcers. Courts and laws work. Smart locks and other IoT might too, but thats a whole other topic. Basically these ILOs need some legal muscle ensuring that token

holders get paid. Ostensibly the defendants will pay in USD so somebody has to make sure this reaches the Avalanche blockchain. On the technical side, projects like this rely on smart contracts and sometimes 'oracles': trusted sources for 'real world' info. This brings in risk.

Ava knows this better than most, having done early work on oracles at Cornell, but they also know that chain code and network participants can act weirdly in the real world (Gun Sirer's selfish miners). So in summary, new blockchain projects like this all come with tech risk.

While Ava is newer to the game, Ethereum's *mostly* successful experiments in locking up $15bn of value in the decentralized finance world show that the tech risk can indeed be figured out and be palatable to investors. So legal and tech will get figured out IMO. Whats left?

With ILOs in particular, I suspect there might be unsettling implications on justice and civil society. If my nephew desperately wants Joe Rogan to lose a court case so his ILO is in the money, thats just super weird. What if investor behaviour begins to impact the case?

Are we going to create a society wherein people are mass manufacturing litigation because they know that lawyer fee financing is cheap through ILOs? I doubt it, but we all saw the 2017 ICO rush so these are definitely things to be wary of..

Anyhow, these were my 3am musings on the Avalanche ILO news. I am excited to see how this plays out and wish luck to everybody involved. Its such an exciting time in the fintech and crypto arena, and we all have front row seats thanks to Twitter I hope you enjoyed this