After a statement by SEC Commissioner Hester Pierce last week, I was unsure what this means for delegates, voters and others responsible for the creation and maintenance of Yield and Index DTFs.
Are delegates now engaging in financial services? Or proposer who put basket changes on-chain? Or proposal authors on the Forum?
While the exact language and its meaning remain unclear, at least until CLARITY passes, and more likely, until we see a solid body of case law, my current thinking is that they’re not.
When zooming out onto what SEC Commissioner Pierce said in other communications, the dividing line seems to be whether funds are self-custodial or not. The thinking behind that is sensible: If you’re actively touching and managing other people’s money, you provide financial services, whether on-chain or off.
Vaults, Yield and IndexDTFs never touch other people’s money. Instead they are a set of parameters, that users can point there funds to, so that smart contracts allocate their money. The creator, the delegate or the voter have no way of ever touching users funds. (Thank God!!)
This view has been echoed by the community recently, so I think we can sleep well for now.
Interesting pointers are this tweet:
And this great article by Steakhouse Financial:
https://x.com/steakhousefi/status/2080639667444019239?s=46
The last point also strengthens the importance of governance procedure.
Publishing correctly labeled RFCs, stickign to voting and commenting lifecycles, voting and publsihing rationales aren’t just pretty lines in coloring books.
They’re making processes legible so that users don’t have to trust curators, creators and proposers. And if people have to trust someone with their funds, that someone is in the financial services business, whether on-chain or offchain.
