Original Author: Wang Chao, Co-founder of Metropolis DAO
In the early morning, the fog shrouded San Francisco Bay Area. In the office, the blue light from the screen illuminated the tired face of the developer. His eyes were bloodshot, and his fingers slid quickly across the keyboard. This was the final check before contract deployment; every semicolon, every boundary condition could be a matter of life and death.
Suddenly, the Telegram channel erupted. Someone discovered that the project team had violated the token unlocking promises in the white paper.
Across the ocean, on a meme player's monitor, countless transaction data wove a web, outlining the movements of the whales. DeFi miners were checking the time lock for the new mine: "72 hours," they nodded, "safe."
In Discord, a heated debate was underway regarding the registration of a DAO. Outside of this dispute, an AI Agent was quietly writing down its reasoning process on the blockchain.
This was an ordinary morning in the crypto world of 2024. On the surface, these scenes seemed unrelated, but beneath the complex appearances, an invisible bond tightly connected them. That bond was the belief that "Code is Law."
In this world built by code, code is law, faith, and the ultimate arbiter. This rule, like an invisible chain, tightly links this circle filled with speculation, ideals, innovation, and chaos. It is the cornerstone of the crypto world and the soil that breeds countless stories.
But what does 'Code is Law' really mean? How did this phrase evolve from a warning into a belief? To answer this question, we must return to that autumn 25 years ago, back to an office at Harvard Law School…
Code is Law
In November 1999, the Harvard campus was filled with autumn's chill. Professor Lawrence Lessig sat in his office. He had gained fame for serving as a neutral legal expert in the Microsoft antitrust case, and in just a few days, his new book "Code: and Other Laws of Cyberspace" was about to be published.
The internet wave swept across the United States in the 90s. Years earlier, Lessig had been pondering a seemingly simple question: In traditional society, behavior is constrained by law, morality, market forces, and physical laws. But in cyberspace, these constraints seemed to blur, while another form of constraint appeared to be more direct; system administrators controlled user behavior by setting permissions. This control was not enforced through threats or punishment but directly determined what was possible and what was not. "In a Unix system, if you don't have permission, you simply can't open that file," he wrote in his notebook, "this is not a legal constraint, but something more fundamental."
On the notebook in front of him, he sketched a simple diagram: the layered structure of the TCP/IP protocol. The manuscript stated that this was a revolutionary design; the protocol did not care about the content of the data packets or who you were. It only cared about one thing: transmitting data according to the protocol rules. This 'permissionless' quality made the internet a land of freedom.
But Lessig also keenly noticed that new walls were growing on this land of freedom. Amazon could shut down your account, AOL could block your login, and Google could decide what content should be seen. Those commercial platforms built on open protocols were creating new forms of control.
The first chapter of his new book was titled Code is Law, but this phrase was not a praise; it was a warning. Lessig feared that if commercial giants and governments controlled the writing of code, they could control the entire cyberspace.
"Every era has its potential regulators threatening freedom. We are living in the era of cyberspace, which also has a regulator, and this regulator threatens our freedom. This regulator is code. It determines the ease of protecting privacy and the ease of censoring speech. It affects whether information access is universal or tiered, deciding who can see what or which content will be monitored. In many ways, we can only gradually realize the regulation of cyberspace when we begin to understand the nature of code."
Two months later, The New York Times published a review of the book, stating:
"These discussions are well thought out, but the premises underlying these discussions are unstable; Lessig does not provide much evidence to prove that the loss of privacy and freedom is occurring on the internet."
Haha.
In a sense, Lessig foresaw the future. But he did not foresee that his warning would soon transform into a banner. In garages in Silicon Valley, in the studies of cryptographers, and in front of computers around the world, a group of people was brewing a revolution. They would not be enslaved by code but would use code to rebuild freedom.
Smart Contract
In 1994, Washington. Nick Szabo, a member of the cypherpunk movement, was writing in his modest apartment. On the screen was a paper about "smart contracts." Szabo's apartment was filled with books on law and computer science. As a researcher passionate about both fields, he had been thinking about how to combine the certainty of law with the precision of computer programs. "Imagine a vending machine," Szabo wrote, "that is the simplest smart contract. It does not need a judge to enforce the contract, nor does it need police to maintain order; the rules are written in the machine's program."
"Traditional contracts have too many problems," he told a reporter who came to interview him. "Performance depends on people's willingness, and dispute resolution requires lengthy litigation. But if we can encode contracts into programs, they will operate strictly according to preset rules. No judges, no lawyers, just code."
The reporter questioned, why should people trust code? Szabo smiled mysteriously: "Because code does not lie. It cannot be bribed, threatened, or change its mind arbitrarily. It simply executes the established rules faithfully."
In the subsequent paper, Szabo elaborated on the concept of smart contracts:
"Smart contracts are computerized transaction protocols that execute contract terms. The overall goal of smart contract design is to meet common contract conditions, minimize malicious and accidental exceptions, and reduce the need for trusted intermediaries. I believe that significantly lowering the transaction costs of executing certain contracts and the potential for creating new types of enterprises and social institutions based on smart contracts is enormous, but it has not been deeply studied."
However, the technological foundation to realize this vision had yet to emerge. Szabo and other cypherpunks would have to wait many years.
Bitcoin
On October 31, 2008, a calm Halloween evening. Satoshi@gmx.com sent out an email that would change history. The subject was simple: "Bitcoin P2P e-cash paper."
This email sent to the cryptography mailing list stated: "I have been working on a new electronic cash system that is completely peer-to-peer, without the need for a trusted third party."
On January 3, 2009, the Bitcoin genesis block was mined. In this system, no one could violate the rules of code. "Code is Law" transformed from Professor Lessig's warning into the ideal of the cryptographic community, ultimately finding its first complete practice in Bitcoin.
Ethereum
In the fall of 2013, in a café at the University of Toronto. Vitalik Buterin was sketching diagrams in his notebook. As the editor of Bitcoin Magazine, he had studied every line of Bitcoin's code in depth. But he believed that Bitcoin's design was too conservative. "Bitcoin proved that code-based governance is possible," he told his peers, "but why limit it to just the scenario of currency transfer? What if we could create a Turing-complete system…" This idea quickly developed into the white paper for Ethereum. Vitalik envisioned a "world computer": anyone could deploy smart contracts on it and create various applications.
"At that time, many people thought it was crazy," recalled an early contributor, "we wanted to build a platform governed entirely by code, allowing anyone to run programs on it. The risks were too great." But this was precisely the upgrade of the "Code is Law" concept: not only was the platform itself governed by code, but every application running on the platform also followed the same principle.
The smart contracts envisioned by Nick Szabo over a decade ago finally found fertile ground for realization. A decentralized application ecosystem began to take shape. From simple token issuance to complex financial protocols, and to decentralized autonomous organizations (DAOs), immutable code began to take over more and more scenarios in this world.
The DAO
In April 2016, in Switzerland, the Slock.it team was introducing their ambitious plan: The DAO, a decentralized investment fund governed entirely by code.
"Imagine a fund without a board of directors or a CEO," founder Christoph Jentzsch explained, "all decisions are made by token holders voting through smart contracts. This is the ultimate practice of 'Code is Law.'"
The crowdfunding for The DAO began. In just 28 days, it raised $150 million in ETH, creating the largest crowdfunding record at the time. "People believe in code," said an early participant, "the smart contracts are public, and everyone can check them. This does not rely on people's promises but on immutable code."
However, a fatal flaw was hidden in this seemingly perfect code. On the early morning of June 17, 2016, an anonymous hacker discovered a recursive call vulnerability in The DAO contract. Through carefully designed transactions, he began transferring ETH from The DAO to a child DAO. "Theoretically, this fully complies with the contract rules," explained a security researcher, "the hacker did not 'break' the code; he merely exploited the operations allowed by the code. From the perspective of 'Code is Law,' this is completely 'legal.'" However, when over 3.64 million ETH had been transferred, the entire Ethereum community fell into an unprecedented crisis.
"If 'Code is Law,' then this attack is legal," one faction insisted, "we cannot change the rules just because we dislike the outcome. This violates the fundamental principle of decentralization." "But code serves people," another faction countered, "if the code leads to obviously unfair results, we have a responsibility to correct it." Intense debates continued for weeks. Ultimately, Vitalik and the Ethereum core team proposed a hard fork solution: to roll back the blockchain and return the funds transferred by the hacker to a new contract.
This decision sparked even greater controversy. Some community members insisted on the original chain, forming Ethereum Classic (ETC). This was not just a fork of the chain but a split of ideologies. "For many people, the pure ideal of 'Code is Law' was shattered," lamented an early Ethereum developer, "we realized that code can never be perfect."
Is Code Law?
In the summer of 2020, the crypto world welcomed a new wave: DeFi Summer. Various innovative projects sprang up like mushrooms after rain: Aave's flash loans, Curve's stablecoin trading, Yearn's yield aggregation… Each project was redefining the possibilities of finance with code.
But amidst the frenzy, risks were accumulating. "Remember that YAM?" recalled a DeFi miner, "A small error in the code led to a complete breakdown of the governance mechanism. This reminds us that 'Code is Law' is a double-edged sword. The consequences of code errors can be more severe than human mistakes."
At the beginning of 2022, with the popularization of the Web3 concept, DAOs experienced explosive growth, each exploring new possibilities for decentralized collaboration and governance.
"Initially, we thought a DAO was about using token voting to achieve code-based governance of the organization," recalled a member of a certain DAO, "but soon we realized that reality is much more complex than code. Look at the governance processes of each major DAO; on the surface, they are executed through smart contracts, but real decision-making often happens in discussions on Discord or forums. These politically coordinated efforts that do not rely on code are actually the core of how DAOs operate."
"Code is indeed law, but it is not the only law," said a core member of a certain DAO, "it is more like a component of a legal system that needs to work in conjunction with other parts—community discussions, expert opinions, real-world constraints, etc."
Just a month ago, Proposal 662 of NounsDAO sparked deeper reflection. While most DAOs primarily rely on human coordination rather than code to operate, NounsDAO had achieved operation almost entirely through smart contract code. However, Proposal 662 suggested registering a DUNA entity in Wyoming, embracing the off-chain legal system.
This sparked intense debate within the community. "We joined NounsDAO because it proved that an organization governed entirely by code is feasible!" one member exclaimed angrily, "Now you want to replace code with a legal system; isn't that surrendering to the traditional system?"
"We cannot pretend the real world doesn't exist," said a supporter of the proposal, "DAOs ultimately have to operate in the real world. A proper compromise is not a betrayal of ideals but a way to make ideals sustainable."
Support for the proposal slowly but steadily increased, and it passed.
Almost simultaneously, a new participant joined the crypto world: AI Agents.
In the world of 'Code is Law,' AI found its ideal habitat. The rules here are definite, verifiable, free from human interference, and most importantly, do not distinguish between humans and AI. Protocols only care about whether actions comply with preset rules; AI can autonomously trade, provide services, and participate in governance, with all decisions and actions executable through code.
In a world where code is law and algorithms dominate value, AI Agents transformed from mere lines of code into a form of existence for the first time. As more and more AI Agents join, the crypto world will present a new ecology: humans and AI interacting under the same set of code rules, creating unprecedented collaborative models.
Twenty-Five Years
In just 12 days, it will be the 25th anniversary of the publication of "Code and Other Laws of Cyberspace."
Over the span of 25 years, "Code is Law" has taken an unexpected path. It transformed from a warning against digital centralization into a banner of cypherpunk rebellion, continuously tested, adjusted, and evolved in practice. The evolution of this concept reflects our deepening understanding of the digital world:
Initially, Lessig warned us that code could become a tool for controlling cyberspace. This concern remains profound today—tech companies influence users through algorithms, and in the age of AI, an insecure model could lead to catastrophic results.
Then, the cypherpunks turned this warning into action. Bitcoin proved another possibility: code can not only restrict freedom but also protect it.
The DAO incident served as a mirror, reflecting the limitations of pure code governance. But this failure was not an endpoint; it was a new starting point. It prompted us to think: how should code and human society interact?
The rise of DeFi brought surprises: in specific scenarios, code can indeed be more effective than traditional rules. Automated market makers, flash loans, permissionless lending—these innovations showcased the unique advantages of code governance.
The evolution of DAOs is the most enlightening. From dogmatic "code-only" thinking to seeking a balance with the real world, this process reflects an important reality: at least for now, code cannot replace all other rules but must coexist and complement them.
The inclusion of AI opens up new imaginative spaces. As artificial intelligence begins to operate autonomously on-chain, "Code is Law" may gain new dimensions.
Outside, the morning fog in San Francisco is gradually dissipating. A new day is beginning. In every corner of this world, a blockchain network composed of countless nodes is operating. Smart contracts act as tireless guardians, faithfully executing their missions; DAOs are conducting the largest governance experiment in human history; AI Agents are evolving at a speed unimaginable to humans, paving new forms of existence in a world built by code.
This is the new world created by code. It is not perfect, but it is vibrant; it has flaws, but it is constantly evolving; it is still young, but it has already shown the potential to change the world. It carries the promise of making the world more open, transparent, and fair. Even if this promise has not yet been fully realized, every participant is pushing this promise step by step into reality in their own way.
Perhaps the most profound insight of "Code is Law" over the past twenty-five years is that it is not a flawless dogma but an ongoing experiment, a process of continuous exploration. In this world built by code, people are not only followers of rules but also creators of rules. Every line of code written by people shapes the future of the world.
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