Research Project: Can SAFE Contracts be Smart?
Y Combinator's Simple Agreements for Future Equity (SAFE)
agreements are a type of contract used in startup seed
financing. Rather than receiving shares directly for their
investment, the seed investor receives a contract that is
intended to be converted into preferred shares at the time of a
future equity round. This circumvents the problem of placing a
valuation on a very immature enterprise, and defers the complex
negotiations on the terms of the preferred shares to a time when
the company is ready to take on a larger investment.
This project is investigating the potential for SAFE contracts to be implemented
as smart contracts on a blockchain platform. Since smart contract code is necessarily more
precise and formal than legal text, the work encompasses financial analysis, legal formalisation,
software engineering and computer security analysis.
Staff:
Prof. Ron van der Meyden (CSE), Prof. Michael Maher (ADFA and Reasoning Research Institute),
William Coulter (CSE Honours Student)
Outcomes:
- Seminar: SAFE Contract Financial Design Issues
- Project Overview Paper: Smart (Legal) Contracts: A Case Study using Simple Agreements for Future Equity, R. van der Meyden and Michael J. Maher, Oct 2022
- Architecture for Smart SAFE Contracts, R. van der Meyden and M.J. Maher.
3rd Conference on Blockchain Research & Applications for Innovative Networks and Services (BRAINS), Sep 2021.
(This is an extract from the longer work "Can SAFE contracts be smart" below.)
- Simple Agreements for Future Equity -- Not So Simple?, Ron van der Meyden and Michael J. Maher, Manuscript (v2), Apr 2023
- A Game Theoretic
Analysis of Liquidity Events in Convertible Instruments, Ron van
der Meyden, arXiv:2111.12237, Nov 2021
- Can SAFE contracts be smart?, Ron van der Meyden and Michael Maher, Manuscript (Jan 2022)
- On Conversion of Multiple SAFE Contracts, Ron van der Meyden, Manuscript (Apr 2023)
- Building Smart SAFEs, William Coulter (UNSW Honours Thesis)