Code Isn’t Law—Until It’s Backed by Property Rights

Why Smart Contracts Fail Without Legal Force, and How DeFi Can Grow Up Without Selling Out

You’ve heard the chant in the crypto streets:
“Code is law.”

It sounds edgy. Revolutionary. Like some bulletproof rebellion against the corruption of courts, corporations, and corrupt politicians.

And make no mistake—that revolution is needed. But like bringing a watergun to a wildfire—current solutions are woefully inadequate.

Here’s the harsh truth:

Code isn’t law—not until it’s backed by something bigger.

Not hype.
Not mob consensus.
Not even a DAO vote.

Law comes from something deeper. From natural rights. From property. From jurisdiction—that dirty word most DeFi ideologues like to pretend doesn’t exist.

And until smart contracts can respect that truth, they’ll never power a system worthy of the freedom we claim to be fighting for.

The Roots of Prosperity: Why Property Rights Matter

Let’s start with something fundamental. You want freedom? You want abundance? It starts with this: property rights.

In this piece, I break down how nations that honor and protect private property rise from poverty to prosperity. Meanwhile, countries that play fast and loose with who owns what tend to rot from the inside.

This isn’t about rich vs. poor. It’s about certainty.
Property rights are the foundation of trust, trade, investment, and innovation.

You don’t need a master’s in economics to understand this. A child with a lemonade stand gets it. You can’t build anything if some bully can take it from you.

So ask yourself—how can you have trustless smart contracts… if there’s no property law underneath to trust?

Property Is a Natural Right—Not a Permission Slip

This goes deeper than borders and constitutions. 

Property is not granted by governments. It exists by natural law, because you own yourself. And from that self-ownership flows the right to own the fruits of your labor.

I dive deeper into this in this article, but here’s the short version:

To attack property rights is to attack individual sovereignty.

This is the heart of the crypto revolution. It’s not about lines of code. It’s about protecting the individual from the tyranny of mobs—whether that mob wears suits and works at the Fed… or votes on-chain inside a DAO.

The DeFi Ideologues Have Lost the Plot

Now we hit the part that needs to be said:

Too many in DeFi are playing in the kiddie pool.

They’ve read a whitepaper or two. Learned the language of decentralization. Spout phrases like “death to TradFi” and “code is law” without the foggiest clue how real legal systems work.

They hate the corruption of the old world. Fair enough. So do I. But hatred of the old is not the same as a vision for the new.

These loud voices:

• Mock legal frameworks but offer no working dispute resolution.
  
• Rage against jurisdiction but ignore the fact that laws define ownership.
  
• Pretend voting is virtue… even when it overrides the natural rights of the individual.

Mob rule is not decentralization. It’s tyranny with extra steps.

True decentralization doesn’t mean anything goes. It means no one has the power to violate another person’s rights—even in the name of the “collective good.”

When the mob decides who wins and who loses, we’re not innovating—we’re just rebuilding the same systems we claimed to reject.

Why Smart Contracts Fall Apart Without Law

Smart contracts are brilliant. But they’re blind. They don’t know when something was a mistake. They don’t know if one party was coerced. They don’t interpret intent.

They just execute.
And if there’s a bug? Or an exploit? A human error or a violation of another’s rights?

There’s no legal backup. No venue for redress. No way to reconcile code with context.

Until smart contracts can interface with human law—and respect human rights—they remain nothing more than vending machines. Not agreements. Not justice. Not real contracts.

Ricardian Smart Contracts: The Bridge Between Code and Law

Here’s where it gets exciting.
The future doesn’t have to be either code or courts. It can be both.

In my article on Ricardian smart contracts, I laid out a potential solution:

Ricardian contracts combine machine-readable code with human-readable legal text.

They create a dual-layer contract:

• One part executes automatically.
  
• One part can be interpreted by a judge—or even a DAO court—if something goes wrong.

This isn’t a dream. It’s already being prototyped.
And it may just be the missing piece DeFi needs to grow up.

Because real-world contracts require more than automation.
They require accountability.
Jurisdiction.
A place to resolve disputes.

Ricardian smart contracts provide that bridge. Not a replacement for law—but a way to embed law into code without sacrificing individual sovereignty.

It’s still early. But this hybrid model could finally give DeFi the legal legs to stand on—and challenge TradFi on more than just tech.

The Way Forward: Grown-Up DeFi

Here’s the path:

• Anchor smart contracts in legal frameworks that honor natural law.
  
• Design platforms with built-in dispute resolution—both automated and human-interpretable.
  
• Recognize jurisdiction—not to submit to it blindly, but to use it wisely.
  
• Build systems that protect the individual before the collective.

We don’t need to burn it all down.
We need to build something better. Something freer. Something that doesn’t just work in theory, but actually works in real life.

Final Word: Revolution or Regression?

The question for DeFi isn’t whether code can replace courts. It’s whether we can embed justice into our code.

Because if we can’t—if all we build is a new playground for the powerful—then we’ve traded one form of tyranny for another. 

One where the suits with power are traded in for mobs rule.

Freedom doesn’t mean no rules. It means rules that protect the individual.

Code can be power. Law can be protection. But only together can they secure liberty.