In the early morning, the San Francisco Bay Area is shrouded in mist. Inside an office, the blue light of a screen illuminates the tired face of a developer. His eyes are bloodshot, and his fingers glide rapidly across the keyboard. This is the final check before deploying a contract; every semicolon, every boundary condition, could be a matter of life and death.

Suddenly, the Telegram channel erupts. Someone has discovered that the project team violated the token unlocking promise in the whitepaper.

Across the ocean, on the screen of a meme player, countless transaction data lines weave together, outlining the movements of the whales. DeFi miners check the time lock on the new mine: “72 hours,” they nod, “safe.”

In Discord, a heated debate rages over the registration of a DAO. Outside this turmoil, an AI Agent quietly writes its reasoning process onto the blockchain.
This is an ordinary morning in the crypto world of 2024. On the surface, these scenes seem unrelated, but beneath the complex facade, there is an invisible bond connecting them all. That bond is the unwavering belief in “Code is Law.”

In this world built by code, code is the law, the belief, and the ultimate arbiter. This rule, like an invisible chain, tightly binds together a world full of speculation, ideals, innovation, and chaos. It is the cornerstone of the crypto world and the soil in which countless stories are born.

But what exactly does “Code is Law” mean? And how did this phrase evolve from a warning into a belief? To answer that, we must go back 25 years, to an autumn day, to an office at Harvard Law School…

Code is law

In November 1999, on the Harvard campus, the autumn chill was in the air. 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 weeks, his new book Code: and Other Laws of Cyberspace was about to be published.

The wave of the internet had swept across the United States in the 1990s, and several years earlier, Lessig had begun pondering a seemingly simple question: In traditional society, behavior is constrained by laws, ethics, markets, and physical laws. But in cyberspace, these constraints seemed to become blurred. However, another form of constraint appeared to be more direct: system administrators controlled users’ behavior by setting permissions. This control was not enforced through threats of punishment but by directly determining what was possible and what was not. “In a Unix system, if you don’t have permission, you just can’t open that file,” he wrote in his notebook. “This is not a legal constraint but something more fundamental.”

In front of him, on his notebook, was a simple diagram: the layered structure of the TCP/IP protocol. The manuscript noted that this was a revolutionary design because the protocol did not concern itself with the content of the data packets or who you were. It only cared about one thing: transmitting data according to the rules of the protocol. This “permissionless” quality made the internet a free land.

But Lessig also keenly observed that new walls were growing on this free land of TCP/IP. Amazon could shut down your account, AOL could block your login, and Google could decide what content should be seen. Commercial platforms built on open protocols were creating new forms of control.

The first chapter of his book was titled “Code is Law,” but this phrase was not meant as praise, but as a warning. Lessig was concerned 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, and we live in the era of cyberspace, which also has a regulator, and this regulator threatens our freedom. That regulator is code. It determines how easy or hard it is to protect privacy and censor speech. It affects whether information is universally accessible or tiered. It decides who can see what or which content will be monitored. In many ways, we can only begin to recognize the regulation of cyberspace once we understand the nature of code.”

Two months later, The New York Times published a review of the book, stating:

“These discussions are thoughtful, but the premise of these discussions is unstable; Lessig doesn’t provide much evidence to prove that privacy and freedom are being lost on the internet.”

In a sense, Lessig had foreseen the future. But he didn’t foresee that his warning would soon turn into a flag. In garages in Silicon Valley, in the studies of cryptographers, and in front of computers around the world, a group of people were brewing a revolution. They would not be enslaved by code; instead, they aimed to 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 his screen was a paper on “smart contracts.” His apartment was filled with books on law and computer science, reflecting his dual passion for both fields. He had long been contemplating how to combine the certainty of law with the precision of computer programs. “Imagine a vending machine,” Szabo wrote, “this is the simplest form of a smart contract. It doesn’t need a judge to enforce the contract, nor does it need police to maintain order. The rules are written into 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 could encode contracts as programs, they would run strictly according to predefined rules. No judges, no lawyers, just code.”

The reporter questioned why people would trust code. Szabo smiled mysteriously: “Because code doesn’t lie. It can’t be bribed, threatened, or change its mind arbitrarily. It simply follows the established rules faithfully.”

In the paper that followed, Szabo elaborated on his concept of smart contracts:

A smart contract is a computerized transaction protocol that executes the terms of a contract. The overall goal of smart contract design is to meet common contractual conditions, minimize malicious and accidental exceptions, and reduce the need for trusted intermediaries. I believe that significantly reducing the transaction costs of enforcing certain contracts and the potential for creating new types of businesses and social institutions based on smart contracts is enormous, but it has not been thoroughly studied yet.

However, the technological foundation for realizing this vision had yet to emerge. Szabo and other cypherpunks would have to wait many more years.

Bitcoin

On the evening of October 31, 2008, a calm Halloween evening, Satoshi@gmx.com sent an email that would change history. The subject was simple: Bitcoin P2P e-cash paper.
The email, sent to a cryptography mailing list, read: “I’ve been working on a new electronic cash system that is completely peer-to-peer, with no trusted third party.”

On January 3, 2009, the Bitcoin genesis block was mined. In this system, no one could break the rules of the code. “Code is Law,” which started as a warning from Professor Lessig, evolved into an ideal for the cryptographic community and eventually found its first full implementation in Bitcoin.

Ethereum

In the fall of 2013, in a café at the University of Toronto, Vitalik Buterin was sketching diagrams on his notebook. As the editor of Bitcoin Magazine, he had thoroughly studied every line of Bitcoin’s code. But he believed 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 transfer of currency? What if we could create a Turing-complete system…” This idea quickly evolved into the whitepaper for Ethereum. Vitalik envisioned a “world computer” where anyone could deploy smart contracts and create various applications.

“At the time, many thought it was crazy,” recalled an early contributor. “We were going to build a platform completely governed by code, where anyone could run programs. The risks were too great.” But this was precisely the next step in the evolution of the “Code is Law” concept: not only was the platform itself governed by code, but every application running on it also adhered to the same principle.

The smart contract envisioned by Nick Szabo more than a decade earlier had finally found its soil for implementation. A decentralized application ecosystem began to form. From simple token issuance to complex financial protocols, and to decentralized autonomous organizations (DAOs), immutable code began to take over an increasing number of scenarios in this world.

The DAO

In April 2016, in Switzerland, the Slock.it team introduced their ambitious plan: The DAO, a decentralized investment fund governed entirely by code.

“Imagine a fund without a board of directors or a CEO,” explained founder Christoph Jentzsch. “All decisions are made by token holders through smart contract voting. This is the ultimate practice of ‘Code is Law.’”

The DAO’s crowdfunding campaign launched, and within just 28 days, it raised $150 million in ETH, setting a record for the largest crowdfunding effort at the time. “People trust the code,” said an early participant. “The smart contract is open and anyone can inspect it. This doesn’t rely on people’s promises; it relies on immutable code.”

However, hidden within this seemingly perfect code was a fatal flaw. On the morning of June 17, 2016, an anonymous hacker discovered a recursive call vulnerability in The DAO contract. Through carefully crafted transactions, the hacker began transferring ETH from The DAO into a sub-DAO. “In theory, this was entirely within the rules of the contract,” explained a security researcher. “The hacker didn’t ‘break’ the code; he simply exploited an allowed action. From the perspective of ‘Code is Law,’ this was completely ‘legal.’”

However, after over 3.6 million ETH were transferred, the entire Ethereum community faced an unprecedented crisis.

“If ‘Code is Law,’ then this attack is legal,” one faction argued. “We cannot change the rules just because we don’t like the outcome. This goes against the fundamental principles of decentralization.”

“But code is meant to serve people,” the opposing faction countered. “If the code leads to obviously unjust results, we have a responsibility to correct it.”

The intense debate lasted for weeks. Ultimately, Vitalik and the Ethereum core team proposed a hard fork: rolling back the blockchain to return the stolen funds to a new contract.

This decision sparked even greater controversy. Some community members stood by the original chain, leading to the creation of Ethereum Classic (ETC). This was not just a split in the blockchain but also a division in ideology.

“For many, 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 witnessed a new wave of excitement: DeFi Summer. A variety of innovative projects sprang up rapidly: Aave’s flash loans, Curve’s stablecoin trading, Yearn’s yield aggregation… Each project was using code to redefine the possibilities of finance.

But with the enthusiasm came growing risks. “Do you remember YAM?” a DeFi miner recalled. “A small error in the code led to the complete collapse of the governance mechanism. It reminded us that ‘Code is Law’ is a double-edged sword. The consequences of code errors can be more severe than human mistakes.”

In early 2022, with the widespread adoption of Web3, DAOs experienced explosive growth, each exploring new possibilities for decentralized collaboration and governance.

“At first, we thought DAOs were about using token votes to govern organizations with code,” recalled a member of a DAO. “But soon we realized that reality is much more complicated. Look at the governance process of every major DAO—on the surface, it’s executed through smart contracts, but real decision-making often happens in Discord or forum discussions. These non-code-based political coordinations are actually the core of DAO operations.”

“Code is indeed law, but not the only law,” said a core member of a DAO. “It’s more like a component of a legal system, needing to work in coordination with other parts—community discussions, expert opinions, real-world constraints, etc.”

Just a month ago, Proposal 662 from NounsDAO sparked deeper reflection. While most DAOs relied heavily on human coordination rather than code for their operation, NounsDAO had achieved near-complete operation through smart contract code. However, Proposal 662 suggested registering a DUNA entity in Wyoming, embracing an off-chain legal system.

This sparked heated debate within the community. “We joined NounsDAO because it proved that a fully code-governed organization was possible!” one member said angrily. “Now you want to replace code with the legal system. Isn’t this surrendering to traditional systems?”

“We can’t pretend the real world doesn’t exist,” said a supporter of the proposal. “Ultimately, DAOs must operate in the real world. A reasonable compromise isn’t betrayal of ideals; it’s making them sustainable.”

Support for the proposal grew slowly but steadily, and it passed.

Almost simultaneously, a new participant joined the crypto world: the AI Agent.

In the ‘Code is Law’ world, AI found its ideal habitat. The rules here are definite, verifiable, free from human interference, and most importantly, they do not distinguish between humans and AI. Protocols only care about whether the pre-set rules are followed, allowing AI to trade, provide services, and participate in governance autonomously. All decisions and actions can be made through code.

In this crypto world, where code is law and algorithms govern value, AI Agent transitioned for the first time from a piece of code into a presence. As more and more AI Agents join, the crypto world will form a new ecosystem: humans and AI interacting under the same set of rules, creating unprecedented collaboration models.

Twenty-five years

In 12 days, it will be the 25th anniversary of the publication of Code and Other Laws of Cyberspace. Over the course of these 25 years, “Code is Law” has taken an unexpected path. It has transformed from a warning against digital authoritarianism into a symbol of crypto-punk rebellion, and has been continuously tested, adjusted, and evolved in practice. The evolution of this concept mirrors our deepening understanding of the digital world:

Initially, Lessig warned that code could become a tool for controlling cyberspace. This concern remains deeply relevant today—technology companies influence users through algorithms, and in the age of AI, an insecure model could lead to catastrophic results.

Then, the crypto-punks turned this warning into action. Bitcoin demonstrated 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 beginning. It prompted us to ask: How should code interact with human society?

The rise of DeFi brought new surprises: in certain scenarios, code can indeed be more effective than traditional rules. Automated market makers, flash loans, and permissionless lending showed the unique advantages of code governance.

The evolution of DAOs is the most enlightening. From the dogmatic “code-only” approach 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 introduction of AI has opened up new possibilities. As artificial intelligence begins to operate autonomously on the blockchain, “Code is Law” may gain a new dimension.

Outside the window, the morning fog in San Francisco is dissipating. A new day has begun. In every corner of this world, a blockchain network composed of countless nodes is operating. Smart contracts, like tireless guardians, faithfully execute their missions; DAOs are conducting the largest governance experiment in human history; AI Agents are evolving at a pace beyond human imagination, carving out new forms of existence in the world built by code.

This is the new world created by code. It is imperfect, but full of vitality; it has flaws, but is constantly evolving; it is still young, but already shows the potential to change the world. It carries the promise of making the world more open, transparent, and fair. Although this promise has not yet been fully realized, each participant is pushing this promise step by step toward becoming a reality in their own way.

Perhaps the most profound lesson of “Code is Law” over the past 25 years is this: it is not a flawless doctrine, but an ongoing experiment, a process of continuous exploration. In this world constructed by code, people are not only followers of the rules but also creators of the rules. Every line of code written by people is shaping the future of the world.

Disclaimer：

1. This article is reprinted from [Chao], All copyrights belong to the original author [@cwweb3]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. The Gate Learn team does translations of the article into other languages. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.