I'm assuming you didn't watch the video, because it did discuss that.

Alice, who is a subscriber of Dawn Defense, was murdered by Bill, who is a subscriber of Tanner Justice. Dawn Defense is pro-death penalty for murderers and Tanner Justice is not. Therefore, each company does a calculation to figure out how many users and how much revenue they will lose if their side is not upheld and the side that is likely to lose more pays the other side to stand down. In the case of the video, the assumption is that if Dawn Defense loses, they will lose one million currency units worth of customers, where if Tanner Justice loses, they will lose 500,000 currency units. So, Dawn Defense pays Tanner Justice 800,000 currency units to stand down, which is more than the 500,000 they would have lost, and less than the 1 million that Dawn would lose if they weren't able to enforce the death penalty on Bill.

These stand-down arrangements would be known beforehand, and therefore, when Bill subscribes to Tanner Justice, he would be informed that if he murders a client of dawn defense, that he will not be protected from the death penalty.

Yeah, blockchain adds nothing to an existing economy. It could be useful as a means of distributed public records between anarchist communities, but it is documentation, not ownership. Ownership is an extension of political power and grows from the same barrel of a gun

Oh, absolutely. But that's because the way we've always done the stock market is through centralized systems. If a company were to be formed today and only ever issue their stock tokens on a decentralized system such as Ethereum, then the Ethereum system would be the final arbiter of who does and does not have shares in that company.