Open protocols such as HTTP, TCP/IP, and email standards have become critical global infrastructure, quietly underpinning modern commerce, communication, and coordination at scale. They define how information moves, how systems interoperate, and how participation scales across borders, markets, and societies.

Blockchain-based protocols are beginning to play a similar role in financial systems. They are shaping how financial systems operate globally, including the rails through which markets are accessed and transactions are executed. As this shift accelerates, expectations around global access, uninterrupted availability, and user agency are rising, and blockchain-based protocols are rapidly emerging as a foundational layer of the financial infrastructure of the future. 

In this environment, jurisdictions that do not provide clear conditions for protocol builders risk pushing critical capacity to concentrate elsewhere and increasing dependence on infrastructure built to reflect different values. As financial infrastructure becomes increasingly protocol-based and globally shared, the capacity to participate in building and securing open-source systems shapes which standards, safeguards, and design defaults become widely adopted. Over time, those technical choices determine how transparency, user agency, risk mitigation, and market integrity are embedded in the infrastructure itself. Regulators must therefore modernize institution-centric frameworks while preserving clear, workable conditions for building and maintaining secure open infrastructure.

Open-source developers are a strategic asset

Open, collaborative development is a primary way critical software is built, maintained, and improved across sectors, from core internet infrastructure to widely used code libraries and security tooling. As financial infrastructure becomes increasingly software-driven, this same open-source development model is now being applied to systems that support financial markets.

Finance, however, is subject to robust and complex regulatory frameworks addressing risks around custody, market integrity, and systemic stability. These frameworks were designed to govern financial actors and activities, not the development of the underlying technology on which modern infrastructure increasingly depends.

As software takes on an infrastructural role, the risk of conflation increases. The breadth of financial regulation can cause ordinary development and maintenance activity to be treated as a regulatory anchor, creating uncertainty about when builders may be pulled into frameworks designed for operational intermediaries rather than infrastructure development.

That uncertainty does not effectively reduce risk. It makes it harder for developers and organizations to build and maintain open infrastructure with clear, bounded responsibilities. Jurisdictions that provide predictable, outcome-based boundaries—distinguishing infrastructure development from custody and intermediation—will be better positioned to sustain critical technical capacity over time.

This creates a fundamental choice for societies: treat builders as strategic assets to be enabled under clear conditions, or treat them as risks to be constrained through rules that call ordinary development activity into question.

Software development is not intermediation

Secure digital infrastructure requires ongoing iteration, maintenance, and collaboration. Development is necessarily continuous and often distributed across contributors and organizations. These activities are structurally unavoidable if infrastructure is to remain safe, functional, and competitive in an accelerating global landscape.

However, there is an increasing tendency to treat signals of development, such as maintenance, upgrade processes, coordination among contributors, or funding of development teams, as evidence of “control” over systems. This approach risks conflating development activity with custody or financial intermediation.

Protocol development, even when it enables financial applications, does not inherently involve custody or discretionary execution. Writing, publishing, or maintaining code does not place a developer in the flow of funds or make them a financial service provider. Where development activity does not result in custody of user assets or unilateral authority to move funds, it should not be used as a proxy to infer financial intermediation.

When development practices are treated as regulatory triggers, the result is not greater safety but legal uncertainty about whether ordinary, necessary development work may be pulled into regimes designed for custodial intermediaries. That uncertainty discourages ongoing maintenance and improvement, erodes local capacity to participate meaningfully in global infrastructure development, and concentrates talent and investment in jurisdictions with clearer, bounded protections.

This outcome is misaligned with regulatory objectives. Many protocol builders are explicitly designing systems to advance policy-aligned goals such as reducing custodial risks, increasing transparency, and improving systemic resilience. Enabling developers to freely work toward these outcomes within clear boundaries strengthens, rather than undermines, the effectiveness of financial regulation. In a world where financial infrastructure is increasingly protocol-based and globally shared, sustaining the capacity to build and secure systems that embed these objectives will determine which societies and values help define the standards and safeguards that underpin the next generation of financial infrastructure.

Moreover, software evolves faster than law and rulemaking. Process-based regulation therefore becomes outdated quickly, forcing regulatory scope to chase technical change.

Drawing the line between intermediation and infrastructure

Protecting builders does not mean ignoring risk. It means drawing regulatory boundaries at actual financial intermediation and custody, rather than at the collaborative process required to create, publish, or maintain open-source protocols.

Systems that are open-source, non-custodial, and peer-to-peer, where users interact directly and assets are not held or managed by a third party, present fundamentally different risk profiles from systems that custody assets or operate as intermediated financial services. They should be treated accordingly under law.

This distinction is functional, observable, and technologically neutral. It preserves the ability to regulate real financial risk while avoiding misclassification of infrastructure development as regulated conduct. Focusing on system function and real-world outcomes, rather than the mechanics of writing, deploying, and maintaining code, keeps regulation targeted where risk actually arises. It reduces uncertainty, keeps custodians and intermediaries accountable, and helps jurisdictions sustain the capacity needed to participate meaningfully in building resilient global financial systems.

Recommended principles for regulation

• Focus on system properties and outcomes, not development activity.

  Evaluate whether a system has publicly available source code, is credibly neutral, non-custodial, and peer-to-peer in practice, and does not treat maintenance, upgrades, coordination, organizational structure, or other development practices alone to infer custody or intermediation.

• Attach regulatory obligations to custody and discretionary intermediation.

  Regulatory obligations should attach where actors hold user funds, take custody, control, and execute transactions on users’ behalf.

• Establish clear and durable safe harbors.

  Developers and infrastructure providers should have explicit, unambiguous protection from civil or criminal liability solely for creating, publishing, maintaining, or enabling access to open-source, non-custodial, peer-to-peer systems.

• Ensure protections apply across the full lifecycle.

  Protections should extend beyond initial deployment to ongoing development, maintenance, security upgrades, and improvement, so long as the system remains non-custodial and disintermediated.

These principles do not weaken oversight. They strengthen it by ensuring that regulation attaches to the activities that create risk for the user, while protecting the necessary development processes that make modern infrastructure secure, resilient, and capable of evolving in the public interest.

The Alliance is a voluntary coordination forum and is not a legal entity. Each participant speaks only for itself unless expressly stated otherwise.

Today, we’re launching the Ethereum Protocol Advocacy Alliance to coordinate policy efforts among the teams building core onchain infrastructure. Together, we secure over $100 billion in assets through open, non-custodial protocols that operate without intermediaries. Drawing on our pragmatic and technical experience, we will advocate for onchain solutions to regulatory challenges.

"Initiatives like the Ethereum Protocol Advocacy Alliance (EPAA) reflect a growing recognition that stakeholders across the Ethereum ecosystem have an important role to play in educating policymakers. The Ethereum Foundation supports community-led coordination on advocacy and applauds the EPAA’s work."

- Tomasz K. Stańczak, Co-Executive Director of the Ethereum Foundation

Strong advocacy efforts are already underway. The Alliance exists to reinforce these efforts with the collective weight of builder voices. Policymakers now face increasingly complex questions about onchain systems. Protocol teams bring years of practical experience building infrastructure that provides benefits to individuals and institutions, and addresses risks directly in code. By working alongside existing organizations, we can help ensure regulation is effective, technically grounded, and supportive of the principles that keep Ethereum protocols secure, neutral, and transparent.

“We’ve seen firsthand the technical and practical complexity involved in building onchain systems. Bringing together the most credible protocol teams will help ensure regulatory outcomes are workable for the builders moving this space forward.” 

- Anthony Leutenegger, CEO of Aragon

“The Uniswap ecosystem has faced undue regulatory scrutiny in the past—that’s why we know how critical it is for actual builders to have a seat at the table when policy for decentralized financial systems is being shaped.”

- Brian Nistler, General Counsel of the Uniswap Foundation

Our Priorities

To ensure Ethereum’s core infrastructure remains resilient and globally accessible, we have aligned on the following priorities to guide our policy engagement and define the outcomes we work toward.

Protect the neutrality of the protocol layer: Non-custodial, open protocols form the foundation of decentralized finance. They must remain neutral and permissionless. Regulation should not interfere the with code itself or how it is developed.

Advance onchain transparency as a compliance path: Onchain data provides a real-time, verifiable source of compliance for protocols. Regulation should not duplicate onchain information offchain or treat permissionless infrastructure as if it were an intermediary requiring registration, reporting, or disclosure.

Preserve flexibility for protocol innovation: Tests, criteria, and definitions should reflect how onchain protocols function today and are evolving in practice. Regulation should avoid overly broad rules and requirements or rigid standards that constrain innovation or hamper the diversity of technical infrastructure implementations, now or in the future.

Uphold global permissionless access: Protocols must be able to operate globally, enabling borderless and permissionless access and participation. Global guidance should avoid fragmenting access along jurisdictional lines or undermining composability, interoperability, and liquidity.

“Decentralization is the foundation of Ethereum’s credibility and resilience, and through the EPAA, we’re ensuring that policy recognizes and protects this principle.” 

- Sam Kim, Chief Legal Officer of Lido Labs Foundation

Our Work

The Ethereum Protocol Advocacy Alliance advances these priorities through targeted, collaborative policy engagement. We:

• Identify areas of common technical interest to align on policy positions.

• Contribute technical expertise to policymakers, advocacy partners, and public consultations.

• Produce pragmatic resources that explain how onchain systems mitigate risk and embed accountability in code.

• Coordinate strategic engagement to strengthen the reach and consistency of builder voices.

“After years of building with the incredible Ethereum community, I've seen firsthand what's possible when protocols collaborate and support one another. The EPAA's mission to bring protocol builders' perspectives to policymakers is exactly what our industry needs to ensure regulation supports rather than stifles the remarkable progress we've made together.”

- Nick Hansen, Team Lead of The Graph Foundation

Who’s Involved

The Alliance is launching with an initial cohort of leading Ethereum protocols with strong track records, including Aave Labs, Aragon, Curve, Lido Labs Foundation, Spark Foundation, The Graph Foundation, and Uniswap Foundation. These protocol builders bring deep experience from years of stewarding Ethereum infrastructure. They have learned from past challenges and are uniquely positioned to help shape practical solutions for the future.

“At the Decentralization Research Center, we see the Ethereum Protocol Advocacy Alliance as a vital step toward ensuring that those who build decentralized systems also help shape the rules that govern them,” 

- Connor Spelliscy, Executive Director of the Decentralization Research Center. 

We’re partnering with aligned organizations including the DeFi Education Fund, the Decentralization Research Center, the European Crypto Initiative. These groups are already leading critical advocacy efforts. The Alliance aims to bolster their work by contributing technical and pragmatic input from teams building core infrastructure.

“At its core, advocacy depends on building coalitions — across the crypto industry, we are all working together to enable the next generation of financial innovation. At the DeFi Education Fund, we are proud to promote and protect DeFi’s technologies and builders, and we appreciate EPAA’s efforts in advancing crypto policy globally.”

 - Amanda Tuminelli, Executive Director of DeFi Education Fund

We have a pressing and meaningful opportunity to shape how onchain infrastructure is understood and regulated. By working together, we can help ensure that the systems we’re building are not just compliant, but also clearly understood, protected from overreach, and recognized as valid solutions.

The Alliance is a voluntary coordination forum and is not a legal entity. Each participant speaks only for itself unless expressly stated otherwise.