Seven prominent Ethereum protocol teams have formed a coalition to counter regulatory pressures threatening the blockchain ecosystem's governance structure. The Ethereum Protocol Advocacy Alliance brings together developers managing systems that secure more than $100 billion in digital assets, marking an unusual collaboration among groups that typically operate independently.
What to Know:
- The alliance includes Aragon, Lido Labs Foundation, and Uniswap Foundation among seven founding members coordinating policy responses across U.S. and European jurisdictions.
- Four core priorities guide the group's work: protecting protocol neutrality, advancing on-chain transparency for compliance, preserving innovation flexibility, and maintaining global access to permissionless infrastructure.
- The coalition operates without centralized leadership or lobbying budget, instead providing technical expertise to existing advocacy organizations and policymakers grappling with decentralized system classification.
Protocol Developers Enter Policy Arena
Ethereum's foundational protocols have powered decentralized finance applications, stablecoins, and smart contracts for years without significant developer involvement in regulatory discussions. That dynamic shifted as governments accelerated efforts to establish crypto oversight frameworks.
The alliance emerged from concerns that regulators lack technical understanding of blockchain systems. Anthony Leutenegger, Aragon's CEO, said the coalition aims to bridge that gap. "We've seen firsthand the technical and practical complexity involved in building on-chain systems," Leutenegger told BeInCrypto. "Bringing together the most credible protocol teams will help ensure regulatory outcomes are workable for the builders moving this space forward."
Regulators in Washington and Brussels face particular challenges classifying infrastructure that operates without central operators.
The EPAA wants to clarify those distinctions before laws cement misconceptions about how these systems function. Sam Kim, chief legal officer at Lido Labs Foundation, emphasized one core concern: "Decentralization is the foundation of Ethereum's credibility and resilience. Through the EPAA, we're ensuring that policy recognizes and protects this principle."
Uniswap Foundation's involvement carries weight given the protocol's past regulatory battles. Brian Nistler from Uniswap said those experiences demonstrated why developers need direct participation in policy formation.
Alliance Framework and Operations
The group's policy approach rests on four principles. First, protocol-layer code should remain outside regulatory scope. Second, blockchain transparency offers real-time compliance verification capabilities that traditional systems cannot match. Third, innovation requires flexible standards rather than rigid requirements. Fourth, permissionless infrastructure must stay globally accessible.
These priorities reflect technical realities that policymakers often miss. Protocol neutrality matters because treating code as a regulated entity could fragment global blockchain networks into isolated jurisdictions. On-chain transparency provides auditable records of all transactions, offering compliance tools unavailable in traditional finance.
The EPAA operates differently than conventional trade groups.
No single entity leads the coalition, and no pooled budget funds lobbying activities. Instead, the alliance coordinates with established advocacy networks including the DeFi Education Fund, the Decentralization Research Center, and the European Crypto Initiative.
Connor Spelliscy, executive director of the Decentralization Research Center, described the collaboration's value: "Those who build decentralized systems should help shape the rules that govern them." The structure lets protocol teams contribute technical knowledge while advocacy specialists handle policy engagement.
Understanding Decentralized Finance Terms
Several technical concepts underpin the alliance's work. Layer-1 protocols form blockchain base layers where transactions settle and smart contracts execute. Ethereum serves as the largest Layer-1 network for decentralized applications.
Permissionless systems let anyone participate without approval from controlling authorities. This differs from traditional financial infrastructure requiring licenses and intermediaries. On-chain transparency means all transactions record permanently on public blockchains, creating auditable histories without central databases.
Protocol neutrality refers to base-layer code operating without built-in preferences for specific users or applications. This neutrality enables innovation because developers can build applications without seeking permission from protocol maintainers.
Closing Thoughts
The seven founding members plan to expand membership over time. Current focus remains on educating policymakers about technical realities before regulations take effect. Whether the alliance can influence regulatory outcomes depends partly on timing, as both U.S. and European Union frameworks continue development.