Permissioned vs Permissionless: Why Polygon Is Telling the EU to Know the Difference

Polygon says that Article 30, as it currently stands, is in opposition to the European Union’s other crypto-related policies


jarrow153/Shutterstock modified by Blockworks


European regulators need to understand the difference between permissioned and permissionless systems, Polygon Labs said in an open letter published Monday. 

Polygon is calling for the European Parliament to amend Article 30 of the Data Act to clarify that permissionless systems are excluded from certain regulations. 

Specifically, Polygon would like to see the language updated to “ensure it accounts for the ways in which smart contracts operate and the potential negative consequences of imposing a requirement for ‘safe termination or interruption’ of such smart contracts in permissionless systems,” the team wrote in the letter

Only “enterprises” with an “identifiable natural person or corporate entity” should be subject to Data Act regulations, Polygon said. 

The company claimed that Article 30, as it currently stands, is in opposition to the European Union’s other crypto-related policies, most notably the markets in crypto-assets (MiCA) regulations in Europe, which are poised to pass this month.

MiCA, in its most recent draft, excludes “fully decentralized” crypto asset services from regulations outlined in the policy, Polygon noted. 

“Art. 30 should remain consistent with MiCA in keeping decentralized, autonomous systems out of regulatory scope,” the letter added. 

Crypto wallet provider Ledger is also in support of Polygon’s proposed Article 30 changes, Polygon Chief Policy Officer Rebecca Rettig said. 

“We will continue to engage constructively with policymakers and regulators in the EU (and beyond) to ensure that any regulation is evergreen, can grow with the innovation & also build sufficient guardrails for users of blockchain-based software,” Rettig added on Twitter

It’s not the first time the crypto industry has expressed concern about regulators’ approach to DeFi. When the Office of Foreign Asset Control (OFAC) sanctioned crypto mixing service Tornado Cash, crypto policy groups spoke out and Tornado Cash users joined forces to sue the government, claiming a software cannot be sanctioned. 

Polygon invited European regulators to respond and comment on its amendment proposal, the letter said.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research



Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495B in value locked, doubling Uniswap's Base deployment.


The former Valkyrie CEO chats with Blockworks about what she has her eye on as Cypherpunk Holdings’ new leader


Thursday’s CPI report shows prices are coming down more quickly than analysts had anticipated, renewing hope that central bankers will cut rates in the fall


If we tokenize all assets in a speculative rush, the risk of creating illiquid markets and trapped value will manifest on a large scale


Plus, Trump is headed to the heart of Bitcoinlandia with a speaking appearance at the Bitcoin 2024 conference


Meanwhile, stocks rally after Jerome Powell finishes his Capitol Hill tour


Plus, Blinks have reshaped many people’s understanding of what blockchains are capable of