Polygon, Ledger urge EU to change smart contract rules

Polygon Labs and Ledger have called on EU lawmakers to amend some provisions of the Data Act on smart contract rules.


same company Write In an open letter, Article 30 of the existing Data Law will “hamstring innovation and economic growth in the European crypto industry” because the regulation does not take into account the complexities of a permissionless system for smart contracts.

They added that the Data Act aims to “bridge the digital divide” and allow people to participate in these emerging systems. However, the status quo of Article 30 may be counterproductive and limit the system of equal participation.

“We respectfully request that you consider the proposed amendments to Section 30 discussed below to ensure that new laws do not inadvertently prevent the emergence of open, transparent and permissionless parts of blockchain technology.”


According to the letter, certain clauses in Article 30 need to be amended because the language lacks clarity and specificity more than necessary.

This could lead to a “prohibition of unintended effects of autonomous, permissionless smart contracts and applications,” which would inevitably become entangled with the provision.

The main issue raised in the letter is that the preamble to Article 30 sets out the requirements to be placed on “smart contract providers in the context of data provision agreements”.

However, the letter argues that most smart contract systems without such a party, because they are autonomous, cannot comply with data law requirements.

no supplier

The companies called on lawmakers to amend the provision to ensure it only applies to smart contract-based systems that are “licensed” to be owned and operated by “identifiable natural persons or corporate entities.”

They also asked lawmakers to exclude software developers who work on protocols and decentralized applications (dApps) from the term “smart contract provider.”

“Because of the autonomous nature of dApps, where no party ‘provides’, we recommend that the EU amend Article 30 to exclude software developers who write and publish code from the scope of supply, to ensure that participants in software development are not inadvertently Consider the “provider” of a smart contract.

Additionally, the letter acknowledges that some projects may claim to be decentralized and still have a point. Therefore, only software developers are excluded from the term to ensure that entities with centralized control over these agreements remain liable.

The letter urges lawmakers to clarify that “data provision agreements” can only apply to “traditional contractual agreements” between two people or corporate entities.

The current Article 30 enforces centralization due to the termination of functional smart contract clauses. As mentioned above, this is not possible without a centralized entity controlling the system.

They also suggested clearly defining the scope of Article 30 by specifying an “agreement” that only processes personal data, trade secrets or other sensitive business information.

Polygon and Ledger close letters asking lawmakers to ensure the language and scope of the data bill is similar to the Market for Cryptocurrencies (MiCA) that regulates cryptocurrency projects, fully decentralizing elements and excluding them from requirements for centralized entities .

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According to Cryptoslate

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