On March 14, the European Parliament passed legislation under the Data Act, which includes provisions on smart contracts and the internet of things (IoT) that could target decentralized finance (DeFi). This situation is expected to affect DeFi coins such as AVAX, UNI, LINK. Here are the details…
AVAX, UNI, LINK: DeFi coins may be at risk
The European Parliament on Tuesday voted in favor of a law that is expected to limit the effectiveness of smart contracts. The European Union bill of 2022, known as the Data Act, contained provisions aimed at giving people greater control over information coming from smart devices. However, the situation has raised concerns in the Web3 community. On Tuesday, 500 EU lawmakers voted in favor of the bill, 23 voted against, 110 did not.
“The new rules will empower consumers and companies by giving them a say in what can be done with the data produced by connected products,” said MP Pilar del Castillo Vera during the debate over the bill. The provisions in Del Castillo Vera’s re-draft mean that smart contracts must have access controls and protect trade secrets.
The proposal is now expected to come to the agenda of the European Council and the European Commission. It is in question that the first meeting, where the details of the proposal will be discussed, will be held on 28 March. The vote empowers del Castillo Vera and other lawmakers to negotiate with governments in EU member states to finalize the law.
Expert: “It’s more dangerous than anyone could imagine”
“Article 30, currently in draft form, goes too far in addressing the issues raised by immutability,” Thibault Schrepel, associate professor at VU University in Amsterdam, tweeted before the vote. “It puts smart contracts at risk to a degree no one could have predicted,” he added. Schrepel, who is an expert in blockchain legal issues, drew particular attention to Article 30 of the proposal. In this article, he mentioned that the issue of who has the authority to terminate the transactions was left in the air. He believes this issue “interferes with the basic principle that automatic programs cannot be changed by anyone.”
Today, the @Europarl_EN is debating the Data Act (https://t.co/cwDOFDGmU9). My thoughts on the latest version of Article 30 (#smartcontracts).
➝ The immutability of smart contracts is key to their survival (i.e., immutability is their main differentiating https://t.co/X3XfgRC6ZL… https://t.co/4JHg2fP84j pic.twitter.com/8QTSBxSueH— Thibault Schrepel (@ProfSchrepel) March 14, 2023
Which coins can be affected by this situation?
It is thought that this will mostly affect coins and projects operating in the decentralized finance (DeFi) field. The bill also claims to give smart contracts equal protection when compared to other forms of contracts. Here is a list of the biggest coins in the DeFi space:
As we have also reported as Kriptokoin.com, a DeFi coin is one of the coins in the subcategory of cryptocurrencies. Again, it transfers value during a financial transaction. DeFi coins are built on and are often referred to as unique, native Blockchain networks. Maker, Compound, Uniswap, Aave, Chainlink and Ankr in spring 2021; There have been coins that have benefited from the explosion in the DeFi space.
