Oct. 29, 2023
Dear Securities and Exchange Commission, I wanted to provide my opinion and some insight on the subject of insufficient consideration of blockchain interoperability The proposed SEC rules do not seem to sufficiently account for the complexities of interoperability between diverse blockchain networks and protocols. Some risks of this oversight: -There are crypto protocols that enable assets and data to seamlessly move between different blockchains. SEC rules could restrict interoperability if they take a one size fits all, chain-specific approach. - Assets bridged from public chains to blockchain-connected DeFi protocols may get stuck in regulatory limbo if the SEC takes an inconsistent cross-chain approach. - There are chains that deliberately foster interchangeability between stablecoins and native tokens. Disjointed SEC rules could fracture these interconnected designs. - Cutting edge interoperability solutions like decentralized relays may allow regulated assets to be trustlessly ported into unregulated environments like DEXs. Clarification is needed on resulting compliance obligations. - Chains focused on interoperability have rich, diverse token ecosystems that may confound SEC categorizations if viewed in isolation. By taking a universalist approach that does not account for the equivalence and transfer of assets across blockchain networks, the SEC risks a fragmented, inconsistent framework. Rules should be technologically neutral and flexible enough to accommodate interoperability innovation. I suggest the SEC works closely with experts in multi-chain architectures, bridges, and relays to craft regulations that are future-proofed for Internet of Blockchain designs rather than siloed, individual networks. Interoperability are the key capabilities of Web3 that cannot be ignored. Sincerely, Diane Yearout