Blockchain Regulation Matrix
The Blockchain Regulation Matrix (BRM) establishes a framework outlining the concerns of regulating the blockchain from both the government and the consumer perspective, and in doing so, provides a pragmatic and clear approach to Web3 regulation. The BRM outlines regulation aspects of the blockchain by viewing it as a blockchain stack in many layers starting with the electricity physically supporting the blockchain at the base layer, all the way to the process of offloading crypto to fiat currency. With centralization and decentralization on either side of the matrix, the primary objective of the BRM is to understand where and how regulation of the blockchain should be developed specific to each layer.
Beginning with the electricty supporting the blockchain, as you hover over the images of each row, you'll see the specifics for that topic within that layer. The left side refers to projects that are centralized, while the right side refers to projects that are decentralized. For example, if there was an organization or business that wanted to provide electricity to miners in their area, that would be a centralized project. However, if there was a solar farm operating as a DAO that wanted to provide electricity to miners, that could be a decentralized project.
There are two illustrations of the Blockchain Regulation Matrix below, a short-form immediately below and a long-form afterwards.
Hover over the icons to preview each topic, and click any icon to pin its details — the address bar then links straight to that cell, ready to share.
Application Layerdecentralized
This row applies to companies whose apps give access to other protocols on the blockchain.
ContestedFront-end liability is the ecosystem's live boundary dispute; the broker-rule repeal settled one piece of it.
Government Concerns
- Sanctions and takedowns apply at the DNS/front-end level while the protocol persists
- Whether hosting an interface to someone else's protocol creates operator liability
- Cloned phishing front-ends impersonating legitimate applications
Consumer Risks
- A malicious or compromised front-end serving altered transactions to signers
- Wallet-drainer approvals harvested through fake or injected interfaces
- No way to distinguish the official front-end from a perfect clone
Cons to over-regulation
- Holding interface hosts liable as operators of protocols they merely display collapses the app/protocol distinction
- Front-end licensing pushes users toward unhosted, unvetted interfaces
Cons to lack of regulation
- Phishing clones of major dApps proliferate with no takedown standard
- Compromised dependencies propagate across the ecosystem unchecked
Does blockchain technology currently exist to fulfill these obligations, and if so, what is it?
- ENS + IPFS front-ends whose integrity users can verify against on-chain records
- Wallet-side simulation and allow-list registries flagging known-bad interfaces
- Subresource integrity and dependency pinning against supply-chain injection
Current regulatory landscape
- guidanceOFAC-driven front-end geoblocking practice — US, 2022–. Interface operators geoblock sanctioned regions voluntarily; the legal status of a pure interface remains judicially untested.
- repealedIRS DeFi broker rule repeal — US, 2025. Congress rejected treating front-ends as brokers — the clearest legislative statement yet on interface liability.
Notable incidents
- Ledger Connect Kit supply-chain attack (2023) — A compromised npm library served wallet-drainer code across many dApp front-ends at once — the application layer's systemic dependency risk made real.
- BadgerDAO front-end injection (2021) — Malicious script injected into the site UI harvested inflated approvals for months (~$120M) while the underlying contracts stayed uncompromised.