Protocol Licensing

Definition ∞ Protocol licensing refers to the rules governing how a blockchain or cryptocurrency protocol’s underlying code and intellectual property may be used. These legal frameworks dictate the terms under which other developers or entities can build upon, modify, or distribute the protocol’s components. Licensing structures range from permissive open-source models, which promote broad adoption and collaborative development, to more restrictive proprietary arrangements. The chosen license significantly impacts a protocol’s ecosystem growth, its capacity for permissionless innovation, and its long-term decentralization trajectory.
Context ∞ The discussion surrounding protocol licensing in the digital asset space frequently concerns the balance between open innovation and proprietary control. Debates often address whether restrictive licenses hinder decentralization or protect intellectual property for sustainable development. A critical future development involves the evolution of licensing models that appropriately govern complex decentralized autonomous organizations (DAOs) and their underlying technological foundations.