Restricted Protocols

Definition ∞ Restricted Protocols refer to blockchain networks or decentralized applications that limit access or functionality to specific users or entities based on predefined criteria. These limitations might include geographic restrictions, identity verification requirements, or permissioned access for institutional participants. Such protocols often aim to comply with regulatory mandates or to serve specialized use cases requiring controlled environments. They contrast with fully permissionless systems.
Context ∞ News reports frequently discuss restricted protocols in the context of regulatory compliance and institutional adoption of digital assets. While permissionless systems prioritize open access, restricted protocols seek to offer controlled environments that satisfy legal and operational requirements for traditional finance. The balance between decentralization and control remains a key discussion point in their development and deployment.