MiCA's vault problem: four roles, and no obvious provider to regulate

The provider question is a key-holder question, and Vault V2 is built so that no single key holds everything. The curator configures strategy and risk parameters, the allocator executes allocations, and the sentinel holds powers intended to reduce risk ^[3]. That is described powers for three of the four named roles, with the owner's left unspecified in the account ^[4]. On Cointelegraph's reading, none of those positions currently amounts to providing a regulated lending service, but the split is exactly why naming the provider is harder than pointing at a bank ^[5].

The friction sits in the carve-out. MiCA leaves out crypto asset services provided in a fully decentralized manner, while still reaching activities that are only partly decentralized ^[6]. A vault with an identifiable curator, allocator and sentinel is not fully anything, so the exclusion has to be argued role by role rather than assumed ^[7].

Two dividing lines are on the table and they do not point the same way. Galea's objection to keying rules to decentralization is that it is "a spectrum and a function of time," penalising newer protocols while entrenching incumbents that have had years to distribute control ^[11]. Brisov's alternative is structural: no undertaking, no appointed manager, a direct coded claim on the pool, and an exit before any parameter change takes effect ^[13]. One of those is a specification an engineer can implement; the other is a status a protocol can only accumulate ^[17].

The drafting choice underneath is narrower than "should Brussels regulate DeFi lending." Brisov's position is that lending and borrowing, if they warrant supervision, belong on the list of regulated crypto asset services rather than inside a broadened definition of the provider itself ^[10]. Galea's point about function explains why that matters: some vaults route fragmented liquidity into lending markets, others buy and sell crypto assets, and they deserve different treatment ^[9]. Widen the provider definition and both arrive together.

Egorov, who founded Curve, wants any framework built from scratch, on the argument that DeFi lending can drop some traditional safeguards and needs others traditional lending never had ^[12]. His stated risk is rules that certain protocols cannot comply with because of how they are constructed ^[14]. That risk is not hypothetical for anyone selling access to these structures: Cointelegraph notes Bitwise moving to launch onchain vaults through Morpho ^[15]. Whatever text follows the consultation will be read first by whoever holds the curator key ^[16].