What makes a DeFi protocol NDA different from a standard technology NDA?

DeFi protocol NDAs must address unique concerns like TVL strategies, yield mechanism design, liquidity provider terms, oracle configurations, and the risks of MEV exploitation if protocol details are leaked before launch.

How should liquidity arrangements be protected in a DeFi NDA?

Liquidity arrangements should be classified as strictly confidential, including LP incentive structures, locked liquidity terms, and any side agreements. The NDA should prohibit trading based on this information.

What TVL information requires NDA protection?

While on-chain TVL is public, strategies to attract or retain TVL, planned incentive programs, and partnerships with large depositors should be protected. The NDA should also cover unreleased features that could affect TVL.

How do DeFi NDAs address composability and integrations?

DeFi NDAs should distinguish between public smart contract interfaces (which enable permissionless integration) and confidential integration arrangements involving custom terms, priority access, or fee arrangements.

DeFi Protocol NDA | Protocol Partnerships & Integrations

🔒 Key Provisions for DeFi Protocol NDAs

TVL Strategy Protection

Protect plans for attracting and retaining TVL, including planned incentive programs, liquidity mining designs, and partnerships with institutional depositors.
Yield Mechanism Design

Classify yield generation strategies, fee structures, revenue sharing arrangements, and any proprietary mechanisms as confidential trade secrets.
Liquidity Arrangements

Protect LP incentive terms, locked liquidity arrangements, market maker relationships, and any side agreements that affect protocol liquidity.
Oracle Configurations

Protect oracle selection criteria, price feed configurations, and any custom oracle arrangements that could be exploited if disclosed.
Integration Terms

Distinguish between public permissionless interfaces and confidential commercial integration terms including priority access, custom fee arrangements, or exclusive features.
MEV Protection

Include provisions prohibiting exploitation of advance knowledge for MEV extraction, front-running, or sandwich attacks against the protocol or its users.

🌐 DeFi Protocol Types

💸

Lending/Borrowing

Interest rate models, collateral factors, liquidation parameters

🔄

DEX/AMM

Pool configurations, fee tiers, liquidity incentives

📈

Yield Aggregators

Strategy vaults, harvest timing, fee structures

🪙

Liquid Staking

Validator selection, fee splits, withdrawal queues

🎯

Derivatives

Margin systems, funding rates, oracle arrangements

🏭

Cross-Chain

Bridge mechanics, security models, liquidity routing

When to Use This NDA

Common DeFi scenarios requiring specialized protection

🤝 Protocol Partnerships

Protocol-to-protocol integrations, cross-protocol yield strategies, or collaborative liquidity arrangements.

💰 Liquidity Provider Terms

Custom arrangements with large LPs, locked liquidity terms, or incentive agreements beyond public programs.

🔍 Pre-Launch Features

Sharing upcoming features, mechanism changes, or roadmap items with potential integration partners.

🏢 Institutional Onboarding

Discussions with institutional depositors, market makers, or treasury management services.

⚠️ Common DeFi Protocol NDA Risks

Issue	Risk Level	Recommended Action
No MEV exploitation prohibition	High	Add explicit prohibition on front-running, sandwich attacks, or MEV extraction using disclosed info
Oracle configuration exposed without protection	High	Classify oracle arrangements as critical confidential information with extended protection
No distinction between public and private interfaces	Medium	Clarify that public smart contract ABIs are not confidential while commercial terms are
TVL strategy not explicitly protected	Medium	Enumerate TVL acquisition strategies, incentive programs, and LP terms as confidential
Standard term insufficient for trade secrets	Low	Add indefinite protection for proprietary yield mechanisms and algorithmic strategies

⚠️ DeFi Regulatory Considerations

DeFi protocols may be subject to securities, commodities, or money transmission regulations depending on their design and jurisdiction. NDAs for DeFi partnerships should include regulatory cooperation carve-outs for SEC, CFTC, FinCEN, and state regulators. Protocol teams should consult with regulatory counsel to understand how their specific mechanisms may be classified.