The FCA’s draft DeFi liquidity protocol framework introduces stricter oversight, impacting Curve and Uniswap governance tokens (CRV, UNI). A 20% surge in implied volatility reflects market anticipation of regulatory costs and compliance risks. The transmission mechanism involves: (1) Increased Uncertainty: Ambiguity in FCA rules (e.g., CATP authorization, slashing penalties) raises fears of restricted operations. (2) Liquidity Risk: Potential KYC or capital requirements may deter LPs, reducing pool liquidity and increasing price swings. (3) Governance Pressure: Token holders face higher stakes in voting on compliance measures, amplifying speculative trading. (4) Market Sentiment: Regulatory scrutiny signals broader DeFi clampdowns, spurring volatility. Curve’s stablecoin focus and Uniswap’s concentrated liquidity model face unique risks, with CRV and UNI prices reacting to perceived regulatory burdens.