Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the people behind DeFi infrastructure. Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, highlights the growing involvement of traditional finance companies in DeFi and the importance of protecting open-source, permissionless, and programmable technology. She emphasizes the need for policy objectives that defend the technology and infrastructure that make DeFi valuable. Rosenthal also discusses the Promoting Innovation in Blockchain Development Act, which aims to protect software developers from misclassification under criminal code. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, comments on Ethereum's scaling problem, arguing that the rollup model was flawed from the start and that state channels offer a more promising solution. He believes that the industry's focus on building better bridges was misguided and that state channels can provide a more secure and efficient way to transact. The newsletter also includes expert insights from Francisco Rodrigues, who highlights the growing connection between traditional finance and the crypto sector, as well as the impact of smart contract exploits on the market. A chart of the week shows Aave's market share sliding after the rsETH exploit, and the newsletter concludes with a call to action to defend the policy principles that make building and using DeFi possible.