Safeguarding DeFi's 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, discusses the growing recognition of DeFi's potential among traditional finance companies and the importance of protecting the technology and infrastructure that make it valuable. She highlights key policy objectives, including the protection of software developers who do not control customer assets. The proposed Promoting Innovation in Blockchain Development Act aims to clarify legislation and provide legal clarity for these developers. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, comments on Ethereum's scaling issues, arguing that the rollup model was flawed from the start due to its focus on throughput rather than the movement of value between participants. He suggests that state channels could provide a more effective solution by allowing peer-to-peer transactions off-chain, with the base layer serving as the enforcement mechanism. Other topics include the CFTC's plans to approve a framework for perpetual futures and the impact of smart contract exploits on the market.