Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the importance of protecting DeFi infrastructure builders. Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, emphasizes the need to safeguard the people behind DeFi, as traditional finance companies increasingly embrace the technology. She highlights the introduction of the bipartisan 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, argues that Ethereum's L2 strategy is flawed due to its focus on throughput rather than trust at the intermediary layer. He proposes state channels as a solution, allowing for peer-to-peer transactions without custodial chokepoints. The newsletter also features headlines of the week, including the impact of smart contract exploits on the market, and a chart showing Aave's market share decline after the rsETH exploit.