Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the individuals building 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 the technology and infrastructure that makes DeFi valuable. She notes that software developer protections have become a key topic in recent market structure and crypto policy discussions, with many industry participants agreeing that protecting DeFi builders is crucial for the industry's growth. For instance, the Promoting Innovation in Blockchain Development Act of 2026 aims to protect software developers from misclassification under criminal code. Meanwhile, Alexis Sirkia comments on Ethereum's scaling problem, arguing that the rollup model was flawed from the start, as it was designed to address throughput rather than the actual constraint of how value moves between participants. He suggests that state channels, which allow for peer-to-peer transactions off-chain, could provide a more effective solution. The newsletter also covers recent headlines, including the impact of smart contract exploits on the market, and features a chart highlighting Aave's declining market share following a recent exploit.