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 recognition of DeFi's potential among traditional finance companies and the importance of protecting the technology and infrastructure that makes it 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. The Promoting Innovation in Blockchain Development Act of 2026, introduced by Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren, aims to protect software developers from misclassification under criminal code Section 1960. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, argues that Ethereum's scaling problem was never about throughput, but rather about how value moves between participants. He believes that the rollup model, designed to address congestion, has instead produced isolated liquidity pools that can't interact without routing assets through bridge infrastructure, leading to fragmentation and security risks. Sirkia advocates for state channels, which allow participants to transact peer-to-peer off-chain, eliminating the need for intermediaries and reducing the risk of exploitation.