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. As traditional finance companies increasingly embrace DeFi, it's crucial to protect the technology and infrastructure that underpin it. The DeFi Education Fund, a nonpartisan nonprofit, is working to defend key policy objectives, including software developer protections. Recent discussions with Congressional leaders have been productive, with a bipartisan bill introduced to protect software developers from misclassification under criminal code. Meanwhile, Ethereum's L2 strategy has been criticized for its design flaw, which has led to fragmentation rather than scaling. Experts argue that the rollup model was never going to deliver a unified scale, and that state channels offer a more promising solution. The industry is shifting towards new infrastructure that eliminates intermediaries, and the market is starting to price in the limitations of rollups. Other news includes the CFTC's preparation to approve a framework for perpetual futures, and the impact of smart contract exploits on the market.