Safeguarding DeFi Infrastructure Builders

Welcome to our institutional newsletter, Crypto Long & Short. This week, we focus on the need to safeguard the individuals building decentralized finance infrastructure. As traditional finance companies increasingly engage with DeFi, it's essential to protect the technology and infrastructure that make it valuable. We believe in defending key policy objectives, including software developer protections. Recently, the Promoting Innovation in Blockchain Development Act was introduced to protect software developers from misclassification under criminal code. Additionally, we explore Ethereum's scaling problem, which was never just about throughput, but rather about how value moves between participants. The current rollup model has led to fragmentation, and state channels offer a potential solution by enabling peer-to-peer transactions off-chain. We also discuss the latest headlines, including the impact of smart contract exploits on the market, and Aave's market share decline following the rsETH exploit.