Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the people driving DeFi innovation. By Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, we learn about the importance of protecting open-source, permissionless, programmable, non-custodial, globally accessible, and interoperable technology. There's a growing understanding among traditional finance companies that DeFi presents significant upgrades for parts of the financial system. The DeFi Education Fund invites those new to DeFi or looking to connect customers to it to join in protecting the technology and infrastructure that makes it valuable. Key policy objectives include defending software developer protections, which have been a topic of discussion in market structure and broader crypto policy talks. A bipartisan bill, the Promoting Innovation in Blockchain Development Act of 2026, aims to protect software developers from misclassification under criminal code. In a separate piece, Alexis Sirkia discusses Ethereum's scaling problem, arguing that the rollup model was flawed from the start, focusing on throughput rather than how value moves between participants. State channels offer a potential solution by allowing peer-to-peer transactions off-chain, with the base layer serving as the enforcement mechanism. The week's headlines highlight the growth of traditional finance and crypto bridges, while also noting the impact of smart contract exploits on the market.