Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the people building DeFi infrastructure. Alexandra Levis shares expert insights, and Jennifer Rosenthal, chief communications officer at DeFi Education Fund, discusses the importance of protecting the technology and infrastructure that makes DeFi valuable. As traditional finance companies increasingly engage with DeFi, it's essential to defend high-level policy objectives that support neutral, decentralized technology. The DeFi Education Fund has participated in bipartisan discussions with Congressional leaders to build legislation that reflects a fundamental understanding of this technology. Software developer protections have become a topic of conversation, with most industry participants agreeing that protecting DeFi builders is crucial. 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. In a separate article, Alexis Sirkia, chairman and co-founder of Yellow Network, comments on Ethereum's L2 strategy, arguing that the rollup model was flawed from the start, focusing on throughput rather than the actual constraint of value movement between participants. Sirkia suggests that state channels, which enable peer-to-peer transactions off-chain, may offer a more effective solution. The CFTC is preparing to approve the first U.S. framework for perpetual futures, which will impact the crypto derivatives market. Meanwhile, the 21Shares prediction that most L2s won't survive 2026 may be pessimistic, but it highlights the need for infrastructure that can settle cross-chain in real-time without passing through custodial chokepoints. This week's headlines also highlight the growing connections between traditional finance and crypto, as well as the devastating effects of smart contract exploits.