Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we delve into the need to safeguard the people behind DeFi infrastructure. Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, highlights the importance of protecting these individuals. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, discusses the shortcomings of Ethereum's L2 strategy. Rosenthal notes that traditional finance companies are increasingly embracing DeFi, recognizing its potential to revolutionize the financial system. However, she stresses that it's crucial to protect the technology and infrastructure that make DeFi valuable. This includes defending high-level policy objectives, such as software developer protections. Rosenthal cites the Promoting Innovation in Blockchain Development Act of 2026, which aims to protect software developers from misclassification under criminal code. Sirkia, on the other hand, 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 increase capacity, has instead led to fragmentation and isolated liquidity pools. Sirkia proposes state channels as a solution, allowing participants to transact peer-to-peer off-chain and eliminating the need for intermediaries. The newsletter also features headlines of the week, including the impact of smart contract exploits on the market, and a chart highlighting Aave's market share slide after the rsETH exploit.