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. Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, highlights the importance of protecting open-source, permissionless, programmable, non-custodial, globally accessible, and interoperable technology. She notes that traditional finance companies are increasingly embracing DeFi-related initiatives, and it's essential to defend high-level policy objectives that make this technology valuable. Rosenthal also discusses the Promoting Innovation in Blockchain Development Act, introduced by Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren, which aims to protect software developers from misclassification under criminal code. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, comments on Ethereum's scaling problem, arguing that the rollup model was never going to deliver a unified scale due to its design flaw. He suggests that state channels, which allow participants to transact peer-to-peer off-chain, could be a more effective solution. The newsletter also features headlines of the week, including the impact of smart contract exploits on the market, and a chart showing Aave's market share slide after the rsETH exploit.