Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the people developing DeFi infrastructure.
Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, highlights the growing recognition of DeFi's potential among traditional finance companies and the importance of protecting the technology and infrastructure that make it valuable. She notes that high-level policy objectives, such as software developer protections, are crucial in defending the principles that make DeFi possible.
For instance, the Promoting Innovation in Blockchain Development Act of 2026 aims to protect software developers from misclassification under criminal code. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, discusses how Ethereum's L2 strategy is flawed due to a fundamental design flaw, emphasizing that the rollup model was never designed to deliver a unified scale. He argues that state channels, which enable peer-to-peer transactions off-chain, are a more viable solution.
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.