Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the people building decentralized finance infrastructure.
As traditional finance companies increasingly engage with DeFi, it's crucial to protect the technology and infrastructure that make it valuable. The DeFi Education Fund, a nonpartisan nonprofit, invites you to join in defending key policy objectives. Recently, the bipartisan Promoting Innovation in Blockchain Development Act was introduced to protect software developers from misclassification under criminal code. This act clarifies that certain regulations apply only to those controlling customer assets, not software developers.
Meanwhile, Ethereum's L2 strategy is facing criticism for its fundamental design flaw, which prioritizes throughput over trust and value movement between participants. An alternative approach, state channels, allows for peer-to-peer transactions off-chain, reducing the need for intermediaries and increasing security.
As the crypto landscape evolves, it's essential to support legislative and regulatory initiatives that foster clarity and enable responsible participation in both centralized and decentralized markets.