Welcome to our institutional newsletter. This week, we focus on the need to safeguard the people building DeFi infrastructure.
As traditional finance companies increasingly engage with DeFi, it is crucial to protect the technology and infrastructure that makes it valuable. The DeFi Education Fund, a nonpartisan organization, invites you to join us in defending key policy objectives. We have been engaging in productive discussions with Congressional leaders to build legislation that reflects a fundamental understanding of neutral, decentralized technology. Software developer protections have become a topic of conversation in recent market structure and crypto policy discussions.
A bipartisan bill, the Promoting Innovation in Blockchain Development Act, aims to protect software developers from misclassification under criminal code. In other news, Ethereum's L2 strategy has been criticized for its design flaw, which prioritizes throughput over trust at the intermediary layer.
State channels offer a potential solution by allowing peer-to-peer transactions off-chain, with the base layer serving as the enforcement mechanism. The industry is shifting towards infrastructure that eliminates custodial chokepoints, and rollups may not be suitable for this task. Meanwhile, the CFTC is preparing to approve a framework for perpetual futures, which will pull a significant share of offshore derivatives volume into regulated venues.