Safeguarding DeFi Infrastructure Builders

Welcome to Crypto Long & Short, our institutional newsletter. This week, we focus on the need to safeguard the people behind DeFi infrastructure. As traditional finance companies increasingly adopt DeFi-related initiatives, it's crucial to protect the technology and infrastructure that makes DeFi valuable. The DeFi Education Fund, a nonpartisan nonprofit organization, invites you to join us in defending key policy objectives. Recently, Congressional leaders have engaged in productive discussions to build legislation that reflects a fundamental understanding of neutral, decentralized technology. Software developer protections have become a topic of conversation in market structure and crypto policy discussions. A majority of industry participants agree that protecting the people building DeFi is essential. For instance, the Promoting Innovation in Blockchain Development Act of 2026 aims to protect software developers from misclassification under criminal code. The bill clarifies that Section 1960 applies only to those controlling customer assets and transmitting funds on behalf of customers. In a separate article, Alexis Sirkia discusses how Ethereum's L2 strategy is failing due to a fundamental design flaw. The rollup model was designed to address congestion, but it has produced isolated liquidity pools that can't interact without routing assets through bridge infrastructure. State channels, on the other hand, allow participants to transact peer-to-peer off-chain, eliminating the need for intermediaries. The industry is starting to recognize that the real constraint is trust at the intermediary layer, and infrastructure that eliminates this layer is where capital and builders will migrate.