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, noncustodial, globally accessible, and interoperable technology. The DeFi Education Fund, a nonpartisan, nonprofit organization, invites readers to join in defending high-level policy objectives that make DeFi valuable.
Recent bipartisan discussions with Congressional leaders have been productive, with a focus on software developer protections. The Promoting Innovation in Blockchain Development Act of 2026, introduced by Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren, aims to protect software developers from misclassification under criminal code. Meanwhile, Alexis Sirkia, chairman and co-founder of Yellow Network, comments on the limitations of Ethereum's L2 strategy, arguing that the rollup model was designed around the wrong assumption that Ethereum's limitation was throughput, rather than how value moves between participants. State channels, which allow participants to transact peer-to-peer off-chain, may offer a solution to the fragmentation caused by rollups.
The CFTC is preparing to approve the first U.S. framework for perpetual futures, which will require infrastructure that can settle cross-chain in real-time without passing through custodial chokepoints. Other news includes the impact of smart contract exploits on the market and Aave's market share slide after the rsETH exploit.