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. Jennifer Rosenthal, chief communications officer at the DeFi Education Fund, emphasizes the importance of protecting open-source, permissionless, programmable, noncustodial, globally accessible, and interoperable technology. She highlights the introduction of the Promoting Innovation in Blockchain Development Act, which aims to protect software developers from misclassification under criminal code. Meanwhile, Alexis Sirkia discusses the shortcomings of Ethereum's L2 strategy, arguing that the rollup model was flawed from the start, as it addressed congestion but created isolated liquidity pools. He proposes state channels as a potential solution, allowing for peer-to-peer transactions without intermediaries. The newsletter also covers recent headlines, including the impact of smart contract exploits on the market and the shift in Aave's market share following the rsETH exploit.