GM! It's been another exciting week in web3. Welcome to your Monday digest from Layer3, and here's what we'll cover:

• SBF proposes controversial regulations for crypto, backtracks after criticism

• @DefiIgnas: Reddit's collectible avatars are what crypto mass adoption feels like

• Aptos mainnet launches, is off to a rocky start

• Featured community: Slingshot Finance, the web3 way to trade crypto

Sarah at Layer3

Your Web3 Briefing 📝

An analysis of what you missed in web3 over the past week

SBF, Enemy of the people (DeFi enthusiasts)

Samuel Bankman-Fried (Co-Founder and CEO of FTX) published a controversial document on crypto regulation last week. 

The flurry of responses and pushback, including from prominent figures like Erik Voorhees and Ryan Adams, led to SBF somewhat backtracking on his position after just a couple of days. So let's get into it: What exactly was behind the criticism surrounding SBF's regulatory proposal?

One, it's important to understand where SBF is coming from. FTX is a custodial financial intermediary is subject to U.S. regulations and "Know-Your-Customer" (KYC) obligations. In his proposal, SBF advocates for a set of industry standards that would subject all crypto front-ends to become registered broker-dealers with KYC obligations, effectively subjecting most DeFi protocols (and much of FTX's competition) to the regulatory structures that govern traditional finance. Imagine if you had to register your phone number, address, or social security every time you wanted to make a non-custodial swap!

As Rekt News mentions in their nuanced takedown of SBF, he would probably not be here today if not for the benefits that FTX and Alameda Research reaped from DeFi. And now that they're in a dominant position, they have the ability to regulate their competition away....

There's a lot more in there, which Erik Voorhees lays out pretty well in his breakdown here.

Sarah's Recommended Reads: Reddit onboards 3 million users to crypto with Avatar NFTs

Welcome to Sarah's Recommended Reads! Here, I'll be summarizing well-written articles or threads by web3 thinkers and builders that you should know about.

Up today is @DefiIgnas on Reddit's collectible NFT avatars. Following the news that Reddit had onboarded more than 3 million new crypto users through their NFT avatars, Ignas has written a great overview on why Reddit's strategy worked.

As noted by Reddit CEO Steve Huffman, an important part of Reddit's strategy was to abstract away the terms typically associated with NFTs. 

The result? Less speculation, more dedicated collectors, and a thriving Reddit community of people genuinely interested in showing off their NFT avatars. Contrast this to Discord, which received heavy backlash from users who would cancel their Nitro subscriptions after they announced they would implement NFT functionalities.

It seems like there's a lesson here to be learned from the two competing camps in web3 UX: "Abstract away the technology" is beating out "web3-specific, developer-heavy UX", for now. 

You can read more in his thread here! 

What else you should know

• VC-backed Aptos launches on mainnet, gets a rocky start

• Azuki's "Proof of Skate" auction receives over $2.5m in bids

• Gavin Wood steps down as CEO of Polkadot

• USDT will be available in over 24k+ ATMs across Brazil

What we've been BUIDLing 🏗️

Have you noticed our latest feature?

We don't want to reveal too much...but if you participated in our latest Quest with Flipside Crypto, you may have noticed a new form of Bounty that would allow you to learn and discover at the same time!

Watch out for the official launch of this feature sometime this week, and join the Discord to stay tuned on how to participate.

🛣️ Stay up to speed on what we're building: Take a look at our roadmap to see what we've been cooking at Layer3, and a preview of what’s to come.

🚢 And if you want to help decide what we ship next: You can submit a feature request here and vote on your favorites! Some top community requests have already made it onto our roadmap.

Community Feature: Slingshot

Our featured community of the week is Slingshot!

Slingshot is the Web3 way to buy, sell, and swap 40k cryptocurrencies at the best prices, all with 0% swap fees.

We’ve created a series of Quests in collaboration with Slingshot so that you can experience the magic of Slingshot’s DeFi swaps. Slingshot currently aggregates liquidity across all top DEXs so that you can find the best price possible for the token you’re looking for.

Watch out for our "Slingshot Elite" Quest coming out at 3PM EST today!

Thanks for reading!

Join our Discord and follow us on Twitter to stay up-to-date on the latest Bounties, communities, and more!

That's all for this week! Until next time, frens.

Cheers,

Sarah at Layer3

Let us know how we did👇