GM! It's been another exciting week in web3. Welcome to your Monday digest, and here's what we'll be covering in today's issue.

• Tornado Cash officially sanctioned, developer detained by Dutch authorities

• Marc Boiron: Sufficient Decentralization, A Playbook for web3 builders and lawyers

• A beginner's guide to Squeeth, an ETH derivatives strategy by Opyn

• More leaderboard updates and a major feature coming soon.....

Sarah at Layer3

Your Web3 Briefing 📝

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

Tornado Cash Developer Arrested in Amsterdam #CodeIsSpeech

After Tornado Cash was sanctioned last week by U.S. authorities, Dutch police subsequently arrested one of the developers behind the open-source, decentralized Ethereum privacy tool. Tornado Cash allows users to conceal their transactions so that it's not always permanently visible on the Blockchain.

In the official arrest memo, Dutch authorities noted that the developer was "suspected of involvement in concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies."

The developer's arrest also kicked off a series of events that sent shockwaves throughout the crypto world. It began with the deletion of Tornado Cash's Discord, to addresses suspected of using Tornado Cash being blocked by front-ends such as AAVE, to Github suspending the accounts of Tornado Cash contributors. Circle also froze the USDC held by all Tornado Cash addresses.

To this day, Tornado Cash's entire Github codebase has been deleted—as if it never existed. Watching the events unfold over the past week was tragic as a believer in decentralization. I see it no less as an attack on open-source technology and a vain effort to "regulate" crypto as a whole.

Privacy is a fundamental human right, and no one should ever have to face retaliation for building things that ensure such a right.

Sarah's Recommended Reads: Marc Boiron on Sufficient Decentralization

Welcome to Week 3 of Sarah's Recommended Reads! Here, I'll be summarizing well-written articles or threads by web3 thinkers (or dabblers) that you should know about.

Up today is Marc Boiron on Sufficient Decentralization, a hefty playbook for 1) web3 founders who want to efficiently decentralize off-chain activities while remaining compliant with U.S. securities laws, and 2) web3 lawyers advising those founders. Marc is a strategic advisor at Variant Fund and is currently General Counsel at dYdX, so if there's anyone you want to be taking legal advice from, it's probably him.

The playbook summarizes what it means for a tokenized web3 community to become sufficiently decentralized. In short, it's not just enough to decentralize your on-chain activities; the off-chain, day-to-day activities of community contributors must also be considered.

While your protocol may rely on DAO governance, is your DAO's marketing activities carried out in a decentralized way? Who's able to participate in business development activities? Does the Core Team have control over all off-chain aspects of the protocol?

If you are in charge of a protocol where people reasonably expect to profit off a given value of a crypto asset, then these are all important questions to consider!

You can read more in the playbook here.

What else you should know

• Su Zhu and Kyle Davies make it into a New York Magazine article

• Ethereum rises to $1700 after Merge date in September is confirmed

• Nigeria has the most interest in crypto, according to a study

• Reddit partners with FTX, allows users to purchase ETH via an integration

What we've been BUIDLing 🏗️

Since implementing our Daily and Weekly Bounties, we've been building more and more features to make Bounties more intuitive.

We'll have a ton of new Bounties launching this week from new partners, so make sure you're subscribed to e-mail notifications to receive our weekly Bounty digest!

We also have a huge new feature coming soon that you don't want to miss out on. To stay updated, make sure you're in our Discord, and turn your announcements on.

🛣️ 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.

Web3 101: Opyn's Squeeth💡

Each week we’ll cover an essential web3 concept in simple terms. This week we’re looking at Squeeth ✨

What is Squeeth?

Squeeth (squared ETH) is a financial derivative that gives traders perpetual exposure to ETH². Squeeth functions as an ERC-20 token that consolidates much of the options market liquidity into a single token. The product eliminates pain points with traditional options, such as the need for strikes, expiries, and liquidity fragmentation.

There are many ways to Squeeth (long, short, LP, Squeeth Strategies). If you are interested in learning more, you can head over to Opyn’s Gitbook.

How can I use Squeeth?

Users can long, short, and LP Squeeth. Opyn also recently launched Crab Strategy v2, a delta-neutral Squeeth strategy that aims to make money in USD terms.

Where can I learn more?

Head over to Opyn’s Twitter and Discord to interact with the team, ask questions, and find out all the latest updates.

This section was co-authored by Regan from Opyn: Opyn is a DeFi protocol building DeFi-native derivatives and options infrastructure.

Disclaimer: This section is not sponsored by Opyn, and we encourage you to do your own research before proceeding! This is not financial advice. Cryptocurrencies are inherently volatile assets. Proceed at your own risk.

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

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