GM. This is Layer3's weekly newsletter, helping you stay updated on all things web3. We pay attention to Crypto Twitter so you don't have to.

This week, we cover:

• MakerDAO's controversial governance proposals

• Facebook begins testing Ethereum and Polygon NFTs on profiles

• North Korean hackers behind Harmony Protocol's $100m hack

• Our latest engineering blog post by Lars

Sarah at Layer3

Your Web3 Briefing 📝

A roundup of the biggest Web3 headlines over the last week

MakerDAO struggles to balance growth and decentralization

Governance trouble has been brewing at MakerDAO. On June 27, three controversial proposals were put forward by members to restructure MakerDAO's management approach.

MakerDAO governs one of the most sophisticated and decentralized DeFi protocols in crypto. Fully decentralized since 2021, MakerDAO is the DAO behind the $DAI stablecoin, a collateralized cryptocurrency that is pegged to the US dollar.

The first proposal was a vote to add a new core unit that would oversee MakerDAO's growth strategy and its onboarding of collateral assets, while another proposal focused on forming a "Growth Task Force" for high-level protocol decisions.

The last proposal would tap into MakerDAO's reserves and invest 500m DAI into a combination of US treasuries and bonds to increase yield.

With a record turnout, MakerDAO members rejected all three proposals—with many suggesting that the proposals would make the DAO too centralized and privy to the interests of VCs.

Facebook begins rolling out NFTs for certain profiles

Ever wanted to show off your NFTs on Facebook? Well, now you may be able to—and receive dozens of discerning questions from your older relatives about why you bought a pixelated animal for $1500.

Meta Product Manager Navdeep Singh shared a preview of what NFTs on Facebook would look like last Wednesday. Users can connect their crypto wallets and display NFTs in a "digital collectibles" section.

Personally, I'm skeptical of Meta's recent attempts to appeal to web3 users in this way. 

For a company that has done absolutely nothing to retain young users, hasn't shipped anything appealing or usable related to their "Metaverse" rebranding, and fails to provide meaningful value to any consumer that uses its products, a surface-level addition of an NFT profile picture isn't going to do much, and nor is copying popular products that web3 folks actually use.

And let's be real: A decentralized vision of web3 will not be built by Meta. We're bearish on this one.

What else you should know

• North Korea's Lazarus Group behind Harmony Protocol's $100m hack

• 3AC files for bankruptcy, co-founders' location unknown

• STEPN's decentralized exchange (DEX) is now the biggest DEX on Solana

• A16z on the potential for democratic governance in web3

What we've been BUIDLing 🏗️

We've spent the past week working on some significant backend improvements to make the site feel as smooth and intuitive as possible.

Our very own senior engineer also wrote an engineering-focused blog post diving into how we work around Vercel's 4kb environment restriction! If you're curious about how we run our fullstack environment and want to dig into some juicy engineering notes, be sure to check it out:

🛣️ 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: Automated Market Maker (AMM)💡

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

What is an Automated Market Maker (AMM)?

An AMM is a type of protocol in decentralized finance that allows digital assets to be traded permissionlessly and automatically via liquidity pools. They are DeFi's answer to exchanging and trading cryptocurrency!How do AMMs differ from traditional exchanges?

Unlike a traditional exchange, AMMs do not rely on the seller setting a price for an asset and the buyer accepting a price in order for a trade to happen; rather, liquidity providers supply liquidity pools with assets, where tokens are automatically taken from when someone wishes to make a trade. Prices for a swap are determined by algorithms that balance the assets within the pool.

How do I use an AMM or provide liqudity?

There are many AMMs in the DeFi ecosystem. The three dominant AMM models include Uniswap, Curve and Balancer. Uniswap allows users to create liquidity pools with any pair of ERC-20 tokens with a 50/50 ratio; Curve creates liquidity pools of similar assets such as stablecoins (with some the lowest rates); Balancer allows users to create dynamic liquidity pools of up to 8 different assets in any ratio.

Layer3 aggregates a variety of ways to become a liquidity provider or make a trade on an AMM like Curve, Matcha, and Uniswap via bounties. You can check them out below!

Disclaimer: Cryptocurrencies are inherently volatile assets. We recommend you do your research into each protocol and platform before proceeding. This newsletter is not sponsored and does not contain financial advice.

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That's all for today!