First they came for privacy protocols…
First they came for privacy protocols, and I did not speak out—
Because I had nothing to hide.
Then they froze stablecoin, and I did not speak out—
Because it is ‘stable’ and audited.
Then they came with frontend censorship, and I did not speak out—
Because my address wasn’t sanctioned.
Then they came for me with protocol-level censorship—
and there was no one left to speak for me.
The original version of this poem was written by German Lutheran pastor Martin Niemöller about the silence of German intellectuals and certain clergy—including, by his own admission, Niemöller himself—following the Nazis' rise to power and subsequent incremental purging of their chosen targets, group after group.
With Ethereum Merge right around the corner and DeFi protocols dancing to the tunes of regulators with frontend censorship, the time has come to realize that it’s all just a start. First, they came for Tornado, then freezing of assets, then frontend censorship, and finally protocol-level censorship.
As TheEylon has pointed out on Twitter, Ethereum Merge is an exciting event but the Ethereum community is still shying away from answering critical questions. Most importantly, currently, it looks like over 66% of the beacon chain validators will adhere to OFAC regulations. If these validators choose not to validate blocks that include sanctioned transactions, that my friend, is the start of base layer protocol censorship.
The conversation first started by TheEylon was taken ahead by Lefteris Karapetsas who raised the question directly to the biggest stakers of the beacon chain such as Lido Finance, Coinbase, Kraken, Staked, and Bitcoin Suisse. Lefteris asked a simple question:
If regulators ask you to censor at the Ethereum protocol level with your validators will you:
A) Comply and censor at the protocol level
B) Shut down the staking service and preserve network integrity
So far, only Coinbase’s CEO Brian Armstrong has replied to the question stating, “It's a hypothetical we hopefully won't actually face. But if we did we'd go with B i think. Got to focus on the bigger picture. There may be some better option (C) or a legal challenge as well that could help reach a better outcome.”
Brian’s response is hope amidst the chaos and hopefully, Coinbase will stick to these principles.
This week in Web3 Wednesday:
- 🍍Pineapple extension against frontend censorship
- 🤔How Circle Pay was able to freeze USDC token balances in blacklisted Ethereum accounts?
- 🔬Web3 research tools for hunting alpha
- 🚨This song is illegal
- 🪂Loop Finance rescue drop live now
- 📈Large Korean securities firms including Samsung rumored to set up a crypto exchange
- 💡Most web3 giants are already in crypto
🍍Pineapple extension against frontend censorship
If you’re no longer able to interact with your favorite dApps because your address has been blocked with frontend censorship, worry not anon, Pineapple is here to rescue.
Pineapple 🍍 is a browser extension that intercepts and mocks requests made by dApps to check if you are sanctioned or not. Pineapple is a ready-to-use extension that works on Chromium (Chrome, Edge, Brave....). No configuration is required. You just have to follow the readme, install it and enjoy freedom again 🍃
To learn more about the Pineapple extension and install it on your browser, head to the pineapple GitHub repo.
🤔How Circle Pay was able to freeze USDC token balances in blacklisted Ethereum accounts?
With the US Treasury sanctioning Tornado Cash, Circle Pay being a US-based centralized company had to bow down and freeze the USDC token balances in blacklisted Ethereum accounts.
But aren't token transfers permissionless? So was Circle Pay able to do that?
Well, here’s a thread explaining how USDC can be frozen in permissionless Ethereum accounts.
🔬Web3 research tools for hunting alpha
We all are aware of the well-known web3 tools for research purposes such as Nansen, Dune, DefiLlama, Parsec, etc.
Well, here are 10 not-so-well-known research tools that could be particularly useful.
- EtherDrop Bot
- Wallet Tracker Discord
- Apophenia's Blog Scrapper
- Token Unlock Dashboard
- OpenBB Terminal
- EigenPhi – MEV and On-chain analysis
- Deep Dive into MEV
- Coindix – Identify yield opportunities
- Laevitas – Track Derivatives data
To know more about each one of these tools, check out this thread by Sergio Gallardo.
🚨This song is illegal
“History doesn't repeat itself, but it often rhymes” – Mark Twain.
There was a time when the ITAR (International Traffic in Arms Regulations) prohibited exporting cryptographic software (or technical data about cryptographic software) without a license from the U.S. Department of State. The definition of "export" includes disclosing or transferring technical data to a foreign person, either in the U.S. or abroad. That law made it illegal to ship a piece of code outside of the US jurisdiction.
To make a mockery of that law and showcase the stupidity of regulators, some cypherpunks printed the code on a t-shirt with a tagline – “Warning! This Shirt is Classified as a Munition!”
Rhyming history after so many decades, the US treasury has sanctioned another piece of code, this time an open source code for private transactions by Tornado Cash. In protest against this sanction, Jonathan Mann sang some of the code of the Tornado Cash smart contract.
Check it out here: https://twitter.com/songadaymann/status/1559983727488409601
🪂Loop Finance rescue drop live now
For those who invested in Loop Finance prior to Terra’s crash, you can now claim your $LOOP token on Juno Network.
To claim your rescue drop, check out the tweet attached below, connect your Terra Station and Kepler wallet, and claim your $LOOP token. Make sure you have some $JUNO in your Kepler wallet to successfully claim the tokens.
Check out the details in this tweet.
📈Large Korean securities firms including Samsung rumored to set up a crypto exchange
As per a Korean news website, seven large securities firms are rumored to establish virtual asset exchanges in the first half of next year. As per Newspim, seven large domestic securities companies have applied for preliminary approval and establishment of a corporation from the financial authorities for the establishment of a virtual asset exchange in the first half of next year.
That includes the tech giant Samsung. It’s worth noting that Korean tech giant Samsung already supports virtual assets with Samsung Blockchain Keystore and Wallet. It’s only logical that Samsung will jump into the crypto space with its own exchange.
💡Most web3 giants are already in crypto
As Binance’s CEO CZ has recently pointed out through a tweet, most of the biggest tech giants are already invested in crypto/web3 startups. From Alphabet (Google’s parent company), Microsoft, Samsung, to even LG, American Express, etc have already invested in a range of web3 companies.
Check out the image below to get the full lists of tech giants and their investments in web3.