Hello and welcome to the latest issue of the Web3 Rewind!

No event in recent memory has catalyzed the blockchain world as much as the U.S. Treasury sanctions against Tornado Cash. The tl;dr is Tornado Cash is a mixer, and can be used to obscure cryptocurrency transaction provenance, hence it makes for a nice tool for money launderers. That’s what Treasury is accusing TC of doing, to the tune of $7 billion over the years with recent high profile instances involving hackers affiliated with North Korea. Considering the U.S. believes North Korea is using its hacking proceeds to fund its nuclear weapons program, that puts a national security target on TC’s back.

I’m of two minds here. First, the reaction from high profile people in the web3 world to the Treasury’s action strikes me as naïve. Maybe it’s my background covering Wall Street and the numerous ways banks, brokerages, exchanges and the like are regulated and then regulated again just to be sure. When money is involved no one in web3 can expect to not have regulators keeping things in check. Any tool created in a peer-to-peer fashion that can abet crime will have authorities looking to shut it down. That’s just big boy stuff, and web3 leaders need to acknowledge it and work to put in place systems that allow the Tornado Cash’s of the world to exist within legal boundaries, not cry that jack booted thugs are ruining their defi party.

Second, what is going on here is unprecedented and needs to be fought on as many fronts as necessary. Simply because we shouldn’t have been surprised by this enforcement doesn’t mean we should let it go by uncontested. The Treasury sanctioned code — a series of smart contracts that enable TC to function — rather than a shady Russian oligarch. Code is speech. Simply writing a computer program that has good and bad potential applications can’t be deemed out of bounds.

This leads to the most egregious aspect of this — Dutch authorities arrested Alexey Pertsev, a developer on the Tornado Cash project. In a free society developers like Pertsev must have the guaranteed right to create the code they want. The legal line cannot be that because that code can be used to break the law the developer bears any responsibility. Do we arrest automotive engineers after someone drives drunk and kills someone? Of course not. Code and cars have perfectly legitimate uses and uses that can lead to death and mayhem, but the end user who causes that mayhem bears the responsibility. Alexy Pertsev must be freed at once. After that, a long legal battle is probably in store for the U.S. over the TC case, one that in a free society should be a win for free speech and free code. —Matthew Leising, editor in chief DeCential Media

Mural raised $5.6M to help brands deploy DAO treasuries

Decentralized autonomous organizations, or DAOs, gained media attention and notoriety in the last bull market. The high profile Constitution DAO formed and raised about $60 million in the span of a week to try to buy a rare copy of the U.S. Constitution, only to lose out to billionaire evil genius Ken Griffin. DAOs have always needed better tools and infrastructure to allow them to grow sustainably. There are even DAOs to help other DAOs form, as Seed Club enters its fifth cohort of coaching startups hoping to make the decentralized format work.

In addition to the more broad development of infrastructure tools, the rise of treasury management and guidance has also been of key concern for many startups. The economic accounting for treasury assets has proven to be more complicated than initially thought as discounted treasury values have posed not only a risk for balance sheets, but also for liquidity as liquidation events pose a very present threat. 

Into this mix comes Mural, which will use its $5.6 million seed round to further develop tools that can be used by DAOs to sustainably manage and deploy their treasuries with maximum effect. As more DAOs and crypto communities are coming to maturity, the need to streamline and simplify DAO infrastructure will be all the more essential in order to make the technology more accessible to a wider variety of groups and individuals.

“That’s Our Two Satoshis” — 6 Reasons ETH Merge Concerns Are Overblown

There has been a lot of handwringing and worry about the upcoming Merge in Ethereum, where the blockchain network will switch from using proof-of-work to proof-of-stake for its consensus layer. The change will cut Ethereum’s energy usage — and therefore the carbon emitted to create that energy — by more than 99 percent. It’s a huge deal and has been many years in the making, yet suddenly a lot of miners are coming out of the woodwork to say they want to keep the Ethereum proof-of-work network alive.

Why? Simple, their expensive computer hardware that’s used to validate transactions will become worthless and they will be out of a lucrative business. The timing from some in the mining community is highly dubious, as this has been in the works since Ethereum went live in 2015. The environmental benefits of moving to proof of stake should be enough to convince anyone that this is the right thing to do. Living in California the effects of the climate crisis are real, noticeable and only getting worse. It’s the same way in many parts of the world now. Sticking to proof of work with its huge electricity consumption for a few bucks is a serious case of rearranging deck chairs on the Titanic.

Beyond those concerns, the amount of coordination and infrastructure needed to continue the Ethereum PoW chain is a serious challenge. It’s not that it would be impossible, it’s just a question of why? Why go to all that trouble and expense to keep a relic in place that serves no benefit to the wider web3 world.

But don’t just take our word for it, read this excellent analysis by Arca’s Jeff Dorman in the latest That’s Our Two Satoshis.

DeCent People Podcast With Archstone Entertainment’s Jack Sheehan

President of Worldwide Sales & Development at Archstone Entertainment Jack Sheehan discusses his journey through the traditional Hollywood system and his views on Hollywood pertaining to how crypto and web3 can change the industry.

What’s Happened Between Ukraine and Russia with Matthew Mežinskis