In Vitalik We Trust

We answer your questions about The ETH Merge, Tornado Cash and decentralized stablecoins.

Hey friends, welcome back to another issue of Web3 Seems Legit, the newsletter that keeps you up-to-date with all the web3 Twitter tea 🍵.

This week, we've got a cup of hot ginger tea for you - slightly sweet, but mostly zesty with a burning aftertaste.

We explore these questions:

• Are you prepared for the ETH merge?

• Is privacy in crypto good or bad?

• Is this the end for centralized stablecoins?

Are you prepared for the ETH merge?

D-day is finally here, and by that we mean the Ethereum Merge. After two years of delays, the date of The Merge has finally been scheduled for September 15th or 16th - for real this time...we hope 🤞.Ethereum is the second biggest blockchain, so even if you aren’t actively invested in it, you'll still want to understand how it impacts the whole market.

What is The Merge?The Merge is the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) census on the Ethereum blockchain. It is technically a hard fork that will split the chain into two: old PoW and new PoS.

Okay, sweet, what do I need to do? 🕺Technically nothing. After The Merge, you will have a copy of your assets on each chain, but the old PoW assets should effectively be worthless. If all goes well, your experience should be seamless and your history and wallet will continue to be accessible as usual.

Despite the FUD warning you about what you need to do to prepare, just know that you are not required to do anything. More experienced users will always want to capitalize on the situation, so be prepared for volatility, but keep calm and carry on 🫡.

Is privacy in crypto good or bad?

If you have nothing to hide, you have nothing to worry about, right? If you believe in that statement, then you'll love this 🙂.Tornado Cash (TC) is a protocol that mixes and pools funds together to blur the origin of transactions. This way you can send and receive crypto without revealing your wallet.Last week, the U.S. announced that TC has been added to its sanctions list for “money laundering”. If any U.S. citizen interacts with TC, they could be fined up to $330k.

Okay, but the reason to ban seems legit? 🤔

Sure, but when did the law ever stop criminals from being criminals?

🤷‍♂️So..what happens now?There is a wildfire of over reactions right now. We’re not all going to jail. If so, the Feds are going to have to lock up Vitalk and a bunch of celebrities and influencers first 😉.

This doesn't mean you should sit back and not care.

• A developer for Tornado Cash was arrested.

• Circle has frozen $USDC in all TC accounts.

• Github has banned accounts contributing to TC.

Expect more attacks on crypto and constitutional rights. If you’re still on the fence on why we need privacy, read the thread below.

Is this the end of centralized stablecoins?

Because of Circle freezing $USDC, the price of governance tokens issued by decentralized stablecoins has spiked up to 40% last week.An increasingly popular contender emerging from the flames is $RAI 🔥.Unlike other stablecoins pegged to collateral issued by central banks, $RAI is backed by Ethereum and relies on algorithms to maintain its price. It also seems to be Vitalik approved ✅.

ETH is volatile though, how can $RAI be stable? 🤔Good question. $RAI has two prices: initial target price and market price.

1. Arbitrary initial target price is set.

2. Market price fluctuates based on supply and demand.

3. When the market price deviates from the target price, the algorithm sets an interest rate that will incentivize users to bring $RAI back to its target price.

Could $RAI be the stablecoin to save us from the centralized nightmare? Something to keep an eye on 👀.

👉 @chriscantino on subscription NFTs👉 @milesdeutcher on the rise of “real yield” protocols👉 @thedefiedge provides a detailed framework on how to do your own research (DYOR)

That’s all we have for you this week. Now go forth with your day and give a stranger a smile today 😊. We all need it. See you next week!

For regular updates, follow us on Twitter 👉 @web3seemslegit.