Layer 2 Don't Have Enough Censorship Resistance To Protect Protocols From US Prosecutors

In its current form Arbitrum One isn't really censorship resistant, hence the "mainnet beta" moniker they've been using since launch last year.

There are two majors steps that need to happen for Arbitrum to be "credibly neutral" in my eyes:

Remove the validator whitelist so that anyone can force-include transactions via the delayed inbox contract, and so that anyone can use the fraud dispute mechanism.

Relinquish the admin keys to the contracts

I think 1 will happen relatively soon since it's not a huge change to how Arbitrum operates today. It will mostly solve the censorship issue through the delayed inbox. I don't know how soon 2 will happen; many other projects in the space seem to operate just fine with admin multisigs in place and I don't know how much pressure there is to move away from that.

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In a sense DYDX building on Cosmos makes more sense from a censorship resistance standpoint.

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The US government has no interest in Credible Neutrality, Nato has no interest, and frankly neither does India or the PRC or Russia.

People are very very very very naive and slow on the draw with GeoPolitics.

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If you don't want Credible Neutrality, go back to FinTech and Banking, go back to Web 2 Securities, go back to SQL databases.

I think the California Legislature and their VC lobbyist think we do not have the capacity to Meme Into Existence the entire branding of their industry as "Walmart Chains"

It's going to happen.

I suggest people start normalizing ways to do smart contract in a politically neutral manner that do not revolve around KYC, the PRC, and the US, that have some sort of trustless mechanism for making it dramatically harder for North Korean whatever, or whoever such criminal to run the whole thing into the ground, if the tech is too easy for the bad guys, we don't have a very good legal defense, so at least try to make it harder.

Some type of ZK viewkey and client side encryption to demask private transactions is good if it helps you prove you're not a tax cheat to the authorities, you can't escape death and taxes, so at least have a legal defense. Our tech is not designed for easy compliance, and when it is, it is not designed for privacy, things that should not be onchain are made onchain or on the front end, and things that should be onchain are not there.

Much of the "proof of innocence" should be offchain paper work protected by the Rule of Law and court procedure, because the US is dangerously close to infringing on "Presumption of Innocence"