Overarching Point of Thorswap's FrontEnd Going Down, Is Lost or Not Understood By The Entire Industry

I've been debating with lawyers in this space substantially in regard to whether the entire industry is going to switch to fully permissionless frontends-

The consensus with them and other dev's is yes -but

It isn't enough, it simply isn't.

First we have to understand enforced compliance comes in two versions, overt and covert, overt felonies on validator and infrastructure are already in Congress, and are making demands on smart contracts that aren't even technically possible. Wanting 1099 tax info ie

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The covert censorship and permissioning is the real threat, it is the use of white lists.

Washington is looking at the space with two new terms "associative lists (white lists)" and "Responsible persons (anyone with a pulse)"

The threats being made for overt compliance will turn into threats made for covert backdoors.

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I would urge everyone to read very carefully what Tay said in response to Thorswap.

Thorchain does not provide privacy, but it is still at risk of being sanctioned.

Tay's arguments are why if nothing is done by DeFi to regulate itself, the government will absolutely criminalize key infrastructure such as validators, indexers, rpc nodes, and especially anyone doxxed involved with smart contracts. The 1st and 4rth is never going to hold up to this, it just isn't.

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What happened to Thorswap is going to happen to every frontend in this space, because it is legally weak, and easy to pin illicit history to, there are no mechanisms to deter illicit use, and no clear way to do anything but privacy pools.

Privacy pools don't actually stop the illicit use, which means it really won't satisfy the Pentagon as far as North Korea is concerned (or China), but Privacy pools open up the entire attack surface of normalizing smart contracts that can work with known zkp white listing.

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You are your meta data. Pretty much all onchain non monero addresses can be tied back to at least a geolocation, there is enough meta data to do a lot of extreme national security legal enforcement once the feds get fully committed to coercing the industry into using extremely heavy Zkp identity and white listing at threat of prison, this is absolutely what will happen.

There's no compelling arguments in congress or federal DC circuit, or Supreme Court, and no legal code, no legislation to stop them from abusing this type of demand. Since they know the tech is coming and is basically prototypically here, they're just going to expand it onto key infrastructure like rpc nodes and indexers.

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