Blockchain and Web3 ideology is based on decentralized asset ownership, security and absolute transparency. But that's the ideal. The industry is evolving, joining the global economy and gradually adopting its shortcomings.
Recently, we have seen more and more cases of cryptocurrency exchanges blocking users and disabling services for citizens of "untrustworthy" countries. Thus, MetaMask blocks residents of Venezuela, Iran, Russia, North Korea, Syria, Cuba, Lebanon... Binance, Coinbase, Upbit, Gopax, Bithumb and Korbit are closing their services for thousands of IP addresses. The NFT OpenSea trading platform blocks users and territories on the extensive U.S. sanctions list.
So one of the most important benefits of crypto disappears - being beyond states, beyond intermediaries, beyond nations, beyond borders. But we can regain control of our digital assets and hedge against potential trouble.
How can we do that? Here are just a few tips.
Avoid CEX whenever possible
Any centralized exchanges (CEXs) with custodial wallets, user identification, and a single point of control for all transactions are analogous to banks. They essentially own your assets, which means they can block them at any time. This happens regularly and without any sanctions. For example, when a user accidentally bought "dirty" cryatocurrencies (stolen by hackers or used by criminals), put them on an exchange, and the coins get frozen.
If you do use CEX, try to spread the capital over several exchanges. And do not keep the assets on the exchange, immediately after the transaction withdraw them to your wallet. For more secure withdrawals, you can use cryptocurrency mixers or other solutions for anonymity, like Ethereum's decentralized private transaction protocol, Tornado Cash.
For confidential transactions, many use anonymous cryptocurrencies (Monero, Dash, Zcash) or wallets with built-in anonymizers - Wasabi, Samourai. They intermingle a lot of transactions of different users and only then send them to their destination. As a result, no "piece" of the transaction is connected to the real sender.
DEX gives more control
In this situation, it is still more reliable to move to decentralized platforms. They allow users to trade with each other directly, without intermediaries. Control over assets and wallets is left to the user.
Moreover, in DEX there is no centralized authority that could block the user's account or withdraw funds. But at the same time nobody except user is responsible for their safety: if you suddenly lose access to your wallet, nobody can help. So be careful.
The most popular decentralized marketplace right now is Uniswap, based on Ethereum blockchain. It accounts for about 40% of DeFi market transactions. There are more than 2,100 assets and huge opportunities to earn money. No registration or KYC is required to work. Uniswap users have an opportunity to create their own liquidity pools with customization of different parameters (share participation, current exchange rate and other functions). By the way, the ARCONA liquidity pool on Uniswap has been growing lately!
Other reputable platforms are SushiSwap (Uniswap fork), ancakeSwap which works on the AMM principle based on BNB Chain and 1inch which also provides access to DeFi-aggregator.
Use crosschain bridges
CEX is often used to transfer funds from one blockchain to another. But this can also be done without the involvement of an exchange, that is, in a decentralized way, using crosschain bridges. Among the most popular are Allbridge, Portal Token Bridge, cBridge, Hop Exchange and others. Soon the renewed Arcona Marketplace will open its own crosschain bridges and you will be able to transfer ARCONA tokens directly on our portal.
Also, so called "wrapped" assets can be created for transfers between blockchains, liquidity pools in different networks or relay nodes that use liquidity in different blockchains can be used.
Choose non-custodial wallets and connect to an alternative node
All cryptocurrencies are divided into custodial wallets, where you give access to the key to the operator, and non-custodial wallets. Here, the private keys are fully controlled by the user. It is believed that no one can freeze cryptocurrencies in such a wallet. However, one of the most popular non-custodial wallets, MetaMask, easily blocks users.
The reason is that MetaMask is only an interface to interact with the blockchain. It cannot operate on the wallet owner's assets, but it can block entry for users with IP addresses of sanctioned countries.
How does this happen? Such wallets receive information about users' balances through one of the nodes running the blockchain network. For example, MetaMask uses the blockchain provider Infura. It is a centralized cluster of nodes that allows transactions and connections to the network without having to synchronize the node with the Ethereum blockchain. It is Infura that makes decisions about IP blocking. In this case, you will be able to log into your wallet, but you will not see the balance - instead it will be a sign that the connection is blocked due to sanctions.
Fortunately, bypassing this blocking is simple enough - you just need to connect your wallet to another node, which does not prohibit this connection - a kind of analogue of VPN in the crypto world. In this case, there are a lot of alternative nodes. That's how the problem with any blocking by MetaMask and any other wallets that can potentially get you banned is solved.
How to bypass MetaMask blocking?
Change geolocation
Geolocation blocking is one of the most common, so it's worth mastering VPN services. Back in February, decentralized exchange PancakeSwap banned users from Belarus and 9 other regions. And 1inch blocks users from the United States. Money is not lost in this case, as it is stored on an offline wallet, so it is enough to access the site with a VPN.
Your country is determined by your IP address, so all you have to do is swap your IP address to make the site seem like the traffic is coming from an allowed jurisdiction.
But even with a VPN connected, by no means connect to public wi-fi while working with financial services.
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