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I understand your feelings, but I do not agree.
To avoid legal risks, SN has to go noncustodial. To avoid UX decline, SN created cowboy credit.
And I don't think there are better solutions than cowboy credit. We just have to accept the reality. When SN goes noncustodial, people would receive nothing if there were no cowboy credit. At least we can spend cowboy credit the same bitcoin. And when we zap people with cowboy credit, we can get bitcoin reward.