This character, or any other variation of Luffy, is needed to complete a mission on Missions: Shells Town.
Also known as G3 Luffy, and less often as v2 Luffy (since he was the second Luffy released on global).
His special is different from his unevolved version, so you cannot use Balloon Luffy special to level G3.
He is one of the best RR captains. As long as you are confident in your perfects (no easy feat for newbies...), he allows you to lead rainbow teams, free of class, cost and color restrictions, that can clear a lot of end-game content.
G3 teams have a higher damage output than teams led by 2.5x ATK captain teams (again, assuming you'll hit your perfects). See images: here and here for some idea what that means.
Totally replaceable by superior on all counts by LL, aka Legend/Log Luffy (who has better stats, better special, better captain ability=damage output, and more sockets).
How to socket him? The usual dilemma: Anti-Bind, Anti-Despair, Charge Special, Matching Orbs and Auto-Heal are all good. Take whatever you need for your team. AB and AD are probably the most must-have's, with Charge Special being the least needed.