Aave updates, Curve on Optimism and more - The Daily Gwei Refuel #295 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's 18th of january 2022 all right everyone let's get into it so today uh evan van ness and josh stark published their year in ethereum 2021 review a blog post now this is quite a lengthy read here it goes to everything that happened with ethereum in 2021 from d5 to nfts to protocol upgrades like erp 1559 and all that good stuff there now obviously i highly recommend going and giving this a read if you haven't yet i read it earlier today and honestly as i kept reading i just kept getting more and more excited like it's always well and good to kind of talk about

what's happening on from from day to day as i do on the on the refuel but then kind of like doing a retrospective and looking back at what happened in 2021 and kind of like going through all the metrics and seeing how much success ethereum had in 2021 just got me super pumped up and then you know towards the end you kind of like have things about like you know what's happening this year going forward stuff like the merge layer twos and i just and i just came away after reading all of this just like super pumped for you know the past present and future of ethereum really at the end of the day so i highly recommend giving this a read but i just i did want to talk about a couple of things here i think what stood out to me the most just scrolling through here was

things like total transaction fees now i know layer 1 fees are high and it's kind of like funny how it's the thing that ethereum is most criticized for but it's also the thing that i think is most bullish when it comes to ethereum is the fact that last year uh in 2021 uh people paid a total of 10 billion dollars in transaction fees uh in 2021 to use the ethereum network now um i'm pretty sure this kind of like uh most of this kind of i guess uh happened towards maybe the the end of the year or kind of like the last six months of the year the first six months were high but not as high as high as this and then you can kind of see here that how it compares to bitcoin bitcoin only did a billion dollars so ethereum did 10 times the amount of fear

of when u.s bitcoin did but and if you kind of like take that as a dollar terms ethereum's market cap uh sorry eats market cap is is uh you know i guess less than half of bitcoin and then kind of like uh if you kind of like extrapolate that out and kind of um do that over all of 2021 it becomes even more pronounced and the reason why i bring up market cap is because you're measuring this as ethe usd value in btc usd values so obviously btc's usd value is higher so the fact that if atheist ethereum is kind of like 10 times greater even though it might you know it has a much less not much less market but less than 50 of the market cover bitcoin is a pretty big deal there so there's that and then there's um another chart here

of comparing kind of like the transaction fees to not just protocols but also defy apps and things like that comparing it to visa so visa does 24 billion dollars in total fee revenue uh last year so ethereum's catching up right the ethereum already beat stripe stripe does 7.4 billion dollars and obviously now you know i mean after august most of that fear revenue is being burned 70 to 80 of it which is absolutely insane right like this is revenues um for visa and stripe right that goes i mean that's not profit right like that's um that's revenues that go to kind of like paying for our staff paying for uh you know equipment paying for for maintenance and service and all that sort of stuff there whereas this kind of like 10 billion dollars i mean if you

want to say that extrapolate that out and say okay well one five five nine if it was live for the whole year seven to eight billion dollars of that would have been burned so crazy crazy uh and then going down you can kind of like see uh some some layer two stuff here like cumulative transactions on uh on layer two is up at like over 500 million here or something like that there you can go down and see kind of cumulative transactions on uh well i mean this was this includes uh sorry this includes ethereum l1 so you can see cumulative transactions of ethereum l1 and l2 which is like about 500 million but maybe over 500 million here and then you can see just l2 on its own it is up to almost 100 million i

think that's about 80 85 million there so and then you know it really only started in july as i said the second half of last year was when at layer 2's really started kind of taking off and they went live and stuff like that so some really cool stuff there some stuff around the crater economy and how much kind of like um creators are earning on the platform so you know artists musicians writers and other creators obviously got to do with nfts i really like this little picture here that says who makes a living in crypto you can see through the years like who's making a living now well in 2021 investors developers crypto companies and artists musicians right as gamers are all making money in crypto these days whereas the previous years it was just like investors developers and crypto companies so very cool to see

that some coverage of core protocol upgrades like one five five nine you can see a nice chart here of one five five nine adoption through time um and yeah anyway i'm going to let you guys give this a read yourselves as i said highly recommend it if you read anything this week make it this uh and i guess kudos to josh stark and evan van ness for putting this together they do this every year by the way for the last few years always love reading them but as i said this got me super super pumped today for the past present and future of ethereum so uh speaking of 1.559 vitalik shared a paper today that was done by some researchers at peking university and duke university of the on the consequences of erp1559 and vitalik says here i particularly appreciate the

confirmation that erp 1559 has greatly decreased average waiting times for transactions then he shares this little chart here now this is uh you know one of the other benefits or at least kind of like a major benefit of one five five nine obviously we had the uh the uh obviously we had the kind of like burn that everyone focused on but i've gone through before the other benefits of one five five nine like better fee estimation um you know decrease the average waiting time for transactions because you because of that so you don't have to speed up a transaction most of the time anymore uh and there was a few other benefits in there as well so really great to see some objective data on this obviously you know there's um uh there's more time that needs to go past before we kind of like say that this is uh you

know the an amazing fix or kind of like does what it says it does but i mean i think it's been six months so far we can obviously see some some early data showcasing that it does what it says it's going to do you know the funny thing is is that ethereum layer 1 is mostly bots today and like in the near future especially as more people migrate to layer 2 it's going to be basically 100 bots and these bots are basically going to have like very fine-tuned ways to pay for transactions on the ethereum network so it really is going to be a thing where 1559 is going to help so much that uh i mean in theory 99 or even more than that of transactions should never have to be sped up and and people can kind of get their transactions into the next block

as long as they pay the correct fee obviously if you pay two level fee you're gonna be waiting but i'm talking about kind of like priority transactions to get into the next block that should uh that should definitely get better you know get uh uh be a be in a really good place for these bots and things like that as well on on layer one of theory i mean you know the funny thing is is that um myself and a few of the i guess like other eth ogs and whales that i know in the ethereum ecosystem are now moving most of their activity to layer two as well so even the whales are pretty much getting priced out um and this is because like when you think about it it depends what kind of you know how um you know what what these kind of like whales

are and how active they are but for example you know a few of them i know they love to do kind of like uh trading nfts and things like that they love to do uh putting their stable coins into yield farms and kind of like re-upping their their farms every day and kind of like compounding every day uh you know if you if you have token rewards coming to you and selling those token rewards but the thing is if you're doing that every day on layer one it's going to cost you hundreds of dollars in gas fees and it's not even going to be worth it uh you know i mean obviously depending on the size that you put in there but it's not going to be worth it for people who have millions of dollars in there to re-output every day because the gas fees just eat into it

like crazy so these people are moving to layer two as well because layer twos now have more to do you know on opportune optimism they've got a lot more apps on there which i'm gonna go through in a sec as well some some major apps went live today but essentially i think as i said one five five nine oh sorry layer one is really not even gonna be whales anymore like maybe mega whales like people have like a [ __ ] ton of money like maybe tens of millions if not hundreds of millions of dollars but mostly it's gonna be bots doing mev stuff doing arbitrage stuff layer twos obviously posting their cool data and proofs to the layer one network but anyway if you're interested in reading this research paper it'll be linked in the youtube description below so three other updates today so istani

is teasing ave's l2 strategy where he says the current rv l2 strategy is avail protocol v3 are they governance v3 and are there redacted v3 i wonder what redacted v3 is because i know that the alveo is building a mobile a mobile wall or a wallet in general but i don't know if they'd call that a v3 wallet because they don't they haven't even had like a v1 or a v2 so i'm wondering what other redacted v3 is going to be maybe i don't know maybe it's kind of got to do with the institutional stuff that they're doing i don't know i'm not sure but uh this is cool i i'm really loving the fact that ave is stepping up on their kind of like l2 game lately and you can see here a related update from emilio from from rb here that they've kind of got a

proposal up on the governance forum right now to use uh snap snapshot x from snapshot labs which i'm going to talk about soon um on on starkwear here so as i said ave is getting very very involved with the later ecosystem and that argent kind of d4 integration that was being teased was actually r there so you can now earn interest with up to 100 times lower fees than l1 by using the zk sync wallet so you can see here gif basically deposit uh not depositing usdc but trading usdc for a usdc which is rv interest bearing usdc um on zk sync here using the argent wallet which i think is really cool you know the fun thing is is that yes okay this isn't like an other integration where

through your argent wallet you deposit usdc directly into r there but it's the beauty of d5 is that you don't need to do that all that needs to happen is that you trade your rv for ausdc sorry you trade your usdc for ausdc and you still get access to that same yield because of the fact that a usdc is a is a yield-bearing token issued by the arbeit protocol whenever anyone kind of like puts their usdc in there so this is really what this is really one thing that dfi uniquely enables is those tokens that represent different kind of positions and different kind of things within the dfi ecosystem and it makes it really easy to do integrations like this without are they having to deploy to zk sync you know as um uh uh as kind of like the core protocol

and then liquidity having to flow in there and flow into that to you know for it to mean anything what this can do is you can just tap into rv kind of like could it be anywhere and this is part of rv v3 um roadmap as well with their portal where they want to have like our a tokens flowing from chain to chain l2 to l2 and have and you know no need to kind of like fragment liquidity like that as well which i think is really really cool so awesome to see this from arjun and aven as i said like arve seems to be really doubling down on their l2 strategy now i'm very much looking forward to seeing other v3 go live on both optimism and arbitrary which has been kind of like teased for a while now i'm sure they'll be going live

relatively soon so very very uh very very excited for that so uh openc announced today with a bunch of different partners the nft security group so this security group has 18 different partners in it 18 very involved uh kind of like um apps companies services within the nf within the nft space such as i guess foundation coinbase uh maker's place manifold metamask polygon openc of course wearable zora wallet connect you can see all of them here i'm not going to list them all out but there's 18 of them so and the nft security group is basically a group that's come together to obviously tackle security and safety challenges within the nft space

obviously uh the nft space is bringing in a lot of newer people and there's a meme going around that a lot of these nft people give away their seed phrase because they don't know what it is the um i you know i've made some joke jokes about it on twitter before about the board ape holders they seem to give away their seed phrases and lose their board apes and other nfts quite regularly now as much as you know we all laugh and it's a meme and everything this is a real problem for adoption like you i i like arjun's approach to it where they basically saying you know we need to get rid of seed phrases we shouldn't be showing user seed phrases at all and i agree with that approach because at the end of the day um this kind of like seed phrase a lot

of users can get tricked into giving this away just like they've been tricked into giving away their password for for decades now in the web 2 world so if we get to a point where we can remove seed phrases or at least kind of like have so much education out there that we can reduce the number of people who are just like willf lee giving their seed phrase or secret phrase whatever you want to call it away the better and it's not just that there's a bunch of other kind of like security practices for for nfts and just for crypto in general that are going to be worked on um but i think the the seed phrase is a major thing because look when you think when you kind of like just uh look at the reality of the situation if you give away your seed phrase those

words 12 or 24 words have access to all of your kind of like wallets which means it's basically your private key right which means that anyone you give that that to has access to everything you have not just one asset all the assets so if you have an ethereum kind of wallet um whether it be on your kind of like hardware wallet or metamask or some some other thing um and you have ethan there you have stable coins in there you have nfts in there you have other tokens as soon as you give away your seed phrase or as soon as your seed phrase becomes compromised because you put it on your computer and someone's kind of like stolen it um you know the smart kind of like hackers are going to drain everything instantly right and you're going to lose everything with zero recourse there's nothing you can do

about it then because obviously once a transaction has been done and confirmed on the ethereum network you can only roll it back if you have you know uh control of the chain which obviously is not going to happen so from that perspective again that's just a warning for everyone please never ever ever give your seed phrase to anyone never write your seed phrase on your kind of like computer and write it down and save it in a text file even if it's password protected or anything like that never do that it's the one of the most dangerous things you can do and it's also just bound to get you wrecked eventually so if you do have to store a seed phrase because you do get them with hardware wallets and you do get them with something like metamask always write it down physically and store it somewhere

extremely safe but also uh you you want to make sure that you kind of like um go beyond that depending on how much you you have as well if you have a substantial amount you can kind of like split up the seed phrase give i don't know give like half to your parents and keep half yourself to keep keep safe but also keep in mind that you have to trust them to keep that safe as well because uh not not that it could get i mean it could get stolen of course but like i think the bigger risk is that they just lose it or they forget where they're gonna like they put it or it gets damaged or kind of like it gets thrown out or something like that so these are the things to consider but this is again why we shouldn't really have users kind

of i guess like being faced with seed phrases and secret phrases and things like that it's definitely a big deal that we need to kind of like deal with so i'm great to see that open seeing a bunch of other companies and services and and ecosystem participants i have introduced or launched this new nft security group to help everyone out here so as i mentioned an update from snapshot today so they've introduced a snapshot x which is basically a iteration of snapshot uh snapchat snapshot uh which is the upcoming on-chain voting framework uh for trustless execution that is going to be deployed uh to i guess stocknet so this is being worked on in collaboration with the starkware team it was previously known as a stark vote i'm

pretty sure i covered it when it was called starkvote but now it's called a snapshot x so here's a description of what of what snapshot x is basically snapshot x is a voting framework built on stock net the layer 2 zk roll up it will allow any doubt to run their governance on chain on layer 2 and execute transactions on ethereum that's very very cool right like i've talked about this before how about how people are getting priced out of doing governance things on layer 1 because of the fees so if we can do governance at layer 2 while still executing it at layer 1 that's awesome and that's exactly what snapshot x wants to enable here so very very very very happy to see that but also snapshot is good on layer one two because of the fact that you can um just sign a message you don't have to

actually do on-chain transactions so it's already obviously uh you know free to do because signing a transaction sorry signing a message is free uh but like if you want to go beyond that and kind of like execute these things on chain and stuff like that that's when it becomes you know expensive so cool to see this definitely go give this blog post to read for more information about a snapshot x here uh so polygon their pos chain is integrated one five five nine so obviously aip159 as i just talked about brings to uh briggs with a bunch of upgrades uh like better fee estimation better fee market things like that on polygon uh polygons pos chain here and i'm pretty sure they are burning matic as well but obviously because fees are much cheaper on the pos chain um the

burn is much less i think they're burning like i i remember that i talked about this on the refill they were going back and forth about like burning or not burning uh oh no they are okay so they landed on burning the the magic token so uh but yeah they're still cool to see like i can't wait to see some kind of like dashboards sprung up around you know how much magic token has been burned but i doubt it's gonna be much as i said i am um uh so sorry what was i saying i was saying that um you know the fear revenue is quite low because of the fact that the transactions are low and the funny thing is that doesn't mean the activity is low the activity is actually pretty high on the pos chain but um don't expect like ethereum levels of burn

right like i mean i'm pretty sure the pos chain uh does like one to two hundred k worth of fear venue on any given day compare that to a theorem that does like 50 million dollars a day yeah there's there's just really no comparison there but you know better than nothing but also you get those usability and ux benefits that come with one five five nine generally so very very cool to see this um and uh uh yeah i i'm uh i can't wait to see kind of like how the polygon free market evolves from here as well because they obviously had a bunch of issues with bots and things like that too and and spam so i'm curious to see how that gets kind of like handled under one five under a one five five nine world for the polygon pos chain here so curve finance is now live on optimism

so you can go to optimism optimism.curve.phi and play around with curve on there just another app that's gone live on optimism since they removed the white list they were already live on arbitrary of course and i think they're they were live on zk sync or at least they had a testing implementation on zk sync so curves moving fast they're obviously live on some other kind of like evm chains as well makes sense for all these projects to deploy to basically every avm chain i'm curious to see long term kind of which ones hold the um the most usage of the most activity obviously my bet is on layer two is because they're just objectively better from a speed uh perspective but like from a transaction fee perspective longer term they'll be better but for now i mean obviously optimistic rollups are still a few dollars for a swap and

things like that whereas some of these kind of like cheap centralized evm chains uh are very very kind of like low um low fees there but as i said roll ups are going to get to that point eventually when we have things like erp 4488 and sharding in place but it's going to be on a kind of like longer term thing there so just another thing for you guys to play around with on optimism though with with curve uh both optimism and albatroom's ecosystems are pretty much i wouldn't say they're kind of like on par with ethereum l1 yet but they're getting there like if they're getting there very quickly as i said rv v3 is getting ready to be deployed on both of them very very soon i i'm sure and then once that happens there's only a few other things that need to happen i mean

union swap is already live on there kerbs live on there now they have their own exclusive apps like uh optimism has stuff like lyra uh arbitrary mass stuff like dopex there's their own kind of like you know native um ecosystems developing like um magic or treasure on albert trim as well and an optimism the synthetics ecosystem seems to be doing very well so these things are coming together really really quickly and i i did tell you guys like it's kind of like a slowly and then suddenly thing where you think it's happening really slowly but then suddenly there's all these apps available for you you're bridging across you can just stay on l2 there's no need to go back to l1 and we also have now with binance integrating arbitram deposits and withdrawals that's just the beginning so really you know most of us in

i guess maybe this year even probably won't be touching l1 very much at all if ever again and there's no reason for us to right the l2 migration is well underway as i mentioned earlier i have a lot of um etho g friends um you know both whales and and not whales i mean it depends what you consider a whale but you know both whales and not whales they're migrating a lot of their stuff to l2s and being like you know it's time like l2s are finally where we need them to be and uh and and people are kind of like happy to to kind of um be on there instead of just being on l1 and you know i'm i've the funny thing is with my activity i noticed my activity go down a lot uh because of the l1 gas fees like i

only do uh my my kind of like weekly things like i have a few things i do each week but like most of my activity i tried to keep to to l2s these days as well but i mean it is always hard to migrate across depending on what's happening because you may have some farms on on l1 that you have to unwind and then re-spin them up on l2 again and you have and you may have to wait for things to be live as well because they may not be everything you need for me the reason why i haven't moved a lot of my stuff off l1 yet is the fiat on runoff rams i don't use binance and the exchange that i use for fiat on and off rams may not be supported for a while so i may have to use binance if i want to

get off l1 i'm going to go to our gym from now or something like that um but you know it would it'd kind of be kind of like i mean i would save some money but what would have to happen is that i'd have to kind of like do my stuff on arbitrary for example or optimism or whatever other l2 and then kind of like send those funds back to l1 so that i could send them to a to an exchange in order to trade it for fear and you met you guys were thinking why is he going to fiat uh taxes unfortunately i hate that i have to go to fiat but i have to for taxes like um you know half of it almost half of it goes to taxes which is obviously super annoying um but uh it is what it is so that's why i have to kind of like

go to um i go to centralized exchanges uh but i'm hoping more of them obviously support things like optimism and arbitrary so that i can myself get most of my stuff off l1 and go to l2 because the fees you know i mean the fees like i can't look people always have this meme that kind of like the early eighth holders the people with lots of e don't care about the fees because uh because they you know they they made a lot of money off eight they have a lot of eighth whatever but this is wrong for two major reasons one i don't like spending thousands of dollars in fees like that's still thousands of dollars it doesn't matter kind of like how much money you have that's still thousands of dollars that you're spending unnecessarily if you can do that stuff at l2 which you you can do a

lot of it now and two it's eighth so i'm essentially giving up eighth right like eight that's gonna be that i believe is gonna be worth more in the future so if i spend a thousand dollars on gas fees in a month for example because that you know if you're a regular kind of like on-chain user a thousand dollars in gas fees on layer one a month is on the low end of stuff like you could spend much more than that what happens if eighth goes or when eighth goes like you know 4x from here or 5x from here that one thousand dollars suddenly becomes four to five thousand dollars like and and and kind of like um you when you really think about that and you kind of like take all the eat you've ever spent on fees kind of like over the years and the price point that it was at

that point and what it is today it hurts like i went back and i looked because uh for my taxes i just went back and i looked through it all and i'm like holy [ __ ] like i spent so much eth when um on gas fees when eth was in the one to three hundred dollar range because i was doing um stuff on there wasn't as much to do on chain but i was still doing stuff and and obviously um fees were much cheaper then but like if you're doing a lot of things you would still spend kind of like all these eighth and then obviously when eighth went high up and uh like 500 or something like that the face started spiking but even then like i look back now it's over 300 3 000 so any any thought i spent on fees at 500 it's gone

up 7x since then so if i spent like i don't know five thousand dollars worth of fees or it was more than that it was much more than that during defy summer and then day five summer happened when eth was like around five hundred dollars like i think eighth when day five summer started it was only like 300 or something like that so between 300 and 600 i spent like you know tens of thousands of dollars during d5 summer and you go look back on that now and what atheists today it hurts right so when people say oh the ethojs don't care because they have so much eat it's like well they do care they don't want to have to spend like all these um this money on fees uh uh and just because they can afford it doesn't mean they want to do it and

that's why a lot of them are moving to l2 that's why i'm trying to move as much as my activity to l2 uh and i think as i said like l1 fee as i've said plenty of times our one face they're not coming down anytime soon guys like they're gonna keep getting up there especially as these l2 start competing for block space as well so so yeah just a bit of a not a rant it's just a bit of a kind of like thing that i've been thinking about lately because i'm just like sick of these memes right like these these memes that people think like every every time like i talk about fees on twitter i get this just reply guy saying this sort of stuff to me it's like oh you're a rich ethoje you don't care you have so much ace you don't care about the fees it's

like i mean i i do i do care about the fees like i don't want to be spending these i don't want to be you know using my even if i don't if i don't have to and yes i know that it gets burned right and and that's you know in some way contributing to the value of future eighth but that's not the point the point is like i want to keep as much either as possible in my pocket because i love 8 i want to stack my 8 so i can stack more validators and i think that's the same for everyone right it's not just the pain of paying the high fees it's all also the pain of paying the high fees in each now i know some people replenish their eath after they've paid it like by buying new eth but the thing is like when you think

about kind of like tax uh tax implications and stuff like that as well it gets messy depending where you are but i know some people do that too which i guess like is a solution-ish but like yeah i mean if you don't have spare kind of like cash lying on the sidelines you wait a few days until you have spare cash then heath price goes up or is different from where you kind of like um where you kind of like spent that if it becomes a bit messy there but anyway i'll leave it at that last couple of updates to get through um there was a critical vulnerability in the multi-chain or previously called any swap bridge affecting six tokens uh weth perry omt wrapped uh a b and b matic and avax so if you have any of kind of like approvals with the multi-chain contracts

you need to go revoke these approvals um before it's too late because this is still being actively exploited so you can check this out it'll be linked in the youtube description uh below i'll link the blog post for all the details here if you ever use this i don't i don't even know what these tokens are like perry on i know the rest of them obviously but i don't know what these two are but if you're affected by that definitely go check this out uh you know right now even maybe i should have talked about this at the start but yeah i'm sure if you you know you're kind of like involved in this you probably saw it by now but definitely go check this out final uh thing to talk about sam richards from the ethereum dot org team uh put together some kind of like stats

and some growth stats from ethereum.org so ethereum.org received 20 million visits in 2021 huge right five times the traffic it received in 2020 68 people are contributing to the project on github which is two times the 30 contributors in 2020 and 3 500 translators joined and translated nearly 3 million words um seven times the people and ten times words translated since 2020. that's insane like that particularly to me is insane 3 500 translators man that just really speaks to how global ethereum is right like and the ethereum website is available in in many different languages which i absolutely love by the way i hate that so much of kind of like i guess d5 interfaces and things like that are only

available in english ethereum is global crypto is global let's start getting you know these things available in different languages i know it can be difficult sometimes if you don't have translators on board and kind of like getting things translated can be quite costly but a lot of these d5 projects have massive treasuries and spending some of that to translate the website into at least the most popular languages um maybe the top 10 would be well worth it but anyway great to see this growth from ethereum.org as i've said before to you guys ethereum.org used to be kind of like basically uh uh useless like i think that's the best way to describe it and i think 2019 was absolutely useless it was it was old outdated it hasn't hadn't been updated since like 2015 then a new team came together and have been absolutely

crushing it like absolutely crushing it the ethereum website is one of my favorite websites or in crypto uh and and one of my favorite websites just in general right because it's just such an awesome site to go on there's tons of information and resources there i love the artwork i love everything about it but enough gushing from me congrats to the team then i think i'm going to end it on that for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone