AllCoreDevs update, L2 client diversity and more - The Daily Gwei Refuel #657 - Ethereum Updates

Transcript

hello everyone welcome to another episode of The Daily way refuel where we cup the latest news in ethereum ecosystem I'm your host and this designer and test the 15th of September 2023. all right everyone let's get into it so the 15th of September means that it is the one year anniversary of the merge uh it's already been one year crazy right I put out this tweet uh just before basically celebrating the one year anniversary with a few metrics here so since the merge we've burned almost 1 million each so about 980 000 eighth was burned um and I think that the net issuance is like negative three hundred thousand that's that's the kind of like um supply of eth uh going down because of the burn offsetting the issuance uh in in as well in that same time frame 11.6 million eth

was staked which equates to an additional 362 000 new validators coming online on the beacon chain so obviously a lot of um healthy stuff going on with ethereum staking and as I said here you know the markets have been bearish over the last year but the ethereum ecosystem has never been more bullish and it's not just the staking ecosystem of course is everything like layer twos all the general stuff that I talk about on the refuel from day to day uh and yeah I mean we really are kind of laying those foundations for the next uh bull market but I can't believe it's already been a year honestly it feels like yesterday to be honest even though some people will say oh well this year you know has felt so sluggish because the markets have been so I guess down and up and not really doing much and crab you know the

crab market that we talk about and there's been like a slew of negative news from regulations to other things and the only kind of light that people seem to latch onto is like the ETF stuff but that's broader crypto to me like when it comes to the ethereum ecosystem I mean I've done an episode almost every weekday of this year right going over uh the technology side of the crypto ecosystems obviously specifically ethereum here uh and it's just been up only really and I mean I've been doing this for years and it's been up only so yeah personally I I don't really feel the sluggishness I always feel like there's things to get excited about things to cover uh you know things to dive deep on and I'm sure a lot of you feel the same way and the daily grade Discord channel is always popping off so

yeah I'm having a lot of fun obviously but yeah I can understand why some people were you know may feel like it's uh it's already been like a yeah whereas I I don't I feel it feels like yesterday to me there but uh yeah I guess like um you'll see a bunch of people posting stuff on Twitter today around this uh and things like that so keep an eye out for that but yeah here's to another year of ethereum uh on proof of stake all right so uh and also before I jump into so I've got a mini rant lined up for today before I jump into that I just wanted to give a quick shot that the uh holy ski or you know I keep pronouncing it different ways I remember saying this that I would I would keep pronouncing it different ways I say whole Sky then I

say whole ski and then I say holesky there's different pronunciations here so if you hear me saying any of those three I'm referencing the same thing uh but that that public test net is going live in what two hours from when I'm recording this so it'll probably be live by the time the episode goes out uh and you can actually monitor this at this link here um I mean it's probably going to be irrelevant by the time uh by the time the episode goes out but yeah that that public testing is going live today with 1.5 million validators so the biggest ethereum uh public test net in history in ethereum's history uh and then girly it's replacing girly but girly will be uh kind of uh phased out towards the end of the year I believe so yeah still got a few months left there of of goalie but

yeah whole Sky whole ski holeski should already be live by the time you guys are watching this episode or nia watching uh or near live watching this episode all right so actually I where's my rant I think it's yeah yeah okay my Randy's here so I'm going to move the rant over here because I think it's important for me to get this out of my system before we move on to do some other things and this is going to be a very eighth kind of like core Dev heavy episode today I think I've actually only got like one or two other things that are not core Dev related uh but yeah the reason why I say there's going to be a bit of a rant today is because we had the latest all-core devs call that I mentioned yesterday um that that happens um and that EIP that I was talking about

around the churn limit so EIP um I believe it's 75 14 uh got approved for dencoon and so did another eip7516 which is uh adding a blob base fee op code here which is a purely technical change there's nothing controversial about that in my mind and it is definitely needed as kind of like a sister EIP to erp4844 but what I'm really concerned about is Erp 7514 now uh this is going to be a bit ranty see but I'm going to give a bit of technical background here before I start my rant so what exactly is Erp 7514 well it was an EIP that was proposed not too long ago I think maybe a couple months ago maybe not even that right it's very very fresh as an EIP and it proposed to add a

Max Epoch activation churn limit so right now uh you know when validators are entering the ethereum beacon chain 12 validators can enter uh per Epoch so there was debate around um basically pausing this at 12 as part of a previous EIP um or reducing it uh uh sorry pausing it at 12 and also pausing the exit queue as well but then this new Erp replaced that old one and it only affects the entry crew does not affect the execute so what happened was basically that Erp 7514 got approved and the churn limit is going to be set to 8. so essentially we're actually reducing the current churn limit from 12 to 8. now the reason why

this was done is actually technically sound I actually do think that this EIP is necessary generally but my main issue with this AIP is how fast it happened and how it has a definite negative consequences in my eyes that haven't been discussed enough and I don't think the community had enough input on this before it was approved I feel like it was rushed in honestly and I I kind of like try to keep up as much as I can with the core Dev stuff and try to you know not not get involved too much if I don't feel there's a reason to get involved with anything or not not try to kind of like spread it's not fud but like spread kind of dissent against decisions that are made but this is something that I feel really strongly about so yeah this EIP as I said is it's

part of the dencoon upgrade now the churn limit is going to eight uh and as I said I do believe that it is a technically sound EIP it actually is is needed I just wish that it was given more time to have more research done on it and it was given more time to have more Community input and I said before I think I say for the last few weeks that I wanted this to actually be pushed out to Elektra which is the next ethereum upgrade rather than it going live in dencoon now now there was a pretty good post from Dan kradd out today that actually explained why the core devs and and researchers decided to do this change and why they think it's necessary so I highly suggest you go and read that but the tldr why they think it's necessary is basically that uh they're

kind of concerned that the uh I guess like validator set is going to grow too quickly and cause instability on the ethereum Chain because there has been a kind of like um a thought process to limit the amount of validators on the ethereum chain for a long time now I mean I've talked about this on the refill there was that for I think it's been at least two years since this research started and basically limiting the validator set to 30 million validators and then just doing a round robin of of selecting validators so people could still stake but you would do a round robin on on the validator set there and then there are other kind of proposals to reduce the validators like increasing the max max effective balance so people would consolidate their validators and a few other things hanging off of that there but because

none of that stuff is ready right now I'm because the core devs and researchers are worried about the current growth rate of the the validator set it was proposed that we put in this kind of Band-Aid EIP into dencoon in order to alleviate those concerns and give the core devs and researchers more time to decide on the actual fixes right and as I said I am totally fine with that but my issues begin at how fast this was allowed to basically be approved um so I'm going to cap off uh not cap off I'm going to start off this with uh the issues themselves so they're them dropping the churn limit them I mean this EIP dropping the churn from 12 to 8 is in my view a hit to ethereum's Credible neutrality it's a small hit

it's like it's not going to kill ethereum or anything it's not gonna it's not a huge hit but it's a small hit and I'll explain why there is a social contract around the chain at any given time and that social contract is enforced via protocol rules and Via expectations out not just a few weeks out not just a few months out but potentially the years out on how those rules will change now because this EIP was allowed into the network or allowed to be scheduled for a network upgrade within a matter of a few weeks what ends up happening is that the social contract is not given enough time to adjust to that and to get community feedback on that and it basically gets broken because the existing social contract is not uh is not changed it has changed too quickly in my view obviously this is all

my opinion here other people are going to disagree with me on this but that breaks it in my view because now essentially what you've done is by reducing it from 12 to 8 the expectation of what the tournament was going to be has has gone away so it's not just a cap on the churn limit at 12. it's actually actively reducing it to eight which breaks that uh that that social contract to me and it also as I said has a has a bit of a hit to ethereum's Credible neutrality here but on top of that as well this is effectively a monetary policy change in my eyes a very very small one but it is effectively a monetary policy change because now only eight validators per EPO can go go in um whereas before well I guess like post dencoon only eight validators per Epoch

can go in whereas currently it is 12 which means that the validators that come in will be be slower than it otherwise would have been with the the current rule set right and that means that uh the I guess like issuance goes down essentially does it I mean it doesn't go down but it doesn't increase sorry it doesn't go down it increases at a rate uh that was um that is less than it would have been without this update there now honestly this is not a huge deal to me uh I I don't think it's it's kind of like a big monetary policy change and honestly it still fits in with ethereum stated monetary policy of minimum necessary or minimum viable issuance where essentially we only issue enough eth that is minimally viable to secure the network and really in this

sense we we still are kind of like sticking by that so I think that's fine um and then the third issue I I I had with with this uh and that the one that I brought up was that it was rushed through in a matter of weeks I don't like how that was done I don't think there was enough Community input on this at all I feel like that it was definitely um a rush through and then uh fourth I actually don't consider this to be a critical thing to get into the network in dancoon I actually believe it could have been pushed out to a lecture because and this goes back to what I was saying at the beginning where the justifications given for doing this EIP to begin with was because there were was concerns around the validator set growing too quickly now what are these

concerns based on well of course they're based on the fact that we've added a lot of validators recently right post withdrawals the the validator entry queue went up to like 90 000 stayed there for a bit but since then it has been trending down now I believe this this entire EIP is basically just based on that really at the heart of it it's based on that kind of small relatively short period of time that we've had where the deposit queue was so large and so full and the only reason in my mind about why that happened was because we had withdrawals right we had withdrawals in April that was a massive de-risking event for the beacon chain and for ethereum and more people wanted to stake but not only that people were reshuffling their steak Kraken had to uh

Force withdraw all of their um uh or their all of their retail customers stake and you know there was probably a significant portion of those retail customers that just went and staked with someone else so they re-entered the queue right they came back into the entry queue so there was a reshuffling going on there that in my mind is at that scale is a one-time thing right enabled by withdrawals um and the the influx that we saw is also in my mind a one-time thing because I can't think of any other event that would lead to that I don't even think a bull market would lead to that kind of demand all at once for uh for kind of like each staking maybe you could argue some kind of like staked ETF might do that but that is so far away in my eyes I don't even think it's worth worrying

about because what the cordovs are worried about is the more medium-term future the more 6 to 12 month future and if you look at it from that perspective I really don't think that we would add Enough validators by the time Elektra came out even if electric came out on like July of next year I really don't think that that we would add enough validators uh where it would cause the network to become unstable um so that that's that's my view of things maybe I'm wrong here but Dan kradd and the reason why I say that I think this was the the impotence for this EIP was that Dan krad actually put a little sentence here in his post where he said if the deposit queue remains full we're looking at 50 of all each Stakes by May 2024 escalating to 75 by September 2024 and

potentially 100 by December 2024. this is based on nothing in my eyes this is literally honestly this this entire sentence right I read it and I was like wow this is just shocking to me this is as I said this is this sentence is based on the assumption that the uh the the um deposit queue is going to act like it has uh over the over the last few months since withdrawals was enabled in my mind this is not even uh not even based in reality because there's no way that the deposit queue is going to remain full until May 2024 here when it's been coming down over the last few months it went down from 90 000 now to 35 000.

we're lit we're literally uh kind of churning out or turning in all those validators already and and within two weeks I think the queue is going to be zero unless we get like a massive influx again which as I said I don't expect to happen so giving these numbers here in my mind is is not a justification for anything this is just assumptions and these are shaky assumptions at that so if these are the assumptions that the core devs and researchers were working off in order to rush this AIP through I I don't think that that is a good way of going about it and um that really is at the heart of I guess like the whole issue for me is that I believe that this Erp was rushed through based on shaky assumptions based on not enough research and not enough I guess like Community

input and I understand why it was done because obviously the core deficit researchers know that the protocol better than I do and they know what will happen if that amount of eth was to to get staked and the network can't handle it you know obviously we want to prevent the network from becoming unstable as I said I'm all for the EIP on a technical level I just don't think that there was enough research and Community input and and everything done around this EIP it didn't go through the ringer so to speak it didn't go through the normal in my mind governance process for such a big change because it might seem like this is a small change on the surface but as I explained to you there are big consequences here of this change and on top of all of this the last point that

I'll bring up because as I said it this is going to be ranty and I've ranted for a while here the last thing I'll bring up is that by limiting the churn you actually now uh play favorites with large staking providers they're already at an advantage because they can socialize the I guess like quote-unquote opportunity cost of the entry queue but the smaller players can't so essentially if Lido is like in the entry queue for two weeks um they're just socializing that across all of their validator set if a solo Staker is stuck in the entry coup for two weeks they have to wait two weeks they're earning nothing basically right so you're now favoring the bigger pools and you're actually making staking centralization worse with this EIP and I don't think that that was thought about at all because I believe if it kind of

was then this EIP probably wouldn't have got in again this goes all the way back to what I was saying at the start about the fact that my main issue with this IP was that it was rushed in I don't think there was enough research done on this and I don't think it's as critical as the core devs and researchers think it is anyway and rant there because I don't want to spend this whole episode ranting but I feel very strongly about this and I feel like everything that I have said or most things that I have said have not been considered I don't know if my rant is going to reach the core devs and researchers and they're going to rethink their decision here about including 7514 in in dencoon honestly if if you had a gun to my head and I was forced to

include it or not include it I would probably include it even though I just rancid about the fact that I thought that it it um I didn't like how it was included because I understand that when it comes to the protocol we need to ER on the side of caution we need and we need to be as conservative as possible and this is exactly what it is they're just being super conservative here but my main issue is that it was just rushed through too quickly I feel like it could have been pushed out to Elektra and and still being fine but if the core devs and mergers want to play it as safe as possible then yeah okay it makes sense to put it into dencoon it is a really simple change right it's not going to delay the timeline on of dencoon which I

hope that we get in in you know November um uh now I think we we I mean I haven't seen anything that we wouldn't get in November maybe it gets pushed out to to December for some reason but I don't think that's going to delay anything uh but yeah that's that's my rant on on that one there but as I said please go read Dan kradd's Post it's actually full of a bunch of great information besides that sentence that I pointed out that I didn't like the rest of the information is great uh it's not too long of a read and it gives kind of um the justification around why this change was made and why it was done um you kind of last minute here I mean the big reason is that none of the other Solutions are ready guys like the max effect balance

increase is not ready it's still in research phase the validator cap thing it might not even happen because if we just if we increase the max effective balance of of all the validators you don't need the cap because it logically follows that a lot of the a lot of the stake will just consolidate uh sorry a lot of the validators will consolidate and all that that stake will consolidate into a into a much less uh uh set of validators rather than the reality that we kind of live in today where there's lots of validators um which is you know if it was the double from here it would potentially cause um the bigger change to become unstable and this goes back to actually to the whole Sky testing it there's the whole reason why they're launching the whole Sky testing it is to actually test these

assumptions as well so a lot of the research is is being done around this already but as I said I don't think that the EIP had enough time to bake I feel like it got you know ripped out of the oven it's like some Half Baked kind of potatoes tastes gross um that may be a loose analogy but that's how I feel about that there but anyway we'll link all the relevant stuff in the YouTube description below for you to check out all right uh and the other EIP actually that I mentioned was 7516 which is the blob base fee op code EIP you can go read about this I'll link it in the YouTube description below but this is basically as I said a sister EIP to erp4844 it helps it on a technical level um if I'm understanding it correctly these are the kind of two main points

here that this EIP allows roll-up contracts to trustlessly account for blob data usage costs and blob gas Futures can be implemented based on it which allows for blob users to smooth out data blob costs so it's basically in the spirit of erp1559 I guess of making it more predict making gas cost more predictable for blob users and making it so that they can smooth out their data blob costs as well all right so in some more positive Accord Dev newcr Raul from the prylabs team put out a tweet where he said uh I just verified a message signed by ethereum validator BLS key on arbitrim stylus and deployed it to test net and he says here why is this a big deal underneath the hood the signature verification is written in Rust and the math is too expensive for it to be done

in the AVM so this opens up a ton of use cases around ethereum L1 and Roll-Ups and we're just getting started so very cool little update here to arbitr on the arbitrim side of things using arbitrim stylus which as you guys know is a new development framework that is based on wasm that uses languages other than solidity and is like a sister kind of framework uh next to the evm in the arbitrim world TR so you can actually check out how to do this yourself as a GitHub repository here which I'll link in the YouTube description below uh but you can go check that out and play around with it yourself alright moving on to an update from nevermind now so they've said here the Netherland client now has a draft implementation of the op stack execution specs where stabilizing it as we speak week the implementation

is done as a plugin our client's architecture and plugin system allow easy customizations without compromising stability and performance so you guys know that optimism and basically a lot of the l2s uh trying to do client diversity of their clients that you run and the nodes that you run on their respective networks another mind has their hat in the ring for optimism here on the execution side of things obviously because never mind builds execute an execution client for ethereum L1 but I love this I I really love that we're getting client diversity on l2s because it's all well and good to extend ethereum's block space so to speak with these l2s and for these l2s to be decentralized and secure in their own ways but really at the heart of I think a lot of the ethereum ecosystem is

diversity and client diversity is critically important to ethereum L1 and I believe that it is critically important to anything that is essentially when you when you really boil it down um anything that is a blockchain because for example the same thing can happen in L2 that can happen R1 around liveness where and essentially one of the clients could have a bug in it and it goes offline well you want there to be able to be other clients that can stay online or be online in order to to prevent against the network potentially going uh going down or anything like that and it's not just the full node it's also things like sequences and stuff like that and it's also the fact that you want to distribute out the developer kind of load so to speak so it's not just op Labs developing all the uh kind

of optimism software here it's also various teams around the world doing it and they're doing this with the op stack overall as well and the other L2 teams are doing this too where they're basically pushing stuff out and encouraging different teams around the world to develop these things and also giving grants for them too uh you know the grants are usually done in the native token as well so it kind of aligns incentives so there's a lot of stuff going on here a lot of positive stuff going on here on the L2 front that I think we're going to keep seeing and I really do think that the winning l2s at least the generalized ones are going to look a lot like ethereum L1 in its you know architecture-wise uh development philosophy wise uh you know a distribution wise all those sorts of things I think it's just going to look

like ethereum L1 and that's what we want because ethereum L1 is the gold standard in my eyes of how to build a truly decentralized secure blockchain now obviously ethereum L1 is not scalable but it's not trying to be whereas the l2s come in with their superpower which is being scalable they're never going to be as decentralized or secure um as ethereum L1 itself right uh because I mean there's you know and there's debates around this obviously because if you have a full-blown roll-up you basically inherit all of ethereum l1's security but the kicker here is that you inherit all of ethereum L1 security at ethereum L1 so let me explain let me break it down because this is something that I don't think is talked about enough so essentially your users if if the L2 goes offline the users of that L2

can always get their funds back on L1 now going back to L1 doesn't give you scalability anymore right if the L2 is completely offline and you have to do transactions on L1 to get your funds back you've now sacrificed the whole kind of purpose of the L2 right which was to give you more scale so that's why I'm saying that the L2 will never be as decentralized and secure as ethereum L1 because because it won't be able to offer you the scale once the L2 goes offline it can still offer you the decentralization and security of eth L1 but of itself it is not as decentralized as and secure as ethereum L1 hopefully that kind of explains it there and my way of thinking um which is I guess like just how they're designed and how it all works

which is fine but in at the end of the day ethereum L1 is the gold standard and it all in my mind it always will be it will be the the global kind of like most secure global settlement layer that we have as decentralized as we can get it as stable and reliable as we can get it and I think that that's going to continue for the foreseeable future I really don't see any kind of like close second to be honest I mean for lack of a better term uh or a better meme there is no second best as sailor says about Bitcoin but boy is he wrong about that there is a there is a second best and it's Bitcoin to ethereum anyway no no I'm not gonna I'm not gonna rant about that um but yeah that's that's kind of like my take on that one there

all right moving on to just some quick news here that the block published so SSV Network which is a uh Network that's um being built with DVT have launched their decentralized staking mainnet with a bunch of partner apps here so you can see here in the block uh on the Block kind of article uh SSV has launched with stata and car stake star and a bunch of other staking pools here I'm not gonna not gonna um not gonna go through them all there and ssb's mainnet deployment occurred in multiple phases starting with a limited launch last month which I believe I covered and this current stage permits the public to stake in the SSV via uh via the Launchpad apps and you can see here what I guess like the SSV um network is it's a staking mechanism

by connecting users to a network of operators responsible for jointly managing ethereum validator nodes in a trust minimized fashion uh and using uh DVT technology as well to achieve that there so yeah you can go check out the article for more details on that one uh there but yeah I've got a another few minutes here actually on on today's episode but I wanted to quickly talk about uh something else and this is not Market talk I usually do Market talk when I have stuff left to talk about but no this is not Market talk this is talk about I guess like the general future of ethereum from like a really high level perspective I think that my rant before about these this EIP being rushed in and about how I didn't like that and about how um I think that you know there wasn't

enough research or Community input done here this is what this goes back to what I was saying where like the ethereum broad map is very technical like pretty much everything on there isn't going to be controversial and really um even things that are controversial like like what I was ranting about before technically are fine it's more the implementation details of it it's more the kind of like how it makes it way how it makes its way into the network way a bit because not every technical upgrade is actually a positive thing even though I believe that AIP is not everything will be and I sometimes worry and I feel like this is not it's not a huge worry of mine but this is like the worst case scenario of you know potentially one day fire into the future uh ethereum governance somehow gets captured in some way

without us knowing it has been captured and this is always the worry of any blockchain network that's trying to be decentralized right where it gets captured in a way that it doesn't know that it's captured where essentially uh whether it be special interests or people trying to do things with good intentions leading to bad outcomes it just captured as it in a way and it becomes something different to what it once was and and and it basically means that the network kind of stalls out I actually think this is what happened to bitcoin to be honest um for uh in a lot of ways where essentially the governance was I don't know if captured is the right word but it was like dictated by a relatively fit you know very I guess like aggressive group of people for Bitcoin

to become one thing when a lot of people wanted it to be another thing and obviously Bitcoin is now what it is and the people who wanted that to become another thing is it forked off in the form of Bitcoin cash and other offshoots ethereum is not a fork of Bitcoin but the social aspect is because vitalik wanted to build ethereum essentially on bitcoin but he couldn't because that's not what the Bitcoin uh I guess like Community wanted at the time so he went and built ethereum and ethereum has obviously been on its own path uh ever since then but I worry far into the future that uh if we don't kind of like ossify the base layer and we don't kind of like uh and ethereum keeps growing it just becomes a question of when not if there are special interests there are uh

kind of like people um putting things into the network that uh they're doing so with good intentions maybe but it just leads to about about outcomes now I'm not seeing any of that right now and I don't think EIP uh the churn limit EIP is that at all to be honest I think that that was done with good intentions I just wish there was more time for it but it's okay we're okay for now I think that um uh uh hopefully my rant from before reaches some core devs and researchers we'll see what they say I'm happy for them to completely disagree with me I mean they know the the network better than I do they know the protocol better than I do I mean they build the software so who am I to to basically tell them uh you know what's from what's what from what but

yeah as I said my tail deal of the ramp before was basically that I just it just robbed me the wrong rubbed me the wrong way how fast the EIP got in considering that I don't think it's critical it was actually critical if if it was a matter of if the Erp didn't go in and then a month's time the ethereum network would fall over I'd be all for it but I feel like they're playing extremely conservative with it which has led to some of the negative externalities I'm talking about and this is exactly what I'm talking about when I say that there are good intentions here which could potentially lead to perverse outcomes and I labeled them before in my in my kind of rant there but anyway I'm gonna end today's episode there uh for for today and it is uh kind of the weekend

so yeah I guess like thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subscribe to newsletter join the Disco Channel and yeah as I said it is the weekend tomorrow so I guess I'll catch you all on Monday thanks everyone