Alpha Finance exploited, NFT craziness and more - The Daily Gwei Refuel #57 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today is the 15th of february 2021 all right everyone what a crazy weekend so a lot to get through but before we do that i wanted to give a quick little market update here as we did see some volatility in the markets over the last few hours uh so we saw eath drop from a high of about i think 1840 down to about 1666 and then it popped back up basically we're almost back at eighteen hundred dollars now at time of recording which is quite cool um you know it's always funny seeing the sentiment you know on twitter and stuff kind of change really rapidly depending on whether what the price is doing

but while i was watching this i was like this is nothing right and and i'll zoom out here on the chart and you can see what i mean by this if you actually see uh here and this is the four hour chart to the left here on the 10th of february which is about five days ago right the price basically just went back to that uh and then you know the fact that we've bounced off that kind of bottom there and now we're back up to basically you know almost back where we were but essentially we were at this price like two days ago you know you kind of zoom out and see this perspective and you're like what's everyone worrying about right it's just it's just always funny to see that sentiment there so yeah the prices is the the bounce has been quite quite bullish and quite good

i mean it shows that there's a lot of people still wanting to buy kind of eth and i guess like the rest of the cryptocurrencies as well kind of fell it was kind of like a market-wide sell-off there was like i think 1.6 billion dollars worth of liquidations across like d5 and and that stuff too so it was it was a pretty good shakeout in general i think um you know usually these things happen and the goal is to kind of like shake out the people that are over leveraged right um you know and basically liquidate them because there's just too much froth in the market so you know i guess like uh some people like to say bullish selling like they'd like to say it as a joke but in reality it can actually be true sometimes where you know selling clearing out the froth

clearing out the leverage can lead to a more healthy market going forward and that's kind of what we saw there and you know of course i'm still bullish this is nothing for me this doesn't change anything you know if i scroll out you can see we've had these kind of like dumps like many times over the last you know month month and a half two months right and we've always had these sorts of things you can see here dump down up down you know up up down dump down again like it's just this is par for the course of crypto and i know you all probably all know that so i won't hop on about this too much but yeah i just wanted to give a quick little update on that one there um and on that note i saw like a few people asking questions around why does

the gas prices or the gray prices on ethereum spike so high when uh the price is volatile right and i've spoken about this before but the two main reasons is that when there's that much volatility arbitrage bots are going to go crazy right they're going to try and get their transactions in and they don't really care what fee they pay as long as the result of their transaction is still profitable so there it depends on the variance of these bots but you could theoretically set up a bot that paid the that paid 99.99 of the profit it was going to make in the transaction fee because it would still have made 0.01 profit right and it's not exactly like that there is variance there but if you have to pay 90 of the transaction um as fees right and

about 18 to 90 of the profits sorry and you still profit 10 at the end of that you're probably still gonna do it right and that's what kind of pushes the gas prices up so high this is a major reason when the markets are super volatile because only a couple hours later when the volatility died down their gas prices went back to under 100 which is quite quite crazy and then on top of this as well people you know scrambling to cover their leverage positions now i was just talking about how people get shaken out in these things you know if you have on-chain kind of leveraged positions you're going to pay whatever fee you need to to make sure that you don't get liquidated so that pushes it up as well and you know there's only a maximum amount of transactions that can get into a block

right there's around 15 transactions per second on average so you pay a higher fee because you want to be in the next block right you want to beat everyone and you're willing to pay whatever fee to get into the next block depending on your circumstance so those are the two main reasons why we see these bad fluctuations and this is actually something that eip1559 will help with i've mentioned before how 1559 is not actually going to make gas costs cheaper but it will make it so that you can have better fee estimation and smoother transactions rather than having to do this kind of race um you know at least for a part of it like there's obviously the way that eip1559 works is that uh there's like a base fee which which makes the transaction smoother and everything like that

but then there's also a tip and when you're in the tip kind of part of the the uh the block um the transaction kind of gas fee mechanism reverts back to what it is today so you know it's not a perfect solution but it does help a lot so yeah for those who wonder you know will 1559 lower the gas costs no it won't unfortunately not in any kind of impactful way but it will make kind of a gas estimation better make transactions smoother and we'll fix a lot of these issues that we see today for sure on the bullishness about eighth kind of note as well the grayscale eath trust is uh basically still going up and going up a lot actually this is a dashboard from the blocks data section which i like what uh keeping an eye on um for those i mean

most of you probably know this by now but the grayscale ether ethy trust basically holds ethan it really isn't a one-way street like eat only goes in it doesn't come out you can see from this chart that it rarely ever comes out it's pretty much always like up only and they're up at over three million each in that trust right now and it's still been going up over the past few days so yeah that's another very bullish thing to keep an eye on i think um you know especially the rate at which is going up as i said it doesn't really go down but the rate at which it is going up is what you really want to kind of pay attention to and you can see here it started like pretty much in like march or april right after that dump we saw last year uh it kind of like started

skyrocketing from there and it's kind of kept going up and you'll notice this flat line here that's because they actually turned off the fund for a couple of weeks for for some for some reason i wasn't sure on the exact reason i haven't checked on that yet but then it's continued up from there so yeah another kind of bullish indicator here that eth is still being bought up by both institutions and kind of retail investors who want this exposure in their retirement accounts basically all right so i think the biggest news from the weekend was the fact that there was an unfortunate kind of hack or exploit within d5 between alpha finance and cream finance so for those who don't know uh what happened i'll give you kind of like a summary here it was actually one of the most complex exploits

and one of the most creative ones i would say that people have seen yet in d5 and it was it was funny because when chatter of the exploit first came out people were blaming cream and then the cream token price dumped and then a couple hours later people like wait no this isn't cream's fault this is kind of on the alpha finance side so then alpha's token price dumped uh so it was it was funny to see that the market was just following the kind of sentiment on twitter and kind of like what people were saying because the market itself didn't know and and it was funny to watch people get like confused between it like i originally thought it was on creamside then i saw people say no if you actually look what happened it's on alpha side so yeah what i'll run through um i'll run

through what happens so basically what alpha finance does as part of one of its products is it borrows money from cream's iron bank at zero collateral so for those who don't know the cream iron bank is a kind of i guess pool of capital that other protocols can access without putting up collateral to to borrow that kind of capital now this was introduced a few weeks ago it has been a pretty uh kind of innovative feature that's come to d5 and i've talked about it before on the refuel so there's kind of nothing wrong with the underlying mechanism of how it works that wasn't the exploit what the exploit was was that because alpha finance is whitelisted to borrow from this iron bank so the only people who can borrow or their

only kind of protocols that can borrow have to be whitelisted so alpha finance is one of those protocols i think it's the only protocol that's whitelisted so far to borrow from the iron bank so it did it you know as part of its products and for its users it borrowed uh uh capital or sorry uh kind of um liquidity from the iron bank uh put it into its own system to do to do whatever i won't go into the details of what happened there um and but basically the way the exploit worked is that someone very craftily was able to kind of i guess impersonate an alpha finance kind of our contracts so what they did was they made a new kind of contract smart contract that looked like it was alpha finances so the cream iron bank

thought that um the the the kind of contract that was withdrawing uh i guess capital from it was part of alpha finance but in reality it was it was fake it wasn't actually alpha finance themselves but they were able to use a mechanism to trick the protocol into thinking that it was now i mean they have a postmortem here alpha finance themselves and it's important to to remember that the actual exploit and the debt um that's owed now i guess the short forks i think the export was for about 34 million dollars is actually between the protocols because it was the alpha finance protocol that borrowed the money from creams iron bank originally right wasn't the users yes the users have access to it as part of alpha but the debt is not between the

users and alpha the deputies between alpha and and and cream so that begs the question like who's going to cover this right like is is is alpha going to cover this are they going to sell treasury assets to cover this right who knows they haven't put out like a plan yet i think there are multiple ways they can do this um but yeah because of the the complexity of this kind of exploit here and how it works um people think it might be an inside job because it required some very specialized knowledge of how uh both protocols worked essentially how they were interacting with each other how the kind of i guess smart contract intricacies worked for alpha finance so people were speculating you know could it be one of the team members

could it be one of the auditors right that found this kind of bug in an order and figured wow this is actually really profitable and maybe i won't report this bargain and i'll wait until it's live and then i'll exploit it no one really kind of knows obviously alpha finance did mention they have a suspect already in mind i don't think they've mentioned who that is yet maybe they won't but you know maybe the the hacker was sloppy here who knows but yeah i mean this is this is quite crazy because it's very it's very well and good to say you got an audit right of your of your smart contracts of your code but an audit isn't actually going to cover economic exploits a lot of pretty much most of them don't i think um and because they're relatively new right

it's normally not part of the scope of a smart contract audit to cover economic exploits and it's something that you kind of have to look at yourself as like an internal team so because of that i don't think the auditors caught this and i'm not saying that the auditors were the ones who pulled off an inside job but if they were maybe they caught it and then i guess they didn't want to report it but that's just pure speculation and and i probably shouldn't even be bringing that up but uh and that's that's not true i haven't seen anything about that it's just like pure speculation that i've seen on twitter and and myself speculating too but in general from what i know the auditors aren't looking for economic exploits whether that's an exploit via flash loan whether that's this kind of exploit with with uh someone faking an

alpha finance contract and being able to access kind of uh creams iron bank i just uh not not totally sure there but uh because it was so complicated that's why we had the kind of market chaos where the cream price dumped really hard and then the alpha prize dumped after and i don't think the cream prices actually recovered from that dump unfortunately uh so it's a bit unfortunate that i guess cream kind of like wasn't at fault here and they still copped like most of the uh the pain i think from it um it's unfortunate there but alpha was quick to respond here they have a postmortem out here if you want to go read it it'll be linked in the youtube description um this t i mean i i'm a very big fan of the alpha finance team in general and their

products and everything like that full disclosure i hold alpha tokens here and i also hold cream tokens as well just should put that out there um but basically you can read the full breakdown of what happened here they've got links to the transactions right they've got exactly what happened they've got how much kind of like how the uh how the exploit actually worked um uh from from i guess like the technical point of view as well so uh yeah definitely if you're interested go give this a read i won't go over the whole the whole thing here but i think in general what this points to is that or you know a smart contract audit is not enough anymore you need to basically if the auditors won't do it you need to examine your own protocol for the possibility of economic exploits and you need to get that peer across

examined by your peers in other kind of projects and stuff like that and you need to do it lots of times it can't just be done once you have to keep kind of looking at this you have to even when it's live you have to keep thinking about this if you see new attacks happen you need to you know and that aren't that don't involve your protocol you probably need to look at your protocol be like okay could this happen to us and if it could you need to quickly fix it because you know if you don't figure it out someone else will figure it out for you and steal money from your protocol uh because there are probably i wouldn't say a many people there's probably a handful of really really really smart people that are able to pull this off in the world

and they're probably actively looking for these opportunities all the time on chain right and if you're you know you could probably get away with it if your protocol was like small and wasn't really known but if your protocol is really popular and has a lot of money in it that's a very juicy target for these kind of um hackers or exploiters right and if they can get away with with doing this which a lot of the time they can because one you know if they still eat they can just wash it through tornado cash if they steal stable coins they can also wash it through tornado cache and then you know if they have the eighth on to a new washed address they don't have to go to fiat right they don't have to try and get it through an exchange they can simply go to stable coins and

just do whatever within d5 is stable coins they could get like a debit card and then pay their bills with that right we're gonna get to a point where stable coins are ubiquitous and visa and mastercard are gonna have them integrated so you know these hacks are just gonna become more and more i guess profitable not only from a monetary perspective but also from uh you know you don't have to worry about exiting anymore because you can just exit to fiat on chain you don't have to exit the fiat in like the i guess exchange space right the centralized exchange space where you know a lot of centralized exchanges will block you from kind of depositing there so yeah i guess the trdr here is that this was a very novel exploit that hadn't been done before within d5 i feel really kind of bad for the alpha

hamora or sorry alpha finance team here that they had to deal with this this is a very big loss 34 million dollars i'm not sure how they're going to cover it they have i think over a billion dollars in treasury assets most of it being the alpha token i don't think they necessarily want to dip into that as that would be a pretty big market shock to just sell 30 million alpha tokens or 30 million dollars worth of alpha tokens sorry so maybe they'll take an innovative approach like yeon did remember last week i talked about how yearn covered the loss from or is covering the loss from their hack by using the the wi-fi tokens that they printed as collateral in maker to draw die and then kind of uh farm with that die and then the kind of like i guess protocol fees and performance fees

go to uh paying off that kind of debt um so maybe alpha will do the same thing here i'm just not sure but yeah i just wanted to give like a quick rundown there as i said there's a more technical explanation a more detailed explanation in this post which will be linked in the youtube description and yeah i guess keep an eye out because i think we're gonna see more and more of this stuff happen uh you know i'll be very surprised if we go with you know we go like a few months without a defy exploit or hack only because there's going to be a lot more d5 apps coming online right so the honeypot gets like even bigger and a lot of people building are building kind of these apps for the first time so they might make mistakes that that other kind of more experienced

developers won't make but unfortunately and what i read on online is actually a lot of the auditors are pretty much booked out till i think like may or something like that so you know if you need to get an audit done and and you have to wait till may but you want to you need to get your product out because you know it's a competitive environment it's a bull market and everything like that you might just forgo that audit and say oh well i'll just peer review it i'll get like a few different people to look over and if it looks legit i'll deploy it and then you get a hundred million dollars in your contract and then you know there's a there's an exploit just sitting there that's probably gonna get exploited so that's why i think we're gonna keep seeing this happen this is like basically saying that you

know uh people you know this is like people deploying websites right and then those websites getting kind of exploited or hacked or put malware put on on on them because you know i guess in the website world they're not really audited either because it's not really a thing that you do um but in general uh i think you know it's just gonna get worse from here unfortunately i i wish i could say it would get better but you know the way to protect yourself is is definitely to use trusted protocols i know alpha finance is one of the bigger protocols and was and was thought to be kind of like trusted and everything like that but i'm talking about like the big protocols like are there like compound like makeup there is a reason they are the top protocols like unisop as well right they are the reason that they have the

most value locked and it's not just because they're they're the biggest it's because they're the most secure too like you know makers never been hacked they've had one economic exploit that involved the keepers which was supposed to bid on the collateral back in march of last year and that wasn't really maker's fault um so and compound as far as i know has never been hacked unicef has never been hacked uh ave i don't think has so yeah there's a reason why there's lots of money in those protocols and i personally will you know only use uh well for like if i'm putting a lot of money into something i will only use those top protocols as well so that's a very easy way to protect yourself another one is insurance but that's still a very nascent field right now the only one i would trust right now is

kind of nexus mutual if i'm being honest and that has kyc too um but you know there's cover there's yam that's doing umbrella protocol which i don't think is live just yet or might be live in a limited fashion so yeah i mean as i've said plenty of time still very early in this space if you're interacting with this stuff this is just the risk you have to take unfortunately and i would actually the way you kind of mentally kind of prepare for it is that if you put money into something kind of say to yourself i could lose this right i could lose all of this because of this this and this reason and i know that's kind of crappy to say but i think that you know that's how you kind of prepare yourselves for these things and if you you know you're not comfortable taking

the risks then don't do it you know no one's forced to do this stuff or do it with like a small amount of money that you don't mind losing so yeah i mean give this post a ready for the full breakdown here uh and then yeah that's it all right next up we have this really exciting podcast from camila russo of the defiance so she had mark huben on her podcast recently and i actually listened to this it was pretty amazing actually uh you know you might have seen mark cuban tweeting about crypto specifically ethereum d5 nfts on kind of twitter lately and you know this podcast just kind of i guess reinforce the fact that he really knows what he's talking about uh i'm not gonna kind of like go over all the all the juicy bits here but i

highly recommend going and giving it a listen because he's not just some guy who's tweeting about some random coins on twitter and some random things trying to like catch a trend he's actually deep in the weeds and knows what he's doing he's played around with a lot of this stuff he's really really into nfts especially which has been a very hot topic over the past few weeks i think as well but it's been really awesome to just see uh to just hear him um kind of like talk about this stuff like i will talk about with my friends in d5 right for example so yeah definitely go give this a listen i'm not going to spoil it for you because there's a lot of juicy bits in there and it was a very very fun listen so thank you to camilla for for getting him on and kind of putting

this together i thought it was really great speaking of nfts so for those who don't know hal finney uh is a kind of famous bitcoin developer i mean very early bitcoin a lot of people consider him to actually be either satoshi himself or themselves or at least part of the kind of satoshi circle if satoshi was actually a group of people so and and unfortunately hal finney passed away earlier on i think a few years ago now uh so he basically lives on in memory but he has a lot of i mean he was an early cyber cipher punk sorry um and he was as i said very early bitcoin so justin here posted on twitter today that hal was actually talking about crypto trading cards

back in 1993 right so 1993 like get crypto you know basically nfts crypto trading cards and this was long before bitcoin came out right um but back then there were actually attempts to do this right digital money digital collectibles all this sort of stuff um so yeah this is a kind of note from hal finney on compuserve.com and he posted this in 1993 and uh you know i'll let you read this i'll put it in the youtube description if you want to read the whole thing but basically uh yeah this is crazy and i kind of like made a comment here helfini was a time traveler you can't convince me otherwise because not only did he kind of put these really early kind of comments out about nfts and stuff like that

but if you go back and look at a lot of the posts he made on the bitcoin research farm in the email trails with satoshi he was very forward you know forward-looking he kind of like could tell or at least had a kind of idea of what the future would look like uh one day right far into the future because 1993 you know that's like almost 30 years ago now uh you know we only recently saw like the uptrend in d5 uh kind of lately i guess like if you're looking at the history of nfts you know 2017 we had crypto punks and crypto kitties so you know maybe 25 years or so uh from when hal started talking about it um so yeah this is really really cool and some some nice kind of history here so i guess thanks to justin

for putting this out on on twitter today and on top of that again as i said it's there's been very bullish kind of stuff happening with nfts lately and michael wong posted this video of cha mouth and uh for those who don't know chamath is a basically a billionaire investor he basically was early facebook and and and kind of like was was part of that but he's also the yeah i mean he's his own fund called social capital and he's the chairman of virgin galactic uh part owner of uh warriors which is i think a sports team in the us i don't follow sports i'm not exactly sure which but basically uh if some of you might have seen like a few weeks ago he was on laura shin's podcast and basically she asked him you know have you been following the d5 space or

anything like that and he said you know what's a defy and the funny thing is is that when he said that i'm like no no way this guy doesn't know what defy is no way this guy doesn't know what ethereum is right and anything like that i you know he he's he's a billionaire investor he's got his pulse on like what's happening and what's you know what's kind of um i guess new and innovative going on in the space and he's also really early uh sorry very big on bitcoin and actually really early on bitcoin too he was i think back in like 2013 or 2014 he was into bitcoin as well so i thought yeah there's no way and then this video comes out of kind of him saying or talking about nfts and saying that him and his team have uh built a sizeable position within nfts

now i don't think that uh he stopped here i think he was building a sizable position in d5 in eth and everything like that and has been and continued to be and he wants to do it in silent right in private he doesn't want to publicize his his kind of like picks yet because all the people catch on that he's into this stuff because you know then the coins and token price of that those coins that he's accumulating is just going to pump because everyone's going to be like wow there's billionaires in it right he's buying it all up let's let's make him buy higher so i think he's been accumulating for quite a while i'm curious to see when they actually do go public to see what nft kind of i guess nft items they bought and nft kind of plays they bought like there's a bunch

of tokens you can buy in the nft space right now like nftx and rory and i mean there's a few other smaller ones out there uh you know there's tons like there's so much to invest in there so i'm very curious to see kind of what he did here but yes it's funny to see that i guess i was right when i thought to myself there's no way this guy doesn't know what d phi is uh he was just bluffing or at least he didn't want to give away the alpha so to speak so i guess in general it's a good rule of thumb to take what everyone says with a with a grain of salt right no one really wants to give away their positions before they're done accumulating as i said last week on one of the refuels you don't shield something before you buy it yourself

essentially right uh you want to you know feel before shill as the kind of term goes but yeah you can watch this clip it'll be in the youtube description um it was it was quite quite fun to watch as another i guess note on nfts is that if you haven't noticed yet the entire nft economy or at least most of it is priced in eighth right it's not priced in stable coins it is for some reason priced in eighth now i have my own theories on why it's remained priced in eth but i'll quickly tell you why i think this is actually a really awesome thing and i tweeted out here basically saying you know not only does this reinforce the fact that ethi's money right because it is and i've argued this for for years now but it also means that all the new

people coming into the ethereum ecosystem via nfts become eath holders by default because they do right that i mean this is this this kind of ties into why i think the nft economy is priced in eighth i think the main reason is because you have to pay gas fees in eighth right so it's just easier it's easier for someone just to have ether in their wall and buy an nft with it rather than forcing them to go trade that eth for stable coins after buying on an exchange or something like that right but also have to keep eat for gas so it's like a holistic thing where price things in eath right um and and then people can just like pay the gas fees in eighth and pay for the nft and eth and then it's just a very smooth and simple transaction that way

the second reason i think is because with eth it actually because e to such a such a higher price the the kind of like unit price of these nfts might be like 10 eighth and you know you you don't think that 1080 is like 18 000 right you think that 10 8 is depending on when you bought it you might think it's a lot less like sometimes i think to myself 10 that's not that much because i forget that if that 18 thousand 18 thousand dollars right because you know i bought my eve a long time ago so for me like 108th is is in my head at least psychologically is like that so i think that's another reason where the psychology of it plays into it people are like oh that's all right it's only 10. so they they'll easily spend that rather if you

told someone that like 10 eighth was 18 000 they'd be like wow that's that's a lot of money right so from that perspective i think that plays into it as well um and but i think that the first point is stronger in that because you need to pay for gas and because like you don't want to make people have to do multiple trades and because the gas fees are so high as well like you know just doing a uni swap trade to get some stables is like 30 or 40 or something like that right you know that's just an extra transaction an extra money people have to spend that it doesn't need to be spent if you just price these things in eighth so yeah i thought that was really really interesting as well another thing on nfts and it's the last thing today i was interesting

thread from uh tm from coingecko so he starts his thread off by saying the momentum behind nfts reminds him of the history of venice during the renaissance period uh just like how art and artists were supported by thriving trade economy and major port at that time and then he says that basically the the rise of the d5 economy on ethereum is supporting this kind of i guess nft boom or renaissance as he likes to kind of liken it to and i think this is very true actually because if you think about it there's a whole economy on ethereum right and nfts and kind of like art and stuff like that are luxury goods right they're not something that like are a necessity or anything like that whereas

you know and in the economy there's a lot of things that are a necessity for people you know like taking loans and swapping you know from you know currency to currency and stuff like that those are sort of things that you kind of have to do but you don't have to buy collectibles you don't have to buy luxury art and stuff like that but the fact that you know people are making so much money within the on-chain economy now and the fact that it's so easy to use that money to buy nfts right i was just talking about how you can use eth to buy nfts leads people to just spend more money and to be a and and to like i guess want to uh you know use their gains to buy uh you know unique pieces and i mean i've spoken about nfts plenty of times

before and about why they're valuable i've written about it and everything like that and i think that's basically fueling that so interesting tweets right here i'll link it in the youtube description you can read the full full thing here but got my kind of brain moving for sure so synthetics has raised an additional 12 million dollars from paradigm coinbase ventures and iosg so this 12 million dollars was raised out of the synthetics dow so they basically uh i guess bought um uh snx from the dow it's invested over time of course and now they're on board as partners so yeah i mean i don't think synthetics needs this money at this point because they already have like a massive treasury but i think it's more about getting these vcs or these investors on board to help them

in various areas and i spoke about last week hayden adams had a threat about how vcs kind of helped them and helped their product grow and one of those vcs is actually paradigm so you know paradigm i've heard from multiple people have like a pretty good kind of rep in this ecosystem where they've got a rep for helping their projects that they invest in right and being very hands-on when needed they don't get in the way or anything but they're hands-on when needed so yeah congratulations to synthetics on this raise and to getting these kind of partners on board especially coinbase ventures right i mean coinbase has a lot of different um i guess links within the traditional finance system especially through their exchange that will help synthetics as well i think so yeah really really awesome to see this raise

from synthetics here so another thing that's been firing up over the weekend is this website called support eip1559.org that basically is a website that tracks like you know who is in support of erp one five five nine why we need it what the arguments are for and against right um and you know you can tweet your support like i've done here now i wrote about this in the daily grain newsletter today uh and for more detail you can go check out that edition but the tldr is that there are some miners right now that don't want eip1559 they've banded together they actually made a site called oppose eip1559 and uh they're doing this because they're going to

because of the of the fact that in one five five nine there's a fee burn mechanism right where that fee burn mechanism is obviously going to mean that miners take a bit of a pay cut here now i don't think that the miners that are holding out here are actually arguing in good faith or actually have any kind of leg to stand on and as i said i go into detail on the daily wear newsletter i won't go into too much detail here but you know if you support 1559 you know i'll link this in the youtube description you can go tweet out your support it's really good to make sure that the kind of ecosystem knows that these miners that are against it are a very kind of small minority and um as i explained in the newsletter today actually they don't control the network i mean i

think people kind of think that miners control the network when that's so far from the truth the miners are service providers i mean i've spoken about this before but basically the miners are service providers they get paid by the network for their service right and you know because of the fact that their service providers it means that they are there to serve the network the network is not there to serve them right so from that kind of point of view the miners basically have like they still have a voice right i'm not saying i hate miners or anything like that i think they're evil and don't deserve a voice they have a voice but if the rest of the ecosystem wants something then the miners are just going to go along with that that you know they're not going to create a new fork of ethereum over this

and try to split the network if they did that they'd just be wasting money because i don't imagine any exchanges listing a new kind of aethea you know the i guess the non-1559 fork of ethereum eth which would just be weird and you know that you would need to have liquidity for it right you don't need to have all this sort of stuff um and then mine is kind of mining this other chain we just waste money essentially waste electricity waste kind of opportunity cost here from not mining on the correct chain so that's just like i guess like a long-winded way of saying i'm not worried about this at all about miners opposing this i still think it's important to show your support publicly on twitter so that the rest of the ecosystem can see this because i saw some people getting concerned and kind of saying to me you

know this is going to lead to a change split when in reality no it's not we've already seen this kind of play out in a much bigger way with bitcoin and bitcoin cash there was a split there and that was actually very ugly there was a hash war that going on and everything like that but it's not like bitcoin stopped being bitcoin right bitcoin continued on just fine i don't think this is going to be anywhere near that i actually think some of the miners or at least most of the ones against this are bluffing and they will just simply go ahead with um 1559 when it gets implemented so yeah as i said read the delegate newsletter for a fuller breakdown on that one there interesting tweet from will price over the weekend uh basically a nice picture here you won't see this if

you're listening in but i'll link it in the youtube description he basically calls this the ethereum semantic web and he's showing that everything within ethereum is connected to everything else and you know i mean this is when you think about it it's kind of obvious but it's really nice to see this visualized here because you can see that all the interactions going on between all the different i guess like apps on ethereum all the users and i guess like i don't i don't think this shows users actually i think this just shows the apps and how all these protocols are talking to each other and all these tokens are kind of like moving between apps and things like that and yeah i think it is you can see on the right here he's got like different kind of i guess functions and stuff like the um

governance functions the time locks factories minta those will mean something to you if you're a developer if you're not you probably won't understand that but yeah i think this is basically just showing that all the ethereum apps are like talking to each other and this is what we mean by composability right this is essentially like ethereum's big bang where it starts out of the center and then you have all these kind of i guess planets kind of feeding into it and stuff like that of other apps and and fitting into the core with you know i like to visualize at the center of it basically but yeah i thought this was very cool so thanks will for putting that out so mstable released mbtc over the weekend uh disclosure here i'm an investor advisor to m stable so just want to get that out of the way before i dive deeper into

this but what mbtc is it's basically a uh wrapped kind of um bitcoin so it has three underlying assets which is ren btc sbtc and i think there's one forgotten out off the top of my head here maybe they listed here um no they don't list it here maybe in the blog post i always forget there's so many tokenized bitcoins now that i i sometimes forgot to forget what what this one consists of uh but basically you can go and mint this and here we go wbtc ran btc and sbtc so the mbtc is a wrapper around these three assets and the logic is is that because you have three underlying assets it kind of spreads the risk out here and there's mechanisms in place to kind of do this um

to kind of like make this like a risk minimized tokenized bitcoin because i've described before how none of the tokenized bitcoins today are actually decentralized on ethereum um or at least fully decentralized you know there's a there's an attempt through tbtc but that's not very liquid ren btc i mean there is still centralization vectors there sbtc is part of synthetics it's a synthetic bitcoin so it's a bit different and synthetics is also still centralized because they have an admin key and wbtc is obviously super centralized because it's custodial but basically what what mbs mbdc does is it minimizes the risks of this and abstracts the kind of value so that you know there's a standard because you have all these different tokenized versions of bitcoin let's just make a

standard for it so mbtc acts as a standard here and it also creates a pool of these big tokenized bitcoins on m stable that you can kind of trade between so you can go between wbdc and renbtc or run btc and sbtc and this is similar to what curve has already uh but yeah this is just another implementation of it here so if you're interested in that go check it out link will be in the description of course quick shout out to argent here they put out a kind of blog post saying a brief guide to crypto twitter which basically has a links to kind of like the twitter accounts that you should follow i was very honored to be included in the top five among heavy hitters like vitalik uh anti-pro synthesis ryan shawn adams eric connor

uh and then there's a bunch more down here uh that that kind of like you should go follow here this is actually a really great list not a super comprehensive list it's not going to give you everything but i think if you're new to crypto twitter especially ethereum twitter you should go definitely give these these kind of accounts a follow and i'll link that in the youtube description last up we have x sushi added to ave as a form of collateral uh now for those who don't know ex sushi is actually it's sushi tokens but it's sushi tokens in staking so for those who don't know you can you can when you hold sushi tokens you can actually take them to the sushi platform stake them to earn rewards in the in the form of uh sushi swap revenue so whenever sushi swap makes revenue it

gets paid out to sushi swap stakers and uh that kind of like gives you kind of i guess like a yield bearing instrument there and the tokenized representation of this is x sushi so what ave has done it they've actually added x sushi to their platform not just sushi so what you can do is by putting egg sushi into r there you are still getting exposure to the revenue generated by the sushi swap platform but you can also use this as collateral to draw kind of stable coins against if you want or something like that which i thought was very very cool right we saw this a couple weeks ago with make a dow putting in uni-swap lp tokens as collateral where you could still earn trading fees on your lp tokens and still have exposure to that this is very similar in that you can

still earn the trading fees from staking your sushi on this ex sushi and use it as collateral and this is just the power of d fire right like this kind of stuff is not possible in traditional finance systems this is what's revolutionary about d5 and about like ethereum and the whole kind of ecosystem here so yeah just wanted to give a quick shout out there and if you have xsushi and you want to kind of use it as collateral now you can i think the the tv the the loan kind of ratio is quite low so you can't borrow too much yet but i think it's going to be raised over time but really good to see these lending markets onboarding more of these exotic collateral types that help people kind of like remain retain exposure but also use their things as collateral i thought this was really cool so yeah

kudos to ave for adding this and congrats to sushi spot for getting this added because it's always a big deal when you get your token added to a money market uh it kind of uh creates like a more compelling reason for people to hold the token that's for sure all right that's it for today everyone thank you again for listening and watching this has been a very long refuel i hope you enjoyed it give that video a thumbs up if you did subscribe to the youtube channel if you haven't already join the daily grade discord subscribe to the delight newsletter and i'll catch you all tomorrow thanks everyone