Arbitrum now live, MetaMask has 10mil MAU's & more - The Daily Gwei Refuel #199 - 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's the first of september 2021. all right everyone let's get into it so when arbitram well arbitrary is finally here arbitrary is now live on mainnet to the public i'm sure many of you have used that already i have bridged in some assets to arbitrarily layer two network here and been using a couple of apps on there i think there's just a few apps live right now with more coming over the next few days but there's uni swap sushi swap balancer and maybe one or two other ones that are live right now um for you to kind of go try out and everything like that but they have limited liquidity obviously because people have to add liquidity over time to uh these kind of

like new apps on layer two that don't inherit the liquidity from layer one obviously uh but i i tried to trade i did a trade on sushi swap just a small one and i think metamask is also uh uh doing the fair estimation wrong on on the layer two so that's just like a little bit of quirk that needs to be kind of figured out there but from what i'm seeing i think the proper fee that people should be paying for like a normal swap is about a dollar right now now you know i saw people some people saying wow that's still like pretty expensive right it's obviously much cheaper than mainnet but it's like it's not you know it's you know a few cents for a transaction or whatever and i've kind of mentioned this before and i've gone through it before but the funny thing is about

layer twos is that they are basically the opposite of layer one when it comes to like the fee market because layer twos work off economies of scale whereas with layer one you kind of have like uh i guess once the i mean layer twos work the same way where once the kind of chain gets clogged it reverts to kind of like uh not doesn't revert but like that the fees start going up right if you reach the transaction capacity on the chain whether it be a layer one or layer two the fees will go up to compensate for that because people are trying to compete with each other to get their transactions in but the thing with layer twos that makes them different to layer ones is that well at least roll-ups is that roll-ups have to post their batches and their proofs to layer one to inherit the

security from ethereum that's kind of like how they they get their security and kind of like um and they have to pay for that right they have to pay for ethereum block space now they charge that to the users obviously the kind of like users are paying the fees on the layer two and those fees are going to the validators uh or the sequences as they're called on these kind of like uh roll ups and they will pay that to the base chain and whatever that kind of works out to so optimism is paying anywhere from fifty to a hundred thousand and fifty thousand sorry from fifty to a hundred fifty thousand dollars a day in fees for those batches and those proofs right now i'm assuming arbitrary is going to be about the same as well uh you know as they kind of post those each day it is

not cheap definitely kind of not cheap there actually wait no sorry i should i should correct that i should say that optimism the layer 2 network is generating 50 to 150 000 worth of fees but it is paying a large uh chunk of that two layer ones to kind of like um it's going to verify themselves or secure themselves i should say so i i would expect the same for albert trim to be true but the thing is is that when you're on layer 2 and you have more and more users what ends up happening is that you can charge the users less like as as a kind of like individual but in aggregate you have more fees so for an example if you have like a thousand users on the layer two all paying like 10 cent fees right um then then that's good right

that's that's fine like users really love that that's that's all well and good that's what they expect but if you only have 100 users on there while you need to charge them a dollar fee to have the same kind of fear revenue do you see where i'm going with this so the more users you have on there the more transactions per second you have enabled too because i mean arbitrary and optimism claim to be able to do a few thousand transactions per second they're not unable to do that right now but i mean the demand's not there anyway so even if they put that i kind of enabled that it wouldn't really matter but essentially uh that's kind of like what's happening there so as we get more users onto these kind of layer layer twos as we get more individuals paying less fees because

there's more aggregate fees then you'll be able to to enjoy the benefits of like those super low fees but still i think a dollar for kind of like a unisop or a sushi swap trade is absolutely amazing considering they're coming from the ethereum and you're still inheriting ethereum security mind you like this isn't a different chain with its own validator set uh you're actually still inheriting ethereum security so i did want to clear that up a little bit there and explain like how layer twos rely heavily on economies of scale and as they kind of build up over time the fee should logically get cheaper over time unless we get to a point where the transaction capacity on these kind of like layer twos is at a thousands of transactions per second and that's all being filled then obviously the fees are gonna go up

but i don't think we're gonna get there for a little a little while it's actually funny when you think about this um and think about how many thousands of transactions are per second that's a lot of transactions like there's a lot of transactions on the ethereum main net but the reason why that the fees are so high is because of the fact that the ethereum is pretty much doing only 15 transactions per second right now but there's lots and lots of transactions that want to get in that's why the fees are high and ethereum is limited because of that and that's why i guess we see people kind of like outbidding each other but if ethereum was more scalable say you know you increase the theorem scalability by like 10x i actually don't think we would be able to fill in 150 transactions per second uh even on the ethereum mainnet

right now over time yes but like i'm talking about right now so the demand just isn't there just yet but it will be and it definitely will come faster than we think but but i i think once that happens these like layer twos will have will definitely have the capacity enabled for that and won't have so much these guard rails in place this will have some guard rails and everything like that um but yeah i just wanted to add some color there because i saw some confusion around that but back to arbitrary's announcement here today so essentially they went through exactly what this is so they're calling this a mainnet beta it is not like a full mainnet thing it's still in beta which means there's uh basically centralization everywhere to put to put it um kind of like in in that in that term uh i guess it's not a bad thing i

mean the most centralized aspect of it i mean it's fully centralized because they can essentially pause the the chain so if something they said something going wrong or a security issue they can pause the chain and kind of look into it and and do what they need to do on the chain so from that point of view it is centralized right now but that's okay because they're telling you that it's going to be that they're telling you that they can do this and it's totally fine because it's in it's in beta it's still very early with this sort of stuff and this is exactly what's happening um so then they've also got a speed limit on their main net here sort of like how optimism has their speed limit of 50 000 transactions per day i think it's 100 000 transactions per day now um with

arbitram they're starting at about the same i guess like capacity as ethereum l1 so about that 15 transaction per second mark there now as i was explaining this is going to increase over time up to the thousands of transactions per second that kind of like arbitrary and i mean optimism as well uh and some other ll twos will support but for now they're starting there and i think it's gonna just rely on the how many people use the chain and kind of like what the capacity is like because what ends up happening is that if that kind of limit gets hit on the layer two you're going to run into the same issues that you do on layer one where the fees start skyrocketing because there's lots and lots of demand but the beautiful thing about these layer twos is that arbitrarium obviously it's centralized right now but what arbitrary

can do is that they can just like up the limit on their own right they don't have to go through like the the governance process of layer one to up the gas limit there's there's actually not um as dire consequence i mean the consequences aren't even dire or anything like that it's just a very different kind of thing like as opposed to increasing the gas limit on layer one in order to kind of like get more tps out of the layer one chain with layer two it's it's it's basically i mean it's a similar concept i guess you could call it like making the block size bigger i guess if you want to use that term but the consequences of doing that at layer 2 are basically you know pretty much non-existent it does increase the size of the chain but the point of layer two

is that uh you know it's secured by layer one so that doesn't really matter at the end of the day and and you can run it on kind of like the more beefy hardware to sequence these things out so yeah i'm expecting them to kind of like increase that over time uh the white list is gone so anyone can permissionally uh permissionlessly uh i i think um add their kind of like contracts to to the chain now um uh i think that's actually uh maybe i'm getting it wrong here they say we have removed restrictions on who can transact with the network okay but we will continue to have a wireless in place for adding new tokens to our bridge and being an active validator until the ecosystem further matures okay well that's fine i guess like who can transact on the network which means like

any of us can like we can go in any with any ethereum address that we want bridge in with any token that's supported and and it's all well and good um so they're actually just keeping the whitelist in place for the token and the validators and all that sort of stuff which makes sense and then they say here that their goal with this limitation is to protect users and ensure that it will be easy to recognize which l2 tokens correspond to their l1 counterpass counterparts and then they go on to say something really exciting where they said we have also secured commitments for several highly reputable validators to validate arbitrom and stay tuned for upcoming announcements on this so validators uh are kind of like i call them sequences sometimes they're basically just like these things that that um you know taking the transactions construct the blocks and you know

publish those blocks and like you know have the layer layer 2 chain chugging along like that and the main difference though with layer 2 versus layer 1 is that you only need one validator online and even if that validator was to go offline because of the way layer twos work you'd be able to to get your funds back because they're in the bridge contract on layer one um so it's very different i mean this terminology is gonna confuse people i think because validator is a very um i guess loaded term because it's used in different ways you have validators in ethereum's proof of stake you have it in a delegated proof of stake on other chains you have it on layer twos you have it on like side chains i mean there's there's all this kind of like terminology that kind of i guess blurs the lines between

um a different kind of like implementations so there may be a bit of confusion there but in the terms of like arbitrary and how they're talking about this it's just it's literally the same thing just the the things that construct the blocks um and kind of like put the transactions in but you only need one of them to be live on the layer 2 network for it to process transactions um and even and that one can censor you in theory but the thing is is that even if they do that you can still get your funds back they can sense your transactions and say well i'm not going to let you do a trade on layer 2 but but who cares because at the end of the day if they start doing that well i i would say that this layer two would quickly lose credibility and quickly lose user

support but the thing is your funds are fine your funds are safe because you can withdraw them on the layer one smart contract the bridge contract and that is the entire point of layer two is that doesn't matter what happens on layer two you should always be able to get your funds back um on layer one by triggering that emergency withdrawal from the bridge contract uh and that really is the key innovation at the end of the day in my eyes anyway um and they have like a bunch of other kind of like details here about the pausing and fast bridging uh the bug bounty that they announced which is a one million dollar bug bounty managed by immune fi maybe samsung is gonna get himself another million dollars with this bug bounty program and then kind of talking about what's next and a bit of

thank ucr so i'm sure all of you have already read this post and you know i've been talking about arbitration for a long time now but it's really awesome to see that it is finally here it's gonna it's gonna um i guess keep getting better over time the next few months i mean marine scalability is spring or kind of like arbitrary autumn i guess if depending where you are in the world i like scalability spring but obviously like most of the world is not in spring right now it's on the southern hemisphere thing but it has a better ring to it but uh yeah exciting times i am super excited i really enjoyed uh using kind of like um uh a sushi swap on layer two on arbitram i did end up paying like four or five dollars in fees but as i said i think that's because

metamask uh are kind of like um was was not doing the right kind of like fee estimation there so i'm gonna have to look into that but that's just growing pains at the end of the day and i think that's fine i was just testing it out and the liquidity wasn't even good that was literally doing like the smallest test i could do i think i traded like 50 worth of of of eighth for usdc just to test it because um doing any more of that would have led to like insane slippage but the liquidity will get better i'm sure there'll be token incentives and i'm just really looking forward to seeing how this all shakes out uh but yeah i'm going to move on from that obviously i'll keep talking about arbitrary over time but i don't have to say it's coming soon anymore

which is nice all right so another bit of exciting news out of consensus was that they announced metamask and now has 10 million monthly active users so the last time they talked about metamasks monthly active users they had five million was i think the last time they um they kind of announced the number and that was back i think earlier this year i remember in october of last year they announced they had a million monthly active users which was a big deal at the time and they had five million now they've got 10 million and the interesting thing about metamask is that this isn't just ethereum right because minimize supports any type of aovm compatible network that you want and everyone's using metamask like if you look at the evm compatible networks of like the polygon pos chain avalanches c chain you have phantom now

as well you have uh obviously bsc and then you have ethereum and it's layer two ecosystem like arbitrary optimism zkc all that sort of stuff like any of those networks that you kind of like add to your your metamask they're all kind of in there and that's what uh i guess like is making metamask the staple kind of wallet within the ecosystem now it's funny because 10 million monthly active users uh it's not very much right at the end of the day this is a very tiny portion of even the crypto community i think that i i and during kind of like i guess bull markets there's probably at any one given timeline in terms of monthly active users probably 100 million plus because you have to talk about like the exchanges and people trading on there um individuals trading on there like i'm talking about like the

peak manias when you basically got like your best friend's uncle asking you about cardano like that's that i i think they're like the peak of the the kind of like market it was for me at least i had one of my friend's dads asked me about it and then the whole market had that massive crash and i was like okay well maybe that's a top signal next time maybe but um regardless of that that's kind of like what i'm looking at in terms of uh the kind of adoption rate here and i think that just because uh there's 10 million monthly active users on metamask it doesn't mean this is 10 million uh actual individual people because people can have uh multiple metamask uh wallets on multiple browsers for example i have a metamask extension on my desktop and i also have one on my laptop but i also

have one on different browsers on my desktop like i have chrome i have firefox and i use it for different purposes uh so there's that and then you have the and then i don't know if they're actually splitting up the mobile users and the desktop users i don't think there'd actually be a way to do that unless they i actually don't think there's a way to do that because it's two different instances of the app so essentially they're doubling up there so i'd actually say realistically you could probably cut this down to probably at least five million real kind of people in terms of like monthly active users which is just even more bullish because we kind of like see that there's not that many people kind of like in this ecosystem just yeah and there's still a lot of potential for growth here but generally you can see

the kind of chart here there's only been like one dip and that was after the crash but you know since then it's been going nuts again and i think this is definitely because of the fact that uh i mean nft mania took off there's a lot of people on boarding through that metamask is the gateway wallet for pretty much like everyone these days i mean it has been for a few years now but i mean if you're in ethereum you've used metamask as simple as that i would actually love to meet someone that's in ethereum that hasn't ever used metamask or heard of it at least um that'll probably be the day that we enter like to get i guess like the mass adoption phase when not everyone's using the kind of like the same desktop that we've all been using for years uh but yeah still see it

it's still cool to see this growth and you know another bit of growth that i've been monitoring as well is kind of like the users of the individual apps like with d5 there hasn't been that many but what even surprised me more was the um open c users so i went on this dune analytics dashboard that's tracking different metrics for open c it has got like um the total users not the active users the total users or at least the total ethereum addresses that have touched the uh open open c smart contracts so essentially use the open c smart um opening platform i think it was 320 000 i checked this a few hours ago 320 000 at three m addresses not people now i use multiple addresses for openc i don't know about any of you guys so even if we say that uh that number is like

pretty much overstated say say it's overstated by a hundred twenty thousand just to round it out to two hundred thousand that's not even half of what it is but let's just say that for argument's sake 200 000 people like if we're talking about real humans have interacted with openc and openc saw 3.3 billion dollars of real volumes on their kind of like um on their platform and they took in 250 million dollars of fees just in the month of august i mean that's an insane amount of growth still to go like 200 000 people is nothing like think about how big the gaming industry is how big the art industry and culture i mean culture is everywhere like think about what happens when open sea gets to not just open sea like nfts generally get to 100 million actual people and users in

here it's just absolutely insane to think about the volumes that we're going to be seeing on these things the amount of kind of like money that's going to be made and lost the amount of like i guess scams are going to see as well because scams always follow the mass adoption stuff but generally you know there was this meme that i posted yesterday about the early adopter you probably saw it where it's like it looked like me a little bit like it had like a shitty little beard and like some shitty little hair but um people say you know she'll put the hat on this because it'll look exactly like you but this is something that i always go on about like how early we are but i'm not just saying this to pump bags i'm saying this based on the actual data that i'm seeing you

can't fake the on-chain data you can't basically um remove you know a million addresses from the the um the pool that's touched the openc smart contracts that's not possible yes you can have bad data but this data and this dashboard has been verified i'm like 99 sure it's accurate um maybe there's one percent chance it isn't for whatever reason but it's just insane to see kind of like how much volume has been generated based on not even close to a million users in in and this is total this is not active users as well this is total so we still have an incredible amount of growth left to go within the nft ecosystem especially opens i mean openc is going to be i mean one of the kind of like i guess

i mean people are saying it's like the ebay of of crypto i think it can be like it much bigger than that i think it could be like the amazon of crypto and they don't really have much competition and they've got like a massive network effect as well it's just going to be absolutely amazing to see how much more growth is in store for them uh given that there's not many users in this kind of ecosystem just yet but yeah i mean just generally when thinking about uh rate of adoption where we are in the adoption cycle we are still in the early adopter phase like as i said i think i think maybe a few months ago we kind of came out of the uh the innovative phase and now we're in the early adopter phase because of nfts i believe and then we're gonna go through that and

then we're gonna get to the mass adoption phase where most people come in and then obviously we'll get to the late majority and stuff but this this is going to take years and possibly even decades uh you know we may think that we're getting like this this adoption much faster than what we are but we really are like as i said there's only 320 000 ethereum addresses that are interacted with openc and there's already 3.3 billion dollars of volume being generated there i know that it's a mania but that doesn't matter if you can have a mania with such a small pool of ethereum addresses imagine what it's like when we have 100 million ethereum addresses interacting with openc and nfts in general it's good it's going to be wild right so yeah i guess like congrats to metamask for these 10 million monthly active users

here it's really great to see them kind of like growing i mean there's going to be plenty of other wallets coming out they're going to have their own kind of like users in this ecosystem as well so we're gonna have to keep an eye out for that but anyway moving on for now so there's been this thing that everyone's been talking about in the nft kind of ecosystem right now called loot project now i've seen that people were confused about what this exactly is and i guess a bit of a disclaimer here i own one of these loot bags i bought um a divine robe it's kind of become like a little bit of a meme i bought it a few days ago from my public address so i'm not trying to hide it or anything like that but essentially what this loop project is is a bunch of

nfts that have text on it so they have like a bunch of items uh written in kind of like text on the nft and it'll be kind of like this divine robe or like you know molten ring or or kind of like uh divine hood or whatever you want to call like you know if you played an rpg you'll get what i'm saying here um and people are kind of looking at this and they're kind of like okay well what is this and tand uh tandevas here put like a really great thread out where he basically says this is essentially at least what's happening with loot right now is it's it's a bottom-up approach to an nft and you can see in this kind of like picture what he means is that the typical nft is a top-down approach you have the creator that creates the art right that creates all

the kind of like value around it sends the airdrops grows the fan base all that sort of stuff there and creates a lot of the value and then puts that into the nft and the users buy the nft and kind of like speculate and do whatever else whereas with loot it's a bottom-up approach where you have the collector actually feeding the value up to the nft instead of the creator the creator obviously created this thing but they didn't create the art for it they didn't do any work around it they basically said here's the nft here's the text associated with each one here um and you know you can do whatever you want with it you can build on it you can kind of create your own metaverse around it it's basically a blank canvas for anyone to come along and build their own ecosystem

around this nft set so you can see here that the collectors at the bottom sending the value up to making the nft valuable themselves by building the game creating the avatars building the metaverse writing novels about it doing anything that there is to do within this kind of like game here now if you guys haven't seen this before this is what kind of these items look like this is literally the nft here you can see there's a bunch of items in there you buy this um there's people working on smart contracts to split these items up actually into individual pieces but people are taking this and drawing and cutting art out of it like they say you can see here like a wool sash people are drawing this kind of stuff they're drawing holy graves divine verb protect perfection they're drawing that they're

making art around it people are building derivatives on top of this um they have like uh uh kind of like uh i think he's got an example here of derivatives and stuff that's kind of like um let's that's here uh he gives a few different examples yeah yeah yeah so basically people creating like worlds like realms of like the chord or kind of like lands um within it creating other kind of derivatives on top of it that the current loot holders can actually mint from from the smart contract so there's a lot of stuff going on the way i mean the best analogy that i've come up with for this is kind of like it's like a i guess like a minecraft for for like nfts because with minecraft the reason i think i mean the reason it did get so popular is because it basically

gave uh i guess like everyone the ability to create whatever they want it was a blank canvas there was no one telling you what to do there was no story the creators didn't say hey you had to do this or had to do that they gave you the tools right just like you're getting the tools here which are the items in this case for loot and you can do whatever you want with them and this is exactly like ethereum if you really think about it the ethereum platform is permission permissionless to build on decentralized the tools were given to you were given the solidity smart contract smart contract language you were given smart contracts in general right you were given a platform to build on a network to build on and then people have built whatever they wanted on it they built d-fi they built nfts they built dowels

they built tokens you know they built everything they wanted on it and continue to do so so this is where the real magic happens when you give people a blank canvas they'll create whatever they want and that creativity can tap can come from anywhere and that's why it's so powerful because this is global as well and obviously being an nft people are speculating on this and the floor price actually went nuts on this i saw it at 0.5 the other day it's gone up to like 6 8 on the floor it's absolutely crazy how how much this has kind of grown but i think it really is special because it means that basically anyone i mean not that it means that anyone can kind of like acquire these items yes they're very expensive i mean six eight isn't cheap these days it's what like twenty

thousand dollars dollars or something like that um uh but you know i think anyone can build on top of this anyone can kind of like draw the art for it they can build the game themselves they can come together in a community in discord and start agreeing on kind of like the best approach here and all that sort of stuff there's just like an open field here for creators to to go to town on this sort of stuff and you also have a community that's uh that's that you can tap into because the community owns these things and they want to be able to kind of like visualize it and they want to be part of a game in a metaverse so yeah i mean that's just really exciting for me i just wanted to explain it for those that may be kind of like confused by this um but generally

yeah this has been pretty cool to see play out and this thread is really really great you can go check it out it'll be in the youtube description but yeah just wanted to give a bit of extra color there so speaking of nfts dave white from paradigm introduced something that he's been working on called the floor perpetual so what floor perps are are synthetic nfts that track the floor price of a given project and can be minted by locking up nfts from that project and he goes on to say amanda did you own some ocelots i think that's what it's called some cats here from the wildly popular awful hot ocelots project uh you love your ocelots dearly and refuse to sell a single one of them however they now make up a significant portion of your net worth and you would like some liquidity if you owned a

single rare ocelot you could fractionalize it on uh fractional uh the the fractionalization platform but your ocelot i don't even know if i'm saying that whether i'm going to say cats but your cats are still priced near the floor and their shares are unlikely to attract much interest you believe they will increase in value relative to the floor over time you decide to use your cats as collateral to mint and sell cat floor perps not only do you get immediate liquidity you're also protected at the floor price drops you'll miss out on profits if the floor price rises but still stand again if your cats appreciate more so this is i mean next level kind of stuff and i mean he gives a really great explanation of it in this post here i highly recommend going to going and reading this will be linked in

the youtube description but essentially this is again another kind of like innovation within the nft space that is going to unlock more and more kind of like usage and utility because it's adding liquidity to nfts which is essentially like a major pain point because of the fact that nfts by design uh you either need to be fractionalized or kind of put into an index to get liquidity because they're not fungible unless you do that whereas being able to um generate a synthetic perpetual product on top of it by using these nfts as collateral for that is really awesome i mean i think this is this is huge and i'm sure i mean paradigm a backing fractional there that they led their their seed around so i'm sure that fractional was probably going to add this as a feature to their platform and i can't wait to do this i would love to

be able to put up some of my nfts or my floors like my floor pump that i never planned to sell as collateral to kind of mint these um these perps and stuff like that uh and kind of like see and see how that goes as well so yeah this is a really really cool idea um but yeah definitely go read this uh this blog post from dave white for more kind of like details on that so speaking of the nft's d5 alliance today announced that they're launching a gaming accelerator um so it will they say it'll help web 3 startups with game design community building and more and they have a bunch of really awesome mentors on here such as jihad from axiomfinity also uh gabby daison from uh yieldguild austin griffith famed ethereum builder and a bunch of other great people here and you can basically

uh apply by september 19th to be part of this gaming accelerator so if you go to this website it'll come up with a form and then you can fill out this kind of form and everything like that and then submit it and you know hopefully you can kind of get chosen there so i just wanted to point out that for anyone who i guess like is a you know part of a web 3 startup for for gaming or part of a community or whatever and wants to get more involved in this sort of stuff here so i think this is the last thing or second last thing on nfts so uh pleaser dao has launched uh their doge nft that they have as a uh fractionalized so they're fractionalized that sorry i should say um and and you can buy the dog token to get a share of these doge nft now um

this is really cool like this video that was created by a couple of really awesome people people pleaser and cloud eater with music by uh bass jackers here but essentially i mean look at this video that's amazing for those of you listening in go check this out in the youtube description but this is just hilarious and there's music as well but i haven't got that hooked up to record um at the moment but essentially i think this is really cool that uh plays a dow which is a dow made to acquire really rare nft pieces and letting people purchase a fractionalized share of this instead of kind of like having to unsell the piece so the community ownership can still exist while the dow still gets kind of like the upside from this as well so i just thought that was really cool to point

out there i'm going to get through the the rest of these in a quick fashion because of the fact that i'm running out of time here so last thing on nfts dc investor put out an interesting tweet today where he said nft prices will fluctuate based on eth usd fluctuations but the unit of account for pricing nfts is and will likely remain eth it would not even surprise me to see eath travel to other change to settle nfts there usd hegemony isn't compatible with the global metaverse economy i agree with this i do still think we're going to have to wait and see how it really plays out with regards to if eth will remain the dominant money within the nft category because at the end of the day i mean we're pricing nfts 8 and everyone's trading in eighth um and i think that's

fine for crypto natives but as more and more kind of like i guess non-crypto natives get onboarded into the ecosystem and they might prefer to use a stable unit of account such as usd like a usda stablecoin or like a euro stable coin or whatever else but on that note one other thing i wanted to talk about that was that was in relation to this was the fact that people were talking about you know do nft prices go down if eth goes up i think it's funny because we don't have enough data here to actually point out i guess what would happen in this scenario but i think from my point of view from what i've seen at least with the limited data that we have if eighth is going up that means people that hold either have more money which means that they have uh

but that means that when e starts kind of like slowing down after it's gone up and kind of like starts crabbing again you know through its price range doing it like a crab season uh that means people people with holding ether like okay well i'm a bit bored now i want to do something with my eighth and they're gonna go buy nfts and there's also the people who make a lot of money from me and have this much more disposable kind of like income or disposable kind of like net worth and they're like well what can i spend this on and they go buy nfts so i think while ethies pumping it's going to be interesting to see the dynamics of the kind of like nft ecosystem and if it actually outperforms eighth or which ones do i think there are some projects that will most of them maybe not but

then when eth calms down and stops pumping um and kind of like go sideways for a little bit i definitely think we're going to see nfts like catch up so it's just kind of kind of like this be this kind of like cycle going on because the eighth rich definitely want to speculate on ft's like all the big eighth whales that i know they're all really into nfts they love buying nfts and it's not even just like the eighth rich it's definitely people who are just like making a lot of money from crypto uh outside of nfts speculating on tokens and other coins and sort of stuff like that they definitely want to use that money to buy uh rare nfts and stuff like that so definitely gonna be interesting to see how that plays out um second last thing here so i've got dan held blocked here and he's

got me blocked so i can't actually show you what he said but he was spreading some absolute about uh i guess like a ethereum again like as he usually does but i don't want to really focus on that i want to focus on danny ryan's amazing tweet here where he basically says it's very understandable that you don't know how this works and i think he was replying to dan saying that um all the apps are going to have to migrate when eth2 goes live which is not true at all and you know regular listeners and watchers of the refugee will know exactly what i mean by this but you know he says it's very understandable that you don't danny says sorry i should say it's very understandable that you don't know how this works in the upgrade from proof of work to proof of stake the core

execution engine of ethereum just keeps on chugging this diagram might help clear things up now i'm going to be honest i don't think this diagram would he'll clear anything up for dan um he is like a bitcoin maximalist maximalist he has been spreading this information about ethereum for a long time but i want to uh describe this diagram because i know that this is probably something that you look at and you're like okay what's going on this is super complicated i have no idea and you know what's funny these arrows are actually backwards so if you look at this picture the arrows you have to read you're reading it from left to right but the arrows are pointing to the previous block because that's how blockchains work right they basically what's happening is that you can see the top you have proof of work and the

execution layer which is the current eth1 chain then you have the beacon chain which is the proof of stake chain that we have which is running parallel so it's running as a separate chain to the proof of work chain that we're all kind of like using today then you have the first block of of those two uh then you have the second block and that block points to the first block because um that it kind of references that first block and i mean this is how the blockchains work right they it's basically a linked list of kind of like blocks that go through and kind of reference each other and then on the third block what ends up happening is that this is the merge right in this third block where the execution layer is taken out and put into the beacon chain um so essentially proof of work goes

away the beacon chain or proof of stake is what uh valid starts validating the chain and we get rid of the proof of work channel together and it just becomes one holistic ethereum so that's exactly what this diagram is showing down the bottom on the third block here from left to right this third box that's the beacon chain and then you have all the properties of the beacon chain such as the slot the parent route the state route the signature randall graffiti deposit route and all at the stations deposits and exits that's all the logic that makes kind of like the beacon chain tick and proof of stake tick then and then the bigger chain is verifying the uh sorry validating the execution layer which has things like the parent hash the state route the base fee all those sorts of things that make ethereum as we

know and love today and we use today chug along and all the transactions and stuff like that so this is basically just showing the merge as it looks from like a technical point of view now i think danny was being a little bit funny here by linking this to dan like there's absolutely no way in hell dan would have any idea what this means because um he he didn't even know that you know when we're going from eth1 to eth2 it doesn't require apps to migrate because as you can see here the apps are actually migrated into proof-of-stake automatically because of the merge where the execution layer which is where all the apps live is just put in is just kind of like ripped away from proof of work and proof of stake replaces that on the next block it's literally a one block difference like you you have proof

of work up to block you know 10 million just say as an example and then on block 10 million and one you have proof of stake and the same ethereum that we know and love today known as the execution layer and everything's all well and dandy from there so yeah just wanted to explain that for people who maybe may have been confused by that and it's i mean it's fine to be confused fused by that i know i'm i'm kind of making fun of dan for being confused but i mean he's the one throwing out the misinformation and talking about you know crap right now you guys aren't so i think like um this is definitely not something that you have to worry about generally like the ins and outs of this sort of stuff this is definitely protocol level technical stuff but it's still good to have the context around it

and see what this means so i just figured it was worth explaining there um this is a very long refuel so i'm just going to finish up with this kind of tweet that ryan watkins from asari put out today where he says as the smart contract was heat up it's important to keep in mind power and wealth distribution on each blockchain initial token distribution may not be everything but eventually we may find these earliest the decisions had lasting effects on the credible neutrality of these systems now i've talked about credible neutrality on the refill before i've written about in my newsletter plenty of times but essentially you can see on this chart here the different kind of like token distributions of public blockchains in blue is public sale so what was available for the public in in green here you have community allocations so this is like

fun uh sorry this is like liquidity mining or air drops and all the stuff that will eventually go to the community then you have insiders which are team company and vcs and then you have the foundations um and and others right the foundations are usually kind of like uh part of the team allocation or they're community governed uh kind of like grant pools all that sort of stuff or incentivization whatever you can see here that ethereum is kind of like the best distributed by far i think uh it's funny because cardena on the on the right here has like a massive public sale portion but if you actually go back and see what cardinals public sale was it was actually a very closed off sale from from memory um i think it was it was primarily marketed in japan it was it was kind of like this weird

thing that happened and from memory it was just very closed off whereas ethereum was a global sale um in 2014 everyone could participate there was no kyc or anything like that but um you know other than that you can see in in i guess like the the kind of like orange yellow red or whatever it is is the most important the insider's portion of it like look at how bad some chains are when it comes to insiders like i'm not going to make fun of any of them like but like some of them have like incredible vc and team allocations which does in fact hurt the credible neutrality of these systems especially if they're proof of stake because what ends up happening is that you have like these bunch of like proof-of-stake validators that are just vcs and you know they are legal entities and known

entities if nation-states and governments come towards them and basically kind of like say hey you need to like censor this transaction you need to do something on this chain or else we're going to throw you in jail i mean they're going to do it right and it's not just that as well the the other part of it with the credible neutrality these kind of like vcs could actually just put their weight behind or at least kind of like the vcs and the team and people running the validators and kind of like running the ecosystem can put their weight behind certain projects and bias towards certain projects so their credible neutrality just gets eroded from that as well but yeah just thought i'd point that out it's a much deeper discussion that i have time for in today's refuel but anyway i think i'm gonna end it there so thank you everyone

again 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