Client diversity, Nftychat revealed and more - The Daily Gwei Refuel #343 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where i cut the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 29th of march 2022 all right everyone let's get into it so i'm super pumped today and it's not just because of the eighth price going up which is of course awesome to see um but i'm extremely pumped because today i visited the pools.invis.cloud website that superfiz shared here on twitter and you can see that the prism usage on the beacon chain is actually down to 61.9 percent it is lower than it was when i was kind of like talking to a guys about him having having the super majority of 66 and this is a huge win guys like i'm pretty sure this website updates weekly um and i think they're missing around uh

20 or 30 000 validators right now in their account which is i guess like 10 but uh you know i don't think that's going to make a make much of a difference here to this prism usage percentage absolutely awesome to see and i actually just eyeing it it seems to be coinbase's prism usage uh seems to be coming down i believe that was over 90 last time i checked this website now it's at 85 percent and i think krakens have come down slightly as well but yeah i mean guys this is a huge win right here the fact that prism is no longer the super majority on the network there's no client that has a super majority on the beacon chain any uh at this point in time is an absolute huge win for client diversity now as i've been saying to you guys ideally

we want to get this kind of like below 60 in the in in the best case or at least in the um kind of like most pragmatic case below 50 if we can do that before the merge happens oh man i think super fuzzy's going to throw himself a party because he's been one of the big champions of this but i think this is absolutely awesome like i'm actually so happy about this i saw this over the past i think i saw it uh either late last night or today and i was like holy like this is awesome now obviously this is kind of like an estimation it's not an exact science but you know it's it's pretty good it's um i believe it's using michael sprouse kind of um script to do this and michael sprout works at sigma prime who develops the lighthouse client and i've highlighted

his threads before on the refuel but uh but yeah i was just really giddy about this because i i mean i explained to you guys what happened on the kiln test net where uh prism had a bug where they were producing invalid blocks and if that was to happen on main net and prism was to stop the supermajority it would it would basically result in a failed merge right so this is why we have the test nets and all that sort of stuff there but uh if this happens on main net now uh it won't lead to a kind of like failed merge because prism doesn't have a super majority yes they still account for a large part of the network and if this happened it might lead to a large scale slashing event which is just as bad but uh essentially you know getting off the

kind of like majority client seems to be a priority for a lot of people now especially the exchanges you know i i i'm waiting for the day that no centralized exchange or service provider has more than 50 prison usage that is probably a long way away still i mean coinbase is still at 85 percent kraken's at 93 percent but the fact that it's trending down is really good and you know at this point in time for every new validator that coinbase and crack can spin up they don't have to use the majority client anymore as i've said you guys before the four i mean there's five production ready clients but the four main ones they're all pretty much as good as each other there is no from what i've seen benefit to using the super majority over one of the others uh and there's actually like a lot of

negatives as i've explained before to you guys so this got me super giddy today and you know the the the the fact that it's happened on on the day when the eat price is doing really well is just the bonus there um but i spoke about the market yesterday so i'm not going to rehash that that today but yeah i'm curious to see if this keeps coming down and like at what rate it comes down at i think it will because as i said i think at this point in time the exchanges have heard about this sort of stuff now and they're probably not going to be spinning up prism or at least the majority clients for the foreseeable future they'll spin up another client whenever they get to the point where they have to kind of spin up more clients and i think a lot of individuals as well

are using other clients but uh but yeah we're gonna have to see how it plays out going forward uh as usual rocket pool is doing amazing work here on you know under 10 prison usage which is awesome with 3000 validators they're growing quite nicely uh lido uh is the other kind of like um leading uh staking pool i guess you could say but they're not you know decentralized like rocket pulleys but they're doing quite well as well like they still have 40 prism usage but that's under the 50 threshold which is yeah i mean in the most pragmatic kind of like sense i think that uh one of the clients having 50 is probably gonna persist for a while um just it's just the way it is guys like honestly i think that it's never going to be like an even 25 split between the

four clients or 20 split between the five clients that's just not how these things work so as i said before if we have 50 prism you know and then kind of like thirty percent lighthouse and ten percent take you and ten percent nimbus and maybe you know or maybe there's a little bit of a couple of percent of um load start then that is just as good as having in my eyes 25 25 25 25 because we're never going to get to that like we have to think about what's practical rather than what's ideal and we can keep pushing don't get me wrong we can keep pushing for that i mean keep seeing how we how we can get to that but i don't think that we're going to get to that kind of like ideal world i think we can get to the pragmatic world where prism

or and no one client accounts for more than 50 and it's awesome so far that we're actually doing much better than the execution layer side which still needs client diversity mind you but last time i checked geth accounts for i think 80 or something like that um of the um let me have a look here of the of the clients i'm just loading up ethernodes.org here on my other screen uh so geth is currently 83 of the network so yeah that's uh that's obviously not ideal as well there but it is less of a concern for the execution layer than it is for the consensus layer because there aren't any direct penalties uh due you know there's no slashing obviously in mining and on the execution layer side i mean post merge is going to be a different kind of like calculus there so you know i would encourage a lot of

people to run the non-majority clients on either side if you're a solo staker you're obviously going to be running both the execution um client and consensus client uh so an ideal setup would be you know something like lighthouse and nethermine for example right rather than prism and geth right uh but yeah totally up to you what one you want to go with and you can mix and match and all those sorts of things as i said like the clients are just as good as each other there is no real benefit to going at the majority over over the other things there's actually a lot of negatives that come with it there all right actually i've got something here i want to talk about a bit later because there's a couple other theorem related things i want to talk about first so i put out this tweet today

where i said uh ethereum having a seven year long proof-of-work distribution phase before switching to proof-of-stake is something that not a lot of people think about but it is critically important for ethereum's future i wrote today's newsletter about this so if you want to kind of go read that um for a little bit more detail you can but i'll give a kind of like tldr on the refuel so ethereum genesis happened july 30th 2015. it has been a proof of work network since then it has been producing blocks every you know i guess like 15 or so seconds today it's like 13 and and i guess like block times have varied over the years due to the difficulty bomb as well and every time a block has been produced there's been an eighth block reward attached to that it started out at five eighth per block then it was

three eighth per block currently it's two eighth per block and after the merge is going to drop dramatically um i'm not sure exactly what it is on the per block basis right now i should know this but it's going to drop like you know the 80 to 90 triple hardening that we're talking about here now because of this and because ethereum is currently a paperwork uh network it's lead to a real it led to a really great distribution for eath as an asset so i'm going to give you an example of of ethereum and how this how this has worked with ethereum an example from a network that starts as proof of stake from day one and why i think ethereum's long proof of work distribution phase has been so beneficial so miners they have costs right they have plenty of costs they have electricity they have

hardware they have maintenance they have personnel they have to rent out space they've got costs coming out of everywhere to cover those costs they have to sell some of the ether that they mine or btc or whatever else they're mining right they have to sell the asset that they're mining to cover those costs those are basically costs that are unavoidable right there is no way for them to basically say no i'm not going to pay my electricity bill because then they wouldn't keep getting electricity and they get cut off right and then they lose out completely there so in doing that they're selling it into the open market it's going to either long-term investors or speculators and it's going through the kind of like motions of a market cycle um and speaking of market cycles as well that has also played a big part in uh in east distribution over the

years because i mean east price has gone nuts over the years right like not not just from when it from ico to today but also the volatility so it started off from the ico at 30 cents right we all wish we could have bought eighth at 30 cents but you know it was at 30 cents then i believe for a while there went to like five dollars in uh when it launched in 2015 or something like that and then uh in 2016 during the dow went up to like 25 and then it came back down to i think it was six or seven dollars something like that then obviously 2017 it went all the way up to i guess 1400 1420 uh and then it came to down to 80 dollars then back up to 4400 and then down to 1700 then to 4900 then down to like you know the low

2 thousands and now back up to 3 400. and this isn't counting all the extreme wild volatility that has happened over those years now during all that the ether has been moving around it's being distributed to different parties it's going from short-term speculators to long-term investors it's going from people kind of like capitulating to people who have stronger hands all these sorts of things right so that's worked uh you know to distribute ether as well but the proof-of-work phase has just kind of like compounded that because of the fact that the the miners are just kind of like constantly selling eth right they're not hoarding it um they're holding their profits don't get me wrong especially as we're approaching proof of stake a lot of them are stakers but they're not able to hoard at all because they have to pay to to cover their costs

so i think that has has been extremely beneficial it has made ethereum um you know going into proof of stake a more equitable and distributed network it's going to make it a more decentralized network and also it has bred uh a better social layer in my opinion now let's take the flip side let's look at a network that launches as proof of stake from day one a lot of these layer one networks have very heavy insider distribution some of them are so bad that they have a very small public allocation now because they prove a stake from day one what ends up happening is that these insiders are literally staking from day one uh not even before their tokens unlocked even before their tokens are vested there it's in staking a lot of the time so they're earning rewards and they're

probably selling those rewards you know they have to sell for tax purposes obviously obviously stakers don't have much of a cost it depends on the network i mean not all proof of stake is created equal something like a solana proof of stake which is like a delegated version where that has like beefy hardware there's obviously a much more cost involved there but something like an ethereum proof of stake it's very different because the hardware costs are very minimal it's uh you know it's very cheap to run so really the only time you're gonna be selling is to cover taxes at the end of the day so uh those are kind of those are like kind of like little differences there but you know you have these insiders who don't distribute this at all like the early buyers are just going to perpetually stake why would they sell

their steak they're just going to they can just sell the rewards it's all well and good maybe they'll sell some of it to return some money as part of their fund right if they're a vc or a fund to their investors things like that but they usually have such a large chunk of the supply that they're earning a lot of rewards from these networks and especially during bull markets where these networks kind of go up spectacularly in value those rewards can become very very lucrative from there so there's no distribution phase there's no proof of work distribution phase the only distribution that happens is the selling of the rewards really and the i guess i guess calling it a pre-mining is accurate the pre-mine is never distributed whereas uh well it's it i mean not to say never distributed but it's not distributed in the same way ethereum's quote-unquote

pre-mine was because when you think about it the ethereum ico was a pre-mine right but i would be you'd be hard-pressed to find many people that are still holding their eth tokens from the ico like and it's not even just about people it's about kind of like the percent of eth that hasn't actually changed hands since ico it's a very very small percentage and there's actually um on chain data that you can look for this and last time i checked you know you would have to look at each that hasn't been the only way you could really do it is looking at eight that hasn't been moved in a certain amount of time and i think the amount of eight that hasn't been moved in five years or more is maybe five percent or something like that um so it's it's a really small portion of the supply that hasn't moved

um but that's not to say that all the supply that has moved has been sold but really i mean anyone who's held eighth from 30 cents to now without selling any of it you know from ico to now without selling any of it was already rich to begin with those are the only people who wouldn't sell ethan my at least a bit of it in my eyes because that's life-changing money for anyone even if you put in a thousand dollars that's that's millions of dollars just from the ico so i think when you think about it like that and you think about all the market cycles and volatility and you think about the proof of work distribution on top of that with the miners having to sell ethereum is going into the proof-of-stake uh merge uh very very strongly it's not going to be insider

kind of like dominated there's not going to be massive vcs or funds um staking kind of like their eth and things like that a lot of it is simply individuals and yes there's exchanges that have large earth stakes but those exchanges are not uh it's not belonging to that exchange themselves like it's not coinbase it's not like coinbase is staking you know all this eth it's their customers doing that yes they control the validators but it's still their customers eat at the end of the day those customers will either choose to sell that eighth when it goes up sell the rewards or unstake and just keep it in cold storage if they want to or you know do whatever else with it so i think not a lot of people talk about this but as i said it is critically important for ethereum's future um

because i'd be much less bullish on ethereum if it started off as a proof-of-stake network because of the fact that it would be heavily insider-dominated um and it wouldn't be that great and you know even vitalik for example he hasn't staked much of his eighth i think because of the fact that he doesn't want uh to kind of like uh you know from his public address he doesn't want people seeing that he's like a large chunk of the network or anything like that but he has about three hundred thousand eighth and even if he staked that you know if he's take three hundred thousand eighth today he would get about a thousand validators or something like that right that is not a large chunk of the net that's not even one percent of the network i believe if i'm doing the math correctly it would be

around point three percent of the network and uh vitalik i don't believe is the largest largest heath holder i think the largest single eth holder would probably be joe lubin or one of the billion dollar funds but the funds always are like trading in and out of it so i'm not sure there but i would say that joe lubin is probably still the biggest eath holder out there and look there could be worse eighth holders right he's not a vc he's not a fund he's actually building a company that's um that's trying to kind of grow ethereum so i think there could be worse people than that but i mean joe lubin was also forced to sell a lot of his eighth to cover cost the consensus too so he distributed his eighth out into the wild as well and i don't think he has

anywhere near the amount of eight that he had from from the ico anymore um but he'd still be one of the largest holders of course but yeah as i said like the the the the power distribution phase and coupled with especially coupled with the market cycles has really done wonders for each distribution and it's going to make us going to the proof-of-stake merger a lot stronger uh there all right so speaking about the merge trent van ness has another killer thread about it uh with it which is kind of like starting off by saying ongoing thread for ethereum merge info so you can see here some of the things like unburnt fees going to uh i guess block probation producers or stakers post merge um it links to the eips for withdrawals uh post merge you know blocks being 12

seconds into 13 seconds blah blah blah not going to read it all out for you but go check out this thread it's got a bunch of more information about the merge which is obviously the biggest thing happening in crypto right now i mean it's the biggest thing happening crypto this year i actually think in 2021 besides nfts eip1559 was the biggest thing that happened in crypto in terms of kind of like the impact that it had across the board i think the merge is is that for 2022 coupled with the layer 2 stuff you know layer two stuff is still trotting along guys like all the kind of metrics are going up for layer twos right now and they still don't have tokens like i'm kind of in two minds about them having tokens or not like if they were to drop a token right now it would

actually be like pretty good for valuations and things like that but how good it would be for distribution and and kind of like getting people bought into the ecosystem that's another question altogether but i think that um the longer they go without dropping a token and the more natural growth that they have the better it is uh especially because they're going to be able to air drop these tokens to a wider set of people as well because more people use these things i don't know like i'm just like i'm very happy with where layer twos are today that's for sure um and on top of that i'm obviously very happy on the progress being made with the merge all the stuff going on there which i've covered a million times on the refuel i'm not gonna i'm not gonna go through that all here uh but yeah definitely check out

this thread i'll link it in the youtube description for you because uh trent you know puts together these things he's very very good at getting his point across and i recommend giving it a read all right something that's not directly ethereum related uh but that jake shivinsky shared today on twitter uh and he said on twitter the sec just proposed a rule that would expand the different definition of regulated dealers to include people who employ passive market making strategies that have the effect of providing liquidity to others it's 200 pages but doesn't say d5 even once now obviously this is d5 right i mean employ passive market making strategies to the effect of providing liquidity is literally what you do with uniswap and amms and things like that so it does they don't have they don't have to say d

fight obviously is targeting d5 here and there's just 200 pages i'm not going to read this at all like you guys know my opinion on the sec i don't respect them i don't think anyone respects them i think it is a joke of a regulatory body and i think that uh until they have a better chair at the head of them because gary gensler is a complete joke uh i don't think they're gonna get the respect that they want here so this is obviously just a proposal it hasn't gone through i don't know if it's going to even go through these things kind of like come to the table all the time but this is obviously not a great proposal it is i mean it's more of the same as we've seen from the sec they seem to be just kind of like clamping down on whatever they can honestly you

know the the kind of like um uh what's the word i'm looking for the cynicist within me thinks that i don't know i don't know if it's gary gensler or others within the sec they're just kind of like in the pockets of someone like surely they can't look at all this stuff happening all this innovation happening on their shores as well and be thinking to themselves oh it's a really good idea to go after legitimate companies in crypto such as unisop labs instead of all the bloody scammers like i've ranted on about this so many times i'm not going to go on about it again but they are a joke of an organization joke of a regulatory body i don't respect them i'm sure you guys don't respect them either they haven't done anything to protect any investors in my eyes all they've really done is kind of

like find a couple of things and put out upon it just really hasn't done any good for anyone trying not gonna rant but um but yeah uh you can check out this if you want this 200-page proposal which i'm sure you're not going to check out because it's just total crap and a lot of lawyers speak and all that sort of stuff but yeah i just wanted to kind of like highlight this i'll keep tabs on it i'll let you guys know if this dot if this move it makes any movements anywhere i highly doubt it will like i actually don't think that there's going to be any kind of like thing that comes out of this but it's always good to keep tabs on this sort of stuff all right we have a fresh new thread from bartek today diving into what optimism's cool data compression

actually means and how it all works this is a technical deep dive it's a thread go check it out i actually learnt a lot from from this i mean it's not a long throw but i actually learned a lot myself as well which is really cool to see i think um the the thing that bartek wanted to highlight here is that uh right now you're basically trusting the centralized sequence other optimism has um to do this correctly and to basically post what they're what they're saying they're posting to layer one ethereum correctly here but you can use the script that they provide to decompress the data for yourself that gets posted to layer one in order to kind of like verify the information but uh until the new fraud system is in place which is called canon uh you know it's not going to be done in

a very trustless or decentralized way but you guys know that we all know that we all know the training wheels are still on we all know these things are still early days um and that's all well and good there but definitely check out this thread from bartek for a deeper technical dive on on kind of like uh optimism's cool data compression which i covered last week on the refuel uh it's a really really great little deep dive here so speaking of deep dives arjun posted a blog post today titled wtf is a crown account abstraction now i think i've covered account abstraction before but basically uh i guess like the tldr is that it what it does is there's two different types of accounts in um in ethereum as you can see here simulated in the blog post externally owned accounts and

contract accounts now externally owned accounts is basically just a regular ethereum address that you and i have a contract account is as it's self-explanatory a smart contract account basically so for example a smart contract wallet such as a multi-sig would be a smart contract account it would not be an externally owned account now externally owned accounts control smart contract accounts they interact with them and you know uh i mean smart contract accounts may be a misnomer there but smart contracts basically on ethereum is just a different account type now this leads to a few different kind of things that that are kind of like a little pain points and that's why people have been wanting to do a count abstraction to do it on layer one ethereum uh it's been wanted to be done for a while now but i

think it took a back seat to things like the merge i'm not sure how feasible it is to do it or how desirable it is to do it on layer one ethereum but on layer two it can be done very very easily because as i said to you guys layer two operators have much more control over their system than they would on layer one obviously because layer one is decentralized and layer two is still very centralized but uh but yeah so uh this blog post gives you kind of like a full breakdown of what it is i'm not going to try explaining it on the refill because i want you to read the post as it's it's a better explainer that i could give you um uh but yeah it's also i don't think it's too technical i think it's high level here but uh but yeah go give this post a read

or link in the description below all right so polygon is teasing something new today again uh about privacy so they say here privacy takes center stage and i think they're announcing this today i believe um they may have already announced it no they haven't announced it yet so i believe they're announcing this today and i'm just recording the refuel too early so i'll probably cover this in tomorrow's refuel but uh yeah keep an eye on polygons twitter accounts uh and all their channels to see what they're kind of like doing with this uh this is really cool i mean polygon already has nightfall which is kind of like a hybrid i guess like uh privacy roll up sort of thing going on there they have a lot of the zk stuff that they're doing i'm very curious to see if this is going to be it seems like it's

going to be another solution that's kind of like separate to all of that um which is going to be cool so we'll see we'll see what kind of like happens there i'll keep you guys updated on this i'm sure you're going to see it before i cover it on tomorrow's refuel uh but yeah just keep an eye on on polygons twitter account there today all right so nifty chat has announced that they they have raised a one million dollar funding round led by archetype of uh uh vc fund here with participation from a bunch of angels myself included so disclosure there so basically what is nifty chat it's a web3 chat platform as i've been covering a lot of these recently there was orbis and then there was the ether scan chat which wasn't exactly decentralized web 3 chat but you know these things are making more and

more waves within crypto especially things like decentralized social media and we we we now kind of like have better and better tools to build this sort of stuff so you can go to nifty.chat here you can see i'm already logged in with sasel.eth on my screen here and you can see there's different channels i mean it looks very similar to discord right you can see basically the the chat pane here with a bunch of channels on the left and you've got different servers here so i'm currently in the nifty chat server and the ens server and there's a bunch of useful information around here such as how many people are in here the gas price uh uh things things like um who's online and stuff like that and how many people have said gm um now the reason why i think this is really cool and the reason why i backed

it was because i'm really bullish on decentralized chat applications because at the end of the day there is a lot of chat applications out there today but none of them are decentralized from from what i from what i can tell uh there are some that do end-to-end encrypted messaging like signal for example uh telegram is very popular but still they're not very decentralized they're not um web 3 native and that means they can't integrate with web3 native features so for example you have to use kind of like third-party tools to do things like nft gating of channels whereas with nifty chat you don't have to do that it is a direct web3 platform and it can just read your ethereum address and basic the state of your ethereum address or account and basically say okay well you have this

nft you're allowed into this channel oh okay you don't have this nft anymore well you are not allowed on this channel all in a decentralized way right guys because it's done on the ethereum blockchain so i just really love uh the idea behind this i'm really thrilled to be a supporter of them really excited to see where they go with this and kind of like uh you know what the adoption cycle looks like for this i still think overall some of this stuff may be too early um but at the same time i think it's less earlier than what it was i think in the next few years uh i definitely think as we scale more and as more of this infrastructure comes into play we're gonna see more of these decentralized social media platforms come into play and i think having a chat app is is at

the forefront of that because building a centralized social media platform is much more complex um from a from a you know various different kind of like angles and then building a decentralized chat application but in my mind they're two distinctly separate things um and the chat application is just as important so very excited for this definitely log into this and check it out i mean all you have to do to log in is sign in with ethereum you just sign them with metamask with one of the other weather providers that they have and you can get started straight away in in all the channels like lounge whales suggestions and support i mean the the cool thing is you could have a channel here that says okay well i mean going off the whale theme only uh show this channel to people who have a certain number of tokens and those would

be the whales of your protocol they always have a lot of skin in the game and they can have their own little private whale chat going on there all in a decentralized way by the way guys like no one needs to manage this it's all read by um reading the state of the of the of the accounts so um those native integrations i think are going to be very important going forward so i'm very much looking forward to that but definitely go check this out i'll link it in the youtube description all right finally here i just got a quick shout out that zappa is currently hiring for a bunch of different people so they're hiring for an android developer a product designer and a brand strategist but if your experience doesn't fit the above roles you can dm seb from zappo anyway um if you're good

you're good as he says goes back to what i was saying before guys it doesn't matter if you can't find an exact role to fit your skill set when looking on these crypto jobs websites or looking on on you know really anywhere and job boards things like that literally you can actually jump into a discord channel these days and make a role for yourself if you're filling in a role that that a project needs or if you're filling in a niche that a project needs you know if you do good enough work they're probably just going to hire you anyway and even if it is a casual part-time basis they're usually going to pay you in tokens as well so if the project's doing really well and you hold onto the tokens you can have lots of upside in that from just kind of like

creating a role for yourself so if you don't fit any of these roles yeah definitely dm seb i mean working for zappa honestly i mean i you guys know i'm an investor in zap i've been a user and lover of zebra for a very long time uh they've got a kick-ass team there so it's probably one of the best teams to work for in the crypto ecosystem so if you do feel those skill sets definitely go definitely dm said but even if you don't kind of like dm anywhere anyway if you think you can fit in anywhere else uh there but i think on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to the newsletter join the discord channel and

i'll catch you all tomorrow thanks everyone