Compound Chain, TORN token, Coinbase IPO & more - The Daily Gwei Refuel #18 - 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 18th of december 2020. all right everyone let's get into the news from the last 24 hours so it has been a very big last 24 hours that's for sure i feel like i say that every day within ethereum but i woke up uh this morning and i was like wow okay a lot of things happened while i was sleeping uh so we'll get into that in a sec i just wanted to quickly mention that git coin grants round eight has a matching round eight has now ended uh according to git coin it was a record breaking round which is really cool to see so if you did um if you did donate to the daily gray

and actually to ether as well i just wanted to extend a big thank you for your donations uh it really helps to support me and support all the work that i'm doing and support all the work that eric and i are doing at ethub as well so just a big thank you there and also i thank you to to you if you donated to other projects too right um it's always good to give back especially during these matching rounds where your donations are of course matched quadratically so you can have a bigger impact when when donating money so yeah uh kudos to everyone for that uh there was a uh a tweet put out yesterday by getcoin about how much would have been donated i think it became a lot more so this was the day before it ended basically um so basically they were able to raise 413

000 well not raised but like 413 000 was donated from 24 842 contributions or 4844 unique contributors almost 5 000 contributors so 5 000 like really active if you're in community members have have donated here which is really really really cool um and there was 289 000 in carts you know a day before it ended i'm curious to see uh basically uh what it ended on um which would be really cool and you can see here the top grants that that raised the most and but sorry they got the most matching uh on the technology side it was uh you know things like dap node uh e3 kind of things i think there's dap

note three e3 related things and open ethereum which is eth1 uh related uh and then on the community side of things i think we had uh the communities down here we had coin center obviously like a big entrance this round uh bankless 8th planet dap chaser and d5 dad there um and then i think this one was like the infrastructure uh section where we had like ap or ipy vision mask book rocky snapshot and keeper live so congrats to all those teams for raising a bunch of money there it's really really cool uh it's you know bankruptcy has 586 unique contributors that's pretty pretty crazy right i think that's the probably the most unique contributors out of any grant that i've seen um uh for a while actually

so that that's uh that's pretty cool there so congrats to to those guys um but yeah so i guess we can move on to the next thing finally to this uh so this was the biggest news even though there was lots of big news this was the biggest news from the last 24 hours uh compound announcing that they're spinning up their own blockchain now i wrote a pretty lengthy piece in the daily way about this with with a bunch of my thoughts and explaining exactly what this is so if you want to check that out i'll link it in the show notes it's basically in the daily gray newsletter um but i mean to say i am i'm like positive on this is is not right i i'm more negative on this i don't think this is going to be

anything good i don't think it's a good idea i think it's a pretty poor strategic decision on compounds part i don't see the point in it for a multiple for for a multitude of reasons really i feel like it's going to fragment you know liquidity fragment network effects fragment the utility of compound um for for little gain i believe i just don't think that the gain outweighs the negatives that come with this and it's unfortunate because compound is one of my favorite teams within the ethereum space they've done a lot of work for ethereum they've pioneered a lot of different things i mean they were i think they were the first money market protocol on ethereum so to see them kind of i guess i i

wouldn't say like uh they they stabbed ethereum in the back or anything but they're kind of like migrating away from ethereum right yes they'll still have um bridges back to ethereum and all that sort of stuff and and apparently the chain will actually be governed by the comp governors on ethereum still uh so there's still like that interoperability there but at the same time it kind of feels like you know they they came to ethereum they did what they needed to do to grow their platform and they're basically saying thanks for all the fish we're gonna go to our own chain now uh which i i kind of i didn't like um and i also just don't think it makes sense from a technology point of view for the reasons i outlined just just then uh and you know you can go into my into

go read the newsletter for a longer break down there one thing i will say though is that the general sentiment around this is is pretty negative like usually if i if i think something's like a bad idea uh you know i can find at least a a group of people that think it's a good idea right and i can debate them we can have like a healthy debate about it but literally everyone that i spoke to about this today literally everyone like not one person was able to give me the ball case for this uh they were basically in total agreements with what i was saying and and how i felt about it and they had their own views on it too about how they didn't think it was good uh and you know you can always tell what uh you know what you know a company or like

an individual thinks is going to be an unpopular opinion by this little feature on twitter so on twitter you can actually limit who can reply to your tweets so what they did on this announcement tweet is they limited um the replies to only uh people that compound finance follows or mentioned so they didn't mention anyone so only the the kind of accounts that compound labs follows and it's only 49 people so basically they knew this was going to be a controvers controversial kind of announcement they knew they were going to get a lot of flack for it so instead of taking it they figured that they would just disable replies and i feel like this is like a streisand effect because disabling replies doesn't stop people from talking about it you can see here there's 115 quote tweets here right if i go into them i'm

guaran guaranteeing you that like there uh there are you know a lot of people here talking about uh you know the compound chain itself and and talking about i mean some people are bullish on it here right good news i you know i'm inspired but then you know danger goes on to say wondering why they are reinventing the wheel here um and you know i guess there's positions on both sides uh i mean the people i've spoken to are more i guess like in the ways of ethereum maybe you could consider them ethereum maximalist right and this goes against that that kind of like ethereum narrative um i but i do think it's kind of like torn the the community here uh but yeah there's a bunch of people here that are excited for it i hadn't actually looked at this yet it's

interesting to see that um that there are people are excited about this which is cool and i mean samia is part of the instagram team so he's not just like you know some anonymous twitter account is you know he's a respected developer within the community uh i guess you know there's other people here like tom howard who who says you know why not make their own change but you know a bit sarcastic there so i guess he doesn't really um i think that it's a good idea uh yeah i mean yeah there's other comments here like there's plenty of comments i can go through them yourself i'm not gonna go through 115 of them but i guess like i'll pop up there i guess like um but but what would have happened i think would be you know when you do this you kind of

fragment the conversation right so if you let people reply to it you basically let them you know hash it out in the replies you know it's all you know it's all collected in one place but when you do this it fragments it and the the kind of conversation gets split up here so you know i'm actually just curious just keep scrolling through here and and and kind of see um you know the different opinions here so yeah yeah yeah hey if you're gonna stop using compound right there's uh you know didn't aragon try this already and then they they deleted their efforts uh this is actually a good point i hadn't thought of that um aragon did actually try this they said they were gonna migrate to a new chain they tried it and then they're like okay we're gonna go back to ethereum because

that didn't work out so we already have proof that that kind of that wouldn't work out and i'm and i'm i'm thinking will will compound get kind of like usurped now will they lose their network effects will they basically get forked right you can imagine someone saying okay we're compound classic we're staying on ethereum you know use us instead of this compound because they're left or whatever who knows right there's a lot that can happen here because you're not just dealing with technology here you're dealing with people right you're dealing with a very feverish community who you know don't like to see this happen i mean i'll freely admit that you know i have a bias towards ethereum right obviously right and that i want to see things stay on

ethereum um so that informs my kind of views as well but i also just think in general like app chains don't make much sense they just they it just fragments everything and you lose all the network effects that ethereum has managed to gain over the years by moving away from ethereum um and you know i think that's the reason why i kind of like one of the reasons why aragon came back to ethereum and things like that so you know there are high fees on ethereum and that's commonly something that's cited by teams moving off of ethereum saying you know the high fees are killing us we have to move whatever but there are solutions being built on ethereum to alleviate that right i i feel like sometimes i feel like what happens is that

instead of fixing what we already have like people uh teams or different kind of like teams different builders just decide okay you know let's pack it up and move to a a kind of like a new city without even trying or a new chain without even trying right to fix it um you know i i i'd probably be more understanding if what ended up happening was that we tried to fix ethereum and you know we couldn't right for some for one reason or another we couldn't fix it we couldn't fix scaling we couldn't solve it you know um the protocol ossified or whatever and it was just you know disaster but that hasn't happened so why why i kind of leave right why i just i don't know i feel like it's like leaving the party just when it's kind of getting started um so yeah controversial move from

compound here something that uh i think we're gonna have to see play out because i think compound is obviously much bigger than what aragon was so looking at aragon as an example of what failed probably isn't mapping one to one to this but at the same time i am weary about if compounds are gonna actually see any much traction with this and i actually do think there's a high fork chance uh you know fork risk here now where someone's gonna fork compound and call it compound classic or something to capitalize on this kind of drama so yeah curious to see how this plays out i know there's a lot of thoughts there you can read more of my thoughts in my in the newsletter of course uh but i've been stirring on this literally all day i've been trying to make sense of it

because i really wanted to give this a chance but i just can't i just don't i just don't i don't get it um maybe i will in time maybe i'll change my opinion in time but for now i yeah i'm just kind of bearish on the idea in general all right another kind of controversial announcement was tornado cash uh uh announcing that they've long they're launching a token called torn which i think is a bit of a funny name for a token because every time i see these four letters together i think of tron so yeah it's a bit weird but for those who don't know tornado cache is basically a a uh privacy kind of protocol or a mixer protocol on ethereum where you can send eth or tokens in and mix it and then you you can spit it out and basically have

like a clean address with with eth um this has been a popular tool that's been part i guess of like the the hackers kind of toolkit people who are hacking d5 protocols they always go through tornado cache things like that it's also been popular people who want to preserve their privacy i know a lot of eth2 validators actually went through tornado cache to wash their addresses in order to start like brand new on eth2 which is really cool so yeah they've they've kind of launched this token and i don't think they've really thought it through too much uh they say it's going to be a governance token for tornado cash uh but like then they go on to say like this torn is not a fundraising device or investment opportunity

and whatever which is standard like kind of legal speak but it's kind of funny though because like governance tokens in my eyes like if you launch something is purely a governance token you're launching it to to not make money but to like i guess like cash out on your idea because tornado cash is great right it's getting a lot of use but it's extremely hard to monetize open source so the way you do it on ethereum is you issue a token but what ends up happening is a lot of tokens get issued that don't make much sense because they're just pure governance tokens yes you can vote in like fees later and things like that and fee capture and value accrual mechanisms but for tornado cash i don't they don't have any of that yet and i don't see you know how they would in

the future because i guess i mean i guess it can work if they get like because it's dependent on liquidity if there's enough liquidity within the system they can justify charging fees and they can protect against fork risk but at the same time if it's just fear cruel then i don't see how this token can be you know worth a lot going going forward because i don't see a tool like this being used you know um you know enough to justify like a really high valuation for the token just based on fear cruel right and governance i mean it's kind of like diminishing returns at this point the more governance tokens out there the less the the whole are worth basically so yeah i don't know if this has been thought through too too much maybe it has maybe i'm i'm i'm being a bit harsh here but

yeah um i i think the most interesting part of the token though is that it's going to actually help bootstrap the protocol because what they're going to be doing is they're going to be kind of doing a liquidity mining program which they call anonymity anonymity mining which basically is going to increase the liquidity within the tornado cash system so for those of you who don't know how this works the more liquidity in the system which is called the um the anonymity set the the better it is because the more kind of like eath and tokens can run through and get kind of like washed through and mixed through so by doing this liquidity mining program their their their hope obviously is to get all that liquidity in um and and be able to kind of like

increase that that set of kind of uh eth in there so people can can mix more and they also say that they're going to um be building a an amm on tornado cache here uh which is interesting uh and and they saying that you know it's a complex system but it ensures that user privacy is always protected uh in the process of claiming you know their torn tokens as well so yeah there's a bunch to unpack here i'm not going to read at all you can go check it out in the show notes it's a pretty long read here and you know it might seem funny that i'm saying that it's not like totally thought out because um uh and even though there's like a long blog post here talking about it but the reason why i say it's not totally thought out is because i just

don't think it needs a token really i mean the anonymity set was growing uh regardless of a token uh and you know token will make it happen faster because liquidity mining all this kind of stuff but i don't think it's going to uh you know i don't know i mean i'm not going to like claim that it's not going to be worth anything or whatever but at the same time i just i don't see the fundamental value in it like if it's just governance i mean yeah i don't i don't really see it that to that but maybe i'll be convinced here i know like i just kind of ripped compound uh you know i ripped into compound for their announcement and now i'm doing the same tornado cash but i don't know i just kind of felt that that these things were kind of out of

left field and i mean i don't really think anyone expected tornado cache to do a token right no one really expected compound to do their own chain so that's why i'm kind of feeling like this maybe i need to digest this more um but at the same time uh yeah i i do believe that people should be rewarded for their work uh and you know make money from their work and it's hard and open source to do so you have to rely on grants and like you know funding from from you know companies and projects that do somehow make money um which is which is not great right but at the same time this is i guess like you know issuing a token just for the sake of it sort of thing which uh yeah i just wish it was was better thought out and the token actually had like a a

purpose other than governance at the start but i guess for regulatory reasons especially saying it's just the governance token is is what you do these days right so we've seen a lot of that but you know i'm curious to see where they go with this and how it evolves i'm sure they've got plans like the team's great i'm sure they've got a lot of plans to to kind of make this better than just a governance token but for now that's that's what it is basically all right so i spoke about this regulatory news in the last few episodes and the block got a scoop today on what it might actually be so this was the regulatory news about the kind of like self-hosted wallets in the u.s and people saying you know the us is going to ban self-hosted wallets blah blah blah they're going to

do this that and the other which i don't think is true and i explained that on the previous episodes but basically what this uh post from the block says is that what's actually going to happen or what they've learned right this isn't official information but it's what they've learned is that exchanges are going to have to file a currency transaction report uh if a client conducts a cryptocurrency transaction to or from a self-hosted wallet that involves their exchange and um and above and as sorry as yet unknown threshold so for example if you send in ten thousand dollars in a single day there the regulations will want the exchanges to report this and file it as a report

i mean this is like a nothing burger like what what i don't get like why this is like even bearish or why this is even a big deal exchanges already have access to all of this information exchanges have records of all this information yes they're not directly reporting it to these agencies but the thing is these agencies and these law enforcement bodies can access this information at any time that they want they will get a warrant to do so they will be able to get this information so especially if it's over like ten thousand dollars um because that's what they've done in the traditional system so i don't see this as being anything like special i you know obviously people were kind of saying oh they're gonna ban self-hosted wallets and i don't think they're gonna do that

like that's just insane but at the same time i don't think this is a big deal either right i i just i mean i just think it's just like tightening of regulations making the exchanges have to report this now instead of the law enforcement going to them but you know if they if they wanted to they could have gotten access to this data anyway so not a big deal here but again this is an official we'll have to wait for the official kind of comment which is apparently supposed to come out as early as today so friday but you know maybe we don't see until next week or something i don't know it's just like all up in the air and people kind of like we're like oh we're gonna dump because of this and then we we've got we've actually gone up right in price and

everything like that so who knows we've we always kind of have this kind of looming over crypto it's like is this government going to ban it or is this government going to ban it like the china bans crypto meme is a thing for a reason um i just think it's more nuanced than that there's not going to be outright bans at least in the us right and in other kind of western democracies um because it just doesn't make any sense there's a lot of different players involved i just think there's gonna be tightening of regulations around things and that's that's basically it basically all right on to the next thing so the graph launched their network today so for those of you who don't know the graph is basically an indexing protocol for

querying blockchain data on ethereum and other kind of networks so for example when you go to a default website and it shows all your pretty apis and and kind of like position information on like availa compound for example and things like that that's the graph powering that uh so they actually power most of d5 they they are one of the most used things that you've probably not heard of before because they're back-end infrastructure so they launched their their network today which came with a native token called grt um and that token is currently trading at a two billion dollar fully diluted market cap so it went crazy and i mean i knew it would considering how uh used this protocol is and and and the fact that the token is going to be kind

of more than a governance token it's going to actually be used to secure the network it's going to be used to pay fees and things like that so and their token model in my eyes is actually very well thought out and the network model is very well thought out so yeah congratulations to the graph on launching this uh they had a huge launch i mean they had coinbase listing them on day one they had binance listing them day one all these sorts of things happening um which i mean i expected because i'm pretty sure coinbase invested in the graph uh i i have to double check that but they usually they usually list things day one when they've invested in it through coinbase ventures so i wasn't surprised to see that but yeah uh congrats to the graph there if you want to learn more about the graph

you can go check out their their kind of website here the graph.com uh they're actually a really interesting protocol and i love their their design as well the design of like their front ends and things like that it's really cool to kind of browse through but yeah congrats again to the team on that one speaking of coinbase they also put out a big announcement today what did i tell you there's a lot of announcements to go through basically they have submitted their draft registration with the securities and exchange commission commission aka they've submitted the forms to do an ipo or a public offering to issue coinbase stock everyone kind of knew this was coming it was rumored to be coming you know at around this time uh it kind of makes sense you know

the markets are heating up again what better time than to ipo than right now right you don't want an ipo in a bear market when everyone's kind of bearish on crypto you want to do it in the heat on the heart of a bull market so this will be going live soon i'm not exactly sure when it's going live maybe they say it in the post here but basically uh i think yeah once they've submitted this and then the ssc completes their review process uh and you know subject to market and other conditions they'll kind of launch this so obviously it's not going to go live until next year but this is going to be one of the biggest ipos of 2021 i think uh there is a tweet thread from myra here that basically says that masari values uh coinbase at 28 billion dollars

from from you know right from the onset uh due to the fact that they're doing one billion dollars in daily volume uh you know they're growing they're like the kind of front door into crypto for the us and things like that so that's a you know pretty fair valuation i think uh that's less than ethereum still so you know there's always there's this thesis about you know should coinbase be worth more than some of the networks it supports i don't think that maps one to one i never really kind of understood that thesis but yeah i mean i expect this to happen and we've seen a lot of ipos go live recently uh that have kind of opened at a much higher price than people thought they would so maybe coinbase will do the same thing especially if you know crypto continues in this bull

market right the investors are going to be like i need a piece of coinbase um and people were speculating you know what will this do to the price of like uni on on for uni swap right because people like to compare union swap to coin base so will uni kind of match coinbase's evaluation things like that i don't i don't think that's going to happen but curious to see if uni actually moves when coinbase is kind of um when coinbase does ipr and they have a price for their for their stock or for their share so yeah i guess congrats to coinbase for filing this uh and we'll kind of like see what happens next year on all of this all right everyone that's it for today thank you again for tuning in if you haven't subscribed to youtube channel yet be sure to do so

give the video a thumbs up subscribe to the daily newsletter join the discord and i will catch you all next week have a great weekend everyone