Cover post-mortem, Primitive Finance live and more - The Daily Gwei Refuel #25 - 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 29th of december 2020. alright everyone another big day in ethereum land but first before we jump into the news from the project updates and things like that i did want to quickly give a shout out to this new thing that has been created by uh three community members uh in in ethereum they basically are community members i guess of the reddit ethereum community mostly and what they've produced is this thing called the haiku book now a bit of backstory here this book came about because for quite a while i think since 2019 in the reddit uh you know uh slash r eth

finance and before that slash uh ethtrader uh there's a daily thread on there where people can go in they can discuss you know daily price movements project updates things like that and it's basically like i mean if i had to describe it it's actually pretty similar to twitter where you know you have people just like streaming out you know their thoughts and then you know you have the replies under there from other people so i guess i mean i used to spend a lot of time there back in 2017 or 2018 before twitter became my main kind of go-to but you know it is kind of like that and what a user ended up doing was uh they were posting uh haiku every day in the daily thread and it kind of became like a ritual it kind of became something that people really resonated with it was it was

quite cool uh so what um two other community members uh kitte and uh crocodile man chan i think is his name manches or us uh i think that's how you say it uh they have decided to uh put together this this haiku book so what this is it's basically a collection of all of those haikus from the the daily threads i think there's over 200 of them and they've put to put it into this ethereum themed book here so you can check out the physical book at thehaikubook.org i mean i'll link this in the youtube description for you it takes you to this website here it's available on january 1st 2020 for you to order via amazon and in addition to that there will be a creator series nft so there'll be three nfts

kind of themed around the three creators um so you have the the crocodile one uh you can't really see it i guess on the video here um but there's a crocodile one there's a there's a kitte one um and then there's like a serpent um referencing uh the other person i've forgotten the name now i think i think uh i think uh here it is here it is single state serenity sss so i guess like a snake um you know to go with that theme there uh but basically this is really cool i think there's a lot of ethereum history that a lot of people maybe don't know about and like little corners of different ethereum communities that are really cool not just on on reddit but also on twitter of course and a bunch of other places so i mean i'm going to be ordering this on day

one i think this is gonna be great i'm gonna uh i'm gonna maybe try and get one of those creator series nfts as well if i can uh because they look really cool uh but yeah so go check this out it'll be in the description um you know i highly recommend uh you know purchasing one um and if you want just you know cut something i guess for your coffee table as well right and it's really cool because you can put it on your you know your coffee table or somewhere in your house you can have guests over and they'll ask you know what's this and you kind of get to talking about the haikus and and ethereum in general and it's kind of a good conversation starter i think as well um and for me i guess like and i guess for a lot of us in ethereum it's going

to be some kind of memorabilia because as i said i was active in the um trader and eighth finance kind of daily threads back in the day i guess not commenting but like lurking a lot and that was kind of a home for me before i've kind of migrated to twitter so i think that you know rings true for a lot of different people so yeah congrats to the guys for getting this out there uh this is a really great effort to create a book out of these sorts of things so yeah looking forward to getting my copy all right biggest news of the last 24 hours i'm sure you've all heard about it we all knew it was coming coinbase announced that they have moved the xrp books to limit only mode and coinbase plans to fully suspend trading of xrp on january 19 2021 at 10 am pst

so that is less than a month away it's about three weeks away now where they'll suspend trading here now you know there's been other dominoes falling over the past few days since the sec's kind of announcement came out that they were suing ripple and two of its executives so you know we've seen some big market makers pull out we've seen other exchanges do do list things but obviously coinbase is the one that everyone was waiting for you know now that coinbase has announced this the rest of the exchanges are basically either going to delist xrp or bar us people from trading it basically uh i think they you know might go for the just bar us people from trading it route first rather than kind of listed outright because it still generates a lot of volume and obviously a lot of fees for the exchanges

but yeah this is this is pretty big um you know i mean everyone wants or everyone thinks xrp is probably going to go to zero now and like the whole thing is going to come unravelled and everything i don't think that's going to be the case i mean you know as much as i actually think and i'll straight up say it i think that ripple have have got some really gross marketing the way they kind of sell this stuff to people is is disgusting and you know in the report it said that the two executives profited you know hundreds of millions of dollars over over selling these xrp to the market um so they've obviously profited greatly from this but what i actually think is going to happen is that they're going to go to court or they're going to you know settle you know they're going to talk to the sec

with their lawyers right because they can afford the best lawyers um using the proceeds from their alleged crimes which is a whole another thing but anyway so they're going to do that you're going to talk it out they might pay some ridiculous fine right um and then you know they might have to register it as a security or whatever but then i don't think anyone's going to jail over this for example right and i don't think this kills xrp i think you know it maybe xrp has a tighter regulations around it maybe it has to trade on places that can trade securities all that sort of stuff but i don't expect it to to die and i and you know what i don't expect coin i don't even expect coinbase to have kind of like xrp delisted forever right they'll probably re-enable it if they ever get

the go-ahead to do so so i think you know i mean obviously i'm not a lawyer and that's kind of like just not even a legal opinion that's just kind of like my general opinion of what i think is gonna happen uh but we'll have to see how it plays out these things can drag out for quite a while but the fact that exchanges have suspended training for xrp i think will kind of light a fire under ripple's kind of bottom um and basically get them to try and resolve this as quickly as possible because they obviously want to restart selling this xrp that they still own into the market and you know hopefully at a better price like the xrp price has come down greatly since it's run up in november december um and yeah it's i mean i checked it just before it's down like 70

percent from its november peak in the bull market right i just against usd against ethan btc it's done even more uh against btc i'm pretty sure it's close to its all-time low against btc so xrp has been around since 2013 and you know it's gone up a lot more than bitcoin at times but it's almost close to its all-time low so you know and i you know i mean i i personally i do make jokes about this on twitter a lot um and you know kind of i guess you can view it as like celebrating that xrp is falling and that might come across as a little bit you know ugly to people because obviously there are people getting hurt from this right where they put their money into xrp and now after this announcement they're down like a lot right because xrp dumped obviously

and i get that but at the same time i'm a big believer in taking responsibility for your own actions you you know if you're investing in this stuff like even if you fall for like the marketing that that gets put out there and stuff like that i do believe that you're ultimately responsible for your own actions um and you shouldn't uh you know you shouldn't just go blaming everyone else and say oh it's you know the sec's fault that i've lost money it's like well i mean you know you know if you even paid any sort of attention to what the smartest people i get that i know of were saying and like all you know everyone else inside the crypto community was saying that it was obvious that that xrp was a security like very obvious um you didn't need to be like a lawyer

to know that you didn't need to know securities laws you know like back to front you just you know it was obvious so you know and unfortunately a lot of people just don't see that as well and that's why i actually when coinbase listed xrp i'm like this is just really really bad they're basically leading lamps to a slaughter um where they kind of you know they're the front door for these new investors to crypto and a lot of the time these new investors can't tell what's what because they haven't learnt about it yet but you know because ripple does so much marketing right and so much so much marketing like you would not believe how much marketing they do like i dug into it it's it's insane um and they are kind of like the first thing that a lot of people um new to crypto learn

about and they'll kind of learn about um you know xrp and then they'll have this narrative like it's going to be used by the banks it's going to you know it's going to fix international wire transfers all this sort of stuff right it's going to be a payments network and you know it's pretty easy to fall into a hole once you get to that point um but again you know all about personal responsibility i mean i mentioned yesterday how i got wrecked back in the day too like we've all been there again you know when you're investing in these sorts of things you shouldn't just put your life savings into this not even i wouldn't even say you should put your life savings into anything not just xrp but like bitcoin and ethereum you shouldn't do that either um you know that's just that's just dumb on on so

many levels right that's just uh not a way to invest in general so yeah i guess like enough about that um there's plenty of other stuff to talk about today but i think when looking at this stuff i i wouldn't call xrp dead unfortunately i think we're gonna it's gonna be an interesting 2021 for for ripple and xrp and we will see how that plays out all right so i mentioned yesterday that cover protocol their token contract got exploited now on yesterday's video there was still kind of news coming out about this it wasn't clear what actually happened and there was a lot of i guess confusion so i didn't dive deep into it but a couple of hours after i published the video you know everything pretty much came to light so

they put out a postmortem postmortem here about basically about what happened so there was a bug in their code that uh basically as they explained here uh there was a line of their code that caused the updating of the balancer pull state to be ineffective of the minor state when depositing this misalignment will cause the blacksmith which is one of their smart contracts to mean more rewards to the miner this bug has been present unknown to the devs in the cover protocol blacksmith contract since the day it was deployed after being audited um so yeah that's that's the bug basically and that what that's what allowed someone to mint like i think it was like 60 quintillion or something um cover tokens and then obviously dump that into the market while there was

still liquidity for them to do so on uni swap and things like that um so yeah that's what happened with that with the bug there now the funniest thing that came out of this was that the cover protocol exploiter the person who did this exploit after dumping all their cover for eth sent the eighth back to the team so you can see here on on the screenshot it's it went from graph.finance graph finance deployer which was basically the contracts that with exploiter was using to kind of do this whole exploit and then they sent it to yieldfarming.insurer deployer which is the team's address they sent 4358 3.1 million dollars to that address and they put as you can

see it on the bottom here a little message that they embedded into this transaction saying next time take care of your own this is just you know only in crypto right this is just so funny um you know obviously not funny that people lost money here because they still lost money the cover price tanked it's like down eighty percent or something still um exchanges suspended trading unit stop liquidity providers and and on other you know amms just pulled all the liquidity so people have lost money here like real money and i feel for those people but this is just like insane and i don't know you know i don't think this 3.1 million dollars is enough to compensate for people who lost money um either panic selling or selling because they thought everything was over or you know being down on their investment and stuff like that so i'm

you know i'm wondering if they're going to do like a buy-back program here they probably will right or something like that um but yeah so that that that was crazy i mean that happened at like what was it 12 46 a.m my time i was in bed i'm like oh my god what the what the hell so but again you know we've seen some of this in the past with some hackers returning like half the funds that they've hacked and stuff like that like i wonder if this is the same person you know you never know with this sort of stuff so there was that if you want to read the the whole timeline kind of events uh it's in the uh the post board and which i'll have in the youtube description for everyone um and cover also announce that they're they're exploring providing a new cover

token to a snapshot before the minting exploit was abused it was abused the ether has been returned by the attacker attacker will also be handled through a snapshot to the lp token holders we are still investigating do not buy cover all this sort of stuff right there obviously in damage control here and this is not the first time cover um slash safe so it was originally called safe protocol or something that has been exploited um there's been multiple times that this has happened and they've done multiple token migrations as well so just uh not a good not a great look i guess for uh for cover right now uh unfortunately um but you know hopefully they get through it hopefully their community gets through it uh you know the irony here is that they're an insurance protocol

right offering like on-chain insurance and then they got kind of hacked and people are asking who insures the insurers and all that sort of stuff um so yeah a lot a lot happening there but yeah interesting to see that the funds are returned you know good to say that it was returned and we'll see that people can be made kind of whole from this but i will definitely keep an eye on this and keep you guys updated with any any new kind of updates that come out so kane from synthetics put together a really great uh 2021 prediction thread today so he's got a bunch of different tweets here in this thread and i'll go through um some of them uh the ones that i thought were the most interesting uh but basically he starts off with saying that he believes that layer 2

migration and attempts to consolidate around a solution will take up most of the year fragmentation and forks will ensure across different scaling solutions basically what a lot of vcs imagined happening in 2016 2017 but their layer one bags will still end up worthless so basically yeah i mean i expect this to happen as well we're entering you know we kind of like in 2020 we went through the um you know delivering these layer twos you know and side chain scaling solutions to the market for people to use uh and you know in their finished state or at least in the workable state in a mainnet ready state and now in 2021 we're going to see plenty of teams go live with their own implementations of this synthetics is already going to be doing

that uni swap is rumored to be doing that we already have existing solutions right connects network is another one that's working on interoperability between these things which i think is very important but we're going to have a bit of fragmentation going on right we're going to have some forks we're going to have some drama we're going to have a you know it's going to be a little bit messy because this is you know migrating to layer 2 isn't as complex as migrating to another chain but it is still a pretty monumental task and you know it only needs to be done kind of once once people are on layer 2 and familiar with it once different projects are on it you know it's going to be a lot easier but it's something that needs to happen obviously layer 1 is not scalable even in eth2 with sharding layer 1 is not

going to be infinitely scalable we still need layer two and that's kind of where where we're going so yeah i agree with kane here that's what we're gonna see it goes on to say eip1559 will be a game changer for the ethereum community the wealth effect will dwarf that of bitcoin and since many eighth holders are builders we see a mass proliferation of new projects as these gains are reinvested into the ecosystem i mean i totally agree with that uh that's very succinctly put um you know i think that's that's that's a great prediction uh he goes ux will improve massively yep definitely agree with that another one here he talks about the option space is going to get much more sophisticated and liquid totally agree there's so many options projects coming out in 2021 i think there's five or six

that i'm just thinking of right now um i'm gonna talk about one in a sec but yeah basically that uh he makes a joke here that andre uh he's gonna launch 58 new project projects and will eventually be revealed as a shape-shifting lizard person from rylon 5 a race of super intelligent kaiman like people seeking to bring enlightenment to lesser planets i like that uh he he also says that he thinks we'll have 150 million dollar defy hack and an industry will survive i mean probably i i think that even if we had a one billion dollar defer hack the industry would still survive but obviously that would be very bad um but as we've seen hacksaw uh are kind of like very i guess uh frequent within d5 unfortunately they've

been smaller than and i don't think there's been like a major hack in d5 they've been on a smaller variety but they do happen quite quite frequently um and then there's a bunch of other things in this thread which i will link in the description you can go check that out for yourself so uh for kumba for a combo i think that's how you say it um announced their token launch today so you know we're going to see a lot of these projects that haven't had tokens coming out with their tokens you know they might retroactively air drop it to their users they're going to have liquidity mining programs there's a lot of this coming in 2021. um you know people are speculating on what projects are going to be doing this i've spoken about it before you just have to go down the list on

default polls pick which project doesn't have a token yet you know and speculate on them having a token sometime in the future uh for those who don't know what this app is it's basically i mean if i had to describe but it's basically like a drag and drop defy lego system so what it allows you to do is it allows you to drag and drop different kind of default interactions into an interface and execute the transactions all at once so for example you know you know how you see those flash loan kind of things happen all the time especially with exploits where people borrow you know a lot of money from dytx or rv use it to do an exploit and then pay it back and you know get some profits from that so what this allows you to do is do that without kind of coding up your

own kind of script or bot or anything like that so you could drag in a flash loan uh you can say i want a flashlight this much eighth from avere right i want to go transact it for this token i want to sell this token on this other exchange and you know do it all in one transaction of course and then you know take the profits out from there so i thought that was really cool a really cool tool i've used it before it works quite well um but yeah i i mean obviously any of these projects now are going to come out with a quote-unquote governance token um that's going to be able to generate fees as well they mention that in in the post here that uh the fees generated on the flat platform are going to go to combo token holders at least i think they mention it

um unless maybe it was in a different blog post because remember they had another blog post where they were talking about the combo token uh they're also going to be selling this via a balancer lbp sale um which is a liquidity provider um liquid i don't remember what it stands for but it's basically oh here we go liquidity bootstrapping pool that's right uh it's and it's designed to basically have like a price discovery for the token that's fair for everyone so if you're interested in that link's in the description you can go check that one out all right so as i was saying options are going to be really really hot in 2021 now this uh basically uh primitive is one of those options platforms and now they're live on main net and you know basically 2021 i mean it's

almost 2021 right um and they've gone live with i think of wrapped eighth market first and then they're going to be putting in a bunch of different markets here now options are very complex financial instruments that are typically used by traders and funds and things like that they're not something that retail investors normally use and i and i personally wouldn't suggest using them unless you were kind of like an expert and knew what you were doing here because they are complex products they are products that you can basically lose a lot of money on um if you don't play the right game and they're also products that allow you to make a lot of money if you do play the right game so um i think you know i was listening to a podcast today actually from

uncommon core um hasu and sue were talking to a fellow australian actually about options um and how they work and how the the the funds use them to trade and how traders use them and stuff like that so i actually recommend going and listening to that podcast just google uncommon core podcasts and it's like the latest episode um but uh if you want to get like a better understanding of options because it took me quite a while for it to click and i'm not going to try and explain it here because i'm not i'm probably going to butcher the explanation i'm not an expert on it um it's actually you know you need to kind of like research it and like you know kind of get it explained to you a few different times before you actually kind of clicks in your head uh you know

i mean i learned the basics of of options and then and then i've learned about all these other stuff i'm like okay i'm not a trader i'm you know i'm gonna just like take it easy here but this is one narrative to watch so yeah primitive went live they're really great um you can basically go and and play around with it on primitive.finance which if i was to load the tab i might might load my metamask addresses i'm not going to do that but basically uh yeah you can go check that out for yourself there all right speaking of predictions i made a bunch of predictions at the start of 2020 here you can see them here so basically on january 16th 2020 i said my belated 2020 2020 predictions for ethereum so my

first one was that eth2 phase zero will have a strong launch now i i think that is is true right we had like an extremely strong launch for the beacon chain we had or the eighth deposited um the minimum eighth deposited in time where we would launch on december first the beacon chain launched without a hitch it basically got up to you know over 90 participation very very quickly from validators and now we're at like 98.99 uh you know the slashing is is is happening as it should on on the beacon chain and everyone's pretty ecstatic about how well it's kind of gone so and these predictions were made in a kind of a different i mean i feel like a year ago is like a different world right i mean almost a year ago

uh i think at the time eth2 was still like a pipe dream for a lot of people they didn't realize just how close it was unless you were basically like on the ground like to the metal um you know one there was no dates or anything like that people were saying oh it's going to come in a few months oh it might come next year and then there were doubts whether it would come in 2020 and it and it did right it came in december 1st 2020 so that so that happened there i then made my next prediction that total daily decentralized exchange volume would reach 1 billion usd now let me give you some context for how uh how i guess ambitious this prediction was in january of 2020 the total amount of decentralized exchange volume was only

700 million for the entire month so again 700 million for the entire month and at that time i was predicting that the daily decentralized exchange volume would reach 1 billion usd in 2020. um so that that's obviously a lot of growth there and guess what we reached it and we've surpassed it basically one billion dollar days on dexa's uh are a frequent occurrence now i think monthly we're doing over 20 billion dollars so uh you know two out of three of the of the two thirds of the month is basically doing a billion dollars a volume or more um some days you know they'll have more than others but that's how i guess ambitious that prediction was at the start of the year uh 700 million for the month to 20 billion

for the month and 1 billion per day is crazy i mean i made that prediction thinking you know this is this is insane right i don't know if this is gonna happen um and i'm glad it did so i'm pretty happy about that that's my number one prediction that i made back then that i'm the most happy about because that was my most ambitious one and then next you have usd locked in defy uh i said that it would exceed five billion dollars at the time of this i think it was 800 million so i actually didn't go too ambitious with this and i don't know why because we got to over 15 billion in d5 so i don't know why i was so conservative here even though i was so ambitious with total daily dex volume um maybe i i don't know maybe i just saw

that d5 was still so clunky and it was still it would still take a while for us to to get to the point of like for the majority of defy outside of decentralized exchanges to get adoption but what i didn't count on was the liquidity mining slash yield farming craze that was not a thing at the start of the year that only became a thing in june of 2020. um the closest thing we had to liquidity mining was synthetics uh doing their like you could stake your snx and earn snx tokens so i think that's why i was conservative there because at the time like you know decentralized exchanges were small but i kind of like i knew uniform was such an amazing model that it would basically grow really really quickly once enough people kind of learned about it

and enough people kind of you know needed to use it and i guess at the same time the reason it grew is because of defy liquidity mining and yield farming and stuff like that so yeah i guess like i'll give myself that one as well i mean i got that one right um the usd locked in d5 but i'm a bit disappointed that i was so conservative at the time i think for my 2021 predictions i will be a lot more ambitious on that all right next prediction was that scaling and layer 2 tech would rapidly mature within 2020. i think that's true i think it did i mean as i just explained when i was going over kane's thread we had a lot of layer 2 tech come to main net and now it's just the adoption phase which i think is going to happen

in 2021 spoiler alert that's one of my predictions for 2021 um but yeah so i don't think there's much else to say on that one and then the last prediction is actually something that i got wrong and i at the time i was like okay you know if this happens it's going to be a fluke i know this is going to be wrong but i'm going to say it anyway just in case i'm right basically i said that at least twenty percent of eth or and token transactions would be done privately so you know in private transactions on ethereum this didn't happen of course uh i think we got more private change transactions than we did last year uh in 2019 but definitely not 20 this is i think this for a few reasons is because as much as people love to talk about privacy not you know it's a friction

thing unless there's like a simple button that i can press that says send private transaction you know myself and many others and probably the majority are not going to do that they're just going to send a normal transaction on top of that the privacy solutions didn't get much adoption in general uh tornado cash i think had a lot of adoption but they're not i mean tornado cache is a bit different and then it's a mixer it's not like i'm sending someone a private eighth transaction i'm sending a to tornado cash and it's mixing it for me and then sending it to a new address but that's all kind of like it is private to an extent but it's not like what i would define as a private transaction of eth or a token or whatever so but in saying that this goes hand in hand with layer 2

adoption as well so if we get a lot of layer 2 adoption in 2021 which by default has private transactions for most of the solutions that i've seen we should get that twenty percent of each tok uh if and tokyo transactions being done privately we will see uh maybe i'll make that prediction again i'll be right for 2021 but i definitely want to get some new ones out which i'll be posting in the next few days uh i won't go through them all now but i mean yeah you know i'm going to scroll through the comments quickly uh i think yeah i mean validator.8 is actually an eighth ball here and he said i think a lot of people are really underestimating how much interest there is to get into phase zero right from the beginning and then i basically replied saying yeah the teams

working on phase zero world class and really care about their work they've been at it non-stop for many months now a lot of them are quite young and ambitious anyone betting against eth2 is insane i mean i was extremely confident in my ht2 prediction like i that was i was more confident in that than any of the other ones um so yeah it was great to see that um and then there was some comments about price i get i guess and like uh one guy saying when wow five billion dollars in d5 so you know he was even surprised by that prediction even though he blew past it funny funny thing here when one thousand dollars i didn't make any price predictions here because that's incredibly hard to do especially in 2020 in january 2020 we were coming off that 2019 bear market um but i've been making more i guess

like price predictions on twitter lately um you know half ship posting half serious but i think in general uh you know 2021 is going to be a good year for ethereum and not just the price of eighth but ethereum in general so really looking forward to that but that's it thank you everyone for watching and listening if you haven't done so give the video a thumbs up be sure to subscribe to the delegate youtube channel subscribe to the delight newsletter and join the discord if you haven't yet and i'll catch you all tomorrow thanks everyone