The Daily Gwei AMA Series #12 - 16th of October, 2021

Transcript

all right everyone welcome to the 12th daily way ama uh just like all the amas if you would like to ask a question please uh use the raise your hand button at the bottom and it will come up on my request here and i'll be able to basically invite you on stage you'll be able to ask your question live um and i'll be answering questions from the ama series channel that i've been asked in there but if you don't want to get up on stage you can always ask the question in the ama series channel and i'll get to it at the end uh so yeah i'll be going through the questions just one by one um you know if you want to come up at any time you can and i'll just invite you up onto the stage of course this will be recorded and uploaded to youtube so if

you have and with time stamps and if you have to leave early uh you can just catch back up on the youtube channel there so i guess without further ado i'm going to get right into the first question that comes from md8 who says hey anthony thanks for everything you do can you explain uh like i'm 5 the alcx bond program please sure so this bond program uh basically is um is in partnership with olympus dow it's not just uh alchemics kind of like offering this themselves they're working with the olympus dow kind of team to do this but essentially and i'm taking this pretty much directly from their explainer video the way it works is that these bonds allow people to purchase alcx tokens at a discount now you don't get to purchase them at a

discount and then ever get immediate access to them or anything like that you purchase them at some kind of discount and then uh over time they vest out to you over some predetermined period of time so uh and this is called maturing of the bond right up until like the last date where it's kind of fully matured uh so the reason why this is going to be increa been done like this is designed to prevent people from obviously dumping the token as soon as they get it right and it's designed for long-term investors who are like okay well you know i can see i'll okay lc alcx growing in value over time i want exposure here but i would like to kind of get in at a discount and and kind of like have that have it kind of mature over time sort of like how you

know people getting at a discount when they're um you know doing a seed investment or a series a or something like that and they are they have vesting on top of it it's it's similar to that in terms of kind of like the deal structure here uh and you know you may be wondering why would alchemix as a kind of like protocol do these why would the why would alchemic sell alcx tokens to people at a discount well uh the the cool thing is is that you can only buy these tokens the alcx tokens from alchemix with lp tokens so with liquidity provider tokens so what ends up happening is that you're essentially selling your liquidity provide the liquidity that you've provided to uh the alchemics protocol and they're giving you some kind of like llcx deal in return uh and that way they own their

liquidity so it becomes like a protocol owned liquidity uh and then they uh and by doing this they actually don't need to pay farmers as much with token incentives to bootstrap liquidity so it's just a different way of bootstrapping that liquidity for their native token and i think it's really really cool i mean bonds aren't unique to crypto of course they're they've existed for for hundreds of years right in the traditional finance system governments issue them you know private companies things like that uh but it's cool to see this coming to kind of like defy crypto in a really big way here uh and it's cool that you know i guess like everyday kind of people are gonna get access to this now and get access to kind of like being able to to buy things at a discount being able to uh to to essentially uh kind of like

have a long-term kind of alignment with the protocol uh and and it gives the protocol something as well so hopefully that that kind of is an easy kind of explanation for you maybe not an i explain like on five i doubt a five-year-old would understand what i just said but maybe like and explain like um you know just sort of new to d5 but have like my bearing sort of thing so yeah hopefully that answers uh your question there md triple eight so on to the next one from oh man i don't know how to read this name i'm going to attempt to enchilada source i think that's how you read it um can we get a rundown of the top twitter accounts for crypto maybe just high quality informational content accounts not moonshots or anything like that specifically they file eth so there's a

lot of them and i don't have a list handy with me right now i remember dc investor curated a really great twitter list of um you know top ethereum people that you should be following so definitely go check out his list if you just go to his profile and then click lists you'll be able to see all the people included in that list but i mean what i can do is i can give you kind of like a general guidance on how i would structure kind of a twitter following and how i've structured mine uh first rule is avoid most of the traders because unless you're a trader yourself uh and even if you're a trader um it's a lot of noise right if you're kind of looking for i guess like uh fundamental analysis and kind of like uh information on things following updates

and stuff like that the traders are not going to give you that they're just going to give you charts all day and they're going to give you technical analysis and that's all well and good of people who want to follow that but if you're into like following the fundamental stuff then that's just going to be noise on your feed i follow very few traders there's only a few that i follow and they're more macro people like they don't do day-to-day charts they're like a macro kind of multi-month outlook or multi-year outlook which i which i enjoy but uh there's not many very many of them that i follow i i tend to follow as many of the kind of like project accounts that i'm interested in because then i get the update straight from the project but also a lot of interesting people that do education

especially i mean if i'm not learning something when i'm scrolling through my twitter feed uh then if something's wrong i mean there's a lot of posting of course a lot of people making jokes and i obviously do a lot of it myself but uh i think generally what i want to see on twitter is like a mix of both i want to see kind of smart people talking and having conversations and and kind of like uh teaching me something new and i also want to have a bit of lighthearted fun on there as well so that's how kind of like the general the kind of general structure for me um and i would also not just avoid kind of traders i would also avoid people that are just like pumping a new token like every couple of days and trying to kind of like uh shield a new token it's just

so noisy like a and and the funny thing is is that not only is it is it noisy on the surface it also kind of just starts clouding your brain and like using up your you know precious brain power and you have to focus on that and then you know it just it subconsciously just kind of like ties you out and you kind of like oh god twitter's crap today i'm going to close it and it's just you know because you're following the wrong people i think most of the time and also the last thing that i would be very conscious of would be trying not to fall into an echo chamber but i do think that people uh have the wrong definition of kind of like or the wrong view of an echo chamber here i think following things that you're just interested in and uh

you know say you like follow 90 of ethereum accounts because you're interested in ethereum i don't consider that to be an ethereum echo chamber it's just like what you're interested in and twitter is going to show you uh that anyway like if you're just kind of tweeting about and talking about ethereum all the time or following ethereum updates and interacting with ethereum stuff twitter's algorithms are going to show you that anyway um but definitely you don't want to get stuck in like an echo chamber where you're essentially you're you're kind of like positions aren't challenged you think that everything uh you know everything kind of like you saying everything everyone else says is right you definitely want to curate kind of like um a bunch of different kind of accounts that have more i guess maybe objective view of things and don't fall into any

of the camps so to speak there's only a few of them it's kind of very hard to be impartial in this space especially because there's a lot of kind of like money flying around and stuff like that but just even if you're just conscious of and even even if you see someone kind of like saying something don't just take their word for it make sure that like there's multiple people saying you know multiple respected people saying the same thing make sure you verify the information yourself like i know that the the term do your own research is kind of like uh overused at this point but really you don't want to just be blindly following people kind of like that that are telling you things but at the same time you definitely want to listen to people who you consider to be a trusted voice in the ecosystem like

for example myself i try really hard not to spread any kind of misinformation about anything or any wrong information but you know you shouldn't just blindly trust what i say you should definitely kind of go to other sources as well because sometimes i may unknowingly say something that is wrong i've done it before i will do it in the future again but just generally you want to follow um the people who have you know a very high kind of like hit rate in terms of actual educational information and actual truth and not trying to kind of i guess like spread crap about things so i mean that's a long way around a long-winded way of saying probably don't follow too many bitcoin maximalists um a lot of the stuff that they like from what i've seen a lot of the stuff that they say just is

really crappy if you if you're kind of like wanting to learn uh about anything really i mean it's it's just yeah i mean i'm not going to get too into the weeds there but it's a bit of a disaster i don't follow any bitcoin maximalists really most of them have me blocked at this point but just generally yeah you want to avoid kind of that that kind of um that kind of stuff right so hopefully that answers kind of like your question there enchilada source uh but as i said if you want an actual list i remember that dc investor has a really great ethereum list which basically has you know it's basically a starters guide or a beginner's guide to ethereum twitter uh if you can't follow those accounts i'm sure twitter will suggest you more and more kind of like related accounts as well so good place to start

there all right uh next one here comes from a rob dog uh who he asks or she in the last week the whole ethereum nfts are destroying the environment narrative has really taken off which unfortunately makes many potential users miss out on crypto do you think a switch to proof of stake will be enough to turn this narrative around given that this take is already largely based on misinformation and quote-unquote anti-tanks anti-tech sentiments um so much work on going in crypto to combat climate change uh but it feels like the message is not getting out beyond crypto twitter how do we change that so i would say that this narrative of like nfts destroying the environment is not something that's just happened in the last week it's been persistently kind of like growing over the last i guess well i would say

probably since the start of the year when i started seeing it at least from outside of crypto twitter um i am of the opinion that you can't necessarily win a narrative war just with words alone you have to actually show action so i definitely think that ethereum switched to proof of stake will help with this a lot um it will leave you a lot of these these issues but the problem is is that these people have this opinion based on uh as you said misinformation or incomplete information because they don't understand that ethereum blocks are still going to get mined regardless of if there's nfts in there or not nfts marginally increase the kind of like demand for it for ethereum blocks right because if it's not nft's filling the blocks it's d5 or something else so it you know this kind of argument about nft's destroying

the environment is is just really misguided in general so i think the only way i mean there's probably two ways you can get you can kind of like rectify that one obviously move ethereum to proof of stake so whenever someone brings it up you can say well you know ethereum is proof of stake it doesn't use mining or anything like that it's just like running any software on your pc most people should get that but you know there's a lot of people that have these preconceived kind of like ideas and notions and it's really hard to change their mind sometimes so you'll probably get pushback on that still so that goes to my second point where it's just really hard to win a narrative war because these really shitty narratives can take off and then depending on who's spreading it like if it's a big

account spreading it or you know if it becomes kind of like a common belief it takes a while for that to kind of change over time so you know for example uh you don't hear much about it any uh these days but bitcoin for much of its life was referred to as something that was only used by criminals um and you know that may have been true in the really really early days when bitcoin's main use case was to buy kind of like drugs but i i mean referring to those people as criminals for buying drugs is just kind of a stretch anyway but you know generally people would say that and then and then you know you hit them back with the argument of well i mean cash is used for more criminal activities than anything the us dollar is used for more criminal activities than anything like

then you know it's like probably a million times more than bitcoin would be uh and you hit them back with that and they couldn't really say anything but that still didn't change their mind right it didn't change their view of bitcoin what changed that was just like time passing bitcoin becoming kind of bigger and bigger and kept sticking around becoming more institutionalized gaining legitimacy from different you know institutions and different kind of like companies and different uh people within within the kind of ecosystem i think the same thing is going to happen with nft there's already plenty of nfts uh sorry plenty of celebrities giving legitimacy to nfts and endorsing it obviously you know if you go to some of their posts there'll be people pushing back but eventually those people most of them not all of them but most of them i believe will kind of like change their

tune on things and they'll kind of like just be subsumed into the ethereum nft kind of ecosystem uh but i yeah i mean the only way you win a narrative war is kind of i i guess over the long term you actually have to kind of like make a concerted effort on them on the tech side we are doing that with proof of stake but yeah in the short term there's just no way like there's no reason okay i love using this expression because it's so good and it's it's so useful for everything in life but basically you can't reason someone out of a position that they didn't use reason to get themselves into because they're already not thinking logically they're already not uh kind of like following a great kind of like process to get themselves into a position so it just becomes more

of kind of like blind faith on their part in their own argument and their own position and that doesn't hold over time for most people in the face of overwhelming evidence i mean this isn't just a crypto thing go through history and how many how much crap that people believe over the you know the years of human history that is not consensus today uh there's there's tons of things that were that were kind of like believed uh sorry thought to be true but it turned out to be false because they were disproved in one way or another you know science disproved it a lot and the funny thing is some of these beliefs that people had were disproved by science at the time but people didn't want to listen they it was very hard to kind of like win that narrative war but then over time you know time passes more

and more people's kind of like beliefs get shaken and time kind of like uh and sorry and then you know the beliefs sorry the um the actual evidence gets more legitimacy and it just becomes like kind of a thing that goes away over time there so yeah i would say that i wouldn't worry too much about kind of like the nft stuff to be honest uh i don't necessarily think it's a it's a huge deal i think that there's more than enough people getting involved i think that a lot some of the people that are actually having a goal at people having a go at nfts in general probably are involved themselves it's it's funny how much cognitive dissonance there is around these sorts of things and you know i actually saw people that were kind of like saying well i'm not going to use ethereum nfts because uh it

destroys the environment but they'll use tasos for nfts because taizos is is proof of stake and they're like well you know tasters is environmentally friendly and taylor's actually did a whole marketing campaign based on this and it seemed to have worked so you know i think that it's more about kind of like marketing and and kind of like narrative weaving from these kind of things and that all plays into the long-term thing where you don't win a narrative world by attacking it directly you just keep building you just keep kind of like building a kind of like a base of people and then over time the doubters get kind of like drowned out and and and and basically become you know advocates for the technology eventually i'm sure there's plenty of people that thought the internet was gonna amount to nothing and eventually came around because it was just too big

for them to deny it it you know it was too it was it was a part of too many people's lives that are part of too much of society as well so yeah hopefully that answers your question there rob dog all right one here from t1 who says uh who asks isn't the modular architecture pauline now talks about very similar to the construction of pokedot and cosmos i think i see ethereum's future model compared to celina often as it is the most binary monolithic blockchain but rayleigh comparison is drawn to other modular chains what are the differences between ethereum's future model and those of current day polkadot and cosmos and where are the advantages so polkadot and cosmos aren't modular blockchains they are still monolithic chains um so maybe i should start by defining exactly what a modular blockchain is it is one that splits

three things up right you split consensus and security you split data availability and you split execution into different kind of like i guess layers or shards so the way ethereum and ethereum right now i mean technically isn't like a full modular kind of chain uh because it doesn't have sharding yet but the way ethereum will do it once it does have sharding is that ethereum uh kind of like the base layer will be i mean there'll still be kind of like an execution environment in the ethereum that we know and love today but the shards will be the data availability layers that kind of exist at the base layer for these layer twos which handle the execution to uh put their data on and kind of get more scalability and then the consensus and security layer

for ethereum is actually the beacon chain in a proof of stake world which is running right now it you know processes transactions uh sorry all those transactions builds blocks all that sort of stuff and kind of like um stores them and keeps the chain going so that's why ethereum um i kind of like is is ethereum two i guess specifically will be a more modular design um and the roll-ups or the layer twos inherit their security directly from ethereum and directly from from the shards and stuff like that um and that is why it is considered a kind of like modular blockchain rather than a monolithic chain and the reason why polkadot and cosmos are not um and i think poker is actually changing its architecture recently i think i haven't looked too

into it too much but they've changed their architecture recently to be closer to the modular design um but i'm not sure if that's live yet and i don't know how far along that is but essentially uh their designs are more about kind of like this app chain model where you can either have your own self-sovereign chain or you can go kind of like uh a plug in and share the security of um of kind of like the the main chain so in polkadot's case they have something called the relay chain which is very similar to the beacon chain um and then these kind of like parachains that uh can can connect to the relay chain but they have to pay they have to pay some kind of or put up a bond in dot tokens uh to kind of like do this now um and uh those kind of like power chains

can be standalone change with their own consensus mechanisms so already they're that's not a modular design because these power chains are not uh you know it's optional for them to share security or not with with polka dot uh sorry with with kind of like the relay chain they call it layer zero i don't think that that's really kind of like accurate i think that's just the buzzword but it's it's the relay chain right um so so the power chains are more like app chains that can choose to connect to polka dot if they can afford it because they have to put up a dot bond um and then um even then i don't think it's a modular design because it's as i said i'm not an expert on the architecture there but it's different to how ethereum kind of like tui is doing it uh and and

similar thing with cosmos uh cosmos has like the these kind of like zones and things like that and they do actually encourage like standalone chains where you don't have to do anything but if you want to uh sorry you don't have to kind of like um connect in you can just be your own kind of like sovereign chain and if you want to you can connect to ibc which is like their bridge protocol i believe which allows you to kind of like communicate with other other kind of like cosmos zones and app chains and stuff like that so they're i would say they're fundamentally different designs um and i would say that they're because of that they're not modular blockchains at least not in their current iterations i think polkadot may be making a move towards being more like a modular blockchain but in that case it would just look exactly

like ethereum so i wouldn't really understand the need for polkadot if they're just doing exactly the exact same thing ethereum is doing maybe you prefer on-chain governance to off-chain governance because polkadot has that as a difference maybe you prefer uh programming in rust instead of solidity but it doesn't really make too much sense because layer twos will allow you to program in different kind of languages uh they're not gonna lock you down to solidity a lot of them so uh and then cosmos you know cosmos is a funny one because there's cosmos the chain and then there's cosmos like the tech and the tech seems to be getting like adoption with a few different things like i know that i believe that terror uses um kind of like the underlying tech of cosmos or tendermint thor chain i think there's a few others out there that use this but i

don't think that drives any value back to cosmos itself or the atom token so it's just a very kind of like different design there whereas with an ethereum or at least with if plus sharding um you're going to have this holistic design where the roll-ups and other layer two constructions and stuff like that they're all gonna be feeding value back into ethereum and being secured by ethereum's consensus and data availability layers so you do have like a true modular blockchain in that sense so hopefully that kind of like clears it up for you and gives you a bit of clarity around that uh polynomial does have some blog posts on this i believe i think they did talk about polkadot and cosmos in one of them so they may have more color so if you just google like a polynei medium you know that might it should come up

with with their blog post there uh but yeah hopefully that gave you more clarity around everything there all right so another question from md triple eight who asks if you haven't covered this tweet regarding alchemics working with mim or mim protocol please explain this in the ama how is this different or better than the current process of depositing dye mincing al usd and then using that to yield farm so the tweet that md triple eight is referencing here is one from daniel uh sesta who i think is the founder of abracadabra um where he says with alchemics taking in mim which is a stable coin to mint aosd the loan repayment will be two times faster this is the future of empowering um uh people of empowering people to live their dreams i think is

what the tweet says here um so i may be wrong here because i haven't dived too deep into this just yet but i believe it's because uh me mim i guess like abracadabra or like the the pro the protocol is already generating yield for itself because it's using the assets backing mim to go yield farm with so it's already generating a yield like that whereas maker doesn't do this uh so when you know when you put your funds into maker to back dial to mint die that those funds are just sitting there they're not actually taken to go yield farm with whereas with abracadabra when you put funds into min the mim stable coin um it is actually being used to yield farm with so i think that's what daniel is talking about here uh when he says you kind of get like a double dip

here where the loan will pay itself off two times as fast because not only do you have like um the na the kind of like yield being generated um through through alchemics when um you also have it being generated through abu kadabra as well i think that's how it works uh i may i i may have to kind of like double check that but um yeah uh hopefully that kind of answers your question oh we got oh no i thought we had someone in the audience there uh so another one on the list here from dgen.ed who asks use of default protocols require enabling token approvals how users can keep track and manage given permissions there's a bunch of different tools out there i would suggest using the tool from etherscan it is probably the most trusted one so you can go to either scan i don't remember exactly

where it is in their menu bar but it's there and you'll be able to kind of like see all the contracts that you've essentially enabled token approvals for and be able to revoke them there if you want to so there are a bunch of other tools as well i just don't know at the top of my head what the names are but you definitely want to you know use the etherscan one because i you know in my mind it's the most trusted but and it's the most easiest to use as well so yeah just go to eat the scan and in the menu bar somewhere there will be uh the token approval kind of like uh app there all right a few questions here from patrick so for question one you mentioned a couple of times that you're an active angel investor do you have a framework for

evaluating your investment opportunities and are you willing to share it i mean sure i i'm willing to share it uh so the thing about angel investing and kind of like public market investing they're kind of like very similar in that i use a similar approach when doing these sorts of things but it depends on what stage the project's at like if it's a seed round normally the project is like pre-product they have no traction yet because the product's not out there it may be like a brand new team they have to scale up all these sorts of stuff so it's going to be a very different risk profile to say a series a or a series b where they probably already have a product probably already have some traction um and you know they've got they've got like a solid team behind them and they're just looking for

additional funding uh so they can kind of keep building what you know keep doing what they're doing essentially so depending on what stage a project is at we'll kind of like alter what i look at but generally the kind of like things and this is i'll try and do the kind of like things in order of most importance the least importance so the most important is the team always the team like i i can't stress how how kind of like important the team is because of the fact that the a bad team can have the most amazing product in the world and kind of like screw it up right but a good team can have a bad product but then pivot to a good product a bad team can't pivot to a to a you know to a good product and they and they you know a lot of the times

they can't actually make a product that is actually good work if they just don't know how to build it and they just don't know how to kind of like grow it and they don't actually put effort into it so it's kind of like all on the team i think and you know that may be obvious to some people but just generally the the team means a lot and that's kind of like what i wait as well it's kind of like okay like am i getting a good vibe from this team like when i jump on a call with them when i talk to them just more naturally when i see them see their public presence you know do i vibe with them are they smart people you know what's their background have they done start-ups before or is this their first one as i said like if if it's kind of

like um you know earlier on in the risk profile if it's a seed round and this is like the first startup that that people are doing it's kind of like well okay this is like super risky right this is much much riskier than something else that's kind of like had founders that have exited multiple times or kind of um grown something from from from nothing and things like that uh so yeah team definitely the most important uh second would obviously be kind of like the product that they're building um there's massive differences between them i've invested across pretty much like uh most sectors at this point like nfts d5 infrastructure like layer twos i haven't invested in any layer ones uh in terms of like smart contract layer ones there are uh i think there is a couple of layer ones that i have but they're

not like um ethereum and they're not like a smart contract platform they're doing something else uh but like i've invested in in layer twos and obviously i'm an advisor to polygon who's building a lot of scaling solutions as well but generally the product and and the product has to make sense if i see a product and i kind of think okay well you know this is this already exists so and and if it already exists i kind of think to myself right kind of like um ask the teams like what makes you different like what you know what what sets you apart what's uh kind of like uh what's the draw of your product over something else and you know sometimes the product just isn't that great uh it's it's not that different it's not that differentiated and it just becomes kind of like a thing

where it's like well okay there's a low chance of this succeeding so you may pass on the round you may not put much money into it you may put a little bit into it or something like that but generally i pass on things that i'm not you know don't that i'm not feeling i don't like to kind of like invest in something just for the sake of it so there's that aspect to it and then i mean i would say like team and the thing that they're building are the most important things by far and then you've got like the the kind of like laundry list of of other things that kind of fall into that i think uh number one is kind of like okay uh sorry sorry number number three which feeds into number two is kind of like you know is the market

ready for something like this like is it too early is it too late uh and like how you know how um how dedicated is a team to building this out if it's going to take a while uh because some of these projects may end up being like really really big but it's probably going to take a while to get there like perfect example being a smartphone i mean a smartphone has been around since like the 90s and it didn't take off until i you know until apple did it with the iphone in 2006-7 i think i believe um but before that there were plenty of smartphones but it wasn't a mass-market thing yeah most people hadn't used them they just weren't the you know they weren't the world wasn't ready for it and the infrastructure wasn't there and a lot of kind of um i think uh uh people

oh sorry a lot of products were just inferior so there's also that aspect like is the timing right for this product which which i think you know obviously there's there's kind of like the aspect of okay is this a good product or service and there's the timing which is a big part of it as well so those those kind of like three things i think is what informs me the most especially you know as an example when i invest in these layer twos like for me investing in a later is like the easiest investment i can make uh but you know uh besides eighth of course uh simply because i know that the layer twos are going to be uh you know extremely big i know that they're needed there's already massive demand for them there's already like a massive problem that they're solving and a lot of the teams

that i have kind of like backed um you know big one being arbitrarium they've been working on these things for quite a while now um same with polygon uh they've been i mean asthmatic network they've been working on it for quite a while um so you know when i look at this sort of stuff i'm just like okay well this is a no-brainer bet for me but at the same time not all kind of like layer 2 teams and products are created equal there are plenty of scale not just layer 2 but the scaling part projects in general there are plenty of them that have kind of failed over the years or maybe not having not maybe failed the wrong word but like failed to gain traction is maybe the better kind of description here i think the most obvious example of this is is ryden uh

ryden has a token and it has failed to gain traction over uh over the years because it's uh it's a state channel network rather than a roll-up and roll-ups kind of like superseded that um and me say go failed to get traction for for quite a while with their plasma implementation because everyone moved on from plasma to to roll-ups and now they have like a roll-up called bobber network or something like that um but i think it's like a fork of optimism and i'm not too bullish on on on kind of like l2 forks uh and then i think there's a few others out there that kind of like just failed over the years to gain traction maybe because they were too early or they just inferior inferior products but in terms of what where the layer twos are today anyone building roll-ups i'm i'm pretty

bullish on like building them from from scratch or at least i've been building them for quite a while i'm i'm very bullish on and then bridges as well i mean i've talked about this a lot on the refuel but bridging protocols there's a lot of them though that's the problem right now is that there's so many of them and not all of them are created equal a lot actually most of them are pretty different to each other you can either have like bridges that look more like cross chain exchanges or um bridges that are just like multisigs right and things like that so it's kind of like difficult uh from a technical standpoint as well to kind of like to navigate that and to see which one's going to win um and kind of like things like that and then on you know other things like d5

probably even harder on the nfts even harder like the only nft investments i've done have been infrastructure plays so i invested in immutable x because you know nfts themselves are just in my mind very hard to invest in for the long term but the infrastructure seems like a safer bet so yeah that's kind of like my general uh general framework but if if i don't get a good vibe from the team i'm pretty kind of like turned off investing in general even if i think the idea and the product is is good and it's going to be big i tend to be turned off if the t if i'm not feeling a kind of like vibe with the team because i i generally know like how valuable a good team is and i also generally know how um how dire or how crappy a bad team is

like i've seen it time and time again within crypto where teams just like just don't work they they don't know how to build a product they don't know how to be cohesive they don't know how to grow something and it's uh it's a slow bleed as well it's not like an overnight thing especially if they have a token it's a very very slow bleed so i'm very kind of like conscious of not making the wrong move there but this is why it can be so hard as well in the public markets because on the public markets you're obviously buying things a lot of the time at a kind of like higher evaluation than they were down at the seed in series a rounds um you know maybe maybe it's a little bit more de-risked because there's actually a product and things like that but then you're benchmarking against two

things like at least i do you know you're benchmarking either against usd or eighth like for me i benchmark against eighth if i buy something on the public markets and it doesn't outperform either uh it's just like what was the point of buying it right like i should have just bought eighth and if you look at a lot of these things over the long term they tend to to underperform eighth maybe you know if you catch it early enough you'll be able to outperform but it's just it's very difficult uh to kind of like make these investments and investing is not meant to be easy i think in crypto sometimes people get the wrong idea that investing is meant to be easy if you're just trying to get a return in usd then you'd be fine betting on most things in a bull market because things just seem to rise

together but if you're trying to outperform eth and um you know you and you put your earth into something especially as well well then you really definitely ah are going to underperform a lot of the time because it's just too hard to outperform these benchmark assets but i think that's unique to crypto because you know in the traditional kind of like investing space i don't know anyone who benchmarks against any kind of like stock uh they benchmarks against like an index like the x spx if they buy like an individual stock and it doesn't outperform the spx well you know for them it's kind of like um a bad trade but it's not like they're trying to stack more of the kind of like spx index or like the s p 500 index they're just trying to stack more u.s dollars whereas within crypto most

people are trying to stack more btc or eth they don't really care about dollars too much yes okay people measure their net worth in dollars measure crypto prices in dollars but if you're kind of like um a long-term investor uh you definitely want to be stacking like a long-term stack of like ethel btc so again just very very difficult uh and doesn't matter how good the team is doesn't matter how good the product is outperforming like a benchmark asset like eighth is is very very hard and you can see plenty of examples of this right now look at arver maker yearn compound uh uniswap uh just yeah i mean look at all of those tokens against eth go look at all their charts all of them are down a lot against

eighth from their from their kind of like all-time highs against eighth if you had bought really early on you'd probably still be up against eighth but generally numerous people don't do that so even the best products even the ones that have like hyper growth generating revenue all that sort of stuff they underperform eth and i i think you know a big reason at least going forward especially is going to be the fact that eth is generating more revenue than any than any of these protocols i actually worked it out today annualized right now is generating 14 billion dollars of revenue a year in terms of its gas fees and 80 or 70 to 80 percent of that is being burned which means it's going directly to eath holders and then on top of that you have like a risk-free uh rate for eth with staking like you can just

basically stake it and earn uh i mean i say risk free but like it's it's low risk it's not risk-free but it's like a low risk kind of like return of what five six percent right now and then post merge you'll be earning more for a little bit until more people stake it's just so incredibly hard to to kind of like outperform that um and that's why investing i think is it when using eighth or btsc as well as a benchmark is is very hard within crypto so maybe a bit of a tangent there but um just to add a bit more color around yes okay when i'm evaluating things i'm looking at these sorts of things but at the same time uh those things even if even if project has all those things it can still underperform a benchmark like pretty easily over over

the longer term so yeah hopefully that answers your first question there patrick all right second question uh from patrick how do you think about the development of old school blue chip d5 products it seems like they're struggling with creating new catalysts and are quote unquote dying so i guess i just touched on this with their tokens but i want to touch on the project them projects themselves so the term blue chip defy is a marketing term it doesn't really mean anything uh it's used of course to refer to these big d5 products like as i mentioned like make a uni swap compound all the all the you know the biggest one the curve stuff like that um but it does it's not really like i don't know if i i'd say it's accurate or not as i said it's just like kind of

like a marketing term but the problem is is that these products as i mentioned are still growing they're massive they have lots of like they're generating lots of revenue they have a lot of users but their tokens are stagnating now is that because the token designs are crappy maybe maybe for some of them they are i think for for the mkr token it doesn't really have a great design right it doesn't uh it's like a buy and burn uh kind of like model but i i don't know i've never really liked that model and you know some people bring up well you like it for ethereum technically like atheis is doing a buy and burn i mean technically it's not because eat the protocol is not buying the eighth but uh we are burning eighth but i mean either as an asset does a lot more than just be

burned you know it does a lot more than gas phase uh you can stake it you can do it you know use it as clutter within defy and all that sort of stuff um you can use it as money whereas the mkr token you can't do anything with it you do governance which most people don't care about and they don't do or you get a passive kind of like uh value driver through the buy and burn which really isn't that much and it really doesn't kind of like push the the price higher there so you know that's an example of something that has like kind of crappy tokenomics i would say and then you have something like uh like the crv token which i actually think has one of the best tokenomic designs in in crypto but the problem with crv at least from my point of view is that there's too

many emissions still and they already have like a really large market cap or a fully diluted market cap of i think like oh what was that like 10 billion full dollars or fully diluted market cap or something like that and they had a lot of tokens coming to market over time so what ended up happening was that the price just stagnates because the market caps have to kind of come together the circulating and the fully diluted especially because they have like a big liquidity mining program but their tokenomics makes sense so there's that aspect as well um and then there are like tokens that really kind of like weirdly valued like more valued on their future potential than their current potential so for example the uni token doesn't have a fee capture right now it has governance most people

don't use it as governance but it's one of the most valuable default tokens uh at least in usd terms um but the kind of like hope is that someday in the future because uni top is so large because it people expect it to keep growing someday in the future that fee switch will be turned on and then uni tokens will be able to maybe stake their uni and get like a share of their revenue obviously this already happens with with sushi swap but even the sushi token isn't really doing much so and you know you've you've seen this kind of like wave recently of quote-unquote d5 2.0 projects which again is a marketing term but their tokens have been doing really well i don't think necessarily that's for fundamental reasons as much as it's for kind of like short-term speculation reasons i would like to have more data before i kind of

like declared these other token designs as the holy grail and oh my god we created like a token design that actually you know drives value to a token i would like to wait six to twelve months and see where these tokens actually are against both usd and against eighth especially if they haven't actually you know at least kind of like kept up with over the long term well then you can just chalk it up to short-term speculation for these things and a lot of these things started out smaller as well a lot of these blue chips are already multi-billion dollar defect kind of sorry multi-billion dollar market caps whereas a lot of these quote-unquote d5 2.0 things started at well less than 100 million market cap probably even lower than that so they had much more room to grow as well but that's why i'm saying once you get to

that peak of like a few billion or there seems to be a ceiling uh right now um and the ceiling goes up over time i think as as kind of like ethan btc go up whereas like the total crypto market cap goes up but you seem to reach like a ceiling and then just start bleeding against against eth or something like that so there's definitely that aspect to it as well uh which uh which kind of like plays into it so hopefully that answers your question about about that patrick but i wouldn't say these protocols are dying i would say that there's a bit of like tokenomic design and there's a bit of uh really it's really hard to outperform eth and there's a bit of kind of this market has like a lot of uh participants who aren't necessarily very necessarily kind of like very uh uh

i guess fundamentals based it's just more short-term speculation based so from that point of view you get a lot of these wild swings uh but over the long term we'll have to see we have to see if any of these kind of like outperform ethan and things like that so yeah hopefully that answers your question all right so the third one you had here have you any experience with leveraged yield farming can you share your experience in this area i mean all my yield farming has actually been leveraged yield farming because i didn't want to sell any of my ether or anything so i just used my ethos collateral within maker drew dye out and then just yield farmed with it but there are protocols that let you do this kind of automatically it's kind of like the same concept um but they let you do it kind

of automatically um instadap lets you do it there's alpha finance uh i think there's impermax or something like that there's a bunch of these protocols now i don't use any of them because it just adds more risk i just do it manually um but i the thing with leverage is that it could be dangerous depending on what you do so the what i did by borrowing dye and just using it within kind of like stable coin farms that is not very risky because if i need to pay my loan back uh i can like pretty much immediately i can just withdraw my die go to go to make up pay it back and i'm mobile and good but i also keep a very very low liquidation price my liquidation price on my make a loan is like 500 right now for eighth if either goes back to 500 before i can pay

my loan back we have a lot of other problems on our on our hands um at the end of the day so uh it depends how you play it because people use leverage to buy crypto assets so for example this this is the most dangerous thing you can do with leverage is you use eth as collateral then you borrow die you go buy more eath with that dye to leverage up on eath um but then eat goes down and maybe your liquidation price is isn't kind of like very uh very high uh sorry sorry very low and it's actually much higher i say it's like three thousand dollars and you level it up on eighth at like 3.9 k but the problem is that when it's falling both the value of the the assets that you bought with that die is falling and the collateral backing is falling as

well so you have this kind of thing where you just have less and less money and um you know you won't be able to pay your kind of like leverage back unless unless kind of like you could you can source the the funds from somewhere else so it kind of leads to a bit of a death spiral there you can get yourself into a really really position where the value of your collateral keeps falling the value of the assets that you bought with that uh with the borrowed funds keeps falling and it just it's very messy so i tend to stay clear of that completely i did do some small very very small trades on dydx um just to test out the experience there with with leverage but uh generally leverage isn't part of my my kind of like overall strategy leverage trading at least but

leverage yield farming yeah i mean it's definitely safer but still carries a lot of risk because if you use a third-party protocol lots of smart contract risk you know you need to make sure that you know like what are the conditions that you can get liquidated on and you know if a flash crashes can you get liquidated sort of those sorts of things to consider as well so uh yeah hopefully that answers that last question oh no you got one more question here um uh so your fourth question uh what are you asking at what did you think about all the upcoming bridge aggregators like xy finance and live finance uh how do you see the risk in those especially if we refresh our mind in regards to what happened with the 600 million dollar hack a couple weeks back um so i think the bridge aggregators are

obviously great because there's a lot of bridges now and it's going to be harder for people to kind of i guess uh chew pick and choose which one they want because h i want to use sorry because each different one has different uh networks that it supports different assets it supports it has different kind of liquidity profiles so these aggregators are definitely needed but it does add another layer of risk right because you're going through these aggregators now on top of the the bridges themselves um i don't think at least i don't know about xy finance but with with lee finance or live finance i'm i'm pretty sure they just sit on top of the other protocols so uh i don't think they store any user funds or anything like that so essentially what's happening is that you're taking the kind

of like a smart contract or or bridge or multisig risk of the actual underlying bridges so whether it be like hop or or connect or kind of like uh or synapse or whatever whatever other one there that's kind of like what you're taking on the risk of i don't think at least leave finance doesn't kind of like add any additional risk but maybe xy finance stars maybe some other ones will in the future you really do have to do your research there i think to kind of get an accurate view of these sorts of things um but generally uh i think that they should just sit on top and it shouldn't be kind of like extra risk there all right what a quick break here and then i'll keep going on all right our next question comes from

professor angel ii who asks what sort of future do you see for proof of work mining is there a place for proof of work coins going forward on ethereum or other layer one l2s and what would you recommend good or bad idea to someone considering investing in power or proof of work mining equipment so the only proof-of-work network that i can see uh the you know it's native coin retaining value over the long term is bitcoin i think you know ethereum is obviously moving off of proof of work if you look at all the other networks they've performed really poorly litecoin dochecoin i mean dogecoin has its speculative palms but just generally just most of the time it performs very poorly there's a one that came out a couple years ago called grin this was like the thing that everyone was shilling on

crypto twitter in 2019 uh a lot of vcs were shilling it um i think hundreds of millions of dollars went into investing and mining equipment for it it is down 99.8 percent against usd i don't even want to know what it's down against eighth probably 99.99 or something like that i am bearish on proof of work coins besides bitcoin i mean i'm bearish on bitcoin long long term but i mean i'm sure it's going to keep going up in value regardless but i don't think that there is room for uh another proof of work chain besides bitcoin to kind of like accrue that value over time and and keep it both in the mining equipment and also the coin itself so i think that uh i mean you know and there's another example being zcash

which is which is also proof of work again the coin is destroyed against uh uh us dollar and bitcoin and eth it's just down really really bad i actually think zcash makes sense to become a rollup on ethereum but i think that they're just going to switch to a proof-of-stake or at least a hybrid proof-of-stake proof of work soon and just go down that path for the time being which again is another signal that kind of proof of work is on its way out or it's pretty much it's pretty much out because i don't think since grin launch there's been any high profile proof of work coins launched at all and this is because it doesn't doesn't make much sense it's outdated technology the coins don't perform well because there's a lot of inflation you have to kind of bootstrap a whole network of of miners

and of people kind of like mining these sorts of things with different equipment and then you know it's less secure than proof of stake as well i believe but but you know there's different proof of stake implementations as well so i wouldn't say it's less secure than uh then kind of like some of the really bad proof of stake implementations i would say it's less secure than ethereum proof of stake and it's also harder to get security because you're relying on these kind of like hardware uh rollouts which if someone has to decide where to mine a lot of them are just going to mine bitcoin or ethereum these days as well so i would i don't know if i'd recommend someone to invest in proof-of-work mining equipment at this stage instead i would probably again this is an investment advice but what i would do instead of investing in

mining equipment is i would invest in proof of stake coins uh obviously eth um i would just stake and because i feel like the return is going to be better there i would really only buy eighth to be honest and that's what i already do i don't really i don't really want to buy any of the other proof of stake coins but eighth instead of mining equipment i mean it's a no-brainer for me uh at least at the end of the day there so i think it's funny because i was talking about this in the newsletter the other day where i basically said i think going forward uh the kind of like layer one ecosystem in general is going to kind of suffer the same fate that proof of work did where people are going to stop spinning up layer 1 chains because it's just such a big thing to do

and they're just going to start spinning up layer 2s instead and just outsourcing their security to ethereum there's a lot a lot you know a lot less cost involved a lot less effort involved and just being able to kind of like i guess be like okay well ethereum you can handle the consensus and security and data availability and we'll handle the execution which i think is a better model anyway so there's a lot of those dynamics going on and i think that's why i've been saying the next five plus years is going to be the modular blockchain era rather than the monolithic chain error which we've seen over the last five uh five or so years just doesn't make much sense to launch these monolithic l1's anymore never really made much sense but i think more people understand that now and there's much more competition now

too so i think you know that that that's going to kind of follow the same path that mining uh that mining has over the last few years all right a question here from axiomatix who says uh uh what's your view on amm versus clobs so amn being automated market maker like uni swap versus central limit order book something like dydx seems like the l2 space enables possibilities for the latter to be successful since clubs is the standard for most online legacy market stocks etc is there any reason to think this won't happen here as well so this is like a pretty broad discussion and it's one that a lot of smart people smarter people than i have had in the open on twitter and you know through blog posts and all those sorts

of stuff i think they're fundamentally two different things uh not just from a tech kind of like uh i guess architecture perspective but also from who they appeal to perspective so the main difference is in how market making is done whereas on an amm it's automated right that you provide liquidity the whole the amm handles it all for you you don't have to manually kind of like um put your liquidity up wherever you want um yeah sorry put your liquidity at kind of like this price point or that price point or change it um this this this applies to kind of like a sushi swap and uni v2 um but uni v3 there's kind of like a hybrid model right where you have the passive amm or you can have like a more active kind of like market maker where essentially you

do kind of like passive investment say okay i'm gonna provide liquidity between three thousand dollars and three thousand five hundred dollars for eighth but if it falls out of that range then your position basically stops providing liquidity and you're stacking just 100 of of kind of like a the coin but you can move it right you can actively move it so it's like an actively managed position but like it's like a hybrid passive active whereas with a club or a central limit order book uh you need to be active you need to be an active market maker in there you need to kind of like either have a bot that's doing it for you or you do it you're doing it manually you have to keep rejigging things you have to keep reacting to market conditions so it lends itself to the more professionalized people more

professionalized market making firms whereas amms lend themselves to just normal retail investors who are like okay well i can provide liquidity for this thing just do it in a few clicks and then i don't have to worry about it so that's the major difference in my eyes and and why i think both are going to exist in the future but you're right um clubs couldn't really work on layer one uh there's actually one of the ancient ones from 2017 called ether delta which was very very expensive to use on layer one very very kind of like slow to use because it was all on layer one like it had an order book but you had to like go in manually select the orders you wanted to buy then you had to submit an on-chain transaction to do this and even back in 2017 when gas prices

were were a lot cheaper it was still too expensive and it was still very very slow whereas with something like diy dx now it's on layer two instant transactions you know no fees whatever uh it just makes a lot more sense whereas with an amm because of the fact that uh it's all kind of like done automatically handled by the smart contract it doesn't really matter that they're uh it's running on layer one and it's proved to be incredibly popular because a lot of people are just like okay well i can just go buy these tokens on this thing um i just submit an order to the smart contract i don't have to manually pick it from like an order book it's like just basically a market buy um and everything's all well and good and the liquidity is there i know it's there because it's in the contract and all

these sorts of things in the contract no sorry the um yeah the contract knows it's there and and and can provide users with kind of like this liquidity as well so i think from from that perspective uh it's just really really cool that both of these things will exist and continue to exist in the future uh and it's funny because like uni v3 being like a hybrid between the two is an interesting thing but that doesn't stop people from using uni v2 or using sushi swap or using curve i know curve has some concentrated liquidity stuff as well um but it just generally hasn't stopped people from using those sorts of things now what's it going to look like in the long long term i i'm not sure i'm not an expert on these sorts of things but uh i would bet that amms are not going away anytime

soon and even even the passive ones like the total passive ones not not just the hybrid ones the total passive amms i think they're gonna be around for a long long time uh they you know the funny thing is the idea for an amm has been around for decades it just didn't work in the traditional finance system but now that we have this kind of like level playing field where retail investors can access this sort of stuff and um you know non-professional kind of like uh people can can mark to do market making it's just proved to be much more popular so yeah hopefully that answers your question there all right two questions here from max invests the first one the ethereum fighter continues to annoy me apparently someone can post a blatant lie on twitter and thousands of people will like it and call anyone

encountering countering the fudd and ethmaxy i am worried that this is only going to continue when eat 2.0 happens as 99.99 of people do not understand ethereum's roll-up centric roadmap and will continue to post screenshots of the l1 having high fees what is your perspective on this so this is a very big thing to unpack i would say basically what i was saying before about how you can't win a narrative war but at the same time i've been fighting this fun for years now i mean i started or i started it with eric um ethub because of this i started the delegate in part because of this you just have to keep educating this is a constant battle there's always going to be misinformation being spread there's always going to be people believing things that they shouldn't believe and and kind of like um you know

giving engagement to things that shouldn't have engagement there's always going to be people trying to push their own agenda maybe they're a fan of another chain they're like oh ethereum's dead because it has high fees blah blah people posting screenshots of l1 having high fees and being like ethereum is broken which is always funny to me because when i look at that it's kind of like do people post pictures of like apple's revenue and be like this is bearish it's like i just don't like why is it bearish that ethereum is generating tens of millions of dollars in fees every day like i i don't understand that at all um but from the user's perspective like for them they're just annoyed because they're like i want to use ethereum but i'm priced out which is totally fair i get that but we have the obviously the

layer 2 solutions we have um kind of like the roll-ups and all that sort of stuff for end users but as i said before you can't win a narrative wall just purely based on on that on kind of like uh spreading like a story or a narrative you have to have the tech to match it and that's exactly what we're doing we're rolling out this stuff there's people are using them like the l2s are really growing much faster than even i anticipated they would um uidx is having amazing growth for example arbitram um has had amazing growth since they went live uh you know we've got the the kind of like um the generalized zk roll ups coming zk evm the polygon pos chain which technically is not a layer two but still has had amazing growth right part of the ethereum family um so you have all this kind of like stuff

happening here that i don't think users most users will ever need to understand the rollup centric roadmap they don't need to understand even what ethereum is how it works what the beacon chain is how staking works how transactions are ordered any of that stuff just like most users of the internet don't have to understand how tcpip works because they're protocols at the end of the day ethereum is a protocol um the default apps are protocols uh rollups are protocols and they're just kind of like the users are going to interact with things that are kind of like customer facing so for example we all interact with different kind of email clients right but email is a protocol smtp is a protocol but uh people interact with gmail or hotmail or whatever other mail there is these days

i use gmail um people interact with those and through a client instead of inter instead of having their own kind of like set up directly talking to the protocol they kind of like outsource that to um uh to kind of like google right so the same thing is going to happen with the ethereum experience for a lot of people where ethereum will sit on the background it'll power all these sorts of things the raw apps will power all these sorts of things but people will get access to them without even realizing like there's going to be plenty of people for example that are going to use the immutable x nft roll-up without realizing that it's built on ethereum and secured by ethereum and that's okay that's totally fine uh because uh it doesn't they don't need to know that and they shouldn't need to know that we can't expect everyone to

know the intricacies of ethereum's kind of like design to want to be able to use it if they're interested in learning about it sure go and learn about it but to just use it as a regular user they they shouldn't be expected to know those sorts of things and most people don't want to know those sorts of things too because of the fact that they've got other stuff going on in their lives so from that perspective i would say that don't be disheartened by this fudd it's going to exist forever all this misinformation is going to exist forever but the technology speaks for itself i think over time over the longer term i think that the layer 2s are going to speak for themselves as i say people are going to use them without realizing they're using ethereum you know even the haters are going to use ethereum without

even realizing it because they're going to use one of the l2s which is which is just a really funny thing to think about so focus on the tech focus on kind of like helping where you can with the tech focus on getting people to use these sorts of things and don't worry about like this this kind of like fighting misinformation because narratives can change really really quickly i've seen it happen many many times before where you know the funny thing is a narrative in in 2018 and 2019 was that ethereum was dead that the ethereum network had failed that all these ethereum killers were going to usurp it and everything and ethereum was just going to be you know written in the kind of like footnote of the crypto history books that obviously didn't happen ethereum has gone on to become you know very very

big much much bigger than what it is uh what it has been in the past like by a much more than much bigger than what it was in 2017 as well and eighth price has gone on to fresh all-time highs and continues to accrue value and continues to push higher so from that perspective uh i just wouldn't focus too much on the on the kind of like noise and the fud um but focus on educating it's what kind of like the position i've taken kind of what you know it's why i do the refills why i do the amas why i do the ether stuff newsletter all that sort of stuff it's because i believe education uh over time you know plays massive dividends but i also believe that none of the kind of like twitter squabbles really matter that much at the end of the day because most users will

never see them they never pay attention to them most users just want to use something that kind of like works and that they actually get value out of but there is one key consideration there is that there are a lot of things that quote-unquote just work but are like totally centralized right for example but it's on us as kind of like people that are more involved in the ethereum ecosystem to make sure that we build the best products and keep the decentralization there and keep the security there so that we can protect users as well so i think that's a responsibility of all of us but shouldn't be a responsibility of the everyday user they definitely shouldn't have to worry about that sort of stuff there and then your second question here max is why is maker dow generally considered the most important d5 project i think

this is like super subjective right i don't think everyone can considers make a data be the most important d5 project i think that it it is one of the most important in terms of like innovation what it's done for the space what it's shown for the space how long it's been around um you know across every kind of like metric and barometer whatever you want to use there but it's like totally subjective about what's the most important d5 project right it's it's definitely um it's definitely not going to be the same for everyone for me actually i would argue that unisop has been the most important d5 project if i had to pick one um unizopp has done a lot it basically proved the amm model which basically made it possible for d5 to be d5 without exchanges like without something like an

amm d5 would never have really taken off as it has uh but in saying that you know without stable coins it's the same thing i believe but uh the thing is maker dao isn't the only kind of like uh sorry make it out has die um and then there's obviously the kind of like centralized stable coins and stuff like that but i think that um unisop if i had to you know if i really had to answer it would be the i think the most important d5 project but the thing is they're all important in their own way as well like unicorn maker totally separate products they work very well together of course because you can trade dial uni swap and all that sort of stuff but um i don't consider you know i i personally don't consider maker to be the most important it's it's

definitely one of the most important but yeah if i had to pick it would be uni swap so again subjective right that's definitely not um something that you're going to get the same answer from everyone for at the end of the day all right uh one here from dom who asks what the heck is d5 2.0 so as i mentioned before d5 2.0 is mostly a marketing term but it also it is also used to describe a set of new features that have kind of like come to i guess d5 over the last few months that people are now paying attention to so i think the biggest feature here is something called pcv or protocol controlled value essentially what this is is basically the protocol itself controlling uh you know some kind of like value whether that be their treasury whether that be their own

liquidity as i explained at the start of the ama help about how kind of like alchemix is doing their bond program um and it basically uses that kind of like value to do various things with you know whether that be kind of like uh provide liquidity whether that be backing uh uh kind of like uh uh sorry actively backing like a stable coin like with abracadabra and then using it to yield farm those sorts of things that's definitely one part of it um i think the other part is like more composability so more kind of like stacking the money legos making more efficient use of of capital uh that's in the protocol because something like maker for example and i don't actually think this is a bad thing but make uh all the collateral in there doesn't do anything right whereas with a collateral within abracadabra for

example is being used to yield farm but there are there are additional risks here so i think those are kind of like the two main features um and i think like the third one that uh i don't know how much of this is kind of like i don't know this seems like a sub feature i would say it's kind of like being multi-chain so having like your d5 app on different kind of like l2s and different kind of like side chains is definitely a big theme in that kind of like area as well so um those are like the top three things off the top of my head uh but again d5 2.0 marketing term doesn't really mean much i would actually consider it to be more like d5 1.5 nothing i have seen has been like a zero to one moment to justify like a d5 2.0 thing

but uh i don't think that these other projects that people are calling default 1.0 like the maker the uniforms whatever of the world uh they are not stagnant they are you know working uh sorry they're working on new features all the time they're adding new features all the time it's not like they're going to get you know usurped or killed by these kind of newer protocols i think they're all just going to work together and some of them will appeal to you know some people some of them will put to other people but you know it's the same as like kind of like people saying oh people things are going to kill ethereum no they're not they you know they might cover out their own nation do their own thing but they're definitely not going to kill ethereum so yeah from that perspective i would just

kind of like be wary of people saying oh this is d5 2.0 and this isn't because i think it's just a marketing thing and it definitely comes back to people's bags as well right and at the end of the day all right going to take a quick one minute break here guys uh so yeah i'll be back in a minute all right on to the next question so

this one comes from lucas who says who asks i think at this point most of the crypto natives understand proof of work um with all its mechanisms miners full nodes etc uh could you explain to us the consensus mechanism of proof of stake based on the eth2 implementation what is the equivalent of a full node in eth2 in other words can i read the break and chain myself without validating yes you can so in e3 there's two separate things here there is the validators and then there is the kind of like beacon node so you can either choose to run your own beacon node or kind of like outsource your beacon node needs to someone else and you can run your validators like that so you can basically point your validators at someone else's beacon node or your own so right now on my staking

box i have the beacon node and i have my validators pointing to it and the beacon doesn't require the 328 only the validators require 328. so yes you can verify the chain just like you can with ethereum today without having a mining you know miner for example you can just run a normal full node and it's all well and good and that's actually something that i see as like a common misconception a lot of the time uh on especially kind of like on twitter where people are like oh you need 32 to validate the chain it's like you need 32 to participate in the consensus of the chain you don't need 32 eth to verify the channel validate the chain with a kind of like a full node just like you do in eth1 so you know from that perspective that's actually one of the

things that i kind of like dislike most and one of the narratives that i dislike my most is that people believing that you need over a hundred thousand dollars to verify the chain not at all that's definitely not the case um as you know as i just explained there so and and obviously another another key difference is that um proof of stake relies on steak instead of you know hardware right it relies on on each being staked so that that eth kind of like is like a bond essentially where if you do something malicious and the network detects that you do something malicious you get slashed and you get ejected from the validator set so what ends up happening is that depending on what you do you get slashed for some amount of eighth you you that each basically get you you basically lose that eighth um and then uh you get

ejected from the valid data set which means that you're kicked out from validating and you can't uh you can't basically re-enter i'm pretty sure you can't re-enter with the same address you could obviously kind of like withdraw that eth to a new address top it up with 32 and come back into the network but yeah you basically get ejected uh um you know uh uh for doing something kind of malicious and then also with proof of stake uh the way kind of like the block uh i guess like uh the way that the blocks are verified is very different it's done in a deterministic fashion rather than a probabilistic fashion in proof of work whereas a bit of work it's probabilistic because all the miners are competing to find kind of like a block with improv though within proof of stake it's kind of like a a more kind of like

deterministic ordered system where stakers are basically attesting to blocks and then uh and then every now and again they'll propose a block it's it's rare to propose a block like for about for your own individual validator you might propose like one a month but you'll be uh you'll be attesting to a block like every coup every every few minutes so uh you know depending on your validators and how many validators you have and stuff like that so they're fundamentally different systems actually comparing the two isn't i mean comparing the two doesn't really make much sense uh like comparing bitcoin's proof of work to ethereum's proof of stake it doesn't really make sense at all i think they're they're definitely completely different things the the only thing in common that they have is that they come to consensus on something rather a consensus mechanism but other than that they work very very

differently they have very different security properties and trade-offs and and kind of like um different requirements and stuff like that but in saying that what remains the same is that yes you can run a full node without requiring the 32 minimum of a validator and you know you don't need a miner or anything like that either so yeah hopefully that answers your questions there lucas all right on to one from javier lux who says uh who asks questions about erp 3664 the next generation game nft standard um so how do you feel about this eip and its impact on the nft market so i actually didn't know about this until you you kind of like asked this and i quickly looked it up on google before it seems to want to do what loot did but natively at the kind of like protocol

level where you basically have like these composable nfts so i think that's really cool of course i don't know if it should be done natively at the protocol level i think you can do this with like an erc i don't think you need an eip for this but you know we'll see and then you know you go on to say the eip is qualified as draft now how long could could it take for this eip moving forward it doesn't seem very difficult at the protocol level um difficulty here should be at the daps using these uh these super nfts as you call them and when the creation design of these nfts um kind of like on steroids so and then your third question which feeds into the second one is with with all the mega changes coming in 2022 2023 with the merge sharding l2 deployment

statelessness et cetera does this erp have any enough attention from ethereum engineering research in order to move forward so i would actually say that it probably doesn't and it's probably not going to go into the network for a long time because right now the only thing that's being worked on um in terms of a network upgrade is the merge right that's an eip you know of itself and the only other kind of like stuff that's happening uh is the difficulty bomb pushback so the difficulty bomb is set to golf in december that's going to be pushed back to june that's an eip um there's going to be the merge hard fork sneip then after that there's going to be another set of eips but i think there's already kind of a list on there and i don't think something like this would make it in there um i think what's

going to happen is that this needs to be an erc which is like a kind of like token standard which can be proposed by anyone doesn't require protocol change getting eips into the network especially these days is very very hard unless it actually is considered a major network upgrade for like everyone not just for one specific kind of like sector i don't see it actually going in unfortunately so i would encourage this aip kind of like author whoever whoever it is to create an erc standard instead and try to get adoption that way because yeah as i said i just see a very very low chance of this making it in and if it does make it in it's probably not going to be until 2023 at the earliest uh from what i've seen anyway all right so i got a few questions here from yon and the fawn first one is

having one's tokens on an l one on ethereum l1 a ticking time bomb in the sense that it is getting more and more expensive to transact on l1 meaning should we all be migrating our tokens onto an l2 as soon as possible what if our token doesn't have enough liquidity on the l2 are we screwed and what if our token is an nft on our one so this is a good question and i don't really have like a definitive answer to it obviously because i don't know what the future is going to look like um but i think that yeah generally as a user you want to be using l2s as much as possible you don't want to be doing too much stuff on on l1 but i as i i've mentioned before that i think that the l1 fees are gonna you know keep going up and get like really

really super expensive over time i think that's like the long long term i think i don't think that's gonna uh it's gonna be kind of like uh the case for maybe another i guess few years i would say but as i said like it's very hard to kind of predict these things but at the same time if you have things on l1 that you're just holding uh and that you know you're scared that it's going to cost you 100 hundreds of dollars to move one day or to sell i would definitely get them on to l2s today uh if they're supported by by these kind of like l2s and their bridges and stuff like that which which i think you know arbitrary supports a lot of them already um and then you know nfts are a bit messier i think um i think the the funny thing is is that i

think a lot of nfts are going to end up migrating to to um layer 2 generally like a lot of the mints and only the the highest the value nfts will be on layer one because those are the only ones that make sense on layer one so yeah it's a bit of a kind of like transition period here it's a bit of short term short to medium term pain before we settle on some standards with the layer twos before we have like more support there but i would encourage everyone yeah to move to layer twos get kind of like your funds on there if you if you want to if you if you kind of like trust them um be you know not just because like it might get more expensive on l1 over time it already is expensive on l1 and you can save so much gas phase

even using kind of like the the i guess you could call them gen one l twos today like uh arbitrary optimism haven't got you know they're basically in their their beta stages still they've still got plenty of development coming but arbitrary for example what it costs like a few dollars for for a unisop trade um it to do that on mainnet is like you know 50 or something like that so it's a substantial saving already and that those costs are just going to come down over time as well so when you look at it from that perspective if you're already kind of like paying l1 fees you you 100 should just be moving to l2 and kind of like taking advantage of the low fees on there all right your second question uh say i want to never transact on l1 ethereum again only ever be on l2 how would i do

this if i have a coinbase account can i go directly from buying eth on coinbase to sending it to my wallet on an l2 not yet but in the future you will be able to coinbase has already signaled that they want to support the polygon post train first and then they want to support um optimism arbitram and i think they mentioned starkware as well and i'm sure they're going to support zk sync and and you know all the other l2s and things like that so yeah that just in the future it's going to happen but uh it depends how they do it as well because they can either be just like a bridge from l1 to l2 and just handle that for you which will be more expensive or they can basically have like a liquidity pool that sits on one of these other bridges that allows

you to just go directly from coinbase to this l2 and it's you know very very cheap to do so so it's going to be interesting to see how exchanges handle that and third question after the merge is it possible that eip1559 could burn too much eth meaning does the mechanism design have an asym asymptotic max percent annual burn or could there be a scenario where ethereum demand network demand is so insane that we burn all most of the eat out of existence so there's no limit or anything there's no max percent annual burn there's no kind of like limit to how much fees can be paid there is obviously a limit to how many transactions can go in a block and the gas limit is that limit but there's no limit to how much it can be burned if someone wants to spend billions of

dollars on fees a day on ethereum layer one you know not just someone but like if people want to do that do that then that that's going to happen and the eighth is going to get burned but the thing is is that ether is divisible up to 18 decimals uh so if we do ever get into a situation far in the future where oh you know most of the ether has been burned they're still going to be people people still going to be able to kind of like transact with eth and they're still going to be able to um divide you know divide ethan into those 18 decimals and then over time um you can change that as well you can you can change it so that it can be you know divided up to 100 decimals or something like that something crazy but uh in saying that if

we burn like a lot a lot of eighth eighth price is gonna skyrocket i mean if we're reducing the supply that much if we say we burn like half the supply um in like the next 20 years for say say for some reason or 10 20 years or something like that each price is going to go absolutely ballistic it's going to be like you know probably way higher than a hundred thousand dollars um or something uh something like that because you're going to have um you know that annualized burn being priced in you're going to have like people staking you're going have it being used the way it's used today in terms of like d5 collateral and all that sort of stuff you're gonna have like just general eight you know eighth general growth being priced in and all that sort of stuff there so i would say there's like

a bit of a balancing act going on there but um this is not something that we have to worry about right now and if it does need to be changed far far into the future like for whatever reason in terms of um changing those decimals uh it can be i believe but again um i don't foresee this really being an issue unless like uh yeah i mean i don't know i feel like it's a balancing act i don't i don't feel like it's going to be a an issue long term but we'll have to see it's definitely interesting thing the ponder all right a question here from decca can you give a quick overview of the different bridges available to transfer funds across 8th and l2s uh yeah i mean so i mean you have a bunch of other questions here but i've i talked about bridges on the latest daily

grey refuel on friday's delegate refuel so if you want to check that out at the end of the video i talked a lot about bridges there but i mean there's so many that are available today uh you mentioned hop connects and synapse there's so many others right now like the seller network um i'm just trying to think through on the top of my head uh all the kind of ones out there i mean there's a lot of lead finances like the aggregator there's the native l2 bridges that are already kind of like in existence like the optimism and arbitrary bridge there's the polygon kind of like pos chain bridge and stuff like that um and then you know you go on to ask are they all considered trustless they're a multi-sig that controls the funds at the time of bridging uh as i said i discussed this on the refuel um

the end of last episode but they all got different trade-offs like pretty much i there's a blog post that you should read on bridges i don't have the link handy right now it's by dmitry i don't remember his last name but if you search like ethereum bridges dimitri medium it probably come up with that blog post but all of them have different trade-offs some of them are multi-sigs some of them are kind of like um a totally kind of like centralized just like an eoa or something like that uh some of them have like liquidity provided risks some of them have uh higher fees than others some of them work uh you know differently to others so definitely you wanna be aware of all the risks there i don't think there's any fully trustless ones yet i think connex is probably closest to being that uh in the future

in a future iteration but i'm not aware of any that are fully trustless besides maybe the native bridges like the arbitrary and optimism bridge but even then they have admin keys because of the fact that they like a centralized system but i'm not sure if the admin keys cover the bridge contracts itself it may just cover like the the other contracts in the l2 system i'd have to check on that but yeah that blog post from dimitri i think definitely dived into this when i when i was reading it um and then you go on to ask uh how okay are there are there special considerations for providing liquidity to the bridge do you consider that a decent way to earn on on these base assets um i mean it's providing liquidity is very similar to providing liquidity to like an amm i i think and

depending on the volume that runs through it will determine how many how much fee revenue is being generated and how much you'll make and also some of them have like uh incentive token incentives like synapse for example has a token incentive program so yeah i mean it's just i guess like on the the user to kind of go through look at all these bridges see the benefits uh of kind of like supplying liquidity to them and you know maybe you assume that some of these bridges will do an air drop in the future so maybe it's worth kind of like taking something permanent loss now for an airdrop gain later i'm not sure like which ones will or will not do air drops but or even if they'll have a token but i said before i think everything's gonna have a token um but yeah i think that's uh that's something

definitely that people need to kind of like be aware of and and definitely um uh kind of like make the decision for themselves all right quick drink break all right on to the next question from monkey king who asks i staked my ethon lighter and then staked my st in the curve eighth s to eighth pull i then withdrew all my st from the pool into all into all eighth uh and then you used all that eth to buy nfts my question is am i still staking ether on lido no you're not uh you sold your steak but when you sold your st so your eighth is technically still in

staking because what lydo does is that it sends its eighth to the staking service providers which put it into a validator or sorry put it into the deposit contract which goes onto a validator so technically your original eth is staking but you're not earning the rewards because you're not holding the st tokens anymore because the st tokens are the thing that's giving you the yields um and then it maps directly to that eighth that is being staked so no you're no longer earning uh a staking kind of like a yield there and then you go on to say i don't uh if i don't receive any benefits uh once i return and restake my ether again and the curve full will my benefits resume if you buy stef again then yes you'll get exposure i mean the thing is you didn't even need to stake your ethon

lighter to begin with you could have just bought st eth and gotten the kind of exposure there as well which is a funny thing to think about um so yeah you can just get your exposure back whenever you want basically by trading it back so hopefully that answers your question monkey king all right one here from handusa tuck who asks do you agree that uh wallet owners should have an option to switch from a permissionless setup where anyone can send them tokens at any time to a permission set up where they can restrict the tokens that their wallet can receive to certain tokens only so this will never happen on the protocol level um people are always going to be able to send you trash tokens and scams and all that sorts of stuff but what you can do is what you what what app

developers or wallet developers can do is that they can have their wallet not show you this stuff right they could basically hide it automatically for you so that your wallet isn't your the interface that you're accessing the wallet from doesn't show you all these kind of like scammy tokens um the metamask already does this to an extent because you have to manually add all the tokens that you want they don't really have a great implementation of it because you have to add the good tokens as well uh but then it becomes subjective like what token's good what's bad what's the scam what's not right it just it becomes messy but this uh this isn't going to happen on the protocol level it'll happen on the kind of like wallet level where you can just basically hide the tokens um you can't block the tokens from coming into

your wallet but you can basically hide them the funny thing is though is that um this is this is talking about a normal wallet if you have like a smart contract wallet something like argent you may be able to block tokens being sent to your wallet but again it's hard because you would have to know the token address like the contract address that you want to block tokens from and a lot of the time these scams they just kind of like spin up uh uh kind of like uh new contracts you know all every time so it's kind of like a chicken chicken neck it's a cat mouse game um and definitely definitely doesn't work very um very uh very nicely so yeah i would say that on the user interface level it can be solved but it's just definitely not going to be something at the protocol

level all right uh one here from gr let's go who says how much control do l2s have which uh over which projects are released on their platform uh can this potentially be a problem so uh the l2 is the end goal for all of them is to be permissionless but right now optimism has a white list because they're not ready to be permissionless just yet but arbitrary is permissionless so they have uh so okay the permission list anyone can deploy something to the to to arbitram right now but arbitrary also have uh admin keys so they have a multi-sig that controls the contracts and they can upgrade the contracts whenever they want and they could upgrade the contracts to kick uh you know uh kind of like project off or implement a white list again

or do whatever but the the kind of like the the goal of all these l2s is to be uh completely permissionless where any project can can basically deploy there and nothing can be done to stop it just like on ethereum l1 today so um from that perspective we're not there we're not there just yet we will be there in the future when kind of these l2 is fully decentralized and stuff like that and it can potentially be a problem i mean as much as it can potentially be a problem on l1 uh it's the same kind of stuff like there could be unsavory stuff launched there could be really you know crappy stuff launched it could be illegal content hosted on these sorts of things but that's what you get from a permissionless kind of like neutral platform and that's just the trade-off that you have to make

all right uh one here from hubba cook who basically uh linked the kind of like up only podcast with ari paul where arie paul said that he gives the probability of ethereum being a market leader in ten years uh temp a less than ten percent probability uh he said that having uh only a uh that ethereum has only a tiny mode which is developer mode and it's only a short term one um and it has an innovative innovator's dilemma of moving slow uh and then uh hubba asks would love if you could elaborate on those arguments he's trying to base his future assumption on about ethereum so i've known arya for quite a while he's actually be he was actually one of the first people to notice me on twitter and give me a bit of a boost on there when i was up and

coming in 2018 so i so i i i kind of like owe him a bit of that but i would say that ahri and me differ on a lot of things when it comes to this sort of stuff and our views differ for a number of reasons i think he's a vc i'm not i mean uh vc fund manager i'm not so he has different incentives to what i have he i think doesn't isn't up to speed with uh what ethereum is doing how it's going to scale develop centric mode modular blockchains i think he's i think he's behind there i haven't kind of like seen anything from him about that um lately i think he severely underestimates how big ethereum's moat is on the developer side he seems to discount that for some reason i also think that making any predictions over the you know over a 10-year time frame

and assigning a probability to them is kind of like a fool's errand i don't think you can actually do that um i know i've said before that i think that over the next five to ten years modular blockchains are going to be like the big thing but i didn't assign a probability to that i just said that this is what i believe assigning a probability to it opens yourself up to scrutiny because you've now just put a hard number on it which you know ahri's saying ethereum you know ethereum's chance of being a market leader in less than 10 years uh sorry in 10 years is less than 10 i mean how can you like how can you even begin to to kind of like reason about that how can you even begin to explain how you arrived at that position and you know you can say things like well the

moat is tiny because we're still so early um you know the developer mode is tiny but there's many many arguments against that i think the number one argument against kind of like ethereum's kind of like probability of success is that it actually increases over time like think about the amount of kind of i guess stuff that ethereum has gone through the amount of trials and tribulations it's gone through the amount of trials and tribulations it continues to grow through and will go through in the future just imagine how much it's already gone through and come back stronger like ethereum hasn't stopped growing it kept growing it keeps growing to this day uh no matter what it is thrown at ethereum it always seems to emerge stronger we're on the verge of so many massive upgrades over the next few years coming to the network the merge layer two roll out all

the new kind of like um stuff happening at the app layer uh uh kind of um sharding statelessness uh the modular blockchain error just generally and developers are still coming the new developers are still coming into ethereum still building on ethereum they're gonna be building on the l2s they're not gonna be limited to solidity they're gonna be able to build in whatever language they want so i don't know i just i don't know how he got arrived at kind of like this 10 or less than 10 probability of ethereum kind of like being the market leader in 10 year in 10 years i feel like i mean if i had to put a hard number on it i would say it's much much higher than that but again it's very very difficult to project out what's going to happen in 10 years like 10 years ago what was 2011

bitcoin was two like bitcoin was two years old it was just basically it was worth less than a dollar probably or something like that it was definitely um uh uh an ethereum wasn't even kind of like an idea yet or anything like that so from that perspective trying to project project out what's going to happen in 10 years in crypto is a complete fool's errand so i just kind of like i don't i just don't get that reasoning there uh and then his other point about like having an innovative dilemma of moving slow i think this is why i'm saying that he's missing the roll-up centric road map he's missing the modular blockchain stuff because ethereum is moving slow at the base layer because of the fact that the base layer secures half a trillion dollars worth of kind of like market cap of eth right now

all the tokens built on top all the nfts all the trillions of dollars of economic activity all the l2s built on top you can't move fast in that kind of like scenario so the ethereum base layer is definitely moving slower than uh more of these kind of like newer chains and more centralized chains that's 100 true but at the same time what re is missing is the forest the forest is the layer 2 landscape where if you understand the roll-up-centric road map you understand that all of these kind of like innovations and all these kind of new things are going to happen at layer 2 they're all going to inherit ethereum security and its decentralization and its community and its network effect but they're going to be able to do whatever they want because they only have to focus on the execution side of

things and again this goes back to modular blockchains they don't have to focus on consensus or security they don't have to focus on data availability they can choose to if they want to like start where has validium and volition and stuff like that um uh and zika i think has zk porter but they don't have to they can outsource that to ethereum so and we've already seen like stock where are doing innovations at layer 2 by having their cairo programming language instead of solidity they have starkx which is um you know an alternative to the evm we have different kind of implementations of of evm compatibility and evm equivalents all that sorts of stuff so the innovation is happening at layer 2 instead of layer 1. so i would actually love to just educate ari about this because it just seems like this is

a missing piece in his kind of whole thesis is that he doesn't understand ethereum's roadmap it seems maybe he does maybe i'm i'm i'm wrong here but from my impression from that kind of like podcast and from people kind of like saying about it he just seems to to not get where ethereum is going and he seems to be comparing ethereum's layer 1 to these other layer ones which is not the right comparison at all the other layer ones should be compared to ethereum's layer two ecosystem ethereum's layer one should and really be compared to any one maybe bitcoin but i mean that's even that's stretching the definition or stretching the comparison there so yeah hopefully that kind of like answers your questions uh there are there hubba cook because i mean yeah i just like i feel like it always

these kind of opinions and these kind of stances always come from a lack of understanding and i can forgive ari for this since he doesn't spend all his time in ethereum um he's obviously got like a lot of other stuff happening um in in kind of like what he does within crypto but at the same time i would kind of like say that if people don't understand this maybe they shouldn't kind of like a on it with such kind of like confidence um and i would kind of like love to educate more people about this uh so so yeah hopefully that answers all that for you all right one here from bohus bohus berhas.eth who says could you describe the difference between validiums and side chains in terms of security as far as i understand both solutions rely so i rely on a set of validators that is

separate from ethereum is that correct so l2s um still rely on validators they just don't rely on them for security it's more for kind of like the ordering of transactions like a sequencer and constructing like l2 blocks and and kind of processing transactions and that sorts of stuff um but the differences between validiums and sidechains and security is that validium still inherit uh ethereum security on the proof side so a validium will still post the proof of its transactions to layer one ethereum it will still kind of like say hey you know here's the transactions that i processed he's the proof of sorry here's the proof of the transactions that i've processed uh and it's all stored on layer 1 ethereum whereas they'll store the data the state the user balances as

a kind of like a kind of like simple example there they'll store that as part of a data availability committee which could be just a set of like you know maybe five nodes and kind of like five validators whatever you want to call them signers that keep the data available so the validium can tap into that now of course if the data availability community was to go offline or withhold the data then your funds could potentially be frozen because you you just don't have the the data to kind of like release those funds um and you know some other nasty stuff can happen there but in saying that sideshow but the thing is the the validium will still kind of inherit its consensus from ethereum layer one because it's usually it's still putting the proofs on ethereum layer one whereas a side chain doesn't inherit any security from a

theorem at all um so as a side chain has its own validator set that does the consensus and also does the execution and date availability and all that sorts of stuff so from that perspective there is no proofs being posted on ethereum layer 1 from the side chain and the the data that the side chain has is is basically um like what ethereum has on layer one like just like a normal normal kind of data availability there so i would actually say that a side chain most of the time is just another layer one block chain it's as the term side chain comes from the fact that there's a bridge to the chain but really um it's just a layer one block chain now the most popular quote-unquote side chain is the polygon pos chain but it's technically not a side chain it's

more like a commit chain because it actually commits its state back to ethereum all of its staking logic lives on ethereum so actually without ethereum the polygon post chain couldn't exist whereas there's other layer ones out there that don't rely on ethereum at all right they have their own completely own consensus mechanism completely own kind of validated set and and everything relies on he's kind of an in a closed system nothing relies on ethereum itself but then in saying that and going even a step further you talk about the bridges the bridge to the polygon post chain is unfortunately uh you know unfortunately unfortunately because like i would like to see it more decentralized over time but it's it's a multi-secret it's a 507 i think or something like that multi-sig um and if for some reason that multi-sig was to become compromised the funds in

that bridge could be stolen or if there's a bug in that bridge it could be stolen and it doesn't even matter that you had um kind of like ethereum security for that bridge because it's in a smart contract and your assets that you bridged onto the polygon pos chain well now they're worthless because the bridge which is kind of like the collateral backing those assets so to speak has been drained right for example so and that applies to not just polygon but like anything that you bridge into if the bridge contract on ethereum gets compromised um then the the kind of like assets on the um on the chain that you've bridged to basically are worthless because there's nothing backing them up they're basically like ious so those are kind of like the main differences uh between validiums and kind of like side chains there so hopefully uh uh kind of like

that answers your question what i'm most excited about is the volition kind of construction which is like a hybrid um which allows you to basically choose to have data availability off chain or on chain so you can choose like zk roll up mode or kind of lydia mode as part of volition which which i think is really cool because a roll up is is is definitely what is the most secure layer two scaling solution but it's also the most expensive like the reason why you would use the validium is you get less secure the security um and some trade-offs but you get much cheaper fees because you're not storing the data on on ethereum layer one but the reason you you use a roll up uh a zk roll up or an optimistic roll up is because you want to inherit all that security and get like 100 ethereum

security at the end of the day there so hopefully that answers your question so i've got a few more to get through here i might power through them because we're coming up on on time in 25 minutes here so one from uh paul u who says would be great if you could expand on the differences pros cons between having smart contracts on l1 ethereum as opposed to keeping the l1 as minimalist as possible i.e bitcoin and letting l2s handle this i think bitcoin is too conservative i think ethereum is in the right spot i think that having the l1 be able to do execution of smart contracts be able to uh verify proofs and be able to store data is what you should be doing bitcoin can't do any of that bitcoin can only do bitcoin it's a ui it's it's kind of like it doesn't have a virtual machine can't

verify proofs they can add op codes to do this if they wanted to but who knows when that's when that's going to happen or if that's going to happen so i would say that the pro of keeping a min as being as minimalist as possible is that you focus on one thing one thing only the entire point of the bitcoin network is to secure the btc the asset that's it it's the secure user balances that's absolutely it does nothing else at layer one and that's fine because that's what people want that's what the bitcoin community wants that's all well and good but the the whole point of ethereum l1 is to do more than that is to give you an expressive kind of like base layer to build l2s on top of to build roll-ups on top of to build more complex kind of products

like we've seen with d5 and ft's to do tokens do all these sorts of stuff um that yeah that that that and and and because of that like those are all the pros because of that the cons may be the fact that um you know ethereum is more complex as a protocol so maybe it has a larger attack surface than than bitcoin does um but yeah so so that's kind of like one trade that people point to it is harder to run a node than it is for bitcoin it's not too hard uh you can run on consumer hardware but it's definitely harder than bitcoin because bitcoin's blockchain is much smaller it's much easier to sync because it only has to handle um the utxo set uh at the the bitcoin balances at btc balances it doesn't have to handle all the state it doesn't have like an ethereum like state

um so from that perspective there's kind of like the high level pros and cons there so as i said i'm going to power through the rest of these questions but hopefully that answers answers kind of like your question there paul all right one from tom descent who asked is there anything you'd like to see in the ethereum space that you think would be really useful popular but no one is working on yet you know i saw this question before and i tried to think of something and i still haven't been able to think of something everything that i think of i think of a project already doing it like i thought i'd love to see like a i don't know i was just rambling in my head i was like oh i'd love to see like a better wallet there's plenty of people working on wallets right oh i'd love to

see like a privacy focused layer two roll up i mean there's two teams at the top of my head ey nightfall and aztec protocol that are working on this there are probably more than that um i thought to myself i'd love to see people doing more stuff with nfts and then i thought and then you know i called myself thinking that i'm like what are you talking about like nfts is one of the most innovative sectors right now and then i kind of like thought oh okay well mate what about this in defined like this product in d5 and all that's happening so i actually can't think of anything right now that uh that would be really useful popul or popular that isn't being done right now maybe i'll think of something in the future but yeah it feels like ethereum because it has every base covered at this point

in time all right so one here from uh sovereign so they say context for the question i have not connected the dots of how ethereum makes money when this happens tik tok is working with immutable x to conduct weekly drops until the end of this month immutable team was quoted in the article the layer two has zero gas fees nearly instant trade execution and is carbon neutral i understand the reputation points that ethereum picks up and the additional social currency that will continue to cause exponential awareness by being associated with this deal but how does this translate into ethereum generating a rise in each price from these type of transactions described above um i mean eth is used as a currency on on immutable x right it's uh it's used as money there um so that's one way but

also immutablex secures itself on ethereum it's not technically a layer two it's a validium so it's still post its proofs to ethereum layer one so it's still using ethereum block space it's still paying ethereum the network for security and it's still kind of like using eighth and burning eighth right so that's a that's a value driver there but i think the biggest value drivers are the ones that you mentioned right the the legitimacy the rep you know the reputation points the additional kind of like social kind of um currency or legitimacy or whatever that is much bigger i think than the other stuff that i mentioned because signals legitimacy social signals blah blah whatever you want to call it there at least to me they are worth so much more than people give them credit for because not only do they

kind of like bring like attention to a platform but they also change the narrative around a platform now i was saying before how you can't win a narrative war just based on pure narrative and storytelling alone you need the tech to back it up well this is how ethereum wins the the scaling narrative war people we just have the products people can use right we get these products out there people use them they're like oh wow this is built on ethereum and i have like zero gas fees or i have like really cheap fees that's how you win that's how the narrative changes pretty much overnight um and and that's exactly what's happening right now so there's going to be tons of new people that come into the ecosystem as well that will have never experienced ethereum layer 1 but they'll be using kind of like immutable x and

having an awesome experience with these nfts and i think that that is a massive value driver for ethereum as a brand um which should you know translate into more attention for ethereum as a whole and it logically should translate into more kind of like buy pressure for each as an asset because i think a lot of these things follow uh sorry i think these things uh follow a network effect like pretty strongly and the bigger the network effect for ethereum the bigger the network effect for eighth the more east buyers the higher the east price goes there's my kind of logic there so hopefully that answers your question there sovereign all right so one here from t1 who says how feasible will the taproot deployment make smart contracts on bitcoin given bitcoin is arguably the only blockchain more decentralized than ethereum

is it possible bitcoin could become a viable smart contract competitor to ethereum within five to ten years um i don't think taproot actually does much in terms of functionality of smart contracts on bitcoin i think it adds a little bit of extra functionality but it doesn't do anything like what ethereum can do so i don't think that it's going to make any kind of real difference i don't think that bitcoin's even trying to compete with ethereum to be honest um but the funny thing is is that if bitcoin wanted to do like a massive upgrade without changing much they would only have to do one or two things the first thing add a verifier so that you can verify stark or snark proofs and you automatically have zk roll ups there you go that's all you need to do right you can build zk roll

ups verify it on bitcoin yes you obviously have to add a new op code for this and you obviously add more complexity to bitcoin but this gives you roll ups or second and secondly additionally you can basically have a way to store call data so have a data availability kind of layer on on bitcoin uh native to bitcoin kind of like what ethereum has right now and we'll have with sharding i think the second thing is not going to happen at all because that just increases the footprint of bitcoin too much for bitcoin is and it increases the complexity but i think that if they want to they can just do proof verification and then they can have like validiums of or volitions um or zkporta like uh and do off chain data availability and get that extra scale but in saying that i

don't see these kind of things happening for a long time i think that ethereum is way way way way way ahead i don't think bitcoin community really cares about this i think all the people who care about this are in ethereum already so i don't actually think that bitcoin could be a viable smart contract competitor to ethereum within five to ten years i think that it's going to stick to what it does best which is being whatever the bitcoin is called these days the story value digital gold hard money you know i think it's just going to continue to do it doing that and ethereum will just you know take everything else uh every other use case pretty much all right um one here from brian peace who says because of you and paulinha i'm generally bearish on monolithic blockchains also i'm generally bullish on projects championed by andre andre

chondre he seems to be pretty aligned with ethereum's values and he obviously has a lot of technical expertise so i was surprised to find out that he is a proponent of the phantom network do you have any uh insights about this that might help me make sense of it so i think i don't know like i mean i don't know what andre's motivations are like personally i think that he just likes building cool but i do know that he has a lot of history with phantom i'm pretty sure he's one of the original architects of the network he worked with the team for a while was actually as an employee or a co-founder or something i don't remember exactly but he's very close to them um but i'm with you i found it a little bit odd that he was embracing the phantom network kind of like sidechain

or whatever you want to call it but he was he would he wouldn't embrace the polygon pos chain i think he got a bit upset that that um polygon was using kind of the term layer two in their marketing to describe the pos trade and that's fine like i i have no issue with that um you know people can get upset about that whatever uh but at the same time yeah i feel it did feel a little bit weird when i saw that myself as well but the the connecting the dots basically uh is that like he's worked with phantom for quite a while he uh he knows the team very well and he just wants to deploy stuff there and build stuff there and obviously you know it has cheaper fees and ethereum because it's a i don't know i i i don't know if

i if calling it centralized is going to trigger people or whatever but i feel like it definitely it you know he's nowhere near decentralized it's it's just basically an evm side chain same thing as like the avalanche c champ c chain and a bunch of these other kind of like things out there these days even the polygon post train you know it's it kind of falls into the same bucket where it's just like giving people a cheaper experience but also technically um kind of like a quote-unquote sidechain whatever so um from you know from from that perspective uh i i i think it's just like a a kind of like social thing for andre at the end of the day i'm hoping that he deploys his products to layer twos on ethereum i know that he's excited about them so i'm hoping to see that but um yeah hopefully that answers

your question about connecting the dots all right one here from sour jack if a web 2 developer wanted to make a change to web3 should solidity be the first programming language that they learn would you recommend something else i mean i think so i mean i'm not a developer but i would say that solidity would definitely be something you want to learn um you know just generally uh solidity is not going away anytime soon it's basically the javascript of blockchain development languages there's going to be other languages that ethereum supports at layer 2 like um like cairo from starkware there's going to you know rust support all that sorts of stuff happening at layer 2 but i would definitely learn solidity as like your entry point and you can do this by going to the developer section of ethereum.org a lot of great resources there for you to check out

uh one last one from the princess and then i'll move on to some from the ama series channel can you elaborate on your opinion regarding web3 is there any projects and or research you would recommend looking into and how would you explain ethereum's role in the web 3 development um my opinion on web 3 right now is that it's still very early i think it's going to be big but we're going to take a few years to get there i think um it's going to take i'll i need a an infrastructure build out at layer 2 to make it feasible a lot of the time um web 3 to me is things like decentralized social media and stuff like that that definitely needs scale like a lot of it to kind of like work um and you know in terms of projects and research to look into

i would actually look into what um ens is doing with signing with ethereum i think that's going to be a very very big deal in kind of like web 3 because uh you know as you know when you go to a kind of like web 3 app these days you connect your ethereum wallet to it and that's kind of like your authentication method what signing with ethereum does is they want to bring that to every website on the internet so that you can basically sign in with ethereum have your pr you know your public private key pair or your ethereum wallet be your authentication for the entire internet which is which is you know absolutely awesome i think it's going to change everything um so that's kind of like one project i would definitely recommend looking into and from there you can probably springboard into a bunch of

other things but all this stuff is still as i said very early stage some of it's under wraps there's not you know you know you know i mean something some people call like web 3 like dowels and social tokens so you can check out those sorts of things as well like there's a social token ecosystem called friends with benefits this is that's pretty cool they do a lot of really it's like a a social club i think it's pretty cool they're doing a lot of web 3 stuff there so definitely check that out as well so yeah uh and you know your last question how would you explain ethereum's role in the web 3 development i would say that ethereum is kind of like just leading the charge in terms of like innovation and experimentation but it's just one small piece of the puzzle web 3 is

bigger than i think bigger than ethereum um i think it's going to involve things like uh data data storage chains like um uh r weave and file coin it's gonna involve other kind of like protocols like messaging protocols things like that so the web three effort is not just an ethereum effort it's a crypto white effort so i think ethereum's role is just being the hub of innovation uh just like it is for most things really all right uh so in the ama series we channel we have three questions left and then i'm gonna wrap it up for today so first question uh from moon base 8x8 could can you share your views on privacy tokens um exploiters typically try to cover their tracks after committing their act how do you think

people how do you think the crypto community can work with privacy services that help anonymize transaction activities so privacy tokens i guess like a separate from protocols that allow you to do private transactions so the privacy tokens like monero and zcash i think that they're kind of like i don't know i just don't think that they're going to be used as much as privacy services on ethereum will be i'm kind of bearish on them to be honest uh i wouldn't buy them uh to be honest uh i i don't think they're going to be used very very much going forward um and your second question how do you think crypto how do you think the crypto community can work with privacy services that help anonymize transaction activities um by work with do you mean like catch people kind of like

committing fraud or committing theft i mean the whole point of the privacy kind of like protocols is that you can't catch them right so i don't think you can kind of like maybe work with uh kind of like uh uh work with these privacy services it's more of the fact that this is the lay of the land this is this is how it works here if there is kind of like funds going through like tornado cache or going through aztec protocol or something like that or some other privacy protocol i think that um there's not really much anything there's not really anything the developers can do in that situation because if they could do something it would break the privacy for everyone using the service right so yeah hopefully that answers your questions there uh one here from on the ball who says how does the concept of each staking and

running a node change up to 2.0 doesn't make the most sense to wait for 2.0 as hardware requirements etc will change so the only thing that changes uh once the merge happens is that um you'll need to run an eth1 node as well which you should already be doing um it's not a strict requirement uh you can talk to other eth1 nodes but essentially after the merge you just write an eth1 kind of like full node alongside like your e2 kind of like beacon node and validator so the hardware requirements aren't going to really change that much i would say that the hardware requirements are going to change probably much more dramatically when sharding is introduced because it's just going to need more space to store like the shard data so then that's not not going to happen until probably early 2023 to be honest so you won't have to

worry about that till then but i don't think you should wait to get the hardware now you can always upgrade hardware later if you need to and the hardware that would be probably required to upgrade would just be like solid-state drives which are you know very very easy to upgrade so if you want to build your own staking box today i would recommend doing so all right last one here from sponge just wondering if you've heard of rubicon finance on optimism uh it wasn't the bankless newsletter this week also does optimism still have a white list i have heard of rubicon i haven't checked it out yet actually it's in one of my tabs on chrome somewhere um but i know it's on optimism but i haven't checked it out yet so sorry i can't really add much color there and optimism does still have

a white list i'm going to assume that they're going to remove their white list um uh after they've done their ovm 2.0 upgrade which is scheduled to go on mainnet on october 28th i think it's already on the test net right now so i would assume that they're going to remove it in november because the 2.0 upgrade is a major upgrade and i don't think they wanted to let people just deploy anything when they required teams to kind of like migrate so yeah i'm hoping for a november kind of like removal of that white list there because it's been quite a while right so yeah hopefully that answers your question all right so i'm going to take a lot any last questions from the audience so i'll give it about like you know 10 seconds there if not i'm going to wrap it up for

today all right i think that's it so thank you everyone for listening in again as i mentioned at the start this has been recorded and will be uploaded to youtube within 24 hours i do these every two weeks i'm probably going to change the time for the next one in two weeks because of the fact that daylight savings is just screwing everything so i'm going to look at what times i can do what makes the most sense for most of the world but i mean as i said these things are recorded anyway so even if you can't make it you can ask the channel pre you could ask your question in the ama series channel prior and kind of listen to my answer on the recap but anyway leaving it at that uh i'll see you all you guys in the discord channel

thanks for coming