DAPPCON 2025: Application-Level Data Deep Dive- Trends & Insights With ERC-7702AA - Lorenz Lehmann

Transcript

Okay. Yeah. Welcome everyone. Uh my name is Lawrence. I'm the research lead at Grow the Pay. And today I'm hosting a workshop on application level data deep dives, trends and insights and talking also about ESC 7702 improvement protocol which introduced account abstraction on Ethereum native account abstraction. So there's a lot of cool stuff to go into this deep dive and it's a workshop. So first of all, I want everyone of you to always feel free to interrupt me if you have any questions,

any thoughts, anything to contribute. So let's make this a little bit interactive so it's not too boring. And um yeah, I came up with a short agenda. First I want to talk a little bit about so like the first three points are me explaining a little bit to the current progress and what is important to know about EIP7702 but also like evolution of public goods funding and how onchain data is always becoming more and more important.

And then the number four will be a live demo on how you can basically yeah unlock onchain analytics for your DAP through a simple attestation and I will go through on how to do that in a live demo. You can follow along and yeah just attest your own contracts and by doing so you will unlock a bunch of analytics for free for your applications. So I think so you can basically kickstart your analytics journey for your DAPs today.

And yeah, I was notified that we are actually live. So just as a heads up, um yeah, we are live streamed and everything will be recorded. That means I guess I can't swear, which is kind of sad, but no, just kidding. Okay. So maybe um yeah, let's start with now is the era for DAPs. What do I mean by that? And I think we all can remember or like maybe a raise of hands who remembers checking Ether Scan and seeing these high numbers and basically yeah crying a

little bit. Okay, a bunch of you guys. and crying a little bit when you hit the button and send and yeah paid $50 for an NFT sale. Honestly, thinking back that that was just three years ago, it's crazy, right? Um so many use cases were just not possible if you had to pay $50 per per NFT mint. And yeah, that was the problem. That was the status quo three years ago. um and taking it a little bit like taking a trip down memory lane. What changed in the last three years? And I think it's

important to to highlight that this problem has existed for more than three years. So almost five years ago, the Ethereum Foundation made the strategic decision to abandon execution sharding for data sharding. Why did they do that? Exactly to solve the problem of the high gas fees. And that is exactly when they introduced the rollup ccentric road map. So because data sharding now allows layer 2s to post data much cheaper to Ethereum and therefore scale the execution layer rather than natively scaling Ethereum itself.

and Vitalic and the Ethereum Foundation they released a bunch of blog posts late 2020 already early 2021 explaining the problem and also what they came up with the solution and that's also where protodank sharding was for first fought up which is exactly data sharding and that went live in with the Denkun upgrade early last year and that allowed the rollup ccentric road map to take up even more steam. But yeah, so this problem of high gas fees was really pressing and actually hindered a lot of growth and

my expertise is data. So I really want to also showcase you what changed with data. So I prepared a few slides. One of them is different layer 2 scaling solutions and their average transaction cost. And we can see that yeah we had layer 2s but without data sharding they were also still too expensive. Right? So we can see here for example in January of 2022 sure you can transact not on Ethereum layer 1 for $50 but is OP mainet with $3 per transaction really an alternative? I mean you're running into the same

problem but you can also see really well here that with the introduction of data sharding in the Denune upgrade through blobs the fees basically went to zero. Um, and you can really see that well in the lower right section. Like all of these lines are basically flat. And all of the fees are - 99.9%. Which is insane. And now for the first time in the last three years, we basically have transaction fees that are less than yeah a hundth of a cent.

So even our platform is rounding these numbers down because they are so small. And I think in yeah in the fum ecosystem there's always a lot of talk about what the problem is right now but I feel like a lot of people always forget where we came from and I think solving this high transaction fee issue through the world centric road mapap is really an accomplishment we can all be proud of and it's also something that enables new use cases and I prepared one more slide which is throughput that is basically how much gas is being used across the Ethereum ecosystem.

So that means layer 1 plus layer 2's and gas is just a measurement of how complex a transaction is and we know Ethereum has a limit of 1.5 megga per second and that hasn't changed since Ethereum came out. Okay, recently it changed a bit, but we say it's basically flat. And you can really see that down here on the like this time scale axis, the bottom line, which is this ultra thin line in the dark blue color, that's Ethereum with that 1.5 megga per second.

And now as new layer 2 launched um significant launches where for example in July 2023 base but also um a bunch of other layer 2s they really manage to scale the Ethereum ecosystem to levels we haven't seen and I think that goes also handinhand with the reduction of transaction costs which enable new use cases which enable 100x more transactions going through the fume ecosystem today.

So what do I want to tell you guys? Um as DAP builders, I want to tell you that yeah, we kind of entered a new era. When I guess my father works in walks in on me and asks me, hey son, did you really scale Ethereum? I can say yes, we scaled Ethereum. What is next? Right? And I think next is DAPS, right? We now have the infrastructure. We have the cheap transactions. We have all of these high throughput chains.

We have them somewhat secure, but that's like a whole different story. Now is really the era of DAPs. And while block space is being commoditized, I think the true value, the value capture will not happen in the infrastructure layer but in the DAPs layer. So it's a message to you guys. I think now is the era of DAPs. Okay. So that's what my opinion is on which era we are currently in. I now want to give a little side story to EIP7702.

It's an improvement protocol. So EIP stands for Ethereum improvement protocol and it's basically an upgrade an upgrade to the Ethereum protocol and it launched with PCRA. Perra was a major Ethereum upgrade that launched a few months ago and EIP7702 introduced native account abstraction. And I think knowing what native account obstruction is is important because it can be utilized in building DAPs. Okay, I have a complicated slide here but bear with me. It's I think kind of easy to understand. So this is like the the flow of how a transaction is being built with EIP7702

which is the account abstraction plus a bundling transaction with 4337. You don't really have to know what 4337 is but basically it starts down here. Down here you have a smart contract. A smart contract can be anything right? can be unis swap an exchange it can be agnosis safe a multi-yc whatever but what ultimately EIP7702 does it allows EOAS which is like a single address so let's say you are Alice which is a normal address your EOA with a private key behind it you can now temporarily update your own address with

code from a contract and that code can be any code. How? Yeah, you can reference any code and upgrade your own EOA to become and adopt this smart contract logic. Why is that important? Well, for the first time now, you can actually um really utilize a bunch of benefits that do not come natively with an EOA. And these benefits are really good for DAP builders.

And I think the list is pretty long, but I think these are the three most important advantages for DAPs that enable EIP7702 use cases. So first of all, yeah, your EOA can now become a smart contract and now you can simply batch transactions. So rather than approving first and then swapping like we all know on any current decks, you can now batch these transactions using a smart contract signed with your EOA. And by doing so, you only have to sign once rather than twice. The user only has to sign once and you can approve and swap together.

That sounds simple but ultimately for users of DAPs I feel like that's the biggest use case we have right now here. Then also I think the second most powerful advantage is that DAPs can now use sponsored gas. So rather than having EOAs natively pay for their own transactions, they can be completely they don't even have to know what gas is. They can simply you can simply say okay any smart contract call to my contracts are sponsored.

So you can pay all the gas for all your users and that's it. And the third thing is pro programmable account logic. So you can add like social recovery, you can add pass keys, you can add yeah multi- signatures to really make sure that users don't get locked out or like in case they lose their mobile phones or whatever, you can actually recover the private keys and so on. So yeah, and I feel like the combination of the Ethereum protocol releasing all of these account abstraction features together with the infrastructure being solved and having really cheap fees is like the perfect storm for amazing apps

on DABs to come out. So yeah. Okay. So now um maybe a question for audience. So who here has their own DAP and is currently working on a certain DAP? Please raise of hands. Okay. Yeah. One, two. Nice. Um who is interested in launching their own DAP? Okay. Yeah. Nice. Some more hands. Who is here? An infrastructure maxi.

Yeah. Okay. Also a few. Nice. Okay. Good to know. Good to know. Um I think if you start with building a DAP, most of the times it's really hard to raise venture right from the beginning. And I know that a lot of DAPs that are successful now started with public goods funding mechanisms. Um I mean I can tell the story of growup itself. We are anal an analytics company and we also applied for a grant for the Ethereum Foundation. I actually got that and that's how we started. So with like a small grant from the Ethereum Foundation, we kickstarted our analytics

platform and I think there's so many grant opportunities out there. If you want to get started with your DAP, look for these grants. They are not huge amounts of money, but they can get you going. And I think these public goods funding mechanism, understanding them a little bit better really puts you in a better position to later raise more money and also optimize for yeah for the amount of funding you actually receive. And let me go over one example. So as I said there's there's fundamentally a lot of public goods funding. So whether it be octant distributing yield to dabs,

whether it be the fume foundation, other foundations, there's a lot of opportunity, but I want to highlight one of them, which is the RPGF program by optimism. Optimism being the big layer 2. They are distributing a lot of OP tokens to builders within their ecosystem. And what you can notice, they they have epochs. So every six months or every quarter, I'm not sure exactly, they have a new epoch and they distribute new money to users. And what I noticed and what they changed over the way how they distribute the funds is at the beginning they had community

leaders KS backholders of OP tokens. They voted on who gets money. But what we really notice now with especially RPGF3 which happened last year it's it's a shift of funding mechanisms. In the past, it was people voting, which kind of turned out to be more like a who's the most popular user to how can we measure onchain adoption through onchain data to have a more neutral analytic way of measuring impact and then distributing money to these protocols that have the most impact.

And I think keeping that in mind is important to optimize for funding. So it's much more important to have a big onchain presence than for example convince a lot of KS your project is the best. This is the message I want to I want to give you. Yeah. And yeah yeah RPGF they um yeah, they basically have a function called they measure impact basically by multiplying onchain usage times their contribution and that's how they measure impact. So yeah, onchain presence getting more and more

important. But okay, I think I talked enough about um different public good fundings and why it's important to to focus on analytics for your DAP. Maybe as a little final message here. Yeah, public goods funding is now more than ever determined by your DAB's onchain impact. Okay. Yeah, maybe let's jump into the live demo. How can you now unlock analytics for your DAP and really track your users, your adoption and also make sure that you have a solid onchain presence

that people can track and see and also utilize to measure your impact. And for that I want to go into a live demo. So I will I will sit down here maybe so far. Is there are there any questions regarding the first three topics? Yeah, back there. EA. Yeah. So the question was how do you turn an existing EOA into a smart account? So first of all the chain needs to support Pectra upgrade which currently not all layer 2s have but most

of them are adopting it but yeah if you are on a chain with the pectra upgrade live you can now send a so-called type 4 transaction and within that type four transaction you can upgrade your EOA to have code set behind it and you simply You do that by sending this transaction defining how long it's valid for also on which chain you want to upgrade and then which which is the address of the contract code you want to give to your EOA and by simply defining that you can upgrade your own EOA to any code out there basically and your EOA

will have this code set and then you can send transactions to your EUA triggering these smart contract calls. And yeah, it's it's a new transaction that was introduced. Yeah. Yeah. So the question was if Metamas already did that for the EOA or if you have to build that within your DAP. Yeah. So ultimately you have to build it inside your DAP.

Um the wallet providers they just simply give you the interface of signing a transaction. The actual process of what you want to set behind your EOA you have to still come up with yourself and like program that into your front end for your DAP. So within the front end, you would basically set the contract code you want to upgrade. And then whenever people hit, yeah, upgrade my EOA or whatever, they would then set this code behind the EOS and the wallet would just show them the normal send interface of a transaction and that's how how it would work. So yeah, you have to program the actual upgrading of the EOA yourself.

Yeah. So, because it's a new transaction type, that's correct. Um, oh yeah, sorry, I repeat the question for the live audience. Um, or like the online audience. So, the question was, does do all the wallet providers support sending this new transaction type? Right. Yeah. Yeah. So currently a lot of major ones actually do not support it. Yeah. Which is kind of sad but I think most of them have some sort of timeline behind it. So I think um I think it will come. Yeah. I think I think it's just a matter of time. And uh

there's actually one dashboard. Um let me see if I can find it. Um, I'm not sure if it's No. Okay. You mean the Swiss Army knife? What? Oh my god. Knife. H. You mean this guy? Yeah, exactly. True. Yeah, that's it.

Yeah, on this you can literally track which chains supported currently and also which wallets and I guess [Music] Um yeah, so I agree it's it's still a lot of work in progress, but um honestly I think if your wallet provider not supported eventually you will just become irrelevant over time. So I think I think everyone will eventually upgrade but yeah ultimately it's also a problem of

the wallet providers actually making UI better for the user. But yeah this website is really good. Thanks for highlighting it. And yeah here you can actually track who is actually already supporting EIP7702. Yeah and exactly which chains are not supporting it. for example, Rabby, which is a big wallet provider, right? Yeah. Okay. Any any other questions, thoughts? Nice.

Okay. Yeah. So, how can you now track data analytics for your DAP? And I want to give a live demonstration here on how to do it. So whenever you're building a DAP, you can unlock free analytics for you and track your adoption and how what's the best way to do it in my opinion and I'm of course talking about also how what we are building from grow in some way here. Um so we we basically build a whole applications page.

So in this applications page, we provide free analytics for DAPs across the Ethereum ecosystem. And within that, you can search for applications and instantly see how many users you have, how many transactions on which chains you're active, and a bunch of other metrics, how much fees you generated, and so on. And yeah, so for example, the most used contract in the last 30 days on transaction count is of course unis swap. And you can instantly see, hey, unis swap is active on multiple different layer 2s, almost all of them, right? And they have over 80% of

activity on base alone. Like if you go multi-chain. Um. Oh yeah, a little bit larger. Sure. Can also remove the taskbar. Yeah. So this is of course an extreme example because unis swap is so popular, right? They have millions of transactions um and yeah almost 800,000 or 900,000 plus users on a daily basis. But I think it gives you a nice overview of where your users are, how many fees they pay, who are your biggest competitors within that space, and yeah, um then also what contract addresses are

behind each of the projects. So in this live demo, I want to show you how you can create this customized data analytics platform for your DAP. And it's actually pretty simple. So um we from Grow to Pi, we implemented the open labels initiative and any dashboard is only as good as the labels are, right? So high quality labels in an open format is really important for us data analytics companies to pick up on your projects and also implement them.

So my high my recommendation to you guys is if you ever launch your own DAP go on to open labels initiative test the contracts and then a bunch of data companies will instantly in integrate you because it's on an open ledger and we from growi will also listen to this and also pick up your contracts from here. So by listing on grow the pie or like attesting to open labels you will automatically also be listed on grow the pie. So yeah just as a side note open labels initiative is fully open source I think also public good. So there's they don't have they don't make any money

with providing labels for for the community. Um, and yeah, it's pretty awesome project and you can see a bunch of people already integrated them. So, a testing once will allow you to have your DAP analyzed across multiple data analytics platforms. Okay, that being said, um, yeah, why don't we just test something? So, for example, cow swap probably all know it, right? the MOO um amazing decks and we want to attest these contracts to unlock analytics and it's actually really simple. Simply

go to open labels initiative and then there's the test button here and now they have multiple options of how to test your contracts and let's do a single testing. So what we do here is we're basically openly announcing that this contract or like we are attesting on chain for everyone to view that a certain contract address is owned to a certain project and anyone can do it right either the DAP developer or someone from your community. I guess I would be just someone from the community and I can come in here and for example see yeah

this is the Ethereum address. Yeah, it's being used. So we can see this is the the the entry point DEX contract. So I will simply copy the address um and then start filling out this simple form which basically just says this address is the name is GP version 2 settlement. I'm just going to copy that.

Um assign it the owner which is very important because that's how things are being grouped. And we can see there's already an owner assigned to it. The cow protocol. Um, we can assign a category if we feel like it. Um, decentralized exchange here. I think this is the best one. Common source. Yeah, I don't know. I guess can add the documentation as source. And yeah, and now we simply attest this contract which is an onchain transaction and by doing so we are basically marking

this contract as Krower protocol and this contract being named GPV2 settlement. So I will sign this and let's see what happens here. Okay perfect.

Can see we we are tested on chain. So now this meta data is being posted on chain using the Ethereum attestation service and everyone can now view it directly from the open labels initiative. And if we now update our global pi front end. And now let's see if we can find our cow swap.

Um I guess I have to scroll down a bit. Yeah, there's a lot of different dabs. Where are you? Cow swap. Ah, there. Okay, I found it. Yeah. And so what happens in the back ends? The at the station is on chain. Everyone can view that this protocol is being marked or this contract is being marked as cow swap. We from grow the pie pick it up from onchain run our analytics on top of that and then present finished made dashboards on

grow the pie. So we can see that yeah the GP version 2 settlement contract is in here now and it's around yeah 2,000 transactions in lifetime and now yeah now you have unlocked analytics for your DAP for free and you can track everything that's happening from active addresses, amount of fees paid the transaction count and and so on.

And I think that is really important for for DAP builders to not only track your own adoption but also yeah make sure you are also leaving a presence on chain which could be beneficial for funding. Yeah. Question Yeah. Um, good question. You mean so down here in the owner project?

Yeah, exactly. So that's a good question. So the open labels initiative works by assigning tag ids a certain value and owner project is basically a tag ID and you would set a certain value to it and this value is corresponding to the oss directory and the oss directory is an GitHub repo with source code projects. Um, so I think yeah, there's there's even an add project up here where you can simply add your project information.

So let's say cow swap wouldn't have been there. We would simply add it to the open-source directory. So cow swap. Yeah, just name it cow swap again. Edex. Um, yeah. Okay, now it's already detecting that it exists, but let's just put some name here. And what we are doing here is basically creating a new project in that repo which we can then reference within the atest station. So if I create my YAML here. Yeah. Okay. It's already exists.

Um, okay. Yeah. We generate a YAML file which we then create a pull request for that onto the open source directory which we then reference in the attestation. And that's how we map contracts to a project. Yeah. And then you just had have to hit commit changes and then we will review it and merge it into the OSS directory. Yeah. It's a it's a one extra step, but it allows for really concrete mapping of contracts to a project.

Yeah, good question. Yeah. And yeah, of course. So the thing is with labels and DAP analytics, they're only as good as your labels are. So if you want good analytics, normally you have to label them yourself. Like most of the time, people are not willing to spend a lot of time going through them, labeling them for you. But putting in this five minutes of work as we can see in this live demo here really helps to give clarity on your project, how many users

you have, but also allows community members to maybe easier find you and track and eventually hand out funding. Yeah. So that is it with my live demo. Are there any other questions regarding the live demo and how you can unlock analytics for for your DAP? Yeah. One more from here.

Yeah, there where can I know more about the tag definitions and what else open labels initiative offers from like if if I have other uh labels that I want to open source basically. Mhm. Yeah. So the open labels initiative is a whole standard that is maintained by the community for labels and they have I think 20 different tag definitions.

Um, even if you enable here advanced mode, you can literally see what what you can tag your address and things with, which is like everything from ordered to whether it's a pay master, whether it's an ERC20, ERC 721, the deployment date. So, there's a bunch of stuff you can also tag your address with. And I think the best overview I think there yeah there there's a documentation tab on the open labels initiative website explaining each tag and also the value sets behind it. So how the data model is defined and by doing that everyone can agree on posting labels in one unified format really reducing the

redundancy of contributing labels to multiple data analytics company because everyone can just reference this one pull in all the data and you have your data always in the in the right format. So that really helps in reducing redundancy of labing. So I think open labels initiative is really yeah helping a lot of data teams reduce redundant work and getting getting high quality labels sourced from the community because come on I think most most companies that offer some sort of labeling submitting that's always closed source so whether it's like unis

swap dune or something if you commit your your labels, whether that be names of your contracts or even source code, right? Or APIs. Um, you're basically handing it over to a centralized entity. So, I can really Yeah. Um, recommend Open Labels Initiative because it's all open source. Um, yeah, exactly. And I see we we still have some time. Um, so I think I I made my point. Now is the

best time to build DAPs. Always make sure to combine the best walls, right? cheap transaction fees and also account abstraction being live on Ethereum and a bunch of chains. Now, now is the time to build, guys. And always keep in mind your your your analytics because that's how you can measure your impact. Yeah. So, maybe a question to you guys. Um, what analytics are you looking for when you search for DAPs?

I mean, we from Grow to Pay, I showed you this dashboard, right? It's it's pretty new. So, we only have four different metrics, which is transaction count, we have active addresses, fees paid, and that's it. What type of analytics for DAPs are you looking for? Yeah. What what exactly do you mean by wash trading in the sense of dexes or Yeah.

[Music] label uh the like the fake volume, right? like a simple mint that doesn't actually generate any meaningful value but is there only to increase the stats, right? Stuff like that. That's trading. Yeah. But how would you determine if something is a wash trade compared to a normal user? Yeah, I don't think you can be certain that it's wash trading, but you can recognize some patterns and label it as potential trading or something along those lines, I guess.

Yeah. No, that's that's a good that's a good thought. I know the open labels initiative also has categories for scam. So I think it's called no category. Yeah exactly. Yeah. So I think it's it's possible. Yeah, we can we can extend it to include like scams or wash trades and maybe filter out analytics for that. I think that's sounds like a good idea. Um, any other ideas what you want to see in DAPs and analytics?

Yeah, back there. maybe connections between the active addresses to eventually figure out how many people are actually using the DEP or connections between deps which addresses tend to use um the same set of deps. Okay, nice. So in what sense do you think like do you mean like for example who's using unis swap compared to cow swap or what what would be the interesting insights you would want to know how many users you can convert from one deck to

another or yes basically or um if there are a set of addresses that use a specific set of deps. Mhm. Okay. Nice. Yeah. Um related to that, um app user retention. So like how many people are using the app week after week versus once and leaving. Yeah. Like 30-day retention times and so on. Yeah. I think that's actually really important because also that ties back to what you said with the wash trading. A lot of times there's like certain periods where there's incentives And then you get all the airrop farmers and people just

spamming. I don't know if you saw the layer two or not the the layer zero activity chart. Maybe I can pull it up right now. Um let me search for it. Layer zero. So yeah, layer zero was incentivizing activity quite significantly over the last few years. Um yeah. Okay. You can just see like a giant spike here. Active addresses. Yeah. But now recently the the activities have not been incentivized anymore and you could really see a drop from Yeah. several hundred thousands to

Okay, maybe just a 75% drop. Not that significant, but still. Yeah. Um definitely a good analytic to add. Yeah. Through through retention. Yeah. Showing the difference. Yeah. True. Oh, wait. How do you mean that? Like a like a retention from certain points in time that users can set.

Yeah. Yeah. Yeah. Like you on the chart you can label the point where it ends right the campaign and then maybe something that you set a specific point in time and you see the difference or stuff like that. I think the most important thing I mean you can just derive it just watching the chart but you have the point on where the campaign ends and then it's like maybe it's easy enough. Yeah. Um, we're just thinking about maybe integration with proof of humanity protocols or something like that where it's like you can filter by only people that have had world coin attestation or other proof of humanity things to filter out sables and farming and stuff and you would basically have okay just

count actually verified humans as an active user. Yeah, exactly. That would be cool. What protocols do you think of integrating there? Like which proof of humanity protocols are like the most interesting for for you as a DAP builder? Um, worldcoin um is one. Um, there was one that I tried at E Denver that was like a handprint. I think it was called Proof of Humanity. Um, something like that. I don't know if it's live yet though. I think that was just test net. Um, any anything that could go really. Yeah, makes sense. Okay. Yeah, that's that's also a good thing to to add. Yeah, I know Zillow is also working on their own

proof of humanity concept. So, there quite a few. Um, and I know there was one more Gitcoin passport. I don't know if you have heard of that. I guess it wasn't a fully proof of humanity, but more like a add a bunch of socials. And if you add so many socials, you wouldn't farm these accounts. So in the end, you basically just rank up or rank higher or more you would rank more unlikely to be a bot basically. Um but I think they kind of sunseted Gitcoin Passport a bit was which is kind of sad to see.

because I think it was a good concept. Yeah. Okay cool. Then I would say I ended a little bit early, but um yeah, thanks everyone for for attending the workshop. Um if you have any data questions in any way for your DAPs, come up and approach me. I I hope I can help you out and or just DM me on Telegram and yeah, we we are building road a pie. All our analytics are for free. So if you attest your contracts in the open labels initiative, we will pull it from there and then you can track your DAP users transaction counts across

the firm ecosystem for free. Um, so I I really can Yeah, I hope you make use of that also.