Debunking PoS FUD, Zapper updates and more - The Daily Gwei Refuel #315 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news in the ethereum ecosystem i'm your host anthony sosano and has the 15th of february 2022 all right everyone let's get into it so a bit of drama and fud around ethereum's a proof of stake today or just proof of stake generally from lynne alden now a lot of you will know who lynne alden is she basically is very active in the traditional finance system particularly in the macro environment she you know has done a lot of um i guess like writings on various things within the crypt ecosystem at this point with a heavy focus on bitcoin to be honest um not so much ethereum but today she put out a thread on twitter pretty pretty misinformed thread about proof of stake and she basically led by saying

proof of stake is legacy tech it's what corporations and banks have run on for centuries it's outdated and oligola polistic i always mess up that word and yet still useful for centralized systems proof of work is the new innovation especially when combined combined with difficulty adjustments and then she goes on to you know a few more things in the thread here but i quote tweeted this and said as the proof of stake merged for ethereum draws ever closer expect the fight around pause to ramp up exponentia exponentially so i mean i don't even know where to start with with tweets like this right i'm not going to spend like the whole episode debunking this and and you know saying my proof of stake is good and and you know white people rich get rich all that sort of stuff people kind of like like to bring up all the time but what i want

to like kind of focus on for a second here is lynn's saying that proof of stake is outdated and proof of work is a new innovation i mean in the context of crypto it's the other way around right like proof of work is the kind of quote unquote legacy tech because it's been around since day one since bitcoin and proof of stake especially ethereum's proof of stake is is much newer and and kind of like a much newer innovation here but i think what lin is doing is equating a proof of stake with what we have currently have with corporations and banks which it doesn't really make any sense to me at all uh to be honest i uh and you know her uh her calling it globalistic is uh god i'm never gonna say that word right but her calling at that just doesn't make much sense to me

either because i mean if you take it at its literal definition what the word means is that uh you can only procure what you need to i guess like steak or what you need to mine from a a small group of actors or from even just one actor whereas you can buy eighth from hundreds if not thousands of different places all around the world there is not a monopoly on selling eth i mean whether that's on chain or you know on chain on dexes or off chain on centralized exchanges or any other number of ways to acquire eighth you can obviously mine each directly if you want by buying a gpu or like a bunch of gpus to mine each these days um or you can buy it directly from a mine i mean there's plenty of ways to acquire eth um there's plenty of

ways to acquire asic miners as well on on bitcoin not as like nowhere near as many ways as there are to buy ethan obviously bitcoin as well but uh that that that isn't that kind of system either but i think you know what what i really kind of disagree with here is uh lynne i mean she said something else here with tim biker replied to where she said uh where someone said i don't know why people say uh proof of stake equals centralized if you have a ton of money you can easily buy millions of asics easily access to easy access to cheap and into a cheap energy source and then dominate the system power and pause is is centralized you know following her logic here and then she replied responded to this by saying now if someone spent billions to obtain 51 of bitcoin hash rate and

started censoring transactions it could cause an uproar and raise capital to make new acts asics and regain control and then she continues on by saying if someone gains 50 control of a period of stake system it's checkmate done now this is literally completely and utterly wrong like completely wrong this is not a matter of opinion this is a matter of fact and for her to state this with such confidence just very much shows to me that she hasn't done any research on proof of stake especially ethereum's people of stake and that's what you know kind of like uh that that's where tim biker jumped in and said it would take orders of magnitude more time to manufacture enough asics to regain control then able to slash offending validators in proof of stake only credible move for btc in that case is to switch to a gpu algo but

that's basically a two iteration game pause could slash over and over now there's a lot more i guess like to it than what tim says here but basically what he's saying is that from a social consensus perspective if you're going the social consensus route of raising money to to get make new assets to regain control that is a long and arduous process that's not an easy thing to do and that doesn't guarantee you anything right um there's there's a kind of like a um a term that vitalik came up with for this thing called a spawn camp attack where with with proof of work there's no way to remove the miners from the active kind of like i guess mining set or there's no way to kind of like delete their asic miners whereas in ethereum you can both remove the offending stakers and slash them like burn their

wreath essentially for i guess like attempting to attack the network or attempting to censor transactions and stuff like that and that's you know what tim is basically saying here is that it's just orders of magnitude easier and proof of stake to punish bad actors that is not a matter of opinion it is a matter of fact you can verify this this is coded into you know if you're in protocol it's coded into the bitcoin protocol it's how both of them work uh now i'm not going to sit here and tell you that proof of stake is better than proof of work like i mean i personally think it is but that's a belief i don't think there's actually an objective measure of that just yet i think ethereum's people of stake has not been around long enough and it has not even been securing an actual network yet i

mean the beacon chain you know he's all well and good we all love the beacon chain but it's not securing the trillions of dollars of value that is settled on ethereum every year that's still proof of work so until we've got a few years of that under our ballot i'm not going to sit here and say that we can objectively say that ethereum proof of stake is better than than i don't know bitcoin proof of work and i don't even know if we can ever objectively say that but i truly do believe that ethereum proof of stake is better than bitcoin proof of work and i i say uh if you're improvising not just proof of stake generally because not all proof of stake is created equal just like not all proof of work is created equal there are different things going on with them and

especially with proof of stake most other networks are what's called delegated proof of stake or dpos which is much less secure than ethereum's um version of proof-of-stake or implementation of proof-of-stake so i think what what ended up happening is that a lot of bitcoin has got stuck in the 2017 era of proof-of-stake and they're bringing up arguments from back then narratives from back then and they're trying to apply it to today and it just doesn't make much sense to me at all and it doesn't make much sense generally i think that's what lin is doing here and the fact that they keep attacking proof of stake uh and obviously i mean she didn't specifically say ethereum in this first tweet i wonder if she said in any of the others here i don't think she did um uh but uh yeah i mean she's not specifically

saying ethereum but i think you need to make a a uh i guess like a separation between ethereum proof of stake and other implementations because as i said they're actually very quiet quite wildly here and there's another tweet she put together here where you where she was talking about governance and where she said you know consensus mechanisms that don't involve work instead involve governance which again is wrong because i mean like everyone uses these terms wrong but anyway i'll continue with the tweet she goes on to say work is the only thing that can reduce or eliminate governance proof of work systems can be a commodity proof of stake is inherent inherently in equity i like equities but equities aren't commodities now again this is really silly because you don't eliminate governance with a consensus mechanism

both bitcoin and ethereum run on social consensus social governance just because there are miners and stakers doesn't mean that the social layer can't come together and override that if the majority of the ethereum network wants to upgrade right um and we do have scheduled network upgrades then the network upgrades it hard forks the rules of the protocol change that is the same for bitcoin it's just that bitcoin doesn't want to do that like the bitcoin community doesn't want to hard fork and that's fine but that's what they want right now maybe in the future they do want to hide full they do want to kind of i guess uh upgrade their system or do something which requires a hard fork and you better believe that if there was a bug a critical bug in bitcoin saying inflation bug they would come together and say okay well we have to fix this with a

hard fork that's the social consensus at play that is the governance process of both bitcoin and ethereum they're exactly the same thing it's just that ethereum embraces hard forks for network upgrades bitcoin does not but the thing is when there is an issue if there's it's the same result there's an inflation bug on ethereum if there's an inflation bug on bitcoin the the result would be exactly the same the community would come together they would fix the the bug it would require a hard fork to fix pretty much like 99 of the time and then the chain would continue on and that's the social layer coming in to do that there so when you kind of like take all that into into consideration it doesn't matter that bitcoin is proof of work and that ethereum's you know and there's going to be proof of stake in the future what

matters is the social lay and the consensus around that here and then you can kind of extrapolate that and say okay well what social uh you know consensus is better in the in the event of an attack not just a bug well then that's what matters because if you improve a mistake allows us to have more things that are disposable it's still at the social layer like you would still socially decide if there was a you know a large stake taking over the network to fork them off and slash them and continue on with the actual chain that's that hasn't been attacked but again it's the same as with bitcoin's proof of work here so anyway i've spent about 10 minutes on this almost 10 minutes on this topic so far but i i did want to highlight it and you know literally i could go on

about this for a very long time there are so many bad arguments against proof of stake i didn't even touch on the rich get richer argument which i can basically summarize into uh to be a profitable industrial not even an industrial size miner just like a profit of my profitable miner in general on bitcoin today you would need to spend a lot of money just like to be an ethereum staker you need to spend you know a solo staker so to speak you need to have 32 eth and some computing power um you know to kind of like run your validators or to run your validator on um but the thing it's the same thing it's economies of scale right as the network gets bigger you know it gets more expensive to be profitable because there's more people involved in it just i mean i could go on forever but

i'm not going to because i've spent enough time on this now but i i suggest reading through kind of like lin's tweets uh the replies to her tweets because a lot of good replies for a lot of people uh sorry a lot from a lot of people in the in both ecosystems and i just think that either she fundamentally doesn't actually want to understand because from what i've noticed she's become a bit of a bitcoin maximalist or uh she just kind of like doesn't believe oh sorry she actually believes what she is saying like i think lynn's a smart person but at the end of the day if you're not willing to do the research before um having such strong beliefs about something and then you don't even change your mind when faced with new information or with facebook information you didn't have any you you kind of

didn't read before well that to me is peak done in kruger you shouldn't be opining on things that you don't understand and this is just typical of the bitcoin maximalist camp when it comes to ethereum they always always always do this they are pine on things in ethereum that they simply do not understand they haven't done their research it's very obvious they haven't done their research but they open on it like they have and they they have such confidence in in the way they say things which really really annoys me and you know i fought this for years years and years i fought against this i debunked all this sort of stuff i still do it today not really on twitter but you know i do it on the on the refuel and my newsletter and things like that but it's just never ending and at this point it's

kind of like well it doesn't matter what these people say ethereum is going to transition to proof of stake it's going to work just fine because it's been working just fine if it you know if there are critical bugs we're going to fix them and if it turns out it was a bad idea and it actually turns out that that um that the whole system is is inferior and doesn't actually work as we intended well then you know so be it but the thing is is that i strongly believe that's not going to be the case everything points to that not being the case and the thing is is that like you can't say with confidence today that that is going to be the case so anyway i'm going to end the rant there for now but definitely go check out uh lynn's tweets because uh and the replies

to her tweets because it's really great and there's a lot more education to be had there as well so a pretty pretty big news i guess like outside of crypto today which obviously has a direct relation to crypto so a bit of i guess like this comes out of canada so canada's deputy prime minister said today that under the emergencies acts act banks can immediately freeze or suspend bank accounts without court order and be protected from civil liability now this is being used to freeze the bank accounts of people that are donating to the truckers convoy or the protest in canada i haven't followed it that closely but i'm aware of it i'm not going to give you my opinion on it all i'm going to say is that what i quote tweeted here was that ethereum is trying to fix this not that ethereum

fixes this because the theorem does not fix this today there's a lot of problems with the theorem that we need to solve obviously scale is a big one a lot of the systems aren't actually truly decentralized all that sort of stuff but if the um is trying to fix it this is exactly why we're building decentralized systems because no matter what a centralized body especially the government shouldn't be able to just unilaterally freeze your bank account for uh doing things that they deem to be you know not uh i guess like healthy for society or not in the best interests of society because they may use it for things that legitimately uh you know would negatively affect society today but in the future this power corrupts and crops absolutely because it can be used to silence anyone they want right and i mean at the end of the day

pretty much everything we do in life is a financial transaction really i mean when we really break it down finance uh i guess like uh is such an important part of each and every one of our lives obviously it's not everything but it is such a structural part of our lives without the access to a modern financial system in a modern country you're pretty much locked out of most things you you're pretty much going to end up homeless right but ethereum and systems like it are offering an alternative you can truly go bankless i mean today you can actually go bankless with ethereum it's difficult as i said there's still a lot of problems with with scale you know obviously a lot of ethereum based tokens ethos stable coins aren't accepted to pay things like bills and to pay your mortgage and to pay other things blah

blah you actually have to still go through banks and other centralized intermediaries to do that um and you know i mean there's uh there's so there's a lot of issues right but the thing is is that we're building towards this better future this is the whole point when someone says to decentralization doesn't matter point them to like this because if you're happy with the centralized system you're basically saying that you're happy with uh i guess like governments being able to do this and and as i said like they're doing this to people that you may not disagree with so you may not agree with today maybe you think that the the trucker protests are ridiculous and and and um you know they should be punished to the fullest extent of the law and everything like that blah blah but that's not the point i'm trying to

make the point i'm making is that it doesn't matter if you don't agree with them today they're you know in the future there may be something you do agree with but the government doesn't and they kind of like take the um they freeze their bank accounts or something like that and then you know you start getting in you start having an issue with you like oh my god i can't believe they've done they've done this right so i think that's what you know we're building these decentralized systems for it's definitely what ethereum is being built for and this is what i talk about when i say kind of like credible neutrality and a neutral kind of like settlement layer in ethereum and a decentralized sediment layer because ethereum is not supposed to i mean as a protocol and as a system is not supposed to make a values judgment

on anyone it's literally supposed to just be a dumb and i don't mean dumb in a bad way but just like a very dumb and simple sediment layer that allows anything to settle on as long as you play by the rules of the protocol and playing by the rules of the protocol is basically just submitting a transaction like you you know uh submitting a transaction as the protocol expects it to be submitted and um paying the fee to do so that's that's really it at the end of the day right you can do anything i can send money to anyone i want around the world as long as they have another have an ethereum address and the ethereum network is not going to stop me from doing that now of course these networks aren't fully censorship proof they're censorship resistant which means that if miners banded together

they could technically censor me if they wanted to but the incentive isn't there to do that the miners are basically autonomous machines and you know but the possibility still exists there but and same with stakers i mean it doesn't matter anyone that's producing blocks can still do this that's why we call it censorship resistant and not censorship proof because you can definitely still be censored on these networks it's just that the larger the network is the more economic security there is whether that be under proof of work or proof of stake the higher uh the higher the cost of centering becomes and the lower chance that you'll be censored on there and there's no it's not a centralized thing either because obviously it's a decentralized network things need to band together it's not like some one centralized body like a government choosing to to censor you so

um yeah next time someone says to you that the centralization doesn't matter point them to stuff like this literally tell them like okay well and even if they say oh well i don't agree with the you know the the the the protest here i'm like well say to them that's not that's not the point the point is is that do you believe that the government should be able to freeze anyone's bank account any time for any reason and if they still say yes well i mean can't help them then but you know i think a normal rational and logical pers person should always say no to that question like you don't want anyone not not the government not anyone to be able to do that to you because by shutting you out of the financial system they shot you out of basically everything and there's not much you can do after that

especially if it's the government doing it so so yeah anyway i thought that was important and as i said ethereum is trying to fix this does not fix it today bitcoin does not fix this either today guys like i just whenever someone says that this fixes this or that fixes that we're still so early that none of this fixes anything i mean we're obviously trying to do that and this brings more awareness to the technologies that we're building but you can't claim victory yet you can't claim that this is ready for any sort of kind of like mainstream adoption because it's not we'll get there but it's not ready for that today all right on to some i guess like less drama now and some some project updates so urbit which is i mean i've looked into urbit before it's been around for quite a while they

build themselves as a clean slate operating system and network for the 21st century uh i think a lot of people find it pretty difficult to understand exactly what urbit is i'm not an expert on it but i don't really want to talk about what urban is today what i wanted to talk about is that they announced that they're deploying their own layer 2 roll up on ethereum this is really cool this basically speaks to what i've been saying about how i expect the error of spinning up layer 1 to be over and the error of spinning up your own layer two to be just beginning and that's exactly what urban is doing here so they've called these a technical triumph and they've managed to cut gas costs by almost 200x making planets which is a part of their system more affordable and transaction fees nearly trivial so

there's a thread here about with more about it there's also a blog post and things like that or a couple of blog posts about this i think this is really really really cool um i i really do as i said do believe that the era of um i guess like the monolithic chain the layer one you know to do everything at layer one chains is completely like over it's i mean it's not even near over it it is over the only monolithic chains that exist today are the ones that that kind of like existed you know over the last few years that are kind of just like coasting along but uh the smartest i guess like protocol designers are pivoting to the modular stack which as i've mentioned before is separating concerns between settlement consensus settlement slash consensus data availability and execution now layer two

is where we do the execution layer one is where we do the settlement consensus and it's also uh can possibly be where we do the um data availability now the layer terminology is actually being phased out by researchers because they think it doesn't really make sense to describe this but i'm going to keep using it because obviously i don't want to keep changing terminology on you guys because you're probably just getting up to speed with this now but essentially what it means is that on layer twos or on the execution layout we do all the heavy lifting we do the the processing of the transactions and and and basically that's it then with a roll-up you post uh proof of those trend that you've run those transactions with the data to the layer one or to the settlement consensus layer that secures it because that is coming to consensus

on those transactions just like it would any other transaction and then that layer two has that security so that's what we mean by you'll always be able to exit out of layer two to layer one because the layer one is now securing that uh that i guess like those transactions and that data there uh and and then when we talk about data availability i mean that's another thing you can split off like right now ethereum does data availability and consensus settlement at the same layer with you know with the current kind of like eth1 but in the future we're hoping that we can separate this obviously with sharding and then make uh the current kind of like chain that we all know and love today enshrined uh on on on the beacon chain uh so that you know everything can kind of like talk to each

other everything can be interoperable with each other and this is kind of the future that we're barreling down towards so i'm super excited to see a big project like urban you know spinning up their own layer to roll up i don't think they're going to be the last one i think we're going to see like a thousand you know roll ups and or layer twos bloom and then there's going to be not just roll-ups right like technically things like volidiums and and validity and kind of these off-chain things aren't roll-ups but they could be considered layer two constructions as well uh you know and they're gonna bloom too i mean there's already really popular ones like immutable x right and and then we're gonna just get more and more of these kind of like constructions as time goes on but i really do think that the

error of doing everything at layer one is completely over there are going to be chains that try to do this i mean of the most obvious example is solana that's what they're trying to do i mean i think into the future sometime in the future solana will also pivot and say oh okay you know we'll maybe we won't do everything at least one maybe we'll do uh you know player twos as well all this sort of stuff because they already pivoted on the fee market stuff they said that they weren't gonna have a fee market now they're gonna have a fee market right so i i i do think that eventually uh things change and things come around to the best technical designs because there's a there's a matter of opinion there's a matter of technical fact and at the end of the day like there are certain

different design decisions you can make but there is always going to be a tech that is vastly better than what you've come up with uh and doesn't matter about opinion the tech speaks for itself sort of thing so so yeah anyway cool to see orbit do this today i'm excited to see their layer two roll-up grow all right so i got pinged about this i think yesterday about polygons uh multisig that they have on their bridge which is a five of eight multisig i believe which means five people have to sign um and there's a bunch of functions that can be called on that multisig and this is the main uh bridge multisig that secures the funds that go from ethereum to the polygon pos chain now mahalo put together a great thread kind of like addressing i guess justin bond's thread which started all this

i've talked about this countless times on the refuel so i'm not going to rehash all of it today but the tldr as mahalo points out here is that the multi-cigs are used to increase security not decrease that polygon is responsibly using them and they are working towards removing them now the reason why he says this and he goes into the thread about this as well but basically while it's still in the early stages while upgrades still need to be done to to these systems right you can't decentralize you can't give control over this over to like a doubt over to like magic token holders just yet it's it's still too early for them to do that they don't feel comfortable doing it they want to be able to uh respond to critical bugs which actually was a critical bug recently in the bridge contract where a lot of money could have

been stolen and that was kind of like reported and patched and all that sort of stuff and that's why this kind of like exists is it centralized i mean pretty much yeah like i mean a 508 multi-stick is not decentralized is it is it like a a practical and realistic solution for the short to medium term while we get these systems to maturity yes it definitely is now i'm not defending centralization here but i'm saying you have to be pragmatic about this you can't just say oh all the bridges need to be 100 decentralized from day one because you say that now and then when there's a hack or a bug or an exploit and all the funds get drained there's no recourse about that and there's no kind of like centralized kind of like benefactor to help you you're going to be angry about that

right as a user so i think while these things are still young and immature we need to take the practical and pragmatic approaches and not get bogged down with oh it's not decentralized it means that it's super insecure and super centralized and they're gonna rug it any second no guys like come on like seriously i know i say i'm a decentralization maximalist but i'm also a pragmatist where i say okay i want us to get to decentralization decentralize that just decentralizing everything but i know that you can't do that from day one you can't just have a uh um something decentralized from day one and there's also a spectrum here where it's like there are certain things that are much harder to decentralize there are certain things that have systems in place that make mean that they're never going to be decentralized like i believe

uh the monolithic chains um especially the ones that require beefy hardware to run are never going to be uh truly decentralized because it's an inherent design um fault in or a fault or feature depending on who you ask but for me it's like if for me i look at it as a fault same is true oh sorry whereas for a multi-sig it's very different because the multi-sig can be taken off it's not an inherent design flaw you can literally hand over control of that contract to adele which has a bunch of members in it and you can have token holder voting all that sort of stuff there um but yeah i mean for the meantime it's going to be like this and i'm you know at this point i'm done addressing this kind of like fight i don't know why justin brought this up again i mean it's good to make people

aware of this i'm not saying that we should hide this sort of stuff but justin's thread was was it was uh was very hyperbolic uh was very kind of like uh i guess like bombastic and out there but i'm glad i'm highly replied here and you know people have tagged me and say you have a bias because you're a polygon advisor i mean guys like everyone has a bias right well i have a bias towards ethereum because i'm an eighth holder like i don't get that kind of like line of argumentation here as i said i've spoken about this multisig and this bridge stuff plenty of times before i've given the same answer every single time where i've said this is the pragmatic approach it will get removed sometime in the future but we're still so early everyone thinks that we're like so late stage in crypto adoption that

everything's gonna be decentralized um or else but you know it's always going to be centralized it's not how it works it's time to stop thinking in absolutes and start thinking more practically about things guys anyway moving on from that one to an exciting update from arbitrary another centralized exchange has added support for arbitrary so okay x has enabled depositing withdrawals on the arbitrary network for both eth and magic now this is a pretty uh weir not weird selection but like interesting selection with uh i mean obviously ether is the obvious uh choice here but magic i mean i've talked about magic before how it's part of the treasure dow ecosystem which is a very popular nft ecosystem slash marketplace on arbitram um but it's curious that okay x supports ether magic and not like ethan

stablecoin so i think magic is actually um a big part of the treasure dow kind of sorry the big part of the arbitrary ecosystem right now so that makes sense and maybe ok x is an investor or something like that as an exchange i'm not sure but really great to see another centralized exchange supporting arbitrarium here with deposits and withdrawals being enabled uh so if you use okayx you can definitely go check this out all right so a new post dropped today from xerox park which is called stealth drop anonymous airdrops using zk proofs now i'm pretty sure i covered something similar to this a little while ago i think it was from the same account they were talking about this but essentially there is now a github repository for it with kind of like a demo of of doing this so being able to kind of like

airdrop erc20 tokens that can be claimed by completely anonymous accounts which is really cool you can read all about this i mean there's a lot of kind of technical stuff going on here but you can read all about it on the github i'll link it in the youtube description but i just wanted to put it on you guys radar because i remember speaking about it uh maybe a month or two ago and i just wanted to follow up that there was a demo now and there is more kind of like uh explanation about how this works so definitely go check that out it'll be linked in the youtube description all right finally here we have an update out of zappa so their latest update allows you to follow your favorite wallets on the zappa dashboard this update is the first in a series of features that aim to make using zap and

more social including an activity feed read on for some alpha and follow a feature highlight so i mean i checked this just before i am apparently number two behind vitale hekiha in terms of the the most followers and seb order being number three here he's actually one of the founders of of zappa so i'm ahead of him on his own platform that's pretty funny um but i mean i don't know if people are following my public address it's very it's a very boring address i don't do anything on there for for various different reasons but if you want to follow me you can follow me that's fine but i think this is cool i really do like these kind of like social features i think um these are these social features are only going to get more important as time goes on especially as more of these

decentralized social networks like um lens protocol starts spinning up and you you're able to kind of like take your identity with you take your profiles with you follow everyone on different kind of like places all that sorts of stuff right it's all going to be portable it's all going to be interoperable i'm very excited for all of that but uh yeah definitely go check this out if you're a user of zappa and if you're not a user of zapper you should be uh it is the best dashboard out there i believe for tracking all of your i like positions and things like that uh but but yeah cool little feature here definitely check out the thread for some more alpha um but on that note i think that's gonna be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you

haven't yet give the video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone