Dencun update, Layer 2 chat and more - The Daily Gwei Refuel #681 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delway refuel where cup the latest news in the ethereum ecosystem I'm your host Anthony s the 31st of October 2023 right everyone let's get into it so kicking off today we have some positive regulatory news out of the UK here so Brian quintes who is the ex cftc commissioner in the US here who now works as head of policy at a16z crypto tweeted out basically a summary of what this uh kind of news out of the UK is today so he starts off the thread by by saying or the Tweet by saying the long awaited conclusion conclusionary statement from UK HMT on its crypto asset regulatory regime has arrived and it is wonderful and the main points here that Brian highlights is

that uh specifically hmts response includes air drop excludes air drops from the token issuance regulatory perimeter for now recognizing that they do not constitute a public offering basically saying that air drops are not Securities unlike in the us where we have zero guidance on on that and teams are forgoing airdropping literally free money to people in the US because they are scared of the SEC that it's just ridiculous right uh the second Point here is that the response clarifies that nfts are out of scope specifically citing in-game purchases and sales of digital items as an example of non-financial services activity just a common sense approach there honestly I don't see why the the US doesn't adopted that approach either third point it re

reiterates a goit slow approach on Defi and official recognizes that defi will play an important role in financial services um and outright Banning it is obviously not an option here uh and the fourth point is that the response strongly disagrees with the suggestion to regulate crypto trading as gambling or an outright ban on crypto citing such approaches Divergence uh from International Regulatory workstreams and the ass Associated detriment to crypto-based Innovation so obviously as you can see very positive here very levelheaded uh kind of response and very common sense response it's definitely very different to what we're seeing out of the US here now this gets me excited because as I've mentioned before Australia where I live in Australia they

tend to follow the UK when it comes to uh I guess like policy around financial services and financial markets so if the UK is going down this path which it seems that they are it means that Australia is most likely to follow so obviously positive news for me here um whereas when you look at the US they seem to take their own approach to everything so I wouldn't expect the US to be too much informed by the UK's response here but at the same time I do think we've seen some some some some uh I guess like better regulatory kind of stuff coming out of the us over the last few months uh specifically around uh kind of assets like eth for example because obviously there was a lot of fud for a while there that eth was going to

be classified as security or that the S was going after to eth and I think it by now everyone should I mean it should be obvious to everyone that's not going to be the case I mean it was obvious to me at the time but I think by now that's not going it should be obvious to everyone that that's not going to be the case and you know even outside of e the has just continued to lose in court losing against grecale losing against Ripple right uh they're going up against coinbase and it looks like they're probably going to lose against coinbase if you know and they may even just withdraw their suit against coinbase right but I you know I doubt they're going to do that because that would just put put egg on their face losing is probably the better path than actually

just withdrawing the case altogether uh for them but we'll have to kind of see how that how that kind of shakes out there but generally I can recommend going and checking out this full kind of response here it's linked here I'll link it in the um the YouTube description below but I'm I'm just very happy to see this especially as an Australian as I said because this does tend to bleed into Australia here uh and Australia I mean the the reason why Australia follows I think is because we we're generally pretty conservative with a lot of things uh we are very far away from everyone else we have a financial services economy and and and kind of that's a big big part of our economy I should say uh but at the same time it is definitely dominated by a small handful of players I mean for those of you who

don't know there are only four major banks in Australia um and I think the top two probably account for over 50% of the market share and Australia is not like the US where there's thousands of of of of banks spread across the country in Australia I think there's less than 100 Banks total and most of those Banks would be tiny right um so when looking at it like that from a I guess concentration perspective and centralized perspective uh I think you know things tend to move slower because these big juggernauts just uh you know you know won't innovate as fast as um as the smaller players will even though they do innovate faster than I think players in the US I think that uh the even though the these banks are big in Australia they have been pioneers of new technologies faster than other countries

have been which has been great to see but when it comes to crypto it seems like the Australian government and the Regulators they're they're dragging their feet relatively uh kind of like slowly on this but I think that they're going to catch up especially over the next couple of years as the the UK puts forward these things as as the US becomes friendlier right and in Australia specifically actually um I did go to that event in Sydney uh it was a a few months ago now where there was a lot of policy people there A lot of uh people from trfi there regulatory people and yeah the conversation is changing I think you know post obviously FTX and all the collaps collapses we saw last year it seems like a distant memory now I know that the S SPF trial or the FTX trial whatever you want to call it is

ongoing right now but that seems more like a uh a kind of a circus that you watch and get entertainment from rather than anything that's going to harm crypto I think at this point in time all the harm that that would have done has has long since passed uh the memory of it is I mean it seems like it happened a while ago now right and of course the crypto markets are looking very positive right now obviously with Bitcoin breaching up to 35k recently the ETF stuff so generally I think as I've said plenty of times in the past a few green candles uh tend to make everything seem more positive than what it is but if we actually drill down into what we're seeing on the regulatory front it does look more positive I I think but in saying that there are some places where

it still looks very Bleak and I think one of those places is definitely when it comes to privacy on chain because as we've seen there has not been any let up from ofac against tornado cach uh we've seen um some stuff around Thor chain recently I think uh you know it depends what we're going to see with other protocols or other projects like nocturn and Aztec it's just going to be an uphill battle I for privacy stuff but I guess that's not exclusive to crypto it's definitely something that doesn't just exist for finance financial markets either it also exists for uh Communications just generally uh there has been a war on encryption since encryption uh I guess like since digital encryption has been around there's been a war on privacy there's been a war on encrypted chats with all the prefaces of you know we need to stop terrorism

financing we need to stop uh you know child exploitation all these sorts of stuff and yeah sure we need to stop that but not at the cost of everyone's kind of Liberties right and everyone runs privacy and everyone's right to privacy I mean I I strongly believe that of course and it's kind of funny me saying that because that's a very American belief I think um it definitely drilled into American culture but in Australia we are a bit different there we are definitely I I I don't feel like that that's something that we have in Australia as a as a culture more generally because as I said Australia is is generally pretty conservative um in terms of its approaches to things and we don't um have like a constitution like the US has where it's binding and it's part of the social contract all that

sorts of stuff there but I think that these days I think of myself more as an as as a citizen of ethereum as a citizen of the crypto movement more than a citizen of of Australia right and the nation state that I mean that don't get me wrong I love Australia but I'm much I'm much more aligned with ethereum values and ethereum's Mission and crypto values generally than I am with a lot of the the the kind of values that um that is that are prevalent in Australia right now uh so yeah anyway enough rancing about that as I said you can check out this uh tweet and also the full response here I'll link it in the YouTube description below for you to do so all right so we have some updates from denune today or at least one major update from Denon today so Terren said

here that the core devs are likely moving forward with adding something called blob sidecar inclusion proofs for denb denb is the consensus layer uh client um uh upgrade uh for denune the pr and some implementers notes are linked here and uh and in the hackmd document and last minute feedback is welcome now the reason why I bring this up is because it's not something small that's happening on interb this is actually a pretty major change and it's being done for a bunch of different reasons which you can actually read read in the hackmd document here Terren list out the positives um and also the challenges I think that the main I don't know if I'd call it a negative but the main knock on this that I can see is

that it's going to take a little bit of time to get this implemented into the clients now of course I have said that denune is not slated to go live on mayet uh this year at all and it's probably not going to go live on mayet until February at this rate honestly like if I had to say um a month at this point in time uh January you know it seems like a coin toss it seems more likely to be February especially if they were to implement something like this because it requires additional test testing and stuff like that um but generally I think that because we have that extra time there um there'll be more time to test this sorts of stuff implement it and as I said it is a from my understanding a big significant change but I don't think it's something that's

going to require a significant amount of testing from from my read which is where the roadblocks tend to happen on as we've seen over the last couple months uh especially with IP 4844 and testing blobs generally um there has been a lot of roadblocks that have kind of popped up in the testing that have caused I guess like the delays here I I I think that if those roadblock hadn't popped up we probably would have seen Denon in you know maybe late November early December sort of thing but because the testing obviously um has to be done and we discovered bugs and different kind of intricacies that we had to work through uh it's kind of led to that I mean I said delay but it's not really delay because there was never a date given right but it's led to that kind of thing

where it's going to take a bit longer for this to go uh go live here so so yeah you can read as I said this hackmd document I'll link it in the YouTube description below but I mean I can try and TD what this actually is but it's getting a bit technical for me and I don't fully understand it myself yet so I I didn't really want to uh T Dr it here but uh essentially the Terren list the main benefit here is that it prevents equivocation blobs and allows cleaner Beacon and Builder API Integrations um uh like that's probably not going to mean anything to to you guys I mean it doesn't really mean anything uh to me on the surface of things because obviously I'm not a cordev um but as as teren says here as well the downside is the time for

implementation but he thinks it's a cost worth paying because it's short-term pain for long-term uh gain here so yeah if you want to understand what this change is and why it's been being implemented so late into the denune development cycle here you can go give this document a read and also the GitHub pool request I'll link that as part of the tweet in the YouTube description below for you to do so but as I said um I think that the testing on this on this stuff shouldn't take that long it's more just getting it implemented in terms of like getting it implemented into the apis but also into the obviously the clients themselves and then testing that uh and then obviously getting ready for for mainnet sometime in uh early 2024 all right so uh we have an update

out of obal here today so the first distributed validator M Block on mainnet was proposed over the weekend so uh this was part of the O operation solo Staker initiative being run out of ethery here and you can see here on ether scan uh this block being proposed here now as as asheen says here this block was proposed by a distributed validator through the me boost Network and and this is the first one to to be uh kind of constructed like that which is very very cool to see because obviously if you're building validator software or distributed validator software you need it to work with meev Boost because it is a core part of uh the ethereum kind of Builder life cycle um it's not a core part of the protocol obviously but like

95% of the network uses it and if you're not using it you're missing out on a pretty substantial amount of rewards from the execution layer so obviously uh if people are going to be using DVT it needs to work with the me boost software which you can see here it does because there is a a block that was proposed here uh which is really really awesome to see so I just wanted to highlight that for you guys I think Obel I don't know when they're planning to go live on mainnet I think it's relatively soon I saw that Lio also is planning to either temperature check or vote on um creating a module for the use of distributed validator technology within its stack so they've got to be close is to main net at this point right and I think there is actually a road map for obal somewhere I

may have um have highlighted it on the refill before but I can't remember exactly um what the what the road map actually was because obviously I can't remember everything but you can probably find it on their website so you can go to their website at ob. te that's ob. te um and also it'll be obviously Linked In the YouTube description uh below as well for you to check out all right so the ethereum on arm Twitter account tweeted out today that they've been running an ethereum archive node using the ref client for more than a month and a half uh now uh with the ref client being in Alpha 10 it seems stable aside from a minor issue and they continue we need to make sure that we can run archive nodes on low power and affordable devices I mean I've talked about this I think last week or the week

before in the context of storing historical data on the um of the ethereum network and how there are eips in place or I guess like in the pipeline to expire this data after like a year and obviously running an archive node today is much heavier than running a full full ethereum node but it's not like it's heavier to the point where you need to actually have high powered Hardware to do it you can run it on low powerered Hardware like for example I run my um my archive node which is a GU archive node on a consumer PC it's like sitting right across from me I can see it from from here um and that runs fine like I never have any issues with it it's just sitting there running um and it's it's actually a really small box as well I haven't managed to test or run

one on a Raspberry Pi or Rock 5B board or anything like that just yet um but I think the ethereum on arm people are actually doing this um and and testing it on this but the whole point obviously is to make it so that is it is as accessible as possible to run this stuff because obviously the main bottleneck is going to be storage now the storage costs can can run quite High depending on what type of archive node you want to sync because what you can do is you can sync an entire archive node which I think is over 20 terabytes right now um and that gives you basically everything from Genesis it basically replays all the the state from Genesis or you can sync a full node up to the current block and then start um syncing it as an archive node which is actually

what I did but obviously over time the you know it saves space on the initial sink and saves time on the initial sink but over time it will fill up that space there in my machine I have about 18 terab of SSD space that did not come cheap I think it was like three grand or 3 and a half Grand and that's uh Australian dollars I don't know what that is in US Dollars up the top of my head there um but as I said it is running still on consumer hardware and and the other I guess like the total cost for the Box itself um and and don't get me wrong this box is also overkill for what I'm doing on it but the total cost I think from memory for the entire thing including the um including the the storage it can't be more than 5,000 uh

Australian dollars and as I said you can do it for less than that and you can even do it for less than that on the storage as well uh and obviously these prices are coming down all the time um and in US Dollars I'm not sure what it is it's probably like $3,000 or something like that um and this is for like an running a full archive node uh here now uh if you can run an archive node on a RB pi and a or Rock 5B board even better right you just have to get the necessary storage space and that's your main cost there uh and then you can run it all well and good but yeah I do agree with the ethereum on arm account here where they said that uh you know we need to make sure that we can run them

on these low power devices because that's like at the heart of everything we're doing with in ethereum the reason why the ethereum layer one is so unscalable is because we've basically traded off uh layer one scalability uh for uh the scalability or I guess like the um the Effectiveness and efficiency of being able to run a uh a full node or an archive node on consumer Hardware instead of requiring massive data centers to run these things which is what which is one thing that the ethereum community and ecosystem greatly Prides itself on um so yeah anyway you can check out uh ethereum on um for yourself they've got a bunch of um images for uh various different things I'll link it in the YouTube description below for you to do so all right we have a fresh blog post

from vitalic today talking about all the different types of layer 2 so obviously as you guys know there are various different types of layer 2s that I've talked about before such as rollups um and validium but in between them there are other types as well there's like hybrid rollups hybrid validium uh and and a hybrid validium being a thing where essentially you can have your data posted offchain but then if you want to post it onchain you can pay for that privilege and and and it'll get posted onchain there now what vitalic blog post tries to do is reason through all of these things and also kind of caveat them with uh the you know the important caveats that come with with reasoning through them here and he's also got a nice little um graphic here that you can see uh of the different kind of layers

and above layers a layer two as well such as layer the layer 3es or fours whatever you want to call them um and what they are uh the he's kind of assigned a classical element to them as you can see here why we need them and examples of them so he start I'll start from the bottom here so he's got layer zero which is the people layer right the social consensus layer this is something I talk about all the time it's kind of like got it got the code name of layer zero uh and then you've got the classical element being uh kind of water here and then why it's hard to pin down but stable in its own way uh as as to why and yeah I mean the social layer is definitely the most kind of like uh confusing thing to explain to people I

think uh and examples obviously are Bitcoin and ethereum's social layer being very strong there uh a layer one is a base layer chain uh why it's slow but sturdy the foundation on which everything else depends upon um and obviously more examples of this are Bitcoin and ethereum and then you've got layer 2 plus um that favor security so these are obviously full rollups so these are fully backed by the security of our one can read the L1 if you have assets inside the L2 you can always withdraw them to the L1 it extends layer one with high energy needed for scalability so it's basically an extension of ethereum's block space and examples of this include obviously roll up S Plasma which were kind of like the I guess like first version of rollups or

they're not really the same thing but they're like the rops are like the spiritual successor to to to plasma and then channels like State channels uh something like what the um the lightning network is built upon uh and then you've got Layer Two Plus SC um that that that that are scale favoring so it commits into L1 directly or indirectly can read L1 and offers some guarantees that's better than a multi- but weaker than full security uh and why we would want this it's lighter and faster as upper layer but not the place to rely on fo toop security obviously these are things like validium and rollups with pre-confirmation uh confirmation times here but yeah that's that that's basically the main Matrix there but if you want to dive deeper into any of these things I highly recommend reading vitalik's blog post here because I think

this is going to be very very important going forward because as you guys know there are a proliferation of l2s happening right now and they are definitely not all created equal and all you need to do is go to the L2 beat website to see how different a lot of these l2s actually are and if I go to the l2b website you can actually see this and this actually mirrors how different the l1s are by the way like some sometimes people will go oh you know what's the use of l2s if they're all so different to each other well okay in the world that you think should exist of a multi-layer one world it's the same thing right and it's arguably worse because I mean there's no such thing as an L1 beat right and also on top of that um l1's are very much a a lot more

difficult to build and to to secure than an L2 right so when you look at this and you look at the differences between between the different l2s um that they're all rated based on the same stages they're all working towards these same stages in their own way and they all use uh you know obviously their own kind of flavor of the technology but we have a baseline for each of these things and we have the stages as as listed on L2 be.com and as originally kind of posited by vitalic here um and yeah I mean as you as I said you can see how different a lot of these are even just in what the stages they're in obviously the technology that they use and it's funny cuz arbitrum and optimism both use an optimistic rollup technology but their Tech Stacks are very different to

each other and then you can go um and see the different ZK rollup Stacks or zkm Stacks they're not going to be clones of each other because having you know an exact clone is not going to differentiate you yes they're all evm compatible but the thing is is that um being evm compatible or evm equivalent is table Stakes right it is something that you need to have if you want to succeed um as as an L2 even stocket which is a non evm L2 is adding evm support or types of evm support and kind of um things like the the the transp that I've discussed before I've discussed it plenty of times on the refill so yeah and then you've obviously got the different constructions like optimums and validum and stuff like that as well there but anyway you can go

check out bal's blog post I'll link it in the YouTube description below for you to do so all right so Jesse poac from coinbase tweeted out uh something that I F thought was very interesting where he said every new coinbase engineer now goes through a full onchain curriculum and hackathon all on the base L2 the first class of 30 just demoed onchain coupons onchain promodoro onchain fantasy sports onchain tickets onchain carbon credits so this is super cool because I think coinbase is the closest we have to a centralized company being kind of I guess like onchain native so to speak right and what better than to have all of your incoming Engineers uh work on an onchain product right as part

of like an internal hackathon in order to understand exactly what coinbase is trying to do with Bas what they're trying to do as a company and how they're trying to scale out the coinbase ecosystem because the coinbase ecosystem is not just the centralized exchange it is the wallet it is the the layer two right it is um their institutional stuff as well which they're probably going to want to bring the institutions on chain uh to here so there's a lot of different things that that are happening here so it's a really great initiative that they're running with obviously Jesse poac uh leading it here to get people to build uh build on base now speaking of bass as well there was an update here from Roberto Bardo who um gave an update on farcaster today where he said uh let me tell you a bit about one aspect of

the uh base engineering team's work uh which is our contributions to the op stack now I'll link this thread in the YouTube description below you can go check it out but the tldr is that uh the based engineering team has been uh putting in the work to get EIP 4844 ready uh within the op stack as part of the canyon upgrade so that basically on the day that denune goes live the op stack chains all of them can immediately take advantage of EIP 4844 now this should answer the question that I've gotten a lot from people before about how long it would take for these various l2s to basically uh gets uh get to the point where they can take advantage of 4844 well they're working on it today they're working on it now and actually

have more time than they probably otherwise thought they did because of the fact that denune is probably not going live until like February at this rate right so they've got time to get this work done get it out onto their relevant Tex stxs and then or or their respective Tex STX I should say I should say and then make sure that it's ready to go on day one because immediately they'll be able to lower fees for end users and as I've said before 4844 is one of the biggest end user facing um upgrades uh that we've had in a while on ethereum because uh most of the upgrades over the last couple years have been uh not user facing whereas 4844 while technically not directly user facing it is user facing that the downstream effect is that it scales the L2 and the l2s uh obviously uh can can can lower

their fees and the users get the benefit of that so instead of paying whatever it is these days on the L2 at a certain guay amount uh you know 10 cents or less it's going to be like a cent or less because as I've said before blobs don't share the same fee Market as the rest of L1 ethereum so they're going to have their own e559 style fee Market where obviously fees are still burned and all that but they're not going to be uh subject to the fee spikes on L1 because as you have noticed over the last I guess couple of weeks L1 fees are back to being relatively high again you know 20 plus gay I'm seeing quite regular regularly now 30 plus gay and this definitely does currently affect l2s because l2s use call data or I should say rollups use call data and that the

cost of call data is the fee market for call data is shared with the rest of the L1 so once we have 4844 in place these spikes are no longer relevant uh the the um 4844 sorry the rollup fees will only be dictated by the 4844 fee Market instead of the rest of the ethereum network here but anyway I'll link this cast in the YouTube description below you can go check it out for yourself right an update out of pup today so they said here for some time now we've been refreshing the paup product Suite with a new look and feel to make your paup experience the best it can be today we're excited to release the new and improved paup scan into the wild so they've updated the interface uh to make browsing your collection really easy uh and and and look very nice

obvious obviously that's the that's kind of like one of the main drawers of paup is having a really easy to view and really nice to to view collection here but if I go here and I I kind of uh maybe search S.E I can show you what this currently looks like so I'm just search S.E and I mean the website looks great right I love purple purple's actually my favorite color for those of you who didn't know you probably don't know that I don't think I've mentioned that before but you can see here um I need to be collecting more popups that's for sure but you can see here all of mine listed here apparently I didn't collect any in September Sad Sad Panda right um but you can see them all they're listed here March I seem to have collected a lot oh that's because I was

at eth Denver you can see all the eth Denver related popups right um yeah and then you can just scroll down and see the history of the of the your pups here you can of course connect your wallet instead of just searching but this is what the the new kind of interface looks like which yeah looks looks really cool to me honestly and and it loads pretty pretty pretty quickly uh which is great it's got Progressive loading as you can see here but yeah this is great and maybe on the subject of Pops as well I should tease that there is currently a daily gay rug fuel pup being created uh by some community members now this pup is basically going to be something that you'll be able to collect every time I miss a daily guay refuel episode and it's funny because it's going to act

like a way for me to uh essentially not do rug fuels as often or try my absolute hardest not to do rug fuels as often because I don't want this paup to be a to be something that is very common I want it to be a rare pup right I want it to be one of the rarest pups I don't want it to be something that someone's that you guys are collect every week so that'll hopefully be ready to to go live soon and I'll announce it in the Discord Channel and on on obviously the um the refuel when it does the Grand irony will be if there's a rug fuel on the same day that the rug fuel pup comes out because what I'm planning on doing is I'm going to do addition zero of the of the rug fuel pup as like the honorary one to

give you a to give everyone a pup for all the rug fields that have happened in the past so you'll have probably a week to claim that and then uh I'll I'll make a pup um with the with the relevant date on it every every single time I do a rug fueld there just as a little something to I guess like tide you guys over because I know that you guys get pretty antsy whenever I miss an episode because it's part of your probably for a lot of you your kind of morning routine especially if you're in the US CU I know this comes out in the morning us time there but anyway you can go check out this new poop scan experience I'll link that in the YouTube description below but I think that's going to be it for today so thank everyone for listening

and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone