EIP-1559 benefits, Ethereum's real advantage & more - The Daily Gwei Refuel #98 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i recap the latest news the ethereum ecosystem i'm your host anthony sosano and today is the 13th of april 2021 all right everyone let's get into it so final warning here for those running eth1 full nodes or eth1 nodes in general uh time to upgrade to berlin is is running out i think there's like one day or two days left at this point so if you haven't upgraded to uh to the latest kind of um client for the client that you're running uh sorry the latest uh version of the client that you're running then uh please do so uh and this also applies if you're a e2 staker as well i'm running your own eth1 node uh don't forget to update that as well so yeah just a final reminder there for everyone

uh matthew feinstein put out a tweet today saying that he is looking for a talented ux ui designer to join him he didn't say which project this would be on and some of you may have seen recently he left loopring uh to to to work on something special as he likes to call it um so essentially if you are a you know talented ui ux designer and looking for work within uh i guess like um uh within the space that matt's working on here i'm not you know not sure exactly what he's doing but says here being ethereum experience is a bonus but but definitely not a requirement so yeah it might be something that you're interested in so feel free to dm matt here if you know you fit into this kind of role here so scott lewis put out this really interesting kind of tweet yesterday

um you know i wrote about this in today's delegate newsletter but basically the tweet reads ethereum's biggest competitive advantage is a community of people that have motivations beyond just making money now this is really at the core of what i think makes ethereum special right right at the core of it basically at the center of it and something that a lot of other communities have you know really failed to kind of replicate um and you know obviously people in the ethereum community aren't allergic to money they like money right people celebrate when the price of eat goes up and and d5 and stuff like that and that's all well and good but i think at the very core of it you know a lot of people in the community are here for the technology and i know that's a meme but i i really do truly believe it

uh and you know that lends itself to i guess like a different type of community than you'll find in in certain other kind of like spaces in in this ecosystem so i guess like what do i mean by that well basically if we kind of use some of these other ecosystems as an example and i'm not going to name names here but you know i'm sure you you'll be able to think of what i'm kind of talking about here but essentially they are very kind of like uh price sensitive right where most of the community pretty much like only cares about the project when the price is going up and then when it's going down you know most of them just like switch off or don't really care anymore and you know that happens in ethereum as well you know don't get me wrong i mean

i think what we saw in 2017 was that we had that massive speculative mania we had a lot of people in the ethereum ecosystem that were basically what you know what i like to call tourists so they were only around for like the a few months sort of thing and then during the bear market you had the people who stuck around with like the true believers right in 2018 and 2019 and because of that we've kind of formed this community now of like you know there's still noise there but like the the the people in the community that have been around for a while they're they're here for different reasons than just money and yes they've probably made a lot of money if they've held on to eat from the early days and all that sort of stuff but their motivations are definitely you know run much deeper than that and

you know i i definitely fall into that bucket where you know money for me is a kind of means to an end it allows me to do what i do every day with the daily way and things like that and allows me to do it for free as well which is which is the crux of it and that's you know i think what a lot of people do within this ecosystem as well there's a lot of people working on open source kind of um software and things like that and a lot of it isn't monetized you know unless you create a token it's kind of very hard to monetize uh you know you can have a bitcoin grant but even that is like it's not going to give you the lucrative kind of um you know kind of money that you would get just like

issuing a token or something like that but at the end of the day the money is just there to sustain people so that they can work on what they love right and there's a there's a there's a lot of those people in the ethereum community i talk to a lot of them every day they just really do not care about money they just want to work on things that they believe can change the world and and better people's lives so but again that isn't to say that there aren't other communities outside of ethereum that have this but i think that um you know the the the majority of those people are in the ethereum community at this stage because you know even a lot there's there's a lot of these other kind of i guess like ecosystems that are you know genuinely trying to to make a

difference and trying to build something meaningful but the problem is that their communities are very price sensitive and that's because they're just early communities still right where you know that maybe the the uh the project's only been around for one to two years which means it's only really been around during a hot market and because of that it's it's kind of like being optimized for price sensitive people now you know in the long run a lot of these projects will fail some of them you know may kind of um you know succeed and and if they do they'll they'll have a community that isn't as price sensitive or nowhere near as price sensitive and they'll have like a dedicated community that's stuck around while you know the price wasn't doing much uh if we if we go into like another kind of long drawn out down market here

so yeah i i think you know i i as i said i wrote about this in the in the newsletter today you can go check it out for some more thoughts there but i think in general you know i'm not trying to to you know ethereum the ethereum community's horn or anything like that and to my own horn and stuff like definitely you know i would say the majority of people do you know when they start and come into this ecosystem are definitely attracted by the money right like i guess that applies to the majority of people but you know a lot of people that i see kind of working and sticking around uh they they definitely find meaning beyond kind of um money and and work on things beyond you know for for monetary kind of things as well and i think you know you don't you need to look far

to kind of spot those kind of people so yeah just a bit of thoughts there uh you know i'm sure as i said i'm sure that this uh doesn't just apply to ethereum it applies to some other ecosystems i'm not as involved in other ecosystems of course uh but from what i've seen you know a lot of the time i just see like the speculative side of it and it just you know it's sometimes a bit of a turn off right i think and and you know if you have someone like shilling you something and then saying it's better than this or better than that it's like well i mean you know tell me why it's better in terms of like the the technology the the products the adoption and everything like that don't just like come at me and tell me that it's better

because the price has been going up for example so uh yeah you see a lot of that during the during the bull market and then for those who haven't experienced a bear market yet during like 2018 2019 it was just crazy there was hardly any noise right it was all just like fundamentals talking about technology watching it grow watching it blossom uh and then you know over the past i think the past three months has been particularly bad there's a lot of new people coming into the ecosystem and you know a lot of it is very noisy because a lot of them are you know as i said like i like to call them tourists right they're just here because the market's going up and whether they stick around when the market goes back down is another thing and i don't think a lot of them do i

think a lot of them are just here for the money and there's nothing wrong with that but i think being aware of that and kind of i guess uh being aware of the fact that you know ethereum has a very very strong non-speculative community is is you know it is great because then you can kind of i guess kind of realize why ethereum is so strong still why the builders are still in ethereum why people are still working on ethereum as hard as they are but anyway i'll leave it at that for now um you know there's a bunch of other things to get through today but just something to to think about definitely so right now the market is actually really hot and volatile i mean eighths hitting fresh all-time highs you know a bunch of uh kind of like d5 tokens are actually making moves as well

so the on-chain activity should be spiking right like usually when we see i guess like a very kind of like hot and volatile market we see gas prices spiking but currently they're under 100 way even for like a rapid transaction now i don't remember the last time that we saw this during a volatile market and it probably hasn't been like this for you know at least six months if not longer and you know i spoke about it yesterday but i think this is because of flashbots right and i spoke about how flashbots um you know are basically allowing miners and other kind of ecosystem participants to do mev outside of the normal ethereum mempool now what this means and i mean i explained it in detail yesterday you can go watch yesterday's refuel to get the full explanation

but this essentially means is that if the market is hot and volatile instead of these people who have been extracting mev being in the mempool being in the normal ethereum transaction pool with everyone else they're basically going down a different road through flashbots which means their transactions don't hit that pool at all so you know even though the market's hot and volatile it's just normal normal people's transactions going through now and everyone else who wants to do the the mev stuff like you know front running and even the arbitrage stuff can do it uh through through flashbots so yeah this is this is absolutely massive right and you know uh you may be thinking kind of like uh how does maybe eip1559 play into this right because that's obviously a

a major upgrade that's coming to ethereum's gas market and this is why i kind of put out this tweet last night when i said the amazing thing about eip1559 is that while the fee burn is awesome it's the least interesting feature of the eip and this was basically based on trent's tweet here back from february 17th and i remember i spoke about it on the refill back then but basically he lists here the the basically the short list of the benefits of one five five nine outside of kind of a fee burn so number one is more predictable fees so it's going to reduce the overpayment of fees for the end user giving better user experience here and the way it does this is that essentially you always kind of like or at least like most of the time if not pretty much almost all the time you will

be able to get your transaction into the next ethereum block because the fee estimation is just a lot easier to do under one five five nine uh secondly it removes incentive uh for reorgs in fee heavy environments uh now this is is funny because one five five nine does this but flashbots does this as well right because it reduces uh this kind of i guess like toxic fees that we have on ethereum through mev so uh and i i mean i won't go into too much detail there but essentially what mavs it's basically a negative externality and what we mean by that is that mev exists because on chain defy activity exists and there's and there's profits to make there's there's kind of things to to profit opportunities to exploit things like that

now by putting them into flashbots you remove this negative externality from uh from the normal ethereum ecosystem because now it doesn't just push those costs onto the rest of the users through higher gas fees so that's that you know that's something that flashbots does but also 1559 helps with this as well the third thing here is the fee burn of course and you know you might be wondering well if everyone's doing uh mev through flashbots and they're paying zero fees to the base chain they won't like eat uh you know won't even not be burned anymore nope that's not that's not how it works the way the fee burn works is that the miners in eip1559 the ones kind of put constructing the blocks and processing the transactions they have to pay if um as the base fee and that is what's

burned so if the base fees a hundred way then that that will kind of be burned there that amount of eth so you know for now it's just a short-term thing but once 1559 is implemented you're going to have these each still being burned so flashbots actually doesn't um you know take that away at all it actually it's actually probably beneficial for it which is really really cool and the other benefits here are include you know an in protocol congestion oracle which means you can basically have smart contracts relying on one five five nine to accurately price certain things on on the network you know and this is particularly uh important for layer twos that maybe want to get their transactions in you know immediately to post their proofs to the layer one and they can kind of do this much easier with this kind of like a gas oracle

essentially on here so yeah those are kind of like the main benefits outside of the fee burn and i think you know it's very important and they're very interesting i i'm especially you know um really excited about the more predictable fees here and basically reducing overpayment like i'm sure you know we've all done this before where we've put like 70 way in as a transaction fee and then it's all of a sudden spikes up to like 110 and we have to like speed up our transaction now you know flashbots actually helps with this as well because it means that the reason why a lot of the time the the fees spike is because of these mav things and flashbots takes that away as well so essentially in a one five five nine world we're gonna have a very nice user experience on layer one um for for this kind of fees here and

kind of like not just the fee cost itself but interacting with the network and getting your transactions included and all that sort of good stuff there so yeah really just awesome kind of news here from from flashbots and obviously with one five five nine but also on that note right i think over the short to medium term this is really great but long term as i've said plenty of times long term most users are just gonna sit on layer two so they're not even gonna feel this at all you know on layer two transactions are either extremely cheap or free you don't have to worry about kind of like having more predictable fees or getting your transaction included right you know in in the current world in layer 2 and for quite a while it's just going to be like you know super cheap and and very quick

and very fast as well so you won't even have to worry about that but the layer two operators have to worry about that right they have to still post proofs to layer one and all of these kind of um things that are happening like one five five nine and flashbots helps to improve that experience and lets layer twos be more secure here so it also helps with with it might help a little bit with state growth i'm not sure there but in general i think it's overall positive for the ethereum protocol very very positive for the ethereum protocol so yeah bit of an explanation there but that's uh that's the benefits of one five five nine outside of the fee burn so ethereum dot org is now live uh in a bunch of different languages here uh so there's 15

kind of uh new languages i think or at least 15 languages that ethereum.org supports obviously english but like you can see the list here korean spanish arabic turkish right i mean this is this is awesome because when you think about it you know obviously a lot of the ethereum community right now is is very english speaking but that's only because we're english speaking there are entire crypto communities that are like non-english and they don't speak english at all but they're massive like think about the chinese community and how big they are you know and you see this play out in the markets where certain kind of things or projects that are based in china are kind of like going up in value a lot and no one can kind of understand this and i'm not talking about binance or the bsc ecosystem i'm talking about a bunch of other

projects and people like you know who's buying this like i never hear anyone talking about this on on twitter in my kind of like you know echo chamber so to speak and it's because it's not spoken about in english it's it's in these chinese communities it's in these korean communities and it's in all these other communities i mean you know a lot of the european kind of um people that are in the community speak english as well so i wouldn't say it applies too much there but definitely there is this kind of like east and west split um both down a language barrier and a cultural barrier um sorry there's both a language kind of um barrier and a cultural barrier here so the fact that ethereum.org is available in more languages is is a net positive at the end of the day because we need to bring in you know as

many people as we can into the ecosystem uh that are you know not english speakers like we can't expect everyone to speak english that's not how the world works you know most people actually don't speak english maybe i actually don't know maybe english is still the most popular language but i know that um you know chinese or mandarin is is one of the most popular as well but in general like it doesn't really matter how popular language is if it's being used by millions of people then we should definitely support it right throughout the ecosystem and ethereum.org isn't the only one doing this there's a bunch of d5 apps and other apps that are supporting multiple languages and that's how you get kind of this kind of mass adoption for ethereum because ethereum doesn't care right ethereum's a neutral decentralized network but people can only access ethereum if

it's in their language like you know if they don't speak english then they're they're way less likely to kind of jump through the hoops to be able to kind of access the the ethereum ecosystem here so great to see ethereum.org put this together so ribbon finance which is a protocol that's that's creating a structured products in crypto announced the launch of their theta vaults today which is a new type of yield product that generates yields through an automated options strategy now i've spoken about this before and about how dfi is going down the road of extremely exotic financial products uh you know beyond your your normal just like trading on on kind of uh you know unisop and things like that and you're bought and you're lending and borrowing you know structured products can be very very exotic here and

some examples of structured products are like index products for um for example that's like a simple product then you have like the tokenized leverage products like from the index co that co the index co-op they have like the flexible leverage index that's another structured product there even things like uni swap v3 positions are going to be structured products as well um but we have ribbon finance what they launched today and what actually reached mass magic mass max capacity sorry uh was their theta vaults they basically write an automated covered call strategy on eth and reinvest the premiums earned on a weekly basis effectively compounding the yields here now their back tests have shown that the strategy could generate more than 30 percent apy on eth which

would make it potentially the highest unincentivized yield strategy on anything all of d5 and i think that's right i think the only higher ones you get are the incentivized ones i know that alpha finance has been offering 10 to 15 percent on on eth um obviously staking about seven to eight percent uh but this is this is riskier of course and if you don't understand this product you definitely shouldn't you know shouldn't put your money into it so and obviously back tests don't reflect future performance as as reuben finance has noted here but if this is something you're interested in learning more about you can go check out the the kind of like a link in the youtube description uh to to this kind of thread uh i'm not gonna try and kind of like explain it in any kind of like detailed way uh because of the fact that i don't

fully understand these exotic products myself yet i will probably mess something up and i don't want to kind of give you guys the wrong info so definitely go check this out yourself it's something that's on my kind of to-do list to to research more into because i'm not a trader right i don't really double with these exotic products the most i'll do is like put some ethan to make a dow and and draw stable coins to either farm or maybe buy some some tokens or whatever and i mainly do that for tax purposes or because it's more tax advantage to do that but i know there's a lot of people in the ecosystem that that do trade and they trade regularly um and you know there's a lot of people who want to get yield on their eth as well so yeah definitely go check this out and

you know at the end of the thread here they also announced that they have raised a seed round led by dragonfly capital uh with other investors including nascent coinbase ventures uh scalar capital d fire lines and a bunch of angels like um joseph lubin and and kane from synthetics here so yeah i guess congrats on the raise this product looks super interesting and i'm excited to see kind of how this evolves over time so nick from maker dow posted a basically a tweet today saying that real work real world assets are now here with uh with the make a doubt platform so essentially what he's referencing is basically a new vote that has gone to mkr token holders here or maker governors uh where they can vote on onboarding

uh the new silver series two drop which i'm assuming is uh basically a tokenized representation of silver i haven't actually kind of read this yet maybe i should have before i kind of covered it here um but i think uh you know this collateral type focuses on on silver um let's let's see if i can kind of like quickly dig this up here so that i can be more accurate uh it doesn't really say anything here it just says silver series two drop um and you know because nick is saying that it's a real world asset i'm assuming that it tracks silver uh maybe wrong here but anyway i think you know just on the theme of kind of like real world assets here and be and getting them on boarded into into make a doubt is is incredibly powerful because

you know if you're looking at kind of like make a dow as a whole and seeing what i guess like um assets they have backing die it's mostly eighth wbtc in usdc right now i think a still accounts for 50 of the assets uh wbtc and usdc account for a bit smaller but they're centralized and this is just another centralized kind of i guess um collateral asset that can kind of kind of get added here i actually really think that um this is this is actually a great way to i guess decentralize the decentralized collateral right because if for example if you have like uh just say you had just like ethan usdc backing make a doubt then it probably would be like a 50 50 split right

but you know they don't just have that they have like eth and they have usdc they have wbtc they have a bunch of others in there and you know obviously like the more popular ones are the ones that are going to be more liquid that are going to give you the better parameters when opening a kind of a cdp revolt here and things like that and i'm sure that you know the do it using is still going to be the most preferable because it's the most decentralized asset right it's incredibly liquid it's trustless all that good stuff but over time you know you'll have this thing where it's basically i still think it's going to be majority eighth a lot of the time but then you have a bunch of other assets backing it and if any of those centralized assets gets frozen or something

then it's okay because you have a lot more other assets backing it and then that can be kind of removed and then the maker system can use the the kind of like insurance mechanism it has by kind of printing more mkr um to kind of uh if if it needs to to kind of re-collateralize the system like that as well so yeah this is this is really cool i i i'm curious to see what other kind of uh uh real world assets get added to to make it down here over time obviously there's a ton that they can add here right there's like so many but like a lot of things haven't been tokenized yet i know this project's working on this but it's gonna take take us some time to get there um you know and and it's still bound to i guess like the

kind of like real world legal jurisdictions as well so you know maybe the maybe maker will have to add kyc for certain kind of collateral types i don't know if they will but maybe they'll get pressured into doing so depending on the collateral type you know you could you could kind of like imagine them including maybe some equities or stocks right some some u.s equities or stocks in um maybe that would require kyc at some point but yeah it's going to be interesting to see how this evolves and i'm going to keep my eye on it for sure so last up here dydx announced yesterday that they have added uni and avere to their layer 2 perpetual exchange here so they before this they only had um eth uh bitcoin and link and i just realized i'm

not even following them that's weird ah but anyway they had eighth bitcoin and link and now they have uni and avail and they're basically said here that they go they're planning to add one to two additional markets every week from sectors such as defy emerging layer one blockchains and more so yeah this is just like absolutely awesome because a lot of the time these platforms can be stunted by not supporting a lot of assets right because at the end of the day trading eth trading bitcoin trading link is pretty easy um you know you can do that mostly kind of like anywhere and i know that you know dyds is offering kind of like a different product with the perpetual markets so that's giving it a massive boost as well right but you know trading perpetuals for eth wbtc and link can be done in a very easy way yes i

know it can be done on centralized exchanges but if decentralized exchanges really want to attract new kind of users and want to attract like um you know bigger money they have to basically add support for um you know more of these kind of like long tail markets and you know uni i'm sure there's going to be like a bunch of other um tokens added like mkr for examples snx you know i'm i'm pretty sure they're just going to add what's on coinbase if i'm being honest to their to their kind of exchange here which makes sense but from a regulatory standpoint you know diy dx is based in the us they buy u.s people from using the front end exchange uh you know you can get around that quite easily um you know but they still have to do that because of regulations um so yeah i'm sure they're just going

to list everything that's on coinbase right now and use coinbase as like a regulatory shield which a lot of projects seem to do from what i've noticed uh but i don't think that's a bad thing because you know coinbase is more aggressively listing kind of like assets these days which is really good to see yes they list some some kind of garbage as well but you know i think in general it's hard not to list garbage if you're trying to list like as many asses as you can because there is a lot of garbage out there right but they've added a lot of like defy tokens for example um you know uni and rv are both on there of course and i think that's what dydex is going to do here they're going to follow coinbase's path as like a regulatory shield um and and

open up these perpetual markets to to people on on the layout to exchange here and with that will come more volume as i said you know dydex had a record day of 16 million dollars of volume over over the previous 24 hours i i'm you know this is going to balloon up to 100 million plus very quickly i think uh as awareness grows as you know adoption of the exchange just grows in general because there's more markets on there and as more people you kind of use it there's just an absolute no-brainer um that it's gonna kind of get to 100 million which is about ten percent of uni swaps current volume on layer one and you know these volume numbers are just going to absolutely explode like if you think about it the layer one decks volumes you know the fact that they've gone so high considering how

i guess congested the chain has been and how limited the chain is has actually been very surprising to even me who obviously is a very is a very big default bull i thought it wouldn't get that high and i thought we would hit a cap but we don't seem to have hit that cap and we seem to grow and grow and grow so what do you think is going to happen on layer 2 when we have like you know massive scalability we have extremely cheap or free kind of transactions that's just going to absolutely explode i mean i wouldn't put it past these kind of like layer two exchanges to be seeing billions if not tens of billions of dollars worth of volume uh you know over the next few months you know i don't think we even have to wait very long so that's going to be super

exciting to see and you know i think that the quickest way to get people on board into this stuff is to have bridges from centralized exchanges right but maybe it's not in their best interest to do so but i think you know diy dx i don't know if coinbase is an investor in diy dx but you know a16z and polychain are and they are very close to coinbase so you know you can imagine having like a i guess a bridge out of coinbase two dydx but maybe it wouldn't appeal to very many users because dydx bars us users right so maybe the way around that is you have a bridge into something that sits on ethereum as like a proxy to put you into diy dx or something uh you know because like coinbase yes it services non-us kind of customers but the majority of their customer base is

us-based so it's not you know they're not going to put a direct bridge into dydx here because they can't like regulatorily not for now at least maybe in the future so yeah we'll see how that evolves uh great to see these two assets on there um you know i hold both of these uh sorry just a disclaimer there but still i mean in general i think like a lot of people hold both of these tokens right i mean if you used uni swap and you didn't sell your airdrop you hold uni uh and rv is just like one of the d5 quote unquote blue chips as well so you know i think it's safe to say that most people hold these tokens already so i'm not trying to show it to you to you guys there but anyway i think that's it for today thank you

again for listening and watching everyone be sure to subscribe to the channel if you haven't yet give the video a thumbs up join the discord channel subscribe to the newsletter and i'll catch you all tomorrow thanks everyone