ETH is bullish, Argent integrating StarkNet & more - The Daily Gwei Refuel #238 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news in ethereum ecosystem i'm your host anthony susana and today's the 26th of october 2021 right everyone let's get into it so i've been feeling very bullish over the last few days in particular i guess like over the last 24 hours and you know i know that i'm usually a top signal whenever i tweet anything bullish out but i kind of said to myself stuff it over the last couple days i'm going to keep tweeting bullish things out i don't care i don't think that i'm actually a top signal so i kind of put out this tweet today where i basically went through i mean a bunch of different metrics around ethereum and i'll just read them out here so right now we have 623 000 eth burned and

counting uh since august 56 whatever it was so less than three months eight million each staked over 30 billion dollars worth staked 7.5 million eighth locked in d5 i think it's actually higher than this because i don't think d5 pulse counts layer twos right now we have a 90 more like an 85 right now issue introduction coming with the merge uh we have layer two scaling ethereum to the world and we have institutions going along uh as [ __ ] on eth and then i said the path to a 10k and far beyond has never been clearer let's go um so i guess like i don't have to break down the burning of ethiopia and why that's bullish i mean i've spoken about that a lot before i spoke about staking yesterday i think the the locked in d5 i've spoken about before but what's

really interesting about it is the fact that there seems to be like a lot of ether just just sits in d5 and doesn't really move from it and i think when i when i kind of look at my own positions and how i position myself within d5 it's pretty much the same for me like i have some heath that's been in maker for a very long time it just sits there whenever i want to draw stable coins against it because i want to borrow money from myself essentially um i i'll just i kind of like use that but you know the eighth just pretty much sits there all the time like even if i um have paid back most of the debt i'll just keep the eighth in there i know maybe i i should like withdraw it to my own wallet for better security practices but i just keep it in

there i don't remember the last time i actually paid down all the debt because it's so cheap to borrow from maker it's like two percent a year it's it's ridiculous and i know it's obviously not very capital efficient because you have to over collateralize and obviously there's a risk of liquidation but as i've said before i keep my liquidation price quite low but i think that just generally there's a lot of people who just keep like eith just sitting there and not just within makeup or with other protocols as well other money markets amms like uni swap stuff like that and then more just gets added over time as more people want to participate in the ethereum d5 economy and uh you know at both layer one and layer two so i think that is one of the most bullish things for me something it

doesn't get really spoken about too much is the fact that eth continues to be used as this economic bandwidth for the ethereum economy uh in a kind of like growing way and even if it just kind of like stores for a little bit where more atheism being locked up the most interesting thing is the fact that like it's not really going down either so there there really does seem to be a lot of people who are just happy to keep the eth in these protocols um doing whatever they're doing with it over time and as i just described like i'm one of those people but it's cool to say that there's more than just me of course and then obviously the uh issue introduction here that i uh that i've talked about before has got to do with the merge uh once the merge goes through

we're going to be getting rid of proof of work block rewards going to proof of stake block rewards and they're about at current values i think it's about 85 percent reduction so not 90 exactly and if more eth gets staked before the merge which i actually expect will be that issuance reduction will effectively come down even more so it may only end up being 80 or something like that which is totally fine because at current fee burn rates coupled with even if like something like 30 million each was staked we would still be net deflationary i think we're at the net deflationary up to the tune of like two percent right now which is crazy like negative two percent issuance so uh you know and if there's 30 million each steak that means there's going to be what another 22 million staked that's a lot of a new eighth being

staked and that's just going to push the price up even further so that's really really bullish uh letter two scaling ethereum to the world i mean i've spoken a lot about layer 2's i'm not going to rehash at all and there's some other stuff i'm going to talk about later on but uh you know layers who's basically keeping users within ethereum is obviously incredibly bullish overall and institutions going along on each now this isn't something that really gets publicized that much you won't see it in the uh you won't see it on on twitter a lot of the time you won't even hear about it to be honest but it is happening like from people i've spoken to from people i've listened to um and just from from kind of like the patterns that we're seeing play out it is definitely happening and i think it's

happening in a big way i mean ron paul has been a very big advocate of eth being you know he called it the greatest trade on the bankless podcast he's got a lot of institutional and traditional finance connections he is definitely getting them to buy either or at least putting it on their radar to kind of look into so from that point of view it's kind of easy to draw these conclusions and you know there was a i think this wasn't it was a kind of like a role said that basically that institutions i think it was him or mark cuban maybe maybe no i think it was rule they were saying that institutions were now skipping btc and going straight to eth and i actually think that a lot of them are going to be buying eth for staking because you basically get as

i've described before not a risk-free i don't like using the term risk-free it's like a very very low risk yield on on eighth um and it gives you expo you know it gives you both exposure to eth as an asset as a ecosystem but you also get to to kind of like um stake that ethan earn even more over time which is about 5.4 percent right now i think yield which is probably going to go to 10 plus percent once uh the merge happens because of the unburnt fees going to stakers which is which is obviously incredibly uh incredibly uh bullish there so all that leads me to my classic price target which i've had for a long long time like i came up with the ten thousand dollar target back in 2019 um and you know i've since said that i think it's going far beyond that to a

hundred thousand dollars and and beyond i don't really have any timelines for these sorts of things i actually think we can see ten thousand dollar eighth very very soon i mean we're not very far away from that um i wouldn't be surprised to see it by end of this year early next year to be honest um but i don't know i'm not buying eighth with the goal of selling it at ten thousand dollars or whatever and uh anything like that uh and then the hundred thousand dollar target that i've given before i've told you guys that i don't expect that for five to ten years that's you know it's a ten trillion dollar cap around about that but it's also just about the fact that it takes a lot more money to move uh each the higher the market cap goes so it's just going to

take longer to get to that point and there will of course be drawdowns here like we could go to 10k right the end of the year and then we could dump to 6k again or something like that or to 5k even in some kind of like ridiculous sell-off um you know it might it could even go lower than that i don't know uh but that you know this is crypto we love the volatility we love kind of speculating on these wild price targets i don't think 10k is wild anymore it was wild in 2019 when eth was like two hundred dollars um where you know and back then each market cap was like 10 20 billion dollars whereas today its market cap is half a trillion so doubling to a trillion which is basically a ten thousand dollar eighth doesn't really seem too far-fetched to me at all i i mean btc is

already there and i don't think eve is far behind so yeah very very bullish underneath lately for these kind of like reasons that i mentioned in tweet but also for so many other reasons that i've mentioned on the refuel for months now and uh as i've said before i'm still waiting for someone to give me an actual bear case on ether as an asset and ethereum as kind of like a network uh feel free to kind of like reach out to me on discord or something that would be a fun conversation to have so final reminder here uh to update your altair uh sorry to update your eth2 validators or kind of like consensus layer validators no matter what validator and node you're running you need to update them for the altair fork which goes live tomorrow uh so october 27th at 10 56

a.m utc uh so if you don't update you'll be kicked off uh and basically end up on a minority chain we don't want that happening so please please please if you haven't updated yet do it now this is kind of like the last warning i'm gonna give because by the time the next refuel comes out i think this may already be live or at least almost live so definitely don't dawdle there but speaking of staking validators proof of stake all that good stuff terence from the prolabs team put out a tweet saying that we now have a quarter of a million active validators on the ethereum proof of stake chain which is awesome as i've mentioned before the more validators we have the more decentralized the ethereum network becomes and then in the future the more shards we'll be able to have which means the more scalable ethereum becomes which

is just like the most awesome thing to me because you can imagine like if we go live today or not today sometime in the future with 64 shards live and then uh we have 250 000 validators but then say those validator number that validated number doubles to because we have 16 million each stake that goes to 500 000. that means we can pull we can we can double the shards so we can have 128 shards instead of just 64 which means we essentially kind of like give much more data availability capacity to these layer twos which allows them to to scale even further it's just so cool how we've been able to kind of flip this scalability trilemma on it on its head and essentially get to a point where we get more scale with more

decentralization so just really cool to see that milestone being reached i think this is like so i mean this is really only scratching the surface of where we're going to go with with with staking on ethereum eight million each take is is is not that much in the grand scheme of things it's like six or seven percent of the total supply i think i went through this on yesterday's refuel or last week so i think it was yesterday's actually where i basically said that um and i was talking about obel network and i was basically saying that i expect so much eth to be staked um especially through these institutions and these bigger players it's going to go to 10 million 20 million 30 million 40 million eventually i i just expect most not most it but like a lot of eighth to be staked

and that's obviously going to get us more validators that's going to get us more uh kind of like capacity to add more shards that's going to make the network more decentralized that's going to lock up more eth which means that the price should naturally go up over time because there's less ether available on the market to buy it's just it's such a symbiotic and beautiful relationship like it really is when i when i when i think about all this stuff i was actually talking to my my friend today cooper turley he put a tweet out about it that i basically um talked to him about the ethereum protocol core protocol and kind of like what's um what's happening there and you know for him who doesn't pay too much too much of close attention to the ethereum core stuff that's going on because he's he

does a lot of stuff within the web 3 creator economy and the nft economy um he he kind of like wasn't up to speed with it so i got him up to speed and he he kind of was like wow okay i didn't realize all this had happened and that's what a lot of people don't realize and it's not their their fault they just don't have the time to dedicate to it this kind of like core protocol stuff moves really quickly but when you do sit down and you do understand how all of these pieces come together so nicely and how they actually affect not only the network health itself but also the health of ethos and asset you really start to see that clear vision to a hundred thousand dollar ether that's what i see right now it's what i've been trying to get all of you to see for many

many months now and i'm sure a lot of you see it but i see it so clearly i can basically picture the next five to ten years in the ethereum ecosystem um i know it's very hard to kind of like tell what's going to happen within crypto but i think we've we've gotten to a point now where i can very clearly see ethereum's path to to you know world dominance as a network right to being the global settlement layout to continuing to be a global settlement layer but also i can see it's east path to 100 000 and beyond as an asset and i mean that is the primary reason why i stack eighth every day and why i i buy as much as i can even at these prices like you know i i kind of like asked myself the question the other day and did a little bit of a

thought experiment like how many people buy uh how many kind of like early investors people who have bought uh i guess like their favorite coin you know way earlier say their favorite coin has gone like 100 x since the first time they bought it um for me like i first bought at 10 it means it's gone 400 x or over 400 x since my first kind of like buy of of ether 10 you know how many people who have made that gain on on earth are still buying it or whatever asset they're still buying it there's not many i know there's some in the bitcoin space there's definitely some in the ethereum space but just generally there's not many people like that uh a lot of people kind of tend to scale out over time which is fine you know taking profits there's nothing wrong with that but for

me personally i just i i can't do it like i cannot bring myself to like take profits in eth and then you know some doubt and sometime down the line regret the fact that i sold some eth and then it's worth a lot more and i kind of like gave up a potential validator as well like for me it's not just stacking eighth it's also stacking validators like i actually um count my my a stacking as every 32 8 because it means i can add another validator and i just love doing that not just because i want to earn kind of like a return on my eighth but also i'm adding to the kind of like health of the network i'm i'm kind of like adding to the decentralization and security of the network and and i'm actively participating in consensus and as someone who never did mining that's a

big deal to me so you know maybe i've gone off on a little bit of a tangent here i tend to do that sometimes but i guess this goes back to what i was saying earlier about how like i'm just so bullish on eth and i just i see it so clearly i i've never seen something so clear in my life especially uh after kind of like coming to i guess to the point where i fully understood the modular blockchain paradigm and i was able to to basically articulate that in my head and hopefully articulate it to all of you uh i just like have this clear kind of like um vision in my head which which i don't see changing anytime soon i feel like it's the culmination of the last you know seven or eight years within ethereum kind of like development research and all that good stuff there

so so yeah i'm going to move on to a related thing here actually a tweet from kent barton which i thought was very interesting today we basically said the decision to launch the beacon chain prior to the shift of proof-of-stake will go down in crypto history as one of the best design decisions ever an ideal blend of testing and prod and iterative progress by the time the merge happens this thing will be battle tested and ready to rock uh and then uh he continues saying six months later and we've almost complete uh completed sound check clients are harmonizing nicely bugs have been squashed game theory tested the old crypto kills planet narrative due for an erupt end so i guess um he's pretty much talking about the merge like i think it's gonna take a bit more than six months but still the merge um

but what i wanted to focus on and i wrote about this in the delegate newsletter today was the fact that i was just saying like it has taken you know seven or eight years of research and development to get ethereum to where it is today not just the ethy asset but ethereum the network proof of stake in sharding had been talked about since pretty much like early 2014 by vitalik that was on the roadmap it has been on the roadmap nothing's changed there the way we implemented it changed but not the actual core building block layer two has been on the roadmap uh arbitrary have been working on um it wasn't called roll ups back then but they have been working on scaling technologies like what they have live today since i think it was 2014 2015. so from that perspective like the ethereum ecosystem is not just coming up with

these things now like it's not just like over the last few months we've been like oh no like we have so much competition from these other kind of like layout one chains now and they're just like cloning everything we do let's come up with something to fight them back not at all it's just a bit of a coincidence that this is all happening at once we've been working on this sort of stuff for a very very long time and to ken's tweet here about the beacon chain so the reason why the beacon chain was launched as a separate network is because ethereum got really really big right ethereum is home to millions of users trillions of dollars a year worth of network activity uh in terms of like settlement activity uh half a trillion dollar network so could you imagine if we basically said well okay let's just uh implement

the beacon chain uh or do the merge essentially on december 1st 2020 and without battle testing this new consensus mechanism that has never been run in production before uh let's just do let's just do the merge then and basically rip out ethereum's proof of work and and put in a new untested kind of like um unbattle hardened beacon chain that wouldn't have worked at all that would be so risky and such a stupid decision to make back then and that's exactly why it was opted to launch a separate network now 11 months into the beacon chain there's been a few hiccups with a few bugs we've squashed them uh the bigger chain has mostly been running really really uh really well we've been able to get eight million each stake to a quarter of a million validators and we're pretty much ready for the merge we just got to build

out the the merge i mean all the most of the research and speccing has been done we've got the the kind of devnets that have run i've talked about the merge a lot lately so i won't go into it here but essentially we're almost there we're almost at the point where we can finally just like merge these two networks together and we can have one holistic ethereum and then we can focus on what comes after that which is obviously sharding at the core protocol level statelessness a few other bells and whistles and few other things on the longer term roadmap and all the meanwhile we have the entire layer two rollout happening which didn't just happen overnight there is many many years of research and development have gone into these things to get us to this point today so i think when you kind of

like take that holistic look of the ethereum ecosystem as not just something that has basically uh uh grown a lot in the last six to twelve months that growth is the culmination of everything that came before it and it will continue to be into the future and it's just amazing that we've gotten to the uh gotten it all coming at once here or at least in the same kind of like uh release window which i think is pretty cool so so yeah i guess like on a related note as well speaking of scaling uh mahalo put out a tweet today about another impressive milestone for polygon they have crossed one billion transactions processed on the polygon pos chain which is really really awesome to see i don't know what the total transactions processed on the ethereum main net is right now maybe i should know this off

the top of my head um but it i don't know if it's more or less than that but the funny thing is is that when you look at total transactions processed you kind of have to i guess like not do an apples-to-apples comparison i i think because like with ethereum well obviously um you know hard limited to the amount of transactions that can be processed based on the gas limit i think right now we could do 1.3 1.4 million a day or i think it spiked like 1.6 million a day um if all of the transactions were like eight transfers we could probably go to multiples of that but as the network is being used today it's about 1.6 1.7 million a day uh i'm pretty sure the polygon pos train can do much more than that uh which is the whole point of it and then the layer

twos can it can do even more uh more than that in their kind of like final forms like the optimistic roll-ups can do four and a half thousand tps uh in their current form if kind of like they were um uh i guess like uh upgraded to that point and then and then eventually i mean eventually i've spoken about this before there's going to be the change that can do millions of transactions per second once we have sharing and all that sort of stuff there so we could get like a billion transactions processed in like a day once we have the demand right so i mean the pos chain has been live for quite a while now but it's still cool to see them kind of like cross the one billion transactions processed mark here but i mean again this is just the beginning one billion is is nothing

compared to what we're going to see we're going to see quadrillions of transactions processed uh kind of like on these networks and um you know a lot of this is definitely going to come in you know maybe in the medium long term future maybe not in this in the short term because i still think we're in the early adopter phase a lot of stuff to work out here but if we get to a point where there's like a million transactions per second and that's full say like it's being used and like totally utilized a billion transactions a day is not you know not gonna be something that we scoff at so pretty cool to see this milestone from from the polling on post train nonetheless so a lot of projects seem to be building on immutable x which is obviously the nft layer 2 platform here the immutable

twitter account shared the bunch of projects already building on them such as imx uh college kids orcs immutable apes so all i mean basically all these a lot of these nft projects would have either launched on layer one which is obviously very expensive or gone to another network so now that we have like an option for them to launch on on a layer 2 that's dedicated to nfts and and kind of like has much lower gas cost and much faster transactions and it's just much better for users uh then we can do this so it's great to see projects kind of like uh i guess um choosing to deploy here even if a lot of these projects are just like these profile picture ones which we've seen time and time again but i don't think it really matters too much like

as i've said before i don't like moralizing about what people use kind of like these networks for they can use it for whatever they want that's the whole point so i'm not going to say oh you know the fact that like these peripheral picture nfts are being launched here is actually not bullish because uh it you know they're not like innovative nfts no i don't care about any of that i i all i care about is getting adoption of the later two ecosystem and making sure that users go to layer two rather than going to layer one because it's just too expensive for them at layer one obviously so getting them on layer two is the uh the the goal and it's great to see immutable uh offering this solution for people here so we now have another bridge protocol i mean how many of these are there going

to be there's going to be a lot of them as i've said to you guys before bridges are the thing which i'm going to talk about uh in a second from this tweet from patrick mccrory who puts it better than i can but essentially this new bridge pro protocol is called across protocol and they're building themselves as the fastest cheapest and most secure l2 to l1 bridge and they say the bridge allows users to take a short-term loan on l1 this loan is trustlessly guaranteed using transaction insurance so they're taking a different approach to i guess some of the other bridges out there i think it's an interesting design and i suggest checking out the blog post for a full breakdown of how it works but essentially this is the tldr they say here the way across works is that users on l2 send the transaction to an

l1 liquidity pool an insurer on l1 takes the same amount of funds less a fee and she sends them to a destination address on l1 then she should she submits a request to be reimbursed from the liquidity pool this opens the two hour dispute window she's the only one liable in this dispute window and for this she earns her fee this is equivalent to someone taking a short term loan out but for the end user the experience is an instant transaction uh across protocol will be live audited and on mainnet on november 8th which is really really really cool apparently 100 of the ownership will also be distributed to the community that's a first right like it means that there's going to be potentially a large air drop or kind of i guess like a distribution in some kind of way to to the community um if there is going to be

a large air drop obviously you want to be farming it on on a cross so definitely um keep tabs on this and use it once it's live on main net but i think this is cool i i think you know bridges i've spoken about a lot recently but i think the fact that there's people just still innovating here and using different designs on these bridges is what i'm most excited about because i don't want every bridge to look the same i don't want every bridge to just be a cross-chain decentralized exchange or or a message relay protocol i want bridges to innovate with stuff that what what like what across is doing here i want i mean i want i just much more than what we already have which which i'm i think we're going to get but uh i think the opportunity right now is is growing for

teams to be building these sorts of things because they see the need for it they see that we are going to basically be in a multi-chain world whether we like it or not and that multi-chain world is going to definitely consist of a lot of layer twos and there are there are drawbacks to these layer twos like long withdrawal times and fixing them with different designs getting to like the quote-unquote like perfect design we're never gonna get to the perfect design of a bridge but as close as possible to a perfect design is the way to go about it so i'm really really excited to see all these experiments playing out here but on the note of bridges patrick mccrory put out a really great tweet where he said someday we will move away from the phrase layer 2 for new off-chain systems and we are going to be

happier for it we'll evaluate the bridges and we'll ask ourselves questions like do i have custody of my funds can the operators freeze my funds in what way do i trust them custody and trust is a liability so this is what i've talked about a lot recently especially especially around these bridges where i basically said that not all bridges are created equal there are bridges that will keep custody of your funds that are like literally um uh just not even controlled by a multi circuit controlled by like one address and holding a lot of funds there are bugs and kind of i guess like exploits that could be happening on these bridges uh there are multi-cigs that secure some of them there are bridges that work as like cross-chain decentralized exchanges where you may be taking on liquidity risk and things like that so uh the phrase layer

two i mean i'm still gonna use it i think for i guess like as a marketing term and as a term to kind of like uh easily explain these things to people i think it works fine but in terms of i guess like uh people as like developers and protocol engineers it makes much more sense not to use the layered terminology uh and to kind of move to the modular blockchain terminology which i've obviously spoken about a lot like consensus security layer that are availability layer and and and execution layer those things i mean we shouldn't expect most end users to ever have to worry about those things but that's the way that we as the kind of like people hardcore ethereum community members or kind of like people in the community may talk to each other about these things in that kind of like a language

but then the bridges i think are important for end users to be aware of as well because we don't want them using totally centralized bridges and then one day losing all their funds because of it we want them using the most trustless uh bridget we can find for them and i think that that's where a lot of these kind of like top bridging protocols are barreling towards and making sure that we get there but it's going to be a journey and i think that changing terminology takes a while as well you know for example the e2 terminology has actually been phased out phased out by the core developers but a lot of people still use it i still use it and consensus and execution layer mean nothing to most people doesn't matter how many times i explain it to to you guys a lot of the time it's probably

not gonna mean much to you and eth2 is just like an easier way to describe or refer to these sorts of things which is fine as well so yeah great tweet from from patrick here um speaking of layer twos as well starkware put out an update tweet where they said that argent is coming to starknet so you'll remember that arjun has been working very closely with the zk sync team two on board uh kind of like uh their users to zk sync but they're also going to be working with stock net now and other layer twos as well are coming too so this is really cool they apparently have a dedicated stock net team already building developer tools um and as starkware described see argent is an amazing wallet and og team and stocknet gives boundless computation and account abstraction so argent plus stark net

equals rocket which i mean i agree with i i think if arjun plays that plays their cards right here by supporting all the relevant l2s and making it really easy for you for users to interact with it they're going to dominate the wallet space uh which which i'm pretty excited about because i really love argents while it's a mobile wallet um it's a smart contract wallet obviously maybe not so obviously but the reason why i didn't take off on layer one is because it's very expensive to create a wallet and they were covering the gas fees but that's like cost prohibitive for them uh so you know being able to kind of like create a wallet on l2 and kind of like have a smart contract while it in l2 is going to be much much cheaper and much better for the end user as well you know

allowing them to interact with these sorts of things so very very exciting to see that arjun is coming to stark net which reminder goes live in an alpha fashion next month on mainnet so very much looking forward to that all right so perpetual protocol has a test net training competition for perpv2 live with a total prize pool of three million dollars that is huge right for a test net trading competition i mean if i was a trader i want to get a piece of that so i mean if you are a trader if you like trading perpetual assets if you want to be part of this test net definitely go check this out uh the game will start today 26th of um of october at 1400 uh utc so 2 pm utc the full rules of the game uh can be kind of like

checked out in this blog post you can give this a rate it will be linked in the youtube description the payouts will of course be in perp tokens um but essentially i mean that's a lot of money for for kind of participating in this so definitely go go check this out and kind of like check about check out all the information got to do with it as well perp is great i mean uh perpetual protocol is great uh it's it's kind of like um very similar to i guess dydx in the fact that they trade perpetual contracts but perpetual uh protocol is currently on x-dire they're coming to arbitrary soon as well so really cool to see more of these protocols are kind of out in the wild so uh just the final kind of thing here trent van epps announced that tim biker and and trent will be hosting a merged

community call for infrastructure providers in two weeks so this will take place on november 5th on friday if you work with wallets web3 providers explorers and want to better understand how the merge will affect you you can dm a trend for an invite so if that applies to any of you definitely dm trent uh but this is really cool that they're already doing community calls for infrastructure providers which is obviously critically important because the infrastructure providers need to be on the same page you need to be kind of like ready for when the merge happens in the hopeful near future right q2 i've said q2 many times before but it's good to see that they're already working on this and you remember that trent did this for eip1559 as well he's been uh responsible or at least one of the people responsible for getting a lot

of these infrastructure providers to uh be ready for erp-1559 and he's still doing it as well still trying to get these exchanges on board with it too and they will be over time uh but yeah cool to see this being hosted here and if this applies to you definitely reach out to trent but i think on that note i'm going to end it there for today so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone