ETH futures ETFs, 25mil ETH staked and more - The Daily Gwei Refuel #633 - Ethereum Updates

Transcript

hello everyone welcome to another episode of the liquid refuel where we hook up the latest news in ethereum ecosystem I'm your host and this assignment has the second of August 2023. all right everyone let's get into it so just a quick shout out here that I'll be attending a local Meetup down here in Melbourne Australia so if you're around in Melbourne and want to attend this Meetup uh to watch me basically uh do an ethereum AMA live that's what I'm going to be doing at this Meetup it's on the 17th of August at 5 30 p.m in um Melbourne City here basically on Collins Street in Melbourne City and their full details will be linked in the YouTube description below uh there is this kind of Meetup page as well you can RSVP on uh but yeah I'll be doing an AMA basically at the end of the I guess

talks that are being given it'll be a bunch of networking happening there as well and I hope to see any of the I guess like fellow Melbourne or even just Aussie um uh people that watch and listen to the uh to the Daily way at this event so yeah as I said I'll link this in the YouTube description for full details on that all right so there was a flurry of fresh eth Futures ETFs that were issued over the last I guess 24 40 out at 48 Hours here and you can see basically all the different companies that issued these from vanak pro shares grayscale you know we recognize these names bit wise right you'll recognize these names they've been uh thrown around quite a lot in the crypto ecosystem over the last few years and it is worth noting that these are

Futures ETFs they aren't spot ETFs so they are they're definitely different to the ETFs that have been filed around BTC by BlackRock and others out there but really these are the kind of First Steps right to get the Futures ETF approved because there are already Bitcoin Futures ETFs approved and then after that you get the spot ETFs approved so as I said I think when BlackRock first filed that Bitcoin ETF application once the BTC ETFs get approved right or even before they get approved the ETFs are coming right the Futures and then spot ETF it's just natural that's a natural progression there what comes after that I don't know you know what atfs are approved after that I don't know but once BTC gets approved I think it becomes easier for or at least a lot

easier for something like ethi to get approved as for others it's kind of a it's kind of a weird thing right because you think about who approves these ETFs it's the SEC right now the SEC is going up to many of the biggest tokens and claiming that they're unregistered Securities and it basically said some of the members of the SSC have said that they think that everything except Bitcoin is a security so if they were to approve an eth ETF right while still kind of sending the signal out there that eath was a security which uh I I think that that's their kind of like weakest argument because the cftc has claimed that ethers a commodity eth does not look like a security at all um and I mean it also goes goes back to them losing that case with with ripple where

basically the judge said that the xrp is not a security but it can be offered as part of an investment contract which is a security right so when looking at it at it like that I mean if if the SEC was to approve an ETF it's basically them conceding the point and and basically them sending the signal out there that uh ether's not a security from from their point of view right so there's that point of view but then you look at the other tokens out there because eth isn't actually so okay let me step back for a second here just because the SEC has kind of signaled that they think eth is a security doesn't really mean as much as um them I guess like putting actual assets in a lawsuit against coinbase and binance and saying that they are and registered Securities they

didn't do that for each right they left eth out of those lawsuits which people found surprising considering that the SEC had been signaling that they thought Heath was a security I didn't consider it to be surprising because as I've said before the chances of ether being labeled a you know unregistered security or whatever or even the Ico being an unregistered security is offering uh basically zero in my mind uh for a number of different reasons that I've gone through before so I won't rehash that discussion here but some of the tokens that were included in the lawsuit against coinbase and binance were very popular tokens such as Matic you know part of the polygon project there Lido ldo uh cardano with Adar Soul Solana you know it doesn't matter if you don't like these tokens or do like them they are the some of the biggest tokens on on the

market if you go to the top ten they're all in the top ten excluding stable coins all those tokens are in the top ten so those are the ones kind of next in line right if you go down the market cap rankings the next in line to get an ETF is kind of BNB and xrp then uh Ada Soul uh TRX LTC dot Matic right those are that's the kind of top 10 excluding stable coins so will the SEC actually approve those things with an active case against coinbase and binance uh I don't think so I don't think so and I don't as I said I don't know what's going to be um the next ETF after eth gets approved uh well I mean obviously if we have to get BTC spot ETF approved then the eighth one then after that I think it's

it's really I don't know it seems to be anyone's game after that but there's very few players who actually have a chance there and honestly I don't think we actually need ETFs for for most of these assets or or nor should there be ATS for most of these assets I think that when you look at what an ETF is and the customer of an ETF it's people wanting to get tax advantage exposure exposure to assets and a lot of these people are doing that through their retirement accounts now obviously it's up to people to want that you know to decide where they put their money but I think that at least shielding them a little bit from putting their retirement accounts into trash is is probably good idea now obviously I've said before that

I think that a lot of these Financial regulations don't actually help anyone because they really don't I mean if someone really wants to put their retirement money into like some random coin that they think is going to go to the Moon they're going to find a way to do that right but when it comes to I guess like um companies themselves being able to do this and like companies that manage other people's money and manage their retirement accounts I think limiting what they can put that money into in terms of crypto assets is probably the better player because there would have been some of these Players let's just say for example that lunar had an ETF right there would have been some of these players uh that uh that put their retirement account money um into Luna not all of it but a portion of it and then Luna literally went to

basically zero right so that's just an example of how the you know this stuff can play out and when you are kind of talking about people's retirement money that's obviously a very heavily regulated um a kind of uh industry there uh in multiple countries around the world not just the US so that's just an extra color there on that but it is positive to see that the these companies have filed at the Futures ETFs um and I'm sure spot ETFs will follow immediately after the BTC spot ATF gets approved I I would I would wager within days to be honest if the if the if any of the BTC spot ETFs get approved I would say within days that these companies would it would um apply for an eth spot ETF now who knows when that would get approved is it going to be like a year

out from when the BTC one gets approved I don't know the timings are hard if you want to follow along with with ETF news um Eric balkanus yeah he's a good follow on that he covers a lot of ETF stuff he's the senior ATF Analyst at Bloomberg and I always see updates from him about this stuff so you can go check that out there all right a couple of bullish posts from ultrasound money over the last 24 hours so the first one they put out I should actually cover is that we have burned 10 billion dollars worth of eth over the last two years so since the burn basically uh it actually is the anniversary of the burn I think whether the burn when erp1559 go live oh my memories fail failing me right now I'm

just going to quickly Google that because it is August but uh I think it's like not uh so it's August 5th yeah I thought so so okay we're almost there but I guess ultrasound money wanted to do that nice round number there but yeah the two year anniversary of erp1559 is coming up that's pretty cool but so basically it's been two years since it went live so two billion uh two billion 10 billion dollars worth of ether has been burned which works out to almost ten thousand dollars of each burned every minute and what's insane about this is that I often see people talking about things like you know why doesn't eith have its own Michael sailor right why doesn't eith have its own billionaire just aping lots of money into eth buying eth uh and kind of like just indiscriminately buying it doesn't

matter if the top or the bottom they just buy eighth and I'm like okay well maybe we do in the background maybe there's just silent people out there that aren't making noise like salaries that are buying eth in like large quantities that's always possible but at the same time we have the burn which is not a net buyer of eth so to speak right like you it it'll be impossible to work this out but like I would wager that a lot of the eat that is burned is not being bought before it is burned right it already has been bought and it already has been held by whoever is doing the transactions on the network like I know for me for example um like I personally like when I use eat for gas fees I will I will try and replenish that at a regular interval by

buying eth on the market but I know a lot of other people that don't do that where they'll just have eight that they've had for a while they'll do a transaction that'll get burnt but it's not like a net kind of positive effect on the East price then because no new 8th was bought but in saying that it with the burn it isn't just someone buying the East right like sailor buying BTC it's the East being erased from existence like this eighth no longer exists it is completely gone and it means that eth has been deflationary as well for quite a while as I've gone over before and 10 billion dollars uh worth is is uh is I think a lot more than what sailor has bought in terms of buying BTC here um and uh if I go if I actually look up the current USD amount I think sailor

has bought a pretty big amount of of BTC um I think it's at four what is it the current value is 4.5 billion dollars so yeah he's he's bought a lot of BTC I I I I can't that kind of got ahead of me that um that was an insane amount of uh of BTC that he's bought there but that's still less than 50 of the total eat that's been burned uh and there is and and their burn is faster than sailor can can buy BTC here now obviously as I said it's not a one-to-one comparison but but when you look at this Bitcoin doesn't have this right Bitcoin doesn't have uh a burn on on BTC and even if they did their rate of burn would be significantly less than um than eight than the ethereum's rate of burn of eighth so that's why I try to explain to

people it's like yeah okay you know there's sailor being public about buying beat disable blah blah but really if you look at what's happened with eighth against BTC as an asset the ratio the hbtc ratio has remained relatively flat during the bear Market which is a distinct difference to last bear Market where eighth went down 90 against BTC and I and I really do attribute that uh positive performance directly to the fact that we have erp1559 live but we're burning this eighth and the merge is live which reduce the issuance right we have we're on proof of stake instead of proof of work that's what I directly attribute to it to because some people will say oh well the eighth price is the same price it was when eip1559 uh went live or lower depending on what you're

looking at and it's it's kind of like uh it hasn't gone up that much but that's not the way to look at it and the way I I look at it is always looking at eth against other crypto assets especially BTC because traditionally BTC has been the strongest asset within crypto because it's strong it's stronger than every other crypto asset in a in a in a bear Market um not in a bull market but in a bear Market that's where the the important kind of performance happens because obviously going from cycle to cycle not every coin comes along for the ride but eth being so performance and he's being so bullish really means that once that the man comes back as I've discussed before once the bull market comes back it is going to be a huge beneficiary of this even though oh there have been

players like sailor buying a lot of BTC eth is just perpetually Burning uh sorry ethereum is just perpetually burning eth this is not going to stop unless um the ethereum network stopped being used at all which seems pretty much zero percent at this at this point right uh then uh the burn is not going to stop now of course it depends on what the burn is like it depends on the gray price if we're net deflationary or not um because there's that ultrasound barrier that I've discussed before but at the same time I've also discussed how it's much easier to burn eat than it is to issue eth and then this is just the burn right this isn't even discussing all the other bullish points of eth like obviously um they're e-staking and then restaking each uses a story value as collateral all this sorts of stuff as

I've discussed before uh so so yeah I don't think we need a sailor I don't want a Michael sailor in eth I don't want some crazy dude you know bull posting nonsense stuff on on Twitter about Ethan about ethereum I know I I don't think that the ethereum community and culture are one wants that you know that could stay in Bitcoin and I don't think we need that we are you know every day every minute every block burning eth and burning a crap ton of it to boot so yeah very bullish there now speaking of each staking we are at 25 million each staked if you include the current queue for staking so there is 22.5 million eighth or 42 billion dollars worth that is actively staking which is now greater than all the market caps of every L1 out

there or every kind of other token out there except uh Bitcoin of course so it's even greater than B and B so BNB has a 38 billion dollar market cap if staking Uh current Eve stag not including what's in the queue is 42 billion so it's bigger than every other uh kind of coin out there which is insane right really it really just shows you the the difference in how big um how big of a market cap Heath has compared to other coins here uh and then there's 2.5 million eighth or 4.5 billion dollars that he's queuing to stake right now you know I do wonder if fire into the future after the flipping has happened if we'll have like a staked teeth flipping could you imagine the like how funny it would be if the you know if let's say I don't

know 50 of each was staked or something like that and that US dollar value was enough to flip Bitcoin because you know within the community we've talked about this for quite a while now you know go all the way going back to like 2017. this concept of a flipping but you know when the footprinting happens and when it becomes permanent it's going to become very interesting to see just how far ahead eth gets from BTC right like obviously the flipping ratio I think is like 0.0 or 0.16 or 0.17 or something like that so it's about double from where we are right now I'll over double from where we are right now obviously um I think not three times like 2.8 times or something like that but after that like it goes to 0.2 and then 0.3 and

then higher and higher because there's no reason for it to stop really in my mind I mean unless uh I you know if I summarize for some reason stop being bullish on ethereum and eighth which I don't see I don't see happening then there is no reason for it to stop and then because of that the obviously USD value of um or I guess like the ratio value of staked eth is also going up because it's the same eth so do we get to a point where the total e-state market cap exceeds the Bitcoin market cap that I don't know we need a name for that right the stake flipping or something like that or the double flipping or the or the cope flipping because there'll be a lot of cope that's for sure from the from the Bitcoin is out there but yeah that's just an

interesting thing to Pond that something that I hadn't really thought about before but as more eth gets staked as in the value of 8 goes up as we get as we flip Bitcoin and just permanent flip and the reason why I say a permanent flip is because I do think there's a strong chance this cycle eath does flip BTC but just by nature of that happening and and the monumentous occasion that that event is a lot of Traders and speculators are going to take advantage of that because for example let's say each BTC has done an incredible run it's flipped BTC and you're a Trader what are you gonna do well obviously you're going to try and short that because you're going to see all this Euphoria everywhere you're going to see you know your ta your charts telling you to short it and then

they're going to short it and they're going to rotate into BTC because BTC is the laguard so it's going to be I believe a temporary flip I don't believe it's going to be permanent the first time it happens you'll see each go above and then e Come Back below but in terms of a permanent flipping it's going to be hard to tell like do we go another bear Market where eth basically sits at like a very strong ratio maybe something between 0.1 and 0.15 or something like that right um because of the fact that obviously it performs a lot better in Bear markets now and then the next cycle after that do we get the permanent flipping or does it happen in the bear Market it's kind of hard to tell right it's it I mean it's not only harder that's impossible to tell like I don't know but I do think

that it'll be temporary first I don't think it's just gonna flip and then keep going uh because that's just not the way markets work it doesn't matter this isn't even talking about fun mentals this is just literally the way that markets work the way human psychology works um uh there but yeah anyway very cool to say that 25 million each will be at stake pretty soon once the queue clears here uh I mean yeah it's just really been up only in eth staking land all right so I believe I covered this maybe if a couple months ago when I first heard about it but there is a another consensus client being built for ethereum called the Lambda ethereum consensus node which is uh being built by the Lambda class uh kind of venture

Studio here so they are now going to be doing their daily meetings in public in English all the documentation dailies and meetings will will be public and they already have an internal Gantt chart and they're pretty sure that they'll be able to have an MVP in the upcoming months so another consensus uh client or another consensus node on the way here from Lambda uh the Lambda Studio which is which is great to see obviously obviously because you know we have a new a bunch of clients out there we value client diversity in ethereum it's always good to see more clients coming online and more clients being developed even if the end result is that they don't get that much market share I think it's still beneficial to the ecosystem for a

number of different reasons um one of those being the fact that we just have more eyeballs on the ethereum uh kind of like code base and spec and and more people working on ethereum core which is obviously what we want to be seeing um but this to me looks like something like what ref is to the execution layer where essentially it's being built by like this outside Studio I guess Paradigm is is like Adventure Studio you could call it Lambda here is is also I believe a adventure Studio but uh they're a bit different obviously their Paradigm is a is a proper VC right they've got Adventure Studios or I guess like a research arm is kind of a thing that attaches on to that uh but yeah great to see this and I can't wait to the MVP come out around this

all right the ethereum.org team announced today that the first ethereum.org translothon has uh has commenced so ethereum.org translate is a collaborative collaborative hackathon style online event where participants can compete for prizes by translating ethereum.org's website into different languages now I think I teased this a little while ago but basically this little thread explains how this works there are two categories that can choose to participate in the translator a transathon I mean I'm going to screw up saying that it's a hard word to say uh teams individuals teams can have up to three members and the team scores will be calculated based on the sum of translated words by all members and individuals will participate in the translathon individually and the final score will be calculated based on their

number of translated World words all participants teams and individuals are required to apply in order to participate and compete for prizes so yeah if that sounds like something you want to do you want to um I guess like be a part of you can translate various ethereum.org pages and win prizes for doing so so I'll link in the YouTube description below for you to check out all right the privacy and scaling Explorations team at the ethereum foundation here has announced that the rate limiting nullifier or rln protocol is production ready as a zero knowledge Gadget rln is designed for spam prevention or preserving anonymity you can learn more about rln and rln trusted and The rln Trusted ceremony in this

blog Pro so yes there is a trusted setup ceremony going on right now I think you can participate in it uh if you if you kind of read these blog post I think it's got some instructions here about how to participate in this so that's just something else you guys might be interested in but yeah for those of you who don't know this privacy and scaling Explorations group has been around for a little while now they're doing a lot of great work in the field of zero knowledge of course uh it's definitely at the bleeding edge and it's definitely something that if you are into zero knowledge and you are into bleeding edge research you should be paying attention to so I'll link it in the YouTube description below uh for you to do that there but yeah as I said if you want to

be part of this uh trusted ceremony setup ceremony there is a guide actually in front of screen right now you can see this in the blog post it is very technical there's no front end as far as I know um it definitely requires you to to play around with the command line here at the terminal here so yeah I just keep that in mind when checking this out all right so Tony has a fresh website for us today at riog.pics so he says here realged blocks prevent some challenges to provide a clearer overview of real orgs and the entities involved such as CL clients validators relays and Builders I've created a quick dashboard and then he continues realgs not only caused the total volume of the chain to shrink as a real block results in no transactions for 12 seconds but also

creates potential issues issues with unbundling missed head votes and increased Mev in the subsequent block now I discussed Three Oaks yesterday actually on the show and this was very timely that this came out after I recorded yesterday's episode because it really does explain what the concern is around realgs and as I just said and I read here from from what Tony said uh it creates potential issues with unbundling uh missed head votes and increased Mev in the subsequent uh uh block here so if you want to monitor some of the realgs that are happening on the consensus letter on the um the beacon chain you can see uh The realx Happening Here as I said before realgs are totally normal they happen um you know every day in ethereum basically or most days I guess you could say and you can actually visualize that

on here actually it is it is pretty much every day you can actually uh visualize that uh uh yeah uh on this new site which has a lot of visualizations broken down by entity which is which is great to see so kudos to Tony for putting this together but he also has a longer kind of explanation here about reorgs generally in this in this Twitter um it is tweet here which you should check it which you should check out I'll link it in the YouTube description below uh for you to do so all right there was a tool that I came across here introduced by R5 nine so he's introduced something called tx.cool which is a UI ux aspirations tool for on-chain data so you can basically go here and click chat and basically start a chat um with I guess like from an example if you want to so

you can view an example here you can go here select the chat on the left hand side uh one of these chats if they want to load here yeah uh it's basically uh visualizing kind of like on-chain messages that have been kind of sent on the ethereum blockchain you can kind of go down to different messages in these examples here you can see this is the start of five out of 9. it's message history with this ens address here and yeah there's a few different examples of of how this works um and and there's a GitHub page here for you to check out as well um from the Tweet but yeah these kind of visualization tools are pretty cool because usually when people want to I guess like look at these messages that are being sent on chain what they do is they basically um go to the transaction on etherscan

and kind of decode them message on there which is fine but if you want to kind of like explore just public messages happening then this is the way to this is the kind of like uh way to do it here which is I think is very cool so yeah you can go check this out we'll link it in the YouTube description below for you to do so all right Kayla Phillips here from truffle VC has shared a pretty great graphic here around the emerging roll-up SDK landscape by Leia now I've talked about this a lot on the refuel for months now you know this emerging kind of uh stack where essentially there are different uh a roll-up SDK Stacks from different teams such as op stack and ZK stack and the polygon stack and things like that which make it really easy to

deploy Roll-Ups now of course not all of these things are created equal they have um different trade-offs um and different kind of benefits and pros and cons like cons I guess and in this graphic here you can see uh some of them listed out with their different types and stuff like that so let's just focus on op stack for example on the left hand side you say you know what's the focus and differentiation of op stack well they're rolling out what's called a super chain which is a network of l2s with shared security bridging and communication what's the roll-up type it's a smart contract execution you know what are they using they're using the evm settlement since of course they're using ethereum at for optimistic settlements data availability ethereum but uh I think you'll be able to use other chains

as well and sequencer is centralized uh right now and then there's other ones out here let's look at something totally different like like Sovereign they're focusing on ZK Roll-Ups uh they are really roll up type is Sovereign instead of a smart contract they're using risk zero ZK VM uh they're going to be doing recursive zero knowledge proofs for settlement that availability would be done on Celestia or Avail but it could also be done on ethereum I think when it comes to data availability if these are open sdks then you can basically just choose where you're set where your um uh both settling to and uh you know what chain you're settling to and what that availability layer you're using as well and sequencer same thing right so I think a lot of these are variable and a lot of these are kind of like chop and

change uh but yeah it's it's a great I guess like attempt on um on on this kind of chart here and there's also a chart below that on the emerging no code roll up as a service landscape uh by layer as well such as alt layer and a Caldera and Eclipse that I've talked about before but you can go check these visualizations out for yourself I'll link them in the YouTube description below all right so I put out a tweet today that I'm going to rant a little bit about so I said another day of the majority of crypto Twitter not understanding the difference between a centralized front end and a decentralized protocol and then I said I said a while ago that I thought CTS or crypto Twitter's Collective IQ was going negative soon I think at this point it finally has and that's just a little

frustration jab I like to call them there but the reason why I tweeted this out was because I'm not sure if you guys saw this but the uni swap Labs team disabled or I guess like removed hex the hex token from the uni swap uh front end the official unitop front end because of the lawsuit against Richard Hart from the SEC claiming that hex is an unregistered security Now there as I've explained plenty of times on the refuel the difference here is that the unisop front end that unisop Labs runs the official front end uh I guess a quote unquote official right um is centralized it is not a decentralized front end but the smart contracts that the front end talks to on a few durian are completely

decentralized right the uni swap Labs or any other team out there or anyone else cannot disable trading of any token on the uni swap smart contracts because they are completely decentralized and there was a good little picture posted here from Xerox uh Luca here lvca here where they use an analogy of the menu no longer lists hex but you can still ask the weight up simple as that so and they visualize it here as the back end is the kitchen right the chefs in the kitchen front end is the dining tables where you've got your menus and the apis are the kind of waiters so essentially what the universal Smart contracts are on ethereum are an open API for anyone to talk to and they are in in unisop's case

are completely decentralized no one can change what they do once they've what's the code's been deployed so just because at the front end so the menu that you that you choose from right the Unison front end has removed an option you can still ask the waiter and say Hey I want you know the let's just say for example they removed the stake from the menu let's just say and then you ask them you're like no I actually want the steak and then the back end we'll still respect that request because the back end um is still able to fulfill that request right so that's a really good analogy there um from Xerox Luca which I appreciated but this is only really true for a handful of contracts a lot of the contracts have multi-cigs or have some form of governance or things like that but at the same time uh I I mean it's

only true in the sense of what's truly decentralized but at the same time in terms of interacting with the contract it's the same thing again if the are there front end was to disable something on there uh in one of their money markets from from their front end you could still access that through diver contract because it's not disabled at the contract level it's only disabled at the front end level which doesn't make these things centralized in my eyes doesn't make the protocol centralized and that's why I got so frustrated because I saw so many comments from people who said oh you know so much for D5 so much for decentralized finance uh it's just C5 and these were comments from from you know not only kind of random people on crypto Twitter that have like Anon pictures and that you know you know you see these people but

also people who have names attached to them who have massive followings I mean I saw the uh the guy from uh from Queen Bureau uh making a comment on I think it was Eric Wall's tweet about this saying something like along those lines come over the exact tweet but it's on there if you go to Eric Wall's latest tweets you'll be able to see them and I got frustrated because I'm like dude you have a large audience you have a massive YouTube uh uh subscriber base as well and you're basically saying something that is inaccurate and as an educator that really annoys me so when people say to me you know you shouldn't get annoyed about this stuff like come on guys I'm annoyed because it's not just the random CT accounts that have like no followers that are saying this stuff it's the big

accounts too it's the people who actually have a massive following that are spreading this literal misinformation or fake news that's what gets me the most upset I know you guys understand this um and there's no I'm kind of preaching to the choir here but I think that it's something that still frustrates me a lot about this ecosystem and uh you know I'm hoping it can change over time I don't think it will because human's gonna human right there are different incentives at play here for uh spreading different news I guess it's the same with everything um but yeah just wanted to explain that tweet for you guys and expand on it there but anyway thank you everyone for listening and watching that's going to be it for today if you haven't done so subscribe to the YouTube channel I'll give you another give the video a like

subscribe to the newsletter enjoy the Discord Channel and I'll catch you all tomorrow thanks everyone