Ethereum L1 chat, DeFi season and more - The Daily Gwei Refuel #812 - Ethereum Updates

Transcript

hello everyone welcome to another episode of the refuel where up latest news NE maker system I'm your host and this is Unown the 14th of December 2024 all right everyone let's get into it so I know I have been awall for a little while everyone I did not intend to go I think two weeks since the last episode I did intend to do actually more episodes than usual but it just didn't happen and I know I'm doing this episode on a Saturday that just shows you how I guess out of sync I am with the usual schedule of doing these episodes but of course there's been so much happening within the ethereum ecosystem the last couple of weeks especially a lot of things to get through today but I did want to make a note again about what I said last time on the refie is that in the New Year I'm

definitely going to try to get back to some kind of regular Cadence of episodes coming out uh I don't know why like specifically the last two weeks I just didn't do an episode it just kept getting pushed back kept getting pushed back I've been doing a lot of stuff around the house and by the time I get to the point where I usually record a refu I'm just exhausted I'm like you know what I'll just do an episode tomorrow and then tomorrow becomes the next day and so on and so forth but I'm here today and as I said there's tons to get through so let's get into it so the first thing I want to talk about was this note that was put together by Tim boo on GitHub here all about everything that was discussed at Devcon around L1 R research and development so there's been

a lot of I guess people talking about L1 R&D lately uh maybe the last few months and basically Accel accelerating some of the upgrades that are coming to ethereum L1 and there's so much stuff coming and in this uh GitHub post here um uh Tim details this basically or they'll post a bunch of notes here and you can navigate uh through it on the left here you can see the different sections such as like the beam chain issuance discussions full data availability sharding and sampling and so on and so forth but I felt this was a really good read to basically get a pulse of what's happening on the L1 side of things because I if I was to look further out into the future and kind of look 5 years out this basically encapsulates the next 5 years worth of ethereum L1 R&D there are other things

that are going around this and other things that will be added some of some stuff will be removed so on and so forth but really we're on this 5-year Journey that Justin from from today basically that Justin Drake outlined in his bankler Summit talk I'm sure a lot of you saw that have watched that where essentially the beam chain is basically at the end of that I'm going to talk a little bit more about the beam chain later in the episode but the beam chain is basically at the end of that and what's going to be between now and when the beam chain kind of launches is a host of other L1 upgrades and as I said there's a lot of them detailed here there's going to be more added as time goes on and some of them will obviously be removed if we find they're not

something that we want to put into the L1 so if you want to get up to speed on the latest and greatest this is definitely something to read here I mean you could spend so much time on this because there's not only the notes here there's also links to all of the further research and information um that's going on here but do keep in mind that a lot of this stuff will evolve and change over time you know something that you read today may be completely change there's discussions right now about the fact that veral trees may not be the um uh the thing that we Implement as part of kind of The Verge it it might be something else uh there discussions from balic around maybe doing stars or or snar I should say Bas trees or binary trees I mean a lot of this is obviously

over my head because I'm not a cryptographer but uh there are stuff there is stuff like that that's going to be changing as as time goes on there but anyway I'll link this in the YouTube description below you guys can go check it out for yourself but as I said it is probably the best I think thing you can read right now when it comes to eth L1 R&D just to get a post of where everything is at all right so speaking of eth L1 uh kind of what what's happening there the ethereum core developers Twitter account here basically uh has outlined a few of the short-term medium-term and long-term things that are happening on the ethereum L1 in terms of shortterm there is a gas limit increase that is currently in motion it the gas limit isn't going to 60 million which is double from where it is today it started

at 30 mli it's it's at 30 million today um you know you saw some people including myself advocating for a 60 million gas limit but I was only really advocating for that as a kind of negotiation tactic where knew it wasn't going to happen so I'm glad that we settled for less and it seems like we've settled for a 36 million increase so basically going from 30 to 36 million and that's happening right now essentially I think there's three 3 or 4% of the network currently signaling to increase the gas limit that needs to get to more than 50% for the gas limit to move to 36 million and the reason why we're not going beyond that is actually because there was a small bug found uh in the various clients that was basically left over I think from maybe the merge that's being fixed where

essentially if if we went above 40 million gas uh we would the network would become unstable because of this particular bug not because of any of the other concerns that we've kind of talked about on the refi before such as bandwidth concerns and so on and so forth there so the gas limit is being raised but right now it's only being raised to 36 million but the goal is and I've seen some core developers uh tweet about this the goal is to essentially get us to over 100 million gas limit by the end of next year which is I I think it's pretty ambitious and it requires a bunch of things to go into the network but I think we could probably do in the next 12 to 18 months so a lot of exciting stuff happening there then in terms of the media term uh medium term

their statelessness which as I mentioned before may not end up being veral trees it may be something else that is probably going to go in the fork after faka so in Amsterdam this may happen end of 2026 early 2027 so still a little while away but that is definitely happening there and then EIP cuple 4 which is history expiry as I discussed last time the first phase of this is going live on May 1st and as I discussed I think um on the refu last time phase one of EIP kuple 4 does not require a hard Fork so essentially what it's going to do is it's going to expire all history before the merge essentially so what that means is that we can safely increase the gas limit even more because the chain isn't going to grow and I think I explained this last uh on the

refill last time is not going to grow so big that you're going to have to change your SSD I think that the plan is really to try and keep the chain size below 2 terab and I think that we can get there with a lot of the various things that we're doing with State expiry and history expiry uh but that's all part of EIP quadruple 4 there and then longer term and this is I guess like at the probably end game here in terms of like the end of the 5 years road map that we're currently on which is snark ifying the evm so essentially you can see here it's described as uh this is one of the major components of the beam chain it means that full nodes will not have to natively reexecute every transaction all they will need to do is verify a proof

this will allow us to pump the gas by orders of magnitude and Orders of magnitude here literally means like many orders of magnitude like you could imagine uh Giga gas like that's that's kind of what we're what we're targeting here at L1 at L2 I it's it's going to get it's going to be there at L2 before L1 gets there um you know most definitely but at L1 getting to gigas is is a huge deal and it's a longer term thing as I said it's not going to happen in the short to medium uh term here so those are the the short medium-term long-term kind of stuff happening on L1 there was also this uh tweet put out by David crappers here who talked about the low hanging fruits to scale ethereum execution now this is execution at L1 obviously we're scaling ethereum execution at L2 and there are a bunch of

different l2s doing this in different ways uh and there are a bunch of new l2s like they're calling themselves high performance l2s coming out such as Mega Ethan rise but this is essentially what we can do at L1 what David considers to be uh um low hanging fruits and he was basically discussing this with Dan CR and Anar essentially we can uh we can um basically do something for the fee market so we can re repic inflated op codes such as cold data cold data right now is um is essentially uh I I think like two cheap so making that more expensive um so that we can essentially uh reprise that one but there's also other op codes that are going to be repriced there increasing the limit by 2X and Target by 3x of the fee market and ship multi-dimensional fees now this

is something that's been in the works for a little while but we already have multi-dimensional fees for the normal L1 fee market and blobs so what this means is essentially the normal one fee market and the blob fee Market are separate fee markets they don't affect each other so the goal would be to basically have separate fee markets for uh per per op code essentially and not I don't know if it'll be every op code but essentially you would have it so that one part of the state isn't affecting another another part of the state and this has been as I said in the works for quite a while I believe salana has a similar implementation of this probably not the exact same implementation that ethereum L1 would have but a similar implementation and I I think it's like there there are pros and cons to it I've

called I've called the cons before especially in the daily way Discord Channel where essentially I say that if there's only one part of the state that's really under contention then that part of the state is essentially subsidizing the whole chain so it it's it's kind of funny when you think about it and think about the economic incentives here and and think about maybe some of the I guess economic games that can be played here it definitely requires further research and and so on and so forth into that uh but then David also uh mentioned state so we can essentially delay the state route by one slot which I believe is being worked on right now actually and will end up in a hard Fork sooner rather than later State expiry and potentially State rent I mentioned State expire before State rent has been something that's been discussed

for a while like I'm talking maybe five plus years on ethereum what this means is that essentially you have to pay for the um state that you want to occupy on the chain or to keep hot on the Chain otherwise it essentially gets expired and then if you want to reenable that state on the chain or or or kind of reactivate it you have to present a proof I think or some kind of thing like that I it's been a while since I looked at the the actual specs for it and I'm sure a lot of things have changed but that is definitely something that's been looked at and of course statelessness as part of The Verge upgrade there um and then slot anotomy anotomy Anatomy essentially optimize inter slot boundaries more efficient networking and cut slot Time by 2 to 4 seconds so slots

in ethereum is essentially ethereum's block time so every 12 seconds there's a slot the block is technically 4 seconds of that but essentially uh you could think of 12 seconds as like the the block time so we want to cut that down to 2 to 4 seconds that's part of the beam chain upgrade as well of course and then optimize a bunch of different things and and have more efficient networking there um and then also David mentions protocol participants we want we obviously want full nodes for auditability that's what ethereums be designed around solo Stak is needed for censorship resistance and think seriously about the requirements for these roles in a post fossil or fossil world and I've discussed fossil before it's basically the implementation of inclusion list that looks like it's going to make it into the network not into Petra but potentially in fusaka

there but you can go check out David's tweet for yourself if you want to look into any of this stuff but that's a lot of stuff that's low hanging fruit that David Kia that is potentially coming to L1 the next 12 to 18 months there all right so as I mentioned the gas limit is going up to 36 million right now and Justin Drake tweeted about this so essentially what I really wanted to talk about was the fact that a lot of this discussion around the gas limit being increased is not so much that we think it's going to be like a huge scal ility unlock for L1 or it's going to like move the needle or anything like that because if you really think about the I guess majority of the L1 participants at this point it's a lot of big money Players you can actually see this on chain for

example if you're like a big money player and you have like 10 100 million potentially even a billion dollar you're really not going to care about a $100 fee and the fees aren't even that high right now on L1 but if you're for example getting into a Athena position as a whale you say you've got $10 million of stables and you're like you know what I want to go farm Thea with it to do that it's not costing you $100 today but if you look at it as a percentage if you are going to make 20% on your $10 million that you're putting in there that's $2 million a year and within like a few minutes you're going to recoup the gas fees that you spent so you're not even thinking about gas fees at that level so what and by bumping up the gas limit even like 10x from here we

bring the fees down to let's just say all else being equal instead of the fees being $100 that would be $10 do you think someone with $1 million is actually going to feel that no they're not going to feel that at all and and and at L1 a $10 fee for a regular user is still way too high that's why we have L2 that's why we want fees to be 1 cent or lower so it's not necessarily about scaling the L1 for the end User it's about two main things really and I think I've discussed this before it's so signaling that we are doing stuff at the L1 we are committed to upgrading the L1 we are committed to scaling it so it's more of a social signal there and I know people who listen to the refuel obviously know that a lot of L1 upgrades

in the pipeline but your average kind of user does not and your average participating crypto does not so it's a way to signal that and secondly it's just better overall to make sure that we keep up with Hardware over time because as Justin mentioned here the last time the gas limit was rais was three and a half years ago and in that time both Hardware which isn't really the bottleneck but bandwidth has also improved for bwi's kind of harder to measure but like for for a lot of people you would you would say that in the last 3 and a half years bandwidth has definitely gotten better there but as I mentioned last time on the refuel my preferred way of upping the gas limit from here on out would be for the clients to essentially say okay well every time we do like a

client release uh in you know six-month kind of uh periods of time we do a gasm increase of like 5 million or it would probably be based on a percentage or something like that let's just say 10% or 20% and if something breaks if the network becomes unstable or whatever we roll it back essentially and that's a good way of doing it because one it lets us keep up with the I guess development in hardware and bandwidth and the advancements there uh but two it doesn't mean that we have to like every I don't know 6 months one year 18 months whatever it is have to go to the community and and do this massive push so it becomes more automated in a way and the community can still veto this they've still got control over it because they can still manually set it in their own clients if they want to but

honestly if the client devs are okay with doing this then it should be okay because they're the ones who know the clients obviously the best they know the network very well they're the ones who who should really be not necessarily making the these decisions but making the recommendations that other people should take into consideration more so than just some random saying we should increase the gas limit it's like okay well yes but like why are we doing it is it is it healthy to do it isn't it we're going to fall over so on and so forth so essentially uh that was my take on on the gas limit there and then Justin also mentioned you know when are we getting Giga gas at L1 and as I mentioned before this comes with sned execution clients or sned ethereum and they're key to scaling gas by up to 1,000x so that

that's just like a ridiculous amount from here that does materially move the needle of of L1 it does make a big difference but the block blockers right now are sub slot so sub 12 seconds or if the slots go down to 2 to 4 seconds Sub sub 2 to 4 second slot ZK evm proving latency which is coming down a lot over time and I think that there's a lot of ZK Bulls who believe that by 2026 we're going to have real time proving uh and then one slot delayed state routs which I don't know if it's imp Petra I don't think so it's probably going to go into faka but we don't know yet um and as Justin mentions here Charlie from Paradigm is cooking an EIP uh for delayed State reach which could hit fake in early 2026 and Justin thinks that real time proving will be ready by then

that is really the holy gra real time proving and if we can get that done in the next 12 to 18 months then bring it on like bring on as much L1 scale as we can kind of get because it doesn't detract from the l2s it definitely doesn't it basically enhances the l2s as well that's another reason honestly to scale the L1 cuz it enhances the l2s and technically we are scaling the L1 for the l2s Via blobs right because the blobs Liv on live on L1 and in pectra as you guys know we're basically doubling The Blob capacity there but yeah a lot of stuff happening on L1 as I said I've spent half of this episode already talking about L1 stuff and I think I got more to talk about when it comes to L1 uh yes so this was again on the gas

limit this was some research that Tony put together essentially a bunch of research on gas limits generally how clients handle them um and I think he calls out the I guess like U bug that was that was found that basically puts a constraint on going above 40 million gas right now uh and essentially he thinks that we should wait for Petra to go beyond 40 million which I I I I think I kind of agree with here and then he basically put out a call for patience and collaboration and this is what I think that we should be doing you know people always want things to happen quickly and I understand that but at the end of the day ethereum is moving I think as quickly as it can I honestly don't think ethereum could be moving quicker than what it is today because you got to think if we want to move

ethereum quicker what do we have to sacrifice to do that because as it exists today we have to coordinate with 10 different teams at least and that's just core client teams in order to upgrade the network That's not including all the other stakeholders like the infrastructure providers the exchangers the users the solo stakers we have to coordinate with all of these different people in order for an hard for to happen so just getting to the stage where we can do a hard for is not a trivial thing so if we wanted to move faster what what would we sacrifice well we may sacrifice some client teams maybe some of these clients are like well you guys are moving way too quickly right now we can't keep up with this so we're not going to bother maintaining our client like that is a real risk or we

could move too fast and break something on the network and if ethereum goes Offline that will be the first time in ethereum's history that it has gone Offline that would be a huge hit to ethereum's credibility that in my mind is pretty much IR erable or irreversible I should say irreversible I can't even say the other word um but yeah in my mind it's basically irreversible because essentially you shatter the confidence that e has built up you shatter that Lindy effect that ethereum has built up all in the name of moving maybe slightly faster maybe you can juice out an extra 3 months and say okay we're moving 3 months faster than we normally are I just don't think it's worth it I don't think it's worth the risk here I don't think it's worth the network falling over I don't think it's worth uh it's

worth it from a competitive point of view either because if you actually look at the competitors that ethereum has today they're not moving all that fast either you know everyone compares ethereum to all these other chains once you reach a certain size you get bogged down by all the same stuff ethereum is getting bogged down by by the fact that the ecosystem is so big you have to coordinate with all these different players you have a lot of politics involved too any ecosystem that says that they're immune to politics is bullshitting you you're not immune to politics you're not immune to bureaucracy as long as humans are involved there's going to be politics and bureaucracy and within ethereum it's such a massive ecosystem of thousands of people that have a influence on the core protocol now let alone the l2s that you do have a lot of politics you do have a

lot of bureaucracy and honestly the fact that there's so many dis seate groups working together in a decentralized way around the globe there's no Central party telling them what to do the fact that anything even gets done in the first place is amazing to me and the fact that we actually are not only um doing things but we're doing them at a faster Pace than we ever had have because 2024 was the year of the most eips proposed and also Petra will be the biggest hard fork in ethereum's history and on top of that we have all the l2s doing stuff too like the fact that any of it even works to begin with is incredibly bullish at ethereum scale like no other ecosystem even the smaller ones are moving as fast as ethereum is I believe across all fronts there but anyway you can go give Tony's post a

read for yourself if you want to still on the L1 topic here Christine Kim put out a nice tweet thread regarding Petra U this is probably old now I think this was from like a week ago uh and she was covering the previous two weeks so essentially um Petra as I mentioned will double blob capacity uh the increase of cold data cost EIP 7623 is also in Petra so great to see that there the the EIP to increase the minimum blood base Fe fee is not in for now uh which is Erp 7762 that was removed I think that that makes kind of sense because I guess like blobs are in price Discovery now and essentially like it's not urgent it's not really an urgent EIP to begin with it's like a nice to have and considering that we're already changing a bunch of

stuff it's probably not prudent to do a major change to the blob fee Market here um in the same high Fork as other things so yeah that makes sense there uh so essentially there are a bunch of other eips as well I mean you can go give uh a read of Christine's uh uh thread here but we're approaching the point where I'm pretty sure like very soon if not like pretty much any day now it's going to be Frozen and that what what that basically means is that where there's going to be no more EIP additions or removals I think we're on devet 5 almost and then we're going to start doing the test Nets in the New Year in terms of when we see Petra on May net I would suspect like late March into April at this point um but honestly I'm I'm still

thinking much like we'll see how it goes see how the dev Nets go and everything um but yeah March April is kind of my target there for for Petra all right so I mentioned before I wanted to talk a little bit more about the beam chain so super feiz shared this great Reddit post that Bergen Berger man C Bergman SC I've completely butchered that name but that's their name there you can see it on on Reddit uh talking about uh what the impact of the beam chain is from I guess like not not not like an explain like I'm five but in like simple language that you can understand and I just wanted to highlight this for you guys because it is a great read and and I highly recommend going and reading it I'll link it in the YouTube description below but the TDR is that you're not bullish

enough on the beam chain and I as I said I think when I first covered the beam chain I think everyone focused way way too much on the 5year timeline and did not focus on what is actually being delivered by the beam chain and how it is really the end game for ethereum and uh the fact that there's so much other stuff happening in between now and then anyway that the beam chain is going to just be this thing that happens eventually and you'll be like wow that happened that came out of nowhere so yeah anyway go give this a read I'll link it in the YouTube description below uh for you to do so all right so there was a new staking protocol called or maybe not protocol but like initiative called solo that was introduced uh I think this is old now yeah haven't done a refill for so long

this is like almost 2 weeks old now so this is called solo it's a protocol that lets anyone run an ethereum validator with just 1.25 e instead of 32 e it enables an LST backed by the portion of a validated stake unlikely to be lost without ring on governance or trusted Hardware so essentially how it works is that you put eth in and then you mint solo tokens which is backed by up to 96.1 of the Stak eth and our Dynamic funding rate keeps solo uh pegged to eth and there's a little diagram of how this works here and how how it works in practice essentially the solo is a representation of the the solo um a token is representation of the eth that is stake TI and that can freely trade on the open market and how the eth is originally how the remaining eth so if

you put 1.25 eth in how the other eth is acquired is that it's acquired via a flash loan from RVE or something like that and then the solo backs that up and the Flash loan is repaid using the eth that I assume you would get from selling Solo or if solo was on AR you could probably do it that way but at least that's my understanding maybe I'm misunderstanding this because I think like reading through this I was I read it through a couple of times to make sure I understood it there but that's the kind of gist to it I think it's really cool because as uh Diego the assume says here is that it's a huge uh hugely lower barrier of entry for for for validators there is a one fun fungible permissionless LST across all validators cuz solo is the LST here no

trusted Hardware no governance no additional token requirements market-based funding rate and it leverages Petra's EIP 7,2 and EIP 7251 uh I believe 702 is the execution layer withdrawals and 7251 is of course Max EB I believe I'm going to look that up quickly because I want to make sure that I'm getting that right yeah it is 7251 is Max EB as you guys know that's the EIP that allows you to stake more than 32 e per validator um so yeah if you want to go check this out you can I'll link in the YouTube description below but great to see more initiatives around solo saking e especially ones that are governance less and aren't just like a new protocol that looks the same as every other protocol something novel something interesting so yeah you can go check that out I'll link it in the YouTube description below for you to do

so all right so optimism shared a Twitter thread all about their new new super chain ERC 20s uh kind of token standard here so essentially you can think of these um this super chain erc20 as an interface for cross chain tokens to move across the super chain so it's combined with Native interoperability it will make this super chain feel boardless borderless so essentially how it works is that uh some token on chain a that can be used within a game on chain B some token on chain C that gets lended on a pool in chain D so and and there's no need to bridge or anything like that at all is just like interoperable like it is on ethereum L1 for example so very very cool way of doing interoperability between different

super chain I guess like chains so this would not apply across the different I guess L2 ecosystems it would apply across like bass and op main net and uni chain and Zora and all the other chains that are part of the super chain or will be part of the super chain in the future so just another way to do inability between the different chains out there not the BL endol but I think this is really cool because I think one of the complaint for a lot of people I guess the biggest complaint for a lot of people is the asset fragmentation not so much the I guess ux fragmentation of having to have uh you know apps being on different chains for example there'll be an app on like Bas that's not not another chain so you have to bridge it's not necessarily about that it's about

the fact that your assets could be on multiple chains and if you just want to stay on one chain you have to go get those assets from that other chain right or you have to bridge across or anything like that so with this essentially you wouldn't have to do that you would just feel it would would just feel seamless it would feel like it would feel when you're using just like one chain and that really is the end goal in the end game of ethereum broadly like and it's L2 road map broadly is for everything to feel like one chain so this is another initiative and you can go give this thread a read if you would like I'll link it in the YouTube description below for you to do so all right so I put out a tweet the other day uh where I said it's it's been

said before but it's worth repeating ethereum defi will be the biggest winner of a crypto-friendly US admin it it has years of Lindy it's battle tested it's trusted in with tens of billions of dollars of tvl all secured by ethereum which is the most robust settlement layer in existence now the reason I said this was because I think I've talked talked about this on the REI before but for the last two years at least there has been a boot on the neck of crypto and it's not just crypto it's ethereum specifically because if you actually look at all of the high-profile companies that the SEC or projects at the SEC went after ensued is all pretty much ethereum so if you look at the um the lawsuits against coinbase for example that is still

ethereum because base is ethereum that's an L2 on ethereum they're building within the ethereum ecosystem usdc is on base which is on ethereum the stable coins there so coinbase is a huge ethereum Ally they were sued cracken same thing sued huge ethereum Ally building an L2 Unis swap obviously ethereum right sued uh there was a few others out there consensus sued uh before the E ETFs were approved there was a lot of stuff happening in the background with the SEC trying to classify ether of security or subpoenaing subpoenaing different teams out there to do that so and I'm forgetting teams here are off the top of my head but you can see the Common Thread here it really did affect ethereum the most and ethereum defi in particular the most as well now with the new admin coming in with the

inauguration happening in on January 20th with with Trump coming in as president and then with Gary gendler's replacement coming in a few weeks after that I think it takes a little while for the replacement to come in but it seems like it's going to be a bullish replacement and with a bunch of different things moving there and with the fact that Trump is building an ethereum D5 protocol I mean not him obviously but like the people around him and his team and the fact that we have like e atfs uh already approved which means that we're probably going to have staked e atfs next there's just like a lot of things that are going to be unlocked for ethereum Defi and I really do believe it will be the biggest winner of a crypto-friendly US admin because it already is big and as we know liquidity

begets liquidity if you actually look at the tvl of ethereum compared to all the other chains even the chains that have gotten a lot of growth so far their tvl growth has not grown that much like uh if I'm if I'm calling out a chain here I'll call out salana there's a lot of activity on there obviously but as I've said before it's mostly mem coin activity and there's nothing wrong with that but their actual defi ecosystem like their core defi e ecosystem which is measured really by tvl has not really grown that much not nowhere near as much as the mcoin stuff has and obviously people trade meme coins on dexas that grows the the D5 volumes for for salana but if we're talking about like the long-term sustainable stuff the other things you can do within defi such as like lending and borrowing getting

stable coin yields um lsts reaking within defi right all that sorts of stuff that's mostly happening on ethereum within ethereum Defi and ethereum I believe has $80 billion dollar of tvl right now stable coins are mostly on ethereum like it really is ethereum and Tron like that's that's stable coins for you Tron has like $60 billion worth of stable coins I think ethereum has 105 billion so really it's it's all happening on ethereum now it's all happening on ethereum even in the face of that really aggressive admin that we've had the last two years so what do you think happens once we have a friendly admin once once all that stuff happens once the Trump trump admin gets in it's going to be a huge unlock I think for ethereum def5 we're going to see a lot of these traditional Finance players who didn't or or couldn't get

into D5 before specifically on ethereum are going to get in and I wouldn't even be surprised to see and I know this maybe is a little bit farfetched but I've mentioned it before but I wouldn't even be surprised to see one of these big Trad f institutions creating their own L2 on ethereum you know my my dream or one of the things that I would really love to see is for Black Rock and their Partners to launch a new Stock Exchange on ethereum as an L2 to trade real world assets like stocks like bonds like uh Commodities like gold and silver and all that I would love for that to happen because real world assets is another thing that's that's been happening and that's going to happen in a really big way once the the atomy change is over and that's mostly happening on ethereum

as well so you can imagine a world where we do have an ethereum L2 stock New Stock Exchange that's that's an ethereum L2 that is really uh optimized to trade real world assets and yes it'll be completely centralized but that's because real world assets are centralized to begin with but the whole point is that it exists in the new economy the new internet the new kind of um uh I guess like Financial layer that is ethereum and that's what excites me like I don't even care if it's centralized like I am a decentralization maxi but I also understand that there are certain things that are always going to be decentralized you can't have decentralized real world assets because those assets by definition live in the real world right like for example if you're tokenizing your house that's not a decentralization there's no there's no decentralization thing there the the

property right that you have of your your house of the physical land that your house is on is granted to you by the government and the government really is the ultimate um Arbiter of that but when you have a digitally native asset such as eth no one's the Arbiter of that the ethereum network is that that's the ultimate source of truth that's the ultimate settlement layer for eth but the ultimate settlement layer for a house for property for Real Estate is the government is the the state local governments they're the ultimate ultimate settlement layer for that so tokenizing that and putting it on a blockchain doesn't even if it's on ethereum L1 doesn't make it decentralized at all it's an I essentially just like stable coins are today the the stable coin um you know me having $1,000 of usdc in my ethereum address I don't have a $1,000 of USD I

have $1,000 of usdc that has a claim on USD and that is valued as USD but the real USD that's backing that up is in a bank account controlled by Circle so you see like the ultimate settlement layer of usdc is circle is circle's bank account but they use crypto rails to for efficiency to get access to broader markets to export their business to a broader set of participants and that's exactly the same thing that would happen with black Rock's uh potential like I don't know anything here I'm speculating but Black Rock like if they did with their partners because they've talked about wanting to do a new Stock Exchange but they did it as an ethereum L2 it would be completely centralized but that's fine they get they get to basically settle down to ethereum L1 as an L2 so get that essential security

there get the efficiency of an L2 and get the efficiency of being able to plug in to ethereum L1 and the rest of the broader crypto ecosystem to do their real world asset trading platform CR so that's one thing that I'm definitely super excited about there but I'm just I haven't been this excited about ethereum defi in a while guys just because I know that there's going to be a lot of stuff happening there's going to be like icos are going to come back I think there's going to be profit sharing on tokens it's just going to be so much stuff happening so much building happening and really if you think about it it's going to be at least four years of this or maybe two I mean it depends on the midterms and what happens there but let's just say like the midterms go the

way of the Republicans and we have four years of this four years ago four years ago was the last bull market so we could be having this during not only the bull market but also the bare Market which is even better because in the bare Market that's where most of the building gets done anyway so it's really cool that we have this and that's just assuming that the um Republicans don't win again in 4 years maybe they win again then we can have eight years of this like it's just crazy when you think about this and maybe in 4 years time I don't know if this will happen if the Republicans don't win maybe the Democrats have changed their tune and this isn't um partisan anymore uh and and and essentially what you get is a healthy us ecosystem for crypto no matter what political party is in power there but

anyway that's my bull case going forward for ethereum defi all right last thing to talk about was this little image that was created by I believe Josh Stark which essentially is is describing what ethereum and eth are and how they're basically interlined like ying and yang here so ethereum is the world computer and eth is money and these two things are linked eth as I said It ultimately settles on ethereum L1 ethereum L1 is secured by eth one cannot exist without the other uh but in saying that the ethereum network can do much more and does do much more than just secure eth than just a settle eth it settles tokens right as20 tokens it settles defi activity it settles l2s it settles so

many different things out there and and and obviously like we've all we all know and love ethereum we use it every day so we know that ethereum is not just a platform to secure eth it is a platform to do everything and that's what we call the world computer and yes it's not like a super computer or anything like that it doesn't have much power like ethereum L1 if you looked at it from in in in I guess like a performance metric in terms of like how much you have to spend to get to get out of it it is one of the weakest computers to ever exist potentially um at least in modern times for sure so we're not saying it's a super super computer but what it is is it it's a world computer and in other words it is a trust layer it is a

settlement layer it is something that you can basically go to and know that is ultra secure and it's secured by a worldwide distributed set of validators distributed set of full nodes and node operators out there and you can have uh you know very high security uh guarantees very high settlement guarantees uh that essentially what you're doing on there is what's going to happen as long as it's within the rules so for example if you're sending eth to someone on the other side of the world on ethereum L1 you can be sure that that eth is getting to that person on the other side and it is being secured and and backed up by100 Billion of Economic Security which is the Stak eth and also by those tens of thousands of node operators that exist around the world you do not get those guarantees from anything else maybe Bitcoin to an extent

but it's debatable at this point because I think Bitcoin people don't want to admit it but bitcoin's quite centralized right now uh I think there's two mining pools the kyc mining pools in the US that account for more than 50% of the hash p and I know mining pools are not equal to miners but the miners are incredibly concentrated too because mining is a game of economies of economies of scale and it has become very very centralized over time whereas ethereum on the other hand has become more decentralized over time there is a great a great distribution of node operators around the world and also we have amazing client diversity so even if something goes wrong with one of the clients we have uh backup clients we have fullback clients we have uh the network not going offline so you have all these great guarantees on on this

world computer and then on the other side of things you have e as money as a decentralized money as a store of value as a commodity money this thing can be used everywhere in the ethereum ecosystem everywhere that something exists an app wherever it exists on l2s or l1s or l3s wherever it is even on other chains you can use your e as money now of course you have different security guarantees depending on what you're interacting with if you're just sending eth back and forth with someone on ethereum L1 you have the full security of ethereum L1 full siment guarantees backing that up but if you put your eth into an L2 well depending on the L2 maybe it's at stage zero has a multisig you could potentially lose that eth because that L2 could rug for example low chance of course but that's the that's the example I I think is

worth giving there or it could be exploited as well because it's in a smart contract right so there are different guarantees here are but regardless of all of that eth is still money eth is is still a store of value people speculate on it as a store of value they store their value there I mean I have over the last since 2017 when I first started buying e I've stored my value there because I've increased my purchasing power considerably by doing that not only against the US dollar but also against my local currency of Australian dollars so I I I do that and so many other people do that as well and I expect that to continue into the future that's kind of how I Benchmark things but also I use my eth uh in in defi I use my eth as money I use my eth to do things with and

that's what a lot of people do and you can actually see this on the eth's money website that um I I launched alongside bankless a few weeks ago at um The bankless Summit here uh and and the grow the pie team uh built this website so you can kind of scroll down and you can see where eth is within the ethereum economy we've exported millions of eth to these different kind of l2s and and and different uh uh side chains here as you can see the polygon POS it's not technically an L2 it is a side chain but you can see the eth is being exported here and then eth is held as a store of value by various different parties around the ecosystem you can see E's issu issuance rate here how it's algorithmic now and how it's only gone down over time and how it is basically

net deflationary since the merge uh and then you can learn more about ether's money and what constitutes money and so on and so forth and also join the community as well there's um there's a a Discord community that that you can join you can register your interest and you'll get invited to it uh but essentially the main point here is that e is money eth is decentralized money for the decentralized world computer ying and yang one cannot exist without the other and I think on that note that's going to be it for today's episode so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subcribe to newsletter join the Discord Channel and I'll catch you all next time thanks everyone