Ethereum is the metaverse, Uniswap volumes and more - The Daily Gwei Refuel #297 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily great refuel where we cap the latest news in the ethereum ecosystem i'm your host daniel tessassano and today's the 20th of january 2022 all right everyone let's get into it so i put out these very simple tweets today uh while i was thinking through a few different things and the tweet basically just read ethereum is the metaverse now obviously you know you guys have heard a lot about the metaverse lately people trying to bring their own definition to it you know obviously there are very big billion dollar companies kind of making their moves into the metaverse we had facebook rebrand to meta and i spoke a bit about a bit about this yesterday but i want what i wanted to focus on was really what i said here about kind of like ethereum being the metaverse

earthrim is the metaverse because when you really break it down what people are hoping that the metaverse is going to be is going to be like a shared virtual world right where we can put on some virtual reality uh glasses or augmented reality glasses and we can have like a shared world that we can all interact with well isn't that exactly what ethereum is it just without the kind of like visual aspect i mean the the most visual you'll get is going to something like etherscan and exploring the blockchain and all that sorts of stuff but when you really break it down the ethereum blockchain is a ledger it's a shared state that we all kind of like uh um can view and uh obviously as a blockchain works all the kind of like minors and full nodes come to consensus on the state of that chain at any given

any given a period of time and because it's a shared state you can kind of like do things like defy right where we have like money legos they can kind of like um build on top of each other and share the state between each other or share the kind of information between each other you can have things like dashboards like zappa for example that can pull in all your all your positions from all the different apps like you just don't get that in kind of like the web 2 world because there's not a concept of a shared state there right like every app has its own kind of like database that it pulls from to display you the information for example your bank will have its own kind of like database that it won't you know openly share with anyone it'll have it'll it'll have an api where kind of

like developers can tap into for certain things but most things are not shared uh for obvious reasons right because of privacy and things like that but with ethereum like as we progress through we'll be able to kind of like have the open shared public kind of like legend shared state with privacy built into because of things like zk tech and stuff like that but essentially this is ethereum's kind of like or i guess blockchains smart contract chains kind of like killer uh killer app or killer use case is that shared state now because of that essentially you can build whatever you want on top of that you can tap into the same information that anyone in the world can tap into and everyone has the same objective view of it because that's just the way blockchains work so if you were to build a metaverse on top of ethereum like

maybe not ethereum layer one because that'd be pretty expensive but ethereum layer two where you just stored the state of that metaverse on a layer two network and then you kind of like build out all your um you know if you're building like a virtual world or a video game or something where you have the game assets kind of like off chain but you have the important information the important state on chain that everyone can kind of view then you know something really really exciting happens from there we basically have like a decentralized metaverse because of the fact that you're kind of using a layer two based on ethereum and you know i kind of like i wrote about this in the newsletter today as well but i was kind of thinking well do we really need a decentralized metaverse or would a centralized one be

just fine and i don't think so i don't think so at all because let me put it to you this way wouldn't it be incredibly dystopian if we kind of like got to a place where we had like this one shared world where hundreds of millions of people came to kind of like interact and and do things and kind of like you know live essentially in this metaverse if it was owned by a kind of like centralized operator or a set of centralized operators and they controlled the shared state then that would be very bad because at a moment's notice they could kind of delete you out of the metaverse right they could just remove your state your your presence and you wouldn't be able to do anything about that because it's a centralized service you could probably go join some other metaverse or something like that but maybe it's not

the one that you want to be in because you all your friends are on uh the one that you just got banned from or the one you just got deleted from right like it's very dystopian but then you kind of like look at something like a truly decentralized metaverse where essentially that can't happen right like you can't just become like deleted out of existence and i think that for a kind of like true metaverse to work long term it needs to be built on credibly neutral truly decentralized infrastructure at least the state needs to be stored there and that's why i think ethereum is obviously perfectly position positioned for that but ethereum is also the metaverse like it all comes back to that for me i mean it's funny because like if you look at the ethereum blockchain as a kind of game um you know it has

like an inventory which is your ethereum wallet uh or it look like bag slots which is your ethereum wallet it has a native currency which is eth right and then like in your bags you can store items like nfts and things like that so really i mean the ethereum blockchain is kind of like a game people refer to crypto and define things as a game as well so it's not a new kind of a comparison there but when you really kind of like think about it it's pretty cool it's just the visual aspect is kind of lacking but we do have tools that visualize it as i mentioned zap bars like a dashboard that you can visualize things in um the nft jpegs obviously visualize things but it's not like we have a game world yet that that we can kind of like do stuff in there are like

little projects here and there trying to do stuff but nothing as kind of like a massive shared uh you know world that everyone kind of like walks in through into with virtual reality or anything like that and that's kind of like played by hundreds of millions of people around the world that would be really cool nothing you know i mean you're probably thinking of of ready player one right now that's a pretty perfect example of a shared world but that was like very centralized right there was like one corporation that owned everything um and that you know um that corporation exercised their power and it was pretty dystopian so i do hope that we can kind of like create this awesome shared decentralized metaverse with uh with ethereum rather than and being built on ethereum with its shared state rather than building something you know totally centralized

or adopting something centralized like what i'm sure facebook has in store for the metaverse so yeah just just some additional thoughts uh after kind of like after running through the metaverse yesterday as well so ethereum l2s i'm going to spend i think most of this kind of reveal talking about l2s today but uh you guys know i love l2s i talk about it all the time and i put out this tweet where i basically said ethereum l2s are finally having their moment and it's still only early days the explosive growth that all these l2s are about to experience is going to be intense i really do feel the sediment shifting lately ethereum is scaling and the world is waking up to this fact and i mean it really is like i the sentiment over the last few weeks has been pretty crazy to see shift even

without these um layer twos having done tokens yet there's more projects going live on them people have more stuff to do they're realizing that okay they're not the cheapest thing in the world but they're still giving you the the ethereum experience that you know and love and it's much much cheaper than layer one there's easier onboarding tools there's easy ways to bridge in and out as i said guys like once the infrastructure is in place and once the apps start going onto these things it just snowballs from there and i think that where as i said still on the early days and the explosive growth is yet to come like i could see l2s reaching 100 billion dollars in tvl right collectively in aggregate uh within within a year i mean if they play their cards right i can see that happen within within a year especially with

token incentives and things like that and that's exactly what happened with defy actually defy was like a few billion dollars in tvl and then d5 summer happened and we suddenly went to 100 billion dollars within a year i think it was so pretty crazy to compare the you know to compare and contrast how that could happen again with l2s we can have a true l2 season and i think it's it's going to happen it's going to happen soon and i think the infrastructure as it keeps getting rolled out and built out is going to help a lot with that so obviously i'm super excited for it i've been playing around with them more lately i think the l2s also offer more opportunity uh in terms of kind of newer projects deploying there that the native projects where you can be early to them kind of like buy the token early and and

you know participate in the upside uh and and do it cheaply as well because this is what happened when uh i guess like defy summer kicked off on ethereum layer one is that you had all this opportunity and you didn't mind paying the high fees because there was so much opportunity to be had but now you know since pretty much every other r1 has like replicated this playbook it became kind of like less and less alpha over time and it became kind of like less and less fun as well but on l2's i mean you get fast transactions you get very cheap transactions and you get a lot of projects coming out now that uh that haven't even been deployed to l1 so it's really exciting again and and i've been speaking a lot of my friends a lot of people that obviously did defy summer

with me and they feel the same thing so i'm super excited for all of that uh and and i guess like i'm really excited to see what apps get deployed to l2 that aren't possible on l1 as well because that is the kind of stuff that uh that really excites me about the l2s not just the obviously cheap fees and fast transactions are awesome but the kind of like enabling new use cases which is super exciting as well and speaking of kind of like l2s taking off david mihal put out a tweet yesterday that binance suspended arbitration withdrawals uh less than a week after after first enabled because their hot wallet uh got drained so you can see here that the hot wallet only has about five eighth left in it after getting drained and not because they got hacked or anything but because people

were withdrawing from binance to arbitrary so i think there was like a few thousand eth in there when they first started off so i don't know if they've re-enabled it because this was about 24 hours ago now i think um but yeah that's that's pretty crazy right when you kind of like look at this and think about it so um yeah really cool to see that there's the demand there right and this is going to signal to other centralized exchanges that the demand is there the users want this product like let them kind of like you know onboard it let them use it let them kind of like play around with it and you'll get like a lot of users by doing this so i'm sure other ones are going to follow along soon um but pretty exciting to see that the the adoption is actually

there for for arbitrary right all right so i spoke about this i think a few days ago this bit dow kind of proposal for a 200 million zk sync fund now this proposal is actually live now and if is in is officially live so you can actually go visit this at this link here that will be linked in the youtube description below but if this passes there'll be 200 million dollars worth of bit uh tokens allocated to growing out the zkc ecosystem which is super exciting obviously right like this is going to put them on par with some of the l1 kind of like war chests out there in terms of like incentives for getting developers and users on board and all that sort of stuff and we've already seen like us a lot of these l2 teams kind of raise money too so they've got

like a lot of money to to splurge there and obviously when they do tokens they're going to have treasuries that they can tap into as well and give out like token rewards for various things so i'm super excited for these you know 200 million it's a lot of money right that's going to go very very far and i think the zk sync ecosystem is very exciting too they're uh you know they're obviously being slower to grow right now than the albuquerque optimism ones because they don't have their kind of like proper network out yet but they've still been growing right like uh i've used zigzag exchange on there which is really really awesome to use i've obviously done donations with git coin so it i mean it's a smooth experience i like that i don't have to change my rpc that's really cool that i can just kind

of like stay on the same rpc that i'm using and kind of like just sign messages and interact with it on on layer 2 there so very very cool i'm going to assume this is going to pass right like i don't think there's going to be any any um rejection here and it's really cool to see uh bitdow uh basically put into uh putting toward putting a lot of money towards the zk sync ecosystem here so still on the topic of l2s the polygon zero uh twitter account today shared a blog post called zk and the future of ethereum scaling which is uh basically going through obviously zk roll ups and and uh future of ethereum scaling and things like that if this wants to load yes okay it's loaded here so yeah as i said it's titled zk and the future of

ethereum scaling it was published yesterday and it basically uh goes through you know zk roll-ups versus optimistic roll-ups the state of zk's kind of like how um you know how attacks work and scalability advantages capital efficiency all that good stuff um highly recommend giving this a rate that's why i'm bringing it up of course uh i think you know in general the best thing you can do right now especially when the markets are quiet do as much research on l2s as possible because as i said the opportunity is there um all the opportunities are going to be there from now on i believe i think l1 i mean they're probably still going to be some stuff on l1 especially nfts people seem to love to do nft minting on l1 it's still pretty lucrative but i think l2s are going to have more and more opportunity as time

goes on so the quicker you get on there the earlier you can be to a lot of these protocols and the potential to make a return is a lot higher so but on top of that i would suggest like learning a lot about these different protocols and how they all work and stuff so you can make the right bets as well because as i've said before on the refill i expect there to be plenty of l2s coming out whether they be kind of like novel constructions or forks of existing l2 infrastructure and placing the right bets is going to be very important there so definitely go give this a read and i mean you can just google for like more and more kind of like reads on this sort of stuff there's plenty of information out there on this at this point and of course i'm going to

keep talking about it as well so you've got me to help educate you as well so optimism published a new repo that i released shared a new repo today on github for those for the developers out there you know what this is but it's basically called uh the canon or the canon canon canon which is an on-chain interactive dispute engine implementing evm equivalent fault proofs uh so i guess like in plain english this is basically from what i understand it optimism's implementation of fraud proofs which is how optimistic will help secure themselves so a quick refresher here optimistic roll-ups work by basically taking optimistic approach to uh transaction validity they're basically saying okay we we assume that everything is valid and there's no fraud happening on the optimistic role of

construction uh but but um to to make sure that this is true we give people seven days to dispute anything that happens on the roll-up and if they do that they kind of like play a game called like um called uh i can't remember exactly what the game was called there was a specific name for it but essentially if you can kind of um uh submit like a fraud proof and say okay well here's proof that you know this happened and it wasn't supposed to happen this is actually fraud then you can basically uh uh kind of like dispute that and you can earn kind of like some reward from a bonding mechanism and all that sort of stuff so that's not implemented in optimism right now arbitration does have it implemented but optimism doesn't and they've come under kind of like criticism for not

having it implemented so this is really cool that they've got a reaper here and they're building it out now but not sure how long this is going to take um this is another risk by the way of using optimism that they don't have fraud proofs are enabled which means that you're just basically trusting that everything is going well uh so that's obviously a risk but cool to see them publish this repo and you know i've seen them get a lot more aggressive on twitter lately as well the optimism twitter account here some things i like some things i'm a bit like ah they're kind of like poking fun at arbitrary lately which is i mean it is what it is but um i think uh the competition is going to really really heat up in the l2 space and you're gonna see some toxicity between l2 communities especially when

these things do tokens so do expect that but uh i think competition is good as long as it's healthy competition there's there's obviously a lot of unhealthy competition that can happen that uh you know it's not something that we obviously want to see but at the end of the day you know especially when tokens are involved people get people get very passionate let's put it that way about things but yeah if you're a developer and if you're interested in fraud proof related things definitely go check out this repo from optimism so speaking of if you're a developer spruce uh basically teased today on on twitter that the signing with ethereum developer portal is coming soon so they're putting together the basics for launch um but they asked what else people would like to see covered to enable signing with ethereum now i've talked about signing with ethereum a lot

before and how they're trying to basically become ubiquitous across not just kind of like the web web 3 but across like web 2 as well and basically creating tools to easily integrate kind of like a sign in with ethereum button where you could literally use your ethereum wallet uh to sign into a lot of kind of like the existing apps that you sign into using gmail or using facebook or using twitter right the web two apps i think that's obviously super cool so the fact that this developer portal is coming soon is going to make that a lot easier as well for people um the signing with ethereum crew are awesome they've been doing this for quite a while they're working very closely with things like ens as well and for like on-chain identity and stuff like that too so if you're a developer keep an eye out for this developer

portal go follow the spruce kind of twitter account here for this and just a little bit of background spruce is the company building the signing with ethereum standard uh or at least kind of like one of them i i'm pretty sure they're spearheading it here so if you haven't heard of spruce before that's that's who they are but you've definitely heard of siding with ethereum before no need for me to kind of go into detail there but very very cool too to see this coming soon so hayden from unisop put out a tweet uh yesterday i think it was or maybe earlier today where he said the union swap protocol is currently king of eth usd spot trading comparing eth usd plus ether usdc plus eth usdt plus ethdai 24 hour volumes across uh uniswap and centralized exchanges so you can see here that unisop is doing 1.25 billion

dollars of 24-hour ethiosd spot trading volumes finance is doing a billion dollars coinbase is doing 0.5 billion and ftx is doing 0.43 billion and this is with high gas fees and then hayden goes on to say imagine what happens when we scale i think this is uh this isn't just across layer one uh unisoptor i think this is across layer two as well um i don't know if kind of like hayden commented that uh that here somewhere but most of these kind of like volume would be on layer one anyway but this is insane right like i remember back in 2019 where d5 was still like a niche thing they were people kind of doubting default they're like you know this is never going to take off this doesn't make any sense and there are in particularly in particular doubting the amm model right the automated market

maker model saying that oh who wants to lp you know there's impermanent loss like uh retail users don't know what they're doing who wants to just be a passive lp not lp being liquidity provider and all that fud was put to bed through 2020 like specifically because unisop obviously exploded in trading volumes because of defy summer and uh people were just l peeing and being like okay well i can lp for any token that i hold like why am i just holding it in my wallet i'm gonna provide liquidity for it and you know i understand the trade-off here with kind of like a permanent loss but a lot of these things have kind of like farming opportunities as well where you can earn token rewards to offset that so but like i i think the the real standout winner is kind of like the ethiosd spot trading with stable

coins because obviously stable coins took off uh during d5 summer as well so very very cool to see that unisop is still beating centralized exchanges for 24-hour volumes it's pretty crazy when you think about it right it's also crazy that the uni token i don't hold any of the uni token i'm not saying to go buy the uni token but you can compare the uni tokens value to something like coinbase and it's pretty wild that there's still a pretty big gap there but i think obviously when you look at it you know coinbase generates actual revenue for the company whereas uni swap doesn't generate any revenue for anyone except liquidity providers right now because there's no fee take um enabled on for for uni holders or even for like the treasurer or anything like that so it kind of makes sense but there is kind

of like a pretty big gap there unisop's growth potential is huge from here i mean i'm sure they're working on v4 which is probably gonna you know be just as amazing as v3 was they've just started their kind of like l2 scaling journey with arbitrary optimism and then obviously the polygon pos train as well and it's just going to grow from here i think i think unicob is going to be doing tens of billions of dollars of of usd spot trading volumes eventually but you know this is just one pair like obviously unisoft does uh volumes for pretty much like any any pre-pay you can think of has a unisop pool especially you know and amms are really good for the long tail of assets meaning the uh you know there's obviously like the top 10 assets that account for most of the volume but then

there's like the long tail which is like the thousands of other assets out there that people speculate on so very very cool to see this from unisop and as i said i expect this growth to only continue from here so nick from the ens team today announced the first version of the ens toolkit for supporting off-chain resolution of ens names and he goes on to describe it and saying with these tools developers can build infrastructure that allows hosting domains and sub-domains off-chain eliminating gas fees for record updates and sub-domain creation uh these domain these names will resolve seamlessly in web 3 libraries with support that support ens's new resolution standard support and ethers is coming soon and working on pull requests for other popular web 3 libraries so obviously

this is a big deal for developers but also a big deal for all of us that have to you know pay gas fees for updating records if we want to update our kind of like ens records here so very very cool to see these if you want to read more uh well i guess like uh dive deeper into this you can go to this uh blog post here discuss ens domains on there on their forum i'll link this in the youtube description and kind of like find a detailed breakdown here which is a really really cool now you know ens i mean it's funny since they kind of like issued their tokens started their kind of like uh dow and everything i've seen so much more interest in ens than i've ever had before and it's kind of crazy because for for the longest time you

know the people who had dot ethan they're kind of like twitter name they were kind of laughed at by a lot of people saying oh the dot eats haha they're kind of like cringe blah blah especially during like 2019 and 2020 and now i mean there's leaderboards for the people with dot eighth names like everyone has a name it's like a badge of honor that you have uh have a dot ethernet especially if you've got like a rare one like you know nick.eth for example i mean no other nick in the world can have nick.e and nick johnson from the ens team has it here uh my co-founder of ether eric you know there's uh probably you know tons of eric's in the world but like he has eric dodie i unfortunately don't have anthony. i obviously have sassel.exe but that's good enough for me

i don't need anthony but again like you know having these kind of like things and being able to prove that you have it too because you can sign a message from the address that you've got your um ens tied to is pretty cool and and i think like once the metaverse stuff i guess like takes off as well uh in terms like the visual kind of like aspect of it that's going to be very important and now that i think about it though you already have kind of like a character name right because your your ethereum wallet is kind of like your inventory but like your character name is kind of like your ans name so you know you already have that you can basically port that into any metaverse game that comes out and i can have like my sasser.8th character and that's like

totally unique and i can actually because of the shared state i can port that into different kind of like places and then obviously couple it with signing with ethereum where i can port my whole on chain identity and and my own chain profile to any web 2 or web 3 app out there which is only made possible by that shared state by that kind of like metaverse aspect of ethereum there which i think is really really cool and actually one thing that i didn't touch on when i was talking about at the start about ethereum being the metaverse and shared state and all that sort of stuff is the cost to attack now if you think of ethereum as kind of like the i don't know like i've called it an i've called it like an empire before but some people didn't like that frame but if you

think of ethereum as kind of like a massive online global digital nation and you think about what's protecting that digital nation from attack well right now it's proof of work miners right like the the hash rate's really really high because ethereum is worth a lot and it's obviously very profitable to mine eth but then post merge we're going to have ether as a proof-of-stake network where validators are protecting the network which and the stake is protecting it and we have true finality as well there's going to be like tens of billions of dollars and as its price increases hundreds of billions of dollars at stake securing the network uh and also finalizing the network and that's kind of like going to be the cost to attack and if you do attack if you do attack you you run the risk of getting slashed as well which is just like

not you know obviously not good because you're going to lose a lot of your 8th if you try to attack the network so that's another reason why a decentralized sorry metaverse built on top of decentralized infrastructure is critically important because the cost to attack is so is so high whereas a centralized service the cost of attack is is pretty low right especially if you're able to kind of like uh socially engineer and attack as well of the network and kind of like get admin credentials and things like that could be pretty pretty bad right so that's another aspect that i think is is worth is kind of worth thinking about too is the cost to attack um but uh but yeah that's uh i guess like really um interesting to think about but back on the e s topic here i think you know i was just talking about how only

one person can have like nick.ethan one person can have like eric.eve and people may think oh well isn't that going to be exclusionary but at the end of the day like it i mean web 2 was kind of the same thing for a lot of services where on on twitter for example your twitter handle there's only one person that has like that at nick or kind of like eric or anthony and people got around that right they just made up their own twitter handles they made up their own names and a lot of people do that in virtual worlds already like if you have a character name that you're going for in a virtual world like an online game like world of warcraft for example uh you probably not going to use your real name right you're just going to use the name and you're

pretty much anonymous to everyone except blizzard the centralized company behind world of warcraft but uh in um in a true kind of like med decentralized metaverse world you can be anonymous to everyone because all that's tying your identity to the character is your ethereum address and you can find your ethereum address via kind of like tornado cache even from a centralized exchange and then no one's able to track you and you can stay fully anonymous which i think is really really cool as well but anyway i think i spoken about the metaverse enough today so 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 the video a thumbs up subscribe to newsletter join the discord channel and i'll catch you all tomorrow thanks everyone