Eve of The Merge, Tornado Cash sanctions update - The Daily Gwei Refuel #447 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where recap the latest news in the ethereum ecosystem i'm your host standing social and today's the 14th of september 2022 all right everyone let's get into it so this will be the last refuel in a pre-merged world we are less than 24 hours away from the merge as you can see here i put out this picture dawn of the final day a few hours ago uh it's finally time like i am in disbelief still that it's actually this close i think at time of recording it's around 17 or 18 hours away i get to skip eight of those hours soon by sleeping through it but i'm looking forward to waking up to a awesome merge day with the live stream that we're going to be doing with each staker bankless and myself there's going to be everyone who's anyone really

on there as part of the core dev and research community and it's just gonna be a really fun stream i've seen the agenda there's a lot there there's a lot to um go through and i'm very much looking forward to it myself and i think you know it's gonna be such a historic day for ethereans it's been such a long time coming i've been talking about it for so long i mean i've been talking about the merge since i started this channel like pretty much i don't know if i talked about it on the first video but pretty much most videos i would have talked about it or talked about something or to do with it and it's just been such a long time coming i remember i actually wrote a blog post in january of 2019 talking about uh the issuance reduction that was coming with the merge

and i was giving like a bull case for eth when i mean january 2019 for anyone who was around back then you know that giving the bull case for ethan at that time was very difficult to do but here we are three year uh you know over three years later uh and it's just it it's yeah like we're on the eve so so to speak of the merge at least i'm on the eve i know it's happening at you know it's funny something like the best possible time for i think australians but like the worst time for europeans and definitely not an ideal time for people in the us either asia's fine i believe india and the middle east definitely are fine and everything like that but uh yeah the us and europe are kind of getting a little bit shafted by the timing right now because i think the

timing as it currently stands is uh we'll never look here 4 40 am utc which isn't isn't ideal that's for sure for those people but ideal for me so um but personally i've waited five and a half years for this uh as you guys know since like the day i got into ethereum one of the things i've been most excited about is that transition to proof-of-stake now of course the proof-of-stake has already been live since december 1st 2020 when the beacon chain went live but it's not the same thing right just having a separate chain running on its own as just literally a staking chain that's cool it's cool to see that live it's cool to see it working for so long but you know the end game is merging into the main chain so that we can actually have transactions being processed and being validated and

being kind of like blocks being proposed by the proof-of-stake network so there is a bunch of things that are going to be happening i guess like post-merge that you should pay attention to and adrian sutton has a good thread about this basically immediately post merge what the core developers are going to be looking for now i'll i'll let you read this thread for yourself adrian sutton is a core developer at consensus works on the teku client but essentially the i guess number one thing that they're looking for and what might take up to 20 minutes is finalization of the chain now finalization in an epic or an epoch i should say that's happened after the merge so what i mean by this is that you guys know roughly every six minutes ah it's it's like six point something minutes where he's got

the exact figures here i think six point four minutes uh you we justify the chain and then six point four minutes later we finalize the chain so roughly 12 13 minutes we finalize the chain and that's when it can no longer be re-logged back because finalization has kicked in so essentially that's what the core devs and researchers are going to be looking at to uh i guess signal a successful merge obviously the merge can go through and we'll start producing blocks or slots as they're called in in the beacon chain uh and it looks like it's gone well but until that finality kicks in i i think you know the devs and researchers aren't going to be celebrating so if you see on the live stream the merch happens we all celebrate and then we're just waiting for you know 15 20 minutes don't be

concerned because that is totally normal we want to wait for finalization before we say okay well that you know the merge has been super successful everything's all well and good and let's kick on here and i've discussed the other things that could happen around the merge such as some validators falling off due to configuration issues and maybe just some client bugs they're all nothing burgers in my eyes as long as we're still finalizing over you know we only need 66 percent of the network at least to finalize then everything in my eyes is is fine and the network will recover from any other issues that spring up around that and the fun the cool thing is is like how much client diversity we have especially on the consensus layer side so even if one of the clients just totally doesn't work at all we still

have so many other clients to pick up the slack and there and and and we won't be suffering from a lack of finality as well so very very uh exciting times guys i mean as i said last refuel in a pre-emerge world i will be seeing you all on the other side soon enough but there is a bunch of other things to get through so i want to get through those uh i think there was a couple other things about the merge so one here from terence who shared the command set it a center ready for the merge which is an internal dashboard that uh they use to track everything going on on the beacon chain and through the merge i'll link this neutral description for you to check out uh haim is out with another twitter thread today talking about ethereum's roadmap now a lot of

people have asked me you know what comes next after the merge what are you excited about after the merge well there is a whole roadmap after the merge that we are yet to execute on as i discussed the other day we're only roughly halfway through ethereum's roadmap and we could be adding more items to it as time goes on as well so you can go check out this thread but you've also seen vitalex flowchart roadmap before so you probably have a rough idea of what's happening there and obviously immediately post merge well not immediately but like six to twelve months post merge we're going to be looking forward to the shanghai update which should have with it beacon chain withdrawals and possibly the first version of proto-dank sharding uh or something similar to that in that vein with a few other upgrades coming with it but uh but yeah definitely go

give this thread a read from haim i'll link it in the youtube description uh and lastly uh on the merge topic cloudfare cloudflare here has uh i announced that they're announcing support for the ethereum merge on the ethereum network and that their ethereum gateways now support the girlie and sepolia test network so it's very cool to see a big company like cloudflare uh kind of a signaling that they're supporting the ethereum merch here i just wanted to highlight that for anyone who may you know potentially use their services uh in their kind of like day-to-day ethereum goings now before i move on from the merge stuff for today i had to have something that i'm going to discuss at the end with in relation to the merge but before i move on from it just want to say a good merging to everyone i think that you know some of

you have been in ethereum longer than i have some of you have been in it shorter than i have but i don't think it matters how long or short that you've been in ethereum for this is going to be a historic day for ethereum it's going to be a historic day for our community it's going to be etched into the history books forever this is something that you can tell your grandkids like if ethereum succeeds right uh and uh and you know it succeeds far into the future decades into the future and we become the global sediment layer that we want to be you can literally tell anyone who cares i guess that you were there on the day that ethereum merged like the biggest day in ethereum's history as i said before i don't think there's going to be a bigger day than the ethereum merge for

ethereum in terms of uh the upgrade potential in terms of the attention that ethereum is getting in terms of what it's doing for ether as an asset really it is the merge and you're here to experience it so i think that alone is exciting enough but then you have everything else that falls off of that as i've discussed for years now at this point so i'm not going to rehash myself uh but yeah i mean i'll be on the live stream for the merge itself feel free to join the delegate discord channel if you haven't yet go chat with people in there i think some people will probably join the voice chat and and things like that to discuss amongst themselves you can of course watch the live stream as well but uh it's going to be a super exciting time i i can't wait honestly i mean as i

said 17 or 18 hours to go i get to skip some of them with sleep but still i feel like a kid on christmas eve that's for sure i haven't felt this way about anything in a long time uh but yeah enough enough of that gonna move on to some other important updates and then i will discuss a bit more about the merge at the end here so ofac dropped some clarifications regarding tornado cash today and niraj from coin center has a summary of what these clarifications are so the first one is people with trapped funds on tornado cash aka people who had funds in there before conor no cash got sanctioned can apply for a withdrawal so basically you can apply to ofac to withdraw those funds and get like an exemption from the rules and obviously this only applies to u.s citizens i

believe but this is a honeypot guys this is a trap by doing this you're doxing yourself you're doxing your ethereum addresses and if you're using tornado cash you obviously want your privacy to be kept intact well you're literally giving all that information to ofac to the us government if you do this now maybe it's worth it for you because you have a lot of money in there and you haven't withdrawn it because you don't want to be in the crosshairs of ofac maybe it's up to you what you want to do with it but i just think it really is uh honeypot really is a trap so i mean luckily i didn't have any money in there at time of the sanctuary but i mean it wouldn't really matter for me anyway since i'm not a us citizen but uh but still like that's not great in my

eyes i mean cool that people can withdraw it without getting into trouble but it's kind of like a roundabout way of doing it where it's like you have to give up so much of your i guess privacy that you were trying to get in the first place to get your funds back which i obviously don't think is nice um but the second point here is that they're aware of those dusting attacks that are happening and they're not prioritizing enforcement against people uh for these dusting attacks which i think is just the they actually said this prioritizing enforcement i think that's a really like weird thing for them to say because it's like well if they had the manpower or if they wanted to they could go after these people but it's like okay well these people literally did nothing wrong like they're not breaking the sanctions

um and i think they understand that but they i guess like they don't want to give an inch right they just want to keep those um restrictions up as as hard as possible but by not prioritizing enforcement aka it means that you're most likely not going to get in trouble if you were dusted by uh but tornado cash of which i was of course but again not a u.s citizen so it's fine uh and three uh apparently you still have to report this uh in the rash uh on the second point here you still have to report these dusting attacks if you are a u.s citizen so again like a bit silly uh but i mean to protect yourself probably worth it and three uh simply publishing tornado cash code is still allowed which i think is a big one and as preston van loon um

outlines here uh github should unban tornado cash code since ofac has stated u.s persons would not be prohibited by u.s sanctions regulations from copying the open source code and making it available online for others to view so this is a pretty big deal i think it doesn't really change too much but it's a big deal because it means that the us treasury they're trying to protect themselves a bit here i think uh with with the way they've done these sanctions where they're like okay well you can still distribute the code because code is protected speech on as per uh the the um the kind of like a case law in the us but uh obviously you know running that or executing that falls afail of the sanctions so they are kind of doing this in a little bit of a sneaky way but still good to see that u.s people can

share this code can pull it apart can look at it can do whatever they want with it without getting into trouble with with sanctions which i i think is progress so to speak but still these uh these clarifications aren't really anything major i mean they're still the shitty sanctions they're still alexi percev in uh the netherlands is still under arrest as i mentioned they can hold him up to 120 days without charges really like i i'm still kind of amazed that they can do that but i mean you know that they i mean i haven't even heard any news about it either and that's just what they're doing so it sucks but we'll see what happens when it gets to that 120 days and it still doesn't really give that much clarification around you know uh these sanctions and around like what

they're going to do next with it if they're going to be harsher about it and things like that so yeah just some clarifications for you to to kind of digest there and jace jake chavinsky here as well put together a little thread on these uh these ofac clarifications which was actually published as part of an faq on the website i think there's a couple other things here no there's like there's actually four questions here or four q a's that you can go to uh but yeah he put together a little thread here that i highly recommend giving a read as well since jake is a lawyer so he understands this uh on on the legal side a bit more has a bit more context around it uh but yeah i mean this is something that i guess you can feel neutral about it's not good it's not bad

it just is and it's better that they gave some clarification then then no clarification but still it's uh that first point especially really concerns me you know people with trapped funds can apply for a withdrawal just give all of your information over and tie your ethereum addresses to this thing just so you can withdraw without getting in trouble for it well i mean the thing is is that if you have trapped funds you can just withdraw them to another address and yes technically that'll dress will be dusted but the thing is that they're saying in the second point that they're aware of these dusting attacks and not prioritizing enforcement but only if you report it but again like like it's it's kind of like unpoliceable right like it's very very hard to police not saying that you shouldn't report it

if you're in the u.s or anything like that but it's on you what you want to do i think that as i said as i've said plenty of times this whole thing is just a mess it doesn't really make much sense to me but there's some clarifications and some updates for you today all right so another big update today was that a south korean court has issued an arrest warrant for dokuan about damn time i mean i know people have different opinions about this but like i think that the reason why so many scammers and so much scams proliferate within crypto is because traditionally there hasn't been much enforcement against these people right so we've had some high-profile cases like uh the people who ran bit connect getting arrested people who do money laundering via exchanges like btce

for example were arrested and that was shut down uh mark capellis from mt gox went through the you know uh the the system as well but there hasn't really been anything uh you know major in in a little while right whereas with this i would consider to be a very very big deal and i mentioned when this whole thing was happening with tara falling apart that south korea takes financial crimes extremely seriously uh and there's no surprise that they're going after finally going after dokon with an arrest warrant now now he is not in south korea i believe i think he's in dubai or singapore and i don't think they have extradition treaties with south korea but he's also had his passport cancelled uh and he's also on interpol's red list or a red notice list or something so really he's

stuck in that whatever country he's in he wouldn't be able to move around and at the end of the day he's probably just gonna have to surrender himself because like what kind of life is that like you just stuck you probably had like all your bank accounts frozen and things like that and obviously he's probably got like bank accounts in other jurisdictions maybe he's got some crypto but still like i i feel like the only course of action for him at this stage is to turn himself in now there is as i said the reason i'm really happy about this is because i think actions like this actually will end up deterring people from doing like scams like this not that i consider terror to be an outright scam it's a bit of a murky subject because look i think what dokuan did was fraudulent i don't think he started

terra as a scam so to speak but i think that he obviously lied about a lot of things obviously misled a lot of people he obviously had that ego of his that that really made it much worse than it otherwise would have been and he's directly responsible for losing people a lot of of money right by creating terror itself uh and same with obviously having all those people in terraform labs working on it there are some of those that i think have gotten arrest warrants put out for them as well so it is fraud at the very least uh and and a bunch of other things that i'm sure they're charging him with but i wouldn't call it a scam because we have to be very careful when we talk about scams in crypto because a lot of the actual scammers use that as a way to

scapegoat because there are plenty of actual scammers but then they'll sometimes amass an army of people who say no this isn't a scam because this isn't a scam well this isn't a scam on this this and this when in reality it is and you know the funny thing is a lot of things are actually hard to spot as scams because for example there was icos run in 2017 uh they raised a lot of eth right and then in order to i guess avoid regulators or avoid scrutiny they pretended like they were building something but in reality it was a scam right and i actually think and i'm i've gone on the record about this before i actually think eos in like pretty much was a scam they raised a ton of money they pretended to put effort into

building eos out they did get pursued by the sec for securities um i guess like violations which they paid a 24 million dollar fine for which was literally a slap on the wrist considering they raised over four billion dollars and no one has been prosecuted or gone to jail the founders have basically moved on ios is obviously completely dead so they made it out as if they were trying and doing something to just seem like not an outright scam but i mean it's pretty in my eyes like maybe not everyone as part of eos was a scammer but i think that from the get-go it was definitely uh made with the intention of making a lot of money back banking in on the hype uh and just selling worthless stuff to people so i don't know that that fits

the criteria for me of a scam and but there are also other plenty of other examples out there there are literally like outright scams which are not ambiguous at all and those are the rug pools that we see where there's a lot of this in nft land where you literally issue an nft you make all these promises you say yeah we're going to build this ecosystem this community blah blah and then you just run off with the money delete your account don't you know that's it because you're an anon it doesn't really matter right uh there's been some of those as well that have actually uh i mean maybe not a scam but has have turned out to be very borderline scammy because you could go in it with the good intentions and then slowly realize that wow okay this is actually not going to work this is

actually not going to be as big as i thought it was going to be it's actually going to fail and then you don't want to face the wrath of an angry community so you just like nope out so maybe you didn't start with the intention of scamming but in the end you pretty much became a borderline scammer because you just couldn't face the music so there is a spectrum here but when it comes to dokwan i am extremely pleased to see that south korean authorities are making a move to actually arrest him i do believe this will deter people in the future it's not going to deter everyone or even most people it will deter some people and i think that i hope that not that i'm holding my breath for this but i hope that the next time a bull market rolls around there'll

be at least some more caution or some more some you know more people calling stuff like this out but again i'm not holding my breath about this because we all know how bull markets can get uh but yeah i mean i'll update you guys when dokon is actually arrested i guess but for now it seems that there is a manhunt underway because i don't know if anyone really knows where he is right now but as far as i'm aware he was in either dubai or singapore the last i heard so as i said they don't have extradition treaties with south korea doesn't mean they can't extradite him but uh it just depends what they want to do there all right so uh block native is out with an update today uh and they basically have released their own mav boost relay called dreamboat here so this is going

to be a fourth emi boost mav boost relay that's available at time of the merge or just before the merge i don't know if manifold labs is uh relay is available yet but i do know obviously flashbots is is available blocks rat is available and a dreamboat uh is now available as well so uh this is uh open sourced uh and on github for you to go check out too you can go obviously check it out if you want to and this is another relay you can choose from in a uh in a post merge world as if you're if you have a solo validator or anything like that now i don't know if it's if it's actually listed anywhere here whether they're going to be running a censored relayer or not so i'll have

to dig a dig a bit deeper into this to kind of like find out about that but regardless it's cool to see that there's more relays out there more choice for people i think that there's going to be plenty more given that the relay was open sourced by flashbots and anyone can build their own there is obviously massive profit opportunities for doing this as well if you become a top relayer you can take a a cut so to speak and you can get a lot of activity through through your relayer but there it is a specialized piece of software it's not something that just anyone can run it's not something that just anyone can run a service for uh but block native are definitely um uh i guess like one of the better companies to run this because of the fact that they are as they describe themselves

masters of the mempool they definitely uh i mean i'm an advisor to block native so i know this firsthand they definitely have probably the best or one of the best insights into things like the ethereum mempool and how ethereum works at a very very deep level so you know this might be one that i use i to to be honest like i want to use ones that don't censor so as i said i have to check on on this uh but i i'm not going to use ones that censor even if i think that they're going to be good and think they're going to be more profitable i don't want to be doing participating in any censorship because that obviously goes against the ideals of ethereum and goes against my very core beliefs but regardless it's up to you who you want to use as i said you can use flashbots

which which is censoring uh and by censoring i mean that they're censoring on the the tornado cache sanctions only right now where the address is associated with the sanctions they're not going to process transactions for um and then blocks route has both a sensoring rear layer and a not sensoring rear layer and then you have a manifold which is just going to be doing a non-censoring rear layer and then dreamboat which i do i'm not 100 sure on what they're doing here uh but regardless as i said you can choose from any of these if you want as a solo validator all right so there is a uni swap governance proposal to deploy unisof v3 to zk sync today now this is obvious uh unit swap should definitely be on zk sync given that they're very close to

obviously launching their main nets are less than two months away now uh and unisops on you know so many other layer twos at this point it should be a no-brainer so you can go give this a read i just wanted to put this on your radar you can go give this a read i'll link it in the youtube description below but i don't expect anyone to kind of push back against this it makes a lot of sense and i can't wait to use v3 of uni swap on zk sync once it's live all right just a kind of heads up i'm doing a twitter spaces or actually this is already finished by the time the refill has gone out because i'm doing this at midnight and i put the review out at around 12 20 a.m so i'll probably be in the middle of this when the refill

has gone gone out but uh you can go watch the recording of this it's going to be a spaces i'm doing about the ethereum merge with the block so we're going to be talking all things the merge just uh very very close and i think i think this will be the last thing i do before the actual merge besides the live stream so yeah you can go check this out i'll link it in the youtube description uh below all right to end out today's episode i have a something sorry i have something that i want to discuss and now this is more of a broader ethereum discussion i'm not i'm going to try to keep this as concise as possible but there is this tweet that anti-pro synthesis put out on june 6 2021 and this is his pin tweet on his profile and i think it is

one of the best tweets or if not the best tweet that describes both the crypto ecosystem as a whole and ethereum as a a kind of like ecosystem and as a thing right so the tweet is simple bitcoin is the idea ethereum is the execution very simple but very impactful and i truly agree and believe with this because bitcoin obviously is the idea bitcoin brought us blockchain technology but over the years it kept getting watered down they didn't want to upgrade the community became very hostile to upgrades and then ethereum was born in 2015 mid-2015 and went live and ethereum has executed on all of those early bitcoin ideas from before ethereum went live and bitcoin has just become more and more resistant to change whereas

ethereum has become more and more open to change and we're obviously about to go through the biggest change in ethereum's life right and like imagine doing something like the merge in bitcoin you couldn't there is not enough uh i guess some smart people in bitcoin to make that happen and there's not enough will from the community to make that happen so that alone is a monumental achievement but what this speaks to as well is that ethereum is the execution but it is also the idea people often say you know what is ethereum is it the blockchain right is it the community is it the apps on ethereum is it eth i mean it's everything but what really is like it's all of those things but what really is it at its core well ethereum is an idea right it's an idea of building something

that can be a credibly neutral settlement layer for the world which i've discussed before so i'm not going to rehash it here but that alone is incredibly powerful you can build so many things off of that it's like the internet how the internet is a communication layer for data and there's been so many amazing things built on the internet and so many people have gotten value out of it as it's transformed our lives in in ways that the people who created the internet couldn't even imagine the same is true for ethereum but ethereum is the value settlement layer of the world except it's what we want it to be essentially so ethereum has that is the idea of ethereum and that is aetherium like as long as that idea is held intact by the social layer by the community as long as we keep executing on the roadmap

as part of ethereum's uh uh tendency to execute on things then ethereum remains what we envision it what we i i you know what like the idea of ethereum is far into the future so how do we protect that how do we keep it that way well i've talked about this countless times you have to have a really strong social layer there is no point having just an idea if you can't execute on it and there is no point having execution if you're executing on an idea that isn't really based on something sound for example there are plenty of other ecosystems out there that are executing on their own roadmaps that are actually delivering things but is it things that people actually want to use is it things that people actually going to get value out of does it make sense and i would say for most of the other layer ones out

there they shouldn't exist at all they literally make absolutely no sense they're not going to go anywhere they're going to fail and they should should never have been created in the first place just because someone had an idea to create a layer one in such a certain way um and and you know potentially executed on that as well doesn't mean that idea was good so ethereum in my eyes has the good idea has the good execution and has the social layer to back it all up so ethereum is not just uh you know one or or many things ethereum is the idea and that is a seed that is the root that blossoms into everything else on top of it and because ethereum is more expressive because ethereum is open to change ethereum can be an infinite garden it doesn't just have to be one

tree in a garden it can be anything because ethereum wants to be everything it has a settlement layer that can build anything on top of it it's like if you were to limit the internet to just email that's what bitcoin does it limits itself to just btc transfers yes there's there's value in that right and that's what people want it to be but it's so limiting like the internet just being used for email would be so limiting we wouldn't have all the amazing things we have and it would not even it wouldn't have changed our lives really in any way shape or form it would have made sending a letter more efficient or communicating uh more efficient but if we didn't have uh things like video on the internet instant messaging websites that allowed you to put information on there uh online gaming all these sorts of things

all these different use cases of the internet then uh it would be a much more boring internet so that's why ethereum has always been the most exciting thing to me starts from that idea of an expressive credibly neutral sediment layer for the world that you can build anything you want on it and then it bloody executes on it because that is just as important as the idea so on the eve of the merge on the eve of the biggest execution in ethereum's life ever i thought that was worth discussing and i as i said and this is one of my favorite tweets because of that i always go back to whenever i go to anti-pro synthesis profile i always see it there and i'm like yes ethereum is still executing on that idea that he's sound the moment ethereum stops executing and and

especially when if it stops executing on that idea and on that um sediment layer for the world idea that is when i start to get bearish on ethereum but i'm not seeing that at all i'm seeing that just improve over time get stronger over time and ethereum's community become hardened and more emboldened over time to attempt even you know more cool stuff on the network i mean the merge obviously is the biggest and most complex upgrade in ethereum's history and it will be going forward but it doesn't mean there aren't other big upgrades coming to the network which i've discussed before plenty of times and that's ethereum executing on that original vision that original idea uh and ethereum for all intents and purposes is a world computer it doesn't matter if layer one

can't process this uh the same thing as like an aws instance like that's not the point that's not what ethereum layer one is meant to be if as i said ethereum layer one is meant to be that settlement layer for the world and then we can have layer 2's building on top we can have d5 applications dows nfts every other use case you can think of web3 whatever it is right as long as we have that sound idea that we've built on that we've executed on we get ethereum and i think on that note that's going to be it for today i will see you all on the other side of the merge hopefully it goes well i don't expect any issues personally and i hope to that you guys are going to watch the live stream as well it's going to be a fun one but i'll catch you on

tomorrow's refuel which will be in a post-merge world 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 subscribe to the newsletter join the discord channel and i'll catch you in the post merge world tomorrow thanks everyone