Goerli testnet merged, Ethereum gas guzzlers & more - The Daily Gwei Refuel #425 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel work up the latest news in the theory maker system i'm your host and it's assigned and says 11th of august 2022 right everyone let's get into it so the girlie merge is done as you can see here we had pandas on the screen pop up as we usually do on the live stream hopefully you guys were able to watch that or kind of like tune in there on the bankless youtube if you didn't you can go give it a replay there but it was fun i mean it was just like the other kind of live streams of robson and so polio ones uh but that's it that's the public test nets done now we wait for a main ttd to be proposed which could happen on the consensus core which i believe is happening today or the all-call devs

call next week there is already a document floating around i don't have it handy right now but it's a it's a short document that basically proposes a bunch of uh dates uh a bunch of ttd's and dates attached to that based on hash power changes on on the network and i discussed this yesterday so i'm not going to rehash that here uh but yeah let's look at what happened with a girly so basically it was a bit messier than i guess napoleon robson in terms of kind of what happened exactly and there hasn't been any post-mortems yet i'm literally recording the refuel only a few hours after uh i guess like early went live i think if i can do my math correctly it's about seven hours later and i'm recording it earlier today because i'm actually uh uh going to be doing something else later tonight so

i'm recording the review a bit earlier uh but basically you can see here on the girly beacon chain website that uh participation is quite low and i guess we are finalizing as you can see here marius said that that you know we are finalizing and there were uh there was a bit of instability or confusion on the network because of two different terminal blocks and lots of non-updated nodes so we didn't finalize earlier so finalization happens roughly every 12 minutes on the network and we didn't finalize earlier uh because of that kind of like um that confusion on the network there now you can see here the participation rate right now is about well anywhere from kind of i guess like 70 to 75 percent uh and there there's kind of like a few slots or blocks being missed here this the bigger chain

website has also been a bit buggy today you can see here that they're not kind of like looking at the most recent blocks and not looking at the most recent epics either uh so yeah basically don't take the these sites as gospel when looking at them um really the only thing that's going to give you the current state of the network is going to be your own node right if you're running your own node and running your own validator that's going to give you the current kind of state there and there's also this visualization that people like to look at which i think is pretty cool it just shows kind of like the blocks and i guess slots as they're called on the beacon chain here and uh the kind of finalization percentage here so why is this happening well i mean the same reason as it happens on other test nets

people don't update their software their software can't uh it is misconfigured right uh the beacon chain website itself may be i guess like throwing up errors as well uh and i think the the main difference between kind of like what happened with the sapoly and roxton merge and the girl emerge is that sapoli and robson were proof of work networks whereas gurley is a proof of authority network running something called clique which is a custom i guess like uh consensus mechanism on there so a bit different behavior i guess like was to be expected here but the merge transition still happened at ttd and the network is slowly recovering here and it's only as i said it's only been a few hours it's not like it has been a very long time here um and we should get kind of i guess like a recap of what happened from

the um the core devs eventually but yeah i mean even though it was messier than prior test nets i i don't know i look at this and i'm just like this just i mean even if this happened on kind of like mainnet it would have healed itself very very quickly but obviously on testnet there's no real incentivization to get your validators up and running or to update your stuff or to make sure that you're running fine because you're not losing any money and and you can easily troll uh kind of like uh these test nets because say you had a lot of go ethereum or sorry goeth or gf or girly eth right say you had a lot of that you could just send it to the deposit contract generate all these kind of like um all these new validators and never spin the validators up you can there's a lot

of people who had a lot of ge and just basically wanted to troll kind of like the the network and they could and but that would mean that until kind of i guess like those uh validators get leaked out we would have this law of participation here so there's any number of reasons can that happen on mainnet i mean technically it can but like you can imagine people scrambling to fix their validators very very quickly if it's misconfigured if it goes offline for whatever reason or if it loses i guess like touch with the network for whatever reason because they're losing money if they don't so look if if i had to kind of like give an assumption here and maybe this is a dangerous assumption to make i don't know i don't know if dangerous is the right word maybe it's a bit of a a kind of like an assumption a

low chance assumption here but i would say that we're probably going to see something like this during the main net kind of like transition i don't think we're going to see you know 30 40 of the network being offline or kind of like um not voting and the validators needing to kind of like update or being misconfigured but there will be some percentage like that for sure like there's no way that we're going to get all the validators updated you know from from the get go there will be for sure some people who forget to update who weren't paying attention um or who updated incorrectly misconfigured whatever now do i believe that's going to be a show stopper no not at all i believe it'll be it'll it'll kind of like heal itself very very quickly i believe the chain will uh will be fine

i believe i even like believe it'll be finalizing within you know the first epic on the um on you know on the mainnet merge so yeah i don't know like i look at these things i know some people kind of like sometimes have a go at me and say oh you're just sugarcoating things i don't think so i think i'm trying to look at it as objectively as i can and i don't see anything in what happened with girly today even though it was messier than prior test nets i don't see anything that happened today uh that screams out to me that we need to kind of like test more that we could could have done more here there's not really anything that could be done i mean at the end of the day we can put all the information out there but if the people running the validators

aren't configuring them correctly or aren't kind of like updating correctly well that's on them like i i people some people kind of like hit back on me if i when i say this but basically being a validator on the network you know being a solo validator or being a validate in general comes with a responsibility the responsibility to keep your software up to date and make sure that you're it's configured correctly now can we make it you know as easy as possible for people to do that sure of course we can i can give them plenty of notice as well uh but at the end of the day like we can't force them like we can't go into their computers and do it for them like uh at the end of the day it's it's the entity's responsibility to do the do it themselves so that's my kind of like

view on that but as i said we're gonna have to wait a little bit longer for a proper i guess overview of what happened to come out from the technical side of things but it seems like the network is uh is kind of is finalizing just fine i've read some comments people running nodes on the network saying it's finalizing because the beacon chain website isn't up to date right now but yeah seems uh the kind of like network has has fixed itself up there which is very very cool to see and if you want to keep up i guess like on top of the i guess post-mortem here and kind of like uh read from the voices uh that you kind of like getting it gonna get the most knowledge from there is a list from superficial accounts you should be following on twitter i highly recommend

following each of these people of course uh you know tim biker danny ryan parathosh vitalik and ben eddington here definitely go follow all of them to keep up to date of what's happening there now as i said next step is mainnet merge like we're we're there guys like we're only a few weeks away uh in terms of ttd uh there might be kind of like some soft discussions about ttd on the consensus call i'm not convinced that they're going to set one on that call we'll have to see uh but you know if they don't it'll definitely be on the all core devs call next week so we're about kind of like uh i guess like we're in a week uh within a week or i guess eight or nine days of getting a ttd so within the next eight or nine days if we don't get it today

we'll get it on all called ebbs call and then we'll know a kind of like timeline and and i don't think that the timeline is gonna differ from what we've kind of expected in the past like the week of september 19th but it really does depend on i guess like hash power changes leading up to the merge that'll make it happen you know quicker or slower or anything like that so we're gonna have to kind of monitor that as well but yeah that's the recap of what happened with gurley today as far as uh kind of like i can tell as i said it's only been a few hours since it happened so there's not that much information for me to for me to go off just yet but i'm sure there'll be more coming out over the next 24 hours and i'll be sure to cover any of that on

tomorrow's refuel but anyway moving on from the merge stuff onto some other interesting updates from today so uh seth hartland here who is the global head of policy at ledger put together a really great thread about the uh tornado cache sanctions here i highly recommend giving this a read but basically the tl of the tldr of the thread is that this is the first time the a kind of like us a treasury department has sanctioned code instead of of kind of like a person or a corporation so they've actually sanctioned open source code and you know obviously with with that comes a lot of kind of scary things because if they're gonna sanction tornado cache and kind of like say okay well we're not above sanctioning open source code then that means like any

code is is fair game they could literally if they wanted to they could sanction uh the entire bitcoin network that could sanction the entire ethereum network and basically i mean this is this is the thing with these kind of like powers that are really really strong powers that don't require you know a lot of um i guess like sign off for them to be enacted because they're i guess like quote unquote wartime powers right the problem is is that in theory they could sanction ethereum and bitcoin and what do you think is going to happen to all the centralized exchanges and all the centralized services that are supporting these networks right by law right they're going to have to stop supporting them immediately or else be at risk of kind of like paying massive fines or being held criminally liable for it and going to jail for that

so like that's the i guess like probably the worst case scenario is if the us government wanted to sanction uh the ethereum network itself right like that would be the worst case scenario how do we defend against this well i mean it's hard because you have to basically go to court to defend against this you have to basically prove in a in a court of law that what the treasury department is doing by sanctioning the ethereum network doesn't actually fit the letter of the law and in the u.s specifically it doesn't fit with the constitutional rights that these citizens have so what would i guess like it'd be kind of like wild to see what would happen but immediately the us-based entities would have to stop supporting the ethereum the network right so what about the the um the foreign entities well it depends on

what where they are because there are obviously a lot of uh countries that have extradition treaties with the us and it means how far the u.s wants to go with with this right would they kind of lean on their allies and say hey you know this company is based in your jurisdiction we have sanctions on on ethereum and they're supporting ethereum uh we want you to stop put a stop to this and of course they're gonna put a stop to it so it's it's kind of like it's not just about tornado cash like that's why when people kind of like speak up about this on twitter and say well it's you know tornado cash is enabling uh kind of criminal activity it it makes sense for them to get sanction it's not about that at all it's about sanctioning literally open source code i mean and code is speech in the u.s as i

believe there's a court case that kind of set this precedent uh but basically you and as that opens the door to any piece of code being sanctioned and any piece of code being basically made to you know interact with it being illegal could you imagine them sanctioning any of the code that runs the internet like that that's the kind of thing here that they're doing and i think when taking that view it gets i it gets scary um it gets frustrating because as i said there's not that much you can do in this case you have to literally just take them take the us government to court over this and the treasury department to court over this from from my understanding and and just kind of like hope that maybe not hope but like kind of like present a strong argument and hope that you that you kind of like win the case

but on top of that it's it feels like a very uphill battle right because you're up against like the us government itself and building decentralized tools and and ethereum i mean okay let me take a step back here i'm rambling a little bit here but i'm trying to collect my thoughts here on on this one and trying to explain myself as best as i can but you know just because they sanction ethereum doesn't mean ethereum stops working i mean i'm sure validators within i guess like uh the network you know post merge if they're in the us they'd probably especially the the centralized kind of like services and companies running validators they'd probably have to shut them down right so it would it would hurt the network that way but in terms of kind of like ethereum itself and its decentralization it would remain decentralized you would still

technically be able to use the ethereum network right but if you're a us citizen you'd be breaking the law by doing that if they sanction the ethereum itself um but uh and that's the thing like these sanctions they wouldn't really stop ethereum or bitcoin or any kind of like uh decentralized crypto network right but they would essentially stop all the support from the centralized entities so yeah i don't even know what i i didn't want to think about what would happen in that scenario it'd be very it'd be a very dark day for it and this is the thing right you would probably have people in the uh i guess non-crypto circles cheering this on saying oh well all crypto was good for was scams and money laundering and nft scams and all these sorts of stuff not realizing that the power being kind of i guess

uh i used here is kind of like massive overreach from the us government itself and i guess uh it kind of like pays to pay more i guess like pay more attention to this sort of stuff rather than having emotional reactions to it and it's funny because you know you might think oh well as as long as they go after these kind of like things that i don't like it's fine but it's not about what you do and don't like it's about the fact that sanctioning code is just really uh bizarre and really kind of like weird because it's basically sanctioning speech at least from the u.s centric point of view here so it remains to be seen kind of like if this is going to be challenged in court and who it's going to be challenged in court by the tornado cash sanctions i don't know if the us

government would go far enough as far as kind of like sanctioning the ethereum network itself or sanctioning the bitcoin network itself but the the thing is is that they have the power to do that and that's the scary thing is that they have the power to do that they have the power to instantly force every every single entity whether that be an individual company within the u.s to stop kind of like using and supporting ethereum because those powers uh that that they're using and kind of like the punishments that they have there are so harsh i mean up to 30 years in prison if you if they want you know if you break the law then if they can kind of like take you to court over that and get you a sentenced as well as massive fines like hundreds of thousands of dollars worth of fines and obviously this has

been done because those sanctions are usually put on hostile nation states and they're usually put in place for uh for for reasons that we saw obviously with the recent ukraine russia conflict and stuff like that but when you start sanctioning open source code when you start sanctioning the kind of like literal tools that people can use to do good or bad things that's when it gets into very very murky waters at least from from my kind of like um point of view and i think from any logical insane person's point of view anyway like i don't think there's any sane way to say that what the us government did here was actually good for humanity at a whole i don't think it is at all i think what they've done is very very bad and i hope that they kind of like um change course here or at

least remove the sanctions uh from from tornado cash uh without having to go through a whole lengthy court process because that's gonna take years it's not an overnight process we'll have to see how that shakes out over the next kind of like uh i guess few months maybe even years from here as i said the other day it's a sad day in crypto that this happened and uh it kind of like gives something that hangs over our head now of you know what else is the us government going to sanction are they going to go after privacy coins like monero and zcash i mean maybe they will right i mean will they go after other privacy solutions on ethereum like aztec and phone on network and and other such things who knows you know we'll have to see how that kind of plays out there but

yeah definitely give this thread from seth reed i'll link it in the youtube description below all right uh on to the next thing from today we have a really interesting tweet here from cassie uh who is an investment partner at paradigm so this is basically a new website called gasguzzlers.wtf and she's posted a little thread here with a visualization of how i guess like the ethereum uh gap i guess a gas in ethereum has been used over time so on the left hand side here the access is the percentage of gas consumed and on the bottom you have the dates or i guess like the years now you can see how this has evolved significantly over time xerox actually accounted for a lot of the gas consumed on ethereum for quite a

while here for basically all of 2018 um and it was basically i guess like half in in 2019 and then its market share has gone down considerably in terms of percentage of total gas consumed and then you can see that you know throughout time as well maker got got big at one period of time i guess during 2019 or yeah 2018 2019 uh tether as well and then you had i guess d5 summer completely break out and unusual just became this dominant force and i think that's also got to do a lot with mev you can see on the bottom here there's an mev searcher that popped up as well uh so d5 summer really kicked off unisov's dominance and kicked off i guess like the whole mev story that we're that we're used to and then you can see it the network isn't really

dominated by one entity a unisop accounts for a lot of the gas being used but it's not like back in the day where zero x was basically a hundred percent of the network and then you know make a dell eight into zero x a bit with a bunch of others below that you can see on the chart but really these days it seems very diverse and this is ethereum layer one it's obviously not counting the layer two networks but it's still interesting nonetheless and you can see that openc was you know basically didn't even register until uh the end of 2021 and then in 2022 where they started kind of like where the nft bull market really started in in earnest as well and then you know there's a bunch of other apps here as well that kind of like register and are labeled so i think this is a really cool

new website and tool i love these sorts of stuff and as i said you can go to gasguzzlers.wtf and kind of play with the data yourself and i guess like it's got a better kind of um a better access here with better kind of like timelines you can get a more granular view and then you can kind of go down to the raw values as well down here and this data i believe is coming from the nansen.ai service so yeah i think the most interesting thing about this kind of chart for me is just how significant the ethereum network has evolved over over just a relatively short period of time right and how you can basically pinpoint uh different events like you can literally see defy summer in this right like like right there on kind of like early to mid 2020 was def was the beginnings

of d5 summer and you can see uh unisop just absolutely take off right because unicef was obviously one of the big beneficiaries because everyone was trading deep-fried tokens everyone's yield farming and it was all through uni-swap and you can see that compounds uh kind of like was the first liquidity mining or i guess the first big liquidity mining app to go to to do sorry the first big app to do liquidity mining in d5 summer and then synthetics as well had done it earlier and you can see their market share growing too you can see wrapped ether grows significantly as well from what it was because of the fact that you needed to wrap your eight to put it into d5 protocols and then you can see other d5 protocols like curve and and obviously sushi swap and and and obviously kind of like balancer one

inch and other as well kind of start taking up more percentage of um of the network there in terms of gas phase but i think it's really interesting this mev searcher uh kind of like um story because that really didn't even register until the start of day five summer so before that there wasn't really any mav to extract an mav was a very very limited thing was extremely specialized it wasn't something that uh people were doing very much of but then with d5 summer came a lot more opportunity to extract mev from from people and that's continued until this day and you can see mev searcher still accounts for a uh not a large part of the network but still accounts accounts for a decent part of the percentage of gas consumed here as well which is a very very

interesting story but yeah that uni swap dominance is just crazy to me i mean what's the percentage there there's there's a website tell me i'd just love to know the exact percentage of what unisop's dominance is today yeah it's about 37 of uni swap and you know it was only uh six percent in may 2020 and then by uh september 2020 the i guess like the end of d5 summer it was 35 so almost a you know a kind of like massive increase yeah from six six percent kind of like market share to 30 35 36 market share in the over the course of d5 summer and that hasn't gone back down either like unisop has basically i mean what it was like 35.7 here in september 2020 and then you go all the way to may 2022 and it's 37 so

it hasn't really in terms of like total gas consumed hasn't uh i guess like gone uh gone up very much but it has maintained that dominance and also unisop is on other networks like l2s and other kind of like uh evm chains as well so that that's not counted here of course but yeah that's just a very interesting story and i think that it was worth highlighting so you can go check this out for yourself i'll link it in the youtube description below all right so defy saver now has uh defy savers automation tools for rv3 on arbitrom are now live so you can enable trustless liquidation protection for your other position and know it will be protected while you get a good night's sleep or enjoy a few days away from a keyboard and keys now obviously uh you guys know my view on leverage but like

just generally people are always going to do their own thing with leverage so i'm not going to hop on about that here but if you do have i guess um funds borrowed on rv on on arbitram and you don't want to be liquidated and you want to be kind of like alerted or kind of like you want your position to be saved in case of liquidation well you can use dfi saver for that now d570 is live on optimism and ethereum mainnet as well so you have various options here of um of kind of like using this tool and i think it's a really cool tool um i i've used it before when i had like maker positions open and the thing is is that even though you've got like a position open on one of these money markets it doesn't mean that you're taking leverage

out like for my makeup positions i usually borrowed stables and then by eath with that i was doing something else with it and then i'd repay the stables at a later date and obviously i mean because i'm collateralizing i have a liquidation price and i used if i saver to make sure that i was alerted if you know there was a kind of like massive move there because obviously i didn't want to be liquidated but i did have a very very low liquidation price as i said i wasn't dj leverage trading ether or anything like that so it wasn't that big of a concern but it was still a concern and i think for people that use these tools for le for leveraged trading eighth you should definitely check out d5 saver and i'll link this in the youtube description below for you to do

so all right so speaking of optimism actually uh they've got now a new video here from ori who works at optimism labs to explain optimism in the simplest of terms so this is on youtube you can check this out just wanted to highlight this for you guys because i know that there's still a lot of confusion around layer twos i do my best to try and explain it but i know that my the way i explain it i pretty much like unless you're listening to the refill all the time unless you've actually kind of like got a basic understanding of layer twos i tend to skip over the fundamentals of them and you may get confused because of that so this video should get you up to speed because it's it's basically titled optimism for non-techies i haven't watched it yet i'm gonna hopefully get

around to watching it soon but basically i i'm seeing a lot of confusion still around layer twos around things like you know how censorship resistant they are you know why they centralize today where the funds are actually stored you know how they diff how the um layer two bridges uh the official bridges uh differ from third-party bridges and all that sorts of stuff i don't know if all of that will be touched on in this video but in terms of like fundamentally understand how understanding how optimism works and how layers generally work um this video should be a good one for you so you can definitely check this out i'll link it in the youtube description below all right so polynomial protocol announced today the next generation the launch of the next generation of earn vaults on optimism so these are built on

top of lyra and synthetics and you can go to earn.polynomial.fi to check these out so four months ago polynomial launched earned volts and i believe i covered it on the refuel which were the first ever fully on chain option vaults and now they're live with st sorry today they're live with the s8 call selling and s8 put selling volts on optimism's mainnet and dynamic d5 option vaults now with earned volts v2 it introduces dynamic option vaults with partial collateralization erc20 tokenized the volts in near instant deposits and withdrawals and multiple strikes across multiple expiries so as the vaults are experimental there is a cap on them as well i believe uh that kappa has been there from the beginning uh too but you can read the

rest of the thread for more details on on this year but yeah i know a lot of you have become interested in options over the last few months i see you talking about it in the discord channel uh and you know you're using kind of like centralized exchanges and stuff like that well this is a protocol that may be interesting to you if you want to kind of go check out some options on here and do them on optimism uh powered by two really other great products lyra and and synthetics here and it's funny i started noticing people in the discord channel talk about uh options after the hal press bankless interview because on there he was talking about the options that he had kind of like bought uh i think there were uh some kind of like um call options that he bought uh with

expiries in i think one was in december and it was i think it was like a 5 000 or 6 000 strike or something like that and the way it would work is that you would have like the right to buy the eth at um a lower price if the strike was hit that's kind of like my understanding of it and everyone was like oh oh i'm super bullish on 8th i'm going to buy these and and this is gonna be awesome and then i believe eth came down a lot and everyone's like ah oh because if the strike price isn't hit they kind of like expire worthless which means that just they're just literally worthless and you spent money on on nothing so you really need to understand how options work and understand what you're getting yourself into um but if you do then yeah

definitely check out polynomial protocol here it's pro it's another one that you might be interested in i'll link it in youtube description uh below all right finally here we've some metrics out of cow swap so uh yesterday cow protocol smashed another new record the protocol handled more than 100 million dollars in volume giving it a 26 market share in the aggregator space this is pretty cool and i reason i wanted to highlight this is because i know i've been bearish on uh i guess like um aggregators before in terms of decentralized exchange aggregators because i think that something like a uni swap their brand awareness and everything is just really really strong but cow swap is not your regular aggregator right they are an mev resistant aggregator they try to make

sure that you're not getting wrecked by mav or that you're not getting kind of sandwich attacked or any of that sort of stuff in that kind of like respect or in that kind of like vein i actually think that something like an mav resistant aggregator could be very very popular and could actually ha you know attain a large market share the market share in this chart is just comparing them against other aggregators i'd like to see them compared against you know the actual decentralized exchanges themselves which i'm sure there is a dashboard for that but i just don't have it handy but i just wanted to kind of like yeah retouch on the things that i've said in the past because i mean the reason why i've been kind of like bearish on these aggregators is as i said like i feel like it's all about brand awareness when

it comes to decentralized exchanges generally and it's all about kind of like obviously liquidity and stickiness and stuff like that but people were bullish on aggregators because they were like well these aggregators get you the best price from from kind of like all these other um dexes all these other liquidity pools that exist on ethereum why wouldn't you use it well the reason why you wouldn't use it is simply because you don't know about it and there's plenty of people who have absolutely no idea about these aggregators and they're just coming in and they're like okay well i'm gonna use uni swap because unisop has such strong brand awareness and has such a strong presence it's basically everywhere so they just use the unisop interface instead of using an aggregator so when it comes to i guess like attending market share in this space i

think one obviously there's awareness which cow swap seems to be getting more and more of but also having a unique kind of a feature here for the power users which is the kind of mev resistant trades and making sure that you can kind of like uh prevent yourself from losing money to to mev so yeah just wanted to make a little comment on that uh there uh you can check this out uh this kind of like chart i don't know if they've linked to doing a links dashboard no they haven't but i guess you can check out the chart if you're listening to the podcast be linked in the youtube description below but that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subscribe to newsletter join

the discord channel and i'll catch you all tomorrow thanks everyone