Hoodi testnet live, Tornado Cash sanctions removed - The Daily Gwei Refuel #834 - Ethereum Updates

Transcript

Hello everyone. Welcome to another episode of Daily Refuel recap latest news in the ecosystem. I'm your host and this is the 24th of March 2025. All right everyone, let's get into it. So, apologies for missing Wednesday's and uh Friday's episode there. I did say that I wouldn't be doing one on Wednesday and then I didn't end up doing one on Friday either. So, it's been another week since I did the last refuel. And I will have to give a fair warning here that Wednesday of this week I'm getting some dental work done. So, I don't know if I'll be able to do a refill. It just depends on how my mouth feels, I guess. Right. So, we'll see about Wednesday. Hopefully, I'll be right on Friday if I don't do one on Wednesday. Uh but yeah, anyway, without further ado, let's get into the news from the last week. And

the agenda is actually packed. There is a lot of stuff that happened over the last week, or at least a lot of stuff that I want to talk about. And kicking off today, we had an announcement over the weekend that Fidelity is going to be uh tokenizing a US dollar uh money market fund on Ethereum mainet. Now, we know that Black Rockck has already done this. So, this is Fidelity just following suit. Uh Fidelity is one of the uh Tradfy companies or institutions or or money managers, whatever you want to call them, that has an ETH ETF as well. I believe they're second in terms of AUM to Black Rockck. So, this is a pretty big deal, guys. Fidelity is not a small player. That's for sure. But I think it just really highlights the trend that we're seeing. And I've spoken about, you know, on the refuel plenty of

times now, but this trend of real world assets coming on chain, tradi coming on chain, these institutions coming on chain. And I remember, I think it was the last episode I did, I spoke about how I believed that, you know, native retail onboarding to crypto is quite had has become quite saturated at this point. It may have even peaked, but that doesn't mean that adoption is peaked at all. I do think that over the next few years, most people who kind of come into crypto are going to basically not even realize that they're using crypto. They're going to be using things that are built uh by these institutions that are built by uh, you know, built into their products, built into the existing product suites there. Uh, and they'll just be able to get exposure to whatever they want, whether that be assets or different features or anything like

that. And I think that may while it may not be the the cipher bunk vision that we all kind of wanted to happen, it if you're being realistic about these sorts of things, most people given the option will take like the easiest path. You know, they'll take the path of least resistance. And currently onboarding, you know, onto an exchange, withdrawing your funds to your own wallet, and then going and using a DAP is not the path of least resistance and probably won't ever be the path of least resistance. I'm glad that path exists for people like us, like enthusiasts, right? But for most people, they're going to want just something that's really easy for them to use because if we're being realistic, you know, most people don't have the time to do what we do as enthusiasts, right? They have so many other things going on in their lives and the last

thing they want to do is have to sit down and do all this research and how to on board onto the onchain economy. What they're going to do realistically is use the existing kind of banks and institutions that they already use and then they'll be able to access those products via that. That's why these products like ETFs are so popular because ETFs is just a wrapper around an asset really, but that wrapper is the the killer product. It basically abstracts away all of the management uh all of the kind of tax uh uh I guess like um tax obligations and stuff like that. Abstracts all of that away and just gives you a really simple product that you can use to speculate on and to invest in whatever you want, whether that be stocks or now crypto. Obviously with BTC and ETH and I'm sure others are

coming whatever it is uh you know gold stuff like that you can use ETFs to do that and it's just such such a really great product and that's why ETFs have had so much inflows over the over you know the decades because they're such good products they're the path of least resistance. So this goes for anything in life, not just financial uh kind of things, but I think financial things definitely are up there as like the top thing people look at, but in terms of like taking the path of least resistance, that's why a lot of people um you know, when it when it comes to smartphones, but if you want the path of least resistance, at least traditionally, it was to go down the path of an iPhone, right? Android's a lot better these days, a lot simpler to use. But I remember in the original days

of of Android, it was very difficult to use. It was way harder than than an iPhone, and most people opted into an iPhone, and they still do. I mean, honestly, I've used both lately, like the latest Android, the latest iOS. They're pretty like similar in terms of, I guess, um, ease of usability, but then it comes down to the ecosystem. Obviously, if you're already in the Apple ecosystem, you have like a MacBook, uh, you have an iPad, it obviously makes sense to have an have an iPhone as well to keep it all in the ecosystem. Same goes for something like Samsung's products or Google's products as part of the Android suite there. I think the same is going to be true for for onchain stuff for crypto where if you're already part of an ecosystem where you already have an account with some trady institution or some uh you

know some bank then you're probably going to want to stick with them because you trust them you know them you you know you know your way around that and then when they start offering you cryptoreated products you're probably just going to get exposure via them you're not going to come on chain and do it yourself. uh that's for enthusiasts, that's for people who want to be more involved. And there's plenty of those people, don't get me wrong, but I think if we're if we're looking kind of the the p looking at the past and then into the future, I I'm pretty sure, you know, everyone who wanted to speculate on crypto at this point has pretty much done it. Like it's very easy these days to speculate on crypto. So I feel I think I I definitely feel like we've saturated the retail market in terms of

speculation and I should say retail market here because when it comes to institutions and money managers and trad but but retail you know normal retail investors with their investing their own money they've had exposure to this for a very long time now. So I I do think that market is mostly kind of saturated at this point. Uh not to say that they won't keep investing and they won't keep speculating but I think that's why the cycle's been different this I think that's why the four-ear cycle kind of has been broken this time and I think that's why it's been quite disappointing for people because BTC had the institutional bid, right? ETH had a little bit of it but not enough cuz ETH has traditionally been very retail driven, right? And then the only things that really did well were the heavy kind of retail enthusiast driven stuff like

meme coins. And when I say did well, I mean like for a period of time they went up and then once the music stopped, they've just crashed and burned basically. But when you look at uh institutions coming in and money managers coming in, they are not going to be throwing money into uh memecoins, right? They're not going to be putting money into really most things. It's it's going to be Ethan BTC first and foremost and then maybe some other stuff as they see fit. Maybe some, you know, very mature DeFi tokens like Ave for example. I I don't know. Like I don't know exactly what they're going to look at, but they're definitely going to move slower than retail. And they're not going to speculate. They're not going to gamble like that. they're going to invest in what they see real value in and then that's what they're going to be

offering to their customers as well. So, while it may be kind of, as I said at at the start, may not be the cypher plank vision that we that we wanted to see, it is the realistic vision. And I do think it still offers a lot of benefits to the world, especially because, and I think I mentioned this on on last week's episode, especially because we get a choice. Now, as I've said plenty of times on the refuel, in the normal banking system, like digital banking system or digital financial system outside of crypto, you do not have a choice. You have to use a centralized intermediary. You have absolutely zero choice in that. The only way to not use a centralized intermediary would be to do do cash transactions. But cash transactions obviously lock you out of the digital economy because you can't use cash online. That was the whole

point of Bitcoin is it's digital cash, right? Its original vision there. Whereas with crypto with with with onchain um as an enthusiast obviously it's a bit more involved to do it. But you have the choice to be able to be completely self- sovereign. You can, as I I think I mentioned on last week's episode, you can even go as far as running your own node to verify the rules of the network and to use as an RPC for your own transactions. So, I'm extremely glad the choice exists because it's it's a it's a worse off world and a and a and a more broken world where uh the only way you can do digital financial transactions is through a centralized intermediary. And as we all know, most of those centralized intermediaries, if not all of them, are are incredibly uh obviously uh

centralized to the point of uh almost monopolies, right? And they can be very pred predatory as well. And also they run on so many different kind of rules and regulations internally via and also what the government puts on them, fractional reserve banking, the fiat system. And like I'm starting to sound a little bit of like a Bitcoiner here, but we all know, you know, at this point if you're watching the review, I think you know at this point uh what what that kind of world is like. So I do strongly believe still after all these years that uh that onchain makes it better uh and make and makes a lot of it better if more efficient, more transparent uh uh you know more more opportunities for more people in the world because obviously there's more than just the US and Europe in the world, right? there

are billions of people that have been you know potentially locked out of these financial ecosystems because they were born in the wrong place. Now with Ethereum um and with public open blockchains uh and proper ones you know the ones that actually are public and open permissionless uh they do offer the ability to access it from anywhere in the world. It's no KYC none of that crap right it really is a self-s sovereign financial system there but I didn't expect to rant about that for the last 10 minutes but hey there's there's your rant. There's actually another rant coming at the end of the episode about ETH the asset. Um, but anyway, moving on from this to some very positive news.

So, essentially what happened over the weekend, I think, or a couple of days ago was that the Tornado Cash smart contracts were removed from the OFAC sanctions list, which obviously is huge because they've been on there for what 2 and 1/2 years almost. It was August 8th, 2022, I believe, that the sanctions happened. And the only reason why I remember that date is because it's my anniversary with my with my fiance. And sometimes people ask me, it's like, "How do you remember that date?" I'm like, "Well, that's why cuz I remember I woke up. We were we were um at some hotel were were having a a weekend away." And I and I woke up to the to the news and I'm like, "What the hell? This is this is weird." And it was like a about a month before the merge happened as well.

So, the timing wasn't great. But, you know, now over 2 years later, the sanctions are removed on the contracts. Now, I don't think you can use tornado cash yet. I'm not 100% sure about this. Someone may correct me if you can if you can use it. I don't want to say that you can use it if you can't, but yeah, those contracts have been removed off of the sanctions list here. But what hasn't happened is that the charges against Roman Storm have not been dropped yet. So, he's still fighting his case. And same with Alexi Perzv. They're still fighting their cases and their charges have not been dropped. But I do hope this is a step in the right direction for those charges to be dropped for both Raman and Alexi here. Now, I put my own tweet out regarding this where I basically looked back on the history of

these sanctions, right? essentially as I said they happened in August of 2022 and then that what that really did was light a fire under the Ethereum ecosystems ass that we need to be better with our censorship resistance in saying that we've still had access to to tornado cache because our censorship resistance on the network is actually really good you had delayed inclusion where essentially you may not get your transaction included in a block or the block after that or the block after that but you will uh with with with high certainty get your transaction included relatively uh quickly as I said delayed inclusion but still relative relatively quickly there. Now, of course, this is fine for something like tornado tornado cashache, which isn't block sensitive.

It's not time-sensitive. But when it comes to other things like unis swap trades, for example, or AMM trades, for example, uh money markets, liquidations, uh making sure that you can uh top up your collateral, stuff like that, that's all very sensitive. So, if we were to live in a world one day where those things were being censored, uh that would be really bad obviously for the network. We can't have delayed inclusion for stuff like that because I mean for obvious reasons but also there's a lot of insider games that can happen there. So as I said we had a fire lit lit under our asses to improve the censorship resistance on the network and that is resulted in something called Fossil which is a implementation of inclusion list that I've been covering for the last couple of years on the refuel that seems like the AIP that's going to make

it into Glamsterdam which is the update after Fusaka which is the update after PCRA um and EPBS as well. So en try and propose a builder separation because of the me boost pipeline and because of all the censorship that happened there. We realized we needed to make sure that we can enshrine some of that to to hopefully make sure this this stuff doesn't happen. So really all these OFAC sanctions did honestly was it I mean it I don't think it really deterred places like North Korea from getting access to funds because as you guys know recently they were able to hack $1.5 billion worth of funds from Bybit and they didn't use tornado cash. I believe to watch this or or they could because they don't care about the sanctions. They don't care about getting in trouble from

using a sanctioned contract. So all it really did was punish good and honest honest actors. And also by doing this OFAC uh spurred on this improvement in sensitive resistance on Ethereum. So they really just played themselves in the end. Like I I I think I mentioned this before on the refuel, but they ended up playing themselves because now we have in the next year with Fossil, we're going to have such incredible uh incredibly um tight sensory resistance on the Ethereum network where I believe I've covered it before where I think that with Fossil, even if 90% of the network was censoring you, you'd still be able to get your transaction in the next slot. I believe it was 90%. It might be a little bit lower than that, but that was insane to me cuz it's like holy Like that's 90% of validators, guys, as well. Like that was

crazy to me because if 90% of validators are censoring you or I guess like not just validators obviously there's the whole MV boost pipeline but if 90% of the network let's yeah let's just say the network was censoring you today then you have a 10% chance uh per slot uh to get your transaction included. So obviously it's going to get included it's a it's an okay chance not a high chance but it's an okay chance but as I mentioned before this only works for non time timesensitive stuff for anything timesensitive this doesn't work. uh you can't have a 1 in 10 chance of getting your transaction included um you know when uh when you want to especially when when when it's things like liquidations and oracle updates stuff like that right that's the kind of worst case scenario that we're looking at there so as I said

great to see that the sanctions were removed off of tootto cash contracts here but at the same time guys like it was such a a stupid exercise in my mind I just don't think it ever should have happened but I'm glad to see that that is behind us uh now all right moving on to some core dev updates So, as you guys know, there was a new test net spun up called Hoodie to replace the whole Eleski test net, which as far as I know is dead now. It died uh for so that Hoodie could live. So, Hoodie is going to be a test net for stakers to test everything that they um that they want to. Uh and actually, sorry, I'm reading here. His going to be maintained until September. It still works to test everything except for validator exit.

So, it still still lives, but it is going to be sunset in September, I believe. But Hoodie is the main test net now to to test everything regarding staking. So if that applies to you, you should get definitely go check out Hoodie here. And you can see that there's a nice summary of test nets and their purposes uh here. And there's also going to be a Sapoleia replacement coming in uh March of 2026. So tentatively scheduled for there. So we're going to basically have you know by by March 2026 two test nets that um Hleski and Sapoleia retired and then hoodie hoodie and um Sapia replacements uh there. So test nets evolve guys. This is the whole point of test nets. It's not mainet. Obviously we don't want what happened on Heshki to ever happen on mainet. It can't happen in the same way.

But we did learn a lot about the fact that what happens if we lose finality for a long time or what happens when the minority is on the right fork and the majority is on the wrong fork. Turns out bad things happen. It's really hard to recover from. It requires a lot of social coordination. It's just not a good thing. So, it's good that we learned it on the test net obviously. Um, and I'm I'm glad that we uh that we kind of um did that there. So, yeah, cool to see a new test net live there. Uh, as I said, you can go check it out if it applies to you if you want to test the staking related things uh there. All right. So, there is a brand new beam road map website. So, as you guys know, the beam chain is going to get renamed

because the beam thing in crypto is trademarked. So, it's not going to be called the beam chain, but you guys know all about the beam chain. It's this uh uh I guess like um a massive upgrade to the Ethereum consensus layer that Justin Drake spoke about back at DevCon and at the bankless summit. It is being developed alongside pretty much like everything else in the Ethereum ecosystem with a um a vision to complete it, you know, as soon as possible. There was that timeline given of like 4 to 5 years from last year, but I think things are moving faster than that. Honestly, from the amount of teams that I know that are involved with this from um you know Justin pushing really hard on this making sure that we can push it as fast as possible. I am very confident that we could see this much faster than than

four to five years but at the same time it's not exactly uh something that I guess is critical like you guys know about my kind of prioritization around upgrades critical stuff is blobs right scaling that's critical because market share is critical cuz without market share without Ethereum actually dominating everything else that we're doing is pretty much pointless right so obviously I believe and not everyone agrees with this but I do believe that scaling is is the most critical thing both with blobs and the L1 gas limit, but then all these other things actually play into that as well, right? Like even the beam chain plays into it with some of the the ZK stuff that it's doing.

Obviously, stuff with um a faster finality that plays into it too. Uh I I spoke about three slot finality on the last episode, the episode before that. So, it's all kind of coming together. But when we're talking about like prioritizing the most critical things, podas and a blob count, blob count increases generally obviously we can do that like today or like very soon. Uh and then the L1 gas increase. Same thing there cuz we have uh extra protocol stuff like state uh sorry history expiry that's happening I believe still on May 1st. We have history expiry premerge history expiring there. So a lot of stuff in in motion here. But if you do want to keep keep up with the beam chain in particular, there is this new website at beamroadmap.org. You can go check out the tweet. I'll link in the YouTube

description below, but this is going to cover everything you need to know about what's happening with the beam chain. Uh the client teams involved. There are actually 15 client teams involved now. So there's nine new teams with six existing teams uh involved here, which is really really great to see. The existing teams obviously are the ones that we already have a consensus layer clients on mainet uh which is Grand, Loadar Teu Lighthouse Prism and Nimbus. Those are all the clients there built by their respective teams. Uh, and yeah, this is just a really great resource to come and look at everything that's got to do with the beam chain as well as calls. So, they've had three, no, two calls so far. The third call is happening in April all about P2P networking. And then they've got another call happening after that around three

slot finality, which is actually something that really interests me um because I I've been following single slot finality for a long time now. And I explained to you guys how the road map's kind of shifted into three slot finality, but slots may be reduced or probably going to get reduced to 4 seconds instead of 12 seconds. So, uh that's that's that that's kind of the road I guess like the path that we're taking there. Uh but yeah, anyway, you can go check out this website. I'll link it in the YouTube description below uh for you to do so. All right. Obviously, at this point, blobs and blob fee revenue and blob kind of like fee value acruel to ETH has been debated to death so many times. I'm actually sick of debating it, so I'm not going to talk about that today. But the reason why I'm bringing it up is because

there is a new EIP that's been put put forward uh with regards to the blob fee market. Now, in the fee market mechanism, not the fees that it generates. I'm not talking about that. I'm talking about the the fee market mechanism itself is which obviously plays into the fee revenue and the fees it generates. But this is something that I don't think anyone disagrees with fixing. Like the current blob fee market is not as efficient as as effective as it can be. It's definitely uh not up to scratch of what we want to see here. And there are multiple proposals I believe or multiple kind of schools of thought around how to actually update this and how to actually fix this. And one of those comes from Anders here who has created a new EIP called adaptive mean reversion blob pricing. So uh according to this tweet here uh this EIP proposes

an adaptive mean reversion blob pricing mechanism that adjusts the blob base fee based on the long run average fee. This aims to stabilize the fee structure in response to fluctuating demand, allowing for a smoother convergence to equilibrium and improving user experience by reducing excessive fee volatility. Honestly, this should have been live with Blobs, but I understand why it wasn't. Like, at the time, Blobs was already a huge lift. there's there's only so much you can do. But this will alleviate a lot of the concerns around this kind of volatility with blob fee pricing because the way it stands today, at least from my understanding, is that what you have is essentially periods of like really high fees like a spike and then you have a periods of kind of really low fees. Uh and because of these spikes, it leads to um unpredictable uh

fees uh for the the the roll-ups posting blobs and also for the users because that gets kind of put onto the users there. but also unpredictive uh kind of fear revenue for Ethereum as well because of the fact that we want to have like a steady stream of fear revenue from blobs because blobs are one of the ways the Ethereum network generates fees. But we can't do that if the fee mechanism itself doesn't allow us to do that. So, I'm going to keep a close eye on this. I'll keep you guys updated on it, but I figured it was worth mentioning it on today's episode to uh let you guys know that this is in motion. Uh Anders is actually um been been around in the Ethereum ecosystem for a while now. He is very involved in mechanism design and he's been involved in some of the issuance um the Ethereum

issuance debates as well. So uh there are good people on this uh for sure there. All right. So as you guys know there has been a lot of discussion around hardware requirements for Ethereum full node uh runners and for stakers and you know just infrastructure generally here and there's been a push to set a both a minimum and a recommended spec for bandwidth. in particular because when it comes to hardware, I've talked about this obviously a lot on the refill. When it comes to hardware, when if you're a staker and you have 32, you're going to be able to buy the hardware. Like as simple as that. Like you you you you more than likely have the the necessary funds required to buy even like a two like even if you had to go like a you

don't have to do this, but let's just say you wanted to buy a $2,000 rig, you have the funds to do that, right? And that's overkill, but hey, if you wanted to, you could. So the hardware isn't the the concern here. What's always been the concern is the bandwidth. Because even if you have all the money in the world, but you live in a place that won't get give you more bandwidth because your ISP doesn't offer it or or because they just have really shitty internet where you live, there's no amount of money that you can spend to improve that except by moving. And if that is not something you want to do, then that's just not not an option there. So there there's that uh there's that which plays a big part in the network. But there's also the overhead too because we have so many

different uh validators, so many different node operators I should say on the network. We have to make sure that we're not overloading the network and overloading the validators uh and requiring them to do too much work both obviously at the hardware level which is less of a concern but mostly at the bandwidth level here. So that's why we have an EIP currently called 7870 to agree on a minimum and a recommended hardware requirements for validators and full uh nodes. So as I discussed last time there were there was a um a minimum given of 25 megabits per second for uh basically in a tester which is essentially a validator that doesn't propose blocks. So if you're outsourcing your block, sorry, doesn't build blocks.

If you're outsourcing your block building to me boost, which like 95% of the network does, then this most likely covers you. So you would require 25 megabits per second um uh upload as a as a a kind of I think this is recommended actually uh and 50 megabits per second uh download, which is pretty achievable I think for most people in the world. But then if you wanted to be a local block builder, you you would need double that. If you're just running a full node, you would need a little bit less uh bandwidth. I don't think these are too outrageous as requirements. And I've talked about this before. I'm not going to rehash all my arguments here, but I know some people disagree with me on this, but I don't think that the network should be held hostage by a few people who don't meet the these requirements. I

would love these people to be uh to continue staking on the network, but if they don't locally meet these requirements, and maybe I'm going to get shot for suggesting this, but they can still stake. They can still be a validator. They can do it in uh you know, on on a cloud provider, for example, right? they can still do it and that's actually still fine that you could use a cloud provider that is not AWS for example or not one of the popular ones that is still fine in my eyes because I think it's worth the trade-off of these few people maybe not being able to validate on the network anymore be a validator on the network anymore but the network gets a huge boost in scalability because it all comes down to to bandwidth constraints at the end of the day or at least that's

one of the biggest constraints not the only constraint but it is one of the biggest for how we scale Ethereum with blobs and the L1 gas limit So, I think I'm okay with that. But obviously, this is a sensitive topic for the community. There are a lot of different opinions, and this actually segus me perfectly into um something that Estaker put out, which is their 2025 Ethereum staking survey. So, this is actually very timely because of the fact that this does have questions related to the stuff that I've just spoken about. So if you are a node operator at home, solo staker, whatever you call yourself, uh you should go take this survey because this data actually does inform what happens on the network and does get passed to core developers and researchers to study and to make more informed decisions. I've already filled out this survey for myself. I did

it straight away because I really want to be part of this uh the the solution here. Um but you should go check this out for yourself. I'll link it in the YouTube description below. And I think that even if you aren't a solo staker, you can still participate in this survey. I think this survey covers staking generally. So if you stake your ETH in any way, you can participate in this and you might even be able to participate in this if you don't stake your ETH. I just can't remember all the questions because you can answer and and give and give reasons as to why you don't stake your ETH today, which is helpful uh as well. So yeah, you can go check that out. I'll link it in the YouTube description below for you to do so. All right, so speaking of staking, we finally know how much ETH Coinbase

has staked. Now, as you guys know, there is a killer dashboard from Hillb that I've shown before. It's a Dune Analytics dashboard. I've covered this extensively on the refuel. I'm bringing it up now on my screen here that basically manually tagged a lot of stake across the network. So, Hill Dobby had Coinbase at 8%. And this was all manual. The the Coinbase had never publicly published how much ET they had staked before except in older uh quarterly financial reports, I believe. Now they've published a transparency report not just about how much ETH they have staked but also around uh validated performance and what they're doing with with ET staking here. But the real number we want to focus on obviously is the total amount of stake. They have 11.42% of the total

network stake which obviously makes them the largest single node operator on the network. They already were even at 8% but they're even uh bigger now. The second uh sorry um after them comes Binance at 6.4% 4% than Ether at 5.5% but Ethery is made up of multiple node operators. So if we're talking about single node operators on the network, Coinbase, Binance, Kraken I believe are the biggest three there and they total around what is it not even 20% I think 18 19% total between those three. Then obviously Lido has 27% but Lido as an entity can be considered one entity but they have many different node operators.

you know, they're going to have hundreds of note operators. Same goes for stuff like Rocketool. They have, you know, thousands of node operators. So, we shouldn't be looking at at those as like one note operator. Definitely not. But in saying that, people were asking me actually uh you know, do you think Coinbase is going to keep growing from here? I do think they're going to keep growing in terms of like ETH stake, but at the same time, do I think they're going to get to a point where it becomes, you know, I guess existential to the network. Existential to the network is a debatable topic because some people will say, well, if you get to 33% then essentially you can uh delay finality indefinitely if you wanted to while the network will still kind of quote unquote work, right? Um which is obviously bad all around. Then other

people will say, well, unless you get 66%, you can't take the network offline, so it's relatively okay. But the problem is is that it's not like black and white like that. There are different things that you can do. you can censor, you know, there's all this kind of stuff that comes off of that. And this, this has been discussed to death as well, so I'm not going to rehash the points here, but I think it's important to contextualize that because do I think Coinbase is going to get to 33% of the E stake on the network? Hell no. Do I think they're going to get there even with ETFs bringing staking online? No. And I I actually want to talk about the ETF point. I I spoke about this actually at a meetup recently. With regards to the ETFs, look at it this way. If you

are doing a staked ETH ETF and you're Black Rockck or Fidelity or whoever else, you're probably going to have a kind of department or some kind of team that looks at this from a risk perspective. Now, do you think it's worthwhile uh and and also a cost perspective? Now, do you think it actually makes sense to stake your ETH with Coinbase, for example, when they're going to take a fee off that ETH and they're already taking a fee because you're custodying with them and your fee on your ETF is relatively uh small. So, it's eating into all of that. Or are you going to stake with someone else? Or are you going to set up your own staking operation? Because we've already seen Bitwise acquire a testant, right? So, Bitwise have an ETH ETF. They acquired a testant. If they have a staked ETH ETF,

they're not going to go with Coinbase or any of the existing solutions. They're going to set up their own with the testant. Like, it's it's pretty obvious to me. So, why wouldn't BlackRock do the same, right? Why wouldn't Fidelity do the same? I think it's more likely they do that than stake with Coinbase. not just because of the fee stuff, but also because they would have a team looking at this and assessing all the risk cuz they have to they have to actually have risk disclosures in these products for their customers. So, I don't think that even the ETFs are going to drive Coinbase up that high. So, I I actually don't see anything that's going to drive Coinbase up to the 33% threshold, let alone even 20%. Because if we talk about ETH stake growing uh generally, like so, the amount of ET stake on the network

growing uh over time and and keep going up, let's not think about the um proposed um issuance uh proposals and the state capping and anything like that. Let's just say it was it remains the same as it is today. If we think about the fact that more ETH is going to be staked, who's it going to be staked with? It's not just going to be staked with one entity, right? So even if Coinbase is getting more ET staked with it, its relative market share can just stay the same because the other providers are getting more ETH staked with it as well. And we can actually see this on Hillby's dashboard. This is such a great dashboard. I love this dashboard. But you can see here over the kind of past 6 months who's actually taken in the most stake. Coinbase isn't even in the top 10, guys. Like look at

this. You got Binance, Kraken, Stakewise, Ether, Kil, like they've all got different shares here. Binance got a got a pretty big share. I remember actually seeing this and wondering why. But you can see here just the fact that like the stake is not going into one provider already and it never has. It's going into multiple different ones. And even Lido is fine. Like I actually I don't don't think there's any issue with staking going into Lido either because they've actually decentralized more over time as well. I understand that there is there are risks here, but as long as their relative market share stays below that critical threshold of 33%, I have no issue with it. And their market share's actually gone down over time, guys. Yes, it's only gone down, you know, not that much and it's going down very slowly, but I do think that as time

goes on, you're going to see more and more of their market share go down, the relative market share, and the other ones come up because again, there's fees, there's risks, uh, and these the ETFs are going to care about that for sure. So, yeah, I thought that was just a something of a of a point to bring up. I think there are a bunch of good points, actually. I know some people disagree with me, but hey, I think I argue a pretty good point there. Um, but anyway, if you want to check out Coinbase's full transparency report around this, you can. We'll link it in the YouTube description below for you to do. So, I just realized I'm already at 30 minutes and I've still probably got another 15 in me. So, let's keep going.

So, L2 interrupt, that's been a huge question for the last I'm going to say 2 years at least at this point. And we all know that it's been worked on by many, many different people, especially Josh Rudolph from the Ethereum Foundation who's currently leading one of the big L2 interrop efforts. So, you can see here there's actually a road map now. So, we have a short-term road map that covers the next 1 to 12 months. I've said it before and I'll say it again. It's all well and good that we are doing all this interop stuff, but we need stuff live on the network. We need stuff people can use that they can actually see uh working. And that's what the goals of this is. So, in the next 1 to 3 months, they want to standardize everything. They want to do the standardization and do all the wallet

work. And then in the next 3 to 6 months, they want to do trust minimized crosschain transactions. So, have those live with those standards. in the next 6 to 12 months they want to do uh more exploration around wallet interoperability uh and other things um uh you know other other more kind of involved things like key store rollups and so on and so forth there. So, we have a relatively short road map here that's being executed on when it comes to L2 interrop, but you guys will know that I have argued in the past that I think that the whole interrop thing is very overblown at still. I do think obviously it's something that needs to be solved. But at the same time, and I'm not going to rehash my points, I just think it's been completely overblown because people love to FUD Ethereum and

this is a pretty big FUD point for Ethereum right now. I don't think it will be. I think in the next I'm going to say 12 to 18 months cuz things tend to take longer than we expect them to take. But let's just say mid maybe even less than that. Let's just say mid next year. I do I strongly believe that we will actually have an Ethereum that feels like one chain again to everyone. It doesn't matter if you are adverse with bridging and you're fine staying on one of the L2s. Just being able to do everything across all the L2s and across Ethereum mainet and have that all be interoperable. That is the holy grail. That is what we're working towards. But it's great to have this little road map here. So you can go check this out. I'll link it in the YouTube description below

for you to do so. All right. So, last up before I get into my rant about ETH, uh we have the Mega ETH public test net going live or go has gone live. This is actually really cool and there is a little bit of drama around this as well. But one reason I want to say it's really cool or what I want to talk about with regards to it being really cool is the fact that it is the fastest chain I've ever used to be honest. Like out of every L1 and L2 that I've used, nothing has been faster than this. It is incredibly fast and so it actually lives up to their hype so far. It's only a public test net. It is not a mainet yet. Once they get to mainet, I'll reassess there. But it has been just stupidly fast. Like I've I played around with it a little

bit across multiple different wallets doing a bunch of different things cuz they have like an ecosystem uh that uh section that you can go check out and check out the apps that are that are live on the test net there. And and yeah, it is really stupidly fast. So kudos to them for actually living up to the hype there. And I just want to disclose here that I am an investor in Mega Ether, an angel investor in them. Um, but as you guys know with all my investments, I'm not shilling uh them because of my investment. I'm shilling them because I'm excited and I am excited about the speed. Now, of course, there are trade-offs here. As you probably all know, Mega E does not use Ethereum DA. It does not use blobs. It uses DA. Uh, Eclipse and other high performance L2 uses Celestia. So,

there's a lot of drama around, okay, well, can we even call it an L2 if it doesn't use Ethereum DA? Like, what makes it an L2? Well, it's still proving itself to Ethereum uh mainet, right? It's still settling to Ethereum mainet. It's still using ETH the asset. It's still a part of the Ethereum ecosystem. It's still uh you know building towards uh scaling up Ethereum. It's it's it's the EVM. So, there are definite definite things that obviously still make it an L2. And you guys know my definition of an L2 is uh is something even if it uses alt DA, it's still an L2. A rollup is something that uses Ethereum mainet or a unified settlement layer for everything for both settlement and and DA here. But I I do want to defend Mega ETH a little

bit here. When it comes to uh DA, Mega E can't actually use blobs. Blob, there's not enough blobs for them because what they're trying to do, whether it's like spam or otherwise, doesn't matter because obviously with high TPS, you're going to get high amounts of spam, but it doesn't matter. What they're trying to do is be able to do like as much TPS as humanly possible, as much transactions as humanly possible, uh, while keeping it very, very cheap and very very fast. Today, in the current world with blobs, they can't do that. It's just not possible. There's not enough space for them because the more transactions you do, the larger your data is, right? And then you you literally can't fit it into blobs cuz there's only there's only so many blobs that that exist. They're competing with other roll-ups obviously as well. So, even even if they weren't, even if it

was just mega eth doing it, they wouldn't be able to achieve what they're trying to achieve here. So, I don't think we should be shaming these L2s that literally can't use blobs for using old DA. It's on us as an Ethereum ecosystem to scale up blobs where these L2s can use it. And and even if we scale up blobs as much as we can and these L2s can't use DA um uh can't use Ethereum DA, well, then we'll cross that bridge when it comes to it. But I don't I don't think it makes them any kind of less of an Ethereum kind of L2 or an Ethereum product here. And I don't think we should be shaming them for that at all.

And I think people really have a misconception around kind of DA and its value as well. I've talked about this on the review at length as well, but I've always said that DA on its own on its own this is important point, but DA on its own is a commodity. I don't think it has any value on its own. where it does have value is when you have a a unified settlement ecosystem. So for example, if you uh with Ethereum blobs and by being a full rollup, you have unified settlement. What does that unlock? Well, it unlocks native interoperability and unlocks the full security of Ethereum and unlocks you being the the most secured rollup you can be, the most secured L2 you can be in the entire ecosystem. Right? So from that

perspective, it is valuable. Blobs are valuable, right? DA on Ethereum is valuable because it's part of the unified settlements paradigm there. And this is why chains like Celestia have actually pivoted from being a, you know, they used to call themselves a data availability layer, but now they've pivoted to being a full-blown L1 like Ethereum. They're basically trying to be what Ethereum is with things like uh, you know, uh, fast finality, uh, uh, doing settlement for L2s, uh, not just the DA, but also the settlement on Celestia itself, having fast bridgings, you know, stuff like that, right? So they because I think they realize that DA on its own is worthless. It it's not worth anything because you can literally use uh a AWS instance. You can literally use the most centralized storage that

you that you can find for your DA. Uh and and it really doesn't change much honestly in in terms of like using old DA versus that or using another DA solution versus that. Maybe something like an IEDA or Celestia might be a bit more secure and obviously a bit more decentralized, but when it comes to using old DA, why these chains using it? Well, it's because it's cheap. You know, it's cheaper. It's the costs are low. So, I I just don't see how DA on its own, like a data availability layer on its own accrs any value. If it's part of a unified settlement layer, then yes, a unified ecosystem, then yes, it adds value. It acrus value. And I think I've argued that for a very long time now.

So, it's good to see more people seemingly coming around to this point of discussion here. Um, but that's been my point for a very long time there. But anyway, you can go check out the Mega E test net for yourself. I will link this in the YouTube description below. It's got all the relevant links that you need to go check it out there. All right, last up here. I'm going to try not to rant too much about this cuz, as I said, I've already gone over time, but ETH the asset, it's been unloved, I guess, in in recent times and in not so recent times. We all know, we all know ETH has underperformed BTC for a while. We all know that um you know Salana went up against ETH. You know, there's no no sugar coating it. ETH has felt like the unloved child in crypto

for a little while uh now. And uh you know, I think that has dictated a lot of the different discussions that have happened within the Ethereum ecosystem, some of the changes that have happened. And at the end of the day, I think the Ethereum ecosystem is better off uh for it. Honestly, I think that it's it's pushed a lot of positive change. I think that we're on the right track. definitely at this point across multiple different tracks. I think we're on the all the right tracks at this point um on that front. But in terms of like what ETH is as an asset and how to value it, that's still been an open question for a lot of people which confuses me because I posted this image where this is an image that David Hoffman put together for his article titled ETH the triple point asset back I believe in 2019. And

what the triple point asset means is that ETH has three core value drivers or three core value acral properties. It's used as a store of value and its monetary premium. So ETH use in finance, staked ETH, so it's a capital asset. You know, you stake your ETH and gas as a consumable asset. You pay you pay fees on the network. And his argument was that because ETH has all three, it is more valuable than say like a BTC for example that only has really one. It it's only used as a store of value, right? And I think that this has always been the bullcase for ETH. And it's always been my bullcase for ETH. And I think that if we're talking about weighting each of these things, I would say that like most of the weight goes to store value and money. That's why I've

been calling ETH money for s such a long time. And I've kept it saying that ETH needs to be a store of value. Needs to be a money. ETH can never be worth trillions of dollars just based on fear revenue alone. Most of the fear revenue that's generated by L1's will be abstracted away. it will not be captured by the L1 asset anymore. Apps will internalize this because most of it comes from MEV. You've even seen this happen on Salana. I meant I actually argued about this with people in the daily gray discord channel in the other chains section. I said that the only reason Salana fees were high was because of me due to memecoins. And sure enough, when memecoins died, so did the fear revenue. Their fear revenue dropped by like 95 plus% guys. It was the same thing that happened to Ethereum after

the NFT mania died off, after the DeFi stuff died off there. Uh, and also over time, MEV gets abstracted away. It it doesn't get paid down to the L1 anymore. Apps internalize it. Things get more efficient. So in that world, which is the reality, right? If if you expect that to continue, which I 100% do expect that to continue, how does an L1 asset acrue value? It does so by becoming a store of value and a money. And we already know that works because of BTC there. Like, it's not like we don't have evidence of this. BTC as an asset does nothing, right? No one uses it as money. No one uses it to transact on the network. The Bitcoin network is so limited. It can't be used for anything.

Ordinals and runes, it's not used, guys. It was only used a little bit because people were speculating. But for the most part, almost all BTC is held as a store of value. It is a quite literally a pet rock. No one moves it anywhere. They don't use it for anything. It's literally buying it because you believe it is a strong asset to hold and it will appreciate in value over time. That is where most of it value comes from. Now, where ETH differs here is that I think that ETH is also a story of value. Obviously, the rest of a lot of lot of the market doesn't agree with me at this point, but hey, I've got a long time horizon, but I believe ETH is a story of value. I believe it is a money, but also it gets value from a lot of other things

as shown on this graphic, right? It is a stake a capital asset. You can stake your ETH and earn a yield on it. You can use it as a as gas, right? You can use it as a a money to pay for things within the network and so on and so forth. So, this all feeds into it. Like Ethereum and ETH exist, you know, ying and yang, right? Where the Bitcoin network is useless. All it exists for is to secure BTC as an asset. That's it. It's completely useless for anything else. Whereas Ethereum, the network exists to secure ETH asset, but also to offer an on-chain economy, a decentralized onchain economy, and a decentralized settlement layer for all types of value, whether that be real world assets or L2 settling there or whatever else. And ultimately, all that value does flow to

ETH through fair revenue. Yes, it's not going to be, you know, astronomically big, but it's still there. it's still generating fair revenue through the fact that people are staking ETH to capture both the fair revenue and the issuance of ETH and the fact that people are holding and using ETH to be part of that economy and then people using that ETH uh as as collateral within DeFi or using as a store of value and so on and so forth right so as I said ying and yang Ethereum and ETH are intertwined they're fixed it's a symbiotic relationship one cannot exist without the other you could theor in theory BTC could exist without Bitcoin the network right all that would need to to happen is that the BTC asset would need to the Bitcoin monetary policy, I should say, would need to be kept in check and and and and kept the

way it is because that's what gives BTC its value at the end of the day. That's the story that people tell. Oh, it's capped 21 million Bitcoin. Every four years it, you know, it halves, it's set in stone, it's never changed, blah blah blah, right? That's the story because all it is is a story. So, the asset doesn't actually need the network. the network could not exist and the asset would be just fine as long as maybe it existed on another network that enforced those same rules, right? Whereas on on Ethereum, ETH gets a lot of its value from the value of Ethereum as a network, right? Like Ethereum as a network, as an economy, as an onchain economy drives value to ETH in all those ways that I mentioned there. And I still think that this triple point asset thesis is the correct one all these years on. I really

do think this. So, obviously, huge kudos to David for for putting this together when he did. incredible foresight here. But it's funny because it was actually based on a lot of the discussions we were having at the time as a community anyway. We were all talking about this then because we understood even back then that this is what ETH needed to accomplish and needed to actually optimize for in order to be a valuable asset. So I still still do believe that if ETH is going to be worth trillions of dollars, it needs to be a store of value and money first and then the rest of what it can be used for as part of the Ethereum economy on the Ethereum network flows into that there. But I think on that relatively bullish note, 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 the newsletter, join the Discord channel, and I'll catch you all maybe Wednesday, hopefully Friday. Thanks everyone.