Instadapp, LP tokens as collateral, DeFi gains + more - The Daily Gwei Refuel #10 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i discuss the latest news in the ethereum ecosystem i'm your host anthony sosano and today's date is december 8th 2020 let's get right into everything today guys so i discussed ibs v2 launch yesterday and i actually missed this i think this came out actually shortly after i did yesterday's daily grey refuel but basically you can easily migrate to rv2 using this instadap kind of tool here so i mentioned yesterday that ave is going to have a tool that lets you migrate from v1 to v2 eventually but if you don't want to wait for that you can use instadap's tool here so this is really cool basically lets you swap your positions out um instantly basically uh

you know with an easy to use tool uh and for those who who don't know instadaf's been out for a while so you know they're trustworthy uh it's not just some random app on the internet or something like that so you can trust them if that's something you wanted to do with with your other position i should definitely go check that one out uh it looks pretty cool from what i see what i've seen here i haven't used it yet myself but i i am planning on using it eventually if if not i'll just use the rv tool right it just depends like at the moment as i mean as i mentioned yesterday there's no rush to kind of migrate across just yet um and there's lower liquidity with v2 so it's kind of a risk it's like a little bit of a chicken and egg

but i expect over the next few weeks people will you know continue to migrate and there'll be more and more liquidity there so definitely go check that one out all right so this was i mean today on on twitter there was a bit of rumors around like impending regulations for crypto coming i guess in the next maybe month uh month to maybe five to six weeks um as the trump administration leaves office and the biden administration comes in there's a lot of rumors that the the treasury department's going to be uh doing more regulations for crypto and you know this isn't like new this news this has been around for like a few weeks now if you remember brian armstrong put out

a twitter threader i think it was a couple weeks ago at this point where he basically explained that they're hearing rumors about a possible kind of like ban or you know heavy regulation coming in towards self-hosted wallets so you know you wouldn't have the ability to basically uh withdraw crypto from a centralized exchange into your own wallet or there'd be extra regulations around that and you'd have to jump through all these hoops i mean i went into more detail about this in today's daily grade newsletter if you want to go check that out there but to focus on this kind of article here so it's from the block and it says that at the recent g7 meeting uh the crypto assets was discussed during that meeting um and they basically what all the

countries that the g7 kind of agreed on was that there needs to be more regulation to prevent the use the the the the the use of cryptocurrencies for malign purposes or illicit activities now i mean we've heard this all before right this is the typical spiel anytime the governments want to ban something or regulate something to death they always use the same terminology but this is kind of reverberated throughout the crypto community and people are kind of you know somewhat not cautious like okay what are these regulations going to be are they going to be centered around what brian armstrong talked about are they going to be more heavy-handed than that i mean if i was to speculate i actually think it's going to be centered definitely centered around tightening up regulations around with withdrawing to your own address i

think that's just you know it makes a lot of sense for them to focus on that if they did want to regulate certain things i think a big thing as well will be maybe they say to exchanges or centralized exchanges based in the us you can't let your users withdraw to more than maybe two of their own addresses for example right uh because a lot of people tend to use centralized exchanges to quote-unquote wash their crypto through to to to maintain privacy so i'm sure you've done it i mean i've done it a bunch of times where i send crypto to an exchange i uh especially in exchange that lets me generate new deposit addresses right and then i'll send it out to a new address so that it's very very hard to track me right because once you send it out to a new address

it comes from like coinbase's cold storage so it's not tied to you directly um you know there are still ways to track that but it becomes a lot more difficult uh for for the observer like obviously the exchange has a record of what you're withdrawing to and and where you're depositing from but you know it's it's i mean most of the time it's fine if the centralized exchange knows that because you're not trying to hide from them uh you're trying to hide from people that might know your address you know maybe they somehow doxed you or something like that so i actually think that they're gonna that the regulators are gonna come out along and be like okay we need to prevent this from happening because this is just wash trading not wash trading so this is just like um money laundering you know it's easy

for people to wash uh money through exchanges because of this which i think is a bit silly because a lot of these exchanges already have kyc and aml in place uh the us-based ones especially and these regulations wouldn't apply to the offshore exchanges because of the fact that um you know they're not based in the us or one of these seven nations something like binance for example um you know they're not untouchable but it's a lot harder for the us to kind of go after binance and regulate them rather than something like a coin base right that's a fully regulated entity within the u.s and based in the u.s so again all speculation this is not something to be taken as a truth or anything like that i'm just speculating here

i think it's good to to keep in the back of your mind this can happen in the next few weeks uh probably you know we might see it happen before christmas or something like that i think exchanges are definitely expecting some more heavy-handed regulation here i just hope it's not something ridiculous like banning people from withdrawing from exchanges to their own wallet i think that would definitely be the worst case scenario um and that would kill a lot of the momentum we have right now uh it would force a lot of kind of companies to probably go offshore i mean it's just bad all round so i really hope that that's not the case i'm you know i have a little bit of faith not too much faith after what i've seen the past few days from different people on twitter discussing

how to regulate things i mean i discussed the stable act thing uh last week so yeah i'm i'm holding on faith but we'll we'll see what what pans out here over the next few weeks all right really cool post from hayden adams here actually oh i forgot to retweet this i'm going to do that right now so i make a governance proposal was put forward yesterday uh to add the die eth and usdc eth unispot liquidity tokens as collateral so for those who don't know for those who aren't aware whenever you add liquidity to uni swap uh you get a liquidity provider token that represents that liquidity and you know if you were to send that token to another person

they could then go on unistop and actually withdraw the liquidity that you originally put in there plus the fees as well um so what this makeup governance proposal would do if it was integrated into maker you would be able to use those tokens as collateral and then draw die against it now this has been requested for a very long time i think years at this point that this has been kind of put out there where people were like you know bugging makeup being like you know you need to do this you need to to implement this because it's just a no-brainer right because say you do the usdc eth liquidity token i mean you know that means your position is collateralized by usdc and eth 5050 split right as a typical uni-swap pair there and it

also is i mean as hayden notes here it increases the capital efficiency for this liquidity um and it modifies their exposure in a meaningful way i think it actually is like less of a risk as well than just straight eighth right because you know you have a split between usdc and etr so that's cool as well i think you know you you have less of a chance of being i guess liquidated um depending i guess on your your collateralization ratio as well but this is just i mean this is money legos at work this is superfluid collateral at work um a term coined by uh dan eliza a while ago where he basically said that you know anything that can be used as collateral will be used as collateral so if you can

tokenize anything on chain then why wouldn't you use it as collateral so i think that's exactly what we're seeing happen here uh you know i mentioned the other day arves has their tokenized debt tokenization with v2 that could be used as collateral and things like that so there's a lot of things going on here basically uh and a lot of really cool things happening with maker i mean lately maker has kind of copped a lot of heat especially over the token price right the mkr token price hasn't been performing too well over the last uh i guess you could call it years at this point right the um the chart doesn't look very healthy that's for sure but that doesn't mean the maker system is suffering uh the dye supply is at all-time high

right they keep adding uh new assets to be used as collateral for better or worse uh you know i mean just in general dice makers and dies network effects are growing so it remains to be seen if this has any impact on the token price going forward uh maybe people still think that the token is not designed very well it's one of the i guess you could call it uh original designs of a token i think i personally think that makers should rethink their token and and redo their token economics just like ave did when they transformed from eth lend to ave they completely rethought their tokenomics they called it arvanomics and there's a lot of bunch of other protocols doing this as well so i'm hoping to see maker do that eventually

but might be a bit hard with makeup because they're much i guess they're much bigger um they're they're i mean they have a governance process that tends to move very slowly as well so yeah remains to be seen what happens there an interesting tweet from jesse walden here so i guess a lot of you would have seen uh mira protocol the other day so they air-dropped a bunch of their mir tokens to uni token holders and i think there was another uh token holder that they airdropped it to but i can't remember i i know a lot of people got the token because they were holding uni basically um i think the the minimum was like 200 uni that you had to be holding or something like that

but basically what mirror protocol does is it now lets you basically invest in things like um amazon you know stock tesla google things like that and these are kind of synthetic assets that uh mirror basically uh what is happening in the real world right so all as jesse notes here all these synthetic assets created on mirror are reflected on ethereum and traded via uni swap of course i mean of course you're going to trade these things on uni swap so uh this is just you know more assets flowing to ethereum right i mean synthetics is doing this too with with a bunch of their synths as well uh but i think uh mira is maybe a bit of a competitor here and they have

like their yield farming of course and things like that um and jesse notes here that airdropping mir to uni holders was like a sorry a user acquisition strategy right um i think this is actually really this works really well i think like as a user acquisition strategy uh say okay for example say you have the unisop airdrop that happened and there was 400 uni uh airdrop to everyone now say that those people are still holding their uni right say you survey the blockchain and you see that uh these these people still have their 400 uni and they haven't sold or anything like that and they want to be long-term holders okay well those people are more likely

to hold your token if you airdrop it to them so why not do that why not reward these kind of d5 crypto native people who want to hold this stuff so i think that's exactly what mira has done here with their mir token and it seems to have worked i have a lot of people that i know talking about this uh and funny thing is that this isn't totally like an ethereum native protocol they actually are working with um well from the the people working with terror money so for those of you who have heard of terror which is actually based on cosmosis technology called tendermint so it's kind of like i guess like a blurring here between two worlds because you have these assets on ethereum and then it was done by you know it was launched by terra money

or the team behind that um but this goes back to what i've written about in the daily way before in the newsletter about ethereum being this economic nexus that all this value is just going to pass through right so i think that this just speaks to that and i think ethereum has definitely won uh the the race i guess you could call it to be this kind of global sediment layer for all these assets and we're just going to have a bunch of different things sitting around ethereum as that economic nexus for example so expect to see more of this you know coming online expect to see more assets tokenized i mean back in the day tokenized the world became a meme but i think that's still going to be a reality we're going to tokenize absolutely everything that we can

whether that is as a synthetic asset whether that is as you know a normal asset and a crypto native asset or anything like that it's just a no-brainer to do right tokenize it trade it on uni swap make it composable you know plug into the amazing kind of system that is defy and away you go so looking forward to seeing more products around this speaking of d5 i really love this chart that satur cetera is paribus i think that's how you say it puts out from time to time so they've been tracking defy tokens since the d5 bottom and what this kind of chart here uh cha table here shows is the returns on d5 tokens since november 1st uh roughly the d5 bottom as he calls out

here so the um i guess like the the token that's returned the most is sushi from sushi swap now without a bit more context here this can be a bit misleading so i don't think he's trying to mislead people here but uh it can be a bit misleading if you just look at the data like this on the surface sushi was one of the most kind of i guess brutalized coins during the d5 bear market it went from a top of like 10 or 11 to like 61 cents you can see here and now it's back up to 2.43 so you know everyone who bought above i'm sure there's a lot of people who bought above 2.43 uh are still not you know feeling this 300 gain from the bottom right uh and same with things like wi-fi

wi-fi bottomed at lower than than uh eleven thousand dollars uh i think it bottomed at maybe seven and a half thousand right and most people did not buy between you know one and ten thousand dollars most people bought after that so again they're not feeling this kind of gain here but for the more astute event investors among us and for the people that are more plugged in and are used to this rodeo you know if you had bought at these bottoms like you saw okay this is getting ridiculous you know i'm gonna buy here because these things are already down like 70 80 90 uh i've seen this this play out before i'm gonna buy you would be sitting pretty pretty well right now and and there are fundamental reasons to buy too

sushi swap has obviously got a lot more attention lately a lot more usage they kind of did another vampire attack on uni swap uh for example you know avair has continued to grow v2 just came out wi-fi they're working on their v2 you know wyoming is kind of like doing this whole wire and ecosystem now as i've spoken about before uh you know i don't know that much about thought chain but from what i see they seem to be delivering as well same with hedgic uh not don't you know not familiar with bzx too much or power poor things like that but i won't go through the whole list but just like i'm i guess i'm the point i'm trying to make is that these tokens aren't just like going up for the sake of going up there is actually fundamental reasons why a lot

of them are going up uh and more so than others you can actually see that there are some that haven't gone up very much i was just talking about how the maker token hasn't really done anything right and that it didn't even do anything during the d5 bull market really it just stayed flat uh for one reason or another um and you know this is against usd if you actually measure it against eth it looks even worse right because 8th has gone up a lot since then too so i think that actually it'd be interesting to see this measured against 8th not just usd to see the gain here because when you're investing in these sorts of things and this is an investment advice but this is just how i think about it i want to outperform you know eath right because i want to stack more eath um you

know with i mean some of these things are my long-term holds for example but a lot of them i i tend to try and just like flip right and make more eat with if i'm trading um but even still even if it's like a long term hold if you haven't you know outperformed eth and you traded eth for it especially then what was the point you may as well just held eighth same with like bitcoin for example uh but i measure against eighth obviously for obvious reasons i don't have to go into reasons why i measure against eighth instead of bitcoin um but yeah so that's how i kind of think about it uh and there are a few down here like you know pickle and idex that that are still down from there they're kind of like uh bottoms i think obviously pickle is because of the the

hack that happened with pickle um you know there are other things that where the fundamentals didn't really increase too much i think maker is an exception here where the fundamentals have have kept increasing kept getting better but their token price is just flat but stuff like air swap i mean i haven't seen too much activity there outside of like revised tokenomics and things like that and um you know there's a bunch of other projects here you know it is actually quite weird because harvest finance has actually been growing quite quite strongly and i actually have a friend who's really into harvest and i i spoke to him um and i kind of said like yeah this you know i mean harvest is growing and everything but for some reason the token's not going up and i gave a bunch of reasons like uh i mean i i think that harvest's brand

for example can be better i think because they were hacked there's like a discount on the token now because of that and things like that right there's you can't just look at raw numbers to explain price movements you have to look at everything else around it um and and you know i mean i could go through this whole list and give you probably reasons for most of them as to why i think they've performed or haven't performed but i'm not going to get too too into the weeds here but it's still very interesting to look at uh i i like whenever he posts this i i definitely pay attention to it uh so yeah i will i'll pay attention to this going forward and probably share it in a future episode again really exciting update from tim biker this week on eip1559 so i think it's here right yeah so this

is the fourth state of eip1559 update so the tldr is that i mean he mentioned that we have the extensive economic analysis done by tim roughgarden that i talked about they are building mainnet size test nets to analyze 1559's performance which is a huge kind of step there's already a test nets going but there aren't like as big as mainnet right so obviously we need a bigger test net to test everything as the best we can they've made progress on addressing the transaction pool issues caused by changing the base fee they have new simulations that analyze the behavior of legacy and one five five nine style transactions on a single network so this is what i was talking about the

other day where i said that we're going to have this hybrid style for a while where you can send a one five five nine style transaction or you can send a normal transaction uh so i spoke about that the other day and and a bit of big news here is open ethereum is hiring a full-time engineer to work on one five five nine so if you are interested in something like that that'd be really cool to work on right but you're going to be delivering an upgrade that pretty much like the whole ethereum ecosystem wants so definitely go uh check that out if that's something that you think you'd be a good fit for uh and then yeah tim breaks down everything here into more detail of course i'll link this in the show notes i'm not going to read through the whole thing on the video but basically

i think there was 10 key takeaways from tim rufgarden's analysis here i won't read through them all but the number one analysis that i'm glad that he pointed at sorry takeaway that i'm glad that he pointed out was that uh and i'll just read it out he says no transaction fee mechanism one five five nine or otherwise is likely to substantially decrease average transaction fees persistently high transaction fees is a scalability problem not a mechanism design problem now this is something that i've tried to get through to a lot of people when writing about this sort of stuff this yeah i mean as he says this doesn't lead to lower transaction fees in any substantial way it provides a better fee interface and a better way to do fees

on ethereum which may lead to lower transaction fees but it's not going to do like a 50 reduction in transaction fees or anything like that you might get a 10 20 reduction which is still good but it's not substantial right the high transaction fees can only be offset by scaling right right and that's coming with i guess sharding on layer one and then layer two we have a bunch of different tools and things like that so i i definitely wanted to point that that takeaway out and i'm very very glad he called that out because that's been something that i see people talk about they're like oh we'll just wait for one five five nine and it'll fix our you know it'll fix all the fee issues it's like unfortunately that's not the case i wish it was but that's not the case um the most bullish

thing for 1559 is that he greatly improves the transaction fee mechanism so that fees are more predictable so that you don't have fees going from like you know 30 way to like 60 great in an instant and then you know you just put a 30 grade transaction through and now you have to wait because it's spiked or whatever so it kind of alleviates those issues and of course it burns each that's another thing that most people are excited about but go read the full post here it's quite lengthy i i mean i'm just so impressed by by tim's leadership here with one five five nine i've spoken about it before but i mean i love these regular updates this is this is what kind of coordination and leadership looks like and this is exactly what danny ryan does for eth2 um it's exactly what the eth cat herders

do as well for eth1.x it's just really really great to see this sort of stuff i'm glad that we have these kind of people working on this and and taking this seriously and and putting this stuff out there for us to keep up to date with because perusing all the different you know githubs and forums and everything is not something people have time for so having a nice breakdown like this is is definitely uh very welcome right last thing to talk about so uh larry sirmik from the block has put out this chart today that basically says he says coinbase's traffic increased from 23.7 million dollars in october to 37.5 million uh not dollars sorry visitors uh in october and 37.5 million visitors in november

so that was a pretty massive month-on-month increase for coinbase uh i don't think that's very surprising right btc and eth were going up and where do people do their btc and eth trading uh a lot of the time centralized exchanges right and coinbase is obviously the front door there this means that i think um either you know we have a bunch of new people that came in over the last two months or that we had people reactivating their accounts and coming in and buying more uh or or people selling of course right going to their fiat off ramps to cash out to but whenever this number is is high uh any mentions here that this is the highest number since he started tracking uh that this metric almost two years ago uh this is a good sign there's

i mean there's a very positive sign it means that we have new people flooding in uh that are coming into this ecosystem they'll start with coinbase they'll venture out they'll come to d5 right they'll come to ethereum they'll use the ethereum network they'll do all this really cool stuff i think we're gonna see this keep increasing i mean i've mentioned multiple times already that i think that we're heading into a new like fresh bull market the next kind of year or so is going to be quite good for crypto uh i mean you know pending any bad regulatory news right as i discussed the at the start about this uh this this regulation that might be coming in the next few weeks that can always kill things um but you know i as i said i'm hopeful it won't but

yeah i'm really glad to see this uh to see this traffic growth here and obviously it's not just centralized exchanges that are growing we saw a lot of d5 growing but the reason why like looking at centralized exchange growth is important is because it's more likely that the people that the growth is coming from new users rather than existing users like existing crypto users because with ethereum and d5 and d5 summer i really doubt there are actually new crypto people doing that like the majority i think what happened was we had uh the people already in crypto putting more money in doing more things with their assets right unlocking their assets and doing yield farming with them and then people from outside of the ethereum community like in the bitcoin communities or general crypto

communities seeing all the you know the money that was being made and like fomoing in right and taking their bit we saw bitcoin come over to ethereum in a big way because of it all these sorts of stuff um and not just like regular users but also big funds and big traders and market makers and all these this sort of stuff as well so yeah i think me for me the two biggest indicators of new people coming in is like uh twitter follower growth and not just my follower growth but like on a net for everyone that i know uh if their followers are going up then like at a more rapid pace than it usually is then that's kind of a good indication that new people are coming in and of course centralized exchange traffic light coinbase because that is the front door for the us

as well so gonna keep an eye on this uh i i like that larry tweeted this out and i like that it keeps us updated with this and he's a great follower as well so at loremaster on twitter he is one of my favorite followers so definitely go check him a follow if you're not already i'm sure a lot of you a lot of you are but if you're not go go ahead and do it all right that's it for today's daily way refill everyone thank you again for watching listening i hope you have a great day if you haven't subscribed to the youtube channel definitely go do that and give the video a like if you liked it uh subscribe to the daily gray newsletter as well and join us all on discord and i'll see you tomorrow thanks everyone