Layer 2 updates, ETH as digital oil and more - The Daily Gwei Refuel #173 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where we cap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 27th of july 2021 all right everyone let's get into it so i put out a tweet earlier today uh basically this picture that i found in an article and i basically said eath is digital oil now you can see on this picture i mean it's basically a table uh there's a bunch of different kind of assets being compared to eth and btc here starting at the bottom you have eighth which has a market cap of 260 billion and then all the way to the top you have oil which has a market gap of 107 trillion dollars now on the right hand side of the table you can see what the eighth price would be if the

eighth price was at that market cap uh and it ended each kind of like different market cap uh depend you know it's it's comparing coal natural gas iron gold copper platinum silver btc and uranium now um you know if each market cap was the same as btcs it would be ether would be at six thousand two hundred dollars if each market cap was the same as gold eth would be 137 913 which i mean i've spoken about how i think long term is going to 100 000 um and you can see here that something is useless as gold you know he's worth that so i don't think it's too farfetched to say that ethereum can be worth that one day and then you just keep going up the list right and then you get to oil which has uh which if eath had the same market cap

as oil it would be worth 932 thousand dollars um which is almost a million dollars obviously per eth like per one eighth now this is crazy when you kind of look at this and you kind of think to yourself like this would never happen this is insane like that would require obviously to have over 100 trillion dollar market cap which uh you know no i guess like uh you know it's very far away from where it is today like obviously it's 160 billion today 107 trillion is is much further away than what we are now it's about 400x from where we are today um but i think you know it's funny because like over the years i guess like from the even the earliest days of it's existence it's always been referred to as like this digital oil right that you basically use to essentially

kind of like get your transaction included in blocks aka pay fees uh now i don't think that analogy is actually very accurate i think i don't think eath itself is oil guay or is basically the oil um which kind of like uh i guess is what pays the gas fees technically it is eighth obviously but um you know it's i don't think the analogy holds too too well there but eth is also much more than oil right it's used for much more than paying fees on the network but the funny thing is is that you know oil obviously has like a large market cap because it is used by absolutely kind of like everyone in the world uh you know whether that's for their own kind of cars or whether that's for um you know generating kind of like electricity and and uh you know

flying planes and all that sort of stuff and like boats and i mean obviously like oil is used more than anything else it's the most used commodity in the world that's why it has the the biggest market cap and it's extremely valuable and we've only got a finite amount of it too i mean i know there's still lots left and from what i've seen we've got like maybe 40 years worth of digging left to kind of like um dig up oil maybe there's more you know that's dependent on us not finding extra oil reserves and things like that on the earth and you know maybe we find them in space too who knows um if that's even possible i don't even know i don't know too much about about that sort of stuff but uh generally i think that um when you kind of like compare each to these sorts

of things it's a nice little thought experiment but it kind of like i guess misses all of the value that eth has rather than just like its uses gas phase but it uses everything now does that mean i think that it's going to be worth you know much more than oil one day uh no not anytime soon you know and and for east to be worth as much as oil it would mean that every single person in the world would need to be buying a you know pretty regularly i mean not maybe not every single person but most people either buying eth or or using something that consumes eighth and sure like you could make the argument that one day um you know the ethereum network will be used so much and so heavily by everyone that eath will be in such demand uh for kind of like sorry um block space

will be in such demand that the fees will be so high and eight will be being burned with one five five nine um because obviously oil is burned as well when we use that so it's kind of like finite um and that's kind of like the same concept with eth and then you could argue that we're also going to have like steak teeth we're gonna have eighth being used as a productive asset as collateral and stuff like that uh and you you could definitely make the argument that uh that eth could potentially one day have a market cap this high but it requires a lot of assumptions of course i mean the biggest assumption is that ethereum does indeed take pretty much like all the market share and uh essentially goes on to power the entire world's economy and the new internet and all these sorts of

stuff like that is a biggest assumption at the end of the day like as bullish as i am on eth you can't just say oh yeah it's guaranteed to go to a million dollars because it's guaranteed to do all this sort of stuff like obviously i i i personally have strong conviction and strong beliefs that eth or the ethereum network is going to go on to do great things um but you know you still got to make assumptions here there's no guarantees in this sort of stuff uh so you know it's just funny kind of like seeing this and it's funny whenever you know i gave the 100 000 price prediction and people were just like you know you're absolutely insane that's crazy what the hell like we're only at 2 000 or whatever you know even when we're at the highest like 400 people are like you know you're

absolutely crazy and it's like well i mean i don't i don't think so because when you look at gold like we wouldn't even have to have the same market cap as gold to be worth less than that and you look at the rate of growth and you look at how much adoption ethereum still has left and you think whatever and you look at everything that ethereum can do or eth can do that gold can't do which is infinitely more uh i just don't think it's far-fetched to kind of like give those those kind of price predictions out there now if you're expecting this to happen and you know in the short term then obviously you're gonna be upset when it doesn't you know even people were even having a go at me for uh for the ten thousand dollar price that i've been throwing up for quite a

while and that was saying you know haha wins ten thousand dollars we're crashing bull market's over blah blah and these people are just annoying because i've been calling for eight to ten thousand dollars since 2019 it's not like i've been doing it just because the bull market was on i mean it was a big reason why i kept buying eth is because i truly believed it was going to 10 000 and beyond and you know it's another big reason i'm buying eth if today and continue to buy it is because i do believe it's going to 100 000 plus um and i have the conviction on that so it's always funny and that's why i try to avoid too much price talk and too much like giving actual price targets or anything like that especially on twitter um because generally when i do i get like trolls and stuff like that

it's just annoying but i think you know tweeting at something like this i think it's just funny reading some of the replies i mean it wasn't really any troll replies it's like just people different different people saying like different things and saying kind of like um making up jokes and things like that and i mean yeah it's just funny kind of like seeing seeing the jokes around here it's like someone made a joke that um which digital action is cardinal and someone replied digital air with good marketing and an annoying boss so yeah i mean that's always fun but generally if i do give like crazy price predictions especially when the price is going down uh i get like trolled to death so i try to avoid it but definitely going to keep uh leaking the alpha 2 to my to the refuel watchers and listeners

um but you know who knows we'll see maybe in 10 years 20 years 30 years or whatever uh we're going to look back on on these kind of like videos on the refuels uh and when we're going to see like uh me kind of saying this and saying it was crazy and maybe ether is at that price point i don't know who knows but i'm going to leave it at that because i don't want to spend the whole episode talking about eath prices um there was an interesting tweet from roon christensen the founder of make a dao which had to do with what i was talking about yesterday with regards to regulations within d5 so the tweet thread basically starts with runes saying if the us bans or seriously interferes with the innovation happening in d5 it will be an own goal 10 times worse

than china cracking down on didi which paralyzed innovation d5 today is the most rapidly innovative innovating sector in tech and most of that innovation is us-centric now he goes on uh to to you know in the next few tweets here which i won't kind of read out um but he goes on about like this kind of point here and i wanted to kind of talk to this point a little bit basically i i want to disagree with one thing i don't actually think most of the innovation is u.s centric i i think that um you know someone else brought that up with roone here patrick who said that a big part of d5 is yeon curve ave and they're not u.s centric let's be humble and then roone says they are not from the u.s that they almost exclusively use usd stable coins so there's kind of this i guess like two

prongs to this there's u.s centric eccentric innovation aka teams based in the us building products within d5 and i think they're actually becoming a much kind of like smaller part of of d5 overall but then you can look on the other prong and basically the flip side where d5 is basically all centered around usd at the end of the day i mean not even just d5 crypto in general like all the prices anyone ever quoted in usd like even me i never quote prices in aud i couldn't even tell you what the price of eth was in aud right now i know what the price of ethereum usd is i watch that all the time but the aud price i've got no idea i never even look at that even when i go to uh sometimes when i'm doing yield farming and i have some ether i

earn i have to cash it out for taxes i i don't even know what it's going to be i just like okay well that's what the aud is right now okay sell that off that's for taxes and keep the rest um you know as profits but uh i i think you know both points hold merit here like the fact that more and more innovation is leaving the us because of these tight regulations is obviously a bad thing but the fact that the usd is such a central part of d fi and continues to be a central part of default i don't see that going away any time soon i don't know if i call that a good or bad thing it just is sort of thing right so i think that um rooney's right in saying that the us banning or interfering or cracking down um you know really hard on

d5 is going to be bad for them in the long run and i think as i just mentioned we've seen teams move out of the us or launch anonymously or launches dao's first i mean i discussed a lot of this yesterday but i do believe that us or not i think that a lot of teams are just going to have to launch at least as a dow first um or like just as a pure down not even have like a company attached to it at all have like a so the way you could do it is you have like a dow and m stable actually does this really well you can have like a dow and then you can have like a company that has the original founding team that's a part of it but the founding team isn't actually in control of the protocol

there's like a multi-sig that has different people kind of like on it and the founding team is essentially just one prong of the dow and they're like obviously the builders for a while and then you decentralize that out over time and there's these things called working groups the index co-op does this really well but maker also has this and a few other teams where the different working groups are basically different like business departments if you were like a centralized company so from that perspective i think that's how a lot a lot of these apps a lot of these projects going to be launching from now on but generally if you're based in the us you know and you're launching like a big project you either have to do what uni swap labs is doing and that's play extremely defensively um you know obviously they did their

thing where they censored their own front end by removing some tokens and then with when they launched the uni token they launched it in such a way that um you know i'm sure they had like lawyers go over it like with a fine tooth comb many many times and they basically launched it in in a way where uh i guess like all the liability over the token and the dow was kind of like relinquished from them and they've been taking a step back as much as they can so i think that there's going to be more and more teams that do that i mean compound did it back when they did their token as well obviously maker um has um has desi is dissolving their foundation and has basically become fully decentralized and we're going to see more and more of that happening um so i don't know if it actually

matters in the long run too much about uh you know the us regulating china regulating this this and this regulating whoever whoever wants to basically regulate it i'm not too kind of like concerned uh about that because i do believe that long term uh the healthiest way for d fight to grow and to defend itself is to be dow first and he's also to be uh with anon or pseudo and on founders as well and not just founders but team members and people working on it and having them distributed all over the globe as well so it's going to be interesting to see how that plays out um but i think yeah rumor brought up a good point here that basically spoke to what i was talking about on yesterday's refill so i just wanted to cover that uh for today so joseph from the ethereum foundation

shared danny ryan's latest blog post uh called finalized number 27. so this is basically uh a brief update that danny ryan puts out about the ethereum consensus layer aka the um heath 2 beacon chain uh as you as all of you will know about so the trdr of this up update is that it's time to upgrade uh uh for london um so just a reminder here that even if you're staking and you're you know you're running your own ethereum no at each one node you need to upgrade to london uh for the london hard work which is obviously going live next week on august fourth fifth depending on your time zone um and then there he also um kind of updated us on the merge checklist which i which i kind of like went through on the refuel last week

and a draft erp which i also went through uh for the merge and then some brief updates on the altair devnets that launched and clients clients positioning themselves for mainnet so you can see here now altair is the first eth2 hard fork network upgrade whatever you want to call it that's going live relatively soon there's been multiple devnets um and things like that which basically um act as kind of like uh pre-test nets and then this week uh they expect to see another devlin devnet launched followed by discussions by picking a date to fork paramount which is the long-standing beacon chain test net and then obviously we'll move to mainnet so really cool to see progress happening on the consensus layer here and we're getting closer and closer to the merge right i mean it's august now merging q1 2022 hopefully uh we get

closer by the day so not too much longer before we can get rid of proof of work and be a fully proof of stake ethereum system so l2b which has become pretty much my favorite website to track l2 growth has added another project uh so rare i i used to say it serara but someone um said that it's so rare so i'm just i'm gonna i'm gonna call it surrey from now on but essentially sobre is basically a i think a fantasy football game that's uh kind of like based on nfts and stuff like that and they're on layer two i think i talked about this on the refuel a few weeks ago um that's powered by starkware's starkx so you can kind of like track their growth now their tvl their like all the information about them what their launch what they're using

what kind of technology they're using and things like that you can see here that they're not using roll-ups they're using volidium which is basically an off-chain data availability committee instead of putting the data on chain so it's got some kind of like trade-offs there but definitely makes sense i think for nft projects um and you can see primary use cases nft hypothetical level of the level of decentralization is high current level of decentralization is low because contracts are upgradable and i've spoken about this on the refill plenty of times before where i basically said that a lot of these l2s are going to start with you know centralized admin keys they're going to start with upgradable contracts all this sort of stuff and that's just where it's going to be for a while and then they'll decentralize over time which is totally fair and i think

they're not going to really decentralize until they've got their tokens out there and i'm expecting every single l2 to have their own token and i've mentioned this before you know the optimisms the arbitrage uh star wars zk sync they're all going to have their own token i mean zk sync even said they're going to have their own token so um and that token is going to be used for a few different things i mean you can bootstrap growth with that by liquidity mining you can bootstrap decentralization via getting people to run sequences and paying them for that sort of stuff and and i mean there's plenty of kind of ways to do it but you know i don't know when they're going to come out with tokens i don't think we've got any kind of dates on this sort of stuff but i think until that happens the level

of decentralization uh will be quite low there so and then you know this the website l2b also warns you about um you know the ability for the operators to steal funds so yes they can through the contract upgrade um and then is it permissionless no and only so rare can produce new uh new blocks on this right now um and then a bunch of other things here like privacy and smart contracts and stuff like that but anyway back to the growth here you can see that they've grown um pretty pretty steadily over the last i guess couple weeks here the relatively new project especially new on like layer two as well um but like i think they've been getting a lot of attention and action considering how big football or soccer whatever you call it is i think you know and nfts i mean like

fantasy football and stuff has been big for ages and adding a monetary kind of like aspect to it um you know especially when it's crypto net even and it's so fluid is is incredibly um yeah it works to supercharge it incredibly so yeah i guess um great to see another project heading to l2 using star wars technology i'm sure we're going to see more and more of these as time goes on so the gnosis safe multisig uh kind of like wallet here um it basically supports unisop now which is a major upgrade because essentially what you had to do to interact with unisop before you you basically had to use wallet connect which is just an extra step but now you can do that natively through nurses safe um and uh and basically you can uh interact

with your different multisig wallets whether that be you know your own or someone out or kind of like one that you're on for a project or things like that rather than having to do wallet connect and some other things i mean i know they had one inch support and maybe matcha i know they had some at decentralized aggregator support but essentially you can do this with with just like native uni swap now which is really really cool so definitely check that out if you're using nursesafe added a really interesting feature today which i think is going to be more and more i guess like uh more and more um appropriate as time goes on so what this feature does it is a button that allows you to check which check each address and what changes it has been used on so as i say here

simply click on the block scan icon and any address page on any address page and see where it appears in up to 17 evm chains now these evm chains include things like ethereum obviously polygon uh there's uh ftm phantom and then roxton and covan and i'm sure they're gonna add late kind of layer twos in here as well and stuff like that so i mean this is just another awesome feature that etherscan has added to their already awesome block explorer and i think that you know we can expect to see uh all the layer twos added here as well and there's already i mean the layer two is like optimism and and i mean the side chains like polygon and things like that have their own versions of the explorers but the thing is is that if you want to know if an address on ether scan

like when you're looking it up on either scan has been used on other chains then this is the the way to do it and i think obviously they're going to support the um the the kind of like ether scan like block exploits that they've built for other chains here so i mean at this point it just scans like the default right so that's going to be we're going to continue to see more and more chains kind of be added here so if you haven't checked out that button yet you can just go search for any address um and you know provided that it has been using another chain you'll be able to see uh kind of like what it's been used for and get a link to it and everything like that which i think is a super super useful feature so i missed this the other day but anish

from paradigm together with uh mark balon or i don't know if mark um uh hacked this together with with anish but um definitely he came up with the idea um but essentially a niche hacked together poor nft.co which is a way for anyone to take out a loan against their nfts so the way it works is uses a hybrid auction mechanism um so you can borrow against your collection or earn fixed rewards there's a bunch of kind of different uh loans here and people using it anish describes kind of how it works uh in here basically says by running an active auction for each lent nft uh we solve the problem of a pricing oracle nft owners can draw directly against their supporters bids uh so essentially i guess like in layman's terms if

someone bids on your nft uh you can basically borrow up to that amount of bid because you know that someone is going to be there to buy the nft or to liquidate it if you don't pay back the loan so i think it's actually a pretty smart way to do it at least that's my understanding of it maybe i'm getting it wrong i don't know but i think that's a pretty cool way to do it and there's so many more i guess like things that can be done in the nft ecosystem here i mean taking out a loan on your nfte is is something that i think is like some somewhat of a holy grail for ethereum and for d5 because really i i personally love productive assets but like pretty much all my nfts are unproductive i mean i have a crypto punk that is just a common one it's worth 50

000 right that's the flaw for crypto punks right now and i can't really do anything with that i mean i can put it into like an nftx index and stuff like that but but generally and i mean generally a lot of this stuff is tax tax events too like i trigger capital gains tax on things so it's just a bit of a mess so being able to use it as like collateral in a safe way and borrow kind of like assets against that i think is going to be the uh the um uh the most interesting thing for a lot of people out there so cool to see this project uh kind of hacked together by any issues just as just a machine i mean he he builds these things in like a a weekend essentially um from the idea that he says on twitter and he's done

this for other projects in the past so uh really cool to see this but it's on rinkaby you can go play around with that i'll link it in the youtube description for all of you so speaking of nfts i forgot to cover this the other day i don't know how i missed it xerox mons uh released zk nft which is a proof of concept nft marketplace showcasing the zk sync nft api so essentially this is in alpha so some things may be unstable at 0xmons has uh has kind of like warned here but essentially you can go to zknft.xyz uh if it loads up here i'm just gonna let that load there um but as xerox mons describes it uh zk sync is a zk roll up that supports erc20 tokens nfts and asset swaps they're adding full programmability later this year including solidity

support um and so what's live on zk nft today uh minting is live so you can mince your nfts on there and put your new metadata and things like that um and the images are also pinned to ipfs using nft.storage which is really really cool you can manage your nfts you can view them and view a collection on them things like that you can do swaps which is obviously very important um and then you know there's i think there's a bunch of other features here and it's kind of like open source as well and everything like that um which is really really cool so there's a blog post with a little bit more details here and there's also zero additional marketplace fees as well which is really cool but this blog post will give you a more detailed look at it than i can so

definitely go read this if you haven't yet and visit the site which it loaded up for me obviously you're not going to connect my wallet here but um you know you can still see like mint explore swap i mean i love the art artistic design here as well this looks really cool um you know i've been following xerox months for quite a while and they're one of my favorite kind of builders in the space just building out in the open building really cool things and making it look good as well so you know kudos to your xerox months i know you're a regular daily guy um watcher so uh there's your shout out basically anyone who um who essentially isn't paying attention to the uh to them you just shared the projects they're working on i highly suggest you do so because they're working on some really

interesting stuff in the nft space so speaking of l twos or layer twos a sandeep from polygon uh uh put out a teaser tweet where he said this weekend they finalized uh they being polygon team final is one of the biggest game changes for polygon um this would be more profound than maddox expansion to polygon and we'll set polygons tech to provide extremely scalable layer 2. uh so essentially i don't know what they're teasing here i don't exactly have any inside information here or anything like that um but essentially you know they're teasing l2s like roll-ups and things like that which i think is is really really cool uh i think that polygon has gotten a bad rap for a little while because you know really they have like the plasma chain live which isn't really used in the pos chain and people were

kind of like calling it an l2 and people getting angry about that and blah blah blah like there's all this drama going on but i think you know polygon has always been a suite of scalability solutions they're not just the pos chain i mean they even released a new data availability um chain or announced that the other day uh which is going to aid a lot of projects and and they've worked with other teams on that which is really cool but they're uh you know their new l2s that they're going to bring out as well is going to be even better so i mean the age of scaling is here the age of ethereum scaling is here and don't blink or you'll miss it because every you know there's things coming out pretty much every day now and you know i know that a lot of this is

just announcements and like you know we're coming soon and stuff like that but you know things do get released i mean we saw unisop on optimism arbitram has four days to go live on public main networks i have to eat my hat so if you're listening arbitrary team please please save my hat we'll see we'll see what happens there but you know i'm expecting them to go live relatively soon as well as i've said plenty of times in the past but i mean it's only been a month or so so we'll see we'll see what happens there so a bit more of other news around make a day out here so the maker dow growth uh i guess working group announced that delegation will arrive on to make it down on august 2nd which means that you'll if you're a maker token holder you'll be able to delegate them to for

voting in governance um you know just in case you want to so you can delegate to two different kind of like people in governance now this has been a key feature that maker dao has been missing for quite a while obviously there's already delegate governance in things like uni swap and compound and it's worked quite well i believe in git coin things like that and i think that delegated governance is the way forward i've spoke about this on the refu before but it's essentially a liquid democracy where people can kind of like you know i guess stake or at least delegate their tokens to someone or a group and say okay well i want you to use my tokens to vote on things and then if they vote wrong or like against what you believe then you can kind of like take your tokens away and delegate them to someone

else you know this i think is is really cool because it means you don't have to wait a lot you know it it you know it's it's like the reason i call liquid democracy is because in in an actual democracy um you have to wait right you have to wait like many years to to kind of like uh vote someone out and then you don't you know you don't really have much of a voice uh you have like one vote whereas with i guess like a delegation you know the more kind of assets you have i guess uh the the larger your voice and yeah there are concerns about plutocracies and things like that maybe it becomes like a a liquid plutocracy i don't know maybe democracy is the wrong word here i don't want to get into the politics of it too deeply here

but i do think the delegation method is better than note allegation because you're just going to have lots of people who don't vote with their tokens and then those votes just basically go to waste so i'm glad to see make adele um kind of implement this all right last up here we have lyra finance that announced that they have raised a 3.3 million seed round um led by framework ventures and powerfly capital with support from a bunch of other uh uh funds here and a full disclosure i supported them as an angel so for those who aren't familiar with lyra they are a layer two native uh trade uh options protocol that is built on optimism and that spun out of the synthetics project so i've been following them for quite a while definitely jumped at the chance to support them

um because of the fact that i think that no project has um kind of like i guess like nailed options protocols just yet and things like that i think that a lot of them are doing a lot of interesting things there's a lot of options protocols out there but i don't think any of them have nailed it just yet and lyra has like a few different novel mechanisms that they're using i really like that they're going l2 first i think that that's definitely going to help them with bootstrapping uh a lot of different things and and bootstrapping kind of liquidity and stuff like that so really cool to see that so yeah i guess like disclosure here i put his bed in the round but i'm i'm glad to see that they got funded here and you know it was announced like a few weeks ago i

think i mentioned on the refuel that if you're a synthetic staker or have been a synthetic staker in the past you're going to get um airdrop tokens from lyra fails um and quinta which are the three projects that kind of spun out of um of synthetics so you know keep an eye out for that as well if you're an snx holder or staker but on that note i'm gonna finish it up there for today so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone