Layer 2 updates, Ethena raises $6.5mil and more - The Daily Gwei Refuel #626 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the early gray refuel where it kept the latest news in Ethernet maker system I'm your host Danity sassano it has the 19th of July 2023 right everyone let's get into it so there is going to be an AMA happening in the daily grade Discord Channel this Friday at 11 A.M uh Australian Eastern Standard Time which is 6 p.m uh PDT and 3am CEST now this AMA is not being done by me it is being done by Merlot from uh and the team at uh tax on chain here so this will be an AMA all about taxes and if you're at all curious about taxes especially Australian uh taxes because it is taxes in Australia for those of you who don't know Australia's tax season runs mid-year to Media so July

1st to um to June 30th uh that's the Australian Financial year you can ask your questions and put them in the accounting taxes channel in the Discord Channel and um on the day or you can ask them beforehand they'll be answered on the day and you can check out this announcement it's in the Discord Channel I'll link it in the YouTube description below uh for you to do so just wanted to give a shout out there and thank you again to Merlot and the team for doing this AMA I'm sure it's going to help a lot of people all right so there's a bit of alpha out of arbitrim today so as you guys know the etcc um ethereum conference event is still ongoing and lots of teams are announcing things leaking Alpha of things giving talks all that good stuff there so

Terence here from the um offtrend lab slash prior Labs team shared that permissionless validation is coming soon to arbitrim now this is pretty cool because I've obviously talked a lot in the past about how these layer twos as they exist today most of the time they have like training wheels on them they have centralized points of failure they have multi-sigs uh they have permission validation permission sequences things like that but they're slowly moving towards fully permissionless systems and now with this announcement or this Alpha leak from Terence here today we can see that arbitrim1 is going to be moving uh towards permissionless validation sooner rather than later right now the validation is is permission that's done by uh validators that the offtrend labs

team have picked themselves but in the future anyone will be able to become a validator on the arbitrine one network and of course a sequencer as well and it's kind of crazy on the timing here right because it right now arbitrim1 has fraud proofs enabled they have permission validation and a permission sequencing or a single sequencer that they run um and if you look at the other popular optimistic roll up optimism they have the same kind of thing with the sequencer but they don't have fraud proofs at all right now um and they also have permissioned um a validation there I believe so it's going to be curious to see if arbitrim is able to decentralize both their uh validator

and sequence are at least making permissionless um before optimism does their fraud proofs because optimism have uh needed to have been um working on their fraud proofs for a very long time now and they're still not live which I'm I'm puzzled by that honestly I don't know why they're not live I wonder if they're going to skip over fraud proofs altogether and just go straight to validity proofs which is what ZK Roll-Ups normally use um but I'm not sure I haven't really seen any movement there there is a GitHub repo called Canon um that's the the fraudproof system that optimism wanted to to use for the op stack but it's it's kind of curious because the fraud proving system for the op stack means that it's been it's going to be used by all of um the L2 chains that are built using the op stack so if there's

no fraud proof system there then there's other chains built using op stack I can't use it obviously so I do wonder if they're just considering skipping over fraud proofs and going straight to validity proofs just because I do think the end game is validity proofs for even for like um the existing optimistic Roll-Ups and I think that they're being built that way as well I mean with arbitrim's Nitro upgrade it's it's been built to be validity proof compatible from what I know with the Bedrock update upgrade for optimism was the same deal there so yeah I'm curious to see uh how that's all going to shake out but great to see here that uh that arbitrim is is already moving towards permissionless validation and thank you to Terence for the alpha leak Straight From Paris at 8cc here

all right so there is a new nevermind client out our version 1.20.1 is now ready for download what uh some of the major features in court include logs readability attestation rate sync times full pruning uh and more now you can see that the Netherland logs actually look a lot better now they've been uh I believe uh color coded and they've also got uh they've been split out more and they've been formatted better so you can see here uh in this screenshot that was posted by Merrick what this kind of looks like right now and I think in the past nevermind logs have been kind of meh I guess uh not not the best but they've obviously been improved with this new version so if you run out of mind and you like keeping an eye on logs this is definitely something

to to upgrade uh but on top of that there are also other other things that I mentioned here and you can check out the full uh kind of details um in the GitHub but also in the in the Twitter thread you can see here there's boosted block processing priority to improve attestation rates during sync improvements in sync with faster snap sync all old bodies and old receipts plus reduced SSD rights requirement full pruning improvements better threads management free disk space check for full pruning pruning time reduced and more and there's a bunch of other things you can read about as I said I'll link it in the YouTube description below so just great to see never mind continuing to push out uh better versions of their software here more optimized versions um and you know I I don't think I've looked at the client diversity website

for a couple of weeks on the refill but let's like bring that up really quickly because obviously it's all about client diversity when it comes to uh when it comes to ethereum and you can see we're pretty much like at the same I think Geth creeped back up again to over 50 but we're pretty much like similar to where we've been for at least the last couple of months here uh but never mind is still in second place with Aragon and Basu trailing behind and then obviously we have other newer clients like ref starting to gain some adoption but I don't know if this website client diversity.org is tracking wrath right now uh but yeah that's that's the current state of it there so if you're running down the mind be sure to upgrade uh you can do that by going to the GitHub repo which I'll link in

the YouTube description and below all right espresso systems have announced their partnership with eigen layout so they'll be collaborating to bring a restaking to the espresso sequencer Network now for those of you who don't know what espresso is or what they're building they're basically building a shared sequencer network uh for all the different l2s on ethereum so basically you can plug into espresso's signature Network and not have to use your own uh sequence or not have to try and decentralize your own or create your own decentralized sequencer Network here which is pretty cool obviously they're a trade-offs here and I am definitely not um uh uh have not read up enough on them to understand the trade-offs of shared sequences with single sequences and what

it's going to look like in a restaking world with eigenlayer but I think at the end of the day it's all about experimenting right it's all about experimenting with these different solutions seeing which ones works best seeing which ones are the most resilience are the most secure the uh the you know the things that actually provide the most value to each of these ecosystems and going forward with that so we don't you know we don't know maybe it ends up being that uh a single sequence I'm not talking about like one sequencer but I'm talking about like a a sequencer network uh per Network so for example arbitrum one would have its own set of sequences and then optimism may not would have its own set of sequences and so on and so forth instead of the sequences all being shared between these different networks because you know what

does the economics look like in that world where does the value occur in that world like if there is this shared sequencer Network these espresso systems going to have their own token that people can stake on this sequencer Network in order to earn fees from the other networks okay but then why would the other networks opt into that if uh they're losing out on that because maybe they want their token to be the staking token so there's a lot of open questions here with how the economics are going to work how the technical stuff is going to work but as I said it's always exciting to see the Partnerships here because this is how we come to those conclusions we test we test we experiment we experiment and we get to a conclusion that will hopefully be good uh for everyone here so you can check out more

details about this for yourself as well as the original uh kind of document about shared sequences from espresso systems here which I've talked about a few months ago yeah it was four months ago when they published this uh I'll link that in the YouTube description as well for you to check out all right L2 beat has listed bass on their website here now of course bass is not live yet it is live for developers but not live for uh everyone just yet on obviously not live for users but you can still keep track of what's going on on the network currently so you can see here there is almost a million tvl in the network so far since going live uh for for developers here I guess that's kind of noise it doesn't really mean

anything right and and the other stats like TPS and transaction count don't really mean anything right now and as expected they're stuck at Sage stage zero right now it's obviously going to be fully centralized there is no kind of uh Illusions there about them being uh centralized or decentralized TR and then you've got the full normal kind of like Risk breakdown and things like that that you that and and security breakdowns and stuff that you see on normal l2b pages and and for those of you don't know when you click into a project page and you want to see that the stage that the projects are at and what they actually what requirements they've actually met to reach that stage and What needs fixing you can go to the risk analysis section on each page you can see it here on the left hand side you can look at

the roll up stage and then expand these fields here so you can see that the reason why bass is considered stage zero is because the project calls itself a roll up L2 State routes are posted to ethereum L1 inputs for the state transition function are posted to L1 and open source node exists that we could get back and recreate the state from L1 data that's because obviously bass is built on the op stack where and why base isn't at stage one is because there is no proof system so they don't meet that requirement obviously as I was discussing before there is no fraudproof system for the op stack at just yet users withdrawals can be censored by The permissioned Operators uh because there is only a single sequencer and upgrades executed by actors with more centralized control than a security Council provide

less than seven days for users to exit if the permissions operator is down or censoring that is of course because there is a I believe multi-sig or kind of like Central admin key on base or will be when it first launches but that's that's pretty standard stuff right no surprises here but great to see that based is now listed on l2beat I'm actually curious to see how quickly bass climbs up this uh this ranking here you know it's ranked by by tvl by default when you look here but you guys know that I'm not a huge fan of the tvl metric but it's definitely something that most people pay attention to but I'm very curious to see uh you know how how quickly they climb up their ranks here in TBL uh as well as just general activity um and and and Beyond so yeah

great to see that and you can check this out for yourself I'll link it in the YouTube description below all right oscarf here has append a blog post uh called a friendly introduction to zero knowledge uh he says yeah explore the magic of zero knowledge proofs what they are why you should care and how they work and where we can use them for anyone for anyone curious about this new tech and want to rock it better no math or code required so you can go give this a read for yourself it is definitely not a light read it uh is definitely not a short read as you can see as I'm scrolling through it but if you are still confused by how zero knowledge Tech Works what zero knowledge proofs are how they apply to to ZK

Roll-Ups ZK VMS all that good stuff then this post is definitely one to read maybe you're going to read it over the weekend or something like that some light weekend reading right I'll link it in the YouTube description below for you to do so but you know I've highlighted a bunch of these posts before I think they've been there's different Pros for like different different uh uh from different authors about ZK and people have been trying to explain it using different analogies and things like that at the end of the day the zero knowledge stuff like it can be explained like you're five but if you want to dive any deeper it just starts to become complex there are some things that are just inherently complex that doesn't matter how much you kind of I guess dumb it down you you have this surface level

understanding and then you have like these much much deeper understanding and that is true for a lot of things but I think that people sometimes I see people saying oh you know there's zero knowledge stuff or ZK stuff it's so confusing however gonna get Mass adoption like this well the point is is that like the people the the mainstream doesn't need to know how any of this stuff works right that the whole point of this stuff is for developers is for technically curious peoples for researchers they can care about this stuff and people working in the industry of course but for everyday users for mainstream users they will not have to care about how this works at all just like how you don't have to care or know about how ethereum works when you make an ethereum transaction on layer one like if I say and eighth to you right or

you send eth to me there is so much happening in the background during that transaction but we don't have to be aware of any of that I mean obviously I'm aware of what's Happening uh you know I'm aware that the if I'm using metamask it's probably using the inferior RPC and then it's relaying the transaction and then there and then the validators are on the network fighting for uh for blocks but then there's this this Mev Booth sidecar software that is involved with that and the reason why the network is secure because of the consensus mechanism in place and because of the economic security so I'll keep going on about I can keep saying all these words and they're not meaningless words obviously they're things that actually make sense but a regular user doesn't need to know about that and the future state of Unchained things is that

a regular user doesn't have to know about anything except what they want to do if they just want to send a that's it that's all I should know about sending eth from from uh from A to B that's it that's as simple as it should be they shouldn't need to know what gas is they should need to know about um the the an ethereum address I should just be able to use an ens name or just like a friend name just like how we use the internet right like where you don't need to know what an IP address is you just need to know the URL and in the background DNS does the job of translating uh all of that and keeping record of what IP address matches to what domain and all that other stuff going on in the background there but that's like the tip of the iceberg then

you can go into like the networking stack then you can go into the general Hardware stack and then the software stack and then the firmware and then all the way down as far as you want to go to the bits and Bob zeros and ones right so at the end of the day it's all about abstraction everything is abstracted away and that is inherited from nature like no one in the world probably knows how the entire human body works right doesn't matter if you're the the smartest doctor or scientist out there that studied every body part we still don't have a full understanding of how the human body works especially the brain but most people have no understanding about how their body works right and they walk around with it for their entire life but the point is is that nature has abstracted that away we

don't need to know how it works for us to function all we need to know really if you boil it down to its fundamental things is that we need to survive by eating and by drinking and and that's about it right like we're programmed to do really three things uh eat drink and procreate at the end of the day as humans so yeah I'm getting a little bit sidetracked here I guess but I'm just trying to illustrate the point that there is layers of abstraction to absolutely everything and the way you bring a product to the mainstream is by obstructing away as much of the nitty-gritty as possible because users shouldn't have to become experts in anything new in order to use your product and the and the most successful products or these digital products and services are the ones that are super

easy to use the most successful apps are the ones that are one to two clicks to use that's why uh you know social media apps are literally one to two clicks not even like a lot of the time it's like one click you open the app right and then could you even consider that a click once you open the app I mean open the app refresh your Twitter feed there you go right you're already into Twitter you'll be browsing so when thinking of it like that then we're gonna get there and that's why uh when people say to me you know all this stuff's so confusing for it for everyone however gonna get mainstream adoption it's like well that's the thing it's it's still early we will get mainstream adoption but we have to actually abstract away all of this stuff and the only way we do that

is by having people that understand how this works and then and push it up the chain basically so yeah anyway gonna leave that one at that but you can check out this blog post for yourself I'll link it in the YouTube description below all right speaking of abstracting things I did mention a few weeks ago that the coinbase wallet launched gasless usdc ascends on the polygon POS chain and you can see here Yuga who is a senior staff software engineer at coinbase tweeted out a Twitter thread today saying this feature did not require smart contracts or EIP or Arc 4337 account obstruction instead it relied on a different standard called meta transactions uh and then Yuga continues by saying meta

transactions are defined in EIP 3009 in part authored by former coinbase employees including uh Pete here inspired by the previous aip26 uh 12 it makes some security and usability improvements to the use of random nonsense and ensuring a skewing the transfer from approve pattern so I guess like this is all the technical details of how this works you can go read yuga's thread for yourself here but yeah this is another way of doing gasless transactions there really is kind of like three ways that I know there's probably more ways of doing it maybe maybe there's four ways off the top of my head so there's this way with meta transactions then there is um the second way which is like off chain kind of like signing of orders and

then the gas fee is paid by the person who is processing that auto or the the market makers that is processing that order and they bake it into their model and they pay the fee um then there is um uh someone else paying the fee for you basically uh which is basically what meta transactions are I guess as well and there's there's one or two other ways that just allude me right now in terms of doing gasless transactions as the account extraction way of course and then they're just making the transaction free I guess but there are multiple ways of doing it and again this goes back to what I was saying about account obstruction or sorry layers of obstruction I should say is that we are going to abstract away pretty much everything so that it really is just one to two clicks to send money instantly

anywhere around the world via VIA crypto doesn't matter if it's if doesn't matter if it's stable coins doesn't matter if it's your favorite or nft or anything else out there the point is is that we're going to get to the the the the point where users can just do this uh very very easily so if you want to learn more about uh how uh coinbase is doing it with meta transactions you can check out yugos thread for yourself I'll link it in the YouTube description below all right Athena Labs has announced their fundraise today so they've raised 6.5 million dollars in a seed round led by a dragonfly Capital with participation from a bunch of other funds and Angels now of course I am going to disclose here that I am an

angel investor in Athena um I have been talking to the founder for for quite a while now it's a very interesting project and I'm going to explain to you basically what it is so they're making two kind of key products for uh uh for for the crypto space right now so you can see here the first is a scalable crypto native stable coin called usde and usde is fully collateralized on chain and maintains stability through Delta hedging eth collateral on centralized and decentralized exchanges and the second product will build upon USD at usde by capturing steth yield and the basis in Futures markets markets this will enable the first globally accessible and permissionless crypto savings instrument

the internet Bond so in plain English what it basically means is that this stable coin is going to be collateralized uh fully fully collateralized and then there is going to be a product built on top of that uh sorry it's going to be collateralized I should say with um uh with kind of like a St Ethan and and and other kind of um staked tokens and there will be a product built on top of that to capture that yield uh and the basis points from Futures markets and then basically bake all of that yield into the stable coin itself rather than the yield being leaked elsewhere because for those of you who don't know centralized stable coins the way they work today like usdc and usdt the reason why tether and circle uh have these products is that they take dollars in to issue these

stable coins but then they keep those dollars in a bank account or they buy treasuries with them and bonds with them or they buy other assets with them and they earn a yield or a return on those assets and they profit from it now if all you were to do was to buy uh basically uh treasury bonds right now in the US I think they're paying out like like four percent you would be making a four percent yearly return on the dollars in your account now what is the market cap of of tether right now well it's huge right tether's market cap is over 80 billion dollars right now it's 83 billion dollars I just checked it so if you're earning four percent that tether's balance sheet isn't all in treasury but let's just say it is for for um argument's sake here if you're

earning four percent on 83 billion dollars right because the yield is not going to usdt Holders obviously it's only going to the dollars that are backing usdt um that is a ton of money like that is uh if I'm doing a my napkin math correctly here 10 would be 8.3 billion then you basically halve that and go a little bit more four billion dollars a year literally for not really doing much right for just providing the infrastructure to to redeem and mint these these stable coins through different bank accounts and having it sitting in a bank account right so it's a very lucrative business it's a very uh risk it's not risk-free but it's like it's it's low risk it's a low risk business so what would happen if we actually made a stable coin not a

centralized wine a stable coin that was fully collateralized by not US Dollars by staked eat for example and then we fed that yield not just from staked eat but from from um uh the spread the bases kind of spread on Futures markets and we fed that into the stable coin itself well then it would be returned to users so usde uh in this in this kind of like world as is as Athena lab says yeah becomes an internet Bond it becomes something you can hold and it is uh it is a kind of like a real yield right it's not being inflated by anything now of course you could put that usde into something else like a money market or an LP or another farm and someone could pay you tokens on top of that for doing that but just on its own this is what it kind

of enables here uh which I thought was pretty cool and you guys know my general view on stable coins is at least Fiat Peg stable coins is that I think that they're not going to become like a global thing thing where essentially everyone's using a Fiat pegged stablecoin as part of like their day-to-day or I should say a decentralized one a centralized one can be used as part of day to day because you can just back it with with real dollars but when it comes to decentralized stable coins you're always limited by the collateral type right and and you have to have a collateral and you have to have some backing there otherwise you end up like UST from Terror right so you definitely always need collateral backing it up um but but that incurs an inherent limitation but that doesn't mean that these

decentralized Fiat uh Fiat Peg stable coins shouldn't be attempted or shouldn't be put out there they're definitely very useful for the kind of like on-chain crypto economy as we've seen people like them you know die is still relatively uh pretty pretty big and there's other stable coins like go that launched last week and actually mentioned this to the founder when I got on a call with him the first time I'm like hey like generally I'm I'm pretty bearish on Fiat Peg stable coins being being able to scale as well as being decentralized and he kind of said to me he had really good answer he's like well it doesn't it doesn't really matter we don't need to grow this thing to be uh to take over the world right we don't need to grow it to take over um you know all the money in the world

and to basically replace the the US dollar uh for it to be very valuable we just need it to be uh valuable within the crypto ecosystem it can be valuable within the on-chain ecosystem and as long as people are using it and people are getting value out of it then that makes uh makes it valuable right it makes it valuable as well because you've got that inbuilt yield I was like you know what that's a good way of thinking about it like I'm always thinking about it in the grand terms but if you think about it in just that those kind of terms and just like the on-chain world and what the product actually is where is differentiated from other products out there I was like you know what this this sounds cool this is something that I want to want to see built this is

something that I want to be a part of and that's why I I invested as as an angel investor um in this round here so hopefully that gives you some context about Athena you can go check out um this announcement thread for yourself which I'll link in the YouTube description description uh below for you to do so and go follow the Athena Labs account if you um if you would like to and also This falls into my the camp of D5 projects that I funded recently or that I've invested in recently that I feel are innovating and aren't just doing the same thing that has been done before I know there has been various different attempts at stable coins like this but I think that there is a unique kind of value prop here and I really want to see it build I really want to

see it grow and I want to see um what ends up happening with this and and if it succeeds uh you know if it's if it succeeds or not because at the end of the day I think that when I invest in things I invest in them because a lot of the time especially at the seed stage because I really like the founder I really like the team I think that they really want to build something and even if there is a potential low chance of it of it working I still want to back them I still want to fund them because I think it's important for Innovation it's important to experiment with these sorts of things and that's what ethereum is all about at the end of the day it's about experimenting with new models of doing various different things things and if we can help that if I can help

that along in any way I can then I I will so yeah anyway I will link this thread in the YouTube description below for you to check out all right last up here we have an announcement from superfluid so they've introduced something called super fluid subscript subscriptions the open source programmable and customizable web3 checkout toolkit that allows you to generate recurring Revenue so they continue by saying you can monetize access to anything your software your apis your content your community or grow your donor pool as a public good or Creator request payments from customers businesses or individuals alike directly on your website via a shareable link in the Link's just TR super fluid dot Finance uh forward slash subscriptions here and you can go check this out for yourself and this is basically a tool

for I guess like developers to use here where you can um try the widget Builder and then basically put this widget into your website and and do subscriptions and all that good stuff there and uh yeah they go into more detail about this in the um in the Twitter thread as well as a demo so there's actually a demo here that you can that you can look at so basically if there's a there's a pricing plan I guess uh table here with different price points and this this is just as I said a demo you get 29 per user 99 per user or a thousand dollars per user if we could subscribe on the 29 per user it brings up a nice little interface here of uh of of kind of like uh the super fluid interface of what network and token you want to use so if

you want to use polygon Mumbai which is the polygon test net with usdc continue uh wrap to Super tokens here and then review the transactions let's continue and then it shows you the transactions here and then you you put the transaction and through and I'm not going to do that now but yeah that's just the demo there for you to go check out as well as all the extra info in this Twitter thread here and this is again talk um speaks to the uh stuff I was talking about before about these layers of abstraction by having an easy to use customizable widget built by superfluid uh you can now very easily plug this into your own website onto your own kind of like um checkout experience and users can get started with it straight away without you having to build it yourself and it's all

obstructed away even for the developers so very important for this stuff to be for this infrastructure to be um put out there and for it to allow developers to build with that so kudos to Super fluid for this uh but I think on that 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 newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone