Linea alpha mainnet, CowSwap Hooks and more - The Daily Gwei Refuel #621 - Ethereum Updates

Transcript

hello everyone welcome to another episode of The Daily Review where he kept the latest news nuclear maker system I'm your host Anthony has the 12th of July 2023. all right everyone let's get into it so first up here we have a collection of blog posts from the robust incentives group at the ethereum foundation or the rig group here now for those of you who don't know what the robust incentives group uh is it's an ethereum Foundation research team dedicated to the study of protocol mechanisms with the lens of Game Theory mechanism design crypto economics formal methods and data science so basically the bleeding edge of research in um on ethereum when it comes to things like crypto economics and Game Theory and stuff like that and they've done a lot of research over the years you can see

here they've collected all of their blog posts from at least the last three years dating back to April 15 2020 which was their first post which was erp1559 simulations uh you can see that there and and then that they're all linked here and then you and then you can even go back further down here I believe there's there's earlier post as well than the bottom of the page of that of talk sorry I should say earlier links to talks there if you're at all interested in this sort of stuff like crypto economics and Game Theory and mechanism design and and things around kind of like Mev and uh and PBS and all that sort of stuff then these posts and talks and everything that have come out of the robust incentives group are probably the thing to watch and and read and pay attention to because a lot

of This research informs what actually ends up going into the protocol in the end so it informs things like PBS as I mentioned uh things like Mev generally it informs uh things like the um the issuance curve for ethereum proof of stake you know that was determined by or in part by the robust incentives group they basically said they basically did like a bunch of modeling around this a bunch of research around this and said okay well this is what the insurance curve uh should look like on on previous take ethereum and and away it is right away it goes and of course uh that research uh takes a while to do before it gets specced out and clients start building it and things like that and then it's not just set in stone it can change over time as well and there are a

lot of people working on these sorts of things at the ethereum foundation as part of this group but also as part of wider groups I think you know when it comes to research like each one of these things like proposal Builder separation Mev protocol development consensus resource pricing all that sorts of stuff each of these things is like a massive rabbit hole that you can go down and never come out of basically and the reason why is because it's all bleeding edge stuff right this is not stuff that has well Mo I I think like a lot of it doesn't have any any kind of comparison to tradfy but there are uh kind of things that do such as like Mev right Mev exists I mean not just in Trad fire maybe exist all around us you can ball mov down to its like core primitive

which is basically someone extracting value off of the the you know the work of someone else without that person necessarily realizing that that's happening right um and you know it's just extractable value at the end of the day maybe is minor extractable value or maximally extractable value whereas EV I guess extractable value so just from anywhere right and some examples of this would be if someone buys something from a retail store and there is some middleman getting a fee from that such as a payment processor but the the um the customer doesn't necessarily know that that's baked into the price well then technically if you really want to boil it down the payment processor is performing Mev on the Customer because the customer doesn't know that the um

that the fees baked into the price the customer doesn't even know it may not necessarily know that there's a fee at all and then the the payment processor is is extracting value that way right but I guess that is obviously stretching the definition of something like Mev or EV generally but that's how I kind of think about it and that's why I said these sorts of things are deep rabbit holes then you can go down the rabbit hole for pros that build a separation or PBS which includes all sorts of things that have got to do with ethereum consensus and and and beyond that uh and and things and and how PBS would actually affect ethereum censorship resistant properties so when you look at that and you and you kind of go down those rabbit holes yeah it's kind of hard to get out of them but on on that

note I definitely suggest reading these some of these posts if they interest you in listening to the talks because it'll help you stay on the bleeding edge of these things if that's what you're interested in so yeah I'll link this in the YouTube description below for you to go check out all right so EIP 1153 has been long anticipated and it is an EIP that needs to be implemented on the ethereum network in order for unisop V4 to launch because unisop takes a massive advantage of this EIP now as I said this Erp has been around for a while it was tentatively slated for the last upgrade uh being um uh the chapel upgrade but it was it was punted to dencoon because uh they wanted to keep chappella uh kind of

a lean right with withdrawals but it is happening in Den communities slated to be included so far and it doesn't seem like it's going to get dropped or excluded or anything like that uh and the unisop labs account on Twitter today did a tweet thread all about uh 1153 and explaining what it is so basically what it introduces something called transient storage or t-store for short instead of writing to storage and clearing it before the transaction is over smart smart contracts will now be able to use transient storage which is cheaper and enables some exciting use cases so with tldr you get better gas uh I guess like efficiency here it's cheaper overall to do to do these um these transactions uh and it enables um some exciting new use

cases a lot of them got to do with unusoft V4 here now I'm not going to read out the Twitter thread it's not that long so you can read it for yourself I'll link in the YouTube description below but there's also a website dedicated to 1553 sorry 1150 three at aip1153.com you can check this out for yourself you know it's kind of funny whenever I see websites uh dedicated to different nips because there's an erp4844 website as well and there was one for EIP uh 1559 I think that if you're someone who submits an AIP and you really do think that it's going to add a lot of value to the ethereum network possibly the best thing you can do for getting people to Rally around your EIP is setting up a website for it and breaking down exactly what the benefits of the Erp are what maybe

some of the trade-offs are what value people are going to get out of them what new use cases it could possibly enable and why the ethereum network as a whole needs this uh EIP uh or needs this upgrade so to speak uh in order to become a better Network and I obviously there's not that many people who who write eips and there's even fewer people who write erps that actually make it into the network but it's all about making sure that your voice is heard right that's that's how the ethereum governance process works at its core is that you need to basically rally people around your upgrade and in doing so you can do you can do that as like a a no-name person someone who no one's ever heard of before or you can do that as like vitalik right there are different um levels to this and

obviously if you're metallic you could very easily get attention on something over uh on an EIP over some some kind of like unknown person but that doesn't stop it from going in if it is a good idea and if you are able to just rally a little bit of of kind of um excitement around it then then other people will take it the rest of the way like you all you need to do is create an EIP and create an upgrade to the ethereum protocol that people actually get excited about and it actually makes sense to implement and then get it on the radar of some people that have maybe more of a voice than you maybe if as I said you don't have much of a voice and then you can take it to the next level because anyone can post on the each

Research Forum anyone can go into the different Discord channels where they're called devs and researchers are and suggest these sorts of things uh so it's not like your Erp is going to get ignored you just need to put in a little bit more effort just to get it to get it noticed um but as I said it probably doesn't apply to any of us really I think most most people if not everyone watching then listening to the refueling including myself is not going to ever write an EIP but for us I guess as community members the most important thing we can do is put our weight behind eaps that are good for the ethereum network and that's why I'm bringing up 1153 here because it is definitely good for the ethereum network not just for uni swap but all kinds of different applications on the network and I'm

looking forward to it going in as part of the dencoon upgrade alongside 4844 and a bunch of other eops but you can read this thread for yourself I'll link it in the YouTube description below all right alluvial has announced their 12 million dollar series a round co-led by ethereal Ventures and variant fund here so for those of you who don't know what a alluvial is they're basically building an enterprise Enterprise grade liquid staking standard now what does that mean exactly well when it comes to Enterprises and transfer institutions taking their eighth they can't just I mean I wish this was it was the case but they can't just take the The Ether they have and and shove it into any old staking protocol they need to follow a

regulatory guideline on this and there's a lot of regulations on this especially because it's obviously a custodial thing where essentially there's traffic institutions are holding eth uh potentially on behalf of of their customers in small or large amounts and if they're going to be putting that eth to work with staking then they're going to need to do things like kyc and AML they're going to need to make sure that the um that where they're putting their Eve has good custody practices security practices all that good stuff I have to do the due diligence on these things otherwise they face massive fines and possible jail time jail time is a stretch because this is a white collar crime and white collar crime in America is rarely gets jail time but you know fines and losing business and all that

sort of stuff so where alluvial slots in is basically they come along and they go to these different Institutions and Trad fire and they say hey we have this framework for you already you don't have to do all the work yourself just stake with us take with alluvial obviously they'll take a cart rather but Olivia will do all the other work for you and make sure that you're fully compliant make sure you've got the kyc AML done and they may stake via Lido they may stake via rocker pool they may stake via coinbase they may stay on their own right but they're basically a rapper around Eve staking for institutions and Enterprises and tradify generally to go to in order to stake their eath and I think this is very very important critically important because as I said there's actually really no other way for

these institutions to get involved with staking their eighth because their regulatory bound to do this especially the bigger institutions the the ones that are like Pension funds and stuff like that if they ever want to get involved with um Eve staking they're going to have to do it through the most regulated and compliant service you've ever even heard of they're not going to just go for raw uh you know rocket police for example I mean as much as I wish that they could they're not going to do that they're probably not even going to go for raw estate from Lido because Lido doesn't do kyc AML either for for that coinbase uh you know you could probably go for raw uh raw um coinbase staked eat but at the end of the day that's still something you have to do due diligence on that you'd rather

just Outsource to something else and that's where alluvial sits in here so that's just an explanation of what alluvial is and what the guess I guess the value prop is but congrats to them on this raise it's a pretty pretty big raise especially in the market that we're in right now where really I mean crypto venture has fallen off a cliff and that's actually very healthy as I've discussed before you don't want to see massive deals still taking place in the market that we're in right now because it means that there's still too much money sloshing around around too much dumb money sloshing around and I'm sure you guys have seen a lot of charts around the uh the VC money falling off a cliff basically I think it's down like 95 plus percent that is extremely healthy I mean it may seem uh like a bad

thing but you might you what you have to look at is that that's from all-time high right you have to look at the fact that when uh the all-time high of these private raises uh was hit it was really stupid there was stupid amounts of money going into stupid protocols that made absolutely no sense um and and that's why it's down so much and but if you take the base case as basically the bear Market essentially and like the the razors happening in the bear market then you get to that nice and steady state which is exactly what we're in right now so you may have noticed that the deal announcements or like fundraising announcements have slowed down a bit with some you know some big big razors still happening I remember probably the last big race I can think of is eigen layers series a at

least near ethereum ecosystem and I participated uh in that round I believe that the valuation was like I I think it was 500 million fluid diluted or something like that so obviously a huge valuation on on a raise there but there's not that many of those uh there's a lot there was a lot of those in the bull market and usually VC raises lag by about six months um they lack the bear Market by about six months and they lag into the bull market by about six months as well but I fully expect them to pick back up when demand comes back in uh but yeah I'm just glad to see that there is still Capital out there for protocols like alluvial to keep getting funding so congrats to them once again on their raise you can check this out for yourself I'll link it in

the YouTube description below all right so flashbots has a community grants program called the FRP in case you haven't heard of it and in this post uh from Sarah here the flashbots uh Sarah basically outlines the Euro review for FRP or flashbots uh research proposals which is a grants program as I mentioned and if you're at all interested in Mev and flashbots generally and all the stuff that they're working on you can go check out this summary for yourself or this year in review for yourself I'll link it in the uh the Youtube description below but it covers the topics like private mentals impact the front running amm design auction design PBS credible commitments and seven other projects here so yeah I mean you know what this is actually

really good sister reading if you're reading through the robust incentives group uh process I talked about earlier if you want to go even beyond that you can read all the stuff that flashbots have all the research flashbots has been funding uh and or and and this will keep you busy for quite a while I mean especially in a bear Market where obviously the Market's not doing much and you've got more probably got more time on your hands uh this is the stuff that I would definitely be teaching myself and learning and reading up on more so you can go check this out I'll link it in the YouTube description below all right so starknet had a big upgrade today they've codenamed it Quantum Leap which is an upgrade that is meant to get uh give people speedier transactions on the Stark net ecosystem so you can check

out this for yourself uh this is coindesk article I came across and I'll link it in the YouTube description below uh but Quantum Leap I think I discussed last week was was launched on the girly test Nets uh back then um and then it's been launched on the uh I believe stock net mainnet I I believe today uh so uh yeah yeah um and as I said this leads to speedier transactions and I think from initial reports that I've seen it actually has had an impact for end users and end users are feeling this and it feels like starknet lately has really been hitting its stride in terms of upgrades that are coming to the network more buzz and activity around it I am definitely seeing a lot more activity uh floating around there but there is a tweet that I'm going to talk about at the end of today's refuel about

that about activity and you know usage in crypto generally just to take the other side of that uh but yeah congrats to the stock where team for putting this live I think I've talked about stocknet a lot before on the refueling about how they are one of the only projects trying to do a non-evm layer 2 or a non-evm like equivalent or compatible um layer 2 especially like a ZK roll up and they're taking a radically different approach to what has been taken by other layer twos out there and because of that their growth has been slower because obviously one they're building something completely new from scratch two they have to get developers to build on it um there were things like the transpiler from nevermind that would transpile code from solidity to Cairo but it's not an

exact science and they'd be they'd still probably be bugs and you probably wouldn't want to trust the code that's being transpiled without getting it audited again so it's all these sorts of things they slow things down right they slow things down but that's not going to be the case forever and stockware has been putting in a lot of effort and a lot of uh uh I guess um resources behind getting developers onboarded making sure that the Stark net chain itself is speedy and reliable for people to build on and getting integrated with popular things like Argent wallet for example metamask I believe um has or will have stock net support uh relatively soon so yeah all this stuff is adding up it's it's cumulative it's snowballing and it seems starknet really is hitting its stride or beginning to at least so yeah

you can go check out this coindass article I'll link it in the YouTube description below all right staying on the layer 2 topic so consensus has launched their linear layer 2 mainnet Alpha today so yeah for those of you who forgot consensus is actually building a layer 2 Network on ethereum called linear so they at linear is an L2 chain utilizing ZK Roll-Ups um and is compatible with ethereum apps so it's basically a ZK evm as I've discussed before uh and yeah they're live in an alpha capacity on on mainnet here so just great to see another ZK AVM live here it's funny that there's so many of these things now we have scroll potentially going live next month I believe I actually think scroll ZK AVM from last

time I looked at it is going live in August we have polygon zika AVM live we uh have linear live uh we have Taiko going live I think early next year and there's a few others that I'm forgetting right now if I go to l2b.com I can probably and probably check out uh all of them uh is it yes how could I forget ZK sync error which is a ZK evm um I mean there's a few other ZK stuff here that aren't ZK VMS like immutable X for example is like it's like a A validium or it's not a full roll up it's a it's a ZK villium the polygon page chain is going to transition to that so yeah we are not starved for Layer Two so we're definitely not starved for ZK VMS out there out there right now and layer 2 just continue to grow you can see the

TV out here even though TBR is an imperfect metric you can still see it's continued to grow in the bear Market we're at almost 10 billion dollars uh in tvl here and activity has continues to grow as well which is great to see across the L2 ecosystem but congrats to consensus for launching the linear uh uh layer 2 uh mainnet uh today or yesterday I believe uh I'll be keeping a close eye on this to see how it develops all right chaos swap has introduced a new feature called our or I guess like uh they're calling it cow hooks which is intense based defy now what this means is that with cow hooks you can take multiple defy actions such as swapping bridging staking depositing borrowing and more and group them all into one

single intent so this is basically an if this then that for crypto so you can select from a bunch of things here such as say you want to swap uh your tokens okay let's say you want to swap some usdc for eth you want to buy a hundred eight hundred usdc worth of eighth then say you want to bridge that eighth to a layer 2 Network then you want to stake that eth on the layer 2 Network so you want to maybe swap it for re for example um and and then from there you want to deposit that arith into into AV air and then you want to borrow against that like you can do all of this now in one uh action right in one intent basically there's no need to do it all all in

different kind of like transactions and actions you can do it all in one uh in in one in ten here with these account hooks which is really exciting honestly I mean the the thing is is that when I talk about the UI new X of crypto needing to get better and how a lot of things are going to be obstructed away this is the core part of it because you can imagine a product offering on a wallet for example that says hey you know you've got usdc do you want to stake Eat Right do you want to uh you know get buy Ethan then stake it and then a user will be like yeah of course I want that well the product that they click on with their wallet they can just say Okay steak maith but they've only got usdc right they're starting with

usdc steak eth well of course they're you know if they've only got usdc they don't have gas fees so what could be integrated in this is a a swap in the background in order to make to get the uh the usdc swapped to Ethan a gasless way and and the way you do this is basically the um the fee is covered by a contract and then the contract gets repaid the eighth once the swap is done and then what and then after that happens the user then gets to uh stake their eighth um by uh by either going through the deposit contract or essentially swapping it for uh uh R8 or or a state or something like that right and then maybe say that there's a bonus offer there say Hey you know you can do

leverage staking or restaking and then all of that can happen within one action so there's no need for the user to do multiple things they just start with usdc and in the end they get restaked eth for example or restaked um a rocket pool if how cool is that like that that is right there that is what we have to get to to enable mass adoption that is the product that needs to it needs to come to Market in order to get people involved with this sorts of stuff and to get people to actually use this and it really needs to be you know one to two clicks two probably two clicks Max one to to say yes I want to do this and and two sign the transaction basically or submit transaction and because you only have to do it once it really is two

clicks and then you started staking eighth and you only started in usdc you could even take it a step back and say you start in Fiat maybe it becomes three clicks because starting in Fiat you'd have to click to convert from Fiat to a stable coin and then from the stable coin to something else but you could just go straight to Ethan that case so I guess from my example you would you you know I'm just using usdc as an example there but all of this kind of compounds and adds up together and you can create some crazy intents here which is which is very very cool so a great product launch from Cal swap today which you can go check out there's a blog post uh that will explain this in more detail for you and we'll do a probably a better job than me at

explaining it so you can go check that out I'll link it in the YouTube description below for you to do so all right something interesting that I came across today was this project called Joker race or joke race I think it's called joke race um so what they're doing is they've redesigned their project and this is a V3 design of their project and what they're trying to do is eliminate token holder voting or just vanilla token holder voting so their plan is to change the game for acquiring and retaining communities so an example they give here is that if you have a token or tokenized Community it just got 100 times easier to operate say your token is on a mainnet ethereum just pull the list of holders and that's your allow list now you can run governance in any kind of

contest hackathons grants games on any evm chain so basically uh they say here here's where it gets fun you no longer need tokens to run on chain communities your community who is whoever your allow list you allow this to make decisions so you can allow these people to submit and vote based on just about any online Behavior you like so any criteria you like so let's just say that you allow lists certain addresses based on if they've actually interact acted with your protocol so not only do they hold your token but they've interacted with your protocol how active they've been with your protocol have they been active in other protocols that leverage your protocol to do things right do they have an a specific nft community that you want to support literally it could be anything and this is cool because as I

said it goes beyond just vanilla token holder voting you you start off by by a loud listing just the people who hold your token but then you go above and beyond and set all these other criteria and parameters and you basically narrow down your governance list to the most engaged users instead of just anyone right and then with that you basically exclude uh just people who buy tokens for the sake of um for the sake of speculating right especially when it comes to things like maybe VCS that have large allocations that don't even use the product right um when you think about it like that there's a lot of I think VCS out there who buy these governance tokens and don't even use the product and then they have outsized influence on the governance process or they can be excluded you can just literally exclude

them on chain because you just don't include them in the allow list so this is probably the future of governance this sort of stuff stuff that optimism is doing with governance um experimentation this is what I want to see I've said it before and I still reiterate my point that vanilla token holder voting is horrible I don't like it it does not work it is a plutocracy by default it does not lead to good outcomes it is definitely ripe for um collusion and right for um you know Looting of treasuries and stuff like that so we need to do something different obviously and on top of that even if we do like cool experiments like this and get to a point where where we have like a really great governance process for different apps and chains I still wouldn't want it on ethereum layer one for a multitude of

other reasons I think that the settlement layout cannot have any form of unchain uh kind of governance right any any form of token holder governance for a number of different reasons that I'm not going to get into now but for apps and for from even potentially layer twos I think it's totally fine um but it is a case-by-case basis as well but anyway you can go check out this project for yourself I'll link the thread in the YouTube description below and there's a blog post as well for you to read all right to round out today's episode today uh I put out a tweet where I basically criticized a whole bunch of projects without naming a bunch of projects so I said projects mistaking airdrop farming for organic usage is so incredibly prevalent in crypto some projects genuinely believe that these

are real users others know that it's airdrop farming but embrace it because it's good marketing look at the flashy numbers it's also tiring so I'm not going to name the projects here guys I don't want to start any flame Wars I don't want to start any fights I don't want to diss on any projects but you can probably think of a few that do this off the top of your head I mean I already got a ton in my head to do this but the reason I put this tweet out is because I don't necessarily think it's a bad thing even though it's tiring because it is good marketing at the end of the day right let's just say that you have something it's an app or a chain or whatever and like 90 of the activity is airdrop farming right but let's say you

leverage that let's say you know it's airdrop farming you know that these users are mercenaries but they make they make the numbers look good so what you can do is you can use those numbers in your marketing and then slowly over time if done right and if it works I mean there's a bit of luck here involved too you can convert the 90 right and you can basically change it from 90 to 80 to 70 60 and keep bringing that Laura and Laura where essentially those original Farmers acted as your marketing funnel your top of funnel to get the real organic users in and then really at the end of the day it um the airdrop farming and and uh and people just using it inorganically ended up being an organic driver of growth for whatever you're

trying to promote in the end so that's the positive case the negative case is the obvious one where it all just is airdrop farming as soon as you drop your token no one no one uses your project anymore and 90 of your activity evaporates overnight that has happened to some projects in the past that will happen to more projects in the future if you don't build any kind of mission missionary driven Community or any kind of organic community and the only people using your protocol like let's say 95 plus percent 99 or whatever using a protocol airdrop Farmers then um you're not going to retain any sort of activity or growth and you'll see it drop off a clip straight away and people will see that and then it becomes those same metrics that you've been showing for months and months and months as growth

of your project it becomes a flood Vector it becomes a vector for people to attack you and they just say well you know you had 100 million TV out let's just say and now it's down to 10 million only a couple weeks later obviously it was all airdrop farming and then you get dunked on and then obviously it leads to all these other negative kind of consequences here so it is a true definition of a double-edged sword if done right it can lead to organic usage and it can lead to a smooth transition once you do your token if done wrong it could potentially lead to your project dying a slow death over over time right so so yeah but as I said like I'm sure you guys can think of some of the projects that I'm talking about here but um and and and and it's not just a

binary thing either there can be a token dropped and then I promise of future airdrops which I actually think is an underexplored area here optimism did it I remember um but I think it's an unexplored area where essentially you do an airdrop and then you say wait but wait there's more right and then you do more air jobs over time you give away more tokens over time optimism is doing it with their retroactive public goods funding and that way you keep still keep the airdrop Farmers right and then you have more time to convert the uh I guess like percentage from Edge heavy airdrop Farmers to light on the airdrop Farmers with Organic usage and this is just talking about airdrop farming pre-token I'm not even talking about liquidity mining here because I mean I think a lot of the same stuff applies to liquidity

mind generally but liquidity mining when used right is a really great protocol um growth tool in my in my eyes really great app growth tool but when used wrong well there are a few charts out there that you can go and look at and it doesn't look good right it looks pretty brutal but anyway just figured that was something worth mentioning to round out today's episode but that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone