Nomad bridge hacked, ENS has a big July & much more - The Daily Gwei Refuel #419 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where we cap the ladies news in the ethereum ecosystem i'm your host anthony sosano until the 2nd of august 2022 all right everyone let's get into it so i'm sure you've all been seeing uh all the kind of like proof-of-work fork talk volk talk didn't mean to run there over the last i guess like a couple of weeks and i've mentioned that and spoken about it on the refuel i think last week so i'm not going to get into the details but i put out this tweet because the concern trolling just got too much for me i basically said you know ethereum devs and researchers have spent countless hours ensuring that the ethereum network will have the safest merge possible ignore the concerned trolls they only started paying attention to the merge a few weeks ago

and have no idea what they're talking about and i really mean this i the the people that i see talking about these sorts of stuff have absolutely no idea what the process has been to get ethereum to this point where we're only you know six seven weeks away from a mainnet merge here they have no idea the amount of testing that has gone into uh the merge there's been so much testing right they have no idea how many smart people have been working on how many eyeballs are on it they have no idea how it's been developed in in the safest way possible because we launched the biking chain first let that bake for a while and now we're kind of like merging the two networks they have no idea that all of the kind of like i guess uh edge cases and you know as many

kind of like uh bugs as possible as many kind of like possible exploits of pos as possible have been looked into you know they have no idea about this or a lot of the people pushing these sorts of stuff are just doing so because they want to make some what they perceive to be free money and i explained last week why i don't think there's going to be much money to be made from from this sort of stuff uh especially because this fork wouldn't be ideologically driven it would be kind of like purely speculative driven and i don't think we have enough kind of like new money or retail investors uh in the industry right now or in the community right now uh because it's not a bull market maybe in a bull market would be different where this thing would get more kind of like

speculative attention but right now the only people that would be kind of like buying this thing or trying to trade this thing would be people that are already here and they know the game like it's not it's not a secret to them so i don't expect this to be you know anything kind of i guess like lucrative for for very many people i do think that maybe there's uh that the mav people can make some money out of this but again like as i warned last week it's it's just definitely not something that i am interested in promoting i'm interested in kind of like paying much attention to i know i talk i'm talking about on the refill but that's because i ask questions about it all the time so i i feel like a duty to cover it but it yeah it just seems like

it's being pushed by people who actually have no idea what's going on and some people even trying to push uh the kind of narrative that tether there was there was kind of like a more than zero percent chance that tether would essentially uh pick the eighth one chain or they're trying to call it ethanol it doesn't even make sense but would pick the proof of work chain over the proof of stake chain that's just not gonna happen like yeah okay it's not a zero percent chance like there's always nothing's ever a zero percent chance right but these people were trying to say that it was like uh maybe a five ten percent chance that tether would kind of like pick uh the proof of work chant over the proof of steak chain and it was just such a bizarre narrative like that's not gonna happen and then uh

paolo from bitfinex and and tether basically confirmed that they're going to be sporting you know quote unquote 82 which is obviously the proof of stake chain so i i just kind of like really hate these narratives because i i believe that they're actually very harmful to people especially people who have absolutely no idea what's going on i've seen people have like some of the weirdest takes about this fork or potential fork i don't even know if it's gonna happen right but some people have like the absolute weirdest take saying you know this is gonna be worth more than proof of stake ethereum uh because proof of work has intrinsic value and all this sorts of stuff and i'm just like what are these takes like where are these coming from and it's either people just kind of like bullshitting or is people kind of like coping because they don't

want a theorem to go to proof of stake you know obviously there's a lot of people uh outside of the theme community that don't want this to happen um but yeah it's just it's it's really like inaccurate it's not good information and it's definitely not something that i think is going to manifest in reality there might be a fork it may get some value because maybe some centralized exchange will list it i believe justin's son said that poloniex would list it which i guess isn't surprising but uh you know if he did that there might be some liquidity for it and then i think what would happen is people would just trade all of their you know forked coins for real eath and then maybe they're going to fiat i don't know but i don't and all the kind of like fork tokens whatever they could get for

them they'd probably just trade for for forked eighth and then and then real eat right so i and i think a lot of people don't understand that within d5 things break and break really really badly uh and i people are going to learn that lesson pretty pretty quickly if this does happen but uh but yeah i just wanted to kind of like put that energy out there that like the merge is not something that was just kind of like concocted a few months ago and we're kind of you know going about it in a fast way no it's taken a very long time for it to come to this point uh and as i said there's been countless hours like i couldn't even quantify the amount of hours that has been put into this from the hundreds of developers and researchers working across both the

execution and consensus layer at both the research and development are kind of like verticals there so so yeah just wanted to kind of uh i guess chime in there but moving on to the i guess biggest news of the last 24 hours was another uh i guess like bridge was hacked here so nomad uh which i've talked about i think on the refuel a couple of times before i believe they were working with connects uh but they were drained for over 150 million dollars in one of the most chaotic hacks that web 3 has ever seen uh and samsung here has a good breakdown thread of kind of like what the root cause was how it all happened and the craziness around it but for the tldr there was a bug in the smart contract on ethereum uh that kind of like handles the bridged assets and they were able to

kind of be drained and they were able actually to be drained i think by anyone so it was basically like people posting memes saying it was like a department store that had no security had no employees it was just open for in a free-for-all anyone could go steal funds from it and i think some people took advantage of this but i think really the hacker got it the the first hacker got away with a lot of the funds um but yeah i want to kind of like start off by saying this has nothing to do with bridges guys like i know i've been really bearish on bridges in the past because of the fact that uh they're inherently insecure the the kind of cross chain bridges or i guess like the cross l1 kind of like bridges they're very insecure they're not great constructions and also

i've been very scared of them because they're honey pots at the end of the day like these things have hundreds of millions if not billions of dollars put in them and it's just a massive target for hackers but what happened here was just a typical smart contract bug on ethereum we've seen this time and time again it had nothing to do with kind of like the bridge itself it wasn't inherent to the bridge itself it was just inherent to the smart contract being uh you know having a buggy net that was exploited this could happen to literally any type of smart contract on ethereum it doesn't mean it just just because it's a bridge it could only a bridge contract or a contract that did bridge things could you know could result in this and this contract uh was mainly used for i believe kind of

like the moonbeam network and the evm os network and essentially what ended up happening was that all the assets on those chains that were kind of like bridged over from ethereum were basically worth zero because there was no nothing backing it up again like these assets as i've explained before that are stored on the smart contract on ethereum are the real assets they're they're the kind of like collateral so to speak for these assets on these other chains that basically act as kind of like an iou now when that collateral is drained or taken or non-existent well then the ious aren't worth anything anymore so logically they trend to zero which wreaked havoc on a lot of the um these kind of like other networks now moonbeam and evmos are evm compatible networks part of the uh polkadot and cosmos ecosystems respectively uh so so yeah

they kind of like had a bit of bridging activity going on there but this sucks obviously for the people affected by this uh but i did want to make it very very clear that this wasn't anything to do with bridges it was to do with smart contracts being hacked right we've seen this time and time again now people always like to bring up vitalik's kind of i think blog post he talked about six months ago where he argued that cross chain across l1 was inherently kind of like insecure it would never be as secure as say cross roll up or l1 uh l1 to l2 he's still right about that but i don't like it and people bring that up as kind of like oh look vitalik called this no like as i said this was just a normal smart contract exploit so it's it's very different to

the actual bridge construction being exploited right and that i i believe has happened before but not in in this case here so yeah if you want the full breakdown of what happens uh technically you can give this threat from samsung a read they're always a good read obviously i think all of you will know who samsung is is pretty famous within the community for being a a famous kind of like white hat hacker uh and he's kind of found multiple bugs and he now works in research at paradigm here so so yeah but i i think like when when talking about these sorts of things i think it's really good to stay to the facts but at the same time i think that it's it's kind of funny because as i said this can happen to any smart contract but because it's like a bridge

smart contract it may make people kind of like even more cautious on bridges which they should be like i actually think people should be very very cautious of bridges i've warned about bridges in the past not only because they're smart contracts they can have bugs in them but also because if you kind of like bridge your assets from ethereum to another chain and for some reason the assets on ethereum are kind of like frozen or stolen well like anything you were doing on the other chain is is affected right on the other chain that you bridge to is affected and it gets really messy like especially say you had kind of like assets in in defy um you could get kind of like a double whammy there right so it's it's not fun like and and i was talking to some friends today about this and

it's kind of funny because i don't actually use any of these bridges but it's not out of some kind of like ideological notion of not wanting to use an alternative l1 it's got nothing to do with that and it's also got nothing to do with being able to afford the fees on ethereum layer one like if i if i wanted to i would use these other networks but for me i experienced d5 somewhere in all its glory and there were a lot of exploits in d5 summer and i didn't get involved in any i've never actually gotten kind of lost any money to an exploit but that experience seeing people lose money then is what kind of like made me cautious on these things and kind of like makes me not want to use these these sorts of things especially at the say the early stages

of them especially bridge contracts because they're massive honey pots right and i think the people using them these days i mean there's probably a wide variety of people using them for different reasons but they they learn the lessons the hard way now which is just it just sucks right but i think at this point we've had enough of these kind of like exploits in in these bridges and sorry in these bridge contracts to show people that building kind of like these sorts of things is definitely a big honey pot people are going to exploit them and at the end of the day like it's not just going to be people that are based or individuals or maybe like hacker groups that are based in in the us or europe or anything like that but there's plenty of hostile nation states out there like north korea

and china that definitely have hacking groups going after these sorts of things in order to get money like north korea especially like they're not a rich country right so they need money well what better way for them to get more money than hacking smart contracts where there's no retaliation at all the us isn't going to go after north korea right like that just it's just not going to happen so uh the north korean kind of like group i think they call the lazarus group they're they're kind of like they're what's called an apt which is a advanced persistent threat um they're very active in the cyber security kind of like scene or uh or you know outside of crypto but for them to be active in crypto it's like a no-brainer because there's just money to be made at the end of the day and like very relatively easy

money to be made too they don't care about cashing anything out they can just hold the eighth right like obviously they're not going to hold any centralized stable coins because it'll probably get frozen but if they just hold the eth then it's it's whatever like obviously they have to kind of like put up with the volatility but it's better than what they had before which was zero right they get all the eighth i mean if it goes down 50 who cares they still had like more than that before so to speak so yeah anyway give this thread from samsung read i'll link it in the new subscription all right so kevin owenki has given us a reminder today that git coin grants around 15 is starting on september 7th and runs to september 22nd so not too close it's about what five weeks away at this point um

but you know what's funny this is going to possibly run during the merge event which is just kind of like a nice little crossover there but round 14 i believe was the biggest uh kind of like bitcoin grants around in history hoping round 15 is just as big it's always a bit of a kind of like toss up here because it's a bear market you know obviously in the bull market people people feel richer they have more money they're more prone to donating so i'm curious to see if kind of like in the bear market we get the same thing i think we we will not maybe not this exact same thing but i think that there's still a lot more i guess like attention on git coin these days and a lot more money flowing into public goods and a lot more kind of i guess like awareness around

public goods that we're going to see a really really great good coin grants around 15 you know so i just wanted to give a heads up there you guys know that i'll be reminding you when this goes live i always do that uh but yeah i'm looking forward to it in around five weeks from now all right so coinbase's institutional arm has announced that they are now offering ethereum staking to institutions in the us so they say here using our industry-leading cold storage you can now generate yield by staking eighth and they have a blog post here detailing all of that i think this is a pretty big deal i've said before that the eath staking opportunity is absolutely massive not just for individuals but also for institutions and corporates and all that sort of stuff and i think what's going to end up happening here is the institutions are

going to wrap each staking in their own kind of like vehicle and sell it to their customers now people people talk about this sometimes on twitter saying this is basically like the world's greatest grift right you wrap the existing product up uh in in your own product you charge a fee on it and you kind of like on sell it to customers to you know pension funds to endowments all these sorts of stuff and you get to collect a nice juicy fat fee for for essentially not really doing much right you're you're basically like the very definition of a middleman but that's how things work like that's the way of the world so i don't think it's worth kind of like helping on about that or getting too caught up in that what i think is is cool is that it like i've always believed that the east

staking ecosystem would be very diverse it wouldn't just be solo stake is it wouldn't just be liquid staking providers it would be you know centralized exchanges uh doing staking it would be some staking service providers it would be institutional staking uh that that that is kind of done there'll be decentralized services obviously like rocketpool and things like that so it's going to be a very wide and diverse set of stakers and as i said before that's what we need in order to make ensure that no one party or no one kind of like group or corporation or institution or whatever has a majority or even a close to majority control over the beacon chain obviously today there's a lot to be desired you know lido has over 30 percent um even though lighter is like 28 i believe kind of like unique and

unique kind of like staking service providers it's still all going through kind of like the lido system so there is at risk there and there are some centralized exchanges that have a lot of stake already but as i've said like once beacon chain withdrawals are enabled we're going to see a bit of a reshuffling there i think and also as more competition comes online it just naturally di uh you know distributes out the stake which should make for a much healthier uh and decentralized kind of beacon chain so very cool to see this from coinbase today obviously it's probably not going to apply to anyone maybe watching the refuel here maybe it will i don't know i obviously don't know everyone who watches the refuel but i imagine a lot of you are just kind of like individuals they do your own staking or maybe stake through something

like rocket pool but this is still very very cool it means probably more eighth demand more eighth locked up and maybe it leads to an e it kind of appreciating eighth price because because of that right and obviously it leads to a more secure ethereum network the more eat that he staked the most you know the more expensive it is to attack the network so it's all good right with kind of like staking here so very cool to see this from coinbase today all right so rainbow has announced today that to commemorate the launch of l2 nfts in the rainbow wallet they collabs with optimism to make a special token gated custom optimism x rainbow app icon which you can unlock by claiming the optimistic explorer nft that's a mouthful so you can get the optimistic explorer nft here at the get started

page on optimism which i actually spoke about the other day that new kind of get started page that i have that i really really liked uh but essentially you can now unlock this uh kind of like new icon for your app i think only i don't know if this is both on ios and android but you can see it here on ios the cool little new kind of like rainbow icon for the rpr so this is cool i guess this is another way to kind of like use nfts and kind of i guess like expand the utility of nfts and i think that uh you know rainbow doing this is obviously uh very natural of them i've spoken about rainbow countless times on the refuel but they're always on the forefront of these sorts of things and they always love doing these sorts of things so if you want to get your

optimistic explorer nft you can go mint it and then you'll be able to get a fancy new icon if you're a rainbow kind of mobile wallet user all right so the july 22 stats for ens are out so i think they had kind of like a record month so 378 000 new dot eth registrations uh 6.8 million dollars in protocol revenue 5400 in revenue highest ever month 48 000 new ether accounts with at least one ans name and over 99 of open c's domain volume so yeah i do believe just eyeing the chart here that july was the biggest month uh in ens history uh beating out may by just a little bit there in terms of monthly registration numbers that is insane like it's crazy because i've said before i

mean it's crazy because if you look at last month june the registrations were registrations were down a lot from may but they seem to have spiked up again now i i do think that like probably i don't know it's kind of hard to quantify how much of this is speculative activity but a lot of it would be i saw like a lot of people speculating on the three digit e s names on the emoji e s names and all those sorts of things there but i don't think that's a bad thing i think you know people often look at speculation as all bad and no good i think speculation is kind of a delicate balance you can have things which are purely speculative which add no value to the world uh and kind of like just like a pump and dump or a ponzi and then you

can have things that have speculative elements attached to it but are also also like a great product that people love to use ens is an amazing product no one can deny that like it's so good i mean being able to kind of like just have an e s name attached to a theorem address is a huge ux benefit um and you know there's obviously a bunch of other benefits on top of that as well but there is a lot of speculative activity activity for people who are trying to make money on things like three digit ens names and emoji ens names and that's totally fine like you can't take that away i don't think there's any way to to kind of like get rid of that speculation maybe you don't want to either because this speculation would lead to more marketing you know better kind of revenue for the dow as

well better kind of like revenue for ens in general and more awareness around ens as a product uh generally so i don't think it's a negative thing i think people often like to look at speculation as all negative but that's only if you're looking at it from a pure kind of like i guess maybe you could say markets perspective where it's like okay well you know this thing went up like 10x and then it dumped 90 percent like this is just kind of like a rug you know this is like a ponzi this is a scam but like i don't think ens falls into that category at all and i think that you know anything that has speculation tied to it has to be looked at in that frame of mind you can't just say oh this is speculative which automatically means it's trash i think you have to take all

of the arguments and and points together and kind of like add the nuance to it and then come to a conclusion and my conclusion of ens is that has an amazing product has speculative activity attached to it that doesn't take away from from the product and i think it actually enhances the product by bringing in a lot more attention and a lot more awareness around ens all right so this nft i guess like uh marketplace on starknet launched today called aspect so you can check this out at aspect.co uh and this is the first time i've actually heard about kind of like aspect here so if i actually go to their website here uh yeah so they're on mainnet uh you can enter aspect and connect your wallet here and everything like that looks pretty cool looks pretty uh modern i guess it's using some of the

ethereum.org artwork here which is which is kind of cool it's got obviously your buy and sell sections there's not going to be that much on here just yet given that it is on stark net not on on main net i uh that you can see here and like i don't recognize any of these kind of like nftcr but you can buy sell and create using stock net mainnet which is very very cool uh i think um i i think that you know obviously stock net is very early still uh but there is a lot of people building on them a lot of projects building on them that i haven't heard of before i mean this is the first time i've heard of aspect today i don't know if i've talked about them on the refill maybe i've forgotten about it but i think this is the first time i've

heard of them today or at least kind of like paid attention to them and they're already live on main net with their nft marketplace which is very very cool so looking forward to seeing more of these kind of like types of apps going live on on starknet obviously uh they need to build out their ecosystem to get to probably the same level as optimism and arbitrary in terms of kind of like what d5 they have what nfts they have what uh kind of like uh tooling they have and all that sort of stuff but i think they will get there i think you know betting again like even though i've been bearish on starkwear's token distribution or stocknet's token distribution i've always said that the technology is is real what they're building is real they have a really good ecosystem building up around it that i can't be bearish on

stocknet just because the token distribution is something that i don't really think is is great um i'm actually more bullish on stock net than i've ever been because i'm just seeing so much traction kind of building up around it i'm seeing so many people kind of like embracing them and seeing people wanting to build on there that it's kind of like impossible for me to be bearish so so yeah you can check out aspect if you want to as well you can check it it'll be linked in the youtube description below all right another another project that i've come across recently is something called flashstake and they're going to be launching very very soon so they have a thread here saying the flash stake launch month is here amplified unlimited time yield for early adopters let's time travel into the future for a look at

everything you need to know for the launch of the time travel uh the time travel of money protocol and you can see kind of like this little calendar here of what the flash stake flash a month or i guess like launch month will look like they're planning to launch i believe uh their liquidity mining program on kind of like august 11th here so they're going to be kind of like juicing up those apis with i assume kind of like a token emissions here uh and then they've got like a bunch of other things planned for august basically it's all happening in august from what i can see there are some i believe kind of like uh contracts going live at the end of july july 31st here and early early august and then throughout the rest of august you've got like a roadmap here of what's

happening so for those of you who don't know what flash stake is it's it's going to be obviously a new protocol here that allows you to essentially get your yield up front from kind of like any strategy that is basically created as part of the protocol so for example the reason why they call it the time travel of money protocol is because say you're going to get like a a 10 yield or something and you want you don't want to wait to get that yield well you can kind of enter into flash stake uh and kind of get that yield immediately right which is i think very very cool uh there's obviously different risk tradeoffs here and things that you would need to take into account which you you can kind of like um visit uh flashstake to learn more about it here on their website uh and there's

also this thread about their kind of like launch month and how everything is is kind of like happening here as well so very very cool i think august is obviously the month to look at for flash stake i think it's going to be an exciting new d5 protocol as i said guys i'm always on the lookout for new and exciting actually innovative d5 protocols not just ponzis on ponzis on ponzis you you know you guys know i hate those sorts of things uh but yeah this is one of them and one of them one of the ones to pay attention to so you can go to a flash stake a dot io to check out their website and everything but this thread will also be linked in the youtube description below for you to check out all right finally here i just wanted to give a shout out that i'll be doing a

talk today uh with at the ssv network on the emerge series again with gupta gupta sorry uh from polygon here he's the chief information security officer at polygon we're going to be talking about all things related to the merge i'm gonna be asking him a bunch of questions around that of course and also questions around the proof of work chain what his opinion is on it uh what his opinion is on how things like uh kind of like the merge itself and what he's excited about all those sorts of stuff so if you want to listen in you can it's on twitter spaces i'll link in youtube description below for you to do that if not you can kind of like listen to the recording because obviously all twitter spaces are recorded uh because i think this is at a time where the us is

definitely still awake but europe is definitely sleeping i think some of the us is awake maybe not the east coast but the west coast might be it's really late there because this is 2 p.m my time my time being australian eastern standard time so yeah anyway i'll link that in the description for you to set a reminder there uh but yeah i got a few minutes here left again today so i wanted to talk about something else that i i kind of um was thinking about over the last 24 hours especially you know it was funny i was thinking about this yesterday and then i started thinking about it even more today because of the um nomad uh kind of like uh hack but essentially i was thinking about kind of like smart contract security in general because like

when you when you kind of like see these hacks uh you kind of like think to yourself are we ever going to get to a point where these smart contracts are going to be secure enough to actually run these things at scale run d5 at scale run you know anything at scale and get everyday people using them i think yes i think we're still in the pioneer phase we're still in the really early adopter phase i think that it you know some of this stuff is really really amateur hour but there are plenty of examples of things that haven't been exploited or hacked yet i mean i'm not going to say they're not going to be exploited or hacked but there have been plenty there are plenty of examples of apps that haven't been that are really trusted that work really well makeup for example right uni swap

uh rv uh compound compound did have an uh kind of like exploit but it was relatively limited and it was kind of like um related to the liquidity mining i believe if i remember incorrectly but generally the reason why and synthetics i don't think has been exploited before maybe it has but maybe really early on in its life but you know when you think about kind of like things you always think of the bad things first like you think oh my god there's been so many hacks and things like that and there has been don't get me wrong but if you kind of put it all together and look at what has actually been hacked and drained most of the time it's really early stage protocols that are just not taking security as seriously as they should be um secondly it's protocols that are just

forks that are just trying to you know change code because they want to make more money whatever it is like just a pure speculative thing uh and third they're sometimes they're just like outright scams right and they get exploited because the creators of these things don't care about security so you have to take it all together and look at smart contracts as a kind of like general thing and you have to look at the trend over time as well yes the hacks may be bigger today because the dollar value is bigger but in and maybe the frequency is up but that's because there's just so many more smart contracts out there today than there was even just a few years ago so if we should look at kind of like the percentage of things so i haven't done this myself but i'm curious if someone

has done it where they've looked at you know how many smart contracts are deployed today and how many have been exploited you'd have to probably look at economically relevant smart contracts you can't just look at all of them because you know probably a lot of them are just trash but looking at the economically relevant ones and then doing a percentage of those that have been hacked and has that been trending down over time i think it would be has the dollar amount been trending up over over time certainly it has but that just shows that the ecosystem is growing that just shows that the value of uh money in these protocols is growing and i don't think that's a really good measure of anything because the kind of like a smart contract would have one million dollars in it or 100 million dollars in it the bug would still be the

same right if you were kind of like if you had a bug to drain that amount of money in it um but obviously as the kind of like value goes up the more eyeballs go on that contract there's kind of like a huge honey pot it becomes more and more worth it for people to kind of spend time finding a hole in that contract that's why i've said you know for a long time now that bridges are the best honey pots out there for hackers because they've just got so much money in there and uh it's basically worth their time to look into it to see if they can poke holes in it and see if they can get away with the capital so yeah just something general that i've been thinking about maybe you get your brains turning about this as well um but

i think on that note i'm gonna end it there for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone