OpenSea Series C, Rainbow ENS integration and more - The Daily Gwei Refuel #286 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delight refuel worry cap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 5th of january 2022. i'd have iran let's get into it so i've had a few people kind of like ask me today about what's going on with the polygon pos chain why gas prices are so high on there and kind of like why their transactions are failing and things like that so i'm going to go over that in a sec but uh polynomial had a great tweet thread about this today where they basically started off the tweet thread by saying the polygon pos and celina situations are more interesting data points in the transaction quality trial hammer discussion by optimizing for low fees and censorship resistance they suffer from spam and very low quality transactions and then polynomial goes on

to describe how we can kind of like rectify this or solve this with things like layer threes and being able to kind of like filter out obviously low quality spam transactions and all that good stuff there now what i wanted to kind of like talk about is the fact that i've brought this up before right where i've said that these ultra low fee networks whether they be kind of like side chains alternative uh layer ones or layer twos or anything like that they're always going to end up in the same spot where there could be legitimate spam transactions or they could be transactions that are happening on the network that are just very very low value don't make much sense and borderline spam but you know someone maybe coded up a smart contract in the in the kind of like incorrect way that's encouraging spam transactions and all

that sort of stuff there so i think when you look at it from that perspective i agree with pauline now when they say here that uh fees should be basically from one cent to 10 cent range instead of the fees being kind of like basically free because then you just get really like lots of spam lots of kind of bot activity you open yourselves up to ddos attack and all that sort of stuff like that there so this is an open problem i think you know polynomial says that there are there are some uh clear solutions like recursive roll ups or l3s where l3s can have ultra loyal even zero transaction fees but where but use web 2 style ddos ddos protection filtering out um the spam transactions now this is what i believe kind of like solana uses at their layer one uh they

basically have like a qos or quality of service system where they filter out kind of like transactions that they suspect the spam i'm kind of on the fence about this i think that it basically amounts to censorship right because i mean you're not going to get 100 hit rate you're not going to be able to determine that all the spam that all the transactions that you've dropped were actually spam and weren't and weren't legitimate transactions so i think that there is an argument to be made there that that kind of like amounts to censorship but i think that the the point here is that if it's being done like a layer 2 or layer 3 you get a lot less censorship resistance guarantees uh the kind of like further up the stack you go as opposed to something like layer one so you could imagine layer one

is kind of like the most decentralized and censorship resistant layer basically you know near impossible for you to be censored on layer one ethereum then go up to layer two well depending on the layer two that you're using the sequences can censor you right now albuquerque and optimism both use the centralized sequencer if arbitrary optimism that the teams of chain labs optimism team wanted to censor you then or censor your transactions they could and there's nothing to kind of stop them right now and then you go to layer three it's the same kind of deal there so i think that as long as people are kind of like aware of these trade-offs it's fine but this is kind of like one of the really really hard problems that exist within kind of like scaling any kind of crypto network is that you you know there's that

trilemma right that that polling has written about before which is i'll show the blog post here for the trailer mark you know you've got it here as a triangle you have spam at the top of the triangle censorship resistance on the left side at low fees on the right side and you can really only have uh kind of like two you know what i mean like you can really you can have low fees and censorship resistance but then it kind of leads to spam um you can have spam and censorship resistance uh uh and then it kind of leads to low fees i mean it's just it's a it's a very very hard problem as i said right and you should give this blog post a read it's not a new one i believe it's from october uh last year but you can give this a read

for kind of like more information about this but i think that this kind of like relates back to the polygon situation because on the pos chain obviously the fees are basically negligible most of the time right i mean you know they're measured in way but that's measured against the matic price not the eighth price so in dollar terms it's basically you know a few cents on the dollar sort of thing most of the time probably even cheaper than that depending on on what the network's doing but what happened on the pos chain recently is that some nft project uh kind of spawned i can't remember what's what it's called but it got created and it got you know pretty popular but it's basically i think it's a borderline scam or ponzi um but they coded it up in such a way where essentially uh everything's done on

change so it basically encourages people to because of the monetary incentives to keep doing stuff on chain which drives up the gas prices and as i mentioned before people are happy to pay uh the gas prices if it's worth it to them right that's why everyone is paying expense not everyone but that's why a lot of people are paying the fees on ethereum l1 still is because a lot of the people using ethereum l1 are happy to pay the high fees because they're getting the that value or more out of it so the same is true for any network guys like a block space demand is literally unlimited it doesn't matter which network it is as a matter if it's an alternative l1 or sidechain l2 there is always going to be a ceiling that gets hit at least in the short to medium term

we hope that we can get to a point where we've scaled up so much that it becomes very very hard to hit that ceiling just like in the web 2 world it becomes very very hard very very difficult to you know flood a kind of like server because there's all those kind of techniques in it with the quality of service techniques um load balancing all that sort of stuff there and we don't have that yet within crypto besides kind of like fees fees are the load balancers of crypto networks like there's a reason why the layer one fees on ethereum are so high is because the the um the gas limit is is low right the amount of transactions that can be processed by the network is low but we get uh from that we get guarantees that the network's not going to go offline if

it's hit with too much activity it's just that the fees go up so but on these kind of like l2 networks or all these kind of like cheaper networks out there they're offering lower fees so they fill up you know really really you know once they fill up they go they basically revert back to what um what ethereum l1 has or they start to slow down as i've seen with something like solana where they slow down to a crawl or they go offline sometimes as well so there are plenty of kind of like trade-offs here to be had there is plenty of infrastructure still to be built there's plenty of kind of like optimizations to be made on these l2 networks uh and for now that's just what we're going to have to kind of like deal with and i don't know if the if i'm kind of like happy with uh

basically filtering out kind of like spam transactions as a solution to this definitely not going to happen at layer one um which is fine layer two maybe i don't know depends how how you can do it at layer two i don't think i know what's possible at layer two but it it's a lot harder and i think and and i think it's something like a layer three it becomes a lot easier easier to do but then yeah you have like a you have way less of a guarantee that your transaction is going to go through right uh your transaction may get caught in that spam and you may kind of like have to retry it or something like that which i mean it's okay if you if you have to retry it and you're not purposely being censored it's kind of like you just get caught because they

think you know the network thinks you're a bot or something like that but i don't know i don't believe it's kind of like the ideal solution but uh yeah anyway give this blog post a read from paulina it goes into a bit more depth about that there so the ultrasound money account gave an update today of its scarcity engines so apparently 8.9 million eighth is staked beneath two nine million ether is locked in d5 and 1.3 million each has been burned as part of eip1559 now this locked in d5 metric i don't think it's counting layer twos which um i i don't believe it's kind of late too is actually because the last time i checked d5 pulse if i bring it up here actually i bring up d5 pole cr um i don't believe d5 pulse is tracking l2s right now and i think that's where they're getting the

nine yeah that's where they're getting it from so if you were to kind of like count layer twos um in this kind of like metric here for locked in d5 i'm assuming that would be over 10 million at this point last time i kind of checked because there's a lot of eighth locked on um in kind of like arbitrary and optimism and a few other networks out there so i'm sure that's higher there but yeah still really cool to see i mean almost 9 million each staked in eth2 this is kind of like slowed down considerably and i think uh it's going to basically remain that way until kind of like we get a clearer window around the merge but even still like i think a lot of people are expecting that withdrawals they're going to get enabled with the merge for some reason when in reality they're going to

be three to six months out i think vitalik on a recent bankless podcast said that they're more likely six months after the merge so if the merge happens in june of um of this year then we probably won't be expecting to see kind of like staking withdrawals until the end of 2022 so that's pretty crazy right and that means like for a six month period we're literally going to have no net new issuance entering the market so price could do some crazy things there i mean we not only have that triple harvening with the merge we also have that kind of like um period where there's no new eighth kind of entering the market as well so not only are we deflationary we're like deflationary by a lot a lot more than we would be and then when when the withdrawals are finally enabled it's not

like everyone can just unlock their earth and sell it at once that's not how it works as i've mentioned before um how it works is that there's a kind of withdrawal delay or there's like a maximum amount of 8 that can be withdrawn each day unless this changes i think it's about 30 000 ether day or something like that so definitely not a scenario where you know one million can be withdrawn and just sold instantly that's definitely not how it's going to play out so anyway i'm i'm pretty i'm curious to see how this plays out closer to the merge like are we going to get to 10 million each stake before the merge are we going to see a spike once the merge happens because as i mentioned before the apy is going to go up for staking your eighth because there's going to be the unburnt fee revenue and

possibly mev going through stakers as well which is probably going to push i think like the api up to 15 to 20 at current staked ether amount and current fee revenue amount so that's going to be pretty crazy but uh yeah we'll have to wait and see there but great to see this kind of like scarcity engine update from the ultrasound money account here so openc announced their series c fund arrays today so i think they've raised oh my internet i seem to have gone offline again yep i believe they raised something like 300 million dollars at a oh yeah that's right right in front of me they raised 300 million dollars but i was thinking of the valuation at uh i think it was a 15 billion dollar valuation or a 13 billion evaluation or something which is absolutely crazy right i mean i think that is the biggest

kind of like crypto valuation uh especially for a series c um that i've seen so far and apparently there is really not going to be a token i mean i commented here when token but from everyone that i've talked to and everything that i've heard they're pretty confident that there's not going to be a token open seas basically just going to go public and ipo and and that's going to be basically all they do there i think this is incredibly short-sighted as i've discussed before i think open c is absolutely ripe for disruption if they're not careful they could become the pets.com of um of the nft ecosystem look i think that's a low chance of that happening but i really do think that um as i mentioned i think yesterday or the day before about these grassroots communities around things if opencv doesn't do a token their

community is going to be pissed right if that depends how much that counts for i know a lot of people use opencv that aren't kind of like crypto people right they're just kind of like normal general people and maybe they're not going to care but i think that if they don't do a token they basically open the floodgates to any other nft platform that does do a token to essentially do a little bit of a vampire attack on them and get some volumes that way because people would go there kind of like you know because they'll use that instead because they hold the token or something like that and you could even do like an airdrop of um you could literally just kind of like fork open c do an air drop of the token to the same users and then kind of get some

traction that way because as i mentioned yesterday openc has 96 of the current kind of like market i mean nothing stays that high for long like in terms of dominance like it just it's just not how it plays out so i'm curious to see how that goes there but still this is an absolutely massive raise we all know nfts are crazy right bigger than any of us thought they would get and i think they're going to get even bigger this year to be honest i i think that the funny thing is that there's still so much hate for nfts and i actually view the haters as potential customers later down the line or potential users of nfts because the haters are not going to hate nfts forever and ignore them forever eventually it's going to get to a point where nfts are going to become ingrained

in you know their everyday lives or what they want to do in products and services that they use and the people that boycott things are definitely in the minority i don't think they're in the majority at all and i do i do think that once ethereum moves to proof of stake it's going to be a lot easier to kind of like kill those arguments around um energy energy use and all that sort of stuff and then really it just becomes the minority you just think that nfts are outright scams and to be honest they're going to come around eventually as well at least most of them will like people i think when it comes to people they can be stubborn but only for a certain amount of time i think eventually people come around and you know there's obviously a small group that will basically forever remain stubborn and

kind of like boycott and fts for whatever reason but they'll definitely be in the extreme aren't already there so yeah i think nfts are going to get much bigger from here i think the investors know that too that's why they've given openstack 300 million dollars at a 13 billion dollar valuation which is absolutely massive so i guess congrats to them i'm curious to see if they do kind of like uh when they do their their ipo and maybe they do a token may i i would say it's not a zero percent chance but i would say it's an extremely low chance that they're going to do a token but if they do it's going to blindside everyone because no one's really expecting them to do a token right now and i think that would actually work really well as a nice surprise there but don't hold your breath for it that's for

sure so speaking of nfts justin taylor who's the head of consumer product marketing at twitter gave an update today about their nft integration so he said yes we are still working on nft profile verification no i don't have any timing updates i can share but i'm currently testing it on my phone so i remember covering this on the refuel a few months ago where basically you could have your nft as your profile picture and then you would have like a little eighth logo next to it to kind of um say that you know you actually own this nft it's tied to one of your kind of like known addresses you know such as your ans such as tessel.exe so really cool to see that they're still working on this someone asked in the comments about like how they're going to do the verification apparently they're just now they're just

pointing to openc and using their verification now oh my internet's not working whoops now i think that's okay as like a short to medium term solution but we need a better solution longer term we can't just rely on a centralized service for verification we need decentralized verification and i think that's going to come in a big way there's projects like cismo tackling that in a privacy preserving way signing with ethereum can tie into it as well so that's going to come but right now i guess like the really the most scalable way to do it and the the um the platform that has the most kind of like data about this is openc but yeah cool to see that they're still working on this um and i can't wait to see when it goes live so speaking of ens brantley from the ens team put out a great uh tweet today

where he said ens is open source has no gatekeepers is self running on chain specified with erp standards governed by commun community dow had no special allocation to vcs fully self-custodial with dot eth names ford compatible with legacy dns sends all protocol revenue to the dow uh hashtag web3 this is a true web3 protocol we always talk about web3 versus web 2 decentralizing it not having vcs involved having it truly community owned i believe ens is one of the only protocols today that can actually call itself a true web3 protocol for all the reasons that brantley has outlined here if other protocols want to to get to this stage they can but it's kind of uphill battle enes didn't get here overnight they took many years to get here and they only recently

did their token which basically gave ownership over to the community um and you know they were in a unique position where they didn't actually need to raise money from vcs whereas a lot of other teams aren't in this position and that's fine but there are ways to raise from kind of like vcs and angel investors and things like that while still keeping it majority community owned like you say you only sell five to ten percent to these kind of like people just to bootstrap the you know and to actually build the thing and then you release the token out into the wild and you can you can even do like a public token sale which honestly i think public token sales maybe not the way icos were run but just generally are still an underexplored thing i actually think that they should be uh they should be

used more often um i know that balance i was doing some things with their lbp and stuff like that i know that coin list has a pretty popular service where they you know obviously there's kyc and things like that but if you're an angel investor or a senior investor you get a vc you get kyc anyway so it's not too dissimilar from that and i think that uh that would be better than the current like status quo of giving a large chunk to these kind of like insider vcs and angels because you need the money whereas i think if token sales didn't get such a bad rap in 2017 we would be seeing more of them but i do hope they come back in a big way and obviously there's kind of like a regulatory issues with that as well but i mean that's going to be an issue for a very

long time so i think that it's kind of like do or die for a lot of web 3 apps more more of them are going to get launched anonymously i believe but i think they definitely need to follow the ens playbook if they want to be a true web 3 protocol because i can't really think of much else that is that is true web3 i mean ethereum obviously but i mean ethereum is the is the protocol it's not an uh specific application whereas ens i mean the term protocol application gets thrown around a lot but i'm talking about kind of like a generalized kind of thing whereas ethereum is generalized it has all these applications on them whereas something like ens is more of a is more for just like a you know an application kind of like standard here um so i'm just thinking in my head of

any others that are like true web three union sub's pretty good but again they had like vcs and stuff like that there's yeah i mean i can't think of any off the top of my head but there's very few that that look like ans but ins to me is the gold standard for web 3 applications so take note app devs or future app devs or future builders if you want to build something that's truly web 3 then ens playbook is the one to follow so uh forks three three here or exalted forks is that exalted fox for not forks is their handle here on twitter put together a thread on uh protocols building on arbitrarium and these are the protocols that are native to arbitram versus the familiar multi-chain giant so you've got here things like umami finance which is a market maker and liquidity network uh natively built

on arbitrary of course you have dopex which has been pretty popular i've seen on on crypto twitter lately a lot of the djinns are really into dopex it's a pretty great platform from what i've heard it's uh it's an options protocol on there then you have uh noaa i'm not sorry not know of markets nor of markets will um explain to you what dopex is you have gmx which is on arbitram i'm just going through the list here uh treasure nft which is apparently a really cool um nft platform on arbitrage right now i've had a few people talk about that uh just scrolling down the list um into cap.finance here premiere uh 100 finance uh tracer dao lima finance investor finance primitive finance i mean there's so many i didn't realize how many they were they were native to arbitrary here so that's really cool to

see sorry i can't load any of these things up guys my internet seems to have cut out it's funny all day it was working well for the first day in like three weeks that i've been here it was working really really nicely and today it decides to cut out and the reason why it's cut out is because it's using my hotspot from my phone i have to wait till saturday to get actual home internet um but yeah sorry i can't i can't kind of like dive deeper into these but of course this thread will be linked in the usual description and you can dive deeper on your own but i just wanted to kind of like um talk a little bit about arbitrary here for a sec i don't know about you guys but i've been looking at arbitrary statistics lately or metrics lately and they've been

really really good they've been growing steadily arbitrary obviously doesn't have a token yet but their ecosystem seems to be building itself out really nicely and they have a bunch of projects on there that have a really nice community following them now and all these projects are kind of listed here in this thread but i love seeing this because i've mentioned before how i think that layer 2 will need to do tokens to incentivize usage to an extent but at the same time i i believe that the longer they don't don't do a token and the more organic kind of like usage and growth that they get the better it is for for the longer term because tokens and liquidity mining is all well and good but it's very short-term right it's very mercenary it doesn't really lend itself to long-term long-term sustainability unless done right and i

actually think that if these layer two networks do do tokens which they will um i think that a lot of it should be reserved for the builders they should just pay out the builders in these tokens as grants instead of just giving it to mercenary farmers who are just going to dump your token anyway obviously you know you'd want to do an air drop and things like that but i really do think that at the end of the day a platform is all about the applications that are on there and as we've seen with basically all of the um l2s l1 sidechains whatever the ones with the best applications the best ecosystems that develop are the ones that get the most usage i mean the polygon pls chain has basically all the star ethereum apps on there um and you know obviously units of v3 went live on there recently and

they're just continuing to grow i mean they're the only other chain with openc live on there you know opens only on ethereum and the polygon pos chain so it really is about the builders the applications getting those kind of like ecosystems developed there and i know polygon had liquidity mining back earlier earlier in 2021 and that's all well and good it's just it should be used to kind of like bootstrap a little bit of an ecosystem to an extent but it shouldn't be used to kind of like um you know pay out this perpetual reward to these farmers who really are just going to sell your token and then they're kind of like liquidity locus and they just kind of like go somewhere else once the uh once the game's up i think that's how it should be played um and i think that's how some of these l2s are playing

it but as i said i do believe most of them are going to be having their tokens launched in the first half of 2022 um not maybe not all of them but most of them definitely i believe but anyway go give this thread a read it'll be linked in the youtube description below so rainbow is teasing another integration here basically in the rainbow mobile wallet app uh as i can't load this um i can't make this image bigger because my internet's off here but basically in the rainbow mobile wallet app you can uh do the whole ens um kind of like flow so you can register your ens name and then kind of like edit a few of the fields here um and then have it set up with your profile with your nft showcasing and everything like that straight in the rainbow mobile wallet app this is

really cool you know you guys know i've talked about rainbow before it's one of my favorite mobile wallet apps out there i think these kind of like integrations these kind of i guess really nice looking ones the easy one to two click things as i mentioned plenty of times this is what the normies want right this is what mass adoption is going to look like uh it's not going to look like them using metamask and it's kind of kind of like seeing all this weird stuff and editing the gas fees and all that sort of stuff i'm sorry but like that is not going to be what most people do and it can't be because most people don't want to sit there and kind of like uh and play around with it and mess around with that even if they're given a monetary incentive to do

so because it's just not worth their time they get frustrated it's a headache for them they don't have the time to do it a lot of a lot of the time and that's why it took until things got very simple with the internet um like and especially with smartphones for it to really take off and to really reach match mass adoption there but uh yeah really cool to see this new feature from from rainbow here um you can go check out the the you know closer look at the screenshot it'll be linked in the youtube description and i hope to see more of these really cool integrations in the future from them so finally here we have joey from faye protocol talking about a new erc called erc4626 which joey is calling a landmark interface for yield bearing volts that will supercharge dfi innovation on this

rock we will build that empire tldr adopt erc 4626 are not going to make it here is what this interface means for the tribe and for d5 general uh generally so just go give joey gives a bit of a recap about yield bearing tokens here you know they'll come in all shapes sizes and implementations but they have no cross compel compatibility with erc 4626 it will standardize this paradigm of depositing and withdrawing from a vault denominated in a single token which makes it incredibly easy for aggregators and plugins which now only need to implement a single interface rather than dozens of adapters so you can think of this as similar to like the erc20 standard where instead of everyone using their own token standard to to kind of like issue a token everyone just uses erc20 or at least most people use erc20 um for

for a fungible token not for an unflexible token obviously uh and that's supported everywhere it's just a very standard interface and that's what ercs are they're basically standards um so with 4626 this would standardize basically yield bearing tokens and depositing withdrawing from vaults and all that sort of stuff which means that everything would work much better right everything would work in a much more composable way there would not need to be adapters built it would just make it much easier for these default projects to all work together so very very very cool here i'm glad that joey highlighted this is this is not something that i've thought about because i'm not a developer i'm not a builder obviously a lot of these things just get adapters built for them but it would be a lot easier if if devs didn't need to do that and these adapters from

what i understand also introduced more smart contract risk too so obviously anything that we can do to reduce that risk is is a welcome change there so go give this thread a read i think joey links to some github repos as well so you can dive deeper in there if you're a developer if even if you're not a developer i'm sure you can give this a read and learn something about it as well there um so yeah i have five minutes left again on uh today's episode i did want to talk about something else but just quickly wanted to mention that uh it's still kind of like the first week of january so it's been kind of like a slower news days i think um that's why there hasn't been as many updates but i'm sure it's going to be back to our regularly scheduled

scheduled programming next week but for the last five minutes i want to talk a little bit about the merge now the merge guys i've said it plenty of times before that my own estimation i expect the merge to happen in q2 of this year we've had the kinsuki merged test net or devnet whatever you want to call it that's still ongoing i haven't had any updates yet about this but i expect an update either later this week or next week on that from um danny ryan or tim biker or kind of like one of the the core dev um uh uh organizers there um but what i wanted to talk about is people always say things like or ask me is the merge delayed right like is it delayed uh is it going to happen in q2 q2 or is it going to happen in q3 or q4

or is it going to happen in 2023 i want to make it clear that the merge can't be delayed because there's actually been no date given my estimation of q2 is literally my own there is no like i'm not getting that from anywhere else i'm just basically getting that from looking at what the currently available information looking at how long uh it would actually take to implement these things based on previous comments from core developers and then extrapolating a window from there there's no date there's no quote unquote official window the core devs haven't said anything it's basically i mean the core data has basically said when it's ready we will ship it right which is which is the path of the course for ethereum upgrades or for basically most software upgrades right um so if it does end up happening in q3 or q4 or even next year which i doubt it

right but i can see it if something goes wrong or something you know if the core developers don't feel comfortable about i can see it getting pushed to q3 right i can see it getting pushed to q4 but don't i wouldn't consider that a delay but where this kind of becomes a bit murky is that there is a general kind of narrative that developers over time where it doesn't matter if whatever i say doesn't matter whatever someone else says what ends up happening is that people just believe that q2 is the kind of like official window and that is when everyone kind of expects the merge to happen and if it doesn't happen then everyone's going to be like super disappointed and they're going to say there's there was a delay and then everyone's going to get really upset those narratives just form on their own

there's not much that i or anyone can do about them i think that they're bad and very poor narratives they form based on poor information that a lot of people spread within the ecosystem it's the same poor information i mean it's similar to the information about the merge leading to decreased gas fees right like that is oh man i've said it before and i'll say it again that is going to be the worst time to be in ethereum when the merge happens and everyone asking where why are the fees lower right i thought you know this is eth2 i thought the fees were going to be lower it's going to be so bad but it's going to something it'll just be something we have to deal with but yeah just generally when it comes to timelines take them all with a grain of salt don't

actually think that that's any kind of like official things even if it's coming from someone like me who's really plugged in i just give estimations and i said to you guys i will literally update my estimation if the second that i believe that it's not going to happen in q2 or it's not gonna happen in something like june um but we're gonna have to wait and see i think we'll be able to kind of like get a better idea in the next couple of weeks once the update gets posted about the consortium test net how that's going how the developers feel about things and kind of like what they um what they think needs to still be done and kind of like how much work needs to be done on on you know both the the on the client side because i think the research is all

pretty much done it's more about the client side and the implementation side and testing it making sure everything goes well because as you guys know this is the biggest upgrade in ethereum's history it cannot be taken lightly there but yeah just a little bit of um i guess like thoughts around the merge there i will definitely keep you guys up to date on all of that but i think that's going to be it for today so thank you 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