Post-Shapella analysis, L2's on fire and more - The Daily Gwei Refuel #568 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delivery review where he kept latest news in your theme maker system I'm your host Anthony and has the 17th of April 2023 alright everyone let's get into it so an update on the kzg ceremony uh you guys remember the kcg ceremony I was talking about it quite frequently when it was going on about a month ago now I believe uh but basically it's the ceremony to set up the uh kcg commitment for uh wise I guess I should say sorry it's the um the trusted setup uh ceremony for ARP 4844 you can learn all about it by going to to the website and everything but the reason it's back in the I guess refill today is because Karl beak one of the people behind the kcg ceremony uh I put a tweet thread out today announcing that

uh the ceremony will be opening up for public contributions again soon but things are a little different this time so he continues by saying due to the lobby getting crazily large we are trying something new we're starting with really high Nance requirements and we're going to keep reducing them so for now you'll need to have sent at least 128 transactions before the 13th of January 2023 when the lobby looks like it is getting empty will reduce the requirement so new people can participate this is all coming back off the back of some very interesting special contributions which you can check out in Trends thread here but I think this is a really great way to prevent uh cyborg attacks on the kcg ceremony the airdrop Farmers people just coming in you know too many people coming in and overloading the system I think this is a pretty good way of doing

it because this is basically a snapshot on the 13th of January saying hey you had to have 128 transactions before that date to be eligible to contribute and then obviously as our time goes on and the queue you know the queue is small maybe there's not even a Queue at all the requirements will drop down so maybe it becomes like 64 transactions by that day instead of 128 and then it halves again like 32 and so on and so forth um just basically as a queuing system to allow people to come in and get their uh their commitments done and uh no need to foam over in order to make sure to fomo over not getting it done in time and any of that stuff there in order to leave your computer on for days on end hoping that you get into uh you know you're

able to to commit here uh and I think this is a really great solution to that so just a heads up that uh yeah the public contribution phase of the kcg ceremony will be opening up again soon and if you have addresses uh or an address with at least 128 transactions before that date you'll be able to contribute as part of the first round but then as I said as the time as time goes on that requirement will be lowered uh to to something you know whatever whatever they lower it to but it will be lowered over time and eventually you'll be able to get in so I think this is a really great way to to do a queuing system with the kzg ceremony here all right so it's been a few days since withdrawals it was activated on a theory of the ethereum mainnet now we've seen a

ton of analysis of this over the weekend and two of the best threads that I've come across that come from Hill Dobby and Martin Lee now Hill Dobby you guys know looks at dragonfly now but does a lot of doing analytics dashboard and there's a lot of things around Unchained data so who better to put a tweet thread out about the Shanghai withdrawals and also explaining everything got to do with staking withdrawals like all the differences between partial and full withdrawals the the differences between the 0x00 address format and 0x01 address format uh the the queues uh the the withdrawal queue the the entry queue all that good stuff there if you're confused about any of that I mean you've heard me talk a lot about it but a lot of the times I won't give an explanation of it I'll just assume that people know what

I'm talking about unfortunately I I remember saying this early on in the refuel I can't uh explain the same thing over and over again because then it just becomes really repetitive but that's why I link to threads like what Hilda has CR so you guys can get an explanation of these things so as I said Hill Dobby has a thread but so does Martin Lee and Martin Lee um is a data journalist at nanson here and he also has a pretty long thread actually I think it's over 30 tweets uh along here explaining withdrawals as well with a bunch of data analyzing uh withdrawals since they went live so yeah I think it's a great great idea to go check out both of these threads to get a full understanding of the differences between the things I just mentioned and I think from what I've noticed over the last few days on

especially on on Twitter Reddit Discord well people seem to be most confused about and people seem to be getting like uh getting a lot of things wrong about is the difference between full and partial withdrawals because a lot of the dashboards haven't actually split these things out so they've just basically uh commingled them so people will say oh there's a million eighth uh that's that's going to be withdrawn and they'll think that that's got that that million eighth is coming from Full withdrawals when in reality that's coming from partial withdrawals and the partial withdrawals are done automatically so even if the person didn't want to withdraw their eighth or didn't want to do anything with that eighth I just wanted to sit on it it would still automatically withdraw as long as they had changed their withdrawal credentials to 0x01 and of course a lot of people

who had um rewards and who were staking sent you know for a while now may be able to to compound those rewards and spin up another solo validator or maybe they just want to go spin up a mini pool with rocketpool or maybe they want to stake with another LSD right but that's what they're going to do they're going to basically compound their rewards so they're not necessarily going to sell and there's a lot of nuancy and I've talked about it and let's see on the refill so I'm not going to repeat myself there but I think that's the source of confusion for a lot of people and then of course there's even more confusion around the differences between a 0x00 address and a 0x01 we saw the other day that uh do a bunch of um addresses I think like over 40 of the network uh

were changed from 0x00 to 0x01 post Shanghai which means that the um the partial withdrawals uh automation went through again and started withdrawing massive amounts of eth from the consensus layer Awards to these addresses that weren't eligible before so that I saw people on Twitter saying look at this look at this massive unlock now everyone's unstaking it's going to lead to a massive dump when that wasn't correct at all it was literally just the rewards being paid out so but as I said Hill Dobby and Martin Lee's threads explain this quite well and I highly recommend checking them both out I'll link them in the YouTube description below and also the other major source of confusion is around the exit queue on ethereum it's nothing to do with ethereum's uh transactions or how many transactions you can process the exit

and entry queue was designed in in the way it was designed for security purposes it had nothing to do with ethereum scalability it's not it's not being done to to limit the amount of uh eat that can come out for Price related reasons or anything like that it was done for the security of the network and on top of that there is a minimum 27 hour exit queue so even if there is no queue even if you're the only person exiting uh a full withdrawal it would still take a minimum of 27 hours because that is also our designs in protocol that way so essentially the queue starts after 27 hours so the first person will withdraw and they'll be thrown within 27 hours and then it just gets longer and longer from there I believe the withdrawal queue right now is almost 20 days or something like that for for it

to clear so it and as more validators get out to the network it can clear faster and faster uh at certain points it has to reach certain checkpoints and I think either Martin or Hill Dobby's thread uh explains this as well so yeah as I said you can check out these threads uh I'll I'll leave my comments there uh but I'll link both of them in the YouTube description below all right so just another thing about staking comes from superfussia and I think he has actually two things I want to talk about so yeah there's there's one tweet here where he said based on the uptick in Solo staking questions I'm seeing on on the East taker channels I'd say we're getting a big increase in Solo stickers from home this is so beneficial for the long-term success of our Network thank you everyone for this effort

um so this is one of my things that I wanted to see post Shanghai I wanted to see more people solo staking because one it's gotten a lot easier even though it's still not easy right it's not like Plug and Play A lot of the time unless you go with a solution like dap node but even that isn't totally you know plug in and play it right there are still certain things you have to do and as I was explained in the past I don't think solo staking is ever going to get to a point where it's literally click one or two buttons and you're good to go because it the the just depositing the eth to begin with um and to get started staking is a few clicks in of itself so you're already past that one to two click um uh uh uh

one two click requirement there so soul is thinking he's never going to be the easiest way to stake but it has gotten a lot better I think since Genesis and on top of that uh it's been de-risked a lot right uh on top of that uh eighth as an asset has just been transformed right it's just become such a different asset and so many more people bullish on it the ecosystem has grown so much uh and now that withdrawals are enabled it's it makes a lot more sense to solo stake because you get your rewards and then you can you can do whatever you want we do rewards right straight away and all that good stuff there so yeah I mean I'm not surprised to see an uptick here in and people wanted to solo Stakes so just a great a bit of anecdotal evidence from

superfizz and I mean who who would know better than uh someone who monitors and participates in the eat Staker channels where generally people are going to go when they have issues with setting up a solo staking uh rig or maybe setting up something like rocket pool right uh but yeah just great to see that there and the second tweet from Super fears was also related to staking where he said there's a real explosion of new staking services and protocols out there this is wonderful but more than I can keep up with so look for these features and he has a checklist here a non-exhaustive checklist obviously this isn't going to cover everything but this is just a basic checklist that you should use when staking your eighth with a uh a staking provider so the first thing full smart smart contract from end to end so

basically you don't want any centralized middle man so to speak right you don't want any kind of like controlling party where essentially someone says hey give me your eighth you know and they take custom Studio of your eighth and make our stake on your behalf no you want a full smart contract from end to end staking experience something like a rocker pool right open source I mean that's a given like you don't want to be interacting with any smart contracts that aren't open source that's a rule of thumb I think for everything in in crypto and ethereum uh not just for staking but it's it's really important when staking definitely decentralized this is going to be harder for the newer ones the new ones taking services to adhere to because they're new right A lot of times when things are new they don't want to decentralize because of

the risk of of bugs or they still have major upgrades they want to do to to their smart contracts or any you know or for security reasons there are any number of reasons for them for them not to be decentralized so I think this one as I said is going to be difficult for newer services to to hit on and even rocketball as much as I love them there are still centralizing forces in rocketpool right now the odow being the most obvious one right now and I mean you guys know I'm an oh down member as well but I I think it's worth being honesty I'm not sugar coding it the Odell is definitely a centralizing force in rocket pool but it's not like rock-a-pull is centralized because of that like I think rockapole is obviously the most decentralized taking pool we have today and it's only becoming more

so over time and the Oda is a temporary solution but it's still good to be honest here so I don't think any of these services today meet the decentralized criteria here obviously solo sticking does but Solace taking isn't a staking uh service or a protocol right it's all it's taking is is literally you're at the you're literally at the bare metals and you're not using anything built on top so I think that third Point well very important shouldn't stop you from staking with a service uh I just think that you need to see how centralized it is or or what their plan is towards decentralization right do they have a credible path towards it is it actually possible for that protocol to ever decentralize like are they saying oh yeah we'll decentralize uh you know at some point in the future but then you do your

research and and think to yourself well wait this this actually doesn't make sense right this protocol can't decentralize because of this this and this so that's not something to keep in mind as well the fourth point there should be permissionless node operation so essentially anyone should be able to create a node again rockapole allows you to do this anyone is able to create a mini pool there is no permission to do that with stakewise V3 there is going to be no permission for anyone to create their own vault as well so that's what I mean that's what is meant here by permissionless node operation you shouldn't have to ask someone for permission to spin up a validator or spin up a node you should just be able to do it uh and then the last Point here give more than they take there's a few

interpretations of what this could mean basically you want the staking service and protocol to be a good Steward of the network and there are I mean this is a very subjective thing because you could debate people about which service is actually beneficial to the network which one is not beneficial to the network which one is is a leech which one is it has a symbiotic relationship which one has a community that actually cares about ethereum which one has a community of just profit maximalists so as I said it's a subjective thing that can be debated but generally you want to be uh staking with services and protocols that uh that are ethereum aligned right especially if you want a long-term security and long-term uh I guess uh safety I guess you could say of your funds in these protocols and there was

some comments here as well someone mentioned multiple audits that's always I think a given as well for any smart contract honestly like the last time I interacted with a smart contract that wasn't audited was defy summer and I regret doing it back then because I looked back on it now and be like well I could have lost a lot of money if I was rugged by one of these contracts so for me going forward I don't I don't or at least I try not to interact with any smart contracts that have not been audited and I think this is especially important when it comes to staking protocols because not only are you interacting with it once or twice or on a temporary or short-term basis you could be staking with these protocols for long periods of time like potentially years so you definitely want to make sure that they have had Audits

and and especially multiple audits so I think that's also a um a very important point there but I like this checklist from superfizz you can go bookmark bookmark this tweet if you want to keep this handy but definitely something to keep in mind when choosing which staking protocol or service to stake with all right Peter from The Geth team has shared his slides from eth Tokyo about 4844 transaction pooling so this is one of the things that has been under heavy our research and development uh regarding 4844 and something that uh I I I think is um not holding up 4844 anything like that but something of a very important consideration because if they get it wrong it could lead to

potential uh dos attacks on the network it could lead to potential uh things where essentially there's a if there's a reorg on the network and then one of these 4844 blob transactions gets re-old then what happens on the on the layer two like there are all these considerations here and and Peter Peter's um slides do a really great job of explaining it now obviously you're missing the context of Peter actually talking to the slides so hopefully there's a video on um his talk on this but I don't know if there is just yet I haven't seen one but the slides themselves gives you enough context I think so I highly recommend checking out the slides for more information on 4844 and the considerations that are being that are being thought about and talked about in order to make sure that we ship 4844 to

the network in a safe state so it doesn't actually uh cause any instability on the network doesn't cause any any uh anyone to lose money or anyone to uh to kind of uh or any of the l2s to get messed up by it or anything like that because they're going to be the main users here so definitely go check that out and there's also a bit of art here that was generated by mid-journey uh that I thought was really cool just like eth logo with Mount Fuji here and a bunch of Japanese architecture as well I thought that was actually really cool it's a pretty cool image that mid Journey created I saved this as well I don't know what I'm going to do with it maybe it'll come my phone wallpaper for a bit but yeah you can check that out as well I'll link these

in the YouTube description below all right so speaking of Rocket pool in I guess like not even 48 Hours Now Jasper put this tweet out yesterday so basically 24 hours from now or even less than that the rockapool atlas upgrade is going live eight eighth mini pools will become available so you no longer need 16 eighth and a bunch of RPL to stake you only need eight eighth and 2.48 worth of RPL to uh spin up mini pools with rocker pool so that might be something that you're interested in and as I said before you don't need powerful Hardware to do it you can run a smart node stack that's the um the software that rockapool uses on a Raspberry Pi on a rock 5B board the really the thing the only thing you have to worry about is if

you have that you have at least two terabytes worth of SSD storage and that's really it 16 gig ram should be enough 32 for future proof but 16 should definitely be enough and even less than that and you can and you can run hundreds of mini pools and hundreds of validators on these things staking is not Hardware intensive I think that's a point worth reiterating constantly um it is way more Capital intensive than it is Hardware intensive uh even with eight eight pools I mean that's still pretty Capital intensive right that's uh what 16 Grand worth of Ethan then the rpr requirement too um but you know if you've got that and you want to stake uh you don't have to go and Splurge thousands of thousands of dollars on Hardware you can do it for 500 right I'm talking US dollars here of

course uh and then yeah so that might be something that you want to check out but that's going live um rewards will be able to be withdrawn uh when the atlas upgrade go lives and this is the consensus layer rewards and the deposit pool will have room to Mint our eighth again so hopefully there isn't that premium there so that people buy Aries on the secondary market and uh so it opens up uh rocker pool staking to more people here so yeah as I said this is going live in less than 24 hours the Odell actually voted on this before uh I wrote it on earlier in the day it passed the vote so yeah it's all good it's all going live here and this has been a long time coming for for rockapool right and this is uh as I said as I've said plenty

of times major upgrade for the protocol here and it should lead to a bunch of growth and it's come at the right time obviously Pro Shanghai he's the well just a few days after Shanghai is the perfect time to do it uh but I'm curious to see what what this does for rocker pool growth now that people can change from other services unfortunately people can't change from uh Lido just yet unless they sell their steth and um and sell it for R8 maybe or maybe they sell their stf and then go spin up a smart node stack and spin up some mini pools they can do that but not no one can actually withdraw eth from the lighter operators directly yet because Lido withdrawals aren't live yet but you know coinbase is live we've got Kraken refugees that they probably you know looking around and seeing where to stake

next uh we have people with rollers maybe they're solo stickers and they think okay you know I have enough solo validators let's spin up some rockable ones maybe they're coming from other exchanges like coinbase and binance there's plenty of places they can be coming from I do think that rockapool stands a nice chance of capturing a lot of the Kraken refugees because of this or requirement maybe a lot of them don't have 32 ether solo stake and I do think that uh that Lido stickers as well may consider selling their stf and going into R8 for potentially better yield maybe because they want a more decentralized they want an actually decentralized kind of service uh staking their eat for them or being being exposed to that or maybe they want to spin up many pools as well so so as I said perfect timing for Atlas here great

to see it going live and I can't wait to convert all of my mini pools to 8 8 mini pools and then spin up more I've been waiting until Atlas went live to spin up more I want to spin up uh at least two more to get to 10 which is actually going to be 20 because it's it's halving the the requirement here so I'll be getting to 20 mini pools but 10 in the in the um the old requirements uh but the reason I'm not spinning out more is because I've actually been spinning up a lot of solo validators with any eat that I've uh that I've accrued my um and I'm going to be doing that with my My Rewards as well so yeah but as I said like rocker pool is great if you've got less than 3280 if you run you know if

you've got eight ethi and you've got the RPL you can stake it and and you can spin up your mini pools on low powered Hardware all right L2 beat announced over the weekend that the combined tvl or total that total value locked of all layer 2 Solutions has passed 10 billion dollars experiencing a note where the increase in the last week now you guys know that I'm not a huge fan of tvl as a metric like I'll give you one guess as to why it increased so much in the last week I mean you probably know right the prices of everything went up I mean eighth is at 2100 um the ARB token went up right the op token went up and a bunch of other tokens went up so that's why I've never been a huge fan of tvl because it's very

sensitive to price movements and it's also very sensitive to liquidity movements in saying that it's still good to see it growing because I think that the meme and The Narrative of tvl being something important is more powerful than the actual fundamentals behind it and I think it gets more attention on l2s it gets more people talking about l2s and saying oh wow look at the l2s they're growing you know I should go use them what's on there that so many people are putting their capital on there and it just benefits the whole ethereum ecosystem even if the actual metric isn't that much signal in saying that I did showcase the other day how the l2s are generating a lot of fear Revenue right now which I still believe and you guys know it's my favorite metric for tracking uh activity on uh various networks uh and that's still maintaining

today I think if I go to crypto fees dot info right now and bring it up for you guys to see what I'm seeing you can see that arbitrine one still did 225 000 worth of fare Revenue over the last 24 hours over the last day I should say um and optimism did about 143 000 here so they're still up there they're still doing um you know record numbers basically which is awesome and arbitrim is almost at half of Bitcoin I think it's yeah it's pretty much like at half of bitcoin's daily Fair Avenue which is which is pretty crazy when you think about it right so the l2s are growing no matter which metric you look at here there's more of them going online obviously we have the ZK VMS go online they're growing uh there's still more to come like scroll and Tycho and and Stark

Nets grow going and having a lot of great stuff going on there which I should talk about in a sec actually I'm going to talk about this in a sec um but yeah I mean there's no denying that the L2 ecosystem is growing and I've said I don't know if I've said this on the refill before but I have kind of like this thesis right now that we're going to experience something similar to what we experience with D5 summer but we're going to have like a proper L2 summer and I believe it's going to be led by bass so I don't know exactly when bass mainnet is going to go live I assume it's going to go live sometime this year maybe around 48 44 so maybe later in the year I don't know maybe it goes live earlier than that in a mainnet capacity but think about this for a sec

so let's say the bull market comes back in what 2024 right let's say we get a massive influx of of new users in 2024 and let's say coinbase is obviously going to capture a lot of those new users and they start promoting base well people are going to go to base to do on-chain stuff right and then from base they're going to think what other l2s are there and then they're going to go explore the arbitrims the optimisms the ZK VMS right and then that's going to lead to a massive influx of new money and liquidity into these things and it's going to look like what D5 summer look like where there was just so much money being injected into this new ecosystem and all the tokens were going nuts there was so much money being made by everyone and then potentially become crashing down in a big way like defy did I don't

know exactly what it's going to look like but I can potentially see this huge narrative forming especially for newer people who will be able to actually afford this now obviously we had the L1 narrative in 2021 and I think a big reason for that was because of the l1's taking advantage of ethereum's weakness where the l2s weren't live yet and the ethereum L1 Visa really high and there was nowhere else for people to go except these other l1s and there were also token incentives of course but now with the l2s we get a double whammy we get people still in the ethereum ecosystem we get uh uh cheap fees uh well this is a triple whammy actually we get the cheap fees obviously and especially post 4844 and we also get the l2s doing their own token incentives which should drive

growth through and we get a new influx of users which should bring in a lot of new money and all that good stuff there so that's my running thesis right now not sure on the timing here it could be the end of this year it could be sometime next year I would say within the next 18 months I expect this to happen I expect some huge growth for l2s to happen it just logically makes sense to me at least with base leading the charge because coinbase is able to funnel a lot of new users into base and then they're not just going to stop at base right you don't just stop at one once you're on chain you explore everything especially if you can just easily change the network in metamask which you can when you're exploring all the l2s and then you can bridge between

them I I really do feel like the main benefactor of the next influx of new users is going to be ethereum ethereum and l2s and I'm super excited for that obviously but that's my thesis we'll see if I'm right as I said I'm giving myself a time frame within the next 18 months so to pretty much to the end of next year I guess uh for this to play out and we'll see how that goes there all right so I spoke about stock where before and how uh there's an update I wanted to talk about well influence a MMO that I've talked about before a crypto game that I've talked about on the refill bunch of times before announced uh I think it was a week ago now and I missed this but they announced that they have gotten a Strategic investment from stockware into their

game now influence is really cool as I said I've spoken about it before I've showed you guys I think I showed you it on the reef before or at least highlighted it on the refill before but this is trying to be a fully on chain Eve online like game that is powered by Stark Nets uh now this is really ambitious and this is something I think that Stark net uniquely enables as well um and it's something that I think is also very suited to having an on-chain economy uh because it's as I said trying to be or at least um it's it's being built in the spirit of something like Eve online where an Eve online if anyone for anyone who's played it has a massive economy it's not a crypto economy it's a it's a basically based on a Fiat and in-game economy but imagine you had a

crypto economy that overlapped with the in-game economy and then you could trade these items whether they be in-game items or in-game currencies using all the crypto native tools that we're used to on a layer 2 solution where transactions are essentially I mean nothing and then you can do transaction batching and then you could do basically free transactions it's going to be awesome right so I just wanted to highlight this and say congrats to the team on the investment from stockway here if you want to learn more about influence you can go check out uh this post here which I'll link in the YouTube description below and there's tons of info for you to dig through if you're into this sort of stuff all right we have the 11 8th Global Tokyo finalists that have been announced here so you can check out this tweet

thread I'll link it in the YouTube description below but I wanted to talk about uh one or two projects that caught my eye so the first one is called where is it uh it's called Uh ZK Voice key so what ZK Voice key does is that it allows users to recover their private keys with their voice using fuzzy commit and zero knowledge proofs authentication happens through a fuzzy match of Voice without storing voice on the blockchain this is really cool this is a really cool um application of ZK technology here uh which I I thought was very novel and I don't think I've seen anyone do before so you can check this project out uh and check out their Global page here and they've also got their source code available on GitHub I believe here for you to check out as well uh but that was

a cool project that I came across and another one I believe if I just scroll down here was uh which one was it uh there was one more I remember looking at and thinking well I think it might have been this one here A minor or not which is a browser wallet for Japanese residents that that lets them use their government-issued ID called a my number card as a hardware wallet this is really cool as well because as I've said before I'm really bullish on real world authentication and ID mechanisms being bridged into the on-chain crypto um ID ecosystem and using those IDs in a in a privacy preserving way and using them to create you know within wallets and things like that and that's exactly what uh I I think it's called minor I think I think that's what what the

project is called because I think it's a play on uh my uh number card here so uh yeah you can go check out this project as well but those are the two that that caught my eye now I don't think the winner has been announced yet for the 8th Global uh Tokyo um hackathon here let me see if a Winner's been announced no it's just the finalists so far uh is it just the final it's so far I'm just scrolling through here sorry um yeah I guess the winner will be announced uh uh later on but yeah you can go check out the thread for all of the finalists here check out the projects check out uh new novel ways that people are using the technologies that we have within uh crypto but anyway on that note that is 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 a thumbs up subscribe to newsletter to join the Discord Channel and I'll catch you all tomorrow thanks everyone