SBF extradited to the U.S, Optimism Bedrock and more - The Daily Gwei Refuel #512 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Daily gray refuel where we cut the latest news in ethereum ecosystem I'm your host Anthony sassano and since the 22nd of December 2022. alright everyone let's get into it so finally uh SPF is in FBI custody and he is being extradited to the US from the Bahamas he didn't last there very long and I don't think it's uh it's hard to know to tell why uh the the Bahamian prisons are not great I'm sure you guys have seen the pictures of them and SPF was probably begging to be extradited because of that he definitely does not want to be staying in those in those prisons while he waits he awaits um kind of his long-term fate there uh but definitely wants to be at home in the U.S uh because he is an American citizen

here or U.S citizen here uh but that's not the only news that came out today the block reported on this along with a bunch of other media Outlets that uh uh um Caroline Ellison and Gary Wang who were working closely with SPF basically as part of that inner circle have turned on SBF basically completely in a play deal essentially so uh the details are kind of scarce and there hasn't been confirmation on certain details but according to a few Outlets Caroline Ellison's plea deal involves no charges against her for her role in the collapse or all the fraud that went on in FTX as long as she provides all the information she has on SPF and all the other kind of insiders there and I'm assuming Gary

Wang would have gotten a similar uh plea deal there now this was kind of obvious and I think that we all expected this to happen considering that you want to go after the Inner Circle you want to get as much evidence as possible from them and the easiest way to do that is basically to promise them that they're not going to get in trouble if they give all that information away and and they definitely folded on SPF pretty much straight away now in saying that there was also a report that Caroline could still be charged with uh with tax related offenses I'm not sure exactly what those are but that was in the report too but it seems like the uh the FTX uh kind of inner circle is just turning on each other which uh which definitely as I said doesn't come as a

surprise I I don't think too many people considering the the plea deal that's being offered here I mean really doesn't matter how loyal you are to someone uh unless you're basically in love with them or unless they're they're kind of like a a partner and even then it can be tricky but if someone or if the authorities offer you a plea deal where you don't face any uh charges and you don't face any jail time as long as you turn on everyone else well you're pretty much gonna do it especially if you're facing up to life in prison for the crimes that you have committed now is this Fair uh no I I don't think so to be honest I think that uh people like Caroline and Gary should definitely uh serve time and and have punishments brought against them for their role in this whole thing uh but again that's not

obviously up to me to decide this is up to the the US authorities to decide and they're gonna I mean their lives are pretty much over anyway there's no way they can do anything again I mean they're gonna they're gonna have lifetime bans on certain things they can do in the financial sector I'd be very surprised if anyone legitimate wants to give the money uh and all you know the laundry list of things they won't be able to do uh you know from from here on out is is quite lengthy so even if they don't go to prison and even if they don't face those criminal charges that SPF is facing uh their lives are still pretty much destroyed by their own actions now there are debates around this and there's a few debates in the daily this Discord Channel about this about uh if we should be rooting for

these actors to be punished I'm rooting for them for the state to punish them and it's funny that these discussions get brought up because crypto was founded on being I guess like anti-government and anti-state and and you know cyberpunk and all that kind of stuff there uh with Bitcoin but I I've always thought that ethereum doesn't really share that same sentiment I think with ethereum is that we want to create a free R World from not just nation states governments but just in general we're going to create a Freer more open more decentralized world but we would like to work with these governments and nation states uh we would like to work with these different uh different bodies around the world rather than try and uh resist them at all costs right and I think the reason why the ethereum

community is probably more on that side than the hardcore anti-government side is because it's more realistic and I I mean the Bitcoin is the Hardcore ones still believe that Bitcoin is going to be the end of the US dollar right when I I don't think that's going to happen at all and I think the US dollar is is going to be incredibly strong I don't think any of these cryptocurrencies uh the ones that actually our currencies are going to replace the US dollar as a reserve currency uh at least not anytime soon and and I believe that they can live alongside and they are do live alongside the US dollar while still being incredibly valuable and Incredibly useful in their own right so so yeah I think it's just a pragma test versus um you know hardcore ideology kind of you and I think the bitcoiners have

always been very hardcore about their ideology which is which is fine I mean it's helped Bitcoin to survive until till this point but I think that if you look at the way ethereum tackles things uh I definitely see a lot more pragmatism there I definitely see a lot more open openness to working with governments and nation states and making sure that we we you know we we push back where pushback is warranted uh when they do certain things obviously like the ofak sanctions right we push back on that but in saying that we we'd rather uh kind of work with them on a solution rather than resisting them so much that they just want to keep attacking us right and keep coming at us so it's a different mindset there but rolling that back into what I was saying about you know the people behind the FTX collapse

all the Insiders SBF Caroline Gary and everyone else um I it's not up to me or or you guys what happens with with them like how they get punished here I think that white collar crime uh generally doesn't get punished as severely as it should to be honest uh considering that uh there are a lot of people that get hurt by these actions and that's the way I look at it I look at the actions that these people took was it intentional intent is always incredibly important here and if it was and if I believe it was intentional I mean you have to prove that that's like the Crux of of every good court case right you have to actually prove that the the intent was there to do that to do some something bad unless the defendant wants to just plead guilty uh to everything you know

as an open book but usually they don't do that you have to prove that they had intent to do that bad thing now a lot of the time uh it's it's very hard to prove that right because there's a multitude of different things that that go into a court case and there's a lot of you know different evidence as character Witnesses there's there's always stuff that goes on but I think you know playing it back to FTX yeah the the thing that that's got SPF is that he's inside as a turning on him and giving all this evidence probably giving them all giving the prosecutors everything they need to have like an ironclad case against SPF and to send them away for for a long time here but usually it's it's quite difficult especially with white collar crime to prove that their intent was to defraud

people was to take money from people and and actually hurt them whereas a lot of the time they don't really necessarily uh are out there trying to hurt people like for example in the in the financial crimes uh uh uh sorry Financial crimes um a world a lot of the time they're just trying to enrich themselves and they're stepping over people to get there but their primary intent isn't to cause harm to people their primary intent is to make themselves rich and and they're doing that via causing harm to people so it gets even murkier from there and as you can see it can get very um very complex but I think with the uh the FTX case it's it's basically uh cut and dry uh with SPF and and especially with all the evidence that has already come out and and more that will come out

now that the Insiders are turning on him obviously I I I I think that he should get either a fair trial or a fair kind of I guess like settlement deal and should be you know treated fairly by uh by the law even though he did something wrong because I do believe that every uh every human has a right to that but in saying that like this is not me defending him at all obviously this is this is me basically saying that uh there's a lot of different Nuance that goes into this there's a lot of different things that go into this and whether you believe someone should be punished to buy the state and thrown into a cage whether you believe that's right or wrong I think is mostly irrelevant here because we don't really have control over that it's it's basically up to the state

um and and if you want I guess like if you want to see change in that you have to change that at the probably um the political level where you can vote him politicians that want to reform the criminal justice system which to be fair the criminal justice system in the US especially definitely needs reform I mean it's pretty bad like especially all the um low-level drug-related offenses that people get put away for for many years like the the uh the weed offenses right like that that's always been mind-boggling to me and Australia is not much better uh there are um weight is illegal here at the federal level and I I think it's at the state level it's legal in some circumstances like medicinal but it's definitely very uh very locked down still um but we don't have the same I guess like prosecutions for those offenses as

the US does uh and and yeah I don't agree with that at all right I agree I I generally agree with like if you if you're proven to uh do such a a bad crime or a crime that hurts so many people then yeah of course you should be punished for that but I mean you know just smoking weed uh on your own like just having a bit of weed to smoke on your own that that's not harming anyone right um and I think obviously if you're if you're dealing in it as well it's a different story because there's um the quantity that you have depends it depends on the quantity that you have the punishment with that but I guess like I'm getting off right a little bit here off the rails a bit here but yeah I get whenever I look at these things I

just look at does the punishment fit the crime and the amount of people that were harmed and SPF harmed millions of people so really the punishment should be quite severe for that and and I I think that the the the punishment thing and this is the last thing I'll say about this doesn't just serve as a way to punish the uh the actor that did it but it serves as a deterrent and we've needed deterrence in crypto for a long time because crypto is full of scammers the reason I think I believe a big reason why there's been so many is because there hasn't actually been that many prosecutions of scammers and the thing with SPF is that it it he he didn't really he's not one of those traditional scammers that you see the ones that through the pump and dump icos and all

that right he committed fraud as part of a legitimate company that he would that people thought he was running right and well I mean the company wasn't legitimate but people thought it was legitimate company so it's a bit of a different situation there but I think that the more that people get pinged with this sort of stuff the more people that get the the governments go after the more it scares off these scammers because unfortunately the crypto ecosystem has not really been able to self-regulate at all we just keep having more and more of these scammers and they keep getting bigger and bigger each cycle so I would love to see a world where we don't have to worry about this anymore and that's my hope for the future but we'll see maybe the government isn't the best uh isn't the best entity to to to help with this uh

but we'll have to say in the future anyway I'm going to leave it at that for today on on that news front uh there's a bunch of other things to get through so first up is an update from stakewise here so they put out a tweet where they said the way you stake today may not be the way you stake in 2023 it is time to take a deep dive into OS eth and over collateralize staked Eve token that powers takeaways V3 and enables new ways to stake in a decentralized and permissionless fashion and there's a blog post here about OS Ethan also a tweet thread so I guess like the tldr of what is OS eth it's a representation of eth that was staked and earned in a Marketplace of vaults liquid staking mini pools that accept heat deposits and run stakewise V3 validators every OS is

a portion of the total stake uh like a slice of a V3 pie and then we've got a nice graphic here showing this basically one eighth goes in uh gets converted to One OS eth Beacon chain rewards to stakewise validators gets added to that uh One OS then can be turned into 1.1 eighth which is that 10 uh profit coming from the the beacon chain rewards after a certain period of time so it's a pretty I guess like standard uh LSD the loop here that we're used to and I've talked about how stakewise V3 is trying to be a lot more like something like rocket pool rather than uh like a centralized LSD which is which is obviously obviously very awesome to see but if you want to learn more about OS Ethan the entire architecture around it definitely give this tweet thread and

blog post a read I'll link it in the YouTube description below and there's a bunch of nice Graphics as well for you to check out uh that may make things easier to understand as well all right an update out of optimism today so on January 12th optimism's girly test net is migrating to a bedrock and most users and apps won't be impacted by the upgrade and optimism are working with node operators to ensure a smooth migration and you can check the blog post for full details on this and read on for the hype so I remember them saying them being optimism saying that Bedrock was due to launch in late Q4 it seems that that's not going to be the case it seems that they're going to be launching in q1 now so you can see here now the steps gen 12 is the test net

migration optimism governance will vote on a mainnet upgrade proposal and then q1 will be a mainnet migration to bedrock so Bedrock is the major upgrade basically optimism's version of arbitrim nitro in terms of how major of an upgrade it is for the protocol here and after the Bedrock upgrade as optimism says here the optimism mainnet will offer the lowest possible L1 data fees no other Roll-Ups have figured out how to get these fees lower so we'll have to check them on that once once Bedrock is out and they'll and the optimism network will also be able to support multiple execution clients so great obviously for client diversity there uh and Bedrock also future proofs the proof system on optimism so optimism will be able to incorporate multiple proof mechanisms including ZK proofs no need to wait for

a ZK breakthrough to deploy on optimism when ZK Tech is ready you'll be able to use it for your project so obviously a massive upgrade here coming from optimism as I said like the date was supposed to be late Q4 but I mean I always thought Lake Q4 is kind of a funny uh window of time to do something in because it's the holiday period so it makes much more sense that it's happening in q1 on Jan 12 when people are back on Deck I'm I'm for sure think that uh or at least I would I would assume that a lot of the optimism team is taking a break for the holiday so they definitely want to have you know as many people on board as possible when they do both the test net and mainnet migrations and that's why it's happening in q1 now which is totally fine I mean

there's not really any Rush here as I've said before because the Demand right now is quite low uh and because we have time during the bear Market to build out these things there's no real rush but in saying that I I love that that Bedrock is going to come out uh uh very soon here and and I just reminded myself thinking about arbitrum Nitro is that Odyssey Aboriginal Odyssey still hasn't been re-enabled I'm not sure when they're going to re-enable it I honestly expected it to come soon after Nitro was deployed and I'm not sure what they're waiting for so maybe someone else knows I haven't seen any updates on it but it's a bit disappointing that they haven't re-enabled it because that was a really cool thing that was driving a lot of people to arbitrim but again I mean there's no real rush really I mean they

can re-enable it whenever they want of course um but I think we want to keep these L2 this L2 momentum up in 2023 like we saw in 2022 and uh you know with optimism Bedrock going live with other upgrades coming to optimism and arbitrim next year and obviously all the ZK stuff happening as well with the other teams it's going to be an amazing year for layer twos on ethereum outside of um outside of what we're used to that's that's for sure anyway you can go check out this update from optimism I'll link it in the YouTube description and below alright so speaking of l2s David Schwartz from the polygon Hermes team uh put out a tweet today where he said the new public.zkvm-test.net is out ZK proof

recursion has been enabled L2 batch size increased from 4 to 10 million gas proof time reduced from 10 to 4 minutes L1 verification with 350 000 gas this adds more efficiency and ability to manage the trade-off between finality time and transaction costs so a major update that's actually come here for polygons uh ZK evm testnet that they're currently uh that's currently public and currently are live uh for people to play around with and this is actually a pretty pretty huge upgrade I mean we really look at each of these points here ZK proof recursion are being enabled is is a pretty big deal if you don't know what that is you can Google it I mean it gets quite technical but from my reading it it's definitely a very big deal uh the L2 batch size being increased from 4 to

10 million gas uh is definitely like you know more more than more than a 2X increase CR the proof time is being reduced from 10 to four minutes is huge and it's a 50 it's a 60 reduction in proof times right an L1 verification with using just 350 000 gas now I've talked about this before about how L1 is limited by the amount of gas it can process as a gas limit of uh technically 30 million gas because of erp1559 but in but in practice it's 15 million gas per block or per slot now with um within the proof of stake world so the lower you get that the less expensive your transaction is going to be and you want that I want verification to be as cheap as possible I get the best bang for your

buck so I'm sure they're going to keep optimizing that and keep getting that down as much as possible to get the overall uh costs down here which is which is obviously very very awesome but as I said before the 2023 is going to be a bigger year for l2s not just the existing ones that we're used to using like ultimism and arbitrim but also all the ZK VM stuff I mean I think if 2022 was the year of optimism and arbitrum in the L2 space 2023 will be the year of the ZK evm um but but as I've said before Optimus and arbitrim are both working towards being able to do ZK proofs as well so there's and it basically makes them a ZK VM anyway I mean not to the strict definition that we're used to but if they have ZK Pro

ZK proofs instead of fraud proofs implemented and they are evm compatible slash equivalent you're getting a similar experience as an end user regardless of the technical uh accuracy there so that's super exciting I mean that's what I'm most excited about next year to be honest uh uh because when you think about the upgrades coming to a ethereum called protocol we have withdrawals obviously very excited about that but I mean that's being talked to death and that's happening in like March and April and it's basically just a formality at this point it's not something that anyone's really kind of expecting to to um uh to create any any dramas or anything like that it's just something that we get delivered and and we move on it's an expected thing uh and then we have erp40 at 44 which is the next major upgrade are coming next year but that's uh our

two specific upgrade it really just it only benefits l2s but I say only but that's underselling it obviously because I've talked about how much uh the end users are going to get a benefit from it so uh and that's gonna um that's gonna apply to both optimistic and ZK Roll-Ups of course uh but that that's that's why 2023 I think is going to be bigger for l2s in 2022 and I am kind of expecting more demand next year than there has been this year I think 2022 was the was was 2018 and it's funny because if eighth bottomed in June like if he doesn't actually go back to uh its bottom price of 880 that means that eighth bottomed in six months whereas in

the last bear Market it took 12 months for both Eve and Bitcoin to bottom now Bitcoin set a new low last month with the FTX collapse which means it took it it's back you know almost normal amount of time from the last cycle uh to to test it to to set a new bottom right and maybe that's not the Pearl bottom I'm not obviously sure but it's it's really kind of weird when you look at it like that it really does mean that eighth bottom six months into its bear market and obviously this whole year has been very bearish but what if we started getting to mankind back next year what if next year is 2019 uh and there are there are trickles of demand that come back in I mean a lot of people forget this but in 2019 Bitcoin actually doubled in price it didn't stay flat on

the year it stayed flat on the ER and I'm talking uh from the beginning of the year to the end of the year because actually in 2019 what we ended up happening having was uh eighth going from like you know 100 bucks to 360 dollars but I'm talking about maintaining it for that year uh Bitcoin actually doubled from the start of the year to the end of the year and Eve stayed flat which was very different now to where ethers seemed to have bottomed only six months into the bear market and uh eighth may end up doubling next year and and and and holding it sort of thing like so I'm not totally sure I've talked about this Echo bubble that people have talked about over the past few weeks and how I think it's more hopium than anything else but it's just fascinating to see the different market dynamics

here and how that's going to play into the demand side of things like l2s but I'll digress on that point I'll be very very excited uh for these updates that have been coming out I got to do with l2s recently all right so Harpy had an interesting tweet though that I just wanted to highlight for you guys where they said uh this is the first on-chain crime drama drama where the good guys finally win here's a threat on how Harpy stopped the private key theft for one of our users so uh for those of you who don't know just a refresher happy is an Unchained firewall for your ethereum wallet I have highlighted them before on the refuel basically it allows you to set an allowed list of what um contracts and what I guess apps you want to

interact with on chain and then if you try to interact with something that falls out of the scope of that it it'll basically block that transaction and put like a hard block on it and tell you that you can't do it and then you can obviously add it to your allow list if you want to so it's like a firewall for your on-chain activity which I think is a pretty cool uh I I definitely a very cool um a tool for people to to use here but continuing on uh with this thread they said you know a few days ago uh the happy team received an urgent Discord message from one of the uh their users they suspected that their private key was stolen their suspicion was correct and the hacker started attempting to transfer assets out of the wallet but as soon as the hacker sent the transfer

suddenly the transaction failed transfer amount exceeds balance for some reason the tokens were no longer in the wallet instead the tokens were sent to a special smart contract this contract allowed the victim to recover their lost tokens from a different uncompromised wallet even though the Haka was able to steal the key they were unable to steal the tokens inside uh how did this happen well about a month ago uh this user Protected Their tokens with Harpy by approving him protecting their tokens with heartbeat this user gave a harpy permission to intervene if we ever spotted a theft on their wallet uh when Harpy detected the malicious transfer a happy move this uses funds to a non-custodial Vault before that transaction could confirm by paying a higher gas fee uh a herpes transaction transfer executed first and negated the theft uh Harpy has stopped hundreds of

thefts and has recovered over seven hundred thousand dollars in assets uh and they are the first on-chain firewall for keeping your assets safe this is really really cool guys there's not only is a firewall this is like an Iron Dome and for those of you who don't know what the Iron Dome is it's basically a um US military defense uh missile defense system that I believe Iran uses where it's basically it's not a literal Iron Dome but it's it's set up all around the the perimeter in Iran and it will basically act as a missile defense system and it's really good from from what I've read about it it's actually uh very very um uh very uh effective against the against the missiles but uh you can think of like Harpy as that's like an Iron Dome over your your ethereum wallet essentially and protects

you from these sorts of things like protecting you from having your private key stolen is amazing because like when traditionally you would think that when your private key gets stolen or something when someone gets your C phrase that's it there's nothing else you can do except race them to get the tokens out of your wallet but because Harpy detected this and was able to move those assets into a uncompromised non-custodial Vault for for the user uh with uh with another wall that they had set up for this uh that is obviously very very uh cool and very important and and something that is very very useful so yeah I just wanted to hire that for you guys I think what happy is building is incredibly cool and going to be keeping a lot of users safe uh as time goes on all right so superfluid announced over

the weekend that uh super fluid is now available not over the weekend sorry I should say yesterday uh that super fluid is now available on ethereum mainnet in Early Access for selected Partners over the past two years of experimenting across six different l2s thanks to our strong ecosystem of Builders we are excited to bring super fluid to all OG projects on the ethereum mainnet here so basically uh the the select projects that have been integrated with super fluid on mainnet uh right now uh just a a few I think they have like an air table here uh that you can um that you can use to sign up if you're an app that you that wants to sign up and get early access to superfluid yeah you can kind of sign up on this um on this uh this this form here and choose which network

you're on because there are there are on l2s but now they're obviously on ethereum mainnet um but yeah this is very cool because I mean I should disclose I'm an investor in super fluid but I think as I've said before like payments is that use case that I mean it kind of it feels like we're there but like we're not there like we're there in terms of having some of the the core infrastructure in place to do payments but we're still running into issues like UI and ux stuff and scale and turn key solutions for apps to integrate with and that's where super fluid comes in to integrate with these uh with these um different apps and say to them hey you can do payments with us you can do streaming payments with us for things like subscriptions and salary reason all the other good stuff and you

can do them in any token on ethereum or any of on all these l2s and that will basically provide the solution for that so I think it's a very important piece of infrastructure that is probably under the radar uh right now and I think payments generally are because people expect payments to just work it's not something you really think about too much like when you tap your card or when you pay for something when you're paying cash it's like a very I think you're very much accustomed to and it's very normal it's very it's very streamlined for you and that's what superfluid is trying to do for on-chain payments is make it as streamlined as possible to do anything you want with um with the payments infrastructure but making it easy for apps to integrate with it instead of the apps having to build it

from scratch themselves so cool to see them live on the ethereum mainnet you can go check out their thread for a bit more information on this all right we have an update from xmtp here uh they've got a mobile SDK out for uh are now available in developer preview so this release enables client apps in flutter react native and Swift and you can check out the reprocess this is obviously one for the developers out there but for those who don't know what xmtp is it is a protocol for web 3 messaging and I should disclose I'm an investor in xmtp uh as well but I wanted to hire this for any developers out there that are interested in working with xmtp and working with their mobile sdks they're now available in developer free preview for you to check out I'll link this in the usual description below

and you can go uh check it out all right finally here I just wanted to highlight that I had an amazing conversation with whack Whack Attack from the rockapole community today I love saying that name whack Whack Attack it's just it rolls off the tongue right um but the conversation went for quite a while actually I think it was about an hour and a half that we spoke for and we spoke about all things ethereum rocket pool my history in the in the space and and obviously wax history in the in the space as well uh and honestly I I I said this on the episode uh with him as well and I um I've said this to a few friends uh there are very few people in this ecosystem that I have come across where I can talk to them and feel like we're

literally on the same wavelength uh about the ethereum core protocol like there are certain other things that I talk to other people about and I'm aligned on but there are definitely very few people that I feel very aligned with in terms of like everything in terms of where we're thinking it's like I'm talking to myself so to speak uh whack is one of them uh and there's there's been a few others out there I'm not going to name more I don't want to don't want to dox them or docs them or anything like that um but that was that that's why the conversation was so fun for me and so amazing for me because it was just a streamlined conversation there was no arming or aring there was no disagreements on anything that we couldn't kind of uh add Nuance to like we did disagree on things but we added

Nuance to it and we basically came to the same conclusion in the end anyway and we understood each other's points I don't know I I had a lot of fun in the conversation and it is live for you to go check out and I highly recommend going and checking it out not just for my commentary but for wax commentary as well because uh he has a lot of great insight into all things ethereum but also rockapool I mean he's a wealth of knowledge when it comes to rockapole because he does his daily Rocket Fuel show which covers the updates from the rockable community um which is amazing to me that he's able to put together a video on on just rockable right I do you know the ethereum ecosystem at large but he does just rock a pool and it really provides a lot of value to the rockapole

community um in him doing that and he said the daily wear was an inspiration for him to do that which was obviously heartwarming for me uh uh and to see people kind of using my content as inspiration for their own but yeah go check it out I'll link it in the YouTube description below but on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to the newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone