Scaling the L1, Strategic ETH Reserve and more - The Daily Gwei Refuel #838 - Ethereum Updates

Transcript

Hello everyone and welcome to another episode of the Refuel where recap the latest news in the theme system. I'm your host and this is the 27th of April 2025. All right everyone, let's get into it. So yes, I'm back. I think it's been what 2 weeks since I did the last refuel, which was quite a depressing one cuz I did say to you guys I was burnt out and I didn't know when the next refuel was going to be. And today's a weird one. This is a Sunday refuel. I don't know if I've ever done a Sunday refuel. I might have done it once or twice, but I was kind of was looking over my Twitter profile and everything that I had retweeted over the last couple weeks, and I'm like, "Wow, there's actually a lot of stuff to cover. I'm feeling more energized lately. Uh, let's just do a refill." So,

that's why there is a refuel today. And I'm super excited to get into everything. Uh, so yeah, I mean, I'm not going to bore you with the details of what I've done over the last two weeks. I've mostly just taken a break and played video games to be honest. But let's jump into the news. So, Pectrop is coming really quickly, actually. May 7th, it's like what 10 11 days away from today. That crept up really fast. And remember how I said to you guys on the refules that these kind of 2 to 3 week quote unquote delays absolutely mean nothing. Like no one cares because it's really not like Peter is not a quote unquote urgent upgrade that's going to uh you know suddenly moon ETH to 10K or make Ethereum like 100 times more scalable or anything like that. These upgrades are incremental things. Even

the major upgrades you could say like the merge for example was an incremental thing towards that kind of full vision of Ethereum that we're all trying to build here. Um but yeah, it's coming May 7th. If you haven't updated your nodes yet, uh you should go ahead and do that. Update your clients, your execution layer and consensus layer clients. All the releases are out there for you. Uh you can go check out this post from Tim Bico as well officially kind of announcing the date of the fork here. I'll link that in the YouTube description below. But just a refresher as well, guys, like Pearra includes a bunch of exciting updates, actually, upgrades, I should say, or EIPs, I should say. The first one and probably the one that people are focused on most, uh, I guess like outside of the blob increase, because the blob increase to

me is exciting, but it's like to be expected. Like, it's not anything that is controversial. Everyone wants more blobs and we're doing it, right? Um, outside of that, there's two things. Uh, one is the account abstraction EIP, which is going to actually be, uh, you know, userfacing. it's actually going to have a real impact on users. Um, it relies on the wallets integrating it, but I'm sure the wallet will be fast to integrate it because it is a competitive advantage. And essentially what the account obstruction EIP does, well, at least the biggest thing it does is get rid of that approve then swap flow that has plagued Ethereum for basically ever, like since Genesis basically. So, we're getting rid of that. And as I said, does require support from wallets and such, but I'm expecting that support to roll out relatively quickly. The second thing

is the max EB increase uh where you can stake more than 32 E per validator up to a maximum of 248 ETH. This is not direct userfacing, but this is really good for solo stakers, home stakers, you know, rocket poolool note operators and so on and so forth there. I'm super excited for it. I really want to roll all of my stake into a single validator. Um and and then from there I can basically just, you know, I mean the network basically has the same economic security, but I've got a validator there, a single validator there. And then what I can do is autoco compound my rewards which is great because right now obviously every solo validator or every I mean every kind of like staking operation has to wait until they have another 32 ETH in order to spin up another validator and start earning

rewards on it. So even if you have 31 ETH today, right? Say you've got 10 validators and then you've got another 31 ETH that you want to stake. You can't actually do that as a solo staker. Sure, you can go into a staking pool and so on and so forth, but as a solo staker, you actually have to wait to get the 32 ETH there. And I'm talking true solo staking. Obviously, there's other ways to solo stake these days, but true solo staking, you have to wait. So, that's really cool for autoco compounding. And it also takes a networking load off the network, too. And it's going to be I'm going to be really curious to see how many validators get consolidated down and so on and so forth. I do suspect there's going to be a little bit of FUD around this because people are a bit

silly where they're going to look at the I guess validator count coming down and think that oh my god, what happened? And you know, why did Ethereum just lose like 100,000 validators when, as you guys know and are well well aware of by now, counting validators is irrelevant. We should be counting the individual node operators because one node operator can be responsible for many validators and it basically gives the same amount of I guess security from uh the node operator perspective. Obviously, the economic security perspective is different here. But uh yeah, just because we have 100,000 less validators because they were consolidated into you know other down to validators with 248 ETH on them doesn't mean that um that we have less security doesn't mean that we

have less node operators on the network. It's actually a positive. So I expect there to be some FUD around that but it's pretty easy to dispel there. I hope the dashboards uh that show Ethereum staking related things make this clear for people. Otherwise, it's just going to be a really bad narrative that we're going to have to counter, which I guess is what we're experts in in Ethereum land. It seems like every narrative is a bad narrative. Uh, but yeah, those are those are the three things there. The the blob increase, account abstraction, and max EB. There are other EIPs as part of this upgrade as well, and you can read the full list here. I'll link this in the YouTube description below. Uh, but yeah, just just reminder that Pectra is coming up really, really quickly. Uh, here. So, the latest allcore devs call.

I think there were two of these uh that I've missed, but I'm just going to go off the latest one here where uh the discussion was had not around Pekra, obviously discussing Pusaka, and then even further than that with Clamsterdam. The main thing being discussed is not I guess like Pias, right? Cuz Pedas is again relatively uncontroversial. People want it, everyone wants it, you know, it's not something that's going to be like kicked out of an upgrade because of controversy, for example. it may be kicked to have an upgrade because maybe it's considered not ready for Fusaka, but that doesn't seem to be the case here. But what has really been taking up all core dev calls lately have been the discussions around EOF. Now, I've talked about EOF for a long time on the refuel.

I've said before that relatively neutral on it. I'm not for or against it. Sometimes I kind of like eb and flow between for and against depending on who I talk to. But I think based on the conversations over the last couple of days, especially if you've seen them on Twitter, I think at this point there is a very low chance eo makes it into any upgrade. I feel like it's kind of dead in the water. And I know that there are people that have different opinions on this and think that well, you know, it's been in development for so long, we shouldn't just discard it because of such and such reason. We should just include it. it's uh relatively low risk, which I guess other people argue that it's not relatively low risk, but it's there, it's done, we should just put it live. But the problem is is not I think

around risk and not around like security uh for the network and not around, you know, the work's already done. The problem is is that yes, the work's already done on the protocol side, but then to actually take advantage of EOF, the app developers and the smart contract developers have to build with it. Now that means that all of the old contracts, at least from my understanding, all the the current contracts live on the network and all the old ones, they are not EOF contracts, right? To be an EOF contract, they would have to rewrite that and deploy it again. That's my understanding of it. I may be wrong here, but that's what I'm seeing from appdevs. So, I think this is I guess the main lesson from the EOF kind of debate that's raged on for a few years years now. basically

the whole EOF thing is that there has traditionally been quite a disconnect between core developers and app developers. And I think this disconnect wasn't something done on purpose. I don't think that the core developers don't care about the app developers and so and and vice versa. But in large kind of distributed and decentralized organizations like Ethereum, which we don't really have much to go on here, but when you look at the the landscape in terms of um in terms of the different kind of uh networks out there and different kind of uh initiatives out there, what what tends to happen is that if there is no one kind of like leading an effort, it tends to just not happen.

So for example, if there was a leader, say someone that was connecting the app developers to the core developers and coordinating all of that, then this wouldn't have been an issue. But traditionally, there hasn't really been that. Now those things are changing. The EF is definitely putting a much bigger emphasis on making sure that there is communication lines between the core developers and the app developers. But I think that that's the main lesson we can take away from this whole thing because the app developers, you know, should have informed or I guess I should have been able to inform the core developers early on that hey, you know, this isn't necessarily something that we care for.

It's, you know, it just adds more work to us because we have to write rewrite our contracts or, you know, when we're writing new contracts. Yeah. Okay, we can take advantage of it, but maybe it's not something that's worth focusing on versus something else. Now, as I said, there are a lot of different, I guess, position positions and debates on this here. I am back to being neutral on it. I'm not for or against it, but given that it has become so controversial at this point, uh, and it has become something that it seems like most I guess like it seems like a lot of people don't want, uh, I I just don't see it going in. Like this is the thing with EIPs is that once they become controversial, it's really hard to actually get them included. Uh, and this I guess like is true for all EIPs, but

there are a lot of EIPs that inherently don't have any controversy attached to them. As I mentioned before with the blob related stuff, there is some controversy around that where people say why are we scaling blobs when uh you know at at current kind of um scale with sorry current blob count the fees going towards Ethereum are quite minimal and that means that the L2s and rollups are free riding and I understand that perspective but that is less to do with blob scale and more to do with how blobs are priced. So again like it's not really controversy around the blobs and scaling the blobs up. more we need another different EIP in order to fix the blob gas market which is exactly what we have and there's a few different efforts here but that's an example of something that is relatively

uncontroversial but then there are things like yeah eof and I guess like the most controversial EIP I can think of or one of the most is PragueP power from back in the day then there was EIP I believe it was Triple 9 which was the parody unstuck funds one which is basically a bailout EIP that was super controversial so yeah there's just inherently things that have controversy attached to them and things that don't. And I think with EOF, unfortunately for a lot of the devs that worked on this, it has become quite controversial, which means that it is it has a low chance of going into the network. Uh especially when the wider community gets involved, uh that's when it becomes just extra noisy, and that's what we've seen here with uh with EOF. But outside of that, just things are still going well with

getting Faka out the door. I believe uh uh you know, work still being done there and then obviously Glamsterdam after that. But that's the latest on I guess like EOF and the latest core devs call. I think there's going to be a core devs call again. I mean there will be again this week. I believe it's on Monday. That's going to be really interesting because it's going to be a lot about EOF and I think on that call it will be decided finally if EOF is dead or if it will still go in. If I was a betting man, I would put money on it being dead to be honest. Uh but we're going to have to see. It's going to be a spicy call, that's for sure. All right, moving on.

So, there's been a lot of talk about L1 scaling recently. Now, what I'm going to do is I have four tweets here with that that are related to L1 scaling. And then I have a tweet that I put out that summarizes all of it. So, what I want to do is I want to cover this tweet from Justin Drake. So, he basically put out a tweet where he said that uh we're going to get 1 gigas per second on Ethereum L1 with ZKVMs, which equates to around 10,000 TPS, and we're not going to compromise to get there. This is the key thing that I think a lot of the community is debating is basically people keep saying we want to scale the L1 we want to scale the L1 and that's all well and good like that's fine let's scale the L1 but the key is that we

should not be compromising here and what that means is that we should be able to do this scaling the L1 but while keeping uh uh consumer hardware viable to run the network while keeping home internet viable to run the network right while keeping censorship resistance with things like fossil while keeping 100% % uptime with things like client diversity and while having the current 8,000 consensus nodes that we have and potentially growing that even further. We shouldn't be scaling by doing it the way Salana does it or Sooie does it or Aptos does it. These kind of L1 chains that are essentially data center chains.

That is worthless to me. Like that is absolutely worthless. I don't even care if people disagree with me on this. I truly believe that a data center chain is completely worthless long term. it it it just serves no purpose because and I've been talking to a lot of people about this recently and this is something that I've said on the refuel from the very early days and I think I even said this when I was doing ETHub with Eric uh when EOS was a thing where if you optimize to be a data center chain if you optimize to be more centralized then what ends up happening is that you lose out to the other chains that just become even more centralized than you. It is a race to the bottom in terms of centralization because what you do is you shift over to window here

where you basically show that to the market like well you know people are using my centralized chain so uh you know that must mean that the trade-off uh trade-offs that we made are worth something. It's like okay well then now you've just shifted the window and you're basically saying that what if someone else comes along and makes another chain that is even more centralized and people use that. Does that mean that the market found value in that? I mean sure it does. But then what value prop do you now have if you gave up on on decentralization? If you made these trade-offs and then another chain comes along and says that, well, we've done that too, but hey, we're even more centralized, which means we got cheaper fees and faster transactions and, you know, we do all this good stuff in the background. We're a better chain because

of that. Well, then people are just going to go use that thing. And now, where are you left? You're left being not decentralized uh enough to be like a global neutral sentiment layer like Ethereum is. and you're not centralized enough to compete with uh these other more centralized chains. So essentially you have a you're at a crossroads here. You try to become more decentralized which is I believe very very very difficult for L1's to do that have taken that trade-off space to begin with of becoming a data center chain or you go down and down the path of becoming even more centralized. And again that's just a race to the bottom. So from there it becomes a question of well if you're just going to be like this super centralized chain you're competing with a bunch of other super centralized chains then you all look the same then

the value prop really is nothing at that point. That's what I strongly believe. So when we talk about scaling the Ethereum L1 we cannot under any circumstances give up the decentralization that Ethereum has built over the last 10 years. We can't give that up. That is the that is like essentially giving up that that would be like Bitcoin is giving up on the 21 million supply cap. That is what we hold most dear in Ethereum. So again, no one is against scaling the L1. They just do not want to scale it by sacrificing Ethereum's decentralization. And yes, maybe there is like 10% of decentralization that we can sacrifice in order to achieve a 100x increase in scale on the L1 and improvement of the L1 overall. That is a good trade-off.

Don't get me wrong, right? That is actually a good trade-off. But I don't think there's actually a world where that exists. I think that we can keep making Ethereum more decentralized with other things, you know, like with better staking mechanisms, uh, easier ways to run full nodes, easier ways to connect to the network via light clients and so on and so forth, while also scaling up to what Justin outlines here of this kind of gigas era, right? This 10,000 TPS on Ethereum L1. And this is just the L1, mind you. This isn't including the L2s, but of course, we are scaling the L1 for the L2s as well. So in with all these discussions, I think what should be baked into any of the uh I guess like discussions around scaling the L1 is that we do it without compromise. So really the tagline should be scale the

L1 without compromising uh Ethereum's decentralization. Like I know it's a bit longer than just you know saying just scale the L1, but it is a clearer tagline. And if you're scale the L1, then it should be assumed that you're saying the latter part as well that we're not going to compromise on Ethereum's decentralization here. So that's the first tweet there from Justin Drake. Now getting to some more I guess like raw numbers here. So, there was a new performance uh DevNet or I guess performance net spun up by the Nethermine team, I believe, with a bunch of execution layer and and consensus layer clients where they're essentially trying to push these clients to their limit in terms of what gas limit they can actually handle. Now, it turns out they can handle a really really high gas

limit. You can see here that uh the gas limits um that's being supported by this performance net is currently 802 280 times that of Ethereum L1 mainet. And this is actual real data guys. This is not fudge data. This is real data. But I'm going to put the brakes on here for a sec because while this is real data, it is not the same or equivalent data to what you get on Ethereum mainet for two major reasons. One, uh this is not a a hostile environment at all. This is a very controlled environment. It does not have to deal with anything. You know exactly what machines you're using. You know exactly what bandwidth you're you're getting. You know exactly who's running them. So on and so forth. Not a hostile environment, not a real world environment at all. And two, I mentioned that in one, but bandwidth bandwidth is

the bottleneck here, guys. Like the home internet connections are the bottleneck here. Because as I mentioned earlier, when Ethereum is not a data center chain, we can't just say, "Oh, well, everyone has to have a 10 gigabits per second uh connection, right?" No, we that's not how it is. We are setting the kind of minimums and recommendeds for for the Ethereum network, but they're nowhere near that amount. So, bandwidth is always going to be the main constraint for Ethereum L1 uh or maybe not always, but it is going to be for the foreseeable future here until we maybe ZKFI the the L1 here. So, I would take these numbers with a grain of salt in terms of real world performance. But what you can do is you can kind of make like a naive calculation here and say, "Okay, well, if in a controlled environment we get like an 80 to 200x um

increase in a safe increase in the gas limit in a controlled environment with the clients as they currently are, then can we get like a 10x increase on mainet? So, can we shoot the gas limit from the current 36 million to potentially 300 to 360 million gas limit?" And it turns out from the discussions that I've had and from the other stuff that I've looked into, we can do that. It's going to be incremental. We're not going to do a 10x increase at once. That would be very dangerous and stupid to do that. But it's going to be incremental. And but it turns out that we we most likely could safely increase the gas limit by that amount uh there, which would be obviously really awesome uh for the network. And that is not the end of it.

We can keep going from there. But yeah, I just wanted to highlight that while this is real data, it needs to be taken with a grain of salt. There's nuance here. You can't just say, "Okay, well, let's increase the gas limit by 100x." It's not how it works, unfortunately. I wish it worked like that guys but it is not how it works there but you can check out that that data for yourself. I'll link it in the YouTube description below uh for you to do so there. The second up here is related to that from Ben Adams uh who works on Nethermind. You can see that there is a website you can go to called Terraas. WTF which is a website to uh have like a I guess like a dashboard for live gas limit testing.

Now I believe this is just Nethermind um sorry just an effort from Nethermind. It is connecting to other clients, but this is really uh showing u you know what's going on from the Nethermine client here. It is quite technical. I mean, if you don't know what you're looking at just looking at my screen right now, then you're probably not going to get much use out of this. But at the end of the day, I think having materials like this, having dashboards like this, tools like this is really important for essentially setting the standard that we are in scaling the L1 war mode now. You know, we've rep prioritized it. I don't like the term pivot. I think re prioritized is better because a pivot implies that L1 scaling was never on the road map. It was but for multiple reasons it was not priority for the last

like 3 to four years and I think that I I I should you know it's actually probably worth me explaining these reasons. I I actually went through these reasons in the daily discord channel but the reason why the L1 or in terms of scaling wasn't a priority wasn't a high priority over the last 3 to four years was not because of L2s really. I I believe it was mostly because of the fact that we had other much higher priority things to do. So if you go back, let's rewind the clock. Let's go back to 2020. What was the main focus of even 2019 and 2020? It was getting the beacon chain out the door, right? That's what the core devs were focused on.

That's what the researchers were focused on and we got that out the door on in in December December 1st of 2020. Okay. Then what happened after that? What was the focus after that? Well, it was the merge, right? It was merging the consensus layer and the execution layer on top of still doing execution layer and consensus layer upgrades which happened before the merge. Then the merge went live se you know September 2022 September the 15th 2022 but then what was the focus after that right or what was the focus I guess like um during that period of time as well because this this actually happened during the per I should mention EIP559 first right like this actually happened um during uh the mer like before the merge happened but essentially yeah we had EIP1559 go live as well which was

another big undertaking there so the merge and then after that what did the focus shift do well staking withdrawals right that was really really important We need to get that out the out the door. And then from there, the focus shifted to blobs, right? We got that out the door. And then from uh from there, the focus has now shifted to our one scaling as on top of all the other stuff that we were were doing as well with with blobs and peer ads and stuff like that. So I again I I really struggle to call this a pivot and I think that people are saying that not saying it's a pivot is like gaslighting. are just uh wrong. I believe because uh to me the the term pivot implies as I mentioned that it is a complete change in strategy. It's like essentially going

well we're going to you know throw away all the work we did here because we think it's a bad strategy. We think it's a bad product and we're going to pivot and doing this new strategy is new product. No, L1 scaling has always been on the road map at least since 2020. It just wasn't a priority. So that's why over the last few months I've been saying and been trying to hit home that this is a rep prioritization. We've basically said, well, now, you know, we've neglected the L1 because of different priorities, but now we should really, really focus on the L1. So, the pendulum has swung toward that. We've rep prioritized that. And I would not call it a pivot. You guys can call it a pivot if you want. Like, I'm not going to tell you what it is and isn't, but I'm giving my reasoning as to why I'm

I'm not here because I, if you go back and listen to refules and and even read my newsletters when I was doing them, there was always talk of L1 scaling uh during, you know, I always talked about that sort of stuff. It just wasn't a priority at the time there. So yeah, anyway, you can go check this out. Link in the YouTube description below. Last thing, I just wanted to highlight this tweet from Josh Rudolph where he said, you know, what's the near-term road map for scaling the L1? Like what are we actually doing beyond gas limits uh increases? Well, we're doing one slot delayed execution, block level access list and uh state diffs, network level eraser coding, history expiry, gas repricings, and multi-dimensional gas and separate gas type for call data. All in the works, all have been in the works for a while. Again, this is nothing new,

guys. It's been in the works for a while. We have actually been doing L1 scaling things during that kind of 3 to 4 year period. It's just that now it's it's at the forefront. Basically, we've rep prioritized it, rep prioritized talking about it as well, and now we're essentially, you know, much more focused on it. So, yeah, those are all the the kind of like I guess L1 scaling and improvement related updates there. Now, I did put out a tweet just earlier where essentially I've been hearing and you guys have been reading a lot about, you know, why we want to scale the L1. I I've basically been talking a lot about it on the refill uh over the last, you know, year. I've been talking about it the last few minutes, right? Why we're actually scaling the L1 or sorry, how we're actually scaling the L1. But but

not many people actually stop and and and think of why. And I'm not talking about the obvious reason of cheaper fees, you know, more capacity at L1. That that that is obviously table stakes, right? Like we everyone knows that scaling equates to cheaper fees and faster transaction uh sorry and more capacity. That's essentially what the the baked in definition is for the vast majority of people here. But I actually think that that is nowhere near the most important reason to scale the L1. There are other reasons as well. And then these aren't the most important either, but I will get to the most important. There is better interoperability for roll-ups and layer 2s if we scale the L1. Again, that's just obvious to me, but hey, maybe it's not obvious to everyone, so I figured it was worth highlighting here. there. Aside of scaling the L1, we're also improving the

L1 in kind of like conjunction with this year with things like single slot finality or three slot finality, which means we're going to go from like a 13-minute finality time to a 12second finality time. That is a massive upgrade here, guys. Or if we do SSF with a four slot um four slot uh sorry, 4 second slot times, then we'll have 4 second finality here. So, there's that. there's a potentially stronger ETH burn because obviously as we scale up more capacity on L1 you have more transactions more ETH is burned in theory that's why I said potentially here because it relies on the demand side and we never we can never really project that out we just basically have to make a kind of educated guess a more ZK friendly L1 with a lot of the ZK improvements coming to L1 which I'm going to talk about in a

sec as well and things like friendlier solo and homestaking uh and more reasons from there but I then went on to tweet and say that I think that the most important reason to improve improve the L1 and to scale the L1 is to make Ethereum L1 attractive to natively issue assets and tokens on again. Now, why this is important is uh you know there's a couple of reasons here, but the biggest reason is that we know that with the L2s with the roll-ups in a properly constructed L2 and rollup, you have an escape hatch, right? You have an exit kind of uh function to L1 if the L2 was to go offline. That is really one of the core properties of an L2 and why we like the L2 centric or the roll-up ccentric road map here. But this breaks down when the assets are not issued on the L1. So

for example, let's say you bridge ETH from ETH L1 to uh base or to arbitum one. And let's just say and let's say those networks were to go offline and they don't come back online and you really want to get your ETH out. You're like, well, my ETH is stuck in in these networks. I can't do anything with with them at the L2 right now. The sequence is offline. The validator is offline. Whatever it is, it's just offline. Well, you use the escape hatch at the L1. you submit a transaction there and you can get your funds back, you can get your ETH back, right? But this doesn't apply to every asset. If you have, say, a token that you're holding on the L2 that was natively issued on the L2, so it wasn't issued on the L1, then you cannot exit that that asset to the L1. That

asset is actually stuck now. And that that's because it was natively issued on the L2. Now, of course, there are exceptions to this. There are certain uh assets that can have or uh that can and maybe will already have fallback mechanisms to the L1, but this is very messy. It is very social as well. It's not something that can be automated. It requires like social coordination, which as I said is very messy. Um and it is very rare to see this in the wild. So if you look at it from that lens, you would come to the conclusion that every asset should be natively issued on the L1. And then there are of course other exceptions to this as well that I should mention. Sorry that uh you know centralized assets their ultimate settlement layer is not L1 L2 L50 their ultimate settlement layer is offchain

USDC for example USDT the two top stable coins their settlement is done in the real bank world banking system it is not done onchain right so from that perspective even if like the USDC that was natively issued on base for example was to go away because bass went offline they would just reissue that USDC to people on mainet Ethereum maybe or on another L2 because they the the assets backing up that USDC the collateral so to speak is in bank accounts right so again that's the ultimate settlement layer there but for natively issued digital assets like ETH like NFTTS uh that aren't representative of a real world object so like cryptounks for example like ERC20 tokens that again aren't representative of a real world

counterpart like um uh like any kind of I guess project token that you that you have within the ecosystem uni a link so on and so forth right? Um those things need to be issued on the L1. Otherwise, if they're only issu natively issued on the L2, they can't be escape hashed to the L1. Defeats the whole purpose here. So, by scaling the L1, by improving the L1, by making it feel less clunky, making it feel better and more modern. We essentially say, well, hey, the L1 is awesome. You should use the L1. Come and do that with your assets. Come and tokenize your assets on the L1. make sure that you you natively issue your tokens on the L1 because by doing that it's like a one-time thing essentially where you're like, "Okay, well, I have I'll just natively issue it on the L1

and then maybe I'll just bridge it to the L2s myself and then I'll just give it to users on the L2." Now, the users get their their the token on the L2 while also getting the guarantee of being able to escape hatch out to the L1 with their assets because they're natively issued on L1. And then that really strengthens Ethereum's hublike property because we can think of the Ethereum kind of universe as like a hub and spoke model, right? Where Ethereum L1 is the hub, the spokes are the L2s and the L3s and everything else surrounding it that that has bridges in between. Um and and the thing is is that for Ethereum to be a good hub, the L1 needs to be good. The L1 needs to be strong. It needs to be somewhere people want to issue assets on. So I think that

is the most important reason to scale and improve the L1, the assets, because the assets are what give the chain value at the end of the day. And for ETH, it's already natively done because ETH can only be issued by Ethereum L1. But for every other asset, right, they need to be there needs to be a conscious decision from the asset issuer to do it on the L1 or to do it on the on on an L2. And and the L2 even gets more complicated when you say, well, if it's natively issued on base, that means it's a base asset. It is not an L2 asset, right? It's not an arbitrum one asset. It is a base asset. Whereas if it's on the L1 then all of the L2s get to inherit that essentially where they basically like well this asset is bridged in from the L1. I have

guarantees that the asset you know is ultimately easily settled on the L1. So it basically has equivalence across the L2s but the L2s it depends on the L2 right because it depends if the L2 has an escape window because if the L2 doesn't have an escape hatch or an escape window and it goes offline well then it's stuck no matter where it's issued. But when it does have that which is the L2s that people should be using the stage stage one and stage twos right then from from that perspective you have the ultimate settlement guarantee of Ethereum L1 which is the entire point of the rollup ccentric model at least that's my view there so that would be even if you don't care about any other reasons that should be reason enough to improve and scale the L1 uh there. So I did mention I want to talk about the ZK

kind of I guess like direction that Ethereum has been taking for a while and how that relates to L1. So, Vitalic kicked up this a storm the other day because he posted on the Ethereum Magicians forum uh a a post about the long-term L1 execution uh environment. Like, what's it going to look like? What are we going to replace the EVM with? And he proposed replacing it with something called Risk V, which is a ZK uh uh uh VM um architecture like SP1 from Succinct. And there's I think there's a bunch of other teams working on this. They're working on different ZKVMs, but essentially Vitalic was saying, "Let's replace the EVM with something ZK like." Now, what's funny is that people think this is new or people think this is something that like Vitalic just posted about, but refuel listeners and you guys like that have

been listening for a while will know this has been a discussion for years at this point like ZKifying the EVM, ZKifying L1 Ethereum. This is not anything new, but of course when Vitalic posts about it and then uh people kind of latch on to it and start promoting it, everyone seems to think it's something uh something new. But essentially uh the the main benefit of this or at least the main benefit that a lot of people see is that would be able to scale the L1 by a massive increase like essentially orders of magnitude as Umar Roy says here and obviously there's other bottlenecks along the way but assuming those um those have been optimized as Uma says here then yeah turning I guess like Ethereum into a full ZK chain by replacing the EVM with

a ZKVM would allow us to maybe do that gas limit increase of 100x or even more than that, right? It depends on a bunch of different factors here, but it is definitely uh something that should be considered and something that I I see happening eventually. But I want to stress here, this is long-term, guys, and long-term means potentially 5 years from now. It is not something that's going to happen anytime soon. So, while this is really cool, and while I'm glad discussions exist around this, and while I'm glad a lot of teams are working on this, we shouldn't lose sight of the fact that it is not something that's going to happen overnight. There's still a long road to get there.

And yes, it may be the holy grail. And I think I've talked about this stuff being the holy grail before, but it is something that may not come for a while. So, just wanted to set expectations there. Now, related to this, there was a um the first I guess like call from the ETH proofs team uh the first uh ZK call from uh where a bunch of different teams got on uh here and discussed ZKVMs. So, you can see just how many teams are actually working on this right now. Now, of course, there's obviously going to be some drama around this because each team is going to think that their ZKVM is the best. They're going to want to get their technology uh implemented into Ethereum eventually. But what I do think is going to happen is that the best technology is not going to be the one that necessarily

wins. It's probably going to be more the one that has like a holistic approach in terms of like security, reliability, in terms of longevity, in terms of something that is more credibly neutral than commercialized. I think that will be the one that makes it in. But regardless, I think the fact that there's just so many teams working on this means that we could potentially do this sooner than five years, honestly. Like it depends on a bunch of different things obviously here. But yeah, we we'll have to see how that uh that goes there. But if you do want to keep up with all of this, you can go to ETH proofs on Twitter here and follow their Twitter account. Uh Porter here as well, he's really great to follow. He works at ZKYNC um sorry at Matalabs on ZKYNC and he knows a lot about this stuff. So

definitely go give those accounts a follow. Um but I will keep you guys updated on this as well. again, long-term thing. You're probably going to hear me talking about this in another 3 years time. Uh, and yeah, spoiler alert, I will I still do plan to do the refuel in 3 years time. Just, you know, don't know the cadence. Maybe I'm only doing it once a month in 3 years time. We'll see. But yeah, you should go check those out. I'll link them in the YouTube description below for you to do so. All right, changing gears a little bit off of all of the protocol level L1 level stuff. Uh, Honeyu has updated his Ethereum adoption.com website here. So, it looks a lot better actually. It's not just a list of projects building on top of Ethereum. It is a nice little dashboard. Um here you can see at the

top here with various different stats around how many real world assets are issued in the Ethereum ecosystem, stable coins, total value locked, so on and so forth. And you can see um they've also added logos here of different companies building on Ethereum or building within the Ethereum ecosystem such as Black Rockck, Visa, Fidelity, so on and so forth, explaining what Ethereum L1 and L2 is and how they fit in with each other, so on and so forth. And then on the lefth hand side here, you can navigate and dive deeper into different dashboards that reflect different things like what does the real world asset ecosystem look like on Ethereum right now um on Ethereum mainet on different chains here. What does the stable coin ecosystem look like and you know who's building on Ethereum and you can go on on this and see like what companies and

what projects are being built on Ethereum. There's a lot guys like and it's all dated so you can go and check from uh earliest to uh to latest. Uh but this is yeah this is really really cool. So yeah go check out this website. I'll link it in the YouTube description below for you to do so there. Uh moving on to another website I wanted to highlight which is this strategic ereserve.xyz website. Now this is from fabda e here which you should actually go follow um them on Twitter. They're they're one of the new Ethereum warriors that I have been uh uh loving seeing come up on on Twitter recently. But they've created this strategic ETH reserve website in order to track where ETH is in different companies, institutions foundations balance

sheets. Now, it currently stands that there is 17 participants, active participants in this that have a total of 551,000 ETH in the strategic ETH reserve. Now, the Ethereum Foundation has 250,000 ETH. So, they're about almost half of that right now. So if we exclude them, we can actually see a bunch of the other different uh I guess like Dows and foundations and companies such as the Golem Foundation which has 100,000 ETH. The US government has 53,000 ETH which I believe came from seizures. They did not buy any ETH directly. Uh Lido has 38,000. ENS 34,000 and so on and so forth, right? So the whole idea behind this obviously is to act as like a billboard for uh these um ETH treasuries uh and essentially encourage more organizations around the

world to put ETH on their balance sheet and to become uh part of the strategic ETH reserve which I think is just going to keep growing over time. I know that obviously the ETH price action has been not great over the last few months uh and then sentiment has really been in the the for lack of a better term for a lot of people. But I do think that going forward there has been a huge shift in sentiment around it. I do think that ETH has is very undervalued at this point. I'm going to just straight out say that I think that ETH especially compared to Bitcoin is very undervalued. I think that the uh strategic direction that Ethereum is taking over the next 5 years is the complete and total right one. It is not a pivot. It's literally the same road map that we've been on for

a while now. But there has been changes with within various organizations such as the EF to accelerate that timeline. And there is definitely a huge renewed energy around Ethereum right now. And I do think that with teams like Etherealize and and others that are pushing forward on the institutional front, pushing forward on the Treadfi front, we're going to see a huge resurgence in Ethereum mind share and Ethereum usage and demand for ETH the asset. So this is me calling the bottom on ETH, guys. Like I'm not going to tell you guys to go out there and buy ETH, but it really does feel like it's the bottom in terms of, you know, ETH price and ETH sentiment both on the USD pairs, but also the ratios. I know a lot of people pay attention to ETH BTC. I just think that it's completely oversold at

this point. I think that ETH got a lot of undue uh criticism and an undue and unfair uh kind of price performance there, but we're going to have to see going forward. Maybe we'll revisit this in a year and see where ETH is. But that's me uh kind of calling uh the bottom there. Barring any like macro shocks, you guys know my opinion that generally there was a lot of uncertainty over the last, you know, 2 to 3 months. I think the market has digested a lot of that at this point. And I think that if you actually kind of map it out a little bit further. Crypto front runs a lot of these things. It tends to dump a lot earlier than other markets out there.

And it also tends to frontr run reactions to this. So if the money printer gets turned back on, I do think that crypto is definitely going to be a big beneficiary of that regardless of tariff stuff or anything like that. I do think that crypto really loves the money printer. That's for sure because it is relatively insulated from the mac the um the I guess like real world environment, right? It is a global I guess market that a lot of these things are digitally native. A lot of the reasons why you would buy these assets are based on digitally native things. Yes, obviously in recessions and in high inflation periods, people have less money to um to to essentially invest with and they're more protective of it, but at the earlier stages of money printing and

quantitive easing, uh it's definitely beneficial for crypto, at least what history has shown us. So, yeah, we'll have to see going forward what that looks like, but I do think we're going to see more and more of demand for ETH ramping up as time goes on. All right, another project that went live recently is something called immutable ratings. So essentially what this is is a take on onchain rating system for different parts of the ecosystem. Now you can do things like rate up or down tweets, rate up or down accounts, so on and so forth. And it is fully onchain on base. It is not uh something that is done offchain. All the votes, you know, up votes and down votes are stored on chain. So it is actually immutable. That's why it is called immutable ratings here. And you can see

the highest rated, lowest rated kind of uh, you know, Twitter accounts and opinions. It's hilarious that the highest lowest rated or number one lowest rated um, Twitter account is Peter Dutton, who is the opposition leader in Australian politics. It's kind of weird seeing that there, but you can see that that most of the the lowest rated uh, you know, politicians like Trump and Gary Gendler here. And then you've got like um, Docoin, the founder of Terror, and Altcoin Daily, which is a crypto media org. But I mean, I don't know how reflective this is of things because this is obviously a new uh kind of project here. But yeah, you can see things like trending, newly added. You can go to your feed here and kind of connect your account like I've done here with sasslee and be able to see

different things here and up vote down things. Go to the leaderboard, check it out, so on and so forth. I think the whole idea behind this effort is to essentially make it so that you can have like a crowdsourced rating system that is actually immutable and that does it isn't subject to manipulation from the people running the service or manipulation from kind of bots. And that's one thing that they they're going to be putting more work into cuz I actually spoke to the team behind this and gave them some feedback on this. Right now if you click in and and kind of vote you you have to pay to upvote or downvote. It's a very small fee. Um, but that's done as a simple resistant mechanism, but then I said to the to the team, I'm just like, well, that's cool and all, but you know, if it's it has to

be cheap enough for users to want to pay the fee. So, I think it's like 10 cents right now, but then that's not really very simple resistant because say this this kind of thing blows up and you want to you as a as a kind of like project or you issuing a token, you want to manipulate public opinion. Well, then you would be you would be um spending a lot of money to do that. But that'd be fine because if you're trying to pump a token, then you're just basically spending that money to pump the token and then you're selling the token and making back the money plus profit there. We already see this happen on platforms like Kaido uh where there's kind of gaming of that that going on there and it's hard to do real simple resistance here. So I did suggest to the team that

instead of doing like a monetary barrier, there should be a reputation barrier here where you connect your accounts like you did in Bitcoin where you basically get a score that's determined by the reputation of your other accounts. So, for example, Twitter, uh, GitHub, uh, you know, Farcaster, stuff like that, right? Your Ethereum address and and and then you can build up a reputation and build up a social score. And then for you, maybe it's like free to upvote and downvote things, but then for newer accounts, it's really expensive. It could potentially be on a bonding curve where it gets cheaper and cheaper and hits free once you reach a certain reputation threshold here. Now, of course, these things can still be gamed because the people wanting to game it can just pay people out of band and buy off their votes and stuff like that. But for that,

you you can't really, I guess, do much besides penalizing. So, if you see someone that's obviously being paid off to vote up or down things, then you could potentially pen penalize them, but that becomes a messy thing as well. But regardless of any of that, I still think it's a really cool effort. I still think it's something really cool that is outside of the DeFi realm of things. I've been talking a lot about this about this on Twitter recently and and in the Delhi Discord channel about the fact that I think uh you know we need more non-Di stuff even though DeFi is the biggest thing. So this is me just promoting one of those things uh here.

So you can go check this out. I'll link it in the YouTube description below for you to do so. All right, last up here. So, David Hoffman put out an article on Bankless uh called Ethereum Strategic Pivot. And this was all about how Ethereum has shifted priorities over the last few months around various different things. And he has a nice little table here that goes through each of these things. And I did want to go through some of these and give my take on it. But firstly, I wanted to shout out David for being really active in the Delegate Discord channel recently. It has been interesting to be part of the conversations because it has been heated to say the least. They've been heated and passionate where essentially David's come in, he's given his view on things.

People in the in the Delhi community have hit back at him and there's been a lot of back and forth, a lot of heated debate. But I do think that it's been great because essentially it's it's it's um it's been good to be able to get like David's raw thoughts and it's been good for David to get the raw thoughts of other people in the Ethereum community here to go back and forth on. So, I'm just really grateful for him being active in the daily gray discord channel there. But outside of that, I did want to hit on a few things here. So, he identified six key problems that he considers to be problems in the Ethereum ecosystem. The first one is L1 underinvestment, right? And I'm going to read out each one and then go into my thoughts on these based on his thoughts.

So, he then has like a bunch of different sections here where he says, you know, what went wrong with this, how it's being addressed, and what's changing. So, what he believes what went wrong with L1 underinvestment is that the L1 was under prioritized in favor of a far future roll-up vision. I will agree with the former and disagree with the latter here. I do believe that L1 was under prioritized, but I don't believe it was in favor of the rollup ccentric road map. I believe it was because of all the reasons I listed earlier around the fact that we had other priorities for the L1 besides scaling cuz he's really talking about scaling here. He's not so much talking about the other things like beacon chain merge staking withdrawals blobs, stuff like that, right? So, he goes, you know, how it's being addressed right now. we have uh a rep

prioritization of the L1, right? We're being more aggressive with it. We want to do a 10 times gas limit increase. We want to do other upgrades to the L1. Uh and that's what's changed. The L1 is back in focus. So, I would mostly agree with this. I just disagree with the premise that we didn't prioritize L1 mainly because of the rollup road map. I do think it's because of the other reasons I outlined. Secondly, there's been a product mindset deficiency in the Ethereum uh kind of ecosystem. That's that's what David says here. That's one of the problems he identifies. What went wrong? We built for ideals, not users. Ignored user experience apps and builders. I think that that there's like like I think I broadly agree with this, but at the same time disagree with some of it. So I do believe that, you know,

in Ethereum, we have a tendency to prioritize ideals and ideology over more pragmatic solutions. And that's simply because of the fact that that's how Ethereum culture was formed over the years. But I will say that we haven't like ignored UX apps and builders. I think again it's just not something that has been necessarily prioritized as much as other things because ignored implies that we just basically didn't listen to them at all. I don't think that's the case. I think that they were there, they were being listened to in various different places, but they weren't being prioritized. And that's I guess one thing I'm going to keep coming back to priorities, right? Because it is really about priorities. So how it's being addressed, we're shifting the focus and shifting the priority to that. We're doing things like making it so that the EF and core developers have bridges,

have communication bridges between themselves and app builders, right? Um, and then Ethereum is being treated like a product rather than just a protocol. Again, I think that's fine. You know, that's that's actually something that is obviously an improvement within Ethereum. He also identified a leadership vacuum in Ethereum. Now, I think this is more EF than Ethereum. And he identifies the problem as EF. He said, you know, if the EF avoided directional leadership, no one owned Ethereum's vision. I agree that this is an EF problem. I don't agree that it is an Ethereum problem because there are many leaders in Ethereum. There are many coordinators in Ethereum um as part of like the whole ecosystem, but if we're talking about just the EF, sure, the EF lacked good leadership. Definitely, I I

can agree with that. Right. and then how it's being addressed. Obviously, there are new uh co-directors uh co-executive directors Tomas and Shiae that were appointed. Um and the EF is taking more strategic responsibility because of this. Uh and then he goes on and says that we had an ivory tower culture problem. You know, we were insular academic research was disconnected Ethereum from builders and users. I actually don't agree with this that much. I think this is more of a crypto Twitter narrative. The ivory tower thing came about from the fact that there weren't clear lines of communication between the uh builders and users and uh the researchers. Not because of the researchers doing this on purpose. I think just because of the fact that the researchers were in one kind of area, the builders and users were in another

and there wasn't really a communication bridge between them. It and I I think ivory by by saying the term ivory tower, it's implying that the researchers wanted to be there and didn't want to talk to the users and and builders. But I think that's completely wrong. I think they did want to do that. There just wasn't anyone taking ownership of that and becoming that kind of communication bridge between those two parties there. And this is being addressed by again a shift in culture at the EF and uh the kind of wider Ethereum organization uh sorry the wider Ethereum kind of community in order to increase the communication uh lines there. Another problem L2 fragmentation. Again like this is a problem that is being addressed for multiple years now. It's not anything kind of new and it's not anything that

hasn't been being addressed. Um, and I so, so I think that like David bringing this up as part of like something relatively recent and something that we're only focusing on recently is just completely wrong. It has been a focus and a really big focus for quite a while now. Yes, maybe it has become an even bigger focus recently. Uh, but I I think it's it's been a focus for a very long time now. And I know this because I've covered it quite extensively on the refuel. So I I agree L2 fragmentation obviously is an issue but I don't agree that it is a relatively recent issue or something that's only being addressed recently uh there. And then finally uh David um identifies a problem of competitive urgency. Ethereum was slow to adapt while Salana and other others

optimized for product market fit. This is actually the one that I take most issue with and this is a broad topic and I know I'm already at like almost you know an hour here for today's refuel but I think this is worth talking a lot more about. So when I guess like we talk about competitive urgency and when David talks about Ethereum here I think he's probably focusing on Ethereum L1 right he's not really focusing on the L2s and I think from that perspective I don't agree because of the fact that Ethereum L1 is not trying to compete with Salana right Ethereum L1 is not trying to be the best best execution layer out there it is not trying to compete with other other data center L1s it is trying to compete at best I

with with with Bitcoin if you wanted to to say that in terms of being a settlement layer. But I truly do don't think Ethereum L1 has any competition for what it's trying to be. A global neutral, credibly neutral, decentralized, reliable and secure settlement layer for the world essentially, right? So from that perspective, you you can't really say Ethereum was slow to adapt, I think, uh to to to compete with with Salana and other data center chains. I think what you can say is that Ethereum didn't prioritize maybe like all of the right things over the years. maybe too much emphasis were put on certain things when the emphasis should have been put on other things when we're trying to achieve the goal uh of of being that kind of credibly neutral settlement layer there. So from that perspective I

agree but I don't agree from the perspective and I think this is David David's perspective that Ethereum should have adapted faster to match kind of what Salana was doing. That to me is completely wrong. I don't think that should be the case at all. And I don't think that the recent re prioritization of the L1 is uh a reaction to Salana or any of these other um kind of chains that are prioritizing their L1's and trying to be execution layers. I think it's Ethereum doing what's best for Ethereum because as I mentioned earlier, scaling and improving the L1 has massive benefits for the entire Ethereum ecosystem. it is not doing so in order to compete with Salana because in order to compete with Salana on the L1 level in order to replicate what Salana is doing at the L1 you basically give up everything Ethereum is. You give up

decentralization you give up home staking solo staking you give up being able to run full nodes and consumer hardware and you become a centralized chain in order to compete with the other centralized chains and for what like I don't understand why we would do that. So what we're doing is we're scaling the L1 in service of Ethereum's road map of being maximally decentralized, credibly neutral, sentiment layer, all that good jazz there. So the the and David, you know, with the competitive urgency thing here, he said, you know, how's it being addressed now? Well, the ideological resistance is fading, faster roadmap cadence, willingness to execute on short-term wins. Again, this is nothing to do with Salana or other chains. This is everything to do with the fact that we've just re prioritized things for

Ethereum to make Ethereum better, not to make Ethereum more like the other chains. And I really just this irks me, guys. It irks me that we're always a lot of people, not not me, I don't do this, but a lot of people in the community are always comparing Ethereum to these other ecosystems. We shouldn't be doing that. Ethereum is its own thing. Ethereum is building for its own goals. And yes, there should be more focus on maybe you know uh building for better uh building better things for users and and for developers and stuff like that. But again in the I guess like context of Ethereum not in the context of these other things. I really don't think that Ethereum should be looking at other chains and being like wow we should copy what they're doing. There are certain ideas certain things that Ethereum can

incorporate but we should not be trying to emulate these other chains because all of them pretty much all of them except Bitcoin but Bitcoin is its own beast right? all of them are not doing what Ethereum is trying to do which I mentioned it so many times I'm going to be repeating myself here but B that you know certain layer for the world there so I think that uh that point there is the one I disagree with most I don't think that um it's competitive urgency that has spurred this on for Ethereum L1 maybe for the L2s it is and that's why we're doing uh scaling blobs faster because we want to make sure the L2s are competitive with these other L1s because that's the whole point right the L2s are the execution layer they're the ones competing comping with the L1's there.

Uh, and that's why we're doing this here. It's not to make Ethereum more like these other chains. It's to make Ethereum better. It's to make the L2s more competitive with these other chains because that's how we're competing with them there. And that has been theing road map. Excuse my language there, but it has been the road map for a very long time since at least 2020. This is not new. This is not something that has only happened because the ETH price went down. I just I I I get really frustrated about that. That I think is going to be the end of today's episode because I'm ending it there before I keep ranting. Um, but yeah, I hope you enjoyed the long episode for today. Again, don't know when I'll be back. Um, hopefully it won't be another two weeks. I'm feeling re-energized myself lately, feeling

ready to do more refules more regularly. But do enjoy uh, sorry, I do hope you enjoyed that episode there. So, thank you everyone for listening and watching. Be sure to subscribe to the channel if you haven't yet. Give it a thumbs up, subscribe to the newsletter, join the Discord channel, and I'll catch you all next time. Thanks everyone.