Solo staker report, Coinbase Smart Wallet now live - The Daily Gwei Refuel #777 - Ethereum Updates

Transcript

hello everyone welcome to another episode of De refuel where latest news near recos system I'm your host Dan this is Unown to the 6th of June 2024 right everyone let's get into it so of course you will have noticed that the beard is no more I shaved my beard off yesterday after I actually recorded yesterday's refu and I did say that I shaved it on Twitter and that there'd be a face reveal uh today actually on on today's episode um you know the funny thing is the last time I shaved my beard off and kept my mustache was about three years ago I actually went back and looked and I posted about it on Twitter and at that point in time eth was crashing pretty hard it was June uh 2021 it was after the first top in May of 2021 of the market there and then from there like e

dumped a little bit more and then went up only to the new alltime high in November 2021 and so I looked at that I'm like hm okay if I show my beard now will that give eth enough energy to go to alltime highs and Beyond and I think it will so it's uh it's wartime eth bull mode for for sassle here uh but yeah I know it's a little bit striking and weird if people haven't seen me without a beard before uh I don't know if I'm going to keep this look or not but every so often I like to shave it just to see what the Skin's looking like underneath and uh see what my face is looking like underneath cuz I do forget over time um but yeah that's that's basically the reason why I did it there and also you may have noticed that I'm not wearing

headphones in today's episode honestly I don't know why I've worn headphones on the episodes that I've recorded considering that I'm not talking to anyone and I'm nothing's coming through my speakers so it's it's really just me speaking to you guys so for so long I've just had that habit of putting my headphones on for some reason but no longer I don't think I actually don't like wearing my headphones generally anyway I'm not I'm not wearing them most of the time I only really wear them on calls and for the refu but yeah I don't think I'll be wearing them on the refuel anymore but with that kind of housekeeping out of the way let's jump into a bunch of the stuff that I wanted to talk about uh from the last 24 hours so the big thing is still I think the eth ETF you know there's not much

fanfare around the eth ETF generally right now I think like compared to what there was around the BTC ETFs because there hasn't been any movement on the S1 forms or not much move M on those forms and also I think that uh you know any of the Fanfare that you're seeing people are meeting with like bearish resistance and I explained why yesterday or some of the cases why yesterday I think the big question people have is what the flows are going to look like you know are they going to be 50% of BTC are they going to be 30% are they're going to be more and as I discussed yesterday I think they're going to be probably settle around the 30% mark because of the fact that that's like the market cap differential there but I do think over time they'll ramp up to end up being more than BTC flows

simply because there are just so many different ways to sell eth as an asset to potential customers or potential clients or existing clients than there is to sell BTC like really the only I guess like value prop and this is obviously a strong value prop but the only kind of marketing Spiel that you can give to B to BTC is that it is an alternative store of value it is a like a digital gold and that's about it right and I know some people come at me and say no bitcoin's more than that you can build things on bitcoin these days so on and so forth but I think that's all noise I think that the the the core value prop the one that these institutions are using for BTC is that it is a store value digital gold sort of thing but when it comes to eth it's so

much more than that obviously right we have the store of value kind of uh alternative store of value play there I think that's played out quite nicely so far you could you know in these marketing kind of decks that the institutions are going to send out to their clients for the ETFs they're probably going to show show its performance over time and basically say hey it's been up only I mean we're we're only like a few kind of pumps away from alltime high at this point and we'll probably at alltime high before the ETFs even go live at least I I think so so from that perspective you've got the story value narrative but then you have the entire Tech play narrative right which is very very hot right now and will continue to be hot because Tech is and has been the hottest thing not only

in the markets but uh in in the world for for decades now right and then it's on the heels of like the Nvidia stuff going crazy um it's on the he heels of just AI as well and how they can sh ether's AI money doesn't even matter if it doesn't really pan out or make too much sense like we're talking about marketing speak here in Schilling and that's exactly what they're going to be doing because these institutions with these ETF products it's a product right they want to sell this product and the way you sell a product is through marketing so that's definitely what they're going to be doing and obviously there is the yield portion to it as well don't know how hard they're going to go on that given that none of these uh ETFs are going to be staked so that's probably going to be something that's in

the back burner for a little while and then of course there's the deflationary aspect of eth as well the the fact that um you know eth has been net deflationary for quite a while now yes there are periods of inflation but if you look at on the year year-on-year basis it has been net deflationary and that is going to be marketed as well so there are just so many different ways to Market eth as an asset uh and then once we have staked eth ETFs is just another way to do that so I think that as a as the two broad umbrellas here it will be marketed as a alternative store of value and marketed as a Tech play a technology platform basically hey invest in ethereum to invest in you know a new technology platform basically and there could be a third aspect to this as well

that may fall into the alternative story value side of things but I think can actually be put in its own distinct third category which is something I haven't mentioned yet but all about the tokenization and and Defi and onchain finance stuff that's going on obviously on top of ethereum and its respective l2s uh that alone is another kind of category that can be shielded alongside uh the other two so essentially becomes bu e because it's a store of value here's the chart to show that right it's been very very strong over many years now and here's uh you know all the stuff that makes ethereum a very interesting technology platform and show its growth over time active users right fees so on and so forth and then thirdly show what new products are being enabled in the

financial realm of things with things like tokenization that will enable a better and more connected world when it comes to transferring money transferring value doing payments all those sorts of things so those three things I expect to be hit on really really hard when the these ETF issuers go out to the market with their ETFs and say hey buy our ETF and get exposure to all this stuff and it is so much more than what you can get with BTC because you can't even show BTC as a payments thing because you can do payments in BTC but you really can only do them at layer one lightning network is a failure there's no real l2s on bitcoin they're all side chains um and it's very expensive to to transact there whereas uh with and and of course you've got the digital gold narrative but then

you can't say that Bitcoin is building an alternative Financial system because it's not there's no staking in Bitcoin so you can't say to people hey you know you can stake your BTC and earn a yield you can't get any of the the fear Revenue coming to you because there's no staking right you don't get a share in the network there is no uh burning of the fear Revenue either so there's no deflationary BTC so I don't know I just feel like it's so much easier and so much more exciting to Shi e than it is to Shi BTC and that's why I believe longer term the eth ETFs are going to get more Flows In than the BTC ETFs because there's just so many different reasons for money to come in because there's a lot of people who will just not touch anything got to do or not

invest in anything got to do with quote unquote store of value or as it's only single value prop there are a lot of people who don't buy gold and don't want gold yes gold is historically being very strong as um you know as a store of value but people don't want to buy gold they want to buy the hottest Tech stock or they want to buy they want to buy something that gives them exposure to a new technology platform or a new Finance platform or something really fast growing and then obviously there's the store of value folks as well but like if you're going to buy a store of value and you're someone who likes buying a store of value why not just buy eth because you get all this other stuff as well as the store of value aspect as well so there's so much going on here guys

there's so much to be excited about when it comes to eth as an asset and I'm sure that black rock and others are getting ready to getting those marketing machines ready to do the ultimate Shilling as I like to call it there but the reason why I'm talking about the ETFs again today or at least the main reason was this tweet that I have in front of me which is all about the launch timing of the etx now I talk about talked about this yesterday I speculated on this yesterday today I want to make a concrete prediction of when these things going to go live so I can come back on this and be like hey I was right or hey I was wrong I'm not I'm not just trying to make new predictions because I was right about May 23rd it's not that I just like making predictions

generally you guys know this I like seeing you know out in advance and seeing if I get it right or not U not for my ego but just for the just for the fun of it right so I'm going to make the prediction here that I think that the eth ETFs will go live in early July now obviously I'm leaving the uh kind of leaving it open there I'm not giving you a specific date it's kind of very hard to give a specific date there so I'm saying between July 1 and July 10th that's my range so early July uh maybe it happens in late June but I'm not seeing it right now so late uh sorry early July between July 1st and July 10th I think it's a really nice area for for them to launch I mean I think I said this yesterday but I want to be more

concrete about it and say that I think early July is is the way now the cool thing about this is that e ETFs are going to be launching into fresh BTC all-time highs probably fresh eth all-time highs a really hot stock market generally rates being cut I don't know if you guys saw today I think it was in Canada uh the Canadian Central Bank cut rates for the first time in a while uh the ECB I think is expected to cut rates today and then the US rates will probably be cut in a couple months time or something uh like that I don't know when the next fed meeting is I don't follow it that closely as you guys know I I don't really care too much about macro stuff but I mean it does have an effect uh to some extent but I think

that it doesn't have the effect that people think it does I think that the market price is in the effect uh pretty you know pretty well in advance but at the same time it it depends on how low the rates go and how long they're going to go low for I do think we're just going to go into another expansion phase here for the next few years just generally as a as a macro Trend which is going to be a huge Tailwind for for crypto as well so the EFS are launching into that guys and they're launching into an environment where it's going to be very easy to shill it that's for sure and very easy to get flows so I'm very ex excited to see how that all kind of plays out there now there's one other thing on the ETF stuff that I wanted to

talk about which was regards to this tweet from Nate Geri here um who's been following along with the ETF uh the EF stuff for a while and he was one of the only people alongside me of course that thought that the ETFs were going to get approved on May 23rd now we both didn't necessarily think they were going to get approved based on political stuff I know that people speculated that it was based on political stuff in the end but there was some quotes from Gary ginzler today actually uh that Nate shares here that basically ginla is sticking to the story that the rationale for the approvals of the E ETFs was the grayscale lawsuit victory so essentially what was argued uh by me and by uh the others who were kind of pro EF getting approved was essentially that the SEC was in

Checkmate there was no way that they would be able to deny the E ETFs without looking like uncom like without looking completely ridiculous and also getting sued to hell because they had already lost the same lawsuit that they were going to potentially fight or definitely fight if if they denied the E ETFs with grayscale back in October and then everything that fell off of that so we do have pretty I guess like good confirmation here from the horse's mouth I mean I know that generally we don't kind of like Trust gendler on these things maybe it was a political uh kind of pressure here but I think that the grayscale suit definitely played a huge part as well without that I don't know if the political pressure would have counted for anything really and we did see recently that uh the political shift wasn't as strong as we thought it was

with Biden uh kind of vetoing the the fit21 thing uh but there there has been a shift as I discussed yesterday um but generally yeah it just seems like the eth were approved begrudgingly obviously by the SEC because of the fact that they knew they were going to get sued again they knew they were in Checkmate and this is exactly what I speculated on months ago so I'm great to it's great to see more confirmation on that point here all right moving on to non ETF related stuff so I forgot to cover this a few days ago so this came out on June 1st and this is a report that state cat put out all about solo stakers so why I wanted to talk about this report is because it is very very bullish now this is an article that was shared on Twitter here which I'll link in the YouTube

description below but the TDR of this article is basically that there are more solo stakers than we had previously thought so from memory reading through this I read through it again today the range of estimated solo stake a percentage of the network and this includes rocker pool note operators is between 10 and 20% of the total stake on the network belongs to solo stakers here so that is more than the 7% that would that rid network uh kind of put out I think it was like last year they put out this report saying it was 7% um and it is quite a big range so if we just take the bottom of the range though 10% that is still more than that 7% that we have and the trend according to this report from Stak cat seems to still be up uh over over time of course it uh is not

like up uh massively it's not like it's mooning or anything like that and and and the market share of um solo stakers did end up coming down from Genesis obviously because uh more and more people come online staking through other means but I think that's incredibly bullish guys I've always said that anything between 5 to 10% on on on the Soler side of things is is probably like what we're going to be I guess like at with for the terminal rate of solar Stak is just because of the fact that the capital requirement is so large like to be a true solar Staker is over $100,000 now guys 328 $100,000 and even if we were to reduce that to 48 right if we reduce that 32 e to 48 it would still be out of reach for most people that's over 10 grand

and if we reduce that to 2 e it's still more and then we expect e to go up over time and then as I've kind of uh gone through before on the refu there is a limit to this where how low you can do it because then you got the hardware cost on top of that and then you've got the expected rate of return to cover the initial upfront costs uh outside of eth the um depreciating cost so the the actual cost of the hardware not the eth that you expect to appreciate right and also in this report it highlights that solo stakers are definitely more long-term oriented which I think is not a you know new insight definitely not something Revelation right uh but it's definitely good to get confirmation on that point because of the fact that uh when it comes to solo staking you're not

only in it for the yield but you're also in it for the appreciation of eth you're buying eth as as a kind of like Bond I guess and then you're basically saying okay well I want to yield on this thing so I'm going to go stake it and if you're if you're doing it as a solo Staker it's because you want the maximum amount of uh sorry the largest reward for the lowest risk in staking and that is definitely solo staking and that's what you're doing here now of course you are putting up front if you were to Sol a steak today you are putting up $100,000 plus doar to buy the 32 e uh to get a what 3 to 4% yield right now obviously that yield is not going to cover that cost for a very very long time if ever but what you're expecting

is that you're going to get the extra basically just bonus on that eth on on your eth stake and then the E's going to go up against USD over time which is historically been true so I think when it comes to solo saking it's really just people wanting to get exposure to eth and get more eth with their exposure of eth because they expect it to go up if it wasn't if they didn't expect it to go up over time I think that'd be a lot uh they wouldn't stake really I don't I don't think people would really um would really stay a solo stake I think they'd go with other other providers here but I think that's a big part of solo staking there but you can go give this report a read for yourself it's it's really detailed it's got a bunch of nice pretty

pictures and graphs and charts and things so you can go check that out I'll link it in the YouTube description below and there's also a the key takeaways down the bottom here which I kind of went through a little bit on here if you just wanted to read that they did touch on IG and its future potential effects on solo stakers as well but great to see this report here so I think going forward I'm probably going to go off the working assumption that the total solo Stak is is 10% I I like taking the bottom of the range rather rather than the midpoint because the bottom is closer to rated. network 7% as well CU if I say okay let's take the midpoint and it's at 15% I don't know I don't think that that I think that's that's too much on on the estimation side of

things and St cat actually notes in this report that is is extremely difficult to get an accurate picture here that's why the range is so big so I think we can safely say 10% obviously in including rocker poool not operators as well which are Solo solo stakers as as defined I believe they linked to nixo from E stakers post on this uh as well there but that's great I actually think that's really healthy I think it leads to a really healthy and decentralized ethereum network to have 10% of the entire network basically be uh pure kind of solo staking not staking with LST or an all or an exchange or anything like that and really the staking ecosystem has just gotten so much healthier over time I mean lier is at I think what 28 29% market share so they've kind of

plateaued there for a little bit and then you have other players just coming online and and growing more in market share as well and it's just been great it's been great to see that distribution there on that front but you can go give this Stak capat Posta read I'll link it in the YouTube description below for you to do so all right nethermind has a big release out today so if you are running the nethermind client this is something that you would be interested in so they say here nethermind version 1.25 was fast but the upcoming nethermind version 1.27 client is 3.7 times faster on your existing Hardware which equals improved attestation rates for all so you can see in this diagram here what the uh kind of bump looks like this is a this is a huge

bump guys in terms of uh the mega gas per second throughput on the same level of Hardware from nethermind here and it's great to see that they're continuing to optimize the nethermind clients you can read more about this on Twitter here but the reason why I'm highlighting it is because if you are still on gu I don't think it's necessarily A Bad Thing to still be on gu because if you go to client divers unity.org and look at other potential client diversity dboard here gu is well and truly below the 66% super majority threshold nethermind is second place at 28% right now um uh but if you wanted to still get off gu and wanted to bring be you know do do do the work to get gu blow 50% then nevermind is probably the client I mean it at this point it's

definitely the client that I would recommend uh second to get here when you're when you're kind of staking I run nethermind have been running it for quite a while never had any issues with it but I know some people have had issues in the past especially around performance but they've been optimizing this for quite a while now and it runs great I mean it runs really great on my Hardware I think it would run great on yours as well it should run on the low-end hardware as well so maybe this is something you want to check out for yourself but the new client version I don't think it's available just yet but it is coming soon so it's great to see them continuing to work on that uh and yeah I'll keep you guys updated on that one there all right so it is finally here

coinbase's smart wallet has been launched uh today so you can create your smart wallet if you go to this URL which is wallet. coinbase.com smartwall please make sure you're on the correct URL before creating a smart wallet or doing anything with regards to to wallets because there are obviously fishing links everywhere you can go to the Tweet I'll link it in the YouTube description below if you want to go to the correct link but essentially what you do is you click create a smart wallet here and then you can't see this on my screen but it pops up with a little popup uh it's called a smart wallet uh and if I go here and I uh sorry just one sec here uh if I go to create smart wallet again here we go create a smart wallet you can't see this on my screen it's frustrating but create

a smart wallet and then what it essentially is going to pop up with is because I'm on Windows it's going to ask me to authenticate to get into this so I'm going to authenticate here with my password uh on my Windows PC it's currently creating my wallet so it's saved the pass key on my uh Windows device here through Windows hello I'm just waiting for it to process on my end and there you go you're already set up this is your wallet created you have now created a ethereum wallet basically or I guess like it's a coinbase smart wallet so it does support multiple chains here uh but really it's ethereum base l2s is is the thing that uh definitely is going to be what people use here so this is really cool guys I mean I've talked about this before but the reason why

this is so cool is because you'll notice I know you didn't see my the popup but you'll notice that I was not presented and I and I wasn't I'm not lying about this I wasn't presented with a seed phrase I wasn't presented with the crate wallet uh button on like you know on nor normal wallets that we're used to I wasn't presented with weird characters of wallets or anything like that what I was presented with was just a nice easy to use two-click interface to create a new wallet saves it to my existing Hardware if it was on iPhone it would be onto the secure Enclave that powers face it was an Android it would be whatever their version is I've forgotten the name of it right now it doesn't matter what device you're on it's using this and then it's cross device as well this part

especially if it's um on Apple devices it will save it into or back it up into iCloud uh and using the secure secure backup and then you'll be able to access it on different devices there this is mass adoption in a nutshell guys this is how we get Mass adoption and I know that I've been a fan of other wallets in the in the past and I definitely still am like rabie still a huge fan of rainbow wallet though you know there there's there are many other good wallets out there not just coinbase wallet um but I think coinbase wallet with their smart wallet here has done the I guess most so far to simplify it I think the other wallets are doing it are getting there but they're more power user wallets I would say or at least like more involved user wallets than what coinbase has done

coinbase is definitely going for the normies right the the people that we call normies the everyday fair weather crypto folks the ones who are going to get a lot of value out of what we're building but don't necessarily want to be in crypto or like learn crypto things they just want to use things just like today with the internet if you want to get connected you basically go and get a mobile plan right or you go and get an internet connection in your home and then you have a Windows PC or a Mac and then you go on a web browser you go to Facebook you go to Twitter you go to YouTube and Away you go there's no complex setting up things putting in IP addresses you know connecting to things like with dial up and stuff like that right it's all very seamless today

there's no complexities to it uh it's really just like two clicks for basically everything and I talked about this before how the two click thing is the Holy Grail it really is when you when you think about this stuff and that's exactly what coinbase is done here now of course The Golden Child of coinbase is BAS and what they're going to be doing with their smart wallet I don't think this is live yet but it's going to be live soon is as I've discussed before everything that you have on coinbase all of your assets or compatible assets so basically ethereum based assets that you have on coinbase will be able to be used on uh I guess like ethereum and on on bass and potentially other l2s without the need to bridge them out of coinbase essentially now this is a huge unlock because obviously it means that we've

eliminated the extra step of bridging I know you may think that that step is not hard I don't think it's hard I think it's very very easy to withdraw assets from exchange and and send them to your wallet and then do stuff on chain but that's me as a very power user and you guys as probably power users as well but if we think of it from the new user perspective they don't want to learn any of that they don't want to learn what what with what even withdrawing assets is they care about withdrawing cash to their bank account sure but I don't think they want to learn about withdrawing crypto to the right chain or withdrawing crypto to the chain they want to do stuff on what they want to do is have their wallet in front of them know how much money they have and go

find interesting apps whether that's Unis swap whether that's like something like farcaster whether that's buying an nft they just want to do that and that's what we need to be optimizing for to bring the world onchain we're never going to bring the world on chain if we're asking people to jump through all these hoops even if those Hoops may seem trivial to us to everyday person they're going to be massive espe even even with the internet today like things that I feel are extremely trivial about computers and the internet and and basically like just that I think is common knowledge even with people my age or younger than me who you expect to be I guess like more um you know up to date with these things no they they live in most of them live in the world where everything is just made seamless for

them and that's the way it should be just like when I go actually recently with my um with my uh my surgery that I had I I haven't ever had uh proper surgery before I've only really had my tonsils removed tonsils removed my my wisdom teeth removed uh and one other thing that wasn't a proper surgery so this is my first time having proper surgery and just the whole process was so smooth I don't know what it's like in in your countries guys I know it varies country to Country here but in Australia it's pretty good the whole process was incredibly smooth and and I'll get i'll get to my point here in a sec of why I'm explaining this but essentially from when I got to the hospital to when I was discharged the next day I didn't have to worry about anything I felt extremely

looked after I felt cared for I didn't have to know about anything I didn't have to know about what what was happening it was just all handled for me that's that's kind of level of service uh from something as complex as as a surgery I didn't know to know anything else I didn't I didn't really know to know anything besides hey you know don't do this for a few weeks you know don't lift heavy weights for a few weeks or something like that right this this is the recovery plan for you very straightforward kind of simple seamline thing very nice very easy to to do there and my point here is that like that's an area that I have no in at all I know zero about it I know I know nothing about the medical industry at all or really much about um General kind of

medical stuff I'm not a obviously not a surgeon I never did never studied medicine none of that but the the golden uh kind of uh thing here is I don't need to know any of that and I still feel like I get a really good experience seamless experience uh and it's just easy the same is going to be true for anything in life and in relevance to this the same is going to be true for coming on chain that people aren't going to need to know about all the stuff that we know about and find interesting uh whe only if they want to they can learn about it if they don't care for it they don't have time for it they can still get immense value out of it just like I can get a get I got immense value out of the entire uh procedure that I had and

the entire kind of experience that I had there without knowing anything in the back end I KN nothing in the back end I paid for it you know on the on the day and then everything was was kind of seamless from there that's exactly what's going to happen here maybe a little bit of a weird analogy but something that I felt was relevant because it was relevant to to me uh in my experience recently uh but yeah that's that one and I think that's going to be it for today I think I'm almost at 30 minutes a few minutes early but hey I'll end it there for today 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 subcribe to your newsletter join the Discord Channel and I'll catch you all tomorrow

thanks everyone