State of the market, L2 metrics and more - The Daily Gwei Refuel #146 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news and ethereum ecosystem i'm your host anthony sosano and today's the 18th of june 2021 right everyone let's get into it so i listened to this podcast today from hazu and suzu and they basically spoke about the state of the market now i recommend going and giving this podcast to listen i think it was just over an hour long or something like that it was it was a really great listen but the reason why i wanted to talk about kind of like this uh and kind of like the markets in general is because it's i think one month to this day that eth was at 4.4 k so about the one month anniversary of the start of our kind of like i mean i wouldn't call it a bear market

but down market slash crab season whatever you want to call it right and it's it's been you know it feels like it's been an eternity it's only been a month but it feels like it's been a much longer time so i just i just didn't want i did want to discuss kind of i guess what i'm thinking about where my you know how i'm how i'm viewing the kind of market going forward how i'm viewing things uh you know from here i wrote about um something in the delegate newsletter today that suzu said on the podcast where he said that he thinks a lot of people are suffering from recency bias uh right now and i actually agree with him so recency bias is essentially a bias that is innate to all humans of course uh where we tend to put more emphasis on i guess the

things that happen in the short term and we forget about the things that happened you know in back in history and and you know that that are going to happen in the future so for example you know a lot of people are putting a lot of emphasis on the fact that the market has been bearish over the last month but not you know remembering the fact that if he's up from its low of like 100 in march of 2020 to 2300 today so eth is still up 23x from the low and you know even if you don't look at the low and you just look at it as early as kind of like late last year eighth was like four to five hundred dollars so it's still up you know five four to five x or more than that like almost six x from those kind of price points there so

when you kind of like zoom out you you contextualize it you see that um you know you shouldn't be feeling like ultra bearish for any reason just because the last month has had some pretty negative price price action so that there's that's kind of like the perfect example of recency bias but i also think that it affects um fundamental investors too who may stare at the charts all the time you know i definitely look at the charts way too much even though i don't actively trade or anything like that i still just look at them and then on crypto twitter you have everyone making memes about it right and it's very hard to escape the day-to-day price movements but if you actually kind of get out of that mindset and just stop staring at the at the charts and and kind of like just just sit down and think about

what's happened in the past like what what's the really bullish stuff that has happened in the past the foundation's being laid and what's going to come in the future you have a totally different view of the i guess market and of this industry and i gave a few examples in the newsletter today where i said like let's look back at what happened you know maybe over the last year or so well the the the two major things that happened i guess uh sorry the one major thing that happened over the last year was that defy exploded in usage and gained legitimacy and we had the narrative shift from d5 just being viewed as a toy to it being viewed as something that's going to disrupt uh and pretty much replace traditional finance uh and then on top of that we also had uh the eth2 beacon changer alive on this

december 1st which was a massive milestone for ethereum because that represented about six years worth of work to get ethereum to proof of stake and then we've had you know um during early 2021 we had nfts go through their boom like boom and bust cycle in a really big way um and nft's you know just because they're kind of like in their own little bear market doesn't mean that they're going away or they've lost their legitimacy or anything like that the industry is still very strong there there's still a lot of projects working on things there and there's still a lot of value being created there uh and then of course we had uh layer twos you know and scaling in general come online over the last few months uh and you know will continue to go online over the next few months uh we have

eip1559 coming up very shortly uh we have the merge happening you know yes that's gonna probably happen in early 2022 but still if you kind of look back a year and look forward a year um and just ignore the last month right if you okay let me pose the question to you this way if the price was you know uh going if we were still in kind of this bullish momentum where the price was going up and it was like two months ago during april when heath was going up through the 3000s or whatever you know would you have felt totally different to what you feel today about the fundamentals you probably would but but why right why do you feel different about the fundamentals just because of of the price action like literally nothing has changed on the fundamental front at all

like really nothing uh the you know and you could people point to oh well d5 has less you should usage now it's like well yeah but that doesn't change anything about defy and what you know what the technology enables and what it's going to do in the future um all that's just a short-term noise at the end of the day like and people say okay well with one five five nine you know the gas prices are cheap right now it's not going to have as big of an impact as it would have had like over the last few months it's like okay true but that's again using recency bias and thinking that the market's always going to be like this the market is not always going to be like this it works both ways we're going to have bearish cycles and like down markets and we're going to

have bullish cycles so if you're like a fundamentals based kind of like investor and a long-term uh person who's in this for the you know the long term and i i think most of you are if you're watching the refill every day um then you yeah really this recent device is something that you should try to work through and ignore it it does take a while as well you have to i think be in the industry for a little while experience these cycles experience you know the the pits of despair and and the highs of a of a bull market and then you just kind of get used to it and you kind of just ride these waves out you know i was uh looking at some old pictures from late 2019 conferences that i went to uh there was a picture with a bunch of

friends that i was with in osaka for devcon and you know that was only what a year and a half ago now something maybe just over a year and a half and it feels like a lifetime ago because the crypto markets have just changed so much when that photo was taken i looked up the date i looked at the date of the price the price was 180 back then but i would say that you know the excitement for ethereum back then even though the price was at 108 and it actually dipped even further than that into the later months of 2019 but you know the ethereum had been in a bear market for almost two years but the thing is that the people that stuck around and kind of like went through it and just accepted the fact that we were in a bear market and we

were at a point where the price was just gonna do whatever and we'd have to just deal with it once you accept that and just start and just stop paying attention to that then you just focus on the fundamental stuff which is what a lot of us did that's what got us through the bear market is that we knew that there was fundamental value here still and we knew that the world was going to wake up to ethereum eventually and wake up to eighth so that that's kind of what got us through and that's i think what exactly what gets a lot of us through uh these kind of down periods in general is that we know that nothing has fundamentally changed we just know that the markets are going to do the markets and you know sometimes eat is going to get overheated sometimes

it's going to go down more than it should and eventually you reach that equilibrium but the long-term thesis is that eth is just going to keep going up like that that's definitely the long-term thesis for every eighth investor and not just eighth you know btc and all these other kind of like tokens and stuff out there uh and and on that note as well i think it's important to kind of like uh remember that i think right now the reason why it's not very painful for p for people is because they're not ready for a bear market like they don't they refuse to believe that it's going to you know we're going to go into a long two-year bear market because of the fact that there's so much fundamental value still being created every day and there's so much adoption still to happen and i'm one of those people like

i refuse to believe that we are going into a long-term bear market and i you know i i i do believe that we won't we won't do that and there's a chance that we will like i don't know the future but from from just my where i'm sitting and and what i pay attention to in the industry and what i'm seeing just from everyone that i'm talking to like i just can't help but be bullish like if if i was just holding onto something or if i was just involved in an industry that was you know completely dependent on the market movements then sure like you could say that the market the the industry was bearish when the markets are down and it's bullish when the markets are up but that's not true for ethereum i think ethereum you know it and i mentioned this before i think the

teams within ethereum are very well funded now so even if we go into uh a prolonged kind of down market even if this lasts a few months these teams are still going to be building these teams are still going to be shipping uh new new products new upgrades there's still going to be stuff like the layer 2s going online like none of that has changed so i guess the way i would categorize you know my kind of thinking about the state of the market is really that nothing's changed like i don't i don't really care about the short-term movements too much i as i said i'm not trading them i don't plan to trade them ever i don't plan to sell eve to buy back in cheaper you know maybe maybe i could do that maybe i have enough experience in this industry that that would work i don't

think so uh because i'm too much of an emotional investor because i'm so you know emotionally invested in the fundamentals of this technology and and sure you could say that that blinds me and other people like that too two things and you know we remain optimistic for too long and we we we miss by you know selling the highs and buying the lows but at the end of the day we accept that i think as as these kind of like fundamentals and based investors we just would rather pay attention to the tech you know let the price do what it wants over the long term and and kind of have the thesis that uh during you know actual bear markets it you just load up as much as you can you know load up as much as you can or as much as of a project that you think

has a future as you can yes it's risky but you know the reward payoff is huge and you know a lot of the the the trading channels the proper trading channels and one in particular that i watch called benjamin cohen we'll always talk about these macro trends where at different points in like a market cycle it will be you know much better risk reward than other points you know buying ether 4.4 k was obviously a a much higher risk for what much lower reward than if you bought ether like under 500 dollars back in in the bear market like for example you know we range between one and two hundred dollars for like a year in 2019 if or 100 i should say around about that and if you're bought during that period that was the least riskiest period to

buy in um with the greatest amount of reward because even if you bought the top of that year and you bought like 350 or something you'd still be up like a at at the peak at like say 4k you would still have been up like one uh sorry let me do the head math now you would have been up about 12 times or something like that uh uh on on on that buy so you know the risk reward there was was immense because yeah yes it went down but like it went down and just went to like 100 or something like that and re-tested its lows there so yeah from the from that point of view i think that when you take the long-term outlook you can't go wrong as long as it's on kind of like assets that actually you know have a high chance of having a

future if you're just buying into projects that really won't survive if there's a down market for quite a while then yeah i mean i'm not going to say that you're guaranteed to make money on anything you're never guaranteed to make money but you have a better chance uh buying into things that like look like to have a future rather than things that look like they were just around for the bull market but anyway that's my current kind of take on the state of the market i really enjoyed this podcast from hazu and sue so definitely go check this out and listen to it if you haven't already um sue has a very uh good um view of i guess the markets because he obviously is the the ceo of a trading firm and they do actively trade so he he definitely comes at this i think from a less emotional standpoint

uh any any and he comes at this i mean he's pretty bullish in general like based on fundamentals but he has like a pretty good mix between fundamental based um investing and also uh kind of like momentum based stuff where he sees things you know going south and he takes positions because of that and then he kind of like bets on you know a brighter future after that's kind of done there so anyway recommend checking that out i'm gonna leave it at that for now uh hopefully that's kind of by giving you some giving you guys some context around the way i'm thinking about this uh and the way i'm thinking about the market going forward so just a heads up here my crypto tweeted this thing out today that uh users are receiving ledgers in the mail unexpectedly they didn't order or anything like that

and it looks really suspicious and it's because actually a targeted attack so they received this letter that basically says that ledger was recently um you know targeted by a cyber attack which led to a massive data data breach there um and then you know that this whole letter that's that that that says here's basically a free ledger device um and you must switch to this new device to say stay safe now of course the way that this attack works is that the uh new device uh has already been kind of like booted and the uh uh it's already kind of like backdoored from from these attackers here so this is really uh scary actually because of the fact that they're just basically the hackers or the attackers here are basically using that ledger customer database leak

to uh basically man in the middle uh attack people with these new ledger devices so i guess the warning here is that if you receive one of these throw it out straight away do not use it at all under any circumstances do not put any funds on it do not trust any of this only ever buy in my mind like hardware wallets from the actual manufacturer i mean technically they could still be man in the middle attacked but the um the chances of that happening are basically zero uh but you know never ever accept like ledgers from i mean for me i even i or a hydro wallets in general i don't buy them from amazon or ebay or anything like that because they could be sellers that have kind of backdoored it already um and basically uh uh

we'll store your fonts as soon as you load them onto the device so be very very careful here and just use common sense i guess at the end of the day uh you know look at look at the way this letter is done it's like two different fonts here and it's like it's just a weird kind of letter and also like the shrink wrapping on this is like very amateur that's not how kind of ledger devices come and you know it's already ripped open here as well so definitely uh don't put any money on these devices if you get them uh unexpectedly and it's not just ledger like any hardware wallets of course as well but yeah just wanted to give a warning there so for those of you who don't know there's actually this really cool site called l2beat.com that chris has put together

here and he put this together a little while ago but basically what this does is it tracks different kind of value lock in different layer twos now you can see here uh all of the layer twos like loop ring and and zkc swap and optimism dydx and there's a bunch of kind of like uh uh stuff here which which i think is really really cool and you can see like the value locked over time as well and of course like because this is measured in usd as the prices of assets go down of course the usd value lock is going to go down um and also like people you know as the market cools down people are gonna withdraw funds from these sorts of things too uh but but uh what i wanted to go over today was that chris actually put out a um

an update where he's tracking arbitram here and albert trim currently has about sixty thousand dollars locked now this is just arbitrary with the devmain net like obviously it's not open to users just yet so you can basically see that that the devs are loading in funds already i mean here's the the bridge address here so when you actually um i guess interact with arbitram you'll be sending your funds to a bridge which then puts them onto arbitram from ethereum's layer one uh now the reason i like this tool so much is because they ha uh he has this kind of like project in a nutshell uh uh a kind of list here where he basically goes through you know what the technology is uh you know what's its hypothetical level of decentralization what's his current level of decentralization and you remember where i talked about

how arvitrim is going to be like pretty much centralized from the start because they're going to have like admin keys and things like that as part of their guided launch and you can see here that contracts are upgradable is the reason i mentioned this yes on yesterday's refuel uh you know whether it's permissionless to deploy to currently it's it's uh sorry permissionless to to um to produce blocks and currently only the sequencer can produce new blocks and i don't think that's open yet to the public um and yeah forced transaction mechanisms which means that um the sequencer can be forced to append particular transactions into the roll-up for now it's only for white-listed accounts uh so yeah i mean privacy and stuff like that smart contracts yes so you know if you go to some of the other ones here you can see you know loop ring and see kind of like

what what what what it is here um and kind of like can funds be stolen by the operator like all these details which i think is really really cool so if you haven't checked out this site yet be sure to do so um you know you can get details on all the layer twos and you'll notice here that uh polygon isn't on here and i think i saw maybe some debate about this but you know there's been so much talk about this before that that polygons pos network is not a true layer 2 or whatever i'm not going to get into that debate for now um but i think from what i see here is that uh the project in this list are zk roll ups optimistic roll ups validium and and plasma are for now but i hope that they kind of like extend this l2b

to maybe just scaling beat and to see all the theorem scalability solutions on here but we'll have to see how that kind of goes in the future so uh the new go ethereum client uh was released if you run geth definitely upgrade to this one so this is london this has the london hard fork enabled for all test nets with robston switching over in in one week with uh goalie and rinka b coming soon so the main net block is still not decided for london which includes 1559 of course as i've said that's probably late july early august now um but if you're running guest definitely upgrade to to this version here so speaking of polygon uh polygon uh basically put an update here that they are i guess lowering the uh the the

matic rewards for the rba markets here so you can see here the emission schedule for phase two of the medic rewards and rv has been updated with 84 million dollars in in rewards to be rewarded to use over the next seven months a total medic allocated will remain the same uh so i think they've just basically extended the the period of the liquidity mining out um which means that overall there's going to be less rewards but uh sorry slower rewards but the rewards are going to remain the same same here so this is this is good i mean you know generally my view on liquidity mining programs is that they should be done in a way that is not too aggressive where the token's just going to be you know continuously dumped so like a farm and dump token and done in such a way that that

um it actually bootstraps liquidity and keeps the liquidity there once the liquidity mining either tapers off or kind of goes away completely and i've spoken about this metric before called unincentivized tvl which is basically a metric that tracks how much you know of our capital in your product is actually there um for uh for product market fit reasons not for just liquidity mining and this is a metric that um the index co-op likes to use a lot and i i like paying attention to it there because it shows that people are actually using the products like the default pulse index and things like that without just using them to farm index tokens and dump them on on the market here so yeah i mean if you want more information about this i'll link the kind of tweet thread in the in the youtube description

you can go check it out so cyrus put out an interesting tweet the other day where he said he would love to see the maker compound in arabic communities get a little proactive and quote el salvador some favorable borrowing terms seems like a ripe opportunity for some just some disruption disrupting and then someone in the comments said how would that work and sarah said uh maker dao the doubt itself could go to um i think this is the president of el salvador yeah and and say if you issue a tokenized bond we will add it as collateral at expert sensibility fee with a debt ceiling of blah blah um now i mean while this is really cool i think i i actually want to talk about something as a little bit of an aside here i think as a community in ethereum we don't do enough to reach

these kind of like i guess unbanked people or maybe people that need this technology more than than we do like if you think about it d5 is amazing we all need d5 in my mind but some some people i think need it more than others there are some you know there are lots of people out there actually in countries that don't have developed financial systems and don't have developed banking systems or you know any sort of i guess traditional finance but they have access to the internet and they have a mobile phone they can install a crypto while they can interact with defy so we should be doing more to reach these people now i'm sure there's a bunch of projects out there that are doing this and i'm sure there's a bunch of people kind of like out there uh that are working on this but you know personally

i think that i could be doing more for sure i mean i do a lot of education but i think that i could be doing more to uh kind of like i guess reach these people now if you guys have any ideas of how i could do that be sure to reach out there i think you know a lot of it's a language barrier thing as well i mean just take el salvador for example they speak spanish um and but but in saying that i don't think that that should be an excuse for not kind of reaching these people like the ethereum community is a global community it's not just english-speaking people there's a ton of people in the theater i mean there's a there's a there's a very large spanish community uh in ethereum or people that speak spanish are not necessarily from um uh you know el

salvador but also from like all over i guess like uh central america and south america too like argentina has been very active within the ethereum space so you know we should be doing more here i know maker does a lot with their diet product in argentina and things like that but i still think that if we want to kind of bring this technology to the right sorts of people then we need to have troops on the ground now um i i would like to know if anyone's actually doing this because i want i want to support them if i can so definitely reach out to me if that is you or you know someone doing this um but still very interesting tweet from from cyrus i think these projects themselves should be doing this because if you think about it these are dowels and daos can just come

together and basically put a proposal on the forum saying hey we should you know do this uh uh do some vape gives the el salvadorian government some favorable borrowing terms on our default platform see if they'll go for it uh and maybe they will and that'll be really cool for showing more people about d5 getting the word out about it basically free marketing for d fire but also being able to help people uh that would require this um and being able to show people the power of the apps that we've built and all those sorts of good things there so yeah as i said if you're across any of this definitely reach out to me i would love to hear about it well that's just my profile there uh so finally here yam finance uh put out an update that uh yam synth's community testing is now

live so you can basically test the upunk's ugas and ustong synthetic assets uh which provide uh exposure to uh to to you know cryptopine synthetic exposure to crypto punks uh the gas market and uh stonks in general i think i think just stonks in general what is it track the top 10 uh yes stocks chosen by the wall street bets community um and you can unlock uh uma and yam rewards by doing so so if you want a testing pass you just got to jump into the discord here and the testers will also receive a limited edition nft so finally here i wanted to talk about git coin again today so a lot of you will know about git coin a lot of you will obviously be doing a lot of things with bitcoin right now in

terms of like donating during this current matching round i did mention it yesterday that the matching round is now live but i did want to point out that to to truly get your i guess like donations matched in full you should do this trust verification uh process here now i'll explain how this works basically you go to your profile on git coin you go to this tab called trust bonus and then you scroll down here and there's many different ways to verify your identity and this is done for civil resistance and by doing so you get to basically up your matching so you can see here on git coin verified users have 100 or more of their donation amount count towards the match fund algorithm and our unverified users will only begin with 50 uh so you can do it in a number of different ways you can do it with

facebook twitter google sms ens po up idina bright idea and proof of humanity now actually i did want to mention that i have a bit of an issue with idina i improve humanity counting for so much of the matching here because i tried to do the idina stuff today and it is an absolute headache and then i tried to do the proof of humanity stuff and again a bit of a headache there because you have to record a video of yourself saying some line and have your ethereum address in the background as like proof that you own it and i just thought to myself why can't i just sign a kind of like message with my ethereum address to prove that i own it um but you know and the bright id was the same thing i did this a while ago where you have to kind of like join a

verification party to kind of get verified here so i just have like a little bit of an issue with these being worth so much of the match because the idea stuff i think i got stuck on the fact that you need an invite code or something and you know you need to wait till the next verification session which the next one's on the fifth of july um which is actually after the current matching round so that was really disappointing but i i still suggest doing the rest of them if you can if you want to obviously this links your kind of like existing kind of profiles and your mobile number to to get coin here but uh if you do it you get better matching during the the current bitcoin grants matching round here so just a little tip there and i did want to give a quick shout out

to everyone who's donated to the daily gray so far thank you very much i think there's over 150 individual donors so far so i really really appreciate that but again don't forget to donate to all of the your favorite projects there are so many on there there's 650 000 of uh and you know but kind of donating to your favorite projects here you get to support them and you know support them through maybe a down market and a little bit of a bearish market and keep them going keep them building because that's what we're all about obviously in the ethereum ecosystem anyway i'll leave it at that for today everyone thank you again for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all

next week thanks everyone