STRK token details, ETH supply down only and more - The Daily Gwei Refuel #703 - Ethereum Updates

Transcript

hello everyone welcome to another episode of the delway refuel where cup the latest news in eum ecosystem I'm your host Anthony s today's 11th of December 2023 all right everyone let's get into it so kicking off today we have a huge milestone that's been achieved so the total eth Supply H has hit a new low since the merge so as you can see on this uh screenshot in this chart that I took from the ultrasound money website uh the E Supply since the merge has basically been down only uh uh I mean at this point it has because we just hit a new it did have a little bit of an uptick there as you can see in the chart but it's just continued to go down and I mean this goes back to what I say a lot on the refu where I basically said it's

it's a lot easier for us to burn eth than it is for us to issue eth because even if we're at the ultrasound barrier let's say we're like neutral at the ultrasound barrier of 22 gay uh we're burning as much as we're issuing we're basically just going sideways but then uh let's just say guay spikes up to like you know even just 25 well then we're technically deflationary right we're technically burning more than we're issuing but even if gay goes down to like 15 gay uh from from the ultrasound barrier of 22 we're still burning eth and we're not issuing that much more so it's it's much easier to burn eth than it is to issue it and that's why we see this this happening here and I would actually take the bet that the eth supply is literally going to go down only for I don't know if I want to say

forever but I can't really see a reason why it would stop going down only like this like even if we had like a massive influx of new e steak which would obviously increase the amount of issuance because the more e at stake the higher the issuance is but then there are plans in the works over the next couple of years to potentially lower the issuance on the beacon chain even further because uh uh I guess like the core developers are concerned that we may be still overpaying for security which would just offset any extra kind of issuance that we were were issuing while the burn is still ongoing right so I I struggled to see like a reason why this would this would stop because even the reasons that people gave where they said oh well you know e L1 activity is going to go down because the l2s are

going to it into it that hasn't been the case at all l2s have been growing pretty pretty wildly actually like I uh some of them have been growing um a lot more than I expected over the last couple months uh and L1 activity has still been going up and you know even if you come up with the the idea that okay well all the L1 activity is going to be replaced by L2 related activity well isn't that the bull case right like if the l2s get all the activity and then they start posting all their stuff down to L1 um in you know in in in as as they already are doing and they start paying for that and they basically replace the L1 uh users or price out the L1 users over the longer term then the L1 is still going to be generating a lot of fear Rue and

would still be net deflationary at least from from where I'm sitting because at the end of the day like if you just look at the ecosystem and where we're at today and how many people are actually using this stuff we're not even like 0.1% of the population like actively using this stuff and I made a comment actually yesterday where I said that most of the uh I guess activity that happens on on chain is going to be Bots anyway like it's not going to be humans you know humans aren't sitting there all day every day uh doing things uh you know constantly like a bot does like a bot will run 24/7 um and the and what are the most active Bots well they're the me Bots and people will say oh well we have to kind of get rid of meev it's like or mitigate me it's like yeah we

are doing that but the thing is is that there there are actually uh types of me that are required for an efficient and healthy Market such as things like Arbitrage like arbitraging the prices between different liquidity pools is 100% required like without that the liquidity pools would all be different prices so because of that even if we just take that alone the meev Bots are still going to be the ones that are going to be most active on the network even if we eliminate all other types of me right that's still going to happen there but it's not just uh me Bots it's just any Bots generally that exist on the network they're always going to be more active than a human user because at the end of the day like let's just say you're a human user and you go on chain and you do a few things like what's the

most amount of action you're going to be doing in a day maybe you buy a token and then you you know you hold it for a little while maybe you do some social media things you you or maybe you do some nft stuff like you're not going to be doing thousands of transactions a day every day and that's what these Bots actually do like they do this constantly so when you think about it like that and you think about the activity uh over time and how it's going to go up you not only have to account for the amount of um people that are going to be on boarded you have to then multiply that by the amount of bots that are going to to exist and how many actions they're going to take obviously 8 billion Bots aren't going to exist right but each bot

will do thousands and thousands if not tens of thousands hundreds of thousands of transactions a day right whereas a regular user you know and I'm talking like just an everyday regular user not a power user may only do like a few transactions a day right whereas the power users will obviously do more but if we're talking about the normal mainstream M Mass adoption user they're not going to be doing many uh once you break down all the abstraction because obviously a lot of this will be abstracted away so when you think about it like that you you just add a massive multiple onto all the human users and their actions to the Bots and you get to essentially in the end State trillions if not quadrillions of onchain actions uh a day right when we get to like that end State uh I mean I know I'm thinking

like really out there but that's that's how I kind of view these things um that's all just Bots doing that and then think about the the fact that there's always going to be uh kind of like a bidding war as well as always going to be priority fees because of the fact that uh without priority fees you basically get dossed and and your network would go offline we we've seen that happen before right with with various different networks uh so from that point of view I I just don't see a world like coming back to my original point where eth like if eth captures all this value like honestly the there is a world where eth loses its market share and doesn't capture this value and like and ethereum dies off obviously I don't think that's going to happen but that that is a reality that you know that

could could happen right it is one of the possible future paths but the one that I see is much more likely is that ethereum keeps dominating the L2 road map keeps dominating the l2s keep going and going and going and they get bigger and bigger and the space just gets bigger and bigger in general and more and more people come online more and more economic activity happens more and more Bots come online and we get to the point where ethereum as a network is generating not tens of millions of dollars o of of fees a day not hundreds of millions of dollars of fees a day not billions of dollars of Fe but potentially potentially I know this sounds crazy but potentially one day tens of billions of dollars of Fe Revenue uh per day right um and I I know it sounds that that sounds absolutely

insane because when you actually think about it uh if 80% of that fear revenue is burned let's say let's say that's $10 billion of fear Revenue a day and $8 billion is burned we we basically run out of eth at the current market cap obviously in this reality eth would be a lot higher in market cap but we basically run out of e to burn um if I'm just doing the napkin math in my head in like a couple months or something like that maybe a few months or something like that so obviously like the E price would probably be a lot lot higher cuz I'm talking in dollar terms here but if that is the the reality that we're barreling down to rewards like I think we will in the far future like this is decades out then uh yeah I mean I I feel like

because there's so much growth left for these networks I just don't see uh a world where eth goes back to being uh inflationary but anyway I didn't expect that to turn into a bullish rant but it did and I went for like almost 10 minutes there so I'm going to leave that one at that but hopefully that made you sufficiently bullish on eth as I like to do on the on the refuel but moving on from that to something I came across today from Ang gas. e they've built something called ethernet.pdf Network callers coming online now

because historically we really only had one for the execution layer um which was ether noes right ether noes data and then we had basically some soft data that was uh the client the the the person who manages the client diversity website going out there and asking the service providers what you know what e or execution layer client they're running but we orally only had ether noes and then there was one that that uh I I showcased a few weeks ago and another one that I showcased I think last week I've forgotten the names now of them but they're there and now there's another new one that's just come out now each of these have various different uh kind of like data points here like this one was says that there's 12,000 um um nodes on the network whereas the one that I showed last week

I think said that there's 30,000 like the truth is always somewhere in the middle here like it's it's hard as I've said before it's really hard to get an accurate number on these things especially an accurate number on things like active active nodes um and you know there are nodes that go offline and then come back online and if the crawler passes them during that time you have to kind of wait for for the crawl to happen again so there's all this kind of stuff that goes into it but I think that if we take like the average of all of the Crawlers that I've seen you could fairly say there's 15 to 20,000 full nodes like on on the network at any given time I would I would say that's a fair number because we're getting more data as as time goes on here um and and and that's

kind of like the the average I guess from what I've seen now at the same time it's also not just important how many full nodes there are it's also important about like where they're geographically distributed which is something that that I showed the other week from the other crawler who's actually operating them because people will operate multiple full nodes for example like like and it's impossible to get the individuals here like you can say okay there's 20,000 full nodes on the network but there's no way in how you will know how many individuals are running those full nodes like you can't there's definitely not 20,000 people or 20,000 individuals or or companies or entities um running that indiv individually there because for example like I myself been running three full node like I'm running gu nevermind and um uh and uh uh I was running basally the other day I was

testing testing through it a little bit but it might be offline now I wasn't really paying much attention to it I was just doing some experimenting there but like I'm just an individual at home like yeah okay I'm a power user but still like think about all of the other entities that are running full nodes right the the service providers the the the big staking service providers the exchangers uh the the infrastructure providers like so when you take it all like that it there's you you could you can't even estimate like how many unique entities there are running full nodes on the network but that's not the only most important thing I think the most important thing is well there's two the most important things there's uh number of nodes we want to get that as high as possible of course uh so there's actually three three

important things geographic distribution I think is critical obviously for a number of reasons um and in that actually falls like if your full node is uh in a data center or not is also very critical and the third thing which I had in my mind and now I've forgotten um oh no no the third thing is definitely the most important thing is like the ability for a regular person to run a full node on on consumer Hardware right that is to me the by far the most important thing more important than any other things out there because at any given time if you want to run a full node to verify the network uh you should be able to do that because that is the whole value prop of a blockchain basically being open and you being able to verify it yourself without having to trust anyone else and

once you lose that ability to me you no longer are a blockchain like that's just my way of viewing these things people can disagree with me on this but my way of viewing these things is that you you you don't really classify as as traditionally what I what I consider to be a blockchain because you're now basically relying on on trust right you're relying on trust uh and entrusted entities and those entities can be corrupted they can be coerced and in the in the end game if there's only a few of those entities they can all collude and that's not obviously good for decentralization and and then you kind of like Get rid of the purpose of having a blockchain anyway enough ranting about that you can go check out this new caller I'll link it in the YouTube description below but there was also a

related tweet that I came across today from this account called punk 5 736 talking all about execution layer diversity and why it is currently worse than consensus layer diversity and what uh the ecosystem is's doing to rectify this uh and also comparing this to uh salano and how they're doing client diversity I highly recommend going and reading this tweet I'll link it in the YouTube description below because it is honestly like one of the best Tweets that I've read on this topic I mean there are tweets from other people that I've seen over the years but this like just so concisely puts it like very well as to like why execution layer diversity is worse than than consensus layer diversity mean the TDR is that like um the execution layer diversity is just less mature gu has been around for a very long time um and it didn't start

off with with just GE we had like two clients originally gu and parody then parody fell off became open ethereum then open ethereum fell off and then we had other teams coming to the fry like nethermind sorry other clients coming to The Fray like nethermind Aragon and Basu but they came later whereas with consensus layer we had uh pretty much all of the uh all of the the clients from and not not day one but they all kind of came together at the same time so that's why it was um we had better client diversity there but anyway I just wanted to hide this tweets you can go give it a read I'll link it in the YouTube description below uh for you to do so all right so over the weekend I think there was a hackathon yeah there was an eth Global hackathon in India called eth

India of course you can see this tweet here from Maggie just seeing the energy at the hackathon so there were 1,750 hackers across 480 projects and $250,000 uh $50 plus th000 was awarded in prices and it was the largest ethereum hackathon in the world that's really cool because I've been saying this for a while that I think that a lot of the new developers in the ethereum ecosystem a lot of the new community in the ethereum ecosystem is going to come from places that aren't in the west and that aren't in uh sorry that aren't in the US that aren't in Europe more so kind of like in India in you know in in in other parts around the world and to see that this is the biggest ethereum hackathon to date is just really awesome considering that you know some people

will be writing ethereum office dead right now which is just so far from the truth that's the narr Nar that's the narrative this is the reality right and i' I've I mean I've talked about this endlessly on the re I won't bore you guys with repeating myself here but I've always been of the Mantra of like follow the builders follow where the builders are going what they're actually building what they're actually doing what they're actually innovating on because at the end of the day the narrative on crypto Twitter or wherever else is just the narrative it doesn't doesn't have to match with reality because it's free to to say anything you want on these platforms right it doesn't cost you anything whereas the reality here uh is there's a cost to it right these people they had to go to the hackathon they had to register they had they they had to

build a project there uh and yes there were incentives like um like prizes but I mean that's the same with every hackathon but still people went there and uh they hacked and the best projects were the ones that won the the you know the biggest prizes as well so that all kind of um culminated in ethereum's largest hackathon in the world and for people to say on Twitter ethereum is dying ethereum is dead when we just had our largest hackathon ever right uh yeah I don't I don't think that's uh that's very accurate right so anyway just wanted to highlight that for you guys you can go check out the pictures on the Tweet if you want I'll link it in the YouTube description below for you to do so all right so uh you guys are really interested in Igan layer as as I've

noticed in the Discord Channel and I mean I I think you should be because Igan lay is one of my favorite projects in the ecosystem right now and I've been really really excited to see Ian da go live hopefully in q1 next year um but IG da is just one of the projects building on igen lers you can see here that there are currently 12 or 13 total projects building on Igan layer and you you know you can check out all of them I'll link it in the YouTube description below but I just wanted to highlight for you guys that IG da is just one thing and this is why I'm so bullish on Igan layer because not only is there IG da where I'm actually bullish on these alternative data availability Solutions but not on all of them I mean I've gone through this before I've said that I think that

it's a race to the bottom and I think that Ian da da is going to be uh the big winner here just from from the virtue of like it's close relationship with the ethereum ecosystem um and it's you know obviously with with the reaking going into that and everything like that uh but outside of that there are just so many other things that can be built on IG layer like espresso is working with them to build their um you know shared sequences you have alt layer working with them to build uh rollups right the Roll-Ups as a service thing you have uh people building oracles on there there's there's just so much that are going to built using IG layer and I think that the way I put it for like if I had to give a high level explanation of what projects will actually use IG layer

it'll be projects that want to decentralize themselves but don't want to have to go through the hard effort of decentralizing themselves they want to tap into an existing kind of shared security layer in order to decentralize themselves now at the same time there are concerns around this CU people say well know igen layer basically Taps into ethereum's note operator set and then that note operator set starts getting a lot of overhead added to it and then that could pot potentially be bad for ethereum I understand all of the concerns but again I revert back to we're not going to know how this plays out unless we test it and this is how we test it so I'm I'm super excited to see this all go live and I should disclose you guys know I'm an investor in Igan layer um but you know I mean I was

bullish on ianl before I invested in them I've been talking about them for a very long time now but yeah it is definitely one of the most exciting projects coming to ethereum going live in the next few months all right speaking of things going live in the next few months uh starnet has been teasing their token for quite a while now or starware has been teasing the token for starnet for quite a while now and there is a lot of hype around this token right now um and I think that the hype is definitely because a lot of people have been farming it uh that's true with every token I think but the the hype is to the to a fever pitch basically and I think that Stark net wants to launch their token and q1 I believe uh and they actually detailed some of the plans of what how this is

going to be distributed um in this tweet which I'll link in the YouTube description below there is definitely going to be an airdrop I don't know what the airdrop allocations are going to look like I don't know what the eligibility criteria is I do know well I mean I don't know this but I suspect I mean it's pretty obvious that the snapshot would already have been taken so anyone farming it at this point probably isn't going to be successful there but that's not the most interesting thing about their token for me the most interesting thing is that they're actually announced that they're going to be using uh a 900 million Stark tokens for Network rebates or for user rebates so they said here planning for this initiative is currently underway and a new committee is being formed to oversee the distribution of uh stockk to reward

users for their vital transactions on the network this marks a bold step in valuing and empowering the us our user Community by re rebating them for their transaction fees on the network so essentially allowing users to do free transactions on the stocket network which is in my opinion the best way to use a token to be honest I think that especially the bootstrap obviously a new ecosystem because the L2 fees will come down obviously rollup fees L2 like fees validium fees they're all going to come down over time but nothing's better than free and if you can offer free at the start to entice people to come along yes it may not be sustainable because you're doing it as like an incentive program you build an uh Network effect up you build liquidity up and and it becomes a lot more sticky so then if you remove

the rebates and fees are I don't know 1 cent or something like that right or even less than that or fees are just abstracted away completely the users are already there and they're more likely to stay there than they otherwise would have been without an incentive right and that's the whole point of using incentive here so I'm really glad that they're using it for for um Network fee rebat rather than just like straight rewarding it to people for farming different um different kind of like applications which I'm sure is going to happen as well there there is a a plan for that uh but yeah I do like this uh this network rebate idea here but anyway you can go check out the full tweet for more details on this I'll link it in the YouTube description below for you to do so all right so I did mention that Li

was building their own chain uh Lyra Finance they've been around for quite a while now they started off on optimism went to arbitrum and now they're building their own op stack chain um there is an Explorer now live for them an explorer. l. Finance for browsing the Lyra chain so if you have been using the lra Chanel if you're interested in using it and and and kind of like exploring it you can go check this out I'll link it in the YouTube description below for you to do so all right speaking of l2s grow the pie tweeted out over the weekend that uh there was a all-time high in fees paid on layer 2os so you can see here that most of the fees were paid by linear arbitrum and ZK sync which uh you can see in the chart here how much fees they

paid so in one day linear as layer to on ethereum paid over $700,000 in fees arbit over 300,000 ZK sync over 200,000 uh and then the list continues from there now of course these fees are going to drop once IP 4844 goes live at least initially until activity builds back up because the uh price price of gas for um for layer 2 is basically resets to zero because they've got a new transaction type and a new fee Market that they get to enjoy themselves but this goes back to what I was saying at the start of the episode when I was going on about how there's going to be so much activity on these l2s and they're going to be making so much money and they're going to be paying obviously ethereum to to to secure themselves and to to exist on ethereum as a with with the bridge

contract and everything like that as an L2 uh and and that's just going to keep going up only even I mean as I said like there'll be a reset with 4844 but I believe after that it's just going to be kind of like up only from there and then 4844 will get um uh I guess like uh tweaked over time so essentially The Blob sizes will increase we'll have more blobs but at the end of the day um as demand increases that's when we'll increase the size of it but then demand is just going to fill that up again so demand is just going to keep increasing guys like as I said at the start like there there are so many people and and I guess like Bots and economic activity left to on board that we're nowhere near where we need to be in terms of kind of

scaling and in terms of infrastructure um not just within ethereum but within this whole ecosystem um because at the end of the day uh most of the activity is not going to be humans it's going to be Bots but humans bring the liquidity they bring the economic activity for the Bots to use so the Bots will go up as humans go up and the Bots will go up faster so we need to keep scaling we need to make sure that obviously fees for users and user fees remain low uh and then uh we can have like high fees on layer one because layer twos will be the ones using layer one so it doesn't really matter all right L2 beat has up updated their stage requirements so he say they said here back in June this year we introduced the stages framework to help categorize rollups into three stages

based on their Reliance on training wheels wheels we've gathered a lot of feedback during this time we have decided to refine it so they've gotten stricter actually with these requirements and you can see here the security Council requirements have gotten um have gotten a lot stricter so it at the old requirement uh one of the old requirements was that at least 50% of the members are outside of the core organization if they're on the security Council now it's uh at at least 75% threshold um and then the members are publicly announced so uh that that That Remains the Same at least two Outsiders are needed to reach consensus uh at least 50% threshold those have kind of like been removed and these new requirements have been become streamline streamlined and and more strict here which as they should be I think that we we should definitely keep these things

strict and we shouldn't kind of falter in them because it's very important um but yeah if you want to read the full details about this you can I'll link the Tweet thread in the YouTube description below but these stages are definitely the most important thing when it comes to l2s and I've shown it on L2 beats website a bunch of times before so I'm not going to rehash it here but yeah very important so definitely go check this out um if you haven't yet all right so I just wanted to hide this tweet thread and blog post from Jason Chasin here all about account abstraction now this post honestly if you're going to read anything on account abstraction ever this is the post to read because it is long like you can see here how long it is like I'm just scrolling through it's very very long

but it actually goes through basically everything in the state of account abstraction like you probably will not find a deeper dive than this now of course if you don't want to read the whole guide because it's really long and and you haven't got the time to you can read Jason's tweet thread which I'll link in the YouTube description below but I highly recommend giving the post a read I mean I'm not finished with it yet I'm slowly getting through it it is a dense read here but I'm learning so much myself as well from this CU I think account abstraction is definitely a big thing that's just getting discussed more and more it's very important for user experience so definitely go give this a read I'll link it in the YouTube description below for you to do so all right so some Bitter Sweet news

out of ssmo over the weekend so uh ssmo has returned funds to its investors and as you guys know I was one of those investors in sismo I had uh uh some of my funds returned um which means that the project has shut down I guess like the team has dissolved and they they've kind of like shut down the project but the cool thing is that they've actually open sourced uh or are planning to open source all of siso's Technology so you remember sismo is a project that was building um zkps uh to be able to verify things like if you had a you know if you had tokens on one wallet that you wanted to keep private you could generate a ZK proof or a ZK nft of that and and basically prove that you have those tokens without revealing the address that you had them on stuff like that uh

and they were working on on single sign on and identity and all that sorts of stuff there but unfortunately for one reason or another uh that's explained in I guess like the Tweet thread to some extent they had to shut down their operations here but I find it really cool that they open source their technology which means that if another personal team wants to take on uh uh sismos technology and and incorporate it into their own stack or maybe just take on sismo and continue sismo um uh and and continue the project along as an open source project they definitely can so bit of sweet ending I think to to sismo here but I think I did warn at the beginning of the year that a lot of projects would uh would shut down uh and I prefer project shutting down rather than at just continuing on as zombies

but it's mainly because like a lot of things get a lot of things get funded uh in the bull market some of them will fail because they just got they were just bad ideas but a lot of them will fail because I think that they they they get burnt out the teams get burnt out the teams start having differing view on things the team maybe starts not seeing the value prop as much as they once did because things become clearer in a bare Market than they were in a bull market there's like a mil different reasons why things fail um but to say sismo failed I think is is wrong I think what happened is like just generally the um uh that the business and the team wasn't working anymore the technology still works I mean we have proof of that we were using that on on chain I remember highlighting

it a bunch of times on the refuel but unfortunately the the team just couldn't continue working on it um and they've just decided to open source it which is great but that's how some of these things happen sometime so anyway you can go check out adrien's tweet thread here um I'll link it in the YouTube description below for you to do so all right just a quick shout out here to the eth investors Club they've published a uh an article here introducing themselves and what they're actually all about now I remember that I highlighted this on the refuel a little while ago uh and and how it's going to be obviously a paid quarterly uh report about ethereum that's trying to trying to essentially Reach people outside of the ethereum ecosystem and keep them up to date on

what's happening within ethereum and ethereum's growth overall especially from like an investor perspective so you can go check this out for yourself I'll link it in the YouTube description below it hasn't launched yet but it is launching soon so you can sign up for Early Access and I do want to note here that I agreed to be an adviser to the eth investors Club but I have also said to them that I do not want any uh any profits or any kind of share in what they're doing I want them to redirect any uh any kind of like share or any profits that were're going to give to me to the protocol Guild so basically just forgoing anything and donating it there uh because I I I want to help them with their content I want to help them with you know with reviewing the content and

making sure that they're uh they're writing things that I think um you know are good and a value valuable and can add value to people and obviously give them feedback and things like that but like I don't really care about profiting from that or anything like I just want to educate people on ethereum you guys know that's my whole thing so yeah I just wanted to disclose that that I am technically an adviser to them but I am not getting paid for that it is a free thing that I'm doing just because I want to help them uh uh you know write these uh these kind of reports and get them out there to a more mainstream audience all right so a couple of last things I wanted to talk about this is going to send me overtime here but I think this is quite important so I put

out this tweet over the weekend where I said this is ancient history now but once upon a time ethereum L1 was the low fee chain and people would make fun of Bitcoin for being the expensive chain this sounds ridiculous but this was a thing for a little while because ethereum didn't have much usage right uh and Bitcoin did and Bitcoin fees were higher than ethereum and we'd make fun of Bitcoin uh for being you know higher fees than ethereum but then icos and crypto cres happened in 2017 and ethereum fees went up and it took days for the mempool to to clear because we didn't have EIP 1559 yet it actually did take a lot of days for your transaction to clear you'd have to replace your transaction it to get stuck because we didn't have EIP 1559 implemented in to to to make the the fee Market better and

more streamlined um and then fees went down for a bit during 2018 and 2019 bare Market but the most plugged in ethereums knew that this temp this was temporary so they continued working on scaling through plasma which obviously eventually evolved into things like rollups uh then defi summer happened in 2020 and went up so much that they made Ico and crypto Kitty Mania look cheap in comparison and I said here the point of this tweet is to illustrate that once demand for a chain is saturated priority fees kick in and then it becomes a bidding war for Block space and do you know who wins that bidding war every single time meev Bots do because they are the actors willing to spend the most on fees to capture some expected value from Arbitrage sandwich attacks liquidations mint sniping and more and I said that all this can happen on any

layer one layer 2 side chain monolithic chain modular chain whatever you want to call call it and we as an industry should be tackling these issues as a collective rather than a bunch of divided tribes now I really want to hit on this point about the M Bots cuz I was talking about this at the start and about how most activity will be driven by meev Bots but when you think about it from like a economic perspective let's just say there is an Arbitrage opportunity where the me bot will make $1 they'll make $1 in profit okay so how much do you from a $100 from from a $1100 Arbitrage that means that they're willing to spend $99 in gas fees to make that $1 profit because they're still getting a profit out of it right a bot that's doing this hundreds of times a

day is making some good money maybe thousands of times a day even if it's a small kind of Arbitrage they're still making some money so as long as it makes sense for them to do this and for for them to pay the fee to do this they will do it and that's just a simple Arbitrage I'm not talking about sandwich attacks front running back running liquidations you know being the one to liquidate someone and then being able to offload that and make a profit off that is is is extremely lucrative sometimes um and mint sniping you know sniping nfts and stuff like that like this sort of stuff is very profitable if you know what you're doing as an meev bot as a Searcher right so when you think about that it doesn't matter what network you have it doesn't matter if you've eliminated some forms of me there are

very very complex forms of me there are there are a lot of different forms of meev that will happen regardless and these Bots will always they will always 100% of the time out beat everyone else because they are the ones willing to spend the most money to do it right you will always lose to them as a regular user okay so what's the solution here well I put out a tweet in another thread I don't think I've got it up here no I put out a tweet in another thread where I basically said the only way to fix this issue is to align incentives between the Bots and the humans okay so how do we do this well we essentially make it so that the Bots pay the fees for the users and we abstract it away for the user okay what's a practical example of that well I'm sure a lot of

you have used Cal swap before right it's on ethereum layer 1 I don't think it's on any layer twos right now it's just on layer one but you use it and you sign a a couple of messages right and that's your order that goes to to the the cot protocol now you haven't paid a gas fee at all during that you're just signing a message you're signing an order you're saying I want to swap you know usdc for eth or whatever it is and then in the background the meev bot I mean cop calls them solvers they all compete with each other to fill that order for you now they fill that order they make whatever money they make off of without using their complex strategies in the background then they also pay the gas fee on chain to send that to you essentially to send those funds to you

and to complete your order for you so that's the alignment of incentives there where it's it's called a coincidence of wants that's why cop is called cow swap the cow literally stands for Coincidence of wants well you have a user here that wants this you have a bot here that wants to make money bring them together and align their incentives and you have something where the user no longer sees gas fees they have the best execution for their order and everyone's incentives are are totally aligned and that is the end game for this right that that's how it's actually going to be for everyone eventually there is not going to be people paying gas fees it's going to be all abstracted away but you have to abstract it away in a in a in a in a way that allows the alignment of incentives you can't just do it and then

the fees are still being paid some other way in the in the background that hurts the user you need to align the incentives on this and that's what I believe is going to happen but yeah I mean uh the point of this tweet was just to illustrate that no one has solved scalability it's not something you can necessarily solve you can just keep making better over time and you have to keep realigning incentives and you have to keep working on things to mitigate any issues that arise from this and any negative externalities that arise from these things but anyway uh that's one that one's done just a last shout out here I put a tweet out today asking if people would be interested in me doing regular AMA amas about ethereum on Twitter you guys will remember that I used to do them in the daily way Discord

Channel but I would love to do them on crypto Twitter via text so that I can get more eyeballs on it and I really want to clear up the confusion about ethereum on crypto Twitter so this probably will happen I got a lot of good good feedback here people saying yes please do it I think that the format that I'll do is that I'll have like a thread that I'll start I'll be like okay here's an AMA um you have 24 hours to send your questions to me on DMS or on Discord or wherever uh and then I'll screenshot those those um questions and I obviously won't dox the person I'll just screenshot the question I'll post it in my thread and I'll answer it and then I'll have it so that no one can reply to the thread because if I have it as an open thread you already know

what's going to happen right it's just going to be bombarded with it's going to be replies here replies there it's going to be confusing as hell for people so I'll have it as a closed thread where I just basically answer everyone's questions and as I said the point is is that I want to clear up the confusion on crypto Twitter but I also want to get more eyeballs on it because as as good as I thought the daily gay Discord Channel amas were there weren't that many people that kind of were tuned into it it was basically the existing daily way disc uh deway um Community which is fine I love you guys but at the same time you guys are already plugged in you guys already know like a lot of this stuff we need to be reaching people outside of our little bubble right we

need to be reaching people on crypto Twitter where they're very confused about ethereum right now and you know I think a lot of it's got to do with a lot of other ecosystems fighting ethereum but at the same time there is definitely a gap there for educating on on on that platform there but yeah look forward to that uh probably in the next couple weeks I'll do something like that and then I'll decide on the Cadence from there but I think that's it for today's extra long episode so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up sub to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone