Ultra Sound Week, ETHGlobal Scaling Hackathon & more - The Daily Gwei Refuel #544 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Daily Review where we kept the latest news in the ethereum ecosystem I'm your host Dan the Nissan 22nd of February 2023. all right everyone let's get into it so the official sapolia chappella announcement was posted on Twitter today from Tim Biko so as you guys know uh the chapel oh sorry there's a polio test net will be forked over to chappella on February 28th at 4am UTC in this official uh blog post that goes through the upgrade specification client release links to client releases and an FAQ here so yeah if you're interested in that you can go check it out it'll be linked in the YouTube description below um but I think I've talked Chapel to death at this point so I'm not going to to spend too much time here but I feel like I'm

slowly turning into the it's happening guy like um what's his name I can't remember his name he's I think it was a US politician you guys know the GIF I'm talking about or it's like it's happening right I feel like I'm turning into that guy with um with uh chappella going live here or going live relatively soon here and I was actually looking at um the beacon chain today and looking at the metrics around it and and the uh the validators there's so many validators still coming online and what I find funny is that like I've gone through this so many times before about what the implications of withdrawals are going to be for I guess validate account for how much eat this steak but the eat price is blah blah all that stuff there and the fact that more and more validators just keep going online and the fact that you

know as I've said before most of the network can already exit it's taking you if they want to Via the secondary market via lsds I just feel like the withdrawal event is going to be a non-event I don't think there's going to be any kind of fanfare around it besides narrative I feel like the underlying actual fundamentals is is going to be fine I don't think we're going to see a mass Exodus of e3 anything like that I think we're going to see a mass amount of heat staked over the following months uh following the um the upgrade here uh and I was actually talking to someone in the dedicated Discord Channel about this and I mentioned something where I said that I feel like people stake eat no matter if it's a bull or bear market and I've also gone through these before but

basically basically the number one reason why I I think that and why and the evidence that supports that is the fact that we had pretty much half the network worth of validators go live just last year I think it was 220 000 validators go live last year I think there was 250 or 260 000 uh that that had gone live since December 1st 2020. um so during the bull market we had roughly the same uh well I guess like a bit more the amount of validators that went live then went live during the bear market so I think that Eve Staker seemed to be quite agnostic to the USD price and really why wouldn't they be they only have to worry about the USD price for uh running costs I don't I mean I don't know how many Eve stakers are

actually living off of their stake it's actually quite hard to do because you do require a lot like if you wanted to make say a full-time salary from uh staking eth and I mean it's going to vary depending where you are in the world obviously um the cost of living will vary but let's just say you want to make a hundred thousand US dollars a yacht that's going to be hard to consistently make because obviously the eighth price fluctuates up and down but also to make a hundred thousand US dollars a year you would have to be staking a lot of eighth to do that so you would already be wealthy so I think from a passive income standpoint I I I think that matters much less to individuals I think maybe to institutions and and capital allocators it probably matters more to them but

from a individual perspective I feel like a lot of people stake because they have eat they obviously think it's going to go up in value over time against the US dollar and they want to Stack more eth so because the staking rewards are denominated in eighth so I think that's the reason why you say that no matter if it's a bull or bear Market people are going to stake their eath and I that's another reason why I think we're not going to see these Mass kind of Exodus of of eth after withdrawals that's going to get sold and everyone's taking profits or selling it a loss because they want to get out of eighth I just don't see that happening for a massive amount of reasons that I've gone through before I'm not going to rant on about that again but I think it's always worth

reiterating that um and I don't know what's going to happen to the USD price of eighth of course like no one knows what's gonna happen uh and correlation does not equal causation or coralization there's not a correlation right so you might see the price go down a bit after withdrawals well did it go down a bit because of the withdrawals or was it the narrative or was it people front running each other or did it just go down because it was going to go down that sort of stuff's just so much so noisy it's stuff that I don't really focus on too much but I think it's well worth being aware of that and being aware of the fact that uh narratives can influence price but price can also influence narratives and it's not just for withdrawals it's for any kind of narrative I think it's always

good to remember that but anyway you can go check out the upgrade post for yourself it'll be linked in the YouTube description below all right a little bit of drama today around uh the girly test net so Leia zero Labs here announced that they are launching a test net bridge between ethereum mainnet and Gurley uh which basically allows you to trade girly eat for mainnet eth and they basically funded this with their own liquidity and they said the initial price of uh girly eat is set to 10 cents and the pool is seated with 12 500 girly eat now the reason why there's drama behind this is because I mean one layer zero is calling this a public good which it definitely is not a public good uh and Greg here who's um the co-founder and CTO at

chainsafe the team that builds the load star a consensus layer client said this is not a public good this is harmful ethereum does not have a canary Network and you're creating value on a network that hasn't had thoughtful economics the largest holders of girly um Greg included have been against my kids for a reason testing should be free um I generally agree with this I know that it's been generally hard for people to get access to girly eth and there's actually no function in the evm that would allow the I guess node operators to Mint an infinite amount of it and there's been trouble before with people hogging all the girl years and the developers not being able to get uh get their hands on it and trouble with siblers and people doing airdrops on girly which means people were hoarding

the girly eighth even more and that's what initially gave it value but I don't think this is the solution and I I don't think there's any good solution here to just being able to distribute test net eath but putting a value to it just I mean it doesn't really make much sense it feels like it's going to lead to a lot of harm for users because if it gets bad enough what could end up happening is that those the the people running the girly test Nets because it is a centralized test and it's not trying to be decentralized because it's a test net right it's not like a um a consumer which was what's called a quote-unquote canary Network for polka dot that basically wanted to be its own network and assist the network it didn't want to be regarded as a test net even though I

mean it was a test net and we're not going to go into the details about that but that's that's what uh the canary Network terminology is being used to reference ER uh that's not what girly is that's not what sapolia is they're both just pure centralized test Nets that uh are built there and I put out there for developers to use and they're supposed to be as close to mainnet as possible but as I said if it gets really bad I'm sure the code could be changed on girly in order to Mint an infinite amount of of goeth which would just nuke the price obviously and people would get hurt from that so yeah as Greg said this is not a public good this is harmful this is not something that we should be encouraging but at the end of the day these things even though they're centralized these

testnets they are permissionless still you can build pretty much whatever you want on them yes there may be a chance that it gets stopped because of the centralized nature of the test net but generally it's kind of hard to coordinate that and generally uh things are left alone because you want these test Nets to be as close to mainnet as possible and if you start changing anything if you start doing hard forks and if you start doing your regular State transitions you can potentially screw something up and then you have to restart the test net which is a coordination effort in of itself it just gets very messy so yeah I I think I um I most just take you issue with the fact that Leia zero Labs call this a public good when that's just it's not a public good at all it's just speculative stuff

that's going on here it's not even regenerative Finance because the people speculating on go ether not developers they're the and and the fact that they're putting a price on it and they're selling it to the open market means that developers may have to potentially pay in real eth to get their hands on this sort of stuff because people would be hoarding it as a speculative vehicle so so yeah that's my main issue here with that but I guess generally there are different opinions on this there are some opinions that say that well if we can't solve the issue of getting goeth into people's hands for free well let the market sort it out and I I mean I can kind of understand that I guess like argument but even though I don't agree with it and I feel like this is something that's been discussed over

the years um when it comes to test Nets generally it's always been an issue and I don't think adding value to the test net eighth uh would no matter what test net it is actually solve this issue solves this issue maybe it's a case of uh I mean in some World it solves the issue but then creates more issues so it wasn't even worth it right the Q is worse than the disease so to speak we'll have to see how this plays out I mean generally if you do have goeth and you want to speculate on it and and trade around with that uh that you're free to do so I had a bunch of of girly actually I think I had like 20 or 30 000 of the things but when I wiped one of my PCS I forgot to back up that address because I

had metamask on there but I knew that there wasn't any real Eve on there so I just wiped it and I didn't obviously keep the seed phrase or anything like that and then I remembered oh my God damn I actually have a lot of goeth on there now I wouldn't have sold it I would have of course donated it to uh the core devs or to it maybe not even the courthouse whoever wanted to use girly but I don't have access to that anymore but I mean if you do I would encourage you uh I mean it's totally up to you what you want to do with it you could sell it into this uh this pool if you have some uh but I mean I don't even know what the conversion rate is right now as I said like they started off at 10 cents so one girly eat uh got you 10

cents worth of of real eighth which is obviously a massive reduction on what real ape is worth so yeah it just depends how much you have uh there so you're afraid to do whatever you want with it but obviously I would encourage you to give it back to the community give and actually make your girly Eve a public good rather than selling it into but stacking more eighth I get it I get it um but yeah anyway you can go read both of these threads the layer zero Labs thread and Greg's thread I'll link them in the YouTube description below all right so speaking of getting your hands on testnet uh coinbase wallet announced today that you can now get free testnet ethmatic avax BNB and FTM all in one place so they have a faucet here which allows you to get 0.1 uh

girly eth per day so obviously it's not worth it to to I guess uh uh I get um get the get the girl you eat from this forcing and then sell it uh it's not very scalable you're not gonna get much out of it but it is worth it for people who want to use the girly testnet of course and then they've got like a test net for polygon Mumbai for sepolia as well for optimism um and any other networks like Avalanche Phantom BNB pretty cool that coinbase is doing this and I think it's very timely as well that it that it came just as all this drama was bubbling to the surface here but this is a public good right as I said before what layer zero did isn't a public good what coinbase is doing here is a public good like they're just

basically spinning up this service it is free to use obviously it's limited to prevent the 4 process from running dry but it's providing a free public good service to ethereum developers or other you know other evm developers generally who want to get their hands on testnet eth in order or test net other these other tokens in order to test their apps on the test net so kudos to coinbase for doing this just another goal that coinbase has kicked lately man I feel like I'm talking about them all the time these days uh but yeah uh good on them for doing this all right so the a beacon chain uh service here have uh has have said on Twitter as promised the option to broadcast voluntary exits has been added

to the jejang beacon chain uh website here so they said that we are confident that it will facilitate a smooth transition for most users uh PS added some withdrawal stats at the top so basically uh from what I I can see here is essentially what you want to do is broadcast a voluntary exit and you can have obviously your request job done here uh status completed uh type voluntary exit created time submitted to no time and then it will list out the affected validator so basically what this allows you to do is exit staking like that in layman's turns it allows you to withdraw your stake from uh the validator uh sorry from your validator and then exit it out and obviously get your eth back or get your 32 each back

if you're a solo validator here a rocker pool I believe is going to have their own version of this because obviously they have their own system where you know as a nerd operator you're not staking 30 to 8 you're staking 16 8 and then 10 of that is um is RPL tokens as well uh so yeah and I think that's coming with the atlas upgrade shortly after the uh the week withdrawals go live as well but yeah cool to see this from Beacon chain live on the judging test Nets obviously this will be live on Main net when mainnet hits and you can go play around with it on jjang uh I'll link this in the YouTube description below all right so the ultrasound money account highlighted that over the last seven days 99.7 of all ethereum blocks were above the ultrasound barrier this is huge

obviously it's not a hundred percent but it's pretty close to 100 but this is absolutely massive because the ultrasound barrier is currently at 16.6 gray right and and as more it gets fake this goes up but the fact that it's a bear market and we've been Above This ultrasound barrier for pretty much the entirety of uh of a week which is you know obviously not a long period of time but a pretty uh a pretty decent period of time there I speaks to the fact that the ethereum network is still adding so much value to people it's still uh generating so much value for itself obviously generally generating a lot of value that gets burnt um sorry a lot of value for etholders via the burn and things like that um and this is with the back the

backdrop of layer 2's continuing to grow a lot as well I did highlight yesterday how arbitrim's going and I'm going to talk about that in a sec as well but I mean it just seems that a demand for ethereum Block space is insatiable that at the day ethereum is still processing millions and millions of dollars worth of fear Revenue I mean I checked I think it's seven or eight million dollars over the last 24 hours most of which gets burned there is just incredible demand to use the ethereum network incredible demand to use the layer twos as well and the fact that it's still a bear Market just speaks to uh the sustainable demand that I've been talking about a lot lately uh uh which we've seen uh kind of uh proliferate over the last six or so months so just very very cool to see

this obviously we don't expect to be above the ultrasound barrier if the ultrasound barrier goes um goes a lot higher we don't expect to be above it 100 of the time we don't really even if even when it's relatively low we don't expect to be above it 100 of the time and it's always good to I guess stay grounded and not extrapolate things out uh just I mean in the bull market we got a bit ahead of our sales people being like Oh you know 100 gray gas fees we're going to burn so much eth uh you know and and and then extrapolating out the yields that that stakers would get from that but I guess a lot of people failed to account for the fact that those fees weren't going to last in a bear Market we weren't going to have 100 wave fees

in the bear Market but in saying that I think the fact that we've been above the ultrasound barrier at 16 way plus uh has surprised a lot of people because of the fact that the market is still relatively quiet and it's honestly surprised me to be honest I actually thought that we would be below 10 gray until demand really came back but yeah it seems that demand for ethereum Block space uh is is definitely insatiable here uh but yeah anyway um I just wanted to hide that one I will move and on and talk about the arbitrim stuff that I wanted to talk about so as I said yesterday or as I showed yesterday the chart from RB scan that Albertson was doing a lot of transactions per day uh Stephen goldfeda the co-founder of option Labs here I put out a tweet where he said for the first

time ever arbitrim1 processed more transactions than ethereum over the last 24 hours we're witnessing history as ethereum's roll-up Centric roadmap becomes a reality congrats you did this now I did check on this actually after yesterday's refuel the RB scan uh chart uh for daily transactions is not counting system messages I remember I mentioned yesterday how depending on what what uh data source they're using it can count system messages well it's not so these are actual transactions happening on the arbitrim1 network which is just incredible I mean when you really think about the implications of this uh I I think it uh any implications of this in a bear Market it gets really exciting and Hunter here from the um

from the offchan labs team also contextualized this for us he said ethereum scaling is here and it's called arbitrim take a look at this efficiency so in Feb of last year uh pre-nitro arbitrine one network there are about a hundred thousand transactions over a period of a day and 165 000 in fees were paid but a year later right um post Nitros uh they did almost a million transactions of on on the day with only 155 000 in fees so that's a 8.7 times increasing capacity with ten thousand dollars saved in fees so more transactions per day less fees thanks to Nitro thanks to all the upgrades that came with Nitro and of course the

batching that they do for arbitrim1 this is how ethereum scales guys like this is what I've been talking about for years now this is ethereum scaling this is an extension of ethereum's block space yes I know these things are still relatively centralized I know that arbitrim uh ones are uh fraud proofs are permissioned yes I know that optimism doesn't uh doesn't have uh fraud proofs yet yes the ZK VMS aren't even live yet right um and and pretty much all the l2s are generally centralized or I have training wheels on them but I don't think that's the point when you really kind of when you really think about it these things are actually using the technology well the same technology that they're going to be using in their mature State really

the only major difference for I guess um arbitrim is the fact that their fraud proof is permissioned but at the end of the day it's still using the same fraudproof system that they would use if it was permission less and with optimism their fraud proofs aren't live yet so it's a little bit different but um they will be live relatively soon so the actual technology powering the roll-up itself powering the scalability is from what I understand going to be the same whether it's centralized or decentralized so I don't think that that really matters uh because of that but I understand people's reservations here and as I've said before I wouldn't be trusting all of your money on these networks just yet there are real concerns here but the technology itself is real it's working as advertised and it's scaling

ethereum which is obviously something that we can all get excited about all right moving on so eth Global has announced uh that they're going to be uh hosting a scaling ethereum hackathon on March 10th to March 29th uh where they said join hundreds of developers worldwide in shaping the future of our of our ecosystem to win over 125 000 worth of prizes and in this thread they go over basically what this all entails how you can get involved how you can potentially win some of those prizes there so this isn't too far away actually I mean March 10th is 18 days away and then you have 19 days worth of this hackathon I think this is online um uh I don't think this is a in-person hackathon so anyone in the world obviously can participate from the

comfort of their home I believe if you go to eastglobal.com scaling I think yeah it's a virtual hackathon there we go and you can apply to hack here as well if that's something that you're interested in uh there but yeah I guess East Global always does these sorts of things they do in person they do virtual hackathons I've judged a bunch of them they're probably uh one of the best if not the best places to get your start as a developer within ethereum if you feel comfortable enough to do that because what you what happens is that typically a lot of the judges and a lot of the people paying attention to these hackathons uh VCS right are funds that are looking to invest in interesting ideas so if you think you've got something interesting uh around scaling ethereum here for this hackathon in particular and you think that you've

got what it takes to build something that can attract Investments well go for it like this is one of the best shots that you can have so definitely go apply I'll link it in the YouTube description below uh for you to do so all right so an announcement out of superfluid so they've introduced something called superfluidvesting which is an open liquid and composable vesting solution so essentially they say here we believe that that frictionless composable nature of superfluid streams make them a perfect fit for token vesting which is why we developed the superflu investing Suite it includes a Sleek no code vesting solution for projects plus a smart contract vesting framework superfluidvesting offers a multitude of benefits such as a simple beautiful UI full liquidity unrivaled

composability reduce volatility and enhance security so and they go on and saying you know how simple it is to set up a vesting a kind of stream and and some more information about that here as well as the Twitter spaces that they'll be hosting uh I mean that's probably already gone past by the time you've watched the refuel but you can check out the link to that obviously in the YouTube description below and just to disclosure how I am an investor in superfluid now when you see vesting I think a lot of people's minds go to investing of like VCS and and private Investments and Android investors and that's true obviously for a lot of a lot of people but vesting generally gets done in crypto for things like airdrops liquidity mining I mean curved investing for their airdrop right that's one of

the first examples of it and these things are usually done by by building custom contracts right or custom built in-house contracts so to be able to to do that via another solution well that's what superfluid is doing here that's what they want to do and that's their goal here there is another team that I'm also invested in that's been working on this as well that I've talked about on the uh on the refuel called liquify but it's great that that super fluid is doing this as well I mean obviously I say it all the time competition breeds Innovation and competition is good for everyone um but yeah if you want to check this out for yourself you can I'll link I'll link this in the YouTube description below for you to do so all right some sobering news out of the polygon ecosystem uh yesterday so sundip

one of the co-founders of polygon put out a tweet thread by and he started off by saying polygon has grown exponentially to continue on this path of stupendous growth we have crystallized our strategy for the next five years to drive Mass adoption of web 3 by scaling ethereum our treasury remains healthy with a balance of over 250 million dollars and over 1.9 billion Matic which is a lot of Matic I mean at current prices that is what two and a half three billion dollars worth of medic uh so definitely obviously a lot of manic now the the sobering part here is the second tweet where he says a big part of this strategy includes unifying all our teams under polygon labs to drive more growth as part of this consolidation process we've made a difficult decision to reduce our team by 20 impacting multiple teams and about

100 positions so this was uh this was this was a kind of interesting thing to pay attention to because I read through some of the quote tweets some of the replies and people were confused I think that some of the replies said you know you raised 550 million dollars uh a year ago does that mean you've spent 200 million dollars already and then Sunday reply by saying you know we have a 100 million dollar Venture fund uh as well which they use to fund projects in the ecosystem now I'm not I obviously don't know what they're spending the money on I don't know uh kind of um what their accounting looks like I don't know what their book looks like or anything like that all I know is the information that's been presented here but what I do know is that in Bull markets teams no matter who

they are over higher right I remember seeing uh coinbase actually over higher like crazy in the bull market and then have to cut every pretty much every team every project no matter what it is has cut stuff uh or as cut positions as cut team members uh simply based on the fact that yes they have money but they need to preserve that money we don't know how long the bear Market is going to last you can't always rely on on the market to save you um and you know you don't know what the what the environment's gonna be like two years from now let alone five years from now so you always have to be prudent and when you over hire like that as well you tend to hire for positions that become redundant very quickly positions that were just really not needed but but you

were hiring because you had so much money flowing and there was so much excitement there was so much to do so it's it's kind of the same thing I mean this is this is the the this is something that happens throughout all Market cycles of course but it's really prominent where over hiring in bull market cutting the fat in Bear market now obviously people losing their jobs is not a good thing it's it's really sad for those people but at the end of the day uh if they were in jobs that were considered uh something that wasn't valuable to the company or something that was going to just get cut regardless doesn't matter if it's now or in a few months then it's probably better just to rip the Band-Aid off and those people to go find uh roles elsewhere and and I I totally understand

if those people get burnt burnt out from crypto maybe they don't work in the ecosystem anymore that's up to them I'm not saying that uh it's a good thing this happened but what I am saying is that for the long-term health of a lot of these projects they can't operate in bull market mode during a bear market and we saw this happen last cycle and a cycle before that this and it doesn't just happen in crypto it's happened all over uh web 2 as well it's happened all over the traditional system generally but what you want to look at is the growth Trend over the long term if these teams uh keep growing right over the longer term but at more of a slow and steady Pace it means that their project has been growing it means that it's sustainable it means that it is adding a

lot of value to to the world generally and it's okay but then also not all teams are created equal right not all projects are created equal some projects require a lot of um a lot of people as part of the staff some people some projects don't for example a centralized exchange requires a lot of staff to do both customer support and compliance right whereas uh something like a uni swap for example decentralized exchange they don't need uh customer support right they probably do have compliance but it's a much smaller team because they're not they don't take custody of assets they have lawyers but again much smaller amount of lawyers than something like a coinbase would have and then everything that goes into obviously managing uh custody of a centralized exchange or the infrastructure stuff

like that whereas universe doesn't have to worry about that stuff obviously they have to worry about infrastructure to extent but it's on a much uh kind of smaller scale because as I said they don't custody funds so it's totally normal for for this to happen here even to teams that raised a lot of money at the end of the day as Sandeep said here 100 million dollars is is going towards uh funding projects uh within the ecosystem and that can go relatively quickly because there are a lot of projects building on on polygon they used a bunch of money to acquire those EK teams as well which was a pretty substantial amount of money um and they want to make sure that their treasury uh is it can last as long as possible and I'm sure they did the you know they looked at their books and they

looked at their team headcounters okay well if we keep paying this much every month uh after X amount of months we're going to run out of money and uh you know maybe they don't want to raise again because they don't want to sell their their medic maybe they want to hold the money because they feel like if they sell now they're selling it at a price that maybe they believe is is too cheap so yeah that's the decision that they've got made and gone with now you guys know I'm an advisor to polygon I'm not trying to sugarcoat this or or anything like that and obviously there is a bias here from me but I think when you look at the space generally and you just look at how things work generally in Cycles there's always an overhiring crazy kind of period Then There is is a

cutting the fat period during a bear Market or cutting you know what you have to do during a bear Market in order to guarantee sustainability for as Sandeep said here five years ten years sort of thing uh in order to make sure the projects not only survives but also thrives but yeah that's going to be it for today so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone