Vitalik's zkEVM explainer, Synthetix L2H2 and more - The Daily Gwei Refuel #421 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where i recap the latest news in the theorem ecosystem i'm your host the anthony sosano and it's the fourth of august 2022 all right everyone let's get into it so you'll notice i'm wearing the official daily gray merch today you can see it on me the t-shirt here and mine finally came in it took a while but i finally got it this was part of the meta factory drop that we did that was organized by crypto wife and coffee in the discord channel and uh yeah this was basically the t-shirt that kind of like came with it and you can see on the back if i turn around it's got daily gray on the back you can't really see it but it's it's there so yeah and i also got the jumper just sitting over here next to me but not

wearing it right now obviously i've got a large on but it seems i've lost weight since ordering this which is a good thing but the large is a bit of a big fit now but still pretty cool so um hope i saw a few of you got yours as well you're posting it in the merch channel in the discord channel so really really awesome to see that but yeah just a fun little kind of merge drop hopefully we'll do more in the future uh but yeah anyway on to the news from the last 24 hours so an update out of tim baiko here where he said another week and i was testing that upgrade so polio which merged a few weeks ago now needs to undergo a simple post merge upgrade to disconnect non-proof of stake peers the upgrade is scheduled for august 17th and only

execution layers need to be updated so if you are on the sapolia test net you need to update your execution layer client here on uh before on or before august 17th and there's a blog post here and there's also another reminder from tim saying friendly reminder that the battle tricks upgrade is happening on praetor tomorrow tomorrow being today uh if you haven't upgraded your girly prata nodes this is the last call to do so so both of those posts are there in his tweet and you can find them linked in the youtube description below all right so this is pretty interesting so hal press uh from uh north rock digital here you all know who hal press is of course uh shared that goldman has uh goldman sachs has come out with a note on the merge so this is pretty pretty big deal because it's not just uh

the merge is coming you know going from proof of work to proof of stake they've kind of like covered the merge here they've covered kind of like uh the the other upgrades coming as well such as the serge verge purge and splurge and this is just a screenshot of uh kind of like the first page here uh hal says in his next tweet the note is actually much longer than kind of like the screenshot obviously and that's just the first section this is a pretty big deal guys like i've spoken about institutions before now i think a lot of them are going to be coming into ethereum post merge especially for staking right now they probably don't want to get involved with staking because of the perceived risk of the merge but once the merge goes through and it goes through fine it's significantly de-risks the kind of like

network and de-risk staking for these people they may wait until beacon chain withdrawals are enabled as well just so they can exit their stake but they may be able to cut a deal with someone like a coin base right for institutional staking where they give them an out if they want to kind of withdraw and then coinbase takes on the the kind of like locked eighth until he kind of like becomes available when beacon chain withdrawals are done so there are multiple ways to kind of like do this but i think this is just really cool that that kind of like these big institutions are getting involved with ethereum getting involved with eth and you know it's funny when people kind of like say this and they kind of say oh yeah goldman sachs jp morgan getting involved with crypto this is this is really

awesome and then uh kind of people say well aren't we supposed to be kind of like uh you know disimmediate disintermediating the banks and kind of like don't we hate the banks and i i take a very different approach here i think to to a lot of people i and i'm not going to go through my approach again because you guys know it but the tldr is that i think that defy as an infrastructure is just vastly better than tradify and it's going to be a forcing function for these institutions to to use defy instead of their existing systems which is going to make everything fair up for everyone i believe these these banks are not going anywhere guys like th the delusion that these banks are going to just automatically get deleted if ethereum takes over the world or maybe if like kind of bitcoin becomes like a reserve

currency or something like that which i don't think is going to happen anyway but it's delusional to think that that these banks are going to kind of like evaporate or not exist anymore and i've always thought that i just i mean we we have kind of like our own crypto banks being centralized exchanges and they're crypto native so i think getting them on board with things like ethereum with kind of like educating their customer base on on kind of like the merge and all the kind of benefits that come with that you know staking it's it's really cool like i i've said it before and i'll say it again i think an a healthy ethereum staking ecosystem is one with a wide variety of different participants not just solar stakers not just people staking on exchanges not just people sticking with things like rocket pool

and lighter and stuff like that but also institutions companies corporates you know teams kind of like squads staking together right like we have dvt technology coming that's going to make that possible and i'm going to talk about that a little bit today so so yeah cool to see this out of goldman sachs here i hope they keep educating their customer base on ethereum and all the upgrades coming to the network in the near future right so speaking of the merge there are two big educational kind of pieces out today about it so one comes from a bank list here titled everything you need to know about the merge so this one was written by david hoffman of course and this is a pretty lengthy uh piece that's full of alpha and it's basically structured as an faq so if you want to

make sure you have all your bases covered when it comes to the merge you should definitely check out this blog post give it a read and everything uh like that i'll link it in the description for you to do so uh but yeah david's a great writer i always enjoy reading his things i kind of like skim through it obviously because i pretty much know everything there is when it comes to the merge but uh you know going through it i just was kind of like okay well yeah i mean this is really well structured this is really educational i think everyone should should definitely read it and he goes into lots of detail too it's not just a high level thing which is which is really cool so definitely check this out i'll link in the youtube description and the other thing to check out is this video

from finomatics which i think is uh really really well done um you've probably watched a finnomatics video before they're usually really well done with a bunch of uh kind of like art and and kind of like a voice narrating the whole thing you should definitely check this one out i i watched this uh at kind of like 2x speed and just to kind of like get through it to make sure i i want i wanted to kind of like watch it to see what information they had in there they had pretty much like everything that i would want in a merge video like talking about the merge talking about kind of like you know how it's going to happen the motivations behind it you know client diversity stuff like that i actually went into the weed which i think is really really cool so you can check out this video for

yourself i'll link it in the youtube description below it's actually linked here the full video there's a teaser on twitter here um and they also touched on the common misconceptions uh and like such as kind of like staked eighth becoming unlocked and the merge lowering gas fees and stuff like that which i thought was very cool because phinematics has i think over 300 000 subscribers on youtube so they have a very very big audience uh and they don't just have an ethereum only audience they've been doing a videos for a wide range of kind of ecosystem things so definitely check this out uh as i said like even if you're in the weeds of kind of like ethereum of the merge and you listen to the daily way and things like that i think it's still prudent to make sure that you read and consume this other content to make

sure you're not missing anything and to just reinforce your knowledge as well i mean i've gone through it before but the way i kind of learn and i think one of the best ways to learn is repetition right keep hearing the same thing keep reading the same thing and eventually it sticks and then it kind of becomes part of your long-term memory instead of just your short-term memory right so definitely check out that and also the bankless piece they'll both be linked in the youtube description below all right so i said that i would be talking about dvt or distributed validator technology today and this is an update here from greg vardy the cto at nethermine so this is basically a blog post around kind of um i guess like there's a first uh blog post in part of a series giving a technical rundown on

dvt now you'll have heard of dvt before because i have covered it uh with an obel network uh when i've talked about them because they've had various upgrades they're a dvt network but nevermind has been working on this as well as part of um as part of synthesis here so i mean if you want to dive into the weeds of dvt itself and how the technology works you should definitely give this blog post a read it is technical obviously but it is very very good i think that this is going to be something post merge post withdrawals that's going to really take off as i said you can kind of like set up a stacking operation where you can stick with your kind of like squad where you know all of you can run different kind of like validators and different machines uh and and basically

sorry a different kind of like nodes and things and and operate different validators and different machines and kind of like act as a squad while doing that so it basically enhances the security and it's not just for you know everyday people it's not just for solo validators and things like that it's also for institutions corporates all that sort of stuff and it is very cool technology so definitely give this blog post a read and it's also got a bunch of references here for further reading too i'll link this in the youtube description below alright so a couple of things from vitalik today he has a new blog post out titled the different types of zk evms and this is obviously very timely given that we had so many zka vms uh announced in the last few weeks their test nets and and potential maintenance dates and

it's been a talk of the town since then i i gave this a quick read before i do want to dive back into it because i didn't understand it through the first past pass through but it is very well written in typical vitalik fashion here he goes through i think four different four main different types of kind of like zkvms with like subtypes as well here we should which you should definitely kind of read there but then also talks about the future of zk evm type so if you were confused by all the kind of like information being put out by the different teams you know there's uh polygons zk sync scroll uh kind of like mata labs starkware all that sort of stuff there if you were confused by everything that was kind of like talked about a few weeks ago you should definitely check out this blog post from

vitalik as it simplifies things a lot so i'll link that in the youtube description as well for you and the second update here from vitalik is a some theory crafting on how much data space we can save by improving compression on roll-ups so you can see here this is erc 4337 signature aggregation which is essential to to this year so you can basically see a technical breakdown of uh compressing the amount of bytes that it takes for an erc20 transfer so you can see the first one the present day transaction is 188 bytes this i believe is with no compression then you have a zero byte compression which brings this down to 154 bytes you go erc 437 with aggregation gets us down to 128 bytes and then you can do ideal stateless

compression which is 75 bytes and ideal state for compression which is 23 bytes there and like if you're not understanding what this is that's fine i mean this is very technical and you can see all the fields here this is basically what goes into a transaction but getting down to one set of 128 bytes with just erc 4337 is a really big deal right obviously getting from 188 to 128 is a pretty big reduction there and then when we go towards more kind of like stateless transactions and and compressing those they're definitely going to get us even further i mean like less than kind of like half what it takes today so this is really cool like as i've said before guys roll ups are going to be able to keep bringing their costs down regardless of what happens on the layer one protocol side they can do their own

compression they can come up with better compression techniques they can keep getting those costs down as far as possible to essentially give us the cheapest possible roll-up experience even before proto-dang sharing gets out there and proto-dang shotting isn't a silver bullet guys like i've talked about it a lot and this is for aip 4488 i've talked about it plenty of times it's it's still going to be a balancing act where if the roll-ups take up all the capacity on layer one uh then they're all they're also constrained by their layer two capacity as well so you kind of have to scale it both layers you can't just rely on on one layer and that's it and that's what i guess like all the layer 2 teams are doing they're scaling they're improving their architectures i spoke about nitro and bedrock over the last few days but

they're also getting all the benefits of layer one scalability not just at the core protocol level which has to kind of go through uh the eip process but also through different kind of like aac standards like 437 which vitalik obviously describes here so you can check out this graphic i'll link it in youtube description below for you to do so but this is very very cool obviously anything that gets us down to the cheapest possible transactions uh is going to benefit everyone at the end of the day like that's the amazing thing about this like an erc20 transfer like getting the gas cost down on that benefits literally everyone i'm pretty sure like every single person that has ever interacted with ethereum would have at least transferred a token once and the the thing is is that uh it's not

even kind of like just a token you can do this for any transaction like you do this for eighth you do this for a swap anything right you can get these kind of transactions compressed as much as possible and bring those costs down for end users all right so another tweet from superfiz today where he says it's a marvel that we have so many ethereum clients in development i'm counting about nine lodestar nimbus teku lighthouse prism eragon never mind basu and geth we could survive with two but we thrive with nine how can we support them easy use a minority client it really is amazing when you think about it guys the fact that i mean just building one kind of client is a herculean task to begin with and requires a lot of expertise we have nine and they're not nine of the same client

either right we have obviously a bunch on the consensus layer a bunch on the execution layer and then we have different clients built in different languages we have different clients optimizing for different things and there are different people obviously working at each of these organizations which i find to be just so incredibly unique to ethereum because there are there's really no other ecosystem out there today that prioritizes or that tries to do a multi-client architecture bitcoin certainly doesn't there's really only bitcoin core that accounts for 99 of the network i believe last time i checked and i don't believe there's any other networks out there that that kind of like encourage client diversity or even attempting to do it and i think the reason why i mean there are multiple

reasons why i think the first reason is that they don't have a culture of caring about decentralization most of these kind of things bitcoin obviously does but i think bitcoin they don't really care about having client diversity because they believe uh that it's not needed it adds more overhead uh because they don't really change very often right and i mean it's kind of like it's becoming less and it makes less and less sense to compare ethereum and bitcoin uh as ethereum's roadmap evolves so i i guess bitcoin is the exception there but in terms of like every other chain out there none of them seem to prioritize decentralization at the social layer like ethereum does right maybe some of them do in some pockets but not to the extent ethereum does where we kind of prioritize client diversity right and secondly it's a very hard thing to do like ethereum didn't

just get to this position overnight it took many many years to get us to here and we actually lost some along the way right we lost the parity client which was the uh next biggest client after geth we we lost them uh i think in 2017 2018 i guess is when they started kind of like falling off a bit and that's i i i personally believe that's because parity the developers of of um the parity client uh you know obviously have polka dot that they're working on so they kind of put their efforts towards that uh and not only is ethereum doing client diversity at layer one i did mention yesterday that optimism is also looking at client diversity now too for their for their roll up and i'm sure the other roll-ups are gonna follow suit there so this this sort of stuff as i said it's

hard it requires a kind of like a social layer or social culture of caring about this about decentralization but it is worth it because the simplest example i can give is why it's worth it is that if there is a major bug in any of these kind of like clients you don't have to rely on on that client kind of like um getting fixed or waiting for that client to get fixed you could just change to another one right and the thing is when it comes to proof of stake having a major bug in your validator client for example could lead to you kind of like potentially getting slashed right or potentially uh you know being offline for a long period of time uh and then you you know you leak out or something like that so being able to quickly change over to another client

is is is really good especially uh if there's kind of like an attack or anything like that or or there's kind of like a bug that's being exploited actively or anything like that right so having that client diversity there is very very important and as i said ethereum i believe is the only chain prioritizing this uh and we aren't just prioritizing it we've actually gone the extra mile and we have like nine clients which is crazy i mean as superfood says yeah we could do with two we could survive with two we could even survive with four five six now we said no we have nine and the the beautiful thing is all of these clients talk to each other in a post-merge world uh and that's what all the testing's been for of course uh and and kind of you could there's i think 20 different

combinations of what you can do and on the execution lane consensus layer side so you could run like prism and uh never mind or you can run lighthouse and geth or you can run teku and besu or you can run prism and basically right there's all those combinations i think it comes to about 20 different combinations that that you can kind of like use here which is obviously very very cool when you when you kind of like think about it so yeah cool for superfoods to put this tweet out got my brain spinning a little bit and just thinking about how good how awesome it is that ethereum prioritizes uh client diversity all right so we have this tweet thread here from emre who who basically starts off by saying over 44 million contracts have been deployed to ethereum since genesis which is an insane stat in of

itself and he analyzed all 44 million using uh token flow insights so you don't have to turns out 70 of the live contracts around 15 million are copies from one of 15 templates here's a breakdown of the dominant contract codes now uh there's 50 of all contracts were destroyed con contracts i think it uh it was done because of uh the gas token contracts as you can see here emirate details this you know 10 of live contracts were gas token contracts this is when gas token was a thing it got removed in one of the kind of like upgrades uh there's forwarders which is about 50 of live contracts and these are contracts deployed by exchanges as something like a po box for users give user an address custody by an exchange and allows exchange to collect

ethernet is 20 sent to the user of and obviously this this makes a lot of sense because we all use exchanges and all that sort of stuff ownable delegate proxy which is uh accounts for 0.5 percent of live contracts it's created by woven protocol with openc as the biggest deployer deprecated but is essentially a wallet contract created for selling nfts obviously going to be a big deal there ds proxy which you may have heard for fro of before got to do with the make it out system ens deeds uh erc20s and nfts didn't actually make the list they are popular but there is enough variation in their code making them not exactly the same so this is pretty cool i like this this is i like digging into data like this and seeing you know the data behind the number

because you might see you know 44 million contracts and be like well that's a crazy number but then when you put nuance to it you realize that pretty much half of them were gas token contracts that were just destroyed when gas token was a thing i i can't remember the exact specifics of how this worked but essentially you would kind of like create the contract and destroy and you get you get like a gas refund and you could kind of like bank that for later and basically it would it would allow you to save on gas right and that's why this was economical to do and why fifty percent got destroyed um but uh but yeah i guess like uh the other fifty percent account for various different things kind of like as well here so yeah that's that's kind of fun kind of fun little

breakdown here you can read the full throttle link in the description below but this is why i always say that when looking at data you can't just look at the headline figure you actually have to dig in and look at the nuance and this goes for every single metric that you see right whether it be fear of a new which i talk about a lot you know active users which i mean active users is not active users it's active ethereum addresses and users can have multiple ethereum addresses i mean everyone has at least one right but there are plenty of people who have two three four five like so you can't just say okay well this protocol has this many active users based on the number of addresses because uh because of that fact you know one address isn't equal so one user can have multiple addresses

sort of thing there uh and you know not just active addresses but like total addresses uh transactions as well like it's always funny when i see people say that oh look ethereum trans ethereum layer one transaction transaction count is going up it's like yeah but that's kind of like meaningless i mean it it can vary wildly depending on what's being used on the day because the ethereum blockchain has a gas as its metering kind of um has a gas limit right as it's as metering flow so the thing is is that if there's more complex transactions on one day than another day then there's going to be less transactions in the transaction counts uh even though the same amount of gas was used because of that fact right so you can't really take any of these metrics at face value you have to dive deeper you have

to look into the nuance of things and the best way to i think measure the use and kind of like the health of a blockchain is taking all these metrics together adding the nuance in and then using a bit of kind of like anecdotal evidence and a bit of kind of like um creative thinking to bring it all together to get a fuller picture but i have said before and i still believe that that fear revenue is probably the best metric out there and it's probably the one that you have to apply nuance to the least even though you still have to apply it to it uh because of the fact that you know if you use fear revenue as a as a kind of like thing where it's like okay you take a three-month snapshot of fear revenue and it's really high and you say okay well

this is really bullish this is going to continue into the future and it doesn't well you know that's because you you annualized three months worth of um with a fear of revenue which didn't really make any sense and the perfect example of this is actually infinity go look at the axial infinity fear of a new chart you can actually go look at it on um on token terminal it's a website just google it look at axiomfinity you can see where this where they had like a massive amount of fear of renew because of that uh i guess like uh mania around actually infinity around at the game around the nfts around the token around the slp all that sort of stuff now look at the fear revenue as it exists today it's basically non-existent it's completely collapsed same is true for ethereum fair revenue it was much

higher during the bull market than it is today so it's always dangerous to take fear of a new and annualize it out or kind of like try and find a longer-term trend you have to kind of like look at it and be like okay well you know it's really healthy ethereum's being used so to speak it's good but like let's wait and see what it looks like over the longer term and then let's average it out rather than try and annualize it based on bull market conditions which can always distort things especially on chain metrics alright so kane from synthetics has published a l2 h2 he's calling it synthetics update this is a long one i think so i'm not going to obviously read it out you can go check it out it'll be linked in the youtube description but this is basically talking about everything

synthetics and i think basically the second half of of kind of like synthetic sorry the synthetics in the second half of 2022. this is a really yeah really detailed really great blog post i enjoyed reading it talked about a lot of different things not just synthetics but like i guess like some of the wider deep ecosystem as well and kind of like the wider market ecosystem too and you've heard me talk about synthetics a lot lately and how they've been growing uh quite nicely uh especially being on optimism there's a bit of stuff about that in here as well so i just wanted to highlight this for you guys you can go read this yourself and check it out in the youtube description i highly recommend giving it a read synthetics is one of the og d5 projects it's one of the ones you should

be paying attention to of course uh so yeah definitely go check that out all right so uh the voyager labs or sorry i should say kind of like the netherline team uh and the starkware team shipped a voyager uh kind of update today so voyager is not not the voyager that kind of blew up right not the cfi kind of like a lending platform that or i guess like yield platform that blew up voyager is the name of the block explorer for stock net so there's a new ui and front end now on this block explorer you can see it here it looks very nice i can't remember what it looked like before but i believe before it wasn't very structured yet and i believe it's because it was obviously an early kind of implementation of it but it looks very very nice now so you can basically

search for blocks transactions contracts i mean we all know what a block explorer is right enough to go through it you can shift between mainnet and gurley here to deep dive into different blocks with the transactions that are in them right you can kind of sort by transactions here messages events you know all the stuff that we're kind of like used to so very very cool to see this because obviously if you're using things on starting it you want to be able to have a block explorer that you can reference and now this one has a much nicer ui than it did before uh so shout out to i guess like the nethermind and uh team and starkware for building the brains and supporting this project as yuki says here all right last up here we have only dust which has now entered beta and it is

live on testnet so you can now explore the best open source contributions pick a project you like and start building for the ecosystem so for those of you who don't know what only dust is it's a platform that allows you to contribute to the best projects within the stark net ecosystem and get paid in usdc or equity in those projects you can kind of like see here that there's all these projects listed on stock now there's only a few here today but obviously this will keep growing and you can click on it and basically uh well once once you click through uh you can you can contribute to it you can go to the github you can connect your wallet all that good stuff there it's obviously just running on test net right now so it's not not on main net yet but i think this is

really cool um i think you know i the funny thing is i always talk about this when i talk about stark net is that like i i kind of like feel bad for the amount of like i gave them over their token because they're building such an amazing ecosystem like i get the same feeling uh for stark net that i do for all the other kind of like layer twos like you know the polygon ecosystem optimism arbitram um and then and on top of that stockholm is trying to build something non-evm kind of like compatible as well they want to build something totally new but as a layer 2 on ethereum so i think that even if kind of like their token distribution leaves a lot to be desired i think it's still worth kind of like supporting them and supporting what they're doing because it

is very beneficial to to ethereum and only dust is definitely one of those projects which you can check out and i'll i'll kind of like link that in the youtube description uh below here so yeah i think that's going to be it for today but before i finish it up i have a few minutes left i just didn't i have another topic that i want to talk about i have always have these topics i'm thinking about things too much during the day and i want to kind of like get it out there on the refill but uh basically uh you know i guess like when you kind of like think about the position that we're in right now in terms of like the disconnect between the markets and the tech and this is something that i've been thinking about actually the past few days the tech just seems like it's going

exponential right guys like the building just seems like it's it's getting uh like a lot quicker and people are deploying things a lot more quickly it feels like we're really entering layer two kind of like summer it feels like uh not only layer twos it feels like the the protocol side of things are moving uh sorry layer one protocol is moving much faster than it has before the merge is almost upon us but no one's really paying attention it's really just the same people that have been in the ecosystem for for this year basically since the bear market really started in earnest and it feels good it feels good it feels like honestly feels like 20 20 19 20 20 to me again guys like it feels really good to be uh kind of like seeing all this stuff being deployed and seeing the markets

detached from that because it means there's alpha to be had it means there's opportunities to be had it means there's uh kind of like ways for you to contribute that there wasn't in the bull market maybe there was too much noise right it means it's quieter so i'm just thinking about that and thinking about how and being a bit nostalgic about how i felt the same thing three years ago i mean in 2019 i got even more involved in ethereum that i had been the previous two years obviously got my job at set but i also went to a lot of conferences in 2019 a second half 2019 uh and and also i guess like i went to one in april 2019 and uh it really just was an amazing feeling being at these conferences and and kind of like seeing all the building going on even though

ethan was still down like 90 from its all-time high right didn't kind of like dissuade anyone now it's performing a lot better than it was back then and it has a lot better kind of like narrative around it same with kind of like the ethereum network so this building just feels even better now so i don't know i'm getting giddy i'm getting really excited like especially because the merge is almost here like i wake up every day being like oh my god one day closest to the merch right it's so close um but yeah i just wanted to kind of like share that excitement with you guys this is the time like if you are new to the ecosystem this is your first bear market guys time dig in heels in do what you want to do uh do you know contribute uh maybe make your investments that you

want to make and things like that obviously understand the risks stuff like that avoid the leverage as i always say um but yeah now is the perfect time to be digging in because i don't think the markets are going to be detached from the building for very long it's just there's too much going on there's too much value being created that i think that we could get back to the markets kind of like pricing in these sorts of things sooner rather than later but that's as much kind of like not investment advice as i'm going to give i'm going to end it there for today so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to newsletter join the discord channel and i'll catch you all tomorrow thanks everyone