Web3 access w/ Coinbase app, Cloudflare ETH staking - The Daily Gwei Refuel #366 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where he cap the latest news and ethereum ecosystem i'm your host anthony sosano and today's the 17th of may 2022 all right everyone let's get into it uh actually sorry before we get into it just excuse the mess behind me having some shutters installed tomorrow on my windows over here so i had to move everything from over here on my left to kind of like behind me to get out of the way there's a lot of stuff back there just just ignore that mess that'll be gone by tomorrow um but anyway on to kind of like what i wanted to talk about today so i put out this tweet today where i said you know remember when we all thought d5 tokens were going to be in the top 10 and i have that kind of

like wojack meme with a crying face in the background and like a mask of a smiling face on in in my character caricature of course um but you know this was a very popular narrative back in the day that these d5 tokens you know wi-fi you know comp uni yeah there's so many of them now right there was a sushi there were these kind of like narratives that these popular narratives that these d5 tokens would replace all of the dead coins all of the zombie coins all the scams that exist in top 10 top 20 top 30 top 40 blah blah right and you know what i personally was one of those people that was very bullish on this i had a you know a pretty pretty strong thesis that this would happen i thought that um you know we would finally get some kind

of like fundamentals based kind of top ten and sure enough that didn't happen defy tokens have been down only since defy summer against eighth um they never none of them have actually reached their all-time high against heath again uh and i think you know it's a function for a few different reasons but i think what i wanted to focus on with this is that i spoke yesterday about how kind of like i went through my journey of how like i kind of invested in crypt over the years and kind of invested in the wrong things you know sold the wrong time took three cycles to get to where i was blah blah right you guys listened yesterday but what i wanted to focus on with this was that i think what happens in this industry a lot of the time and why so many people are just really bad

investors is because people will take like three months of time like d5 something was about three i guess like three four months of time in 2020 and they'll kind of extrapolate that out to a long-term thesis so you know and and typically this will happen during bull markets so for example if you take like three months of a bull market and say okay well these three months this thing has done really well you know this pro this project's doing awesomely they're generating all this revenue they're growing really quickly i'm super bullish on this i'm gonna kind of like um be bullish on this for like the long term i'm gonna you know stack a bag of this and be really bullish on it over the long term and then of course what ends up happening is that the bull market made it kind of like kind of

tricked people into thinking that this protocol or this project actually had a product market fit when in reality it had kind of like bull market product market fit right it didn't have like you know the ongoing kind of like fit there and that's not to say a kind of like any of these things have failed or anything like that like there are there is kind of like exceptions to this rule as well such as uni swap for example like uni the uni token against both usd and eth has done quite poorly but uni swap has been growing it's deployed in other chains it's maintained its dominance and continued to kind of like increase its dominance over the amm space and it has some of the smartest people in this industry working on it but its token is just not doing much and there's a million

different reasons why tokens kind of like go up and down and things like that but i think that you know extrapolating out certain kind of market conditions and forming a long-term thesis based on that is probably not the the right way to go about things we have plenty of evidence evidence for that and you know it's funny that i say that because i think that we you know it's kind of like these things go through hype cycles as well so for example you know let's use eighth is the perfect example it went through like a pretty massive hype cycle in 2017 where it went from ten dollars to fourteen hundred dollars i guess like the first week of 2018 technically and then it came down to 80 dollars during 2018 and if you actually put a plot that eighth chart in in linear against a lot

of the charts of pretty much like every hype driven token they all look the same right they have like an initial kind of like you know they're flat at the start then they have like a little small run up and they the run gets kind of like more steep and steep and you kind of like have this chart that just goes straight up but then obviously it kind of like peeks out and then it comes straight back down and kind of levels out and and it might level out like uh like above at the above what it was like when it started uh about the same level or below right um and that's because these things a lot of these things are purely kind of like hype driven especially during bull markets where their prices make absolutely no sense and they're only going up because there's such a

liquidity injection into the crypto ecosystem and that kind of like rises all boats for for a relatively short period of time and eth went through that and then came back stronger but the the thing is 99 of tokens during that era have not come back stronger and they never reached their all-time highs against usd let alone eighth again so kind of like when i look at things like like from that kind of like perspective and kind of like take it i guess like take that kind of like longer term view i mean it makes sense that a lot of these things will never kind of like go back up especially if they were only going up because it was a bull market so you know the thing is eight started going up i think in 2020 and it wasn't really a bull market yet like there was kind of like

d5 summer that happened and the and kind of like where i mean it was kind of like flat during that the d5 tokens went crazy but 8th was relatively flat but then e started going crazy from there and had its own bull market so there was kind of like changing dynamics around that but it was uh it was kind of like pretty pretty crazy to see right pretty pretty interesting to see how it all played out and the thesis of defy tokens kind of like climbing up the ranks i think at this point in time he's dead maybe it'll change in the future but yeah it was just such a kind of like uh i guess like a a failed thesis that i i figured that kind of i would discuss it today and i wrote some more about this in the delegate newsletter as well if

you want to kind of like check that out um and you know in my newsletter actually i'm just looking at it now i actually made a point about the fact that i think what a lot of people miss with these default tokens is that they're tied to businesses right and and kind of like if they like businesses being the products the projects the the apps on chain and if these apps are doing poorly then the token has absolutely no reason to go up in value like that's the thing like as i was talking about the bull market masking the fact that these projects don't have actual product market fit because they might be paying out token intentions for example and if their tokens going up they might be able to increase their tvl but it's only because the token rewards that are being paid out is lucrative enough for that to

happen but you know a lot of them don't actually generate much revenue at all a lot of them are actually at a loss because they're paying out for those kind of like incentives and the token literally has zero reason to go up in that kind of kind of scenario and that's that's why a lot of them will just go down trend down over the long term uh you know a lot of them i mean i was looking at some of the charts like a lot of them are pretty wrecked like some of them are down 90 plus percent against eighth which is which is crazy right like uh as you guys know i use eighth as a benchmark asset so yeah i just wanted to kind of like give a few thoughts on on that there and i think the main takeaway is that it's

not just limited to defy tokens don't look at like the three months of like i guess like the few months that we're having like a really crazy bull market where everything's going up in value don't form a thesis based on that because it's not gonna work like especially for an asset that uh you know has a really really strong run in a bull market there's there's no point forming a long-term thesis based on that because there's no guarantee that it's gonna be around even kind of like six months after the bull market uh kind of like subsides the the project may kind of like fail the team might run out of money or anything like that right so there's a million reasons why projects fail or fail and i think if people people keep extrapolating out kind of like the bull market to form a long-term

thesis they're going to end up holding something down like 90 plus percent and i did that from 2017. you know it's funny there was um a token called aeon and i've spoken about this before that i bought like i drank the kool-aid of aon in 2017 it was some interoperability project i you know i bought a decent chunk of it and then there was some token rewards scheme where you could lock up your tokens for a period of time and get more tokens maybe i mean maybe you could call it early yield farming um but it was called the trs the token release schedule and you know i ended up getting a lot of tokens with that but the thing is is that aeon really only went up in value because of the bull market and since the bull market ended in 2017 it's been down

only and no one talks about aeon at all anymore and it's down like 99 plus percent uh percent uh plus uh against usd right uh and i i can't remember where i sold it exactly i think i sold it when it was down 90 ish or something like that i sold it in chunks uh but i held it down because i still kind of like believed in that project i was still like you know it's just the bear market you know this project is going to be cool but then it just faded into a relevancy so don't think that uh you know that that's kind of like a bad thing to do that either i think it's a kind of like a lesson to be learnt but at the same time i didn't put all of my money into a on right like i i still had majority of my

funds in eighth um and then i had a few side bets here and there and i cut but you know i cut pretty much like all of them through the bear market uh which was a good idea in hindsight but yeah you have to kind of like live it i think to get to that point but anyway moving on from that for now is a bunch of other things to get through all right so superfiz put out an interesting tweet uh yesterday saying ethereum isn't done it has been in heavy development for eight years and it may continue in development for a very long time don't assume that you're looking at a finished product and feel frustrated with weaknesses we're building for the future so this is what i try to kind of like get i guess like a major point i try to get

through to everyone when i'm kind of like educating about ethereum is that ethereum in its current state if you're judging ethereum in its current state as if it's kind of like a finished product that's kind of like the complete wrong way to look at things ethereum for all intents and purposes is still kind of like in a beta version right or kind of like version one and then and i know that we had the eighth one and e2 nomenclature before but uh just generally like ethereum as it exists today is really a beta product right and that's because there are so many upgrades still coming to ethereum as a kind of like superfiz alluded to here uh to greatly improve it and obviously some of these upgrades are things like the merge and dank sharding and all these other roadmap items that italic has spoken about before and those

are not just small things they're major parts of the ethereum protocol like the ethereum protocol in my mind won't be finished for at least another five ten years i would have to say in terms of and what i mean by finished is that kind of like it's never gonna it might not ever be like 100 finished when like no changes are made to the base layer um or maybe it will be in like a few decades time or something like that but i think that you get to a point where it's kind of like well you know it's 90 down or 95 done let's make let's make much slower changes to this maybe we'll do a change every three years instead of every six months you know a hard fork every three years instead of every six months because the upgrades aren't you know critical they're nice to haves

um and kind of like when we reach that point that's when we can say that ethereum maybe isn't dumb but like is that's the vision right that is the original vision that we wanted to kind of like get towards this is what ethereum is and it's servicing kind of like billions of users by that point with the layer twos and everything like that so so that's why we say ethereum isn't kind of like done because as it exists today like it's not i mean we all know it ethereum as it exists today can't scale to billions of users it can't even scale to millions of users ethereum layer one at least and a film layer two can't either right now but with all these upgrades coming with all these road map items coming we're going to get to that point and the funny thing is uh a lot of the

uh god my camera keeps going out of focus sorry guys i think it's because i've got the stuff behind me but i'm just going to leave it um i i think i think the thing is is that if you're i think while ethereum can't scale to millions of millions of users or even hundreds of thousands of users because the fees just skyrocket neither can a lot of these other chains even if they've kind of like completely centralized themselves like they all have their own issues for example bsc the fees went up because it's just an ethereum fork right avalanche c chain fees went up again um solana fell over because it can't handle uh you know bots kind of like coming on the network and they're going to introduce a fee market to kind of like combat that which is ironic but i've discussed that before i won't go into

that but basically anything that you look at today can't handle that many users so nothing is finished nothing is done everything has to improve you know orders of magnitude from here to get us to where we want to be which is mass adoption and then and those improvements are going to come in different flavors you're going to have layer one improvements layer two improvements side chains that even exist like people sometimes say oh cigars are going to be completely obsoleted very soon i'm like no i don't think so guys because there are certain use cases that don't require ethereum level security but can still interact with ethereum can still kind of like uh work with ethereum and can still do things like posting a proof of their transactions to ethereum and then having their data stored off-chain right like a

look like a volume for example um and i think those things are definitely going to exist and keep existing for a long time so scaling is going to come in all forms in all kind of like shapes and sizes because ethereum layer 1 and ethereum layer 2 probably i mean as bullish as i am on both of those things they're not going to be ready for mass adoption for quite a while still like it the the thing is is that there's this debate right now oh no no right now but just generally it's like what should be on chain versus what shouldn't be on chain there are some people that think that everything should be on chain like so for just to give an example here say you're playing like a game of chess on chain should every move be recorded as a transaction on chain

well no it shouldn't be recorded on layer one ethereum as a transaction on chain because that just doesn't make any sense right uh maybe even not on a layer two but what about like a side chain what about something like a validium or something like an arbitrarium uh kind of um any trust chain or a polygon supernet right maybe it does right maybe it can be on chain in that because they're obviously much more centralized in ethereum and much less secure but it's a chess move right like it's not like it's a um it's kind of like this high value financial transactions so i guess like taking that view as well well you know you could still store the result of that chess game uh as a proof on ethereum layer 1 if you wanted to right so there are different hybrid ways to scale and i

think that's kind of like the pragmatic approach to scaling uh crypto in general not just ethereum and i think that we shouldn't be so tribal within the ethereum ecosystem either around different scaling solutions like the the tribalism is always funny to me because it seems to always come back to how does this technology or how as this product benefits each of the asset and honestly guys like i think that the more adoption we get in crypto generally is going to benefit the asset even if the adoption doesn't happen directly on ethereum layer one or even at layer two because the pie just gets so much bigger the pie is so small right now so so small like i think at peak during the peak of the bull market metamask had 15 million monthly active

users and that includes not just ethereum layer one it includes ethereum layer two but also the evm chains such as bsc um avalanche phantom all those chains right they all accounted for that so 15 million monthly active users not daily monthly active users at the peak of that bull market is nothing guys there are eight billion people on the planet right and and the thing is is that i would wager that that's a lot less now given how quiet the market is like it's probably only in a few million at best and even then i mean it probably even less than if you look at the prices as like a proxy it could be down as much as 90 that could be like 2 million or something monthly active users that we currently have left so that's nothing we are still so bloody early and it's good and bad i

mean it's good because it gives us a bit more time to build it's bad i mean depending on where you fall here it's bad maybe because like you you would have we would have expected to have more adoption by now but the industry is still young as i've said before on the refuel i think that the industry really started getting like actual proper on-chain adoption in 2017 i think up until that point like even with the bitcoin kind of like uh manias that happened in the past there wasn't really much going on i think 2017 is where kind of like you had the the the kickstart of like the on-chain users and things like that with ethereum and then since then it's kind of like been growing especially during kind of like the hotter periods of the market and if you kind of take that well then it's really only five

years old the industry i guess like if you want to take and even if you want to go back as far as 20 kind of like 15 seven years old so so to speak right 2015 when ethereum kind of like went online but i mean you can take it from anywhere i i don't think you should take it from when bitcoin came out in 2009 it just doesn't seem like the first three even four years of bitcoin was kind of like muted i mean really the only use case was silk road and there wasn't that many people using it in the grand scheme of things so i think that taking it from maybe when ethereum came online and when we can get do more stuff on chain is probably the better way to look at things there but anyway interesting tweet from super frizz that kind of like

prompted me to talk about all this stuff and you know maybe you guys have different opinions to me as i said you can always bring that up with me in the discord channel always uh happy to have a conversation in there with everyone all right so coinbase had a big announcement today uh that they shared here and they titled this post access web 3 with the coinbase app and the tl dr is that uh the post highlights the ability to access and explore web3 directly from the coinbase app powered by the new dap wallet and dap browser so you can use it popular ethereum dapps with coinbase's new wallet here which is really really cool this is kind of basically coinbase acting as a neo bank for different projects on ethereum so you can see here in this gif you load up your kind of

like um wallet you kind of load up these apps created some terms and then you get started right you can see all the apps that are that are kind of like listed here such as uni swap open c curve all the popular ones and then you kind of like interact with it directly using the coinbase app and as i was just talking about when it comes to mass adoption there's there's kind of like two major parts to it in my eyes there's the the kind of part where we need scale obviously like everyone knows that but then there's the part where we need uh ui and ux to get vastly better and i think coinbase is doing a kick-ass job here like you guys know i've been pretty critical of coinbase in the past for various different decisions that they've made but the one thing they do really

well i think is a nice user experience and that's why they're one of the top exchanges in the us i think is that they make it super easy just to buy crypto um you know for all their faults they do that really really well um and i've always liked the coinbase kind of like app the mobile app it's actually pretty smooth and pretty nice and now the fact that you can kind of like access all these apps all these apps using the the mobile wallet app is really cool so kudos to coinbase for this i think this is the kind of stuff that's going to onboard you know even more users than anything else could it in the day maybe maybe we get to a point where we finally flip this industry on its head and instead of like relying on bull markets to bring in new users we just

get new users because the products are that good it doesn't matter if it's bull or bear market the products are good enough to bring in those users i'm hoping we get to that eventually we'll have to see how it plays out but yeah very very nice release here from coinbase today so cloudflare announced that they have started experimenting with ethereum proof of stake so i think they're going to be running from what i understand here i think they're going to be kind of like running their own validators i think tim baiko kind of like asked about that uh they're getting their feet wet right now um and and they'll be using cloud cloudflare's own assets to do this so for those of you who don't know cloudflare is a massive web to kind of like uh i guess they do a bunch of different things but

kind of like you know a lot of you may have seen them they do like ddos protection that's where that's like consumer facing thing where you're loading up a website and then it says like protected by cloudflare and it's like checking to make sure you're not a bot or you're not trying to ddos the website cloudflare does that but they do a bunch of other kind of like internet related services uh and kind of networking related server networking related services i should say so obviously ethereum is right up there alley here and it's really cool to see them publicly announced that cloudflare itself is going to be kind of contributing to ethereum even more than they already have um they've kind of like announced you know uh previous things like the ethereum gateway and kind of like working with ipfs and stuff like that but now it

seems like they want to kind of like get involved with ethereum proof of stake which is very very cool this is not going to be the kind of like first or last company that does this guys like i feel like there's going to be so many of these companies that are going to be running validators for ethereum which is going to be super cool like i know stake centralization has been a topic of this a big topic of discussion recently but i think uh as i've said before i have two kind of like main points around that i think once withdrawals are enabled for steak we're gonna have like a great reshuffling of steak but kind of like secondly as we go on as i've said before the business opportunity for either creating staking services or just staking in general is so so big especially post

merge where the yields are looking like they're going to be seven or eight percent there's going to be a lot of people staking there's going to be a lot of businesses built up around that there's going to be and then post withdrawals there's going to be a lot of businesses that kind of like maybe do marketing campaigns and say hey you should switch your stake from this pool or this platform and you should come stay with us right they can't do that right now because obviously you can't uh kind of um i guess like change where you're staking they can do marketing around you know if you've got ages you should stake it sort of thing and they do that but in terms of like changing providers you can't do that right now you're locked in as soon as kind of like you stake even with the liquid tokens like just

because you sell your st doesn't mean that eat isn't stacked with uh with lido for example anymore yes you could go buy you know you could sell ust faith and then go steak with um with someone else if you wanted to uh but uh but it's kind of like a different thing there right so i think kind of like from that perspective uh the way i kind of like view this thing is that uh there's gonna be lots of these companies staking eth they're going to lead to more decentralization and distribution of the stake and post withdrawals there's going to be a lot of people vying for a lot of companies vying for the kind of like uh steak from different parties out there so i think taking all that into account is is going to be very important um and i think that we should all be focused on

kind of like paying attention to this sort of stuff and encouraging these companies to do it i think it's very very important all right so some big news out of polygon today so well i guess like a teaser of big news so polygon in partnership with ey is launching the first ever l2 zk live on mainnet uh polygon nightfall as you guys have known about now probably got a knife for i think i've discussed this before but i think it came back all the way back came out all the way back in 2018 then they joined polygon recently and now polygon is going to be streaming doing a live stream today at 12 30 pm eastern time uh talking about uh this kind of like l2 zk being live on mainnet which is very very cool to see uh i mean

not much to say here besides kind of like tuning into the live stream and i'll definitely recap this tomorrow on the refuel and see kind of like what what all the fuss is about but very cool to see this out of polygon so uh frederick here uh shared a blog post today called secured number four bug bounty rewards for ethereum core protocol development so you can see here that there's been a massive uh a bump in the rewards paid out to uh bug hunters or kind of like people that kind of like find bugs on ethereum main uh you can get a a reward of up to 250 000 and double to 500 000 for mainnet targeted upgrades that are live on public test nets so for example

if you find a bug in kind of like the robston test net after it goes to the merge transition you could earn up to you know five hundred thousand dollars for for bug depending on the severity here this is really a really big deal i think these but the the kind of ethereum foundation has come under a bit of uh i guess like scrutiny before uh from people saying you know the bug bounty's too low it should be much higher well here it is like this is half a million dollars that's up for grabs if you're able to find a critical bug and so it should be because if a critical bug in a kind of like ethereum mainnet targeted kind of like upgrades are found well i mean if that made it to main net without being found that could lead to a massive loss of funds for users right so

definitely cool to see a bit massive kind of like bump here in the bug bounty rewards if you are a bug hunter definitely go check out this blog post for more details alright so eric connor shared a interesting little tweet thread today about uh kind of like screenshots of the first ethereum newsletters so this newsletter issue went out on the 10th of february 2014 i think the 10th of february 2014 uh yeah i think so i think he's because okay the reason why i'm getting trumped up here guys is because the australian date format is you know day month yeah the american date format is uh month day yeah which it's always puzzled me but that's the kind of like way it is there so i don't know if this is the 2nd of october 2014 or the 10th of february

2014. uh i i i don't know either way it was in 2014. um i it should be the 10th of february since eric is american but yeah anyway let's focus on the content the newsletter itself is pretty cool it's funny it's very very short right this is talking about kind of like um the test net uh the ether pre-sale okay the pre-sale hadn't happened yet so this is the this is the 10th of february not not the second of august uh so talking about the test net the eighth pre-sale coming up the test net client so this is test net clients for like if you're in like genesis right and economic details on the pre-sale and then eric kind of like shares some more so you've got the third of march here uh the afrin 2014 another ethereum newsletter and then a third one here uh

i think from the third of july uh 2014 talking about kind of like uh ether ethan this and ethereal maintenance went live 31st of july uh 2015 and then the ether sale started in around this time in kind of like 2014 so yeah just cool to see some history here from eric he's i mean he'd been around since day one like he i always say to him like dude i like i wish i was around since day one like you were like it's just crazy that kind of like he's been in it for so long but yeah really really cool to see these kind of like original kind of like emails here uh so thanks to eric for sharing this all right so uh slingshot announced their mobile app today so you can reserve your spot on the waitlist by going to slingshot.finance.mobile i slash mobile

and earn an nft plus uh btc rewards so you can go to this link it'll be linked in the youtube description to sign up on like the wait list and then if you kind of like share a referral link you'll get bumped up the wait list now i shared my referral link on twitter today some people kind of like well like has your account been hacked and i was like no guys like i kind of captioned it saying that if i make any money from this it's going to be donated to public goods so i kind of like did it as an experiment i was like okay well let's share this referral link people are going to probably make fun of me but i'll do it anyway and then any kind of like money that i make from it i want to donate to public goods and i'll probably

just send it to the protocol guild that seems to be the easiest way to donate to public goods these days um you know besides the gecko and grant's matching rounds of course uh but yeah anyway sign up on the kind of like wait list here if you're using slingshot if not you know maybe you want to start using it so definitely go give this a sign up all right so for those of you who have been in the ecosystem for a while you'll know that eric and i eric connor and i have been doing a podcast for a long time now three and a half years since the end of 2018 and that's part of ether so it's called the internet ether podcast a lot of you i'm sure have been listening to it and still listen to it um over the past few months

we've been quite kind of like uh i don't know if it was slack um but kind of like very hard to schedule kind of like recording podcasts then we did our first one uh kind of like in in four weeks uh yesterday and it should be uh coming out today uh i guess like today technically we did it and it should be coming out today for you guys um based in kind of like the us and stuff but uh essentially we changed up the format so usually in these podcasts there were like weekly recaps where we'd go through the news of the week and talk about things that you know the major things that had happened but we kind of like figured that there was enough people doing that at this stage i mean obviously i'm doing it with refuel every day that we don't need to do that

anymore so we changed the format up to be kind of like no more structured news updates but just like casual back and forth conversation with me and eric about kind of like ethereum and about crypto in general and like the past kind of like weeks worth of of kind of like big events and you know if i had to say what it's similar to it's probably similar to the live streams i do with david hoffman where we just kind of like have a back and forth no real agenda or anything like that just talking about the biggest themes and honestly like it was super fun this is the first time eric and i had changed up the podcast in three and a half years and it was it was refreshing for us it was really fun it felt uh really really great and i can't

wait for you guys to listen to her if you do listen to the podcast so it'll pop up in your feed if you're subscribed but if not definitely give a listen to it because eric's got a lot of great insights um he's been as i said he's been in the ecosystem longer than i have and he brings a different perspective so definitely you know recommend checking that out if you aren't a subscriber yet but i think on that note that's going to be it for today so thank 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