zkEVM specification, L2 fiat on-ramps and more - The Daily Gwei Refuel #280 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel worry cap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 27th of december 2021 all right everyone let's get into it so hope you all had a great christmas over the weekend um on friday i just realized like pretty late that it was uh christmas eve and i'm like oh god i'm busy right now i don't think i'm gonna have time to do the refuel so i did an announcement in the discord channel saying that i'd do a refuel on monday and take a kind of like break on friday so yeah i'm back here not much has happened actually over the last few days obviously being kind of like christmas time end of year things slowed down considerably um so not much has happened on the kind of like uh projects

update front or anything like that so got a few things to get through today but not that much um i will keep doing the review all the way through um i think new year's actually what what what new year's eve is on a friday as well so it may not do i think it's this friday so i may not do it this friday um pro and then news days of saturday so probably won't do a refuel this friday but as i said there's not much happening right now the markets seem to be quiet too like nft seem to be catching a bit again i've noticed um over the last 24 hours which is funny to see but i think um pretty much january is going to be packed i think a lot of projects right now are waiting until january to announce certain things whether they

announce you know uh come out of stealth or they announce major upgrade updates or anything like that because right now it really is the skeleton crew online i've noticed that twitter kind of people on twitter are just um definitely kind of uh a lot less and i also noticed the biggest thing to happen was the sos airdrop whatever that kind of like was there i didn't look too much into it i just saw it and i kind of like claimed mine and sold it because i'm like oh well some some more eath um but uh but yeah anyway let's get into the updates from the last three days uh one thing that i wanted to talk about was this thing from yee zhang who is the co-founder and works in research at scroll now scroll's one of the zk teams that i've been speaking out about for

quite a while now um and he shared on twitter basically a research post from uh the a team at consensus working on zk stuff basically specifying uh the zk evm now you'll listen to me talk about the zkvm quite a lot on on the refuel and about how multiple teams are attempting this it's basically attempting to create a generalized uh zk uh sorry generalized evm platform built on zk technology so obviously we have that with optimistic rollups right now with arbitrary and optimism and a few others out there but we don't have it for zk yet we have generalized zk stuff like what star wars building with starknet but that is not evm compatible or evm equivalent or anything like that

is that is using their own language and um you know their own kind of um technology there whereas the holy grail that people are working towards right now a lot of people believe the holy grail is is this zk evm thing now polygon is working on this thing zk sync is working on this i'm sure starkware's been looking into this scroll is definitely working on it um and consensus here has put together a spec basically basically kind of trying to define what a zkvm looks like so that everyone's working off the same thing because you can have different implementations of it you know polygon could have their own zkvm and zk could have their own and scroll could have their own but it kind of just creates complexities it's kind of like okay well if we want a zkvm why not just all of us

build something to the to a speck right why not build something similar why not build it uh so that we can all kind of like know what's going on with that instead of reinventing the wheel so to speak so that's exactly what's being done here with this pdf that you can read by the consensus team so just download it here and kind of open it so this is a specification for a zk evm done by the consensus applied rnd team and you can say the names of the people that did this up here uh it's a 41 page kind of um specification it is very very technical i mean don't bother reading it if you don't know you know don't know the technicals of not only zk tech but also the evm and just general kind of blockchain uh low-level blockchain stuff i definitely didn't read this myself because i knew

exactly what it was i mean you can see all the equations and everything in here this is not for the at the average kind of like uh person to give it a read but as i just described to you what it was basically the abstract is and i can basically read out the abstract here to get a kind of like full breakdown this is basically in plain english what this uh what this paper is so in in kind of the specification the the consensus applied rnd team describes a zk evm arithmetization supporting the three following design goals support for all evm opcodes including internal smart contract calls error management and gas management ability to execute byte code as is and minimal prover time we strive to provide an error demand that respects the ebm specification as defined lithium

yellow paper we provide an original and comprehensive approach of the zkvm problem which is technically realizable using existing zero knowledge proving sys proving schemes so this is pretty exciting right because if i mean if this does work practically obviously it's just a paper right now but if it does work practically it means that we basically have the ethereum as it exists today the ibm as it exists today in a zk form now obviously zk tech is is amazing but still very early days and that's why people are working on this sort of stuff you can see here vitalik basically uh commented saying this is an amazing work are there any draft implementations because there's the paper then there's the implementations we obviously want to see the implementations i don't know if there's any implementations yet i think it's just the paper but i'm sure we're

going to see more and more of this stuff coming out over the coming months from the various zk teams because as i said this is the holy grail once we crack this once we get uh kind of like a generalized evm using zk tech it becomes something that a lot of people are going to use very quickly it's going to i think it's going to get adoption very quickly um and and i think the reason why things like i mean stock nets had some pretty decent adoption same with stockx and things like that but imagine if stock where zk tech was built using the evm right like how many projects would have already deployed there so and they've just got a different approach there which i actually think is healthy because we don't you know i mean the avm isn't perfect evm is basically i guess like you could say

solidity is basically the javascript of the crypto world of the web 3 world it is going to be around forever it's probably going to be dominant forever but that doesn't mean that we shouldn't be attempting to make other kind of um virtual machines adopt other languages and that's exactly what starkwear is doing zk sync is also trying to do it with their llvm polygons has a bunch of different kind of efforts going on there but really getting a zk evm to work in production is is a huge deal so yeah go give this specification a read if you're interested in that sort of stuff as i said very very heavy on the technical low level core kind of like devi stuff um so yeah just just a fair warning there so xerox mons uh basically for a little bit of a christmas present put out a

video here where they decided to vampire attack open c infrastructure with sudo swap so any open c link for an nft now redirects to pseudoswap if you change the p to a w making it onc one click to make swap offers and asset pages let you see what offers have been made now sudo swap is being built on i think zk sync uh last time i checked or at least it was experimenting with zk sync but you know the funny thing is with these kind of like vampire attacks on openc or at least kind of like these competitors to open seas that they couldn't be coming soon enough i think openc has enjoyed way too much of a i guess like a cruisy adoption cycle where there hasn't really been any competition for them they need

competition they they're not bad but they could be so much better than what they are and i think i mentioned it on the refuel maybe maybe a couple weeks ago or something how they actually planning to do an ipo and not issue a token i'm not sure if they're going to change their true in there because a lot of people are upset that they're not doing a token but if they did choose to do an ipo instead of a token i mean that really does up um uh does uh kind of like open the floodgates to a bunch of vampire attacks to come in and basically say well we're like open c but we have a token and get the community on board now whether at work is another kind of thing because vampire attacking can be pretty lucrative in the short term if you have a token if you

have a good narrative behind it but there's a lot more to running a product like open c than just slapping a token on it and forking the infrastructure and the code and obviously xerox mons knows this i'm not saying that they have done this thinking that uh onc is going to you know completely destroy opencv overnight or anything like that they are building a kind of nft uh ecosystem with pseudoswap and and stuff like that uh but essentially yeah i mean i think people get this false sense of security where they're basically like oh okay we can just easily fork this code we can fork this infrastructure and we can just run this thing with a token and we're gonna be the best and we're gonna take over the world that's just not how it works you there's so much more that goes into building a successful product and

service i mean not only is it really hard to break the incumbent's network effect even if you do a vampire attack uh with liquidity or whatever you do some liquidity mining or whatever you want to want to call and do some air drops or whatever you also have to have the experience you have to have the team there you have to be able to out compete the pers the um the ecosystem that your vampire attacking like for example the you know the classic example of a vampire attack is sushi swap on on uni swap now cj swap isn't a failure but it is nowhere near as big as unisop right like unisop is still miles bigger and that's because uniswop wasn't just this thing that sat around and stopped innovating they kept innovating they count with v3 which has been a huge success um you know they also did their

token i think partly in response to sushi swap and they at least they did it sooner than they probably would have liked which got a bunch of people back as well because they did the the awesome air drop and things like that but the sushi swap um kind of experiment seemed to run into a lot of trouble over time because it was very chaotic it was uh the the you know that we see kind of like um with how the team i mean the team seemed to not be as cohesive as they could have been they kind of like was a ragtag crew of people really good people really cool people working on it but in the end it just couldn't compete with with uni swap right because they vampire attacked basically the king and then the the king's like well i'm still king like

i'm still gonna keep keep building here we're still gonna keep building products out we're still gonna keep getting adoption and that's exactly what happened with with that so i don't think um open c can be vampire attacked uh without kind of like a strong team behind the vampire attacking happening and it has to be like an actual concerted effort but you know it could be the same thing with openc basically says well okay we got forked and they did a token and now they're kind of sucking liquidity away from us let's just do a token and it'll all be well and good but uh anyway it's still cool to see this still cool i mean i'm not against forking projects i think it's it i think it's fine um as long as it's kind of like an open source license or any uh things like that uh but yeah cool

to see these from xerox mods here so lucas from bankless put together this amazing threat on the best yields for your eth so this is a bunch of different kind of like opportunities that you have for earning uh a basically a yield on your eats so it goes through that the balancer st uh slash wrapped eighth pool currently gives a seven percent apy so this is current as that december 24th i don't know if it's changed since then it's only been three days but yields in crypto can change quite quickly but yeah balancer labs uh st weave pool is currently paying out seven percent eighth denominated yield mind you um and then you have uh yern which is paying at eight percent you have token reactor which is also uh or tokamak which is also paying out eight

eight percent up to seventy percent if you have toke rewards included in that ribbon finances stf covered core vault has 28 apy uh and then redacted he says yeah has uh over 60 api which is uh hint uses unison v3 and always outperforms ethernet bull market uh and and then you've got like a link to a blog post here with the best yields on etheusd and btc so these are all risky and come with their own kind of like trade-offs security risks some impermanent loss depending on what you're doing and obviously opt trading options is not risk-free can be very risky if you don't know what you're doing but it's really cool to see that there's like a much bigger ecosystem these days on earning on your wreath right like obviously you can do staking with your eighth and you can

earn five to six percent on your own uh we know just staking on your own or you can pay a stake through something like lighter and then restake your staked light oh in a pool on a liquidity pool and get more apy like that or you could do the same thing with rocket pool with your r eath and stuff like that but you know vanilla eat staking is about five to six percent ether nominated right it's not usd denominated he's 8th denominated which as i've explained before if eth goes up like 2x then that yield is basically um 2x because essentially you've got the the ethernomic yield and then you've got the price increase against usd as well which is really really cool um and you know there's going to be more opportunities as time goes on as well i mean there are plenty out there it just depends on what

your risk tolerance is and you know it's impermanent loss that comes into things as well if you're providing liquidity on stuff with options there's a risk of things expiring worthless and you know if you don't know how options work i suggest kind of reading up on them before getting involved there but this just speaks to what i've been saying a lot you know for a long time about how each is just this incredibly productive asset you can earn a yield on it you can obviously use it for fees you can kind of like stake it you can use it as collateral within d5 and if you're not earning a yield on it like that's the thing as well you can basically put your eth into like a money market borrow stable coins against it and then go uh earn a usd denominated yield or what you could

do if you're feeling especially risky put your eat in a money market borrow usd against that go buy more eighth you know leverage up on eighth and then put that eighth into something to earn yield on it or you could just kind of like borrow eight depending on what's most capital efficient and do all that sort of stuff there obviously there's liquidation risks there and all that all that stuff there so it's it you know it's more risky but the higher the risk the higher the reward right we all know that but anyway go give this a blog post to read it's published in bankless uh from lucas yeah it was it was a good one so kane from synthetics put out a tweet a few days ago yesterday i think where he said last week i sent an email out to six projects offering them a mentorship

in exchange for a commitment to launch on optimism i wanted to keep it to three but i honestly couldn't decide which ones to cut they're all great i'm going to turn it into a program and publish it and then he says l2 2022 uh and yes i will be encouraging them to all launch via alien protocol so kane has been doing a very big push to get more and more projects onto optimism which i think is solely needed i think you know there's three main things when it when i'm thinking about kind of like l2 adoption that needs to happen first one there needs to be a token right like all these ecosystems that you see get lots of tvl lots of kind of liquidity and users they all have token incentives this is just how we're going to bootstrap usage of anything l2s l1

sidechains whatever it is token incentives are the best way to bootstrap things so that's that's the first thing there second thing there needs to be a concerted push from community leaders to get projects to actually launch on these things the merits need to be explained to them basically it inherits ethereum security and decentralization uh while offering cheaper fees and they will get better over time and the ecosystem will grow over time and then you may get some token incentives as well added on top of that so there really needs to be a push there like i'm pushing it all the time kane's been pushing it a lot there's a lot of other people in the ethereum ecosystem that are pushing it but we need to keep doing that and doing it in a big way and and thirdly the actual infrastructure and the actual teams

building these l2s need to really push on the marketing and business development themselves they really need to do what polygons been doing i know are going to go on about polygons marketing a lot but they are kind of like best in class when it comes to this sort of stuff there's a reason why they have pretty much everything on the pos chain and that's a in large part due to their business development and marketing efforts they really truly understand that that's uh that's kind of like how to um to grow an ecosystem coupled with token incentives the um the automatic token incentives originally on the pos chain and then they kind of built up a base and now it's uh it's kind of been um uh steady growing and and steady growing and i think the polygon pos chain is actually the most used chain um even

more so than these other alt-r ones so it works right marketing business development they work really well goes hand in hand sometimes with token incentives like i think token incentives can be a form of marketing business development as well get a lot more attention on your project get a lot of people involved a lot more people kind of like on there and there's some sort of sticky liquidity that kind of like stays around once those token incentives taper off or go away completely so i'm hoping to see more of that in 2022 um as kane says here l2 2022 that's what we're all kind of like pushing towards as i said before i think within the next six months three maybe even three to six months all the l2s are going to do tokens especially in reaction to what's been happening with other l2s that already have tokens i

mean uh metis is a fork of optimism i believe they have a token and that token's gone pretty ballistic in price right um and and they have a a big army now on twitter that i've been seeing or people just basically shilling them or kind of like shillings chilling has a negative connotation attached to it but i mean it is in like kind of like talking about them a lot promoting them getting projects to deploy there all that sort of stuff so that's a strong thing um but also i think the technology is just going to keep getting better and better exponentially better in 2022 and we're going to have a lot more projects launched there which is going to uh get you know give um uh give users something to do because at the end of the day the users are going to go where the products

are where the money is where the incentives are and we have a really really awesome opportunity to do this with l2 and take a lot of those users back from the alternative l ones but not only that because as i said before the fact that we're fighting over a small set of users right now is kind of like missing the forest for the trees i think what we need to do is focus on the new users pouring in um and and that's kind of like where the centralized exchanges come in with their onboarding as well and i would say that that's kind of like the fourth pillar maybe there's more than three there's kind of like three major pillars for l2 adoption the fourth would be the centralized exchange bridging and fiat on rams which basically go hand in hand i think we're going to see a lot more of that

happening in 2022 as well to capture those new users not only the existing users that we have out there today so speaking of fiat on-ramps arbitram announced that banksar now allows users to convert their fear to crypto that can be used on arbitrary one so this is just another kind of uh i guess uh option for you guys if you want to go straight from fiat to uh arbitrary sorry to crypto and then to arbitram1 which is always awesome to see i mean these smaller ones are cool like i i think it's all additive but man these centralized exchanges are dragging their feet i really hope they're kind of like just doing it gonna do it in january and february i really hope it doesn't take until like mid-year for them to do it because it really

needs to happen i think even with token incentives on these l2s it's still not going to be enough to get the users that we want onboarded because the l1 gas fees are pretty high now obviously if there's token incentives people will be like oh okay well i'll just eat the l1 gas phase because i'm going to make it back with these token incentives but the token incentives can't last forever and and i you know i i don't think these l2 should be do like overly aggressive ones either they should do you know kind of like big ones get some kind of like headlines around they get some marketing from it but i don't think they should do it in in such a way that it basically just attracts like extreme amounts of mercenary capital that just that just leave after it's done uh but i also hope that they

have more kind of like bridges into these l2s before they even do it because if they don't what ends up happening is that i think it's just going to onboard the existing users rather than the new users and what we want are the new users um the existing users have already used kind of like ethereum they've probably already used many of the l2s at least tried them in one way or another but we need the new the new users the millions the tens of millions of people that will come on chain over the coming years hundreds of millions we need them to to kind of use these technologies and that's kind of where we get the the real benefits from but they won't use it unless there's an actual bridge from their centralized exchange to to the l2 so i'm hoping to see more of that um

in in 2022 and speaking of fiat on-ramps layer swap has now added zk sync to their portfolio so you can now bridge either directly from your binance coinbase kocoin uh coin hobby and more account to zk sync without losing on gas fees and it's fast you can go to layer swap dot io to try this out now layer swap i believe is a centralized service that basically is an intermediary that sits between a centralized exchange and the l2 and will basically take on the the cost for you because they're taking kind of like a fee on that it's an option for you guys to use but just be just keep in mind that it is like pretty centralized but at the end of the day like so is a centralized exchange so it's kind of like okay well

they're both centralized what's more risky depends what centralized exchange you're coming from like i would consider you know kucoin much more risky than a coinbase for example i would consider horby much more risky than a binance because it's based in china uh for example so at least i believe hobby is based in china or maybe or maybe korea but somewhere where there's heavy regulations then you know hobbies always been in the news about heavy regulations but still it's all based on your risk preference i mean pretty much everything in crypto is based on your risk preference but um this is just another option for you guys if you want to directly kind of onboard onto uh zk sync or other l2s from centralized exchanges so slingshot has now been deployed to optimism uh this is this is pretty quick this is pretty fast so really really

great to see slingshot on optimism here so uh as you guys know if you've been using slingshot before on the polygon pos chain uh you'll know just how you know how smooth it is to use they've got like dex liquidity with centralized exchange performance real-time charts for every token and a positive slippage and their video is always pretty cool here so you can go check this out on optimism just another way for you to trade on there i believe they're on arbitrary and i mean they're on polygon pos chain i believe they're on arbitrary as well they're going to be everywhere i mean this is the thing about these apps they're pretty much going to be everywhere but it's go and and the winners are going to be determined by a variety of different things of like the winning kind of um implementations on the chains i don't think there's going

to be that many there's going to be a handful for reasons i've outlined previously such as i mean the overhead is pretty extreme to maintain like imagine you're a developer or a team of developers or a dow trying to maintain like 20 different implementations of your your app and trying to update them and try to keep them on the bleeding edge it's not going to work so and and and really i mean it's not going to work for the end user either so i think what's going to happen is going to be a handful of winners uh and then you know that that's just going to be how how it is like how it's um in the mobile world like how there's only the iphone uh the ios app store and the android play store and there's a few other attempts out there i know samsung

had their own store for a bit and there's a couple of other smaller ones but they didn't really go anywhere um but it might turn out to be there's more than just two dominant platforms within crypto i believe there will be like i don't think there's only going to be two dominant l2s or two dominant l1 um but yeah see and then i kind of like think about this as well it's kind of like the l ones you guys know my views on on the l ones is that they all have to be sediment layers or else they're kind of useless like even the ultra scalable ones they're not going to be able to outperform ethereum's alterca system when it really gets going so for me there might just they might only be two settlement layers um uh you know i don't actually think there needs to be two i

think one makes enough sense but there probably will be at least two maybe even three but i i don't know i don't really see it but in terms of like execution layers the l2s and things like that there's going to be many of them but in terms of like the winners it's going to definitely be look like a um a power or distribution where 90 of the activity will just be on a handful of them and then the rest of them will kind of fight over that that last 10 percent there so mahalo from polygon announced that stephen curry uh has joined the polygon family with an nft collection so this is pretty cool a polygons nft uh drops have been pretty big lately they've had dolce and cabana they've had nfl they've had draftkings macy's and a bunch of other brands launching on there so as i said

guys this is their business development team at work this doesn't just happen right it's not like these big companies have all gone to polygon and been like we want to do nfts on you some of them maybe but a lot of it's got to do with having like a dedicated business development team or teams that go out there talk to these brands build relationships and actually get these things to launch on polygon instead of somewhere else like these kind of like big companies they aren't just looking at one solution they look at many other solute many different solutions and whoever has the best pitch and whoever has the best business development team and who is the one that onboards them so polygon really does i mean immutable x is also another example of a great business development team that has been able to get big brands on board such as

tick tock and and other ones like that um but polygon yeah i mean he's just killing it in that in that kind of area too so it's so cool to see this i believe i think i'm saying his name right stephen curry or maybe it's stefan curry i don't follow the nba but i believe he's a popular nba player um but uh but yeah i uh i i this is really really cool to see here from uh from polygon so gnosis safe has now been deployed to optimism as i said last week guys optimism removing their white list means that the floodgates have just been open we're going to see so many things deployed you know slingshot now gnosis safe which is a staple for a lot of teams before they can actually deploy to optimism because they use nurses safe as a multi-sig uh for their kind of like um

for their admin keys that they use you know if they're early stage projects so nurses safe being on there means that a lot of other projects will probably migrate across now i can't wait to see them all go across as i said i think january q1 in general is going to be pretty big for crypto especially for ethereum and especially for l2s we really are just on the cusp of like a huge year for failures i am very excited for 2022 for ethereum i know that 2021 has been a weird year for ethereum where it's funny because we had like a massive run uh from like 700 bucks to 4400 in may uh and to may at the start of this year and then we had the crush and then since then ethan's kind of like hovered around four thousand dollars i mean gone up and

down hasn't really done much since may in terms of price um but it's done a lot on the fundamental side of things but at the same time there's been other l1 ecosystems that are pumped a lot in in price because of ethereum's kind of like quote-unquote failings in the scaling department but uh i think because ethereum has been trying to scale the the right way right the decentralized way it's taken longer but we're finally there and i think 2022 is going to be the year where ethereum actually takes the scaling narrative back in a really big way and allows lots of users to onboard and experience ethereum without the expensive fees and you know the funny thing is these other l1 are allowing users to experience ethereum without the high fees because they're evms right like for example the avalanche c chain is an evm chain

phantom is evm compatible as well there's a few others out there that have ebm compatibility it's basically all ethereum and just on it's not the ethereum blockchain but it is the ethereum experience so you have your meta mask you have uh you're kind of like um you're either scan like block explorer you have the same kind of uh uh ux just generally from there in terms of how to do transactions and gas and all that sort of stuff so i i think people are going to really enjoy the same experience on optimism and arbitram uh and we also need to kind of like keep pushing the virtues of how their d you know these things inherit ethereum security and decentralization they are better than these alt l1s from that perspective and i think we will especially when they have tokens man when these things have tokens it's going

to be such a narrative shift it's going to you know you're going to break your neck just trying to catch the narrative shift because it's going to go by so very very very quickly uh and you know from one day to the next it'll just be oh ethereum scaling you know buy this token and all this sort of stuff so so yeah anyway cool to see nurses save on optimism here and the last update comes out of diversify so if you're looking to buy crypto with fiat on l2 eth well you can because uh diversify is integrated with moon pay so basically moonpay is acting as a fiat on-ramp for diversify's l2 ecosystem so just another one of these fiat on-ramps they're all coming they're coming in waves everyone knows that we've needed them i'm actually really surprised that we're getting the fiat on ramps earlier than

we're getting the centralized exchange on rams because as i've said to you guys plenty of times it's such low hanging fruit for these centralized exchanges to do this it's an in-demand thing their customers want this people are asking for it and yet they're dragging their feet whereas these um fiat on ramps like that aren't centralized extra i mean they they kind of are centralized exchanges but they're not like the coinbase or the finances of the world they're kind of just like a a fiat portal so to speak rather than an exchange they're just beating them to the punch so they're going to get a lot of users out of this i believe um and and also the l2s that they're supporting are going to get a lot of new users too and that's what we love to see when we see these kind of like fiat on

ramps and and stuff like that but anyway go check this out if you're a user of diversify or want to be a user of diversify it's an easy way to get onboarded there but i think 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 the video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone