Aave Pro detailed, MEV drama and much more - The Daily Gwei Refuel #157 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 5th of july 2021 all right everyone let's get into the news from the weekend so actually just before we do that on friday i uh published this piece in default pulse's yield farm uh newsletter called uh the bullish case for governance tokens now this is behind a paywall right now you will have to kind of subscribe to the yield farmer newsletter but it will be available for free later on this week and i'll definitely share that on twitter once it's available but if you do have a yield pharma subscription or you want to subscribe to it um you know you'll be able to read this and i mean i'm pretty proud of the piece i thought it was um pretty convincing

myself and mind you but something that i've you know outside of the delegate newsletter for once but uh i i had a good time kind of writing it and i thanked d5 possibly given the opportunity to to put it together as well so if you haven't read it yet definitely recommend it uh but you can wait for the free version to come out if you don't want to subscribe uh later on this week so um i we meant to talk about this last week actually i think i did but i i think i was not confused but i wasn't sure when this was gonna happen but i put out a tweet kind of yesterday where i said yesterday a couple hours ago where i said the main net date or block number for london uh which contains the ip1559 is expected to be discussed and possibly

announced at this week's ethereum called devs meeting which is uh taking place on july 9th at 1400 utc here just 2 pm utc now this is basically the the regular all core devs kind of like uh meeting that they do every couple of weeks there's an agenda i forgot to link it in my tweet but it's somewhere in my chrome tab somewhere um but uh basically yeah it's on the agenda right to discuss and you know my my guess would be if we get the the earliest date it the earliest it's going to be is august 4th uh and then after that it'll be like in weeks after that so if it's not august 4th it'll be august 11th if not then august 18th you get the idea i'm hopeful that it's going to be august 4th considering that we've had two ma our test net deployments of of uh london

so far and it's gone extremely smoothly obviously on rinker b and gurley there and then we have oh sorry roxton and gurley and then we have rinkaby happening in the next couple days and if that goes smoothly i see no reason to uh kind of like not do an august 4th uh mainnet date now that would be really really cool really hype but even still like i've said this multiple times on the refuel where i basically said that even if the date was to happen on august 11th or even august 18th i really don't think it's a big deal i don't think the market's gonna care i don't think many people are gonna care at all i think you know we've waited so long for it as i've said every time it's just not a huge deal plus we rather get it right and we'd

rather you know the the core devs and researchers feel comfortable with deploying it before doing so and that's basically it like it's funny because i always think about ethereum governance and how it all plays out and you know sometimes i get some troll comments when i say things like this where people are like oh you know ethereum centralized because the core devs can decide when to upgrade the network it's like well no no the core devs don't decide when to upgrade the network they just set a a block number or a main net date block number that they're comfortable with for the upgrade to go through but one f like london and all the ips within it obviously aip1559 being the major one went through two plus years of scrutiny so it's not like the core devs just woke up one day and said okay well you know we wanna put one five

five nine on mainnet it's gonna happen within a month if you don't like it then piss off we're in control that's not what happened at all and i i know a lot of you listening to the refill don't fall into this bucket i hope all of you don't fall into this bucket because it is not one that i think that it comes it's not an intellectual bucket to be in because i i showed the other day andrew uh put together or cyber hokey put i showed a tweet um of the ethereum governance process he put together a really nice flowchart there and it was it was huge i mean i couldn't even show it all in the video because it was so big uh and you know that's basically how it works and it's it's very it's very messy like don't get me wrong it's it's frustrating it's messy

it's uh it's definitely um something that i kind of view on and i'm like uh we could literally fix all of these problems if ethereum was just centralized and when i think about that it's even more hilarious if you think about pretty much every problem within crypto it can be solved with centralization uh if you want to solve anything just add a sprinkle of centralization to it and you've and you've got like the solution but the whole point is that we're trying to solve these problems without doing that so from that perspective we don't want to centralize ethereum's governance process we want it to be like this and as frustrating as it was that it took erp 1559 two plus years to get to mainnet it is still an incredible achievement in my mind that we got such a major upgrade in onto maine now i mean obviously it's

not it's not happening yet but it's gonna happen soon um given like there was a lot of pushback on it originally uh there was a lot of um you know people saying oh well we need to do thyroid testing on this because such a major change which is fine but if you imagine something like this in like a small i guess like i wouldn't say like a large corporate but like maybe a small to medium-sized corporate business this wouldn't have taken two years to happen because it's that's centralized right it would have it would have happened very very quickly you would have had a project manager assigned to it uh they would have managed it all they would have fed it up the chain and then obviously they would have had like um you know whoever's up the chain say yes okay let's do this and there's

obviously hierarchies still incorporate environments but it's different it's very very centralized whereas within ethereum we have to get like community consensus across pretty much the majority of the ecosystem before uh the ecosystem would be happy putting one five five nine in and there are a lot of people who well maybe not a lot but there is definitely some people that don't want one five five nine going in and they they think it's bad for the network they think that burning eight is bad and that's fine they have they they're it's fine for them to voice their opinion but at the end of the day the majority of the super majority of the network sets what ethereum is and if you're part of the minority then you have the choice to either just go along with the majority or you can kind of like fork off into

your own network and try to build up your own ecosystem from there now in saying that within ethereum it's very hard to do that obviously because there's a lot of dependencies the ethereum network is sprawling it is not just the blockchain but it's all the apps on top of it all the assets and things like that so i i think i've spoken i i spoke about this at length in one of the refuels of it's probably a couple months back now where i basically described how ethereum is essentially unfuckable at this point and i don't know what that's going to hold for the future i don't know what's going to happen in a truly contentious kind of time where uh you know it goes even beyond what happened with prog power for those of you who are around for that last year prog power is extremely contentious but

the thing is is that that didn't get very far along i don't think i think that got to a point where it basically hard stopped and we kind of like killed it off as a community because we're like this this is not something we want but you know what the net there's there's never inevitably going to be other kind of governance challenges there's going to be people trying to capture governance so it's going to be interesting to see how the ethereum ecosystem manages that uh considering there's so many dependencies on top of it now and an ethereum as a network is not only defined by uh the i guess like full nodes and the economic nodes and and things like like big the bitcoin community network is defined by the same things but it's also defined by its rich rich app layer that sits on top of the

network itself so it's going to be interesting to see how that plays out but anyway i'm looking forward to this week's uh core devs meeting to see if they give a date on there they may not even give a date maybe they'll there they think okay we we want to kind of like wait wait it out i i suspect that they're going to give a date and as i said like i'm going to assign a probability of maybe like 80 it being august 4th uh and then 100 by august 14th i don't see them extending that out to august 21st that seems very very long and um and that's that's obviously dependent on the final test net going well if for some reason rinka b blows up uh with with london um then it's definitely not happening on august 4th let me tell you that much but there's no

reason to believe it will considering the last two test nets went off without a hitch so another kind of a bit of chatter over i guess like the weekend was around mev and bitcoin is for some reason discovering that mav is a thing on ethereum after how many months or even a like a year plus at this point that the ethereum ecosystem as a whole has been like very focused on it um and you know i think two plus years where a lot of the top researchers have been really deep down into the mev kind of rabbit hole here but for some reason bitcoin has just discovered it now and i say for some reason but i know the reason it's because they don't pay attention to anything ethereum unless it's fed to them through some kind of watered-down narrative machine but anyway i won't go on a rant about

that what i did want to talk about is how ironic it was that they started talking about mev and there was this massive thread that i'm not gonna i'm not gonna go through i'm sure you'll know which one i'm talking about that someone bitcoin maximus of course was just calling ethereum broken because of mev and the the grand irony was that he posted that thread while there was an mev summit going on with ethereum's top researchers it was eight hours plus of talks and videos and and you know the ethereum ecosystem coming together and saying we know mev is an issue uh let's fix it like let's work on it let's see what we can do with it and it's not just that kind of like summit it's been basically years of this years of research and development we had flashbots come out as a kind of

like um as a combination a lot of that research that's helping with a lot of things and there's more eyes on the mev ecosystem than there ever has been there's more people talking about it more people getting involved and just the irony of a bitcoin are saying ethereum is broken because of mev because they they just figured out what mav was or they just did they just you know became aware of it now is hilarious to me but enough on that topic there were two other threads about this uh one from aldogo diablo here uh orfubulublu i think that's how you say his name i love saying it um where he says tridefy solves mev by making it illegal with d5 we are trying to find different ways to avoid mev without regulations and laws which break mev is inherent to any system where a profit can be made from

privileged access to a systems operation no blockchain has solved mev uh now this goes back to what i was saying before about how you know if we just if we just introduced centralization that being regulations and laws into you know the ethereum ecosystem we could solve mav too uh but in saying that um uh on top of this uh trad fly technically yes does make mev kind of like illegal in some sense but it also makes it even more privileged than uh what kind of like ethereum does ethereum doesn't kind of give any one set of people like specific privilege or rights to mev they basically you know anyone can do anything or theorem there's no central body saying okay well you can do it or you can do it it's obviously skill based and you know it's it's very sophisticated but it's still

open to anyone whereas within trad fire and estate dot f um notes here mev is actually very legal but uh it basically goes to like institutions and businesses because for example robin hood outsources its mev extraction by selling its order flow to citadel which is a big uh trading firm which promptly proceeds to front run it so i mean some of it's illegal a lot of it can be legal um but it just depends on like what kind of lens you're looking through it i mean it's probably illegal for uh non-accredited investors or individuals to do it you won't be able to kind of do it like front running and spoofing and all that sort of stuff on exchanges if you get caught doing that as an individual uh and not part of the normal kind of like flow of things then you're definitely

gonna get stinged for that you're gonna either get like um a fine banned from the platform or in the worst case arrested or taken to court in some way so uh that's another thing to consider is that like no no blockchain has solved mev uh tradify solved solves it by centralizing uh and uh uh we are trying to find different ways to avoid mev in a decentralized fashion and that's exactly what that summit was for uh and you can go check out that summon it's just like mev dot um wtf i think i mentioned it on last week's refuel uh but this is the power of a of an open ecosystem right and this is the power of ethereum and what i've spoken about so many times before in ethereum we don't just brush our problems under the rug we talk about them very openly

from what i've seen no one is ignoring mev um no one that i know at least no one is saying oh it's just gonna go away on its own we're treating this like the serious problem that it is and we're trying to to fix it or at least minimize it as much as possible and you've seen that in many coming many many different forms and the mev uh summit videos do a very good job of breaking these down i managed to watch some of them over the weekend uh they were really informative and really educational so i highly recommend going and kind of viewing those as well uh but on that note as well it's just again the irony with bitcoins is that they actually do sweep problems under the rug and they don't actually fix things that are big problems in bitcoin and the

biggest one to me is the dwindling security budget of bitcoin because with bitcoin you know every four years there's the harvening right and that basically reduces bitcoin's security budget by half like the btc block subsidy goes down by half and if the fee revenue or price doesn't make up for that then obviously uh it becomes less profitable to mine and less miners are on the network and blah blah blah you know the rest there so long term i think that's a huge issue for for bitcoin i don't think they're afraid revenue is going to make up for the block award and i don't think the price is going to go up as much as it needs to to make up for that but that's a kind of whole another discussion there uh the last kind of uh thing that i wanted to cover with i got to do with

mev is from jacob here which is this is an awesome tweet thread i you know it's a longer thread here but basically the first tweet says whether it's mav performance of unisof v3 or economic exploits let's take a minute to recognize that a transparent financial system means that people all around the world with nothing more than an internet connection can openly examine flaws and collectively work to resolve it this i mean this whole thread is is amazing i loved this thread and that's just a very powerful tweet because you know i think a lot of people take the transparency in d5 for granted and how quickly things can get fixed solved worked on developed you know upgraded it takes so so uh so so much less time than it does in tradify and this uh i guess uh this tweet from jacob kind of encapsulates that where he

says think about how incredible it is that less than 24 hours after an exploit there are dozens of twitter threads postmortems and blog articles flush with data revealing the precise floor what does that look like in tradfoy a backpage bloomberg article two years after the event and this is so true like i i hadn't even really thought about this too deeply before but this thread from jacob kind of had my my mind kind of racing here really when you look at all the exploits that happen in trad fire anything it comes out normally in kind of like some court documents that are made public because the the state is suing some kind of like financial attrition for something or or kind of like doing an audit of them it it takes such a long time for any of this stuff to come out in the

traditional finance world but because everything is hyper transparent within ethereum as soon as something happens like as he said like as soon as a an exploit happens within defy in less than 24 hours we have so much information about it already and everyone that uh wants to can can look at that information learn from it see what they did wrong see what not to do uh you know kind of warn users about it and kind of like the education of the ecosystem just rapidly goes up and i guess this is just why another reason why defy is going to kill traditional finance and it already i mean they've already lost like in my mind they lost like a while ago but it's obviously going to take some time to kind of take over traditional finance but this is just one of the many reasons why they've lost there is no way

that once um kind of i guess regulatory bodies clue into this um in the in i guess like um in nation states are going to think to themselves well we don't want this and i know people say oh well we're trying to build this stuff so it doesn't get regulated but as i said before on the refuel there's a lot of uh i guess um middlemen or not middlemen but like proxies that are gonna sit between d5 and the end user that people are just gonna use because of convenience and that's fine but those entities are going to be regulated so if the governments and nation states see that okay well we can actually um you know have better visibility over this stuff and we can ensure safety and security much easier than nutritional finance system then they're actually going to uh kind of usher in this a lot faster than

than we think and it's funny because you think about like a trojan horse where we have d5 sitting in the horse and we dress it up with some kind of nice you know transparency and security but really what we're doing is we're just integrating d5 with the rest of the financial system uh and overtaking the financial system so i think that that that that's kind of like um the way it works there but yeah i suggest going and reading this whole thread it's one of my favorite threads in a in a long time actually like it just got me thinking about so many different things and i was kind of buzzing about it on the weekend so definitely go check it out so ben edgington posted his latest what's new in eth2 newsletter packed full of updates uh and i wanted to focus on one thing was this

editorial that he put together where he said that uh there you know i discussed how prylabs is um announced last week i think or maybe the week before that they're dropping kind of the eth2 terminology from their i guess like blog posts and github and things like that and i discussed how last week i think i said that i get it obviously because it's all one ethereum uh and eth2 might be considered kind of like harmful as has been here because it confuses people but you know ben argues that it's been part of i guess the ethereum consciousness for summer long such a long time now uh and it's it's a really great way to differentiate between i guess like eth1 and eth2 and it's just a thing that's that's gone very far like a term that's gone very fine everyone

is familiar with it and knows it and i agree with him to be honest i don't think that i'll be dropping it anytime soon i think the only real time that we should drop it is when uh i guess like we merged one into e2 because then we can just call it ethereum and then from then on it's just fine like everyone's on the same page of ethereum there's no more needing to split it up into eth1 and eth2 so yeah i just wanted to quickly mention that but also in this newsletter he's got his usual upgrades around the beacon chain uh the upgrade coming to the beacon chain the first one alter which is going to be deployed to the pyramid test net by the end of july uh and we'll probably see this in maybe uh august um as he's saying here on on main net on the beacon chain uh

there's some great explainers out here where he links to a bunch of different blog posts um media post research all the regular stuff here so definitely go check this out and if you it's that ease2.news if for the permalink if you haven't subscribed yet you can if you head here so andre dropped a bunch of different projects uh on twitter over the weekend and they're not full projects it's just code for for the ones that he was working on so there's one two three four five of them so the first one is called levex which is leveraged on chain spot perpetuals with any collateral's margin um then he says this one has an unpatched exploit so be careful it's obviously very raw code here the second one is protection markets which is an on-chain pay-as-you-go insurance with dynamic pricing based on

utilization the supply demand anyone can create any protection market the code provided ensures uni swap sushi swap impermanent loss eye protection there ave delicate which leverages abe's native uh credit delegation to easily integrate users available debt into any product below example is yarn vaults but can be anything uh curve gauge metapol where uh this one he says this one is copyrighted but good for inspiration new metaphor that natively earns crv rewards for being an lp auto stakes lp tokens into the gauge and distribute crv rewards to lps easy way to collect crv awards without a gauge and then finally and this is the one he's actually going to be personally releasing fixed forex which is the one i covered last week so i won't go into details

about this now basically a decentralized kind of foreign exchange market um what i wanted to focus on was just how cool it is that andre is basically open sourcing putting out all of this code for people to create projects out of if they want to like he's just built it and being like okay i don't want to kind of like turn it into a real app i don't want to have to manage it like obviously he's very busy as it is so he's just giving it to the world for free and this again is another huge advantage of ethereum of d5 over the traditional system is you have people like this just giving away stuff for free and who knows one of these products could be could go on to be become the next billion dollar d5 protocol you know and it can happen very easily

too it's not like you have to basically uh take a gamble here it's it's it or or it's um you know it's not like it's a it's a gamble at the end of the day it's definitely something that can happen we've seen it happen plenty of times before within d5 so yeah anyway if you want to check out all these projects they'll be linked in the youtube description i think it's just code for now i don't think you'll actually be able to see any kind of like uis or anything for them yeah it's literally just links to the smart contract so if you're a smart contract developer or you can read them definitely go check it out um but yeah there's no uis or anything for these these projects just yet so william mitsuda here announced a new uh a block explorer called autoscan which is an open source blazingly flask

laptop friendly ethereum block explorer built on top of the eragon ethereum client now i think this is still in heavy development it is very alpha as they say here it's just code with like a demo video i'm pretty sure you can run this code locally but i don't think yeah you have to install it and run it locally but i don't think there's a there's a kind of like um a ui for it uh on the public web or anything just yet so yeah if you if you're familiar with this and you're interested in doing it you can go and do it otherwise there's a video here which i'm showing on on on the re on the on my video that i'm recording right now of what it looks like it looks very similar to either scam but obviously they're trying to be open source they're running it on the eragon

client which i've spoken about before and honestly the more block explorer is the better i love ether scam but i think that the community or the ecosystem is still definitely very too centralized around either scan i would like to see more block explorers particularly open source ones that anyone can run going to be put out there because a lot of people are blind without eater scan we don't want that we don't want a central point of failure in ether scan and they don't want that either like don't get me wrong they're an awesome team it's just that they out build every other block explorer so everyone just uses them um and they also make block explorers for other uh kind of like chains not just ethereum as i've discussed before but yeah it's still cool to see this uh from william here i'm really excited to

to kind of like use this once there's an easier to install kind of like maybe an executable or something like that on my windows machine rather than a bunch of uh i guess like manual installation and obviously it's still in an early alpha phase so there's gonna be bugs and things like that but you can go check it out for yourself if you'd like so samuel from rarity capital put out some free alpha the other day we've got two links here where he says follow token lists to see who is ready for layer two now you can see here this is the arbor trim token list and you can see which projects are already on uh layer two so you have alchemy which is the infrastructure um uh maybe is this the infrastructure or maybe it's a project that i don't know of that's called alchemy but anyway

they're here balance is here uh capital finance i'm going to go down the list here cream curve uh what other ones uh no says graph obviously chain link uh mcdex maker um so yeah i mean like when you kind of look at these things you can kind of see which projects are either like planning to or have already kind of deployed like unisop of course to arbitram usdc uh so yeah wrapped bitcoins on there of course and there's a bunch of other ones like you're in finance too so really cool to see that and then optimism is a bit uh bare it's just got synthetics here right now um but i do think there's other project projects deployed there i just don't think that they've uh probably deployed their token just yet i think definitely uni swap would be

on there by now i believe um but yeah we'll have to see i'm hoping july is a big month for these layouts who's like i know that i keep talking about them i know that i keep teasing them i know they're coming soon but i think that arbitrary went the right kind of path by not giving them a main net date they delivered delivered on their dev main net but not giving a public main net date and same with optimism they just said july but if they miss july i mean oh god just you know dates as dates and software engineering uh you know name a more iconic couple at the end of the day so yeah i still i still have hope that july is going to be a nice big month but it's been good that the gas fees are relatively cheap on ethereum anyway so

it's not like this is like super urgent at the moment it's definitely uh very nice to be able to do some five way decks trades over the week over the weekend rather than having to kind of like do it for like 50 way back you know just a couple months ago so but still long term obviously we still need layer two so i'm hoping in july we get the uh the arbitrary optimism going live with the public mainnet here so uh noah here put out a screenshot of basically an email that was sent to attendees uh in the zoom call called next steps in institutional d5 and this screenshot details what's called aver pro and albert whatever pro is it's basically using a battle tested and exclusively audited v2 smart contract system

that adds a layer of whitelisting so that only kyc participants can access the rv pro pool so what that means is that rbo pro i mean it is basically an uh a kind of like a solution for institutions to use to access uh i guess liquidity on rv now this is going to be very similar i guess the compounds treasury product that i discussed last week where it's definitely going to be very centralized kyc regulated all that sort of stuff that institutions need um but you know what what i wanted to go through is kind of like all the different points here and how they kind of like differ to the public uh rba protocol so the second point is initially the rv pro liquidity pool will consist of only four assets bitcoin ethereum usdc and are there

as those are the ones that institutional demand is is concentrated on right now the rvo pro-liquidity pool will be segregated from other lava other rv liquidity pools like for example the rvv2 market and the rv polygon market so and this is yeah as as the states here totally separate to the public are their markets it's not there's not going to be overlap here you're not going to have to worry about it there's no kyc coming to the public pools or anything like that um the next point rbo pro participants will be entities such as institutions corporates and fintechs that will be kyc and onboarded by fire blocks which is a solution that services these kind of uh kinds of clients um uh last second last point here fire blocks will also implement aml compliance and anti-fraud controls on this market so

as i said this is something that institutions need before they can play with this sort of stuff so this is a necessary evil but the final point is the one that's most interesting arveir pro will be decentralized and governed by other governance so iv token holders will still be able to gov govern this new rba pro pool uh i thought that was interesting because what happens when they they kind of do something that the institutions don't like or the institutions don't agree with or you know the institutions can't uh kind of like get on board with because of some kind of regulations i don't know it's going to be interesting to see how that plays out but i'm glad to see that it's still going to be part of the rv kind of like family and the other kind of like a governance system and it's going to be very

interesting to see how that plays out i'm not sure if compound treasury falls under the same kind of scope where comp token holders have governance over that i don't think they said anything about that but it'll be interesting to see how it plays out for other and then how it plays out for compound as well so yeah i mean this is huge news obviously as i said the institution of d5 is just getting started we're going to see more and more of this happening over the coming months and i don't think it takes away from the decentralized nature of the public pools and everything like that i think these kyc regulated blah blah whatever pools uh are fine um they're a necessary evil and this is how you get the institutional capital into defy so uh trent. trent trent posted about the beacon book again here where he says

you can sign up to this email list to get important updates about the beacon book now i've spoken about this in plenty of times i've ran a giveaway in the daily grade discord congrats to the winner there i uh uh that they get a free book here but they're planning to launch the book in two weeks there's going to be there's there's going to be a limited amount of these books i don't know the exact number but it's definitely not going to be uh limited amounts again there's gonna it's gonna be like a bidding system i believe like an auction system but if you wanna get your hands on one i definitely do uh you can go to this email list sorry to this this doc here to sign up to the email list and you'll get emails about when the auctions kind of launch

uh when they're closing all that good stuff i definitely expect this to to make some noise uh this is an amazing book i mean i saw some screenshots of it on twitter and things like that and i spoke to trent about it it it is the quintessential book if you want to be able to get of like a behind-the-scenes look at the e2 research and development how it all came together and kind of like what it looks like in the future right final shout out here is for the ethereum name servers who are looking for uh two positions looking for people for two positions right now a governance lead and integrations lead if you want to be part of the ens team or want to help the ethereum name service and work with them this is definitely uh two roles that i you know think of

would be very interesting governance leader and integrations lead i mean ens needs to be integrated with absolutely everything so you'd have your work cut out for you with integrations uh governance i'm not sure what's gonna what what this kind of like um entails they do detail it here where they say this person must have first hand experience with dows and the governance of other projects um but you know the funny thing is that right now ens is i think like a 507 multi-seek or something like that that's their governance but what would happen um if they like are they going to issue a token like is it going to be an ens token to this dow or is that they are just going to be um some kind of like on chain uh thing that's linked to someone to people's e s names and stuff like that i don't know

what it's going to kind of look like but definitely if they're looking for i guess like someone that has experience with dowels it's going to be interesting so if you want to apply for either the either of these roles you can uh definitely check out this thread and kind of i think you just reach out to them on on twitter here but anyway that's it for today's episode i think so yes thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone