Base open for everyone, General L2 chat and more - The Daily Gwei Refuel #637 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Daily way refuel where you cap the latest news in ethereum ecosystem I'm your host Anthony it has the 10th of August 2023 alright everyone let's get into it so bass is officially live well as of yesterday August 9th it is officially live obviously it has been kind of unofficially live for about a week and a half now maybe a little bit longer than that we saw all the craziness with uh the Bold meme token and things like that but now that it's open for everyone uh and I guess like bass has their on-chain summer initiative ongoing here a lot of people have been bridging in a lot of people have been uh kind of minting these nfts on there you can go to this website on chainsummer.xyz and mint these nfts you can meet the base day one nft I think

there is uh yeah you still got 21 days to Mint this I think so you can go check that out for yourself there is I from my I guess like um from what I can tell like most of the uh popular apps are already on already live on base it's actually pretty amazing how quickly everything got deployed uh to base and you know I say it's amazing but at the same time it's it's not surprising because a lot of these apps uh I mean are pretty easily portable right because they're all built for the evm they're all built in solidity uh already so they can just quickly be ported from ethereum layer one or another or a different evm kind of compatible or equivalent Layer Two are straight to base and that really is the superpower of these evm l2s right

and that it's kind of like we had the evml ones like Phantom and the Avalanche C chain uh back in 2021 and BSC of course by net smart chain where essentially the things could be forked on or just redeployed on these networks very easily well now we can do it with l2s and as we all know with l2s it's uh it you know obviously the end game for the l2s is for them to be much more secure and much more decentralized than these kind of like alternative l1s or side chains uh so you know developers are quick to deploy there people are quick to jump to jump on there they click the bridge from ethereum and they get to benefit from those obvious see cheaper fees and faster transactions now um the the thing about the fees is always a funny thing because sometimes

people will say oh you know the L2 fees they're still pretty expensive they're not as cheap as they um you know as they can be sometimes you'll pay like 10 20 cents for a swap or something like that it's like yeah okay like obviously when I say cheap I mean relative to ethereum layer one right but obviously they're not the cheapest fees around but post erp4844 they're going to get considerably cheaper and then even um after that when we do things like increase the uh L1 gas limit when we have statelessness and vertical trees and stuff like that uh also the l2s themselves getting cheaper to use over time by using compression techniques for for different things and just becoming overall cheaper uh themselves and not relying on on just the L1 here the fees are definitely going to be subset for

for quite a while and it's kind of funny because there's like different there's two really two distinct different constructions of an L2 right there is a full roll up where you post all the data to ethereum and you post the proof to ethereum uh so basically I mean you don't have to post it to ethereum but essentially the way I Define it is that you post both post both the data and the proof and you have the bridge that lives on the one settlement layer right the one settlement layer in this case is ethereum L1 uh whereas you have the other construction of an L2 which is I guess commonly known as a validium where data is actually stored off chain and the proof and the bridge is basically on chain uh which obviously doesn't give you as much security as a roll up but uh

it gives you I guess a cheaper feat because the data is the most expensive portion it's like 90 of the fees or something like that so in that world though it's still cool because essentially you can create a hybrid so there's those two distinct kind of constructions under the L2 umbrella but then you can create a hybrid where essentially you have something that can be a validium or a roll up depending on what the user wants to do so they can store their data on ethereum L1 if they want to they just pay the fee to do that right they pay the extra fee to do that so in that world what does it look like you know what does uh what's going to be a roll-up what's going to be a validium well from from the way I see it is that everything of high value is going to be

full roll up like things like D5 of course um like high value nft stuff like that they're going to be on Roll-Ups but the low value stuff like low value nfts gaming um uh these social apps stuff like that it doesn't make much sense for them to be expensive and to put their kind of like data on ethereum L1 for that L1 security because they don't need it really I mean it's lower value stuff it's definitely something that that can deal with that security trade-off there and that's the beautiful thing about about this right you get to kind of like Choose Your Own Adventure here because in my mind I what I think should happen is that the validium should always be a hybrid where it's like a default of illidium so by default it posts all the data off chain but then it gives the

users the ability to post that data wherever they want really I mean I say off chain but I mean like off the the the same settlement layer but giving the users the option to be able to say no you know what I want to post the data to ethereum L1 or I want to store the data myself or I want to post it to some other data availability layer or I want to post it in multiple places that is the end game for me for me because that means that the users um and not just like the individual users but the actual companies using uh the change the entities using the change different Enterprises stuff like that get to choose what happens to that that data where they store it what their costs are and it gives more flexibility uh for things yeah so so yeah that's that's

super exciting uh in my mind at least around that but yeah if you haven't bridged into base yet be sure to do so you commit this nft as I said this day one nft obviously have to switch the base to do that I'm currently on on mainnet apparently um so yeah you can go check that out for yourself uh and Jesse the lead uh behind the base initiative at coinbase has tweeted out today a picture of Google Trends and you can see here that the term on chain so on chain one word not with a dash has been trending up over the past few months here and is actually shot up recently and of course that's because he's been meming it on Twitter and everyone's been talking about on-chain summer right on chain this on chain that uh and it's obviously trying to be the new online you know we

don't we don't type online with on dash line so with onchain he wants to make it just one word uh and I think it's a good meme honestly so great to see the uh the uptick there for sure but as I said you can go check out bass for yourself and it is now officially live for everyone all right speaking of l2s it seems that another uh I guess like Al alt L1 is going to become an L2 so this time it is Phantom now I mentioned Phantom before it is an evm kind of compatible L1 uh it basically does the same thing as as ethereum has any other evm chain and these are the chains that I I remember I did say to you guys I I thought had the highest chance of becoming an L2 because

they really don't do anything different uh they don't try to do anything different they're not unique architectures they might have like unique consensus mechanisms but that's not really in my mind something to you know something that uh that is a big deal that is that important but on the flip side of things I can't help but think that Phantom is doing this because they it's desperation because you guys know that recently Phantom's biggest bridge was uh I I don't think it was hacked um it was a weird story about how there was a multi-seat controlling it and then and then the guy controlling it got got arrested did and then the keys were handed to his sister or something and then she ran off with the funds so there was yeah there was there was some some stuff going on some dodgy stuff going on there the FTM price has

obviously tanked the all the activity on Phantom is is down a lot so it screams desperation to me and that's why I've said before and I actually put a tweet out about this here where I basically said a layer one becoming an ethereum L2 is cool and all but it doesn't mean that it automatically finds product Market fit many L2 networks will end up being ghost towns in any case ethereum still wins by cementing itself as the global settlement layer for all types of value and I stand by this wholeheartedly and I have talked about this a lot on the refill before where L1 L2 side chain it doesn't really matter at the end of the day when it comes to product Market fit right the market and and people are going to choose what they want to use

they're going to choose what they find valuable and they're going to be willing to spend money on things that they want to use so just because you're an L1 that's become an L2 doesn't automatically to give you product Market fit maybe it marginally increases your chances of success but in Phantom's case for example what does Phantom have going for it over the other l2s that are already evm compatible like what does it have over arbitrine one and op main net and bass right it doesn't and in my mind it doesn't bring anything uh unique to the table it is the same thing as those other chains out there and I've said before that I don't think we're going to have many of those uh those generalized evm chains uh be successful I really don't only think there's going to be a handful of them that have the majority

of the activity and even then that's a stretch having five of them over the long term yeah it remains to be seen but I I don't know I'm not convinced um so yeah it just doesn't really make much sense to me because in my mind from what I've seen from Phantom it doesn't have a unique value prop over these other things um but as I said in the Tweet as well it's still positive for ethereum because it basically just uh I mean it confirms the thesis that a lot of us in the ethereum ecosystem have been saying for quite a while that L1 should just become l2s but at the same time like these L1 as I said these are ones becoming l2s it doesn't really give them product Market fit automatically and in saying that it also doesn't mean that if you create an

L2 like a new L2 it's brand new you'll find product Market fit because it's an L2 instead of an L1 no not at all right the vast majority of other l1s pretty much all of them have failed right completely failed over the years and it's been like 10 years of these things right so it's naive to think that just because something is an L2 means that it's chances of success go you know way way up no it in my mind it doesn't really I think that the of the generalized ones as I said is going to be a handful of really successful winners they have a better chance than l1s for reasons I've outlined in the past I won't rehash them now I mean quick just a quick tip it's a quick rehash of people who may have forgotten things like obviously being in the

ethereum ecosystem getting the ethereum community support liquidity uh bridging in from ethereum mainnet there uh to these l2s um uh having a better narrative stuff like that right that all counts and obviously having a better developer experience and and things like that I think that that all definitely counts um in this scenario so so yeah just I I think the the main point here is like not to get sucked in not to think that just because something's in L2 means it's going to have like instant success and I think it's kind of a funny thing because there was in 2020 during day five summer every project started kind of like calling itself D5 right and wanting to be D5 and wanting to do yield farming and all this sorts of stuff and it didn't mean that that product found product Market fit what happened was

that it may have gotten a bit of traction because it was you know the market was heating up again there was yield farming going on there was liquidity incentives but then when that that stuff dried up though a lot of those projects ended up failing and there's a ton of dead defy projects from uh that people considered huge back then right and I think the quintessential example is something like sushi swap right which was at one point very big as big as uni swap if not bigger I think at one point but this is like the peak of of sushi swap's usage and then over the years for one reason or another it kind of got I guess like out of favor they didn't iterate on their roadmap people left the team like one of the original um people outside of Chef Nomi um Xerox

Mackie ended up leaving and yeah it just didn't really eventually end anything but that's just the the top example there's plenty of other examples out there so I think the same thing's going to happen to these l2s especially if we get an L2 summer like I've I've kind of um uh talked about a lot on the refuel and put tweets out the tweets out about it uh but generally uh yeah I I think I'm gonna stick by this opinion for the foreseeable future that doesn't really make much sense to me just because something becomes an L2 for it to automatically get uh product Market fit now I also came across this little meme bingo card that uh bred to put together on on Twitter today he said with Phantom exploring becoming an L2 just like cello did I thought I'd make a bingo make a

bingo card for l1's uh for easier migration tracking mostly a joke but wouldn't be surprised to see this hit the criteria was uh the l1s have to be outside of the top 20 by market cap and no obvious personality at the Top This actually is pretty in line with the criteria I would have chosen as I've said before I think that the l1s that have kind of an obvious personality or like Founders that have huge egos that are very kind of uh noisy on Twitter and other places those are definitely not going to transition to an L2 anytime soon in my mind it just doesn't make sense for a bunch of different reasons and then outside the top 20 makes sense as well because a lot of the out ones in the top 20 are actually ones that would make absolutely zero sense to become an

L2 because what they're trying to do as an L1 it doesn't really work as an L2 and I've talked about these before something like uh cardano right they've got their unique architecture that they want to focus on even if it's if it's crap right they've got this unique architecture that I want to focus on they're not going to become an L2 for that reason but also Charles hodgkinson is never going to do that right that's just never gonna happen Solana same deal where they've basically got a um an architecture that they uh that they like that they want to keep iterating on and it technically maybe in some kind of way could work with ethereum L1 and as an L2 but I don't think that they would they would they would kind of do that there and then yeah I mean you can go through

the Listia polka dot same deal Tron you know Tron is in the top 20 Tron could actually become an L2 relatively easy easily because it's just an evm chain and Tron is actually one of the evm chains that has usage or any evml ones that has usage um especially with stable coins because it's very cheap for people to use it for stable coins it has deep Integrations with exchanges and stuff like that so I could see that happening but again Justin sun does have a bit of an ego to him maybe he does it because he thinks it's going to make him more money and thinks it's going to make the TRX price go up I don't know it remains to be seen but the ones on Bread's kind of bingo card here I mean most of these are just failed out ones right I mean he's even

got Neo here like Nero is completely dead EOS is completely dead right um you know flow seems completely dead as well like a lot of the acute classic could you imagine if he's classic became an L2 on ethereum that would be like the the most poetic outcome I think it's just like the full circle um but yeah I don't think the whole kind of thing card here is going to be hit there's a lot of them here that are definitely not going to transition and again them transitioning is not really going to do anything for them I think that uh they they definitely are already dead and are going to stay Dead uh for you know all the different reasons that I've outlined in the past there but just a cool little fun bingo card that Brad put together here and actually tagged me and that's why I saw it so I cheers

there to to bread all right moving on from the L2 stuff actually I'm going to talk more about the L2 stuff at the end of the refill I've got L2 beat up for that but I just want to quickly talk about these other things so uh fluent is a new project that I saw was introduced today on Twitter uh and they're introducing something called the ZK wasm execution layout for ethereum they say here roll ups unlock abundant blog space block space but less than one percent of developers can access it fluent offers devs the freedom to build in any language such as rust Garo solidity Etc on ethereum so this is pretty cool this is definitely very similar to what arbitrim is doing with their stylus initiative making it so that anyone can program smart contracts for the evm in kind of any language that they want to

and it seems like fluence is is also taking this kind of philosophy on board and building uh building out this as a general purpose ZK wasm execution layout so they say here that fluent Blends together three key Innovations ZK roll up to relieve app performance and cost constraints webassembly VM to support languages like rust typescript going more and evm tooling compatibility a compatibility to enable solidity minimize support account obstruction Etc so yeah this is pretty cool I I think that wasm was actually something that was on the ethereum roadmap for quite a while it was so so depending on how familiar you are with like the ethereum Bro map from over the years there was once upon a time an idea as part of the execution sharding ethereum

roadmap so this is the original sharding road map to have different shards be responsible for for um or have different shards have different architectures and you know you know you could have one shot that was evm you could have another Shard that was uh wasm you could have another shot that was something else right uh but obviously that idea has been abandoned and now instead of shards we have l2s which work a lot better than execution shards out there so instead of instead of uh execution sharding we have data sharding coming but then we push the execution to the l2s which uh as the ethereum maker system believes is a much better solution here so fluent is basically taking that roadmap item which was wasm as an execution environment for on on ethereum and and making a layer 2

for it so very very cool to see these so cool to say something different I mean you guys know that I always like seeing things different when it comes to the L2 space especially as I said before I don't believe there's going to be um you know a lot of the a lot of the generalized EVMS aren't going to be very successful because of the fact that it just doesn't make much sense from a distribution perspective so it's um fluent here trying something different is to be applauded but I'll link their Twitter thread in the YouTube description below for you to check out all right so I came across this new project on this new initiative called the autonomous worlds Network on Twitter so they describe this by saying autonomous worlds are not just worlds that happen to exist on chain but worlds that could not exist otherwise uh so

they've announced this network which is a Xerox Park organization that seeks to uncover and Advance the plot of these worlds so I've talked about this before autonomous worlds and how a lot of work has been done on this in the stock net ecosystem and I have mentioned before about how it's not just about bringing these kind of like on-chain worlds and and and kind of like uh gaming systems uh also these worlds and gaming systems on chain uh but it's about creating things that can only exist on chain so if that interests you if that's something that has piqued your interest you can go check out the website for yourself there's a bit more information here um and that you can inquire by by emailing here and you can also follow their Twitter accounts but I really do think that this is something there's

something here I do think that there are unique applications that can been enabled by blockchains outside of the usual kind of stuff like defy and just general Finance stuff and obviously things like ens and and and uh and potentially social media and decentralized Social Media stuff like that when it comes to gaming I think that the most interesting thing to me is this autonomous World stuff because a lot of games traditionally have just been slapping blockchain onto the game and trying to like fit it in whereas I like seeing stuff be built from the ground up to use the the blockchain technology that we have and the crypto technology that we have including zero knowledge proofs and stuff like that to build things that just are not possible using a centralized database for example just using the existing infrastructure that people use to build games so if

that interests you you can go check out this tweets oh oh this Twitter thread I will link uh this in the YouTube description below for you to do so all right now I was talking about l2s a lot before but I figured that I wanted to really dive a bit deeper into l2s today on the refill because they are definitely the main narrative right now I mean I'm seeing l2s talked about absolutely everywhere and it's not just uh obviously the optimistic roll-up stuff and the bass stuff but like the ZK Roll-Ups it's it's got to do with um um our ones becoming l2s it's got to do with the security of these things you know there's lots of Fudd around l2s as well people saying that l2s are just Bridges and they're not as secure as ethereum people are saying it blah blah

right that with with popularity Comes Fun and we're all used to that but what I wanted to highlight on the l2b website once again I've highlighted this before but I wanted to highlight this pizza kind of like uh I guess pie chart or people are calling it a pizza because it looks like pizza slices here which shows the risks of each of these l2s there does not exist something like this for our ones and the reason why it doesn't is because there isn't an initi initiative that sits on top of the kind of like L1 so there isn't like a party that is aligned with all the l1s to create something like this whereas when it comes to l2s the people who are who are motivated to create and maintain something like l2b are doing it because

they're in the ethereum ecosystem they are our ethereans and they understand that l2s are the way ethereum is going to scale and a part of the ethereum ecosystem so from that social side of things that's why l2b exists and not only why it exists but why it is so incredibly valuable because on here you actually get these risk disclaimers and it actually shows you uh exactly what's going on on these l2s what risks you're taking you know how centralized they are right now uh and links to and if you click in there is a wealth of information here like it's actually insane how much information there is here you do not get this for l1s there are some websites out there like massari that give you some information but it's nothing like this it's not technical

look at this you don't see this like this diagram here this flowchart this is insane right I know it can be a little bit confusing but all this information is here for you it's links to different smart contracts controlling things like this is just absolutely insane to me and I love that l2bead exists I should disclose here that I actually am an investor in l2beat and the reason I invested in them was because I I wanted this to be built right I wanted this to be built and maintained and for them to continue um to be able to put this information out there because it is so valuable and what it also does and what excites me is that it increases the competition between the l2s to fill out this pie because obviously if you're part at pie or pizza obviously if you have all red

pizza slices here or the majority red you know people are going to point that out or you're going to see that and maybe it's going to be a sense of uh of uh of Dishonor for you right where you're just like oh my God my L2 doesn't look as good as it can I've got red everywhere I need to turn those a yellow and then green and you can see here that that arbitrim is is pretty far along they've got three green and two yellow but then you go to op mainnet they've only got two green and three red because they don't have uh I guess like fraud proofs enabled yet or anything like that whereas arbitrim is further along and then you can see here dividx is actually the most far along where they've got full grain and and one yellow here which is which is which is pretty cool to see

uh and and when you've got when you've got this breakdown like this as I said it encourages teams to fill this out and make it all green and to advance through the stages of uh decentralization for a roll-up so not no one is at stage two right now except fuel V1 but fuel V and fuel v1's actually filled out the whole pie here but no one uses fuel V1 so I mean it's got a tvl of 500 so when you look at it like that it doesn't really matter but there you know and oh there's also D Gates which which has um it all green as well but again two million dollars tvl not that much but if you were to look at the ones that have the most tvl they're not full green yet but they are getting there and one day you're going to see that they're all

going to be full grain like arbitral man op main net ZK sync all of them here are going to be full grain they're going to be at stage two and the only reason you'll really be able to track that and know that is because of L2 beat so I I really do applaud the team for for this and keeping it up to date really the um the Crux of it because this resource could be created and then just left to die right like if there's no one to to update it no one to contribute to it no one to make sure that all the information is accurate uh it could be just left there and then it gets it gets outdated and no and and the information is just bad but uh it's not it's it's it's updated they update it uh pretty quickly as well they add new l2s very

quickly so it's just yeah I I don't know I'm gushing over them but it's really great to see here and not only do they have uh kind of like these um these risk trackers and stuff like that but they also have a risk analysis uh page here where you can kind of view uh at a glance what each out which uh risks each L2 has and they've also got the activity tab here where they track uh the various activity on the uh the various l2s there's also another website for tracking activity that I've highlighted on the refill before but I want to highlight them again and give them another shout out which is growthepie.xyz so this website has a bunch of I guess like additional metrics that l2b doesn't have right now on um on the l2s and their activity stuff like obviously active addresses

transactions all that sorts of stuff and you can kind of go on the left hand side here and explore each of these you've got ethereum layer one you've got arbitrim a bunch of them here and yeah they've got a bunch of nice dashboards and charts and everything for you to look at and there is also stats and metrics on doing analytics as various dashboards there as well but yeah this is all coming together very nicely and it's great to see that we can actually track all of this stuff because at the end of the day it's all well and good for everyone to be saying yeah l2s are getting traction you know everyone's using the l2s there's so much going on on L2 you should go there but what we need is for users to be able to see on here on l2b for example see the risks see what risks

they're taking on by bridging in uh see what would happen in the worst case scenario I'll be able to ask what would happen in worst case scenario and see how these l2s are evolving over time but also for them to track the activity on these different things to see uh what's going on in them to see which ones have the most activity and and and that sort of stuff there so yeah definitely just wanted to give a huge kind of shout out to l2b and also grow the pie uh for basically creating these really awesome websites and you should definitely go check both of them out which I'll link in the YouTube description below for you to do so of course and the last thing actually before I wrap up today's episode on the L2 front it's kind of funny to read people's comments about kind of speculating on

the l2s and like what tokens they think they should buy and how long they should hold them for et cetera et cetera I'm not going to tell you what tokens to buy I'm not going to tell you how long to hold I'm not going to give you any advice like that the one thing I do want to say based on a lot of the conversations that I've seen happening especially in the daily way Discord Channel which you should join by the way Link in the description um is that a lot of these tokens need to be looked at not so much in a vacuum but you need to look at them kind of uh in comparison to each other because when you look at them compared to each other they all have different distributions they all have different allocations as well so different distributions in terms

of like when the tokens actually come out to to Market or when they get hit Market different allocations so how much do investors get how much do does the team get how much does the community get et cetera et cetera some of them have initiatives like the like optimism has the retroactive public goods funding where they give out I think it's like 40 million of op or something like that 30 million dollars of op as part of every round which is about 20 million op or something uh something crazy like that so that's also a factor there um and but generally also being aware of the fact that we are currently in a bear market and it's likely that all of these things are just going to go up in a bull market based on narrative alone they're going to go up against US dollars but

don't let that fool you into thinking that any of these things are going to hold long-term value because things will get crazy and I just I I wanted to kind of put that out there because I know that people are going to be speculating on these things in a really crazy way especially like for bass for example people were buying op up to the the leading up to the base launch because there's no base token right and I'm sure people are going to still buy op when uh the market heats up again because there's going to be a narrative that op is the token for bass because bass doesn't have a token and bass is built using Ops technology right so there's always gonna competing narratives going to be going on but best to keep your head on when when listening to those sorts of things view the L2 tokens the

same way you will view any token really you just look at them the same way as any other token do the same risk analysis on them do the same kind of uh investment analysis on them and decide if it's something that you think you should you want to allocate your your money to and actually on that note as well last last thing I promise um with value accrual for these tokens I get this question this question uh gets asked a lot um in the Discord Channel again but also personally I get it all the time from people my answer really is is that there's really only two big or I guess significant value accrual drivers for L2 tokens it's it's used as a staking token and it's used as a governance token now when I say staking token I mean that

it's probably most likely that these l2s are going to decentralize their validation and sequencing and and proving as well in terms of ZK Roll-Ups uh by allowing users to stake the token and then earn a portion of the fear revenue of the L2 as a reward and obviously any Mev as well uh and then obviously governance is self-explanatory as to why that would be a value driver there but outside of that there's not really much else guys because the L2 tokens are not going to be stores of value they're not going to be money they're they're going to be used as collateral but it's not going to be something like an eth right um and and and so when you look at the the valuable cruel pillars it really just comes down to staking in governance and that's not bearish because if you know this is the most the the most

successful L2 out there will probably have heaps of fear for you right but essentially Millions if not tens of millions of dollars a day in the long long term and if you're staking getting a share of that then that could be a really nice yield and it couldn't it could also just not just be the fees it could be like some tail inflation that they do on the token in order to pay people to stake I don't know it depends on the L2 depends what they want to do but as I've said before and as I'll repeat again today not all l2s are created equal so definitely keep that in mind when looking at these things from any uh number of perspectives 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 it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone