Bellatrix upgrade live, Gnosis Safe rebrand and more - The Daily Gwei Refuel #441 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Deadly gray refuel where we cap the latest news in ethereum ecosystem I'm your host the Anthony 6th of September 2022 alright everyone let's get into it so the Bellatrix upgrade just went live on the ethereum beacon chain about a half an hour ago from time of recording here uh which means next up is the mainnet merge which is going to be happening in like I think around nine to ten days obviously with TTD it's hard to estimate but the battle tricks upgrade itself went through amazingly uh we only had about a five percent drop off in participation rate as you can see here uh from the the epics that followed uh after 144896 you can see that yeah about five percent of validators dropped off which is an amazing result because as you'll

know from the test Nets we had much more than that drop off right I think with with girly we had like 40 drop off or something but given this is mainnet given there is real money on the line um people are much more attentive here and you can already see the participation rate going back up you can see at the Epic that Bellatrix activated here at 896 it was uh well sorry I should say 897 it's 94.49 and then just a couple of or a few epics later we're back up to around 96.1 percent here on 901 so that should go back up to over 99 as we've kind of like saw uh normally you know prior to the Bellatrix upgrade and everything should be fine then so all in all a really really great upgrade here and now the beacon chain is ready

for the merge so really we're just waiting for TTD to happen now and then uh the merge transition will go through as I said around nine to ten days for that to happen now I wanted to go through a little bit of things with you guys uh with regards to I guess things like participation rate how the main merch can go wrong and things like that because I've been seeing a lot of questions being asked about this so what I mean by participation rate here is you can see this number on my screen this is basically the percentage of the net of the validators that these validators right the 421 509 active validators that are actively attesting to blocks now obviously it's never going to be a hundred percent uh it would be very rare for it to be 100 because there is always going to be someone offline here or

there or something happening here or there right but most of the time it has been 99.6 99.7 which is a huge amount uh considering how many value that is there are now this drops off for a number of different reasons as I said someone goes Offline that means that after a few um misastication attestations depending on how big and chain the biggest chain Explorer account set they wouldn't be part of this participation rate that is that is here now right that would be kind of like marked as offline because they aren't actively attesting to blocks uh and they aren't actively participating in the Network anymore obviously uh if you're slashed and you're kind of um getting exited from the the the beacon chain you're not exited at time of slashing you go into the queue and then you exit after that

uh but I think off being offline is is really the biggest thing when it comes to participation rates people just go offline for a number of different reasons maybe misconfiguration their internet goes offline their power's gone out right there's plenty of reasons why someone would go offline and that's actually why the penalty for going offline is is very low right like for example if you're offline for a day and then you're online for the next day your rewards would net out to zero you just basically make back all the all the um eat that you lost for that day that you've been offline in the the next day that you're online so that but it does scale kind of like quadratically from there if you're offline at the same time as a bunch of other people are offline well then you may end up losing more

because the network could view that as an attack a scenario where this might happen is if there's a client that has a bug say you're running one of the the clients uh that maybe has 10 share of the network and all of a sudden has a bug in it which sends all of them offline or sends all of them onto the the wrong chain head well then you may end up losing more ink because of that because the network says that I'm like okay well there's a quadratic inactivity leak that kicks in there so there are a bunch of different reasons for that these kind of like things can happen here but as I said the fact that we only lost about five percent of validators after a major Network upgrade such as as battle tricks is a very very positive sign now in terms of how this can play

out on mainnet and how things can go wrong post merge right once the merge transition goes through I'm obviously expecting some people to fall off for some reason right there are there are as I explained there are many different reasons why people fall off I don't expect us to have 100 or near 100 participation rate per immediately post merge but because this is mainnap because there is more money on the line I think I expect it to be fixed relatively quickly now I people have been asking me you know what is the worst case scenario that could happen uh through the merge transition that would you know lead to a quote-unquote failed merge there's actually only one situation that I can think of and that really is that for some reason the merge transition itself across all clients

just failed catastrophically it just didn't happen right the chain just halted no blocks were being produced at all everyone was confused about what the chain head was and we didn't come to consensus or anything that would be in in my from my understanding the worst case scenario which would require obviously coordinated human intervention to either roll back to the proof of work chain uh or to approve of work consensus mechanism uh or to fix whatever the the issue is there now the chances of that happening are basically zero percent in my eyes it's always uh you know possible that it could happen but it's more about what's probable I don't expect that to happen what I do expect to happen or at least is more likely to happen is that we have a big participation uh drop off now I don't I don't expect a big

participation drop off maybe a small one like five percent as we've seen here maybe 10 I don't even know if it'll be that big because of the fact that there's real money on the line but the worst case scenario in that would be uh people enough validators going offline well actually I should say there's two kind of like bad scenarios there enough validators for Offline that we stopped finalizing so that would mean that 33 percent I believe or 34 of validators would have to fall offline for us to stop finalizing and then for the chain to Halt altogether I believe that would happen if there was less than 33 of the Network online the chain would just stop producing blocks I I think that so there are different thresholds there now for that to happen I mean like that's crazy it would require because we we fixed the

client diversity on the consensus layer side uh it would require I believe both prism and Lighthouse to just be offline off the network for that many validators to be offline at once right and then on the execution layer side it would probably just require Geth I believe so obviously not as great there and that's why a catastrophic bug in Geth wouldn't be great post-merge uh and catastrophic I mean like a critical bug like a consensus breaking bug that that sends Geth off onto its own fork or something like that so that's really the only things that I that people should really be not I wouldn't say concerned about but should be aware of because at the end of the day a failed merge is actually very hard thing to do the beacon chain is self-healing it's very

very resilient it can recover from these sorts of things and we've seen it recover from some pretty shitty uh uh situations such as the girly test net merge which actually saw the chain not finalizing for a few epics there because of the fact that we have that massive drop-off but that quickly rectified itself and that's a test now I don't expect that to play out on Main net and as we've just seen uh five percent only fell off during the Bellatrix upgrade which is a very very good result there and the chain just keeps chugging along we're finalizing everything's fine this is on the real Beacon chain this is not a test net this is mainnet Beacon chain so in terms of protecting yourself from these sorts of things I mean if you want to be 100 protected the only thing you're actually going to be able to do

is not have any assets on ethereum at all and that would mean selling your assets for I don't know some other crypto asset or or or a real dollars not stable coins right because the subcoins are on ethereum of course like real actual dollars on an exchange because this is a consensus level change the merge changes from proof of work to proof of stake it affects the entire chain but it doesn't affect all the individual apps or anything like that like it's a consensus change which means that the only thing it's doing is swapping out private mistake so if you have eth in Ave or Ethan maker or even some other smart contract it doesn't matter if something wants to go wrong with the merge it would affect every single contract equally it doesn't have any preference or doesn't affect any contract uh specifically uh differently

to any other one out there because there's just nothing being changed on that side of things so if you want to protect yourself from I don't know any chance of anything going wrong you just don't want to be part of any potential mess then the only thing you can do is not hold any assets on ethereum at all on like on chain at all you would have to just basically go to Dollars now obviously that is not a workable solution for a lot of people because doing that would incur a lot of taxable events so at the end of the day you should just chill like there's not really anything thing else that that you should as you should do as I've said before use end users aren't going to feel anything different if the merge goes through successfully as we as we expect it will then the only thing end

users may feel is that slightly faster block time of 12 seconds instead of 13 seconds but really I don't really think people are going to even notice that so just chill and if you want to take advantage or try to take advantage of any of the ethereum proof of work Forks look I have talked about these before really at the end of the day like the way to take advantage of it is just to have Ethan your own ethereum address and then you'll get like the fork tokens on the other chain and then you can do whatever you want with that but I've said before how I believe that this is potentially dangerous something that doesn't really that that probably won't be as profitable as you think it will and might be worth more hassle than um than the money you'll get from it but

it's up to you what you want to do with that I'm not going to be putting out any guides on how to take advantage of that or anything like that I have worn before that as I said it's potentially dangerous due to the risk of Replay attacks and things like that but at the end of the day that's up to you to do that so yeah I I expect the merge transition to go through smoothly we've done it so many times and I mentioned yesterday how Shadow Fork 12 went through perfectly the clients all seem to be working very very well together and if you're worried about being on a majority client well then you should be running minority clients right you shouldn't be running Geth you should be running one of the other execution layer clients and on the consensus layer side if you're really worried then you

shouldn't be running prism or Lighthouse you should be running one of the other consensus layer clients on there as well but but yeah hopefully that gives a more in-depth overview of what uh risks are associated with the merge what can go wrong what's likely to to happen what's not likely to happen all in all the merge uh is going to be a smooth transition I believe I I don't think there's going to be anything uh anything catastrophic happening here and I'm just like so pumped for it I mean I typed out my tweet before about uh the um the tweet that I showed at the start here about palatrix going live and I said wow the merge is actually happening in less than in nine days right that's just stupidly close I mean I I don't know I don't know what else to say I've said

this so many times I'm not going to rehash myself yeah but that is really stupidly close now so we are in the end game we're almost home and I'm very very excited about that but uh but yeah I'm gonna leave that one at that uh Beacon chain is the main website I use to keep track of all this sorts of stuff but there's also Beacon scan so that it has various statistics around the beacon chain itself such as you know active validators uh what finalized the current and finalized epics uh the transaction sorry not the transactions the pending validators the participation rate and obviously post-emerge will have things like uh well I mean they'll have kind of like uh ether scan and Beacon scan you can kind of look at for different layers here uh so yeah these are the two sites that I mainly use if you want to keep up

with what's happening on the beacon chain or the consensus layer side itself and as you can see here uh Adrian Sutton explained that we only lost five percent of the validators off the Bellatrix Fork as I explained and Terence has a nice picture of the battle upgrade going uh going through and you see on the bottom it says ready for the merge which I saw on my staking box I actually watched it happen live I was staring at my my command line and I'm just like yep yep oh there it is there's Bellatrix right and then I said ready for the merge and I'm like I am so ready for the merge like I I know how you feel a little command line so so that went through there but yeah that's all the merge updates I think there uh very very successful battle tricks

upgrade and uh yeah less than nine days until the main net merge obviously there is the mainnet merge call that I'll be doing with Eve Staker and the bankless guys uh and I don't like nine nine days from now I think is a weekend uh so maybe I I won't be doing a Refuel on uh the mainnet merge day but maybe I'll have to do a special one if it falls on the um the weekend just like a a special refill to celebrate the merge but anyway it's coming very very soon uh I'm super excited of course uh and yeah that's all on the merge but there is one other thing here from Proto Lambda I just said a screenshot of a message that he put into the uh the uh into a Discord channel here where he said some Anon who I respect very much commented about

block building Oracle abuse centralization of D5 data providers the pessimistic view of post-merge ethereum yes it's bad no not net negative don't drop the ball now if the merge is not your main quest so basically what he's saying here is that because of the fact that the proposers are known ahead of time in proof of stake ethereum there is a possibility of multi-block Mev which I've discussed before on the refuel and I've also discussed all of the solutions that are coming to mitigate if not eliminate all of that such as proposer PBS uh censorship more censorship resistance such as CR lists uh vertical trees uh uh evm improvements and all this sorts of stuff and that's what parallelander is saying here is basically that the merge

is going to free up a lot of resources for these other upgrades that have been put on the back burner because the merge was such a Monumental undertaking that it really nothing else on on the core development side could be focused on in any real capacity but now that the merge is less than nine days away we're going to be moving towards that especially when it comes to Mev because look multi-block Mev the reason why it can get bad is not just teo-op Oracle abuse or manipulation so teo-op stands for time weighted average price and basically a tear up Oracle is an oracle that takes the time weighted average price over multiple 100 blocks and uses that as an oracle price but the reason multi-block Mev can get quite bad is because you could end up in a world where people or I guess like stakers are

re-orging the chain or at least attempting to re-org the chain uh at least before finalization uh in order to capture Mev now this has been discussed before uh it is extremely hard to do it can be extremely costly to do it is not something that is exactly feasible and it's not probably not something that we're going to see play out live but as Mev continues to grow as maybe the bull market heats up again and we get more value coming back into the market from I guess like regular users and things like that and maybe more MAV opportunities popping up this could become more of an issue but I think with the solutions that have been worked on for some time such as PBS and others we're not going to be in like existential crisis mode uh

ever I I don't really think that at all I think some people sometimes make it out as if we're you know close to that reality but I don't think so at all personally I mean I obviously I'm not an expert here but from all the smart people that I've spoken to and from the things that I've seen everyone seems very very optimistic about the future and about solving these issues at the kind of like consensus layer here and it's not something that we should quote unquote delay the merge for because realistically if we were to delay the merge in order to get all of these upgrades live to potentially defend it against something that uh sorry to defend against something that potentially could happen or had like a low probability of happening it would realistically lead to probably a 12 plus month delay of the merge which is

untenable at this point there is no way or there is no reality where that's going to happen so we're going to go through with it yes there's probably an increased risk and some some centralization risks around there with Mev but it is not something that is a death now for ethereum it is not something that is unknown and not being worked on it's just something that we have to to work through and get these upgrades live which as Proto says here is much more I guess like likely to happen now that the merge is he's finished because if the merge being finished frees up all these resources to work on these other upgrades all right so summer ESAT is out with his supplementary guide to staking on ethereum for existing stakers I think I highlighted this a couple of weeks ago but Danny Ryan basically shared this

again today uh you should definitely go check this out if you're an existing solo stick I just wanted to remind you guys again here on how to get set up I mean at this point if you haven't followed these guides the network would have kicked you off if you hadn't upgraded with with battle tricks already so I'm sure you're kind of like scrambling or have been scrambling to get your validators back online but if uh you you kind of like uh even if you are a new Staker you should go check out uh uh Summit esat's guides here if you if you're a new solar Staker because they're Linked In the supplementary guide so I just wanted to highlight that once again for all of you uh because I know that then there's probably going to be new solar stickers coming online especially post merge given that there

is now going to be Mev opportunities right with Mev boost because uh the execution layer is now part of the consensus sorry the execution layer has been merged in with the beacon chain uh and there's also going to be a bump up from the unburnt fear of the news in AP APR so we could actually see including Mev the current reward is I think just over four percent uh for each staking we could see six seven percent and depending on how crazy the fear of venue gets even higher than that post merge I expect that to come down because more people are going to stake like there's no way in hell that it's taking uh the staking yield for it is going to stay at six percent like there's just absolutely not going to happen people are going to buy eat and stake for that that's a six

percent each denominated yield that's crazy especially if the ether price is going up people are going to get bullish they're going to want a stake and they're probably going to want a solo stake uh because of the fact that solo staking can I mean it's always taking probably is going to be the most profitable way to to stake in terms of just pure ether nominated yields but there are other ways I mean rockapool obviously has their own incentives and there's going to be other staking providers with their own incentives as well so but all in all I do believe to I do think we're going to see an up an uptick in solar stakers too and if that is you you can definitely follow summer esat's guides here on how to do that all right so Aztec network is out with a fresh thread today about how to get

fixed yield on a stable coin using Aztecs element Finance integration which offers fixed yields up to 40 times cheaper than mainnet so you can check this thread out I'll link it in the YouTube description below I believe I've highlighted uh element Finance being live on Aztec before on Aztec's uh private defy layer and how you can tap into layer one liquidity and do all your transactions on Aztec privately and I know obviously privacy has come under scrutin ethereum related privacy has come under scrutiny over the last few months with the today to cash stuff and also Aztec uh implementing some controls into their own layer here but you can still use these things you can still use them privately and you should definitely do so you should definitely go play

around with them there is no sanctions on Aztec or anything like that right so you can play around with it without worrying about interacting with someone something that's been sanctioned uh you know if if they actually did sanction Aztec I'd be very uh I'd be very surprised um I think I mean I talked about this a lot already on the previous refills about tornado cash and stuff so I'm not going to rehash here but I think that the Privacy stuff kind of has taken up a back seat uh over the last uh maybe two weeks since since it all died down uh but you know the tornado coach dev has still been arrested right uh there is still a lot of question marks around what these sanctions on Toyota cache actually mean uh for Block producers and and things like that so it's an ongoing

thing but in the meantime you can still use Aztec Network I mean you can still use Toyota cache if you wanted to but you'd be breaking sanctions if you're a hero a citizen but it's immutable it's still on there so you can still use it but Aztec hasn't been sanctioned or anything like that so you won't be taking any risks there and you can use it with element Finance so yeah you should definitely go check this out I'll link the thread in the YouTube description below for you to do so all right so up this is what I wanted to highlight here but I'm going to do that at last uh so nurses safe has rebranded to just safe now so this new brand uh it comes I guess on the launch of the I should follow them on the launch of their uh their token or at least kind of

like uh that they're not I think the token has launched yet but their distribution details that were posted I think a couple of weeks ago that I um that I talked about on the on the refill here so definitely go follow the new account at safe uh which they used to be at nurses safe now they're at safe I think because they've spun out of no sense they're kind of just doing the rebranding here and they've got a new logo and everything like that so cool to see that branding all come together now notice is safe or should I say save is still the biggest multi-sig on ethereum by far I don't know what's gonna happen with the token like tokens are so hard to comment on like I I I avoid commenting on tokens on the refuel for obvious reasons but just generally whenever someone asks me I I

kind of have the same opinion of like every token in in crypto and every coin in crypto my overarching like thesis on on these things and maybe I'm going a little bit off off track here but it may be interesting is that the things that have the attention are the things that seem to do well over the long term now if you look at the top 10 on coin gecko right which isn't very pretty and I've got it here in front of me you can't see it on my screen but the top 10 excluding stable coins is BTC eth B and B uh Ada xrp Soul Dot dojinship and I think Matic is in there excluding the stable coins yeah so what are all these things have in common well the thing that they all

have in common is that like they've got attention all the time I mean BTC and Ethan no there's no question there they are always on people's minds people are always talking about them BNB may be an exception because I don't see many people talking about it but BNB is both tied to the largest crypto Exchange in the world and also tied to the largest alt alt L1 uh and I I think bnb's value is uh closely controlled and protected by Finance considering the supply so concentrated so it is a bit of an outlier there Ada which is cardano I mean as much as I think I don't know is a joke uh it has so much attention there are so many people that still follow it still pay attention to it same with xrp which just puzzles me as to why but there it is Solana same deal I think the

the general consensus right now is that Solana is the top non-evm alt L1 uh at least in terms of kind of like the the sentiment that I've seen and then you have polka dot which doesn't have as much attention but I think like polka dot is is kind of like there as a momentum thing like over time there was a lot of hype for it it's kind of like zombified and it keeps just falling down the rankings here uh so yeah that's another maybe an outlier there but then you look at Doge and and Dogecoin obviously still has a lot of attention and just generally has a lot of attention shib same thing I just it puzzles me as to why but from especially from retail investors they love this sort of stuff obviously polygon gets a lot of attention and then you can kind

of look through the rest of them but it's kind of funny because you even look at like if you're just ranking by market cap there are other things you have to take into consideration as well such as the fact that things have uh a kind of like momentum and stickiness behind them for example xrp uh I I don't think there's actually many large holders that are selling besides the Ripple Foundation themselves I think the large holders are pretty much just exchanges with all these little fishes on there that don't really put a dent in in the market cap so the Mind cap is not going to really move down uh they're all too much because the I believe the Ripple Foundation sells slowly over time and they're probably selling OTC uh in a in a very controlled way and that's not to say that OTC doesn't hit the market but

it seems that they've got like a very stickiness to them where they don't really like the as a as the same with BNB where this Supply is quite controlled right and then uh you know the other ones uh out here like like Doge just been around for so long just seems to be very relevant a lot of the Queens are lost so the market kept like just because a lot of the coins are lost the market cap is inflated because of that same with shib I mean that's an obvious one too that that no one ever expected it to do what it did uh and then there are many like this I mean like ethereum classic right for example Litecoin like there's just things that have had a lot of momentum behind them but in terms of the top 10 itself most of it is just based on on attention and

uh and also based on a I guess like Supply Dynamics and concentration of Supply there but as I said I don't like to comment too much on these sorts of things because you could debate this uh you know forever basically but generally my view on things is that the tokens uh there's thousands of them right they all have to compete with each other and they're all competing with each other for attention and at the end of the day there is only a finite amount of investor Capital out there and whatever they don't put into that you know one token they put into another means that that token didn't get that money so for example if people put all their money into Ethan not into BTC well that is a net loss to BTC uh and I know it's weird for some people to think about that and

some people disagree with me on on this line of thinking but at the end of the day like if more people put money into eth instead of BTC then eth is going to outperform BTC that's just a simple math of it and I think they've been seeing that over the last few months especially um but but yeah I think that applies to basically everything in in crypto and especially over the longer term it's more it's also about like what money gets kept in that and how fast people are to dump it like with beta scene Ethan much slower to dump that dump those things than they are to dump other things because of the risk curve as well and the riskiness associated with them but real over the long term it really is an attention game there are things from 2017 at 20 from and 2018 that were

extremely hyped up and with like the talk of the entire industry and now they don't even register in like the top one two three hundred on on coin gecko right so and that's because they lost the attention game and they when they lose the attention game they lose their their user base they lose people people wanting to build on them if they're a layer one or something like that and the project just fails so I think attention plays an extremely important part maybe this is a tangent I started talking about nurses safe here now I'm talking about different token Dynamics but I think it's something to to consider and something very important that uh they usually definitely think about and maybe incorporate into your own in investing strategy but that's not investment advice it's just the way I think about things and I think that if you look at

the proof is in the pudding really it's it's it Ethan BTC out form pretty much everything over the long term because they have the most attention but that's only one facet of it I'm not saying that it's only attention but I think attention is a big one because if things don't have attention then no one really wants to not be involved with that the price kind of like stagnates people people you know keep selling and the price keeps going down and then it kind of leads to this negative spiral where they lose lose more attention and all that sorts of stuff there but uh but yeah I'm gonna leave it at that definitely go follow the safe Twitter account here because I think they'll be tweeting from safe instead of nurses safe going forward all right last up here I have something that I forgot to shout out the other day

or at least I maybe I did shout it out which is a fresh video from Bank lists and and this one comes from David Hoffman himself about the ethereum merge and this is a normie or Noob friendly video about the ethereum merge that you can share with people that may still not be understanding what exactly the Earth you emerge is so I'll link this in the YouTube description for you to share this I thought it was a really great video you should definitely go watch it as well uh it's not too long and I thought they would do a really great job here uh but uh but I'll link it below for you but on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe

to the newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone