Blob chat, Bitwise Ethereum ad and more - The Daily Gwei Refuel #785 - Ethereum Updates

Transcript

hello everyone welcome to another episode of Del R fuel where the latest news and etherum ecosystem I'm your host and this is 21st of June 2024 all right everyone let's get into it so kicking off today's episode we have a fresh recap from Tim boo of the latest all core devs call now apparently this was the uh first ever call in history that ended early uh which was uh maybe not forever in history but Tim says yeah first time forever that the all C devs call ended early because everyone is heads down working on Petra now of course we all know that Petra is uh right now at least the biggest ethereum upgrade uh that's ever been put together so obviously all of the core devs and researchers are hard at work on that which is great to see of course so basically what they discussed on the

call I think maybe the the biggest thing was that pectra devet 1 spec is I think uh pretty close to uh completion now or at least kind of completed here so that Dev net one can be launched you know I'm assuming that we're going to say like over 10 Dev Nets by the time this thing goes live on Main net as well as the test net Forks of course uh and then obviously main net but as I said before my prediction is still q1 for Petra 2025 there there was a bunch of other updates that Tim kind of lists here that you should che check out for yourself but as Tim said it wasn't early uh they ended the call early so it was relatively lighter than than usual but definitely heavy on the Petra stuff uh they did briefly they did briefly touch on pias

progress so the next devnet will be B based on a recent cpec release or consensus layer spec release and is expected in the next couple of weeks there so you can go give that thread a read for your myself I'll link it in the YouTube description below but not too many kind of I guess major major things happening there as Tim says here everyone's heads down working on Petra which I guess like they they need to be at this point as I said like there's so much going into Petra that it needs all hands on deck and if we can actually get this shipped by I'm going to say like by q1 if it doesn't extend further than that I'll be extremely impressed to be honest because I know how big of a lift a hard Fork is and how big of a a lift

the coordination is for it as well because when it comes to hard forking the you need to coordinate a lot of different parties in a you know a lot of different decentralized and distributed parties all around the world in order to get this thing over the line in order to make sure that a hard Fork goes through which I'm going to touch on a bit more in a sec in relation to something else but yeah we'll see how things go I'll keep you guys guys updated obviously on Petra's progress but as I said you can read this thread for yourself it'll be linked in the YouTube description below for you to do so all right so we saw some craziness happen with blobs overnight well over my night so here Matt Cutler put together a little Twitter thread uh so Matt Cutler is the CEO and co-founder of block native they

are basically a company that works very closely with the mol with uh gas uh you know you've got this extension that you probably see me running up here this little four that's the four that's forway gas fees on Main net right now and that's a realtime uh gas fee uh uh Checker there which is which I've been using for quite a while now but anyway enough background about them uh Matt put out this tweet where he says we're actively investigating the impressive spike in the blob base fee that started at around block uh there's the block number when the blob base fee hit two gay by the uh by block I think 110 so like three blocks later The Blob Bas fee Rose to threeway and then began to run up and peaked at near 7,471 gay at block 272 here which is

about I think it's like 150 blocks after that is an insane gas price there uh and that is obviously not sustainable but it did lead to some Fe spikes in the different kind of l2s that are using blobs in the different rups that are using blobs I think people were seeing like $20 fees on arbitrum one or something like that and of course this is a very temporary thing because at that gas price um there would not be a sustained fee uh Market at that gas price at all no I think it last maybe a few blocks here um and and Matt Cutler goes into uh details in his thread here uh and also there is a bunch of other things to talk about with regards to this as well but uh Matt's thread should definitely be where start I'll I'll link this in the YouTube description below

for you to check out he's got a bunch of links uh to to what happened and also because the base fee climbed there were some rollups subst paying substantially more than what they needed to to post their batches down to the chain I believe we ended up burning a few hundred th000 worth of eth due to this but obviously this is not sustainable you can see here that blast I think uh paid five or overpaid and paid 5.2 e of a blob worth of a blob fee to get their batch included here so obviously not sustainable at all and an outlier now of course this opened up discussions around blobs generally as you guys know and as I've been monitoring lately for you guys if we go to Hill Dobby's blobs dashboard

you can see that we're very much near the target of blobs per block regardless of these outliers you know you can see here the target is the green line we're actually over Target right now so so we're basically like coming you know above and and below it but we're straddling that line there now of course this outlier as you can see here in this chart very much is just a very very quick outlier not something that is going to be sustainable at all there there's just no way I mean I think someone did the math on it and if we were to sustain that gas fee for even like a week we would burn or maybe even less than a week we would burn like the entire eat Supply or something like that so obviously not sustainable because that's many many billions of dollars of

fees there but um it shows it did show one thing that the blob B The Blob fee market right now is I I don't know if I'd use the term broken but it's not working as expected I don't know enough about it to to comment on it poter actually has a tweet Thread about this here um with regards to the fee market and what can be done or the blob fee market and what could be done to tune it so the core devs and researchers are definitely looking into that but there is another problem here I think I've spoken about this before so Tony has a great little graphic here that shows this but the problem is basically that when it comes to blobs there is not really any meev to be extracted from it so to give you a refresher here within the ethereum I guess like uh propos a

pipeline or I guess like build a proposer Pipeline and the meev Boost pipeline that like 95% of the network uses there is the Builder who constructs the blocks there is the relayer who who reloads those blocks to validators and the validators proposes those blocks now the builders uh build blocks based on profitability and they uh they basically um uh prioritize transactions that are more profitable that's me right that's the whole point of me but the problem is is that when you have transactions that not profitable for Builders to include and are also heavier blobs take longer to propagate for Builders who are trying to do things like timing games where essentially they try and wait until the last possible second in order to get the

you know most profitable transactions included here they basically just ignore blobs so this is a form of censorship I guess you could call it but it is an it's not censorship in the sense of Builders are doing this because they want to it's more of they're doing this because it's not profitable to include include blobs now Tony's chart here shows that on average nonme boost users AKA vanilla block Builders include more blobs per block than meev boost Builders do so we've got definitive evidence of this happening here and as I said the financial incentives are there that so that this actually happens and it's a very kind of difficult problem to solve because of the fact that uh just blows by their very nature are not going to be attractive to people who are trying to extract the most amount of value out of

transactions they include in their blocks here okay so how do we get around this how do we actually deal with this well that opens up the wider question around how ethereum is dealing with meev generally and that's part of the scourge road map item that's on the Tex road map here it's a huge issue guys it's not just an issue for blobs but as I've said before me is a plague it is something that will come for everything and come for chain stability it'll come for the way that we expect the chain to to work because it's all based on financial incentives in the most extreme sense it is I guess like the purest form of financial incentives that we have or with at least with within crypto but potentially even in the world where essentially because it's permissionless because there's no there's no one giving

you permission to do or not do things or to include or not include transactions well then basically what it comes down to is just Financial incentives here now of course if you're not running meev boost and you're a vanilla block Builder this incentive does not exist for you so you're going to include these blobs anyway uh and then data always also has a chart here that shows that blobs are pretty slow to make it into blocks because of the phenomenon that I just described where essentially because blobs are take longer to process as transactions or as types of transactions uh Builders are less inclined to include them because of the fact that one as I said they're not paying out that lucrative me that they're expecting or not paying out something profitable for them and two uh it takes longer to to include it so they're trying to play

these timing games and they don't want to include them so there's there's not just a lack of financial incentive there's also an increased burden on the Builder and they need to be able they need to be paid for that burden now greystoke in the daily way Discord Channel actually mentioned something today of an interesting idea of how to rectify this of why not make it more profitable to include blobs in blocks at the consensus layer reward level I I I mean I get the the notion here I'm not sure how technically possible it is I think I think it should be possible but then what you're doing is you're essentially giving more cons layer rewards is all new eth it's not uh it's not rewards that are paid out by users it's new eth that is issued what you're doing is now you're picking and choosing

which transactions to reward with new eth and that starts to get M and I don't know if we should go down that path I it is potentially one solution but I don't necessarily think so because you also end up reaching kind of an upper bound there as well where essentially like do you adjust somehow dynamically the amount of layer contensous layer rewards that are going to blobs based on the demand for blobs but also based on the I guess like inclusion of blobs within blocks and and it gets very murky because what if let's say that um on L1 uh gas fees Spike up to like 50 to 100 gay and this is outside of the blob fee Market because of some stuff that's going on for a sustained period of time some DJ stuff that's going on well then

that's going to be very profitable for Block Builders right so in that environment the block Builders are definitely not going to prioritize blobs and even though you're paying them extra it's probably not going to match what they're going to be able to get from the execution layer rewards of uh extracting the meev basically so when you look at it like that when you think about it like that it gets yeah it gets murky and then as I said it's a path that we maybe necessarily don't want to go down here um but as I said like tackling meev generally on the chain on ethereum specifically is part of that Scourge road map item there uh which is being worked on now of course the question was also brought up by whipper in the daily gr Discord Channel today he basically asked you know are we going to increase

the size and count of BL or count of blobs and or count of blobs I guess uh now that we're seeing sustained demand here and I'm going to say no for a few reasons so I think that even though we're seeing sustained demand it's not sustained enough where essentially it's so expensive to post blobs that L2 fees have spiked to like many dollars right like even if the even if the blob fee goes quite High it would still be sense to do transactions on L2 because of the fact that blobs would still be cheap even at uh you know a few gay or something like that or tens of gay from from my calculations anyway um due to the way that data cost versus execution cost works and as we know the l2s are also working on scaling up their execution so in that I guess like that

that's one reason why I don't think we're going to be raising um the the blob uh I guess like uh limit gas limit I guess you could call it or or or count I mean it's basically a gas limit increase if you want to use the old terminology but that's one major reason there second is chain stability introducing blobs didn't break the chain but there are lower powered devices out there and people with especially solo stakers and solo validators with less bandwidth than you know they would like to have uh that ended up struggling a little bit missing at to tations here and there due to the fact that blobs are an increase in load on the network so that's another thing thirdly blobs haven't been live long enough for us to see everything play out yet so it just hasn't been long they went live in March

guys it hasn't been very long we need to see this play out over longer periods of time know 6 months 9 months 12 months sort of thing uh at minimum I would say and then I think another big one is probably the biggest one is that if we were to do a hard for just to increase the blob size Andor count Not only would it require a lot of attention from cevs and and potentially re researchers um it would also be a huge cordination effort to do that like it takes many I guess weeks if not months to coordinate a hardfork even if we know today what's the changes going to be as I've said in the past with blobs it's basically a oneline code change to do this but that oneline co-

change needs to be part of a hard Fork it's not a software update for the clients so a hard Fork not only involves getting the clients built out testing them running Dev Nets running test Nets you got to be safe right you can't do it without doing all of that that alone is taking months already right um unless it's an emergency like if it's an emergency where essentially the Chain's going to break or the Chain's going to fall over or something's going to get exploited on the Chain if we don't do the fix that could happen much sooner because it would be like a war room scenario all hands- on Deck but when it's something like this doing all that what I just mentioned would at least take months then you have to coordinate with everyone everyone running nodes and infrastructure and validators and all

that sorts of stuff you coordinate with all of them and you also need to make sure the community is aware this is happening and let time for it to sink and bake in and have discussions around it the discussions alone the preliminary discussions alone would take weeks at minimum here so outside of critical bugs on the network that need to be fixed like right here right now or else exploiting them would result in a very bad outcome for for ethereum as a chain there is just no way to do a hard fork in a timely manner now because of that during those months of you know testing and veling the the these these things to get them live in order to increase the blob size and count what ends up happening is that work gets taken away from pectra in this you know in this

example in this timeline so Petra gets pushed out and it just pushes everything back so what we could do and what what could be potential here is if we see sustained Demand on blobs we could include a blob uh size or count increase with Petra essentially uh it would be part of that upgrade it would just be an EIP part of that upgrade and it' be a lot easier to reason about coordination is already being done and we've already done all the heavy lifting there but in saying that if Pi Dash goes into Petra then increasing the size or count of blobs is I wouldn't say like totally redundant but it's like mostly redundant because P Das already gives us a huge scalability increase for blobs without us having to increase uh the you know the the blobs per block or the um or or

the size of them um while not putting more load on the network that's the whole point of Pi Das and you should look up Pi Das that you may not understand uh what I'm like the the word I'm saying I'm saying it too fast but p e ER d a s p I've talked about a bunch of times before it is one of the most interesting uh things coming to ethereum in the next few years and it is very relevant to this convers conversation here and as I said if we can get that into Petra it makes this whole thing moot but I figured it was worth running through why it's difficult to do these things why it's difficult to uh to to just do a high F you can't just let's just do a hard Fork right outside of critical issues um and outside of people

having to be all hands- on Deck it's just not going to happen for good reason I mean that's the whole reason ethereum is decentralized right is because it's hard to make changes to the network but also as I said Network stability is Al always a priority it is definitely the number one priority of the core devs I would say uh to make sure that what they're building is stable in a live and adversarial environment which is what ethereum main net is it's all well and good that things work on dev Nets and test Nets but hey real testing happens in production happens on mainnet where uh you're in an adversarial environment here so I guess to toap the up in the short to medium term I would assume that there's going to be a lot of research done on this problem with regards to uh

The Blob fee Market need potentially needing tuning but also the problem of Builders not including blobs in their blocks and as I said this is a wider issue it doesn't just include the blobs it includes everything got to do with me here and there is a lot of active research happening on this but it is not something that we can fix overnight guys this is very deep stuff this is very technical stuff very heavy research right now um but I'm conf confident that we as an ecosystem can definitely uh fix it but yeah anyway you can check out all of what I've just spoken about I'll link uh the all the relevant stuff in the YouTube description below for you to check out all right shifting gears here a bit so bitwise one of the companies that has a um Big E ETF in the pipeline to set to

go trading relatively soon put together a great 39 second ad uh all about ethereum uh not specifically about the eth ETF but about ethereum in generally so you can go watch this for yourself I'll link it in the YouTube description below but they titled this saying unlike big Finance ethereum doesn't clock out at 400 p.m. and basically the gist of the ad is that this old man is going to bed at 4 p.m. because that's when the the big Finance or tradire markets closed whereas the young hip guy is uh on 24/7 because he's ethereum he can do Finance 24/7 and it's kind of funny the language that they used um big Finance this term of this this uh kind of trend of putting big in front of things is something that's happened over the last

10 to 15 years like big Finance or you know um I guess Elizabeth Warren tried to coin the term big crypto which doesn't even make sense but like big something to imply that they're a huge incumbent and uh they're slow they have a basic Monopoly on things you know let's break them up sort of thing so I'm glad they actually use that language because it resonates a lot with people outside of crypto and the quote unquote normies that we all kind of talk about and I do want to bring up uh just based on on this video something that I I mentioned a few months ago where I said that the marketing around the eth ETF and around ethereum from these issuers from bitwise from Black Rock from Van and so on and so forth is going to be unlike we anything we've seen because

this is what they do for a living they sell Financial products to clients to customers to people with big money they know how to relate to them they know what resonates they have huge marketing departments to do this cuz that's they're selling a product at the end of the day that's their core thing to do they're in sale I mean they're not in sales but like without AUM coming in they're not making more money and they're a bus that's their business of of getting AUM getting money flowing into their products and taking fees off of that right so to do that they need to come up with the the most relatable marketing material and I know that there's been a lot of debate around this within the ethereum ecosystem where you know what's ethereum's narrative and as I said before ethereum doesn't have a singular narrative we just have to

accept that ethereum just by virtue of what it is is so much more than a singular narrative and as I I think summarized uh I guess like a couple of weeks ago on the refuel I said that not only is ethereum a financial platform it's also a technology platform and and ether's asset is a story value and a money so there's so much going for eth as both a a story value play and as a Tech play and that's definitely what's going to be marketed to people I think this ad in particular focuses on the tech side of things where and I guess like the Tech Finance side of things where ethereum can do Finance 24/7 uh and be and it's enabled by the technology that ethereum is built on uh but I'm sure they're going to be hitting on you know eth getting exposures to

this uh buying by buying eth as a story value and as a money so I'm I'm very happy to see this kudos to bitwise definitely for putting this out there but this is just I guess like the the the very first stuff that we're seeing about the ETF guys like it's going to be big and it's going to be really exciting a lot of it's going to happen in the background for sure like unless you're actually kind of on the mailing list of these uh institutions or maybe one of their bigger clients they'll probably Market to them differently you might not see some of this stuff or a lot of this stuff a lot of the marketing but rest assur it's happening in the background and as I said a few weeks ago ethereum as a I guess like thing is just so much I'm not I wouldn't say necessarily

easier but so much more vibrant to Market because of the fact that there's so many different things you can talk about I mean in the in this video alone they mentioned stable coins and nfts that's just two things that ethereum is good at and I think I believe loans as well right there's so many different other rabbit holes they can go down and they're going to simplify all of this for for their clients so as I said you can go give this a watch for yourself I'll link you just description below but but really I I'm just really bullish at this point guys like maybe you can't hear it in my voice because I'm still sick so I'm a bit nasy but like I don't I mean I mentioned this a few weeks ago there's like no reason to be bearish guys no to be bearish there's so many

bullish things happening and yes right now prices are crabbing sideways but like who cares as I explained yesterday this is totally normal especially during the the northern hemisphere summer it's totally normal if we're still crabbing in like I don't know September or something like that I would be like oh okay why are we still crabbing you know by by now maybe we should have gone up it's it's it's been a long time of crabbing I'd be like this is this is weird but I just don't see that happening with all of the stuff coming down the pipeline you know the E ETF just being the tip of the iceberg there's so much other stuff coming out in and outside of crypto and there's so many reasons to be bullish here so when I look at it from that perspective yeah guys like there's no need to be bearish

there's no need at all anyone who is bearish like actually bearish I don't think they have their senses and people who are bearish because they want a cheaper entry well hey welcome to the club right every time I go to buy eth I'm like damn I wish I could have bought this at a lower price because when I buy eth it's when I just get the money that that's coming in and and I'm I'm basically tapped out at this point I'm tapped out in my spare cash to be able to buy eth right now and I have to wait to get more money coming in and once that comes in I'll be able to buy more eth but hey like that could happen when eth is at like 4K and they like damn I wish I bought at 3500 and yes I know some people will be like well why don't

you take on Leverage and borrow against your assets I'm like okay two reasons one uh that's a taxable event in Australia unfortunately it's a dumb thing that they've that they've done but like it's a taxable event so I can't and two uh that's leverage I just don't use leverage no matter how low my liquidation price would be I just don't screw with leverage uh I just use you know actual cash that I have and then just put that into eth when I can and buy eth when I can and of course most of my eth is staked so I'm stacking eth you know even when I'm not buying it directly with my own funds I'm stacking it because I'm earning a return there which I've been very happy with over the years like it's been a really great way to stack more eth uh and doing it in a

Solo validator or solo stake away has been amazing for me but having total control over the whole pipeline uh being able to be involved with that ecosystem it's just great I mean as I said I mean I've said this so many times it's basically a meme at this point there is no need to be bearish so be bullish go watch this ad and you'll even get more uh bullish I reckon so yeah I'll link this in the YouTube description below for you to check out all right last up here I just wanted to shout out that I will be at upside on the of July for those of you who don't know which is probably most of you because you you don't live in Melbourne in Australia upside is a co-working space in in Melbourne Australia I usually attend their events uh because I I just love

the guys there I love the vibe there it's always a good time so I'll be there doing I believe a solo panel talking about ethereum it's probably once again going to be a live kind of daily guay uh refuel basically but if you're in Melbourne on the 4th of July or you live in Melbourne uh definitely check this out I'll link it in the YouTube description below for you to do so and I hope to see all of you there um but yeah I think on that note that's probably going to be it for today I know I'm cutting it a bit short here today but it's because I've already coughed twice in this video so I'm going to have to edit those out before before I publish this uh and I feel um my my throat getting sore again so anyway I've ped through it hopefully I'm good on Monday

but that's going to be it for today so thank you everyone for listening and watching be sure to subscribe to your channel if you haven't yet give it out the thumbs give that video a thumbs up subscribe to newset join the Discord Channel and I'll catch you all on Monday thanks everyone