CFTC investigates Binance, eth1/eth2 merge & more - The Daily Gwei Refuel #77 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today is the 15th of march 2021 all right everyone i hope you all had a great weekend let's dive right into all the news that happened but before we do that actually i just wanted to give a quick reminder here that the git coin grants matching round is still going so if you haven't donated yet to your favorite projects i encourage you to do so and i wanted to give a big thank you to everyone who's donated to the daily graze grant i really really appreciate it um and if you'd like to donate the link to that will be in the description below but don't just donate to the delegate definitely donate to everyone else as well that

uh you know that you use and there's a bunch of projects on here i mean you know there's there's probably hundreds of hundreds at this stage and as i've mentioned before there's like collections you can look at as well if i was to click here um you know people have different collections where they they kind of like uh curate i guess uh a bunch of different grants so if you don't know what to go for you can definitely have a look in these these collections i've got my own one called the sassel's cart of love uh it's here somewhere there it is on the left hand side here um but don't just look at mine look at the rest of them and see what you like as well so definitely go check that out if you haven't already so the biggest news that came out and i

think this came out friday after i put out the uh the last refuel was that binance is under investigation by the cftc which is the commodity futures trade commission in the us um i bet over their trading activities so basically they're under investigation because for the longest time finance allowed uh u.s citizens to trade on the platform when uh you know and they had to they ended up barring them and kicking them off the platform and and creating a new site called finance us where u.s citizens could trade now the cftc is investigating them because they think that finance is still allowing u.s traders to to trade on the platform which you know is probably still happening because you can get around this with like vpns and stuff they have you know finance has controls in place to kind of control this or to like

prevent against this sort of thing but people can still get around it right so that's why they're under investigation here um you know in terms of like where i see this going i i don't think it's going to be like anything major finance is a huge organization now i mean billions of dollars um in in kind of like trading revenue billions of dollars in in profits as well uh you know sorry trading volume and profits too you know i feel like this is just another one of those they're gonna get a fine right a slap on the wrist fine over it they're gonna admit no wrong doing right and they're gonna go about their business i think that sometimes these things can become too big to fail right which is a i really i don't like that term i hate that term because i think that it's just like a

cop-out but i mean could you imagine if binance went under what kind of systemic systemic risk that uh or at least systemic shocks that would kind of like present to the crypto market um and like all the users on there i mean i i'm pretty sure binance has millions of users at this stage being a centralized exchange uh and they they're the top centralized exchange still so yeah that would not be great uh but yeah i think they'll just pay a fine um you know you guys know i'm not a huge fan of binance and obviously all the stuff they're doing with with bsc and things like that but in general i mean i don't really root for for more regulations or regulators to come into this space because you know even if they just go after the you know finance um you know they're gonna they'll go

after everything they're not just gonna stop at binance right um so we in general like i don't invite that many regulators into the space because we're seeing stuff like you know india banning crypto and things like that i mean i that's that's so many so much conflicting information around that i don't think they're actually banning crypto i think there's just news stories doing that for some reason i mean it's like china saying they're banning crypto and they've said that for for years now like i think almost eight years they've been saying you know china bans crypto um and they've done it multiple times so i don't think this this india this thing in india is hasn't has much merit to it i don't think india's gonna ban crypto but again you know these headlines are attractive people like to trade on them you know the market moves in in whatever

direction it wants but it's all short-term uh long-term it's all good but yeah i don't expect much kind of like i guess stuff to come out of this for finance pay a fine admit no wrong doing and you know away you go so hasu had an interesting tweet today where he said many ethereum killers of 2021 remind me of the bitcoin killers of 2015 and 2018 they still think winning is primarily about the tech uh which is funny because um you know actually i should say that i wrote about this in the delegate newsletter today so if you want to go check it out go read that but i can give the tl dr here basically for those who are around in kind of like i guess even like 2013 14 to like 2018 there are a lot of forks of bitcoin right like countless forks of

bitcoin you know the most famous being litecoin which changed a few variables you know faster block times you know change the supply and whatever um change the hashing algorithm and the way you go um but a lot of i don't think litecoin ever marketed itself as like something that was going to kill bitcoin or improve bitcoin i think it was just like a pet project for for for charlie lee that made him rich um but anyway uh i think there are other projects that were always kind of like claiming oh we're better than bitcoin because we have better tech you know we're doing proof of stake right there was proof of stake coins all the way back back then and ethereum isn't the isn't the the network that invented proof of stake i actually think peercoin did and for those of you in you know

watching that are ogs you'll you'll remember that that name peercoin that was very popular it's a very popular bitcoin fork back in the early days but there was countless others right out there and and all claiming to be able to beat bitcoin now obviously that never panned out and i think the last of them were was bitcoin sv right that came along uh that obviously didn't work uh bitcoin cash didn't work either even though i don't know if bitcoin cash was 100 a bitcoin killer more it was like a splintering of the community but anyway bitcoin killers are pretty much a thing of the past now no one talks about them really in in kind of like when they're talking about bitcoin you know it's generally accepted that bitcoin is number one at what it does which is being a digital goal story value sort of

thing which is which is fine but obviously we have a lot of ethereum killers now as well um uh like and and a lot of them market themselves based on the tech and as hazu says here the a lot of people think that it's all about the tech and you know if we just look at the two top networks bitcoin and ethereum by market cap you know bitcoin's worth the trillion dollars ethereum's worth over 200 billion dollars um if we just look at that right um they're one and two by far and they're the most unscalable chains right bitcoin does five transactions per second ethereum does 15 transactions per second and yet i actually think this counts more for ethereum and yet ethereum does um you know way more activity than any other chain most of the other changes are actually ghost

change or they have like basically no activity on them but they claim to be able to do you know thousands of transactions per second right they claim to have better tech they claim to have better you know developer tools and better programming languages and and whatever right you may have seen the joke on on tw on twitter about haskell i mean how cardinal's using that and how that's going to solve everyone's problem um problems and i'm telling you right now no that's not going to happen like haskell is a good language you know good programming language but like hardly anyone uses it so there's a few reasons for why ethereum bitcoin still number one and two and i kind of i spoke about this in the newsletter but basically the number one reason that i believe is community right without a strong and lasting community that actually believes

in stuff you know beyond just the price movement and the price action your networks are just not going to do very well right you're not going to have that ideological drive behind it you're not going to have the builders behind it right the developers the development tools things like that right you're not going to have all of that on your your you know quote-unquote better tech chain if the community is just crap um that's the first thing and obviously bitcoin and ethereum have extremely strong communities and community begets community where the more community members you have the more people preaching your message out into the world the more people you have joining right and i actually think these networks resemble religions at the end of the day um but that's a that's a discussion for another kind of um another time so second to that is liquidity so

liquidity begets liquidity and what do i mean by that well it's the same as community begets community the more liquidity how you have in a system the more liquidity comes to the system because you you know if you're if you want to trade on a decentralized exchange why are you going to trade on the most liquid one aren't you you're not going to trade on one that has like hardly any um liquidity in it so so that there's that but on top of that with the in the liquidity kind of arena there you also have like broad support um for for eth and btc they're pretty much listed on every single centralized exchange and on-ramp every single one that's not true for most of the other networks right those are they're basically the two defaults and now for ethereum in particular a lot of ethereum based assets like

erc20 tokens right are listed on centralized exchanges and services too and the reason why centralized exchanges and services are important is because they are the on-ramps for new users new users get kind of like exposed to these things first and then on top of all of this you have brand awareness is a big part as well where you know pretty much i would say most of the developed world at this stage has heard of bitcoin a lot of people have heard of ethereum too right and that brand awareness kind of like builds you know begets brand awareness right it builds on itself and the network effects keep going and um you know this all culminates in what people like to refer to as network effects where all this stuff comes together and basically

strengthens each other right the kind of bounces off each other and forms like a you know a near impossible kind of like moat for other networks to break and that's why you have not seen any of the networks the quote-unquote ethereum killers come anywhere close to ethereum i mean i remember back in 2018 there was a huge narrative around eos right and eos being the ethereum killer right it's super scalable you know has better tech whatever and eos is literally like i mean not even just the price but like the network itself the community is dead like i go on the er subreddit sometimes and it's absolutely dead right um and this is because they didn't they weren't able to kind of build a great community and they weren't able to build a great community of of believers right of of um of builders especially

and the mission that they stood for everything they stood for just did not resonate with people whereas with a bit bitcoin and ethereum it does so that's just like i guess like a tldr and why beaker and ethereum is still number one and two and i don't think i mean i'm pretty vocal about this generally that i think that ethereum can one day flip bitcoin but i don't think something can flip ethereum at this stage i i don't see any other networks out there that would be able to you know come at ethereum and and kill it so to speak or dethrone it from number number two because it's number two right now right um in terms of like and and i'm not talking about just like a brief thing like i remember in 2017 xrp flipped ethereum uh you know for maybe a couple of days

i'm talking like a prolonged thing where ethereum was actually number three and something else was number two right for a long period of time i'm talking months uh or at least weeks i mean you know even weeks would would probably uh suffice there um but yeah and then in the newsletter i also mentioned that you know a lot of these other ethereum killers are acting like ethereum is not upgrading itself right he's not going to be better tech he's not doing all the stuff we're doing not only on eth1 with layer 2 right and eth2 as well i mean eth2 i've said before how i think it's true e3's proof of stake consensus mechanism is the best in the industry by none like nothing even comes close to it in terms of how decentralized it is how inclusive it is and how secure it is

for the network and on top of that i think the the way ethereum is is approaching and scaling via sharding in layer 2 is a much more secure and decentralized way to do scaling whereas a lot of the other networks are not approaching it in this way that's not to say these other networks won't have their own kind of like communities and network effects and growth of course they will i mean i've been paying attention more to the the terror ecosystem lately there seems to be some genuine traction there right uh and and that's based on cosmos i'm pretty sure um and i haven't done too deep research into that yeah but i'm noticing the attraction there but i think that those handful of networks that actually get traction and deliver value they're all additive to ethereum right all value is going to pass through ethereum you know everyone

wants to come to ethereum because that's where everything is or the liquidity is all the users are so i think that is what drives ethereum actually ironically to to basically flip bitcoin i think bitcoin is going to be like just the modern day gold basically right where gold's market cap is what 10 trillion dollars right if you're rebuilding the entire financial system and being the reserve asset of that financial system well i mean i think it can be worth more one day can be worth more than 10 trillion dollars in market cap but for now it's not you know future's still uncertain but my bet is definitely on that and that's not to say that ethereum is going to kill bitcoin right because bitcoin will still exist bitcoin will still be fine but i do think that ethereum as a network and ethers and asset

is very well positioned to capture a lot of the growth in the next few years as this technology in general enters you know more of the mainstream kind of consciousness here so the technocratic one of the co-founders of alchemix uh put out this really cool kind of like uh explain like on five explanation uh from a community member on what alchemix actually is now i've had a few of you ask me about this um and i haven't been able to explain it in as uh is in as um kind of like i guess smoothly as this explanation is so i'll read it out so basically it reads imagine a bank you can deposit money and the bank pays you 10 to 15 interest there's a credit card attached to the account with a credit line of 50 of the amount you have deposited there's no interest on the card

there are no monthly payments to make instead the interest you earn on your balance pays off any debt that you have automatically okay so that's a really great way of explaining it but i i can probably you know expand on this and give a monetary example here so if you deposit say ten thousand dollars into a bank and they're paying you ten to fifteen percent interest a year that means they let's say they're paying you ten percent that means they're going to pay you one thousand dollars a year for having ten thousand dollars in there but now you've got a credit card attached to this account that you can borrow fifty percent of the amount you've deposited so you can borrow five thousand dollars uh on this so there's no interest on the card right there are no monthly payments to make but the interest you earn on your

balance so that original 10 that you're earning on your balance pays off the debt that you have automatically so what ends up happening is that your original ten thousand dollar deposit is earning a thousand dollars a year in interest you've borrowed five thousand dollars but that that one thousand dollars that you're earning an interest a year is going to pay off that debt that you've accrued so this is just i mean awesome right like automatically paying down your debt on money that you've already deposited as collateral into the system and your collateral is earning the interest to pay off that debt that's that's awesome right i really like this and i will profess this by saying i hold um alcx token cr um i mean generally i tend to hold tokens of things that i feel like are really

you know really innovative projects and alchemics is definitely one of these i really really like what they're doing here but anyway that's a quick explain like i'm five kind of overview of how alchemics works this will be linked in the youtube description as well you can go check it out and kind of like i think there's a bunch of discussions in the thread as well uh that expands on this so overlay introduced themselves overlay protocol introduced themselves uh recently so what they basically are is they call themselves a protocol for limitless markets now is it basically i mean i wouldn't say it's like just a prediction market right but it's definitely in the same kind of like vein here but basically what overlay protocol does is it basically allows you to trade like on nearly any kind of like set of data so this data can come from anywhere

it can be defined token you know price data sentiment analytics data seattle's crime rate for example nft indexes political and natural markets the list goes on basically as i said it's like a prediction market but their goal is to let you trade on absolutely anything right that you can that you can think of um which is which is the goal of prediction markets as well but i think this is just like another kind of like play at this i mean we have orga we have um uh there's another one the name escapes from me right now um but we have we have a bunch of other ones out there uh that that are that are kind of working on this but yeah this is this is pretty cool i mean you can go read this it'll be linked in the youtube description they're obviously gonna have a token

uh ovl here um that but i'm guessing is gonna be like a governance token um and also probably a crucial fees to it uh and then they go over like how you can get involved and and kind of like um they're targeting may 2021 for their beta main net launch so not too far away the token isn't live yet so don't go aping into anything called ovl or uni swap unless you know what it is um but yeah i think they're going to have more details about uh yeah they're investors token economics um coming in the next few weeks as well so yeah definitely go check this out if this is something that you're interested in so an interesting tweet from big sky here about the d5 pulse index now again i will preface this by saying that i am an adviser to set protocol

which is heavily involved with the index cop which you know produces the default pulse index but anyway what i wanted to kind of hit on here was that there's a chart here um showing the different aum uh in dollar amounts or assets under management in dollar amounts for the different indices on ethereum now obviously the d5 pulse index is very far ahead here at 150 million dollars of aum and there's a bunch of other small indexes below it uh now the reason it's like this is because typically index products are a winner take almost everything market if you look at the traditional market in the us there's only two major players and two major kind of indexes there there's kind of like blackrock and and vanguard they're the two major companies uh that have most of the assets under

management and because at the end of the day an index is really kind of like simple to make right anyone can make an index it's not a hard thing you put a bunch of tokens in you weight it some way right you stick a fee on it you create a token of it on ethereum and away you go but the real moat with indexes is not the index itself it is in the distribution so the dpi is very distributed right it's it's it's it's very liquid on uni swap i know that the index cob is working very hard to get it basically onto centralized exchanges right to have it there um the brand awareness is is obviously very important here and as the d5 pulse index is backed by default pulse the brand awareness is there right the distribution channels are there i mean you can

purchase dpi um through unisop through token sets which uses uniswop you can purchase it through different interfaces as well and it all kind of uses unisop under the hood but it's still like different places for different people right and becoming the benchmark index as well is incredibly important uh when people benchmark i guess um you know against d5 they they tend to use default pulse index but they also use some other ones but they centralize exchange versions this is this is like on d5 so that's kind of why i guess you're seeing the default pulse index work here you know as i said at the end of the day it is not about the index itself even though the you know there are kind of like crappy indexes and better indexes but it's really about the the kind of

distribution the brand awareness you know the liquidity especially as well uh that really makes it here so yeah interesting tweet from big sky here that i that i thought i would expand on today so a new term that i came across i guess over the weekend is metaverse preppers now this might be like what you might be thinking what this is basically uh a term to describe people who are buying up nfts to be ready for when humanity resides in the quote-unquote metaverse aka shared virtual spaces like virtual reality and augmented reality and i kind of finished this tweet by saying you may think this is crazy but i think we're closer than ever to this reality and i didn't expand on this on twitter but i want to expand on here the reason we are closer than ever to

this reality is because in general the pandemic has basically just accelerated our kind of like i guess mission or i guess at least the path that we were on to get to this fully virtual world now obviously virtual reality is still niche it's not really mainstream augmented reality still has a ways to go but i do think when a big company like apple releases like the apple glass and you have augmented reality here that's going to accelerate it even more but the thing is is that most of us write or at least in this space and the cryptos we work remotely right we work in front of screens we work in virtual kind of the virtual world already right yes we still go outside and everything and that's still going to exist but as more and more of our lives becomes digital and becomes virtual

things like nfts right um and like rare digital objects are actually going to become highly sought after because you can imagine getting to the point where you know we've got like full augmented reality kind of everywhere and you can like kind of imagine like just an example you can have like everyone wearing augmented reality glasses and then you know on your shoulder you have just like your pet right or like your axi character from axiomfinity and you have it there and then they can see that you have it there because uh you know it's a shared kind of virtual space and the and and you know it's not just limited to that you can have like trading cards you can virtually trade with each other i showed a kind of like video of that the other on the other the other day on the refuel

you know there's so much of this stuff happening here that i think people are underestimating this and i actually think a metaverse prepper is not crazy i actually think it's a pretty good strategy if you're wanting to invest in the nft space or make a bet that everyone's going to kind of move into this vr ar world over the next few years which i think they will as i said only takes one big company like apple to release kind of like ar glasses i mean i purchased them day one i mean i used to think google glass from a few years ago was was awesome but they were obviously too early but now that we're at a point where technology pretty much is part of all of our lives it's fitness trackers there's you know different uh watches right there smart watches you can get

our mobile phone of course you know all our screens our laptops i mean we've always got technology around us you know all the home assistants all these sort of things they're not we're not going back from that we're going to keep pushing forward here so once these kind of ar glasses come out i think that's going to change the game vr is definitely really cool but it's still kind of clunky right you have to put in this whole headset and everything and you know a lot of it um to experience like the i guess the really cool stuff you have to have a powered kind of headset um or something like that so yeah it's still very a bit clunky but technology progresses and we're going to get to this point i think and on that note on about nfts uh dc investor put out an interesting tweet

here where he said on competitive moats and network effect if you're a talented nft artist would you tokenize your work on a chain that no one uses or would you do it on the chain which created and secures a 69 million beeple artwork the world's most valuable nft among many others obviously this is ethereum right this is very important i think because if nfts and i believe they are are a lot about status right maybe it becomes a thing where your nft on ethereum is worth more just because it's on ethereum right it exists in the same shared virtual space that the 69 million dollar beeple exists on right you know that it's very secure on ethereum you know that ethereum has all these different things you can do with your nfts and will be able to do

right where one day you'll be able to use your nft as collateral or you'll be able to do fancy things with them um use them in liquidity pools and stuff you can already do that with something like nftx uh so yeah very very important kind of like tweet here from from dc investor and i think i added something here as well about about nfts and it's actually i went on reddit and i saw on the r games section and this is like a subreddit that i that i tend to go on a lot but there was a thread about nfts being discussed and i it was not positive right uh as i said yeah it's not very positive and you can see the kind of comments here you know someone said nfts might be the dumbest i've ever heard of in nearly 30 years of being

alive not to mention the resources wasted minting them and then someone followed up by saying i find all these coins and currencies and stuff to be just so stupid in general we got blockchain out of it but instead of trying to use it for anything productive it's all just money making shames scams more money making schemes and a dash of money laundering now obviously these are like the most surface level comments you can think of when it comes to crypto i can tell you right now neither of these people have done any sort of deep research on this stuff so i just kind of dismiss these comments i don't really kind of think of them as anything substantial and you know i followed up my tweet by saying the comments in that thread remind me of our buttcoin so but coin is actually a subreddit that

makes fun of you know particularly bitcoin but crypto in generally in general um but they've been wrong for years uh so they've been they've existed for years and they've been wrong for years because btc has gone up in price every year every year since the network you know the community has grown you know same with ethereum right so the fact that these people are saying this sort of sort of stuff and i know they've only got surface level knowledge of this and i know how valuable nfts are and why they're valuable it just makes me really bullish right it makes me really bullish on the whole nft space and i i honestly i i kind of like even at these prices where it's like 40 000 crypto punks i kind of want to buy more i mean i i can't really afford to but i i i kind

of want to and i don't want to give up any of my precious eth2 but you know if people are still kind of like this where they're still calling this this stuff dumb i based on surface level knowledge i mean i always think about it as if like how many people are actually in the nft space right now you know how many people are actually buying crypto punks or aware of crypto punks at this stage probably maybe tens of thousands of people that are aware of it right and that see their value in it what if that grows to millions of people what if millions of people want crypto punks and there's only 10 000 punks it's the same thing with with tokens and coins right you always want to get in as early as possible it's obviously the riskiest time to get in because you don't know if it's going

to be successful or not but if you're in really early on a project that you know you believe in you think it's going to go fine it actually does grow i mean you're handsomely rewarded you can just look at every project that's that's grown and gone far you know the obvious examples being a lot in d5 um but even crypto punks i mean i know a few very kind of like uh uh very good nft investors that bought crypto punks back in like 2019 2018 even 2017. they held till now because they saw the value they're like okay well this is going to take off if nft's takeoff sort of thing so yeah just really bullish in general to see these comments i'm sure we're going to keep seeing them for years to come but that doesn't matter because it's free marketing at the end of the day

there's a bunch of people that obviously will see this and kind of like investigate it further and kind of like see the value in nfts uh and not just nfts but everything in crypto in d5 so definitely not something that uh that is bearish i think so over the weekend we had another hack within i mean i wouldn't really call this within d5 um this is in the social token space now for those who don't know social tokens are basically guess personalized tokens i mean there's a few people who have basically tokenized i guess themselves and they kind of like say their tokens are going to give them give you kind of like exposure to their success right um but anyway outside of that the the hacking compromise happened on a popular platform called roll social token platform

and what ended up happening was that a ton of the social coins basically got dumped on uniswap because i think that the roles kind of account got compromised and they were holding a lot of the toke a lot of the liquidity um a lot of the tokens sorry uh for these kind of social tokens and they were providing liquidity and things like that so they got dumped on market the person that did this you know got away with millions of dollars worth of eth um and they washed it through tornado cash of course uh this is a mess uh there was a lot that went on here there's a great thread from my crypto here that i'll link in the youtube description you can check out but uh yeah i got from uh the block also put out a pretty great thread here um you know detailing what happened and

kind of like what what the affected tokens were kind of what the flows were here but yeah this was not fun for the social token communities there's one social token community that i that i kind of follow loosely i should i should spend more time in it but it's called friends with benefits and i mean like uh disclaiming here i own some tokens um but anyway the reason why i talk about them is because they've got like a really strong community behind them uh and one of my good friends is um koopa uh you may know of him from from twitter and from a bunch of other places he's part of like the friends with benefits kind of team and he kind of like handled all this and i think they handled it really well i went and discord and i kind of like browsed and kind of start was going on

and the community just rallied together this this hack or this compromise didn't really i mean even though the the token price dumped like 99 the community didn't really kind of like it wasn't toxic it was just like banding together like how do we fix this thing how do we come back from this and they're gonna do a token swap and stuff now you can just go into the discord if you're if you want to see what's happening there uh but i think it you know going beyond this kind of exploit and everything this is what makes this stuff so resilient right just because your protocol gets exploited or hacked or whatever if you have a community behind it they're going to rally behind you and and see how to fix it right because everyone knows that you know a hacking or a compromise is not the death of a project

most of the time sometimes it can be if it's like a massive thing where the project loses basically all the money they have and they can't rebuild um but the community you know is always there to rally behind uh the best projects so yeah that's that's just something to think about something i was talking about before about how ethereum and bitcoin have the biggest communities and stuff like that and how they always rally around uh certain things and and i think that's really important to to consider as well so yeah something to keep in mind so stani from ave is teasing another feature coming to ave called the amm market now i think what this is is that you can basically uh use your lp tokens as collateral on rv uh so lp tokens being you know balancer lp tokens or uni swap lp tokens

um lp stands for liquidity provider um and they actually uh partnered up with balancer recently in their v2 so they might be doing more than just uh liquidity providing for amm uh lp tokens sorry they may be doing some stuff with balance of v2 and maybe doing some pulled capital stuff as well um you know if you want to read about that you can just google balance of v2 there's a bunch of details in that blog post about it i i won't go through it now but yeah another teaser here i mean arbi continues to be you know one of the strongest d5 protocols i mean it's just crazy how strong they are and the following they have and the community that they have uh it's really really cool to see them adding more features here obviously they move slower than other default projects because they're

you know the smaller dfi projects they get because they're much much bigger and that's good you know that means the security is better and everything like that um they have to you know have a consideration for security more than the other ones but still good to see them evolving and moving along here so okay i'm going to finish the video with this because we're going over time here but i thought this is very important uh so you may remember i mentioned that there was certain miners rallying together to do what was called a show of force on april 1st uh which was basically pulling their hashrate into the ether mine pool and trying to get uh basically the hash rate to 51 of the of the network uh in order to show you know the network could be attacked and this was in retaliation to

their you know the miners saying that their concerns had been ignored about eip1559 making the network insecure now you know some of them have pulled out of this so red panda mining was one of the i think uh i guess like uh leaders here of this effort and they've pulled out of this so i don't expect this to go ahead on april 1st um and you know as i said on my tweet unfortunately for them the damage has already been done you may have seen that the eighth one to eth2 merger has been sped up now because of this uh it is it is a top priority now and i'll talk about that um in the next tweet i have here from justin drake i'll talk about that in a sec um but basically the miners have also proposed a new eip called eip3368 now what this says it says bump the

block reward up from 28th to 38th but drop it by 0.25 every quarter till it gets to 1 8 over two years now the reason they've done this is because they're like that again they're saying that they're concerned for the security um of the network uh and you know the erp-1559 is going to cut like some of the fee revenue which is going to lead to less less security and there's potentially going to be an attack on the network now i've spoken about how i don't think that's going to happen before um and actually bits be tripping another kind of like leader of this kind of charge here says that the quarter drops of uh the block rewards have been replaced with a slow decay every block so two eighth over eight million blocks uh sorry so minus two eighth over eight million blocks now i also want to hit on the

point here that over two years is just no why i say no is because there's not going to be two more years worth of proof of work in my mind the merger as i said has been prioritized now i won't be surprised to see the merger go in by end of this year if not early next year so that's a yeah max of of proof of work right and maybe there's some unforeseen things that come up but i don't think so because i've seen i as i've explained before on the refuel i'm pretty sure the merge is ready to go and they've already done it on test nets they just have to kind of like wait and make sure and make sure it's done securely and safely to do it on on main net um so i don't think that's happening but also i think that um the fact that they you

know miners are trying to increase the block reward to make up for this you know revenue loss is just like really bizarre to me because over the last two weeks if you go look at the total fees earned by miners for i guess like up until race up in the last couple days but two weeks prior to that the fees earned by miners went from i think 40 million dollars every 24 hours to like 15 million dollars right it fell off a cliff and this is because the market volatility calmed down um and obviously the ethereum network activity calmed down because of this now that's an over 50 drop in fee revenue to miners right i heard nothing about this absolutely nothing from miners and they would feel this straight away right because they can see that their their income's coming down so why are

they talking about this you know why i'll tell you why because the miners are acutely aware that fee revenue is variable right it is volatile it is not a constant the constant is the two-eighth block reward that always exists doesn't matter how much the network is being used or not used every single block on ethereum will pay 2 8 and then you have uncle rewards on top of that that pay a certain amount um you know for uncle blocks now that being a constant means that the only thing that affects that is that is the fluctuation in eth price and that will affect the revenue of miners but they they know that they deal with that right but the fee revenue is always a bonus the fee revenue could be zero but could be you know if it was very low back in the day

but the thing that secures the network is the block reward you know that is the flaw for security so when we talk about ethereum's monetary policy we call it minimum necessary issuance or minimum viable issuance what this means is the minimum issuance required to secure the network this doesn't include fees right because ethereum's long-term monetary policy and long-term security policy does not rely on fee revenue what it relies on is block rewards that's why you see in eth2 there is even even an eighth one there is no hard cap for eth you know because if there was we'd have to rely on fee revenue but we know that fee revenue is volatile we know that fair revenue cannot be relied upon for security so we secure it via the block award this is something that i

i hope miners understand um and i'm not not saying this is all miners you know just the ones that are kind of like fighting back against one five five nine or rallying around this proposal but in general i i just want to make that clear that your the fee revenue is not the part of the security plan at all right basically at all and the benefits that erp 1559 bring are immense and there is no i and i mean they're saying that you know because the revenue is going to drop 50 basically instantly there's going to be an attack on the network and all the hash rates going to go to nicehash where is a place which is a website where you can like um i guess like rent out hash and attack a network why didn't that happen when the fee revenue dropped 50

you know recently right you know why that didn't happen because that's just not how it works so i know i'm ranting here again because i feel very passionate and strongly about this and i get really annoyed because obviously the miners are acting in their best interests here they're that you know their whole kind of like thing is is mining right they're invested in mining they want us you know they want to kind of suck as much revenue as they can out of ethereum while they can um you know which is fine right i get that that's their incentive that's what they should be doing but at the same time they should act in in in kind of with rationality not just in rational self-interest but also rational interest of the whole network as a whole and not just in their own self-interest so yeah anyway i know i'm gonna get some

dislikes on this video from that from miners because they're gonna hate me for it but i i don't feel like i'm saying anything that's kind of a lie or that's trying to bend the truth all i'm saying is what's existed for years on ethereum right the minimum viable issuance policy the block reward being the flaw for security and the fact that the miners haven't said anything about the revenue dropping off a cliff right and the fact that some of these same miners also were bringing up the same thing about prog power back in the day and how if we didn't kick asics off the network it would lead to a 51 attack this is just a cop-out because that didn't happen right um and also saying that something's gonna lead to a 51 attack or the network's gonna become insecure without any substantial research to back it up

again is a cop-out and not something that should be taken um you know at face value i would like to see a substantial research report with very deep analysis done on what miners are saying here before i'll even entertain the idea that this could lead to an attack because i don't think it can i think there's way more research on the other side of things saying that it can't lead to an attack than there is on the on the pro side here so anyway i'll leave it at that for now i do want to talk about the merger being sped up and the reason why it's been sped up is in part because of this right the miners have pissed off the rest of the network people are really upset about this they want proof of work removed asap and justin drake said here you know

because of that the ef the theorem foundation eth2 team agrees do the merge before sharding which means as i said we may see the merge by end of yell early next year um and then you know shining will come shortly after that i think this is the right approach i think we need to get off proof of work as soon as possible for multiple reasons um you know one being the hostility from miners um you know uh i don't think that they uh they've played their hand very well here and on top of that i think that uh we want to you know we want to drop the issuance as well because issuance is very high right now we want to get um you know the ethereum's monetary policy kind of cemented in there and we also want to get off uh proof of work generally because of the energy

usage right i think a lot of people underestimate how much of uh the outside crypto space absolutely hates us or hates crypto because of the fact that there's proof of work and it chews up a lot of energy i'm not going to get into the arguments for and against tr but i do think that you know a lot of organizations particularly governments and nation states are going to take more notice of this and they're going to have different kind of like uh i guess approaches to it so i would like for ethereum not to get crop get caught in that crosshair uh there i would like a theorem to be on proof of stake and get rid of proof of work and then you know bitcoin and the other proof of work networks can deal with the fallout from that uh so yeah let's ship it as justin drake

says and i'm looking forward to seeing this go live soon all right that's it for today's episode everyone i think that's the longest episode i've ever done a lot to talk about of course so thank you again for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up join the discord channel subscribe to the newsletter and i'll catch you all tomorrow thanks everyone