Coinbase Q1 earnings, dYdX L2 DEX now public and more - The Daily Gwei Refuel #94 - 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 cesano and today's the 7th of april 2021. all right let's get into it everyone so yesterday i mentioned on the refuel that coinbase's earnings uh q1 earnings were going to drop and they certainly did so let's walk through this so as i said this is the earnings um an outlook kind of report for q1 of this year so january february and march and coinbase had 1.8 billion dollars worth of revenue in just q1 of this year which i'm pretty sure is a record quarter here net income of 730 to 800 million dollars 56 million verified users which is 13 million million more than last quarter and 6.1

million monthly transacting users which is uh plus 3.3 million from last quarter so doubling the kind of monthly transacting users here growth over the last quarter in revenue was 200 percent net income 300 and traded volume 272 here so obviously a lot of growth here for coinbase and you know to be expected for sure i i don't think you know we could see what was happening in the crypto markets right now and not think that coinbase had such like um spectacular growth here you know i'm actually wondering at this point like how much growth did binance have if coinbase had this much because binance obviously services not just those in kind of like the western countries with finance us but they also service a lot of the um i guess like asian countries the european countries and

there's just like people double dipping because you can't get a lot of the coins that you can on binance on coinbase so i would imagine that binance's kind of growth is is is just as spectacular as this as well and it's definitely you know new investors coming in maybe returning investors from the 2017 boom uh definitely some spectacular growth there and you can see this chart here that illustrates it quite well in terms of like the growth from last quarter just absolutely insane and you know i'm gonna be curious to see if this growth keeps up right through to the next kind of quarter through q2 um but obviously coinbase is is listing on the stock exchange in about a week from now so getting these kind of like uh kind of quarterly report out before the

listing is very smart because if you actually kind of i guess um i saw just before look at kind of the market cap i guess um that coinbase is trading i think it's like over 100 billion dollars right now um but there was a financial institute i can't remember which one uh said this but they basically upped their target of of coinbase's uh share price to over four hundred dollars from like 200 or something like that so basically um you know people are expecting coinbase to open out a 200 plus billion dollar market cap which is absolutely insane that's going to capture a lot of headlines it's going to become one of the most valuable companies in the world basically overnight right one of the most valuable public companies that is which is going to bring a ton of attention into this space and

as i said on yesterday's refuel it's going to legitimize this space a lot as well i think because you're going to have so many diff people who you know might think that it was super risky to invest in bitcoin or ethereum or any of the other kind of crypto assets now seeing well you know i can invest in coinbase which is which is obviously like fully regulated on a regulated kind of platform um and i can invest in that safely with kind of like a retirement account or you know um or any kind of other brokerage account that people have sort of thing so yeah that makes a ton of sense there as well uh a bit more kind of information here i guess from larry is uh what do you say what did he say here he added something here where projecting revenue uh forward by

assuming constant volume growth makes no sense uh coinbase's volume is incredibly cyclical and if markets slow down a bit it's totally possible we even see a decline just watch the volume and i totally agree with that for sure i mean you can see here that usually q1 q2 is is pretty good but then you go into q3 and q4 and the volumes kind of taper off there as you can see but it is volatile i mean last year it was different right last year um you had like i mean in 2019 sorry you had may june and july being like the standout months whereas in 2020 you had march may and august uh being the standout months here now obviously march was was a lot of volume because of the the crash i guess it wasn't actually i guess like

by volume was it was majority cell volume um and then you know in august obviously we had like the d5 run uh of course and and that and like the i guess like an ethan bitcoin run as well which attributed a lot to that so yeah definitely not a constant kind of thing it's not like we're gonna be seeing uh coinbase break kind of record volumes every month sort of thing you know if the market's quiet then clear messages volumes are quiet it's simple as that i mean you know it's pretty easy to kind of um draw that conclusion but anyway this is going to be huge you know i can't wait to see um kind of all the headlines around this and kind of like how crazy the traditional markets go over coinbase and how much they bit it up because this this growth is seriously insane you know

there are not many companies that post this kind of growth and obviously it's because the rest of the crypto market's growing but you know maybe you know we have like another few months left of this craziness in us and yeah it's going to be pretty insane to see how how kind of like coinbase goes here so the ethereum cat herders put out their latest update here on number 41 going over a bunch of different things so i think the highlight of this update was that there's an updated road map for stateless ethereum so for those who don't know stateless ethereum is an initiative that's being undertaken as part of the eth2 roadmap to essentially make it so that we can fix the state bloat problem of ethereum where ethereum becomes a stateless system where you uh where kind of like people

only retain the state that they care about sort of thing um so that is in heavy developing research and and kind of like i guess early development at this stage uh but yeah a bunch of other updates here and for those who don't know what the ethereum cat herders updates are they're basically a way to keep on top of all the eth1 and e2 stuff that's going on at the protocol level it's very comprehensive it gives you links to basically everything you need it's it's the best kind of up best kind of like overview of the eth1 and e2 systems that i've come across um so definitely go check that out but yeah a lot here i mean so much and some of it's technical some of it's not but if you want to keep up with everything that's happening within the ethereum ecosystem and this is the place to do it

definitely so yeah go check it out if you haven't already i'm just kind of scrolling down to i remember where i saw it where uh the um the stateless kind of like roadblock i think it's like the first thing here um yeah there's a bunch of information here around that that's the most interesting thing i think right now outside of like the merger sharding 1559 stuff like that i think stateless ethereum is the most interesting thing um you know which you can kind of see the updated roadmap here sort of thing so definitely go check that out if you haven't already speaking of protocol uh kind of related updates here proto lambda tweeted out that um the alpha 3 eth2 kind of spec release for the first upgrade coming to eth2 or the first hard fought called

called altair um was was kind of released today and there's new merge and sharding r d uh specs now as well so yeah this is obviously very kind of technical very protocol level stuff you know most of us are not going to be kind of looking deep into this but it just shows that there's a lot of progress being made you know on eth2 right now like the altea upgrade i think is still scheduled for for mid this year uh and the merge is obviously taking like a pretty pretty good priority priority now where are pretty high priority now where we could expect to see it by you know the end of this year if they do the minimum viable merge path and sharding is is also kind of top of mind for a lot of a lot of kind of researchers and developers here so great to see that

um kind of like and great to see progress coming out of there but as i said i think that this and a lot of the similar stuff is covered in like this ethereum cad headers update as well so um definitely go check uh check both of these things out um if you're interested in learning more so gnosis has released this new product called the gnosis auction platform basically it's a new platform for fair transparent and decentralized token price discovery on ethereum what is it is essentially aiming to do is basically be a platform for fair token launches um from from kind of like what my reading is here um they have tried to do this before with platforms like mesa um and if you remember uh one i guess like the couple of high-profile launches happened

happened on mesa such as m stable and d hedge in terms of like token kind of sales there um a lot of people use balances kind of like uh lbp platform now but what this platform tries to do is basically uh essentially uh i mean as they described here notices auction for facilitates batching a much larger set of orders which cater specifically to the initial dex offering use case as well as other large auctions such as token buybacks or protocols collateral auctions now this is supposed to be um you know i guess like done in such a way where people can't like front run people or whales can't just buy up everything during these sales it's supposed to make it like very fair for people to be able to participate and also make it transparent and also make it a really great price

discovery mechanism as well so yeah and you know i saw a bunch of people talking about this and i think there's kind of like wide agreement that that this is the best and fairest way to do a token launch um but you know the mesa platform had a bunch of issues i think with it where it was kind of buggy a bit slow like i remember back like i i was kind of like you know i'm staying up and watching the m stable sale at the time and i remember there was like a kind of like thing where they had to find the solver and delayed the the sale by a couple of hours something like that so there were some some kind of hiccups with that but with the the gnosis auction here they seem to have like i guess rebuilt it um you know

and come out with like a new platform here where they've come up with with a kind of like more innovative and new way to do this so yeah i mean this kind of release post is quite lengthy and it will explain it you know in much more detail um and it's live on the ethereum mainnet now and and xdi uh a sidechain too so yeah you can check it out on both of those platforms so i think some of the most exciting news to come out of the last 24 hours is that dydx has released their layer 2 perpetuals exchange to the public so no more wait lists no more kind of i guess caps on how much you can deposit how much funds you can deposit into the layer 2 uh it's now live for everyone and you can put in as much money as you

want which is awesome because they only kind of launched the alpha in like february right it's only been a couple of months and they're already up basically at the point where they've launched a public mainnet now um you know live layer 2 using starquest technology on ethereum you know i know it's become a bit of a meme for me myself and a lot of other people to say things like you know layer 2 is coming you know it's coming just wait just wait i mean and i i've been trying i've been trying to be very clear that layer 2 is not only coming it is definitely here it's just not evenly distributed yet we have a bunch of different kind of like isolated things going on right that definitely harness the power of layer 2 like loop ring you know like dydx like diversify like some some kind of um other projects

out there like synthetics on optimism right and things like that but as i said it's not evenly distributed yet there are no i mean connects is in its early stages of building bridges between these layer twos same with hot protocol and stuff like that but still very very early stages so it's not like the technology isn't real and it's not live you know there's a lot of stuff on test net as well it's just that we need to give it time to kind of permeate throughout the ecosystem we need to give it time to build network effects and we need to give it time for people to kind of get used to this kind of layer two world i think at the end of the day so from that perspective layer two is here it's just uh yeah it's just gonna take a little bit time to to get there and

you know i think there's another update actually here that i wanted to talk about um from god's unchained where they put out i guess like a blog post saying that um people will be getting early access to immutable x their decentralized um kind of like nft exchange here and they've put a post here explaining like here's you know everything that we all need to know to prepare ourselves for the future of nft trading so if you've got gods and chain cards which i'm sure a lot of you do i mean i do i bought them a long time ago you'll be able to kind of trade trade them on this kind of exchange here very very soon i mean i think their release is basically imminent at this point as i as i mentioned uh previously they are using uh starquest technology as well for this exchange

and that's live in a in a very public kind of mainnet way with dydx here so you know i think uh this is going to be live like if i had to kind of give a guess maybe in the next within the next couple of weeks sort of thing it's definitely not very far away at all which is really really bullish and i'm really really looking forward to that for sure um but just on the on the kind of layer 2 case here as well and kind of i guess some of you might know why it takes so long to get these things right i guess like the the the top reason is that a lot of these teams a lot of this tech is very new and very novel and you don't want to launch something and then it and then somehow people lose

money on it right because not only would that shatter confidence in layer twos in general um and and shadow and and lead to like really bad narratives as well but it would mean that you basically um as a team or as like a project building this sort of stuff you start out on a really kind of like crappy foot right where you've essentially launched something and then it's just broken from day one right and we've seen that play out like where um kind of like with the project fey protocol that everyone's been talking about lately where they launched and obviously the protocol is not working as a i mean it is working as intended but it's not working the the way that people thought it would work right or people thought that you know it should work whereas like faye is basically at its peg and things

like that and people can kind of withdraw their money and stuff so you know if you've seen what's happened with that and how much kind of like i guess you know drama that's cause and how much hate is being directed towards the project no project wants to go through that and the easiest way to avoid that is simply not launch something until it's kind of like ready right and i'm not saying that that the faye protocol team did this or anything like that i'm just using that as an example but at the end of the day i've been a part of many different kind of project launches whether as an observer or as like a directly involved and i can tell you that the number one thing you know that i found in common across like all different types of teams is that they really really care about security

they really care about user funds they really don't want to launch a product that can put user funds at risk and if they have to wait to launch it then so be it and that's why you see especially in the layer 2 space things are just slower and that's why you know you've seen things like optimism's public mainnet get delayed they do not want to release something that they feel is either insecure is not ready is is going to lead to a poor user experience because that's just not good for anyone at the end of the day and i think and i've said this before yes there's delays for a lot of different things but like the delays are forgotten about at the end of the day i mean if you really think about it uh you know eth2 the beacon chain itself took forever to

launch from when people thought it would launch and it's been live now and everyone's kind of like okay what's next now right like when merge like people just move on to the next thing it's like people get over the fact that there was all these delays no one even cares about that or remembers that anymore people are like well you know eth2 is is live the proof of stake chain is live right at least the first phase of it right the beacon chain it's working it's doing what it should be doing and the reason it's doing what it should be doing and it's working so perfectly is because of that all those kind of like delays to get the testing done right all that kind of time to to make sure everything was fine so from that point of view i think you know a delayed project is is

not a bad thing i think it's a very very healthy thing and i i applaud projects that kind of like do that instead of just rushing to launch due to you know i guess like either it be ecosystem expectations or internal deadlines that they don't want to kind of skip out on yeah i i just don't see a problem there i know short term it sucks but in the long term it's going to be it's going to be better if more teams do this so yeah very excited to see immutablex go live anyway as i said i expect it any day now i'm sure they've been working very very hard on it they've been teasing it for quite a while and as i've said before it's a it's a decentralized exchange for nfts which is something that doesn't sorry layer 2 decentralized exchange for nfts

which is a use case that is absolutely massive so if they can get this right if this can work i think this is going to change the game for nfts on ethereum so set protocol announced today that they're going to be deprecating v1 of um uh the robo sets on the platform now this is kind of like an end of an error i think for set protocol i was involved heavily with all of this kind of like building out these robo sets and and social sets and stuff like that when i worked at set uh as as kind of like full-time marketing but as the ecosystem has evolved over time and as kind of like gas space have gotten higher uh since kind of like the robo sets were a thing um you know and then set v2 was released it's basically come to the point now

where it's not worth that to keep these kind of i guess like sets going essentially and that's what they kind of describe in the blog post here on on medium and they basically kind of like describe the history and like these robots have been out since like 2019 and you know it's it's actually kind of nostalgic when i look at this sort of stuff because i was involved in this since mid-2019 um and i'm just remembering back to like the gas fees back then right like you know one way up to you know ten way sort of thing gas fees and it was just like nothing and no one cared right everyone would just pay gas fees and it'd be fine right but that's not the case today and and also um the infrastructure and and kind of like the smart contracts that these sets used were based on the v1 of the

protocol which was actually you know uh based on kind of like old code that hadn't been updated in a while because it was from like 2019 um and it hadn't been optimized for for the kind of i guess like high gas fees on ethereum so it was actually very expensive to to kind of rebalance things and you know and now the the gas fees being expensive in general um makes it expensive for market makers to participate in things like rebalances and stuff like that so yeah that's why kind of like v1 is being deprecated here if you do have these robots kind of like sets in v1 um this there's a guide here on how to redeem it and basically how to sell out of it um sort of thing uh you know i know that for some users it's painful because um the fees are quite high on on selling

these sorts of things it can cost sometimes like a few hundred dollars to do this um which is unfortunate um but yeah if you want to kind of get out of this position um you know this is how you do it because these sets will no longer be rebalanced into the future but the positive thing is that the set v2 infrastructure has been built up uh from the ground up to be very gas efficient to you know avoid all of the problems that kind of like rear their head with v1 and like i'm personally extremely bullish on what v2 is doing obviously i have a buy icr as i'm still an advisor to set but you know i think it's just like a better path forward and this is the kind of stuff where it's like short-term pain for long-term gain sort of thing so

i guess like kudos to two i guess like the set team for pulling the the plug here i know it wasn't easy for them like i've been following kind of the conversations definitely wasn't an easy decision to make but it was one that had to be done so yeah if you've got any old sets definitely go check out this post it'll be linked in the youtube description below so nftx has launched their new interface uh which allows people to create mint and trade nft backed tokens here so you can go to app.nftx.org here and you can kind of see there's a new interface i'm not going to connect my wallet here but basically they've kind of refreshed the ui for those who have used nftx in the past you'll see kind of like how this differs from the old ui here but yeah i mean this is one of my

favorite projects in the space still and for those who don't know what this is uh and actually disclaimer i own some nftx tokens of course but basically what um what this is it's a way to create like indexes of different um nfts and give them liquidity so essentially the most popular one i think is the punk index where uh basically all of the quote-unquote floor plan punks or like the least rare punks i've kind of put into this index and you can trade this and it acts as like a a kind of like benchmark for what the floor is on crypto punk so you could speculate on crypto punks by just buying and selling this kind of index now this is just like the i guess like one of the first apps you can use nftx for uh there's obviously other nfts you can put in into this and

anyone can kind of mint their baskets and and create these indexes here and stuff like that so and like with this new interface it's even easier to do so yeah if you're interested in doing that sort of stuff definitely go go check this out but i think this is this is really really cool um i really think that uh this is was is a solely needed kind of thing i think that they're working very hard right now on on like upgrading the protocol as well not just the ui i think there's like a v2 coming at some point as well so i'm definitely excited for that but yeah and i'm curious to see kind of like how this lends itself to the immutable x platform as well will we see nft indexes trading um you know on on immutable x's platform we will see so i put out this poll today and you

know i left this for last tex i think i'm going to be talking about this for a few minutes here but i put out this poll where i asked do you care about decentralization and as you can see here the overwhelming kind of response was yes there's so there's about 83 percent was yes about five percent was no six percent was indifferent and six percent was show results so i was surprised by this if i'm being honest and obviously this poll isn't going to be representative of uh the entire space i have a very kind of like ethereum based following you know most of my followers obviously interested in ethereum and if you're interested in ethereum you obviously care about decentralization but and i wrote about this in the delegate newsletter today i actually think this question is like very

uh very simple it doesn't have enough nuance around it because when you say the word decentralization and when you actually say to people okay you know is this thing decentralized or is this thing people have their own definitions for it is not a strictly defined term it is not something that you can just say you know okay well this is decentralized and this isn't or you know or like people will say you know this is decentralized but really it isn't and sort of thing and there's a there's a piece by bellagi um called quantifying decentralization and it kind of breaks down like what what kind of like things you have to measure to to get to something that's decentralized so you know the number of nodes in the network that are validating uh the kind of like network and can validate the network um how

concentrated the mining or staking is in terms of like pooling and and stuff like that you know how decentralizes the core development is there multiple teams working on the on the clients right um how decentralized is the exchange infrastructure and just general infrastructure in general so all of this sort of stuff culminates into kind of like measuring and has blaster puts it quantifying this decentralization now that is that nuance is completely lost yeah so i think it with this poll a lot of people do care about decentralization but there might be people who think that the you know the things that they care about or like decentralization that they care about is a platform that's not actually decentralized at the end of the day so i'm you know and it's hard to tell

because obviously this is just a poll and i had a bunch of replies here as well that i was kind of reading through um and like i actually uh liked the replies you know i like that some people said you know you know they're like money more so they care about decentralization but they like money more than decentralization which i mean i expect you know this person says yeah yes but yes i care about decentralization but i still buy um b and b if it goes up for example and i don't think that's necessarily a bad thing i mean i don't blame people for doing this you know just because something is not decentralized doesn't mean you can't speculate on it at the end of the day but i think the fundamental kind of i guess like question here that i was trying to answer is that

you know yes you can make money on these things but like like outside of the money making stuff what do you actually care about do you care about decentralization and i think a lot of people do but i do think a lot of people sometimes mistake certain platforms for being decentralized when they aren't you know not just platforms and like other blockchains but also kind of like apps as well because if we really kind of look at it there's a lot of apps on ethereum today within the default ecosystem that are definitely not decentralized because they still have admin keys which is a feature for those apps because they the early stage they want to be able to upgrade the protocol and that's fine like i i don't have an issue with that but you might get a lot of people saying well this protocol is decentralized because

it's on ethereum it's like well okay you know that that i can get why people say that but that is just like you know if the base layer is decentralized but the app isn't decentralized itself well then it's not decentralized just because it's on ethereum it could be on any other base layer but as long as there was admin keys that controlled it it's not decentralized right so the point is here is that like the base layer you know in this case theory and being decentralized is critical because it works the other way too if your base layer is is centralized but the apps you know maybe on top of it are decentralized and don't have like admin keys or whatever it doesn't matter because at the end of the day you're still at the mercy of the centralized base layer so that's why the base layer being

decentralized is the most important thing and that's why i don't mind d5 apps being kind of centralized and then progressing to being decentralized over time because it makes a lot of sense um and you know it's actually easier to do that for different default apps um and and apps in general than it is to do that for an entire platform so that's why i'm unconvinced that a lot of these other platforms that claim that they're going to be able to decentralize over time like all these other blockchains i just don't think that's going to happen i've seen that kind of claimed for many years in this space and it's just never materialized as people kind of thought it would especially in systems that are based on distributed proof of stake or depos they devolve into cartels very quickly and then the cartels don't want to give

up their power and yeah essentially it's just a decentralized system at the end of the day so yeah maybe i'll put out some more follow-up polls to this i don't know i don't know if twitter polls is the kind of best thing to do here i think just simply educating people more about what decentralization is why um you know ethereum is not sacrificing decentralization you know even though it's more expensive to use ethereum people still don't want you know the community at large doesn't want to this doesn't want to sacrifice it uh to achieve kind of like you know cheaper fees and scale or whatever but you know and i guess like the last thing i wanted to talk about here and i was thinking really kind of deeply about this because i actually saw a comment here from someone um there was i don't know where it is

now i can't remember if it was a comment here or somewhere else but essentially people can say they don't care about decentralization until they do because when you really think about it right people like well you know this thing has run centralized for quite a while it's fine like nothing's ever going to go bad with it and then you you kind of look at history and like that's never been the case like even the biggest banks in the world in the us right were uh were doing kind of shitty things leading up to 2008 uh and the only reason why some of them survived was because they got bailouts from the governments the government isn't going to bail out any of these blockchains right if something goes wrong with them no one's coming to bail them out like and if it's centralized then the only person bailing it out is is

kind of like the people running this system but if they're out of money and there's something that that requires money to kind of bail it out then i don't know i just i just see that kind of just blowing up in people's faces so at the end of the day we are building these systems to get away from centralization as much as possible and that's why i personally always fight back against these other platforms and i get that people want to use them because the fees are cheaper and all that sort of stuff and that's fine i don't blame people for doing that but don't call it decentralized you know understand that what you're using is is is is at risk of centralized control and also understand that the whole point of this ecosystem is to decentralize as much as we can so and i think a lot of people do and i

think everyone kind of watching and listening this definitely understands this but you know and this is why i keep doing this this is why i keep doing more education around this is because i want people to understand this and i think during a bull market it's easy for people to lose their heads and not really care about this sort of stuff and that's fine um you know people want to make money and i don't blame people for that right everyone wants to make money i would be lying if i don't if i said that i didn't want to make money either but you know at some point this stuff kind of like means more to a lot of people than money you know for me and a lot of people that i kind of know in the ecosystem we we care a lot more about kind of like

seeing this technology succeed in the way that we want it to and the way that we want it to succeed is it being you know as decentralized and as secure as possible so for me i'll keep supporting ethereum as much as i can i'll keep supporting scaling via layer 2 because it's the only way to scale a system and retain decentralization but that's not to say some of these other platforms won't get traction like personally i'm you know looking at some of these other platforms and being like okay well you know what they're doing here is pretty cool what they're doing there's pretty cool um you know uh not not the the very centralized ones like i obviously have zero interest in following what's happening on bsc um you know there are other platforms i'm not gonna name any right now but there are other platforms that i can see

kind of like maybe carving out value over the long term but obviously most of my focus is still on ethereum here um and you know i mean if you're um is where all the excitement's happening anyway sorry if i want to keep entertain i just stay in the ethereum ecosystem but you know at the end of the day ethereum is the only platform and i believe will only will be the the only platform that appeals to everything that i want to see in in these platforms and to my deeply held beliefs and kind of ideologies and i'll freely admit that it's an ideological thing and i don't think that's necessarily a bad thing i just think that you know not everyone is like that and which is fine um but i think being honest about it and and being honest about what you know you

care and don't care about is better than just lying and saying yeah i care about decentralization when really you know you kind of don't um yeah because like honesty i think is is is kind of everything in this space and you know i'm glad to see actually a lot of people being honest right a lot of people just straight up say i care about money more than i care about decentralization i'm fine with that you just straight up tell me and i'm fine with it what i don't like is when people kind of lie right um and you know when people kind of mislead others by saying you know they really care about decentralization but but they're just profiting off centralization at the end of the day so i think um you know i think from that uh perspective uh it's just like good to kind of like

take stock here and i think i've rambled on about that enough for today and we're up at 30 minutes so i think i'm gonna end it there so thank you everyone for listening and watching again be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone