Core dev updates, New Ethereum book and more - The Daily Gwei Refuel #679 - Ethereum Updates

Transcript

hello everyone welcome to another episode of the Del refuel where cup latest news in the ethereum ecosystem I'm your host Anthony s the 27th of October 2023 all right everyone let's get into it so kicking off today is a fresh allore devs update here update thread from Tim boo going over all things Denon for the most part and a few other different uh kind of updates here that I'll go through but basically there was a healthy chunk of updates actually in this thread around uh denune and all the testing that's been happening so as you guys know Net 10 went live this week and that's been kind of going through the rounds of testing and there's actually a really cool document that you can check out I'll link it in the YouTube description below which basically does an analysis on Erp 4844 blobs um as you can see here with a

bunch of pretty metrics that basically show what the impact on the devet was uh when they started spamming it with blobs and they started kind of testing it and and running and putting it through its Paces basically and this is the kind of stuff obviously we want to see uh done because on Main net it's definitely going to be different but at the same time like we need to be able to test it in some way right because we can't test it on Main net right now but we have to test it on the dev Nets and then the test net so there's this document here that you can check out I'll link it in the YouTube description below and there's a few others as well there's this is the blob analysis document and then this is the stress test document which has the you know kind of similar

metrics here and a lot of detail about this I read through it just before and it's actually pretty detailed so I highly recommend going and checking that out but I think what's relevant to you guys mostly is probably around kind of what the steps are here after devet 10 and I've been talking about the fact that there was possibility that there'd be another devet and there actually is Tim mentions it in this thread saying that they are going to be doing Dev net 11 soon and then he also mentions that the C devs really want to get one of the test Nets Fork so they obviously want to do girly first but in terms of timing around that it's probably going to be later in November rather than the mid to or the early to mid November that they were originally targeting so we can

expect mid to late November at this stage for girly to be forked but even then I mean from the thread that I'm reading here it's not that's not kind of like a confident timeline just because of the fact that there is still a bunch of work to do on a few of the clients to get them up to speed and obviously there's a lot of testing going on still and stuff like that but yeah we could probably see girly Fork I would actually put money on maybe the the end of November to be honest and then after that not sure if we'll get another test net Fork before the holiday period we may we may get another one whether that's tooo or Hy and then obviously not no main net until the new year and given the fact that the test net Forks are being pushed back

already and not to say that there was any kind of definitive date but they are get the estimates are getting pushed back I would say that it's more likely going to be February than January for a main net uh for for denune but it's really hard to tell I think uh what ended up happening and why there's been so much I'm not going to call it delays because there was never a date given but the reason why it's taking longer than expected to kind of test this stuff is because IP 4844 M blobs are a brand new thing for the ethereum Network that has never been done before and has implications especially on kind of like the block propagation side of things which requires extensive testing to make sure that it doesn't I'm not I mean it doesn't kind of like result in any negative consequences on Main net and

that's exactly why it's taking longer to test these things and obviously the core devs want to be sure that we're not going to run into any issues on Main Nets uh that that requires has like another hard Fork to fix or anything like that if there are client issues here and there they're relatively straightforward to fix because it doesn't require a hard fork in order to fix specific client issues but they want to make sure that the vast majority of clients are up to speed uh and and basically aren't going to suffer any kind of um issues once the main net Fork goes ahead because main net conditions are definitely very different to Dev Nets and test Nets but generally it should be uh quite similar in how obviously they they they handle these things they handle blobs so that's why it's taking longer here but yeah I think

at this point in time I I don't think there's any chance that we would get a fork in January for main net I think February is still on the table uh but we'll have to kind of monitor this and monitor how the test Nets go and how the timing around test Nets go as we lead into that I I mean I'd be more optimistic on like uh I guess a sooner timeline if it wasn't for the holiday period because you can basically block out at the very least two to 3 weeks over the holiday period where basically no work's going to get done right there's not going to be any Forks there's going to be minimal work being done on clients so you already got like a bunch of lost time there and that brings us into maybe I guess like the second week of January and then from

there we obviously want to be able to to give people time to update for main net which is usually at minimum 4 weeks brings us into February already right so if you just run out the numbers here and run out the dates you kind of get to February in pretty much like all the scenarios and possibly March like I'm not going to say it's going to be March but hey like we don't know just yet it's very hard to estimate these things it really just just depends on testing but as as I've said before I I don't think it's a big deal honestly I don't see anyone really clamoring right now for for denune to be honest for 4844 yes it would be nice to have cheaper fees on layer 2os but the fees even though the gas is spiked lately on layer one the

fees on layer 2 are still really cheap guys and it's not like we're on boarding a ton of new people right now yes the Market's a little bit hot but I'm going to be honest I'm not seeing any new people really at the moment come into the ecosystem so I feel like we've got some time here which is nice I mean obviously these upgrades aren't really timed around what the Market's doing because it's impossible to time that and it's not really timed around anything but when the upgrade is ready it'll go um it will go live on mayet there but yeah that's all the relevant denune updates there was also some discussion about about this new call uh this new layer 2 call called roll call which I've discussed before and a bunch of other things as well which you can check out which I'll link in the YouTube

description below for you to do so alongside this analysis that you should definitely read on blobs if you're at all interested in how testing is going there all right so I have mentioned nice node before on the refill it's basically a really easy way to get set up with running a full node on any any hardware or software that you run today and the reason why I'm bringing them up them up again now is because they just added support for Ubuntu 22.4 so if you're running Ubuntu uh whether that's on a a server that you have or whether that's you know hosted at home or hosted on the cloud uh maybe you're running a your buntu machines some where in your in your closet or something like that and you want to run

an ethereum full node and want to do it in a really easy way you can now do it with nice node and nice node already supports Mac and windows as well so you can go to their website actually if I bring up their website here I can show you what this looks like it's basically just a client that you download you uh why B basically a piece of software that you download and then on there you can select which clients you want to sync for for an ethereum full node obviously you pick the consensus layer client and the execution layer client and it just runs in the background on your system in a really nice nice uh kind of guey interface graphical user interface here which is exactly what we need really I mean I've discussed this before about how do we get more people to run run

full nodes um and I really think that a big part of it is just making it dead simple to run where you basically download a piece of software like you would any other piece of software and then just run it in the background and and have like a really easy interface to monitor the health of it and to upgrade you know when there's Network upgrades and stuff like that so really really great to see this and I'm sure nice note has plans to add um add valid or maybe they already have validator um support in here but that would be really cool as well uh so yeah you should definitely go check out nice note if you haven't yet as I said they have support for Windows Mac OS and ubun 2 or Linux now which you can go download I'll link this in the

YouTube description below for you to do so and actually just one final note on kind of running full nodes here there was a bit of a discussion about this in in the daily G Discord Channel today around incentivizing full nodes now I've discussed this before on the refill but I did want to reiterate this that it is basically impossible to incentivize full nodes and I think I discussed this with Eric in the daily grade drive-through episode we did about Lio a couple of weeks ago not the latest one the one before that but essentially it is impossible to incentivized full nodes because of a variet a variety of different reasons and the number one reason is probably well I think there's there's two number one reasons so to speak and and and they are it's really hard if not impossible to do civil

resistance like there's no way to know that one person isn't just running a th nodes uh to get as much of the rewards as they can and two what is the reward curve right because with with staking for example the reward curve is based on the amount of e that you're staking so if you're a solo validator um it's based on 32 e per validator right and if you have like 320 e AKA 10 validators then obviously you're earning more rewards than you are with only one validator AKA 32 e right whereas with running a a full node like what's the you know what's the rewards for that full node like how do you even differentiate between one full node versus another how do you uh kind of monitor for uptime stuff like that because the full node isn't doing things

like attesting or proposing blocks or anything like that it is basically not possible to to incentivize full nodes and also on top of that um if you do a kind of like a reward curve like what the the rewards have to be proportional to to I guess like some kind of work that's being done right proof of stake it's it's the work of a testing and block proposing and putting up that Capital as an opport as kind of like the um the opportunity cost there that 32 eth in mining obviously it's doing proof of work but with running a full node you there's no way to incentivize that in any real kind of like Cil resistant way or any real real way that allows people to to essentially earn a reward for that because let's just say you you basically

let's put some hard numbers to this cuz I'm just kind of talking in in um in in kind of abst tracks right now let's put some hard numbers on this let's say that you issue a billion dollar uh a year I'm just doing a random numbers here but let's say you issue a billion dollars worth of eth a year to people running full nodes right whatever that is uh in eth terms I don't know but let's just say a billion dollars there what's to stop someone from just spinning up full nodes which are really cheap to spin up by the way and just getting the line share of those rewards and also at at the same time like how do you differentiate between um a different kind of like full node operators how do you reward one node operator for doing more work than the other like for

example do you reward archive nodes more than full nodes because they're doing more for the network than a full node it just becomes extremely messy right and it doesn't actually add anything to the network in terms of uh in terms of security because there's no e there's no Economic Security because there's not nothing at stake basically and essentially you're just running a full node getting some rewards and then uh and then being able to cball that as well well so I I just don't think it's possible to incentivize people to run uh full nodes now in saying that if you're a validator you are running full nodes so that is the kind of incentive there basically where if you're um if you if you've got validators you are running a full node you're probably only running one as a as a home Staker but a lot of

these kind of like big staking operators they're going to be running more than one but really at the end of the day I think that incentivizing full node running uh with with monetary rewards is not going to work the better way to incentivize it is to basically educate people on the benefits of running a full node uh obviously the major benefits being that you get to use your own full node as an RPC so you get maximum sensorship resistance and you you only rely on yourself when doing your own transactions uh you get to obviously help the health of the ethereum network overall by um increasing the number of copies of the ethereum chain stuff like that right uh and obviously if you're a solo Staker um you know you're running one because you want you're pointing your validators to it um and you have to

do it that way so yeah that just a bit of random thoughts about that but I I wish there was a way to incentivize more you know with kind of like in a monetary way to incentivize full nodes but I I really don't think there there is especially because of that ease of cyal um there and what I mean by that is is as I said people can spin up as many full nodes as they want and just get the lon share of the rewards for themselves at basically no cost whereas you can't really do that in proof of stake or in kind of like how it works for for validators because to do that you have to buy more eth right there is a cost to doing that whereas with full node the only cost that you really incur is hardware and and um and maybe I guess

like a marginally more electricity cost but it's not much right the cost is very small and and the cost doesn't scale either it's not like the more full nodes that come on the network the more expensive it is that's not how it works it's not like proof of work right where there's a difficulty adjustment and stuff like that so yeah anyway enough rambling about that moving on to the next thing that I wanted to talk about which was a new feature from rated. Network they now have a page that covers the whole Sky test net so you you can go here and check out all the various metrics around the H Sky test net validators such as participation rates inclusion delay Effectiveness rating and all that but do keep in mind that this is a test net this is not main net so obviously the effectiveness rating is

going to be quite a bit lower because there's again nothing at stake here this is actually a pretty a pretty uh a good thing to talk about in the context of what I was just talking about with full nodes where essentially uh because there's no money on the line and there's no kind of like money being lost if your if your validator isn't online on this test net the only reason that you keep the validator online is because you're being a good Steward of the test net basically and you and you want to help the test net out but you're not getting rewarded for this there's no monetary kind of value to be had and and and on the um on the flip side there's no uh uh there's nothing being lost either if you're offline whereas with proof of stake uh on mainnet right running a

validator on Main net if you're offline you're suffering the inactivity leak right and and that eventually leads to to I mean it takes a while but it eventually leads to um a big loss of of eth and you getting kicked out of the validator set right and then if you're offline with a bunch of other people the quadratic inactivity leak kicks in and it just becomes worse and worse from there uh so that's why you see this here on the test net where you know there's nothing at stake so there's not there's no real kind of um kicker here and that would be the same with incentivizing full nodes by the way the only thing that's really at stake is the opportunity cost of not earning the rewards but by not running a full node by going offline you're not actually penalized there's no there's no kind of

motivation to be online except to earn some rewards but yeah the the rewards probably won't cover the the costs if it was done in such a way where um there was so many full noes online and the share of the rewards would be so low it it' be yeah it' be a mess basically um but anyway enough about that I've rambled about that too much here today but you can go check out this new uh test net dashboard from sorry the H Sky testet dashboard from rider. Network I'll link this in the YouTube description below for you to do so all right something that I forgot to cover uh yesterday is this new chain chat feature from Zappa so chain chat is similar I guess to some of the other web three chat apps out there like the one that's integrated into coinbase wallet

with xmt um and there's one that's into there's one on ether scan as well I think there's a few others of these things but basically this allows you to essentially log in um with your ethereum address basically and start chatting to people uh you know I guess like with your ens right and then and adding People based on their ens you can see in the kind of video here there's a mockup of like sassel e and Ben armstrong. E sorry Brian armstrong. e David Hoffman Tim boo. e and basically this is a this would be a theoretical group chat where we're all in it and we've all basically got a way to uh uh to chat to each other on chain here and there's a bunch of other features as well such as channels so group chats uh are called channels here and to join a channel one must buy

a share in the channel so it's I guess similar to frch in that in in that respect as well uh and there's a bunch of uh uh basically onchain experiences um uh embedded into the chat as well where you can see here onchain links can be a powerful tool to share tokens wallets nfts apps and whatever you want and whatever you want to share with other members here so yeah if you're interested in stuff like that you can go check out chain chat from Zappa I'll link it in the YouTube description below for you to do so all right so I'm sure you're all remembering or you all remember the other day that Unis swap Labs put a fee on their front end so on the kind of like I guess like official unisoft front end that unisoft Labs runs and there was a lot of discussion around

this and people may be wondering how much money is unisoft Labs making from this well in just one week they made $500,000 from that fee you know for running an interface that they've been running for free and earning nothing from to earning $500,000 in one week is pretty good right and I think this speaks to the fact that as much as much as people said that there's lots of alternatives to the unisoft labs front end at the end of the day it has the most kind of like Lindy around it it has the most brand awareness it has the most Network effect so people are still going to use it and by doing that they're obviously paying this fee now which goes to uh unisoft labs and that you know amounted to

$500,000 in week one uh now I don't know what dates these covered it may no I can see it on here it covered October 17th to October 24th which I guess was definitely a bit of a a hotter week than usual especially towards the end of the week here but you can imagine what this is going to look like in a bull market where you're on boarding a ton of new users right um that don't know any better especially and they're going to be just using that front end I wouldn't be surprised to see this run into the tens of millions of dollars of Revenue per week to be honest in a bull market right because of the extreme amount of of volumes that will be traded through Unis spop especially for things like meme coins that we you know obviously we saw a lot of these in 2021 so that's a

lot of money going to Unis swop Labs on interface as I said they weren't earning money from before so kudos to them for actually finding a business model uh uh that that is kind of like working for them and is very profitable for them but I know that um a lot of the uni token holders are still hurting a lot from this because they're probably like that $500,000 could have gone to UNI token holders but you know I think that I discussed this at length with Eric on the latest drive-through episode if you haven't watched or listen to that yet you can definitely go check that out for my thoughts on that um but yeah I I think generally if that you want if you want to protest this then just don't use the Unis swap front end right just use any other front end basically there

there's so many out there I mean you can use cow swap you can use matcha 1 in um defi uh L sorry llama swap there's so many Zappa has one as well I mean there's so many interfaces now that you don't have to use this but I think I will say that eventually I expect a lot of these interfaces to integrate their own fees as well into the front ends um but I think that there will always be a feess front end available because people someone will just be like you know Screw the the fact that there's fees on the front end I'm going to post one that doesn't have fees on it uh but yeah I mean for the the newer people for the people who don't know any better they're definitely just still going to use this and as I said I expect this to spike to

tens of millions of dollars and maybe towards the like end of the bull market where it's getting real frothy they could exceed $100 million of Revenue in a week sort of thing from from this front end fee we'll have to see but I think if the numbers start getting into those territories you're definitely going to see the other interfaces integrate this because they're just leaving money on the table by not doing it right um and I'm not trying to kind of like say if this is right or wrong it's just more of a business decision for a lot of these projects right where they're basically thinking well I'm leaving millions of dollars tens of millions of dollars potentially on the table here I'm I'm going to just put this fee in and for them it's it's a very simple thing to do like it's not

like it's a huge engineering effort it's very simple thing to integrate into their front end um and then it would immediately take effect and I think a lot of their users would be none the wiser about it but yeah I think that's probably how it ends up shaking out there all right just lastly here I have a quick shout out to Polar who released his new book for pre-order on Amazon here so this book is titled absolute Essentials of ethereum I did have a sneak peek of some of this book uh I was talking to Polar in DMS about this uh honestly I pre-order this straight away because it's looking like a very very awesome book about ethereum I think that there aren't that many good ethereum books out there but I think this one is definitely going to be one of them um

and as I said like it's up for prior now on Amazon you can go you can go pre-order it I haven't been paid to shout this out or anything like that I'm just shouting it out because I think that it is as I said like a really good book uh covering a lot of things around ethereum uh and it's definitely going to uh it's definitely going to up your ethereum knowledge for sure and and I think it's a good book to recommend to people who maybe don't have any grasp of crypto or ethereum to read as well if they want to learn about it and it's definitely going to be a lot more relevant in the bull market when we have a lot more new users coming in because as we all know it is is quite difficult to explain ethereum to people like it's

like this is the the main problem ethereum has I think is where the most bullish thing for ethereum is for it to be understood but it's hard to understand ethereum whereas with Bitcoin I think for on the service level it can be generally easy to understand because people would just say oh bitcoin's like digital gold but if you actually want to understand why it's like digital gold or why people think it is then it becomes a deeper deeper topic so I think there's depth to both kind of um both ecosystems but ethereum is definitely influ more complex because there's just so much more you can do with ethereum so I think this this book is definitely going to help a lot with that um but yeah you can go pre-order this I'll link it in the YouTube description below for you to do so all right I've got a few more minutes

left here of today's episode and I actually specifically left this cuz I wanted to talk about something that I'm seeing a lot of ethereum talk about on Twitter um you know in various other places and especially in the daily way Discord Channel now this is not something that I usually talk about on the refuel or really that often because I don't really think it's it's relevant but I want to talk a little bit about the eth BTC ratio now what this is is basically the ratio that charts e performance against Bitcoin um from an asset perspective not the network perspective just from the asset perspective and of course the reason why people are talking about it a lot lately is because over the last few months the eth has been trending down against BTC and people are kind of questioning this

they're like why is this happening you know I thought the merge in IP 1559 would make ether really bullish asset and would outperform Bitcoin blah blah blah I wanted to kind of walk through the way I think about this and kind of try to explain to you or at least kind of Bring It Back Down to Earth as to why this is actually happening and I think there's two main reasons about why it's happening specifically over the last few months maybe over even like almost the last six months I guess and I think the number one reason should be obvious to people but maybe it's not and it's because for the last few months I think since June since Black Rock filed for a BTC spot ETF The Narrative of crypto has squarely been about that right it has

all been about that you can see it on Twitter how closely people are following this thing now if you're a Trader or you're or you're an investor who likes to kind of like um not necessarily day trade or trade week to week but you're more of like a month-to-month kind of investor where you're like you know what I'm going to trade this and then swap into this in a few months time what asset do you think they're going to buy on this narrative right because The Narrative is huge it's everywhere in crypto I mean it's even outside of crypto it's in trafi it's a huge deal right so what asset do you think these people are going to buy if they want to get exposure to the spot BTC ETF narrative they're going to buy BTC right they're not going to buy eth like I'm

you know as bullish as they come when it comes to eth but I'm not blind to the fact that no one is going to really buy eth based on a on BTC getting a spot ETF it just doesn't make any sense especially from a from a narrative trade perspective and also from a shelling point perspective because you guys know about the concept of a shelling point it's basically a point uh where everyone kind of like just naturally agrees on that's the spot uh like for example if you're in New York City and you want to meet someone and um and you don't know where to meet them the Shing point would be Time Square just like the shelling point for trading this narrative would be BTC it's the most obvious thing ever so because of that people aren't buying eth based on that narrative people are

buying BTC BTC outperforms eth right I don't think there's much of uh the the long-term e investors selling their eth for BTC I think this is more of kind of like the short-term Traders and those kind of more short to medium-term investors just playing this narrative trade um and you can see since June how much ether's gone down against BTC I think it's been like what 25% or something like that um which is a pretty big fault right U even though ether's gained in USD of course uh uh lately um it's definitely accelerated to the downside because the BTC n uh spot BTC ETF narrative is heated up a lot so that's the first reason and the second reason is more of I guess like a crypto native thing and it's more about the fact that typically BTC will lead at the start of a bull market or at the really

early stages of a bull market or at least lead getting out of the bare market and that's happened a few times now uh through the cycles but after that the rest of the market basically catches up and just vastly outperforms Bitcoin in a bull market including ethia and if you want to go kind of like uh look at this from a long-term lens over the long term ether is still up massively against BTC right I'm talking like since Inception basically and it has been on a general uptrend um but obviously the weakness over the last few months has been has people kind of questioning things it's like you know why is it so weak I I really honestly think guys that it's because of that ETF narrative and I do think that at this point in time especially over the last uh few weeks the market especially with BTC going

from 26k to 35k the market is actually now pricing in the the BTC ETFs right I don't think they were pricing it in before for um for one reason or another but I think they are now so ironically what could end up happening is that the ETFs go live and then uh e starts just vastly outperforming Bitcoin because everyone's suddenly like okay well the narrative is dead now they there's no narrative to trade anymore it's real the products alive so I'm going to go play another narrative and what do you think the narrative is going to be straight after that happens it's going to be okay well when spot e ETF that's the narrative straight away right and all it's going to take is uh some some people to keep pting that narrative for it to become like a another shelling

point of crypto and then if we go into like a proper crypto bull market the natural outperformance of eth against BTC happens as well and then you can just see eth outperforming BTC in in the bull market there so that's how I generally think about these things but as I said at the start I don't think about this that often I don't care about this that much um in terms of like a short to medium term perspective yes it does frustrate me sometimes when I'm just when I go on Twitter and I see people kind of like talking eth but whatever ever like I you know I try to kind of detach that and I try to not become too emotionally invested in that and sometimes I do and I I rant to my friends about it and I'm just like ah this is annoying but at the end of the

day like you guys know I'm uh when it comes to eth as an asset and and when it comes to eth performing B BTC it's always longterm for me and longterm being multiple years like decades it's not 3 months it's not 6 months it's 5 plus 10 plus years for me and so far that has been the case ether's outperformed see over that that longterm time frame there but if you as I said want an explanation over the last few months those are the two main things I can offer you the ATF narrative which to me is the most obvious thing in the world right like as I said there's no other thing that you're going to really buy if you're you know if if you're choosing between betc and eth you're just going to buy BTC for now because you're playing The Narrative and the

second thing is as I said BTC typically likes to lead out of the bare Market into the early stages of the bull market which then flips to eth kind of taking over from there and the other assets as well and I know people will say well there's been other assets that have been outperforming BTC and eth over the last few weeks yes but the market caps of those assets are vastly different to Etc s to to BTC and eth BTC is what like 600 billion almost uh no it's more than that now it's 660 billion right eth 213 billion so those two are much bigger than the next biggest asset that is outperformed I think over the last few weeks which is Maybe salana which is at 13 billion right it's so much bigger

than that so this goes back to what I've said earlier about this as well where essentially it's much easier to move something that has a much smaller market cap than it is to move something with a bigger market cap and also on top of that betc and E are usually viewed as uh the same in in terms of like the the pristineness of the assets contrary to what BTC Maxes will tell you uh about eth being a shitcoin it's viewed as the Same by a lot of people right in terms of portfolio construction and stuff like that but if you're a shortterm short to medium-term Trader SL investor uh and you want to play a narrative the BTC spot ETF narrative has been one of the better ones to play and then if you want to play the next one people will just sell their BTC for eth when the time

comes and then you'll probably see eth outperform from there but as I said not something I usually talk about but something that I figured was worth clarifying for people today because I've seen a lot of people talk about it before but yeah hopefully that gives um some color for you guys there but on that note that's going to be it for today so thank you everyone for listening and watching be sure to subscribe to the channel you haven't yet give it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all next week thanks everyone