The Daily Gwei AMA Series #3 - 13th of June, 2021

Transcript

all right everyone let's get started so thank you everyone for joining the third ama uh in the deadly ama series here hope you've all been well over the past couple weeks since the last ama hope the market hasn't been treating you too badly here uh just some quick ground rules please stay muted if you are not speaking so there's no background noise there and also this will be recorded and uploaded to youtube tomorrow so if you have to drop off early or um if you come in late you'll be able to watch the whole thing recapped with time stamps as well a community member has generously been timestamping the ama series for me which is really cool so yeah without a further ado i have a bunch of questions on my sheet here which i'm going to read one from the sheet and then i'll take one from from

the audience so i'll start with one from ghostus ave uh user in the discord who says a few days ago a guy named sam found a bug on geth he's referencing samsung the famed security researcher here um and yeah he said sam found a bug on on geth that could potentially allow an attacker to cause all f fast sync death nodes to fork off main net from my understanding the attacker could have gained control of the network and i'll just quote sam and there's a there's a big quote here i won't read it it's in the blog post um but basically the question is uh well ghosters is saying that they scared them a bit um and together with with what's going on in mev they want to know in the event that something like this has happened like a network attack or something how can we save or restore the network

so this goes back to i guess what i've said a lot of times on some of the refill episodes that i've done where i said that the the main kind of difference between a decentralized blockchain uh and like a centralized one i think you know there's lots of different like little differences but i think the main difference is the social layer at the end of the day so what what do you have as your final recourse if there's an attack on the network you have the social layer you have the people you have the community and the more decentralized and diverse your community is the better social layer you have so obviously bitcoin and ethereum have the largest communities out there they have strong social layers um that that can kind of like kick in when things happen you know we saw this play out uh with the bitcoin kind of um

empty coin cash fork wars in 2017 where essentially the community was the one at the end of the day um and the community community is like a kind of a bit of a loaded term but it basically covers basically all the people in in kind of like that that community so that that that can include not just people sorry entities as well so that could include just community members people working within um uh kind of like the space like core protocol devs or just researchers and and people building on top in case in the case of ethereum uh exchanges node runners of course like everyone that's just like a part of the the network and a part of the community so those people came together and basically said well you know we believe this is bitcoin and then a bunch of other people came and said well we

believe this is bitcoin which is called bitcoin cash now and they kind of went their separate ways and they forked off there now that wasn't an attack like a 51 attack or anything it was just like a pretty um i guess controversial fork at the time but if we're talking about actual attacks and how to recover from them it all goes back to the social layout so if ethereum was 51 attacked or something went wrong and we had to kind of like um i wouldn't say like roll back the chain or kind of like there's multiple ways to do it you can roll back the chain you can do what's called an irregular state change which is what happened with the dow hard fork in 2016 where basically the the kind of the ethereum nodes now have like a rule in there that basically says

you know take the funds away from the dow hacker and kind of like reverse uh the dow and give like and make it so everyone can kind of claim their funds from the dow so that they basically reverse the hack but they didn't roll back the chain it was just what's called an irregular state change um so and that was put in force by people because people are the ones running the nodes uh people are the ones kind of mining the network people are the ones running the economic kind of activity like exchanges and things like that so from that perspective if an attack was to happen we would simply just fork the the attacker out now in saying that i say simply but there's a multiple ways you can attack the network if say the attacker for some reason was able to gain 51 of all of the kind of

hash power on the network then we couldn't just fork them out for example to fork them out we would actually have to change the hashing algorithm under proof of work to get rid of their that particular minor but in doing so you also kind of um get rid of the good miners right because at the end of the day the good miners are using the same hardware that the bad miners are using and the same kind and they're mining the same hashing algorithm and vitalik's actually written about this where he basically argues that proof of stake is better because you uh basically just you know if something like this happens and you have to basically go through the social recovery process you essentially burn the eighth or sl slash or you know whatever get rid of the attackers eighth and kick them out of the validator set

and then you just continue on um you know as as things were normal so but you can't do that with with proof of work and you can't do that with my uh with mining um and on top of that uh by kind of like the strict definition of what constitutes the longest chain the longest chain is is just basically what has the most accumulated proof of work in in in kind of a proof of work systems so it's actually a lot harder to recover from an attack in a proof of work system rather than in a proof of stake system if you're using the social layer as the way to kind of you know fend off this attack now going back to i guess the the bug that samsung found this bug can be patched by the core developers and it has been patched and

it goes it rolls out to full nodes and everything like that and there's been multiple things like this before i mean recently we had the open ethereum nodes have a consensus issue where they weren't able to sync with the network after berlin uh but geth was running fine and nevermind was running fine it was just open ethereum so from that we it's just the social recovery layer again everyone agrees okay this is a bug we need to fix it the nodes get rolled out people run the notes so to speak if there was another bug that was exploited say there was an inflation bug for example where uh the the attacker could mint you know 10 million eighth to themselves uh and they did it and we observed it on the network well then again the social layer would kick in there would be an irregular state change

if you know the majority of the network agreed to it that said well this was a bug this person shouldn't have this 10 million eight that was created out of nowhere let's uh take that 10 million eighth and just destroy it because it shouldn't exist um and then the attacker basically gets nothing and you know it all as well that ends well there but in saying that you know depends what type of inflation bug it is it depends what the attack has done with the eth you know it depends on a lot of various things and this is actually why exchanges require um things like uh transaction confirmations like more than one when you deposit into exchange right they normally take you know sometimes it can take like 10 minutes 20 minutes i don't know what it is on centralized exchanges these days because i haven't

actually used one in a while but it can take a little you know it's not instant you know so to speak and this is this is exactly why because um not just for attacks but also for um uh possible reorg reorgs of the blockchain um so that's another reason why they do it but yeah so i i hope that kind of answers the question it really just comes down to the the social layer at the end of the day and it comes down to how strong your social layer is and how how easily you can kind of not maybe not easily but how kind of like uh how resilient your network network is to these attacks because let's use i guess a different example here of um of i guess like a network that wouldn't have this social recovery and it would just rely on kind of one entity say take binance

smart chain for example if something happened there then it would be up to binance to fix any of it and no one would be able to kind of reject that either and this this is where the perils of centralization come in where what binance says goes for that chain you can't come in and say well no i disagree with you you know i disagree with this change and i don't think this is actually an attack i think this is this is fine and things like that so and i think vitalik's wrote in about written about this as well on one of his blog posts i remember exactly what it was called i think was legitimacy maybe um caught something like legitimacy but essentially yeah he was saying that unless you have a strong social layer that uh of people that are you know accustomed to running full nodes uh

being part of the community being part of the network then not only do you can you find it extremely hard to recover from attacks but also if you are attacked uh and and you need to recover it's a central party that's doing all the coordinating and on top of that if there's a change that's made to the network that you know the majority doesn't agree with well if the majority don't have any power over the network then it really is up to kind of like the minority here where you know all the users of binance smart chain don't have a say in what happens on binance market only binance does none of the users are running full nodes or at least 99 of them aren't or anything like that because they can't uh and they're not involved in the kind of like uh process of keeping the the

chain alive keeping the ecosystem kind of going and things like that uh so yeah hopefully that kind of answers the question there uh ghostess aved it's the user that that asked that question um but yeah if any if anyone wanted to say anything feel fr on that feel free to try me otherwise i'll take a question from the audience now oh good i can move on to the next one from the sheet if no one has one from the audience cool cool all right i'll move on to the one from the sheet here so one from uh wit wiki who said would would you be comfy sharing a template of of your google sheets for cataloging our tax obligations

uh i would if it wasn't a mess like i'll be honest my my sheet that i use to track all my tax obligations is an absolute disaster it is very custom made for just like a lot of the things that you know obviously on a personal level what i do um due to yield farming and like all the other things i'm involved with there's so many different income streams so i have like different sheets for all of it so there are templates out there that i've seen before that are definitely kind of generic and let you put stuff in um and there's also i mean i spoke about this on the last ama there are tax tools out there as well uh automated software and things like that i personally don't don't really trust them too much um so i don't use them uh but also they

don't really uh they aren't able to track like what i need them to track a lot of the time you know if you're if you're a very heavy defer user these tools will take a long time to catch up to things um and you know it'll be very hard to kind of keep up with what you're doing and things like that so that's another reason why as well and they're not built for every jurisdiction i think there's one that that works in australia i believe but yeah generally depending on where you are they could it could just you know your your jurisdiction your country is not supported so yeah unfortunately not wiki i can't share a shared spreadsheet because it is a mess it is not made to be shared that's for sure um but yeah as i said there's a bunch of tools out there if

you if you need that um and just to know there's a bit of background noise from hands and latin girl can you please put yourselves on mute uh when you're not talking that would be great um and yeah i'll take one from the audience now if anyone has one otherwise i can keep going down the sheet i have a fair few in the shape to get through anyway cool cool i'll move on to the next one from the sheet then so uh this is a rather long one from below 10 here uh where they said i have noticed a concentrated recent amount of criticism uh from uh about stable about the stable

coin ecosystem got to do with maker and die and usdt and things like that um and he says here uh more traditional finance type critiques uh a criticism of the ponzi nature of high yields drawing in new investors um and and and uh actually you know i'll because this is so long i'll actually break this down so the first kind of thing that they want clarity on is you know how people are calling like these high yields that we see in i guess defy or within stable coins like a ponzi now i think the way to answer this question is to kind of like figure out or like go over where these yields have been coming from traditionally because the yields are actually quite low now so this directly maps to how hot the market is so

stable coin yields primarily come from two different things one is the people want to borrow stable coins to leverage long during a bull market simple as that they but you know you might borrow like 10 000 usdc go and buy ether and then you're hoping that eight is going to go up because you're feeling bullish now obviously that's not going to happen when the market is doing what it's doing right now where it's bearish sideways action that we're seeing play out so because of that there's less demand to borrow stable coins and the yields drop secondly the other um source of the of the yield for stable coins comes from token incentives now what happens to tokens during a down market they dump and of course if the tokens go down in price the yields go down because uh their tokens are worth less and all that sort of stuff so

when you think about that and when you think about like uh you know those two primary things um you can kind of see why the yields are why the yields are lower and why the yields aren't necessarily ponzi-esque i mean you could argue that some of the tokens that are out there maybe a lot of them uh kind of our ponzis like the tokens themselves and things like that and and you know it might be fair to fair to say that and maybe you know as like a secondary kind of or a second-order effect that affects the yields but generally uh the you know the yields that you see the height not i'm not talking about like the thousand apy kind of like d-gen farms you're going i'm talking about the yields that you might get from something like yarn or you know directly depositing into

like um a curve or alchemics or whatever i'm talking about those sorts of yields there they're generally not boosted by some you know crazy a farm that lasts like two days uh and right now last time i checked i think the yield on stable coins is like seven percent uh just on yearn where it was like 20 25 a few weeks ago so you can clearly see that the yields come down with the the market action like if the market's hot yields are up and all that uh and on top of that as well you know uh depending on what which kind of stable coin farm you're in you can get like swap fees so if you're on like a curve farm you'll basically get these swap fees uh that kind of adds to the yield as well but they're actually a very small part of

the yield um curve in particular for example will pay out like crv tokens for yield and things like that as well and there's a bunch of other things that do this but now that the crv token you know i mean the civ tokens uh the price like has to go out for the yields to go up and if it and and the volume on the exchange needs to go out for the yields to go up if both of those things aren't going up and going down well the yields are going to follow with that as well um and you know this is good and during a kind of like down market there's also less trading volumes so there's less fees being generated and all that sort of stuff so uh sorry my dog's barking there um so you know from that perspective you can kind of see how the how a lot of

the the time the yields aren't ponzi-esque they're actually accounted for and you can see where they are but they are definitely heavily affected by by market movements here so uh the second thing they bring up here is that uh a fud around i guess like the reserves of usdc so the actual dollars in the bank account backing usdc um and there's been different reports you may some of you may have seen this on twitter where there was a report from i think february that showed the exact amount that was backing the usdc and then in march that was kind of changed and now of course like all the i guess like you know people who love to fight crypto and love to be bearish on it you know point to this and be like well this is a change like why did this change are they

not fully backed by dollars in a bank account blah blah blah i think that this is just a bit weird because i get it for usdt like tether because tether has traditionally been very shady um you know they haven't had transparency reports they're offshore but for something like usdc that is domiciled in the us um you know you have much stronger guarantees that this thing is regulated uh and and and then kind of like uh and these checks are done properly and things like that just because they have omitted it from their report doesn't i don't think it necessarily means anything there's a number of reasons why it can be admitted you know maybe they want to preserve their privacy small maybe they they aren't legally obligated to to kind of state this maybe their lawyer says to them well you're giving away too much information

you don't actually need to state this uh and you know as long as i guess like the regulators and the people doing these audits are comfortable with it then they'll attach their name to it now of course you know some of you might be thinking well you know we had 2008 where there were a bunch of auditors who kind of ordered these uh aaa home loans and they turned out they were junk this can happen for sure um but i guess my main point is that you know usdc and usdt are like you know worlds apart very very different uh so you in like and i've said before the only centralized stablecoin that i would use is usdc i never touch tether or anything like that i don't touch the other ones because they're smaller i don't really know much about them but if i have to use a centralized

stablecoin it'd definitely be usdc obviously i prefer to use die um and you know that brings to the next question here where that where below 10 also points out that a lot of dye is actually now backed by usdc i think there's maybe 40 right now backed by usdc um and who kind of like wanted to my opinion on that i wanted me to go over that so i think i mentioned this maybe on a refuel before where i basically said that uh generally i don't think that it's kind of like a death now or bearish that dies backed by usdc in terms of like centralization vectors i think that the the problem is actually in a different area where the reason why there's so much usdc is because dia has trouble maintaining

its peg and the only way it's been able to maintain its peg for long periods of time is when usdc is is is is part of the collateral because they have this thing called a uh i can't remember the exact name of it it's like a stability module or something where people can kind of swap dyeing usdc within the maker system to keep dye stable and that's the main reason why usdc is kept there it's not kept there to let people kind of borrow uh die against it or whatever like that's one function but the main function is that for that peg stability module that's what's called psm peg stability module so from that point of view i think that is the deeper issue with with dye is that if it needs centralized or or okay not not centralized but if it needs another stable coin to remain stable itself

uh then there's a there's a problem with dive there and that's not to say that's a problem that's going to be around forever you know the maker team uh make a teammaker ecosystem community are very smart they're working on these problems trying to solve them and i you know i don't spend uh too much time like in the weeds of that so i'm not sure kind of what they have coming here but i think that that is the deeper issue not not so much the issue that it's backed by centralized collateral now you know that that brings me to another thing that i i think i've spoken about before where i basically said that i don't think it matters if something's backed by centralized collateral but only if it's like a small amount of it like obviously 40 isn't ideal because it means that if

for some reason circle and coinbase wanted to freeze this usdc in maker they could freeze 40 percent of the collateral backing die which would immediately make die logically fall off peg right and for very uh very badly off-peg to the downside which would be very bad for a lot of different things out there uh for example a curved pool containing dye would essentially get drained of all the good assets of all the stable coins that are at dollar and dye would fill it up and then the curve lps would actually get kind of hit hit here in in a mass depending event like that um we see we actually saw something similar play out with usdc recently the um the terra stable coin where it kind of like de-pegged uh pretty badly and and and ended up messing with a few of the kind of defra integrations that had

so you can see you know keeping the peg is obviously more probably more important than kind of what's backing the system but in in saying that like if what's backing the system can be frozen by a central party and causing it to lose its peg well then you have like double the risk there so i think that in the you know as we keep rolling out kind of more collateral or sorry as maker keeps adding more collateral types to the system there will be a more uh diverse kind of set of things backing up die and we'll get over this kind of like issue of oh well you know die is backed by 40 usdc it's like totally centralized because it was backed by 5 10 of usdc i don't actually think that's that bad like at worst it could you know 10 of the usdc would be frozen here and

then you would have uh basically a a diet that would need to be reclaralized some some somehow else you know normally that's done by printing mkr tokens which is not good for the mkr price but it would still work we've seen this work in march of 2020 uh so yeah that i hope that kind of addresses that issue around usdc there um and i think the last thing they said uh i think that i don't think that was it there was just a bit more kind of stuff here so yeah hopefully that that clears up a lot of the the stuff that you've been hearing below 10 um i think that it's a complex issue it's definitely something people love to hop on about because you know there's been fight around usdt like tether for ages people are saying you know tether's just the only thing propping up the market

once tether goes to zero the market's gonna go to zero like look to be honest if tether kind of like went to zero and just disappeared yes the market would probably take a hit but i don't think that tether is the only thing holding the market up especially these days i think the market's a lot mature now maybe it was truer back in the day um that this would happen but these days the market definitely has matured to the point where i don't think tether is a central point of failure and it's actually nice to see the other stable coins gain on tether in terms of market cap too um but anyway on that one i'll open it up to the audience but a few more people join so feel free to ask a question if you have one i have a question regarding the uh

actually it's a question regarding elemental finance because um just like that said that when you think the market now is going down or it's just cramming along you can safely assume that the yields all will also go down the stable yields as you can see right now in urine and elk etc oh that's not me by the way um but do you think that you can hedge these farms by going short on your heels with elemental finance because with elemental finance you could sell the yield portion of your uh stable farm and if you think that the deal is going down you could maybe hedge it by buying put options on them or something so you did do you think that's a use case for elemental finance i i do think so actually and that's that's very interesting that you brought that up

for those who don't know um elemental or element finance i can't remember exactly what it's called is a project that's allowing you to split tokens into the yield portion and the principal portion so as alunara said you could essentially sell the yield portion if you think yields are going to go down lock in that yield and essentially protect yourself against a dropping kind of like a yield percentage there so uh yes i definitely think this could be used but i think uh the the the issue is that a lot of i struggle to call them retail investors i think that's a loaded term but a lot of like non-sophisticated investors or maybe you could say aren't used to using these products don't know how to use these products and aren't even aware that these products exist so i think from that perspective these are good for bigger players and bigger

players already do this they already hedge like everywhere i mean you know if we take like one of the biggest players in uh the kind of like cooper ecosystem three hours capital uh you know the way they would trade is is very very different to how you know an individual would trade they hedge everything that they do because they want to reduce their risk while preserving their upside whereas a typical you know retail investor i guess you could call them or a non-sophisticated investor and i put to put myself into that bucket i don't do any of these complex fancy stuff you know i'll just do simple strategies but i do think that with with element finance it actually lowers the barriers here and kind of puts this in front of people that may not have had access to it before so you can definitely protect yourself

from from dropping yields but you're you're making a bet too like as if the yields go up that means you sold kind of like the yields at a lower rate and you know you might kick yourself but i think sometimes it's rather obvious because you know i you know when the yields for stable coins are at 25 percent you might be thinking yourself wow this is this is crazy and you'll notice the rest of the market is really hot and you'll be like okay well you know the yields can't last like this forever i'm gonna i'm gonna lock this in now so that i can uh basically you know protect myself so yeah definitely i i think sorry well it's it might be a little bit complex but if you combine elemental finance with maybe open where you can buy or sell options you can maybe just buy uh good options

on your yield bearing part of your stable farm so if it goes down you make a profit and if it goes up your yields you only lose a tiny little bit so it might be a little bit too complex for retail but i think that's a safe way to add your yields in the future yeah yeah i think so and i'm sure a lot of the more sophisticated players have been doing this and i hope to see you know more of these tools come out that allow the retail investors to do it because that's what d fire is all about right i mean letting the the you know everyone basically access these these complex tools uh that have traditionally been reserved for the bigger players so yeah definitely i think that's a very interesting thing i'm glad you brought it up all right on that note i'll move on to

the next question from the sheet there's actually two questions here from vogs who the first question is is there any way to bridge assets from polygon to arbitram once uh once sorry arbitrary is live to the general public uh i think there will be um from memory uh i think connext and hot protocol are both working on that i think i've seen them kind of say something about that but there definitely will be uh bridges between these two kind of chains here because the way to think about like layer twos is they're just like essentially a separate chain right a separate block chain and a layer two will inherit its security from ethereum so essentially you can have bridges between you know different layer twos you can have layered to the side chain layer two to you know other block chains you can have a layer tube with

ethereum obviously and you can have like you can basically have like bridges that go all the way around so yes there will be bridges i just don't know if it'll be available like on day one uh when arbitrary goes public to to everyone but there will be bridges there because there'll be demand for those sorts of things and the bridges will come in different flavors uh there'll be bridges to kind of like get assets across there'll be bridges to to kind of like um you know maybe do a swap so you end up with a different asset on a on a different chain rather than the same asset so uh yeah can next and hop protocol would be the two and seller network as well i believe would be that actually the three that i would keep an eye on there uh and the second question from vog says

that won't arbitrarily versus polygon be the ultimate test to see if the majority prioritizes security or low fees i i think this is a question that's been posed a lot it's like it really goes back to the core question of like do people really care about decentralization and i think the answer that i've kind of come to after you know many months of thinking about this and i guess like uh kind of going through the motions talking to a lot of different people i think decentralization is user experience so i think the users are going to go sorry it's built into the user experience so i think users are going to go wherever the user experience is best so if we can give them a better user experience with decentralization than they would get on with higher security i should say as

well then they would get on something that's lower security that isn't as decentralized right then i i do believe that the users would go there and i said this before where i think that the developers have a lot of power in this ecosystem and the ethereum developers in particular care deeply about decentralization and and and high security the end goal really is to kind of have everything as decentralized as possible so i think the developers you know then users follow the developers because the developers are the one i'm deploying the code so i think that from that perspective um it doesn't matter if users care or not i think there's going to be more and more users that care over time as they get like rugged one too many times as kind of like the pitfalls of centralization via their ugly head as they kind of clue into who's behind

these sorts of things like people remember what cz was doing you know the tactics he was using to pump bsc up back in you know a couple months ago and things like that so i think people see that and they clue into that because everything's so radically transparent in crypto that i i do think that eventually we're going to get to a point where all those things come together and people prioritize the higher security and things like that but in saying that you know obviously polygon is is uh it has been very popular lately gotten a lot of usage there i i should disclaim here that i'm an advisor to polygon just just to throw that out there um but it's great to see like on their pos chain they've gotten a lot of activity but people rightly call out that it is not maybe a true layer too as

people want to define it it doesn't inherit its security directly from ethereum which means it's less secure and it's less decentralized because it has its own validated set and that's that's true like i'll give them that but at the same time these layer twos are not like a silver bullet either like uh maybe people don't know this but arbitrary when they launch to the public is going to be completely centralized arbitrary is going to retain admin keys there's not going to be a you know a kind of like bunch of different staking nodes spread out around the world and everything like that um and the arbitrary team can do whatever they want on it now you that that's the kind of trade-off you make when it's early on in these systems but essentially pretty much like most of the layer twos that i know of if not all

of them right now have these kind of uh training wheels on and that's gonna be like that for quite a while um you know mihaylo one of the co-founders of polygon rightly points out that and he points this out a lot on twitter that layer twos i mean i know i high player twos up a lot but at this stage in their life cycle i think people are getting ahead of where uh kind of like layer twos are gonna kind of be in terms of decentralization and security they're gonna give us that scalability from you know the get go they're gonna give us that very nice you know ethereum like experience that we all know and love but in terms of getting them to their end state of being you know super decentralized and you know from that get get the security that we all know and love of

ethereum it's gonna take a while and and by a while like i mean anywhere from a few months to maybe a year or so or something like that before we even kind of like see that play out and i think that's done for good reasons because this is brand new technology roll ups are untested at in the wild at scale um you know but not pun not intended there but essentially the only roll-ups we have right now are in limited kind of quantities we have like loop ring for example it's been running for quite a while but it doesn't have like hundreds of thousands millions of users diversify starkware they're all coming online but we're going to need to give these times these things time to bake so i think when you think about like the decentralization versus security versus kind of like uh you know training

wheels and all this and when you take it in aggregate you can kind of get to a point where you realize that um it's a marathon not a sprint and i've said this plenty of times where scaling ethereum is going to take uh to the point where we want it to be it's going to take longer than most people will want uh in terms of getting to that decentralization and gold there so yeah hopefully that answers your your questions vogs i'll take one from the audience if anyone has one or us i'll keep going down the street here then sure oh i think talking on the phone there we go yeah if anyone has a question if not i'll go with the sheet uh hi there hey i have a question about eth2 staking

so for people exploring the idea of becoming an eth2 validator what a decision do you think they should i mean what sort of thinking should they have going into this before making a decision and then on top of that i would like to ask what are your thoughts on doing it yourself versus doing it through a third party or something in the middle like running a rocket pool node with the min 16 if yeah thanks yeah yeah good question so i think there's a few things that you would want to um kind of take into account and the number one thing is really deciding uh what you mentioned there do you want to be a solo staker or do you want to

stake with one of these kind of pools or do you want to stick with with an exchange so there's obviously like a lot a lot of um different kind of staking service providers out there which will offer you you know various kind of uh i guess uh uh yields with various uh fees um kind of attached to them uh i think coinbase has one of the highest of like 25 but they make it like super easy to stake and uh you know there's a whole spectrum of these things and on top of that they let you stake without the 32 minimum so immediately if you don't have that 32 minimum you can't stake on your own right now you can do what as you mentioned the rocker pool thing where you you essentially put the 16 ether in and kind of run one of their nodes there i haven't

looked too deeply into rocker pool i'm not an expert on it or anything like that um but you know that's you still have to take into account that it's a new system it is is definitely kind of like untested at scale i believe so from that point of view you you definitely want to um you know think about that before kind of doing something and i'm not sure how simple it is for for the for the end user as well yeah i haven't done done it myself yet um so those are the main considerations and then once you decide okay well if you want to be a solo staker well you need to basically be comfortable with the fact that you know your computer needs to be on 24 7. your software needs to be running 24 7.

you need to secure your own keys and make sure that you don't uh do things like double signing which means running the validate the same validator in two places at once so some people get fancy with their setups and do like redundant setup redundancy setups where they essentially have like a backup validator running and sometimes that backup validator will come online when it's not supposed to and the the validators will sign the same message and you'll get slashed because of that so and you get big because of that and you get ejected from staking so it's that's a pitfall that i see a lot of people fall into um which is unfortunate but that is definitely something you have to kind of take into account as well whereas uh but but kind of like running it on your own means that there's no fees or anything right you don't have to

pay a fee to a staking service provider you have complete control over your entire setup full kind of like um self-custody there um and you know you you kind of like uh have that peace of mind knowing that you are your your kind of validate isn't going to be used in some kind of attack or anything unless your pc is kind of like hacked or something but like the chances about happening are very very low because you're just kind of like a a single person if anyone was going to go after stakers it would be like an ex an exchange or a staking service provider or something like that uh and then yeah if you decide to go with a service provider or an exchange well then yeah you kind of weigh up the differences between them like the reputations of them how you know how reputable they they are

on top of the fees that that you're paying them as well which is a big thing because as i said some of them charge hefty fees do you want um you know uh instant liquidity so do you want to do something like lido staking where they give you st eth which is a staked um token which represents your eth in lido and you can use that ste to do a bunch of different things i think you can use it as collateral on some money markets you can put it into a curve pool and earn some yield there but you do have extra risk because um lighter is a distributed system where it just sends your each to a a staking provider so it's essentially just like this this kind of like uh proxy where it gives you it issues you this kind of like staked

eighth token and then from there you can kind of like you use that for whatever you want but you are dependent on on a third party here so it's not self custody or anything like that um so those are the main considerations that i would kind of um take into account there's a bunch of guides out there actually bankless has two guides on this like how to be your own staker um you know even if you you know you've been putting it off because you you think you're not kind of like technical enough or not sophisticated enough it's not that hard to set up um i the really the main requirement is is can your pc be on 24 7 essentially uh you know some of us more hardcore people have built our own staking boxes like that's my staking box here uh up behind

me um and that just stays on 24 7 and i do all my staking on my own but you know and that 32 eighth minimum requirement especially for newer people is is very big because i think 32 right now is worth what over 70 grand that is not a small investment for newer people for sure so i think uh you know until we have like these more mature decentralized staking services coming out like like rocket pool and things like that then the only choice those people have is to stake with a service provider or an exchange and in that kind of respect i would suggest from what i've seen and and who i've talked to lido is probably the best bet for them there in terms of like what you get out of it because you get a tokenized representation of your staking position and you can go use that within d5 and

generate even more yield on it yes there's a bit more risk um but you can still get the same experience with kind of like the lower lower kind of fees here and that staked representation and you're not you know doing it with an exchange doing it with one of the independent staking providers so it's a bit better i would say um but yeah hopefully that kind of answers your question uh yes it did thank you very much awesome sorry guys give me one sec i need to handle my dog i think you need to go outside just one sec sorry about that guys all right so i'll

i'll read one off from the uh from the sheet now so uh dr biscuits asked two questions here the first one is as a relative newbie i'd love to hear your take on history differences uh et cetera between a few of the major stable coins available um so i guess like the first stable coin actually the very first stable coin was called bitshares and this was created by dan larimer of eos steemit fame i think he's got another project out there that he's working on right now um but yeah that was the first debit coin that was created it obviously didn't succeed and didn't really go anywhere but it came out before uh even i think tether i believe or maybe it was like around the same time but essentially uh tether is is the oldest kind of stable coin

that is still around today until it still kind of like dominates that is obviously centralized it is not uh and it's very shady as i was mentioning before i mean recently it's become less shady but still it's not something that uh that a lot of people like to trust and and people think it's a systemic issue but whatever that was kind of like the earliest uh centralized stable coin that took off really and then from there we had dye launch uh in in late 2017 um uh december 2017 dyed launched then after that uh came you know a slew of stable coins actually i think stable coins really started taking off in like 2019 i believe because d5 started growing a little bit on um during that time with like uni swap being live and things like that you can actually do things on on ethereum

with d5 so you had like uh usdc going live you had um you know and in kind of i think usdc was one of the earlier ones and then you had a bunch of others like it pretty much like you know uh uh finances stablecoin you have i think hobby has one or um there's a bunch of different ones out there like pretty much like there's so many stable coins now uh that i i've lost track of them and then came the algorithmic stable coins which prove has proven at this point not to be very stable so all those kind of like i guess um ample faults and esd and dsd and uh the latest one mult protocol or something so there was that kind of thing and they started coming out over the last year or so i think aberforth was the first one there

uh faye protocol as well um has kind of like had a bit of drama around the two so um and i think that this is just going to keep happening where we keep getting these kind of i guess cycles of different stable coin designs everyone wants to create like this um i guess uh uh holy grail of stable coins and i've written about this in the newsletter before where i said that the holy grail is really a decentralized scalable and stable stable coin if you can hit all of those three then you are basically golden you will have like a huge market share from people who want to use decentralized stable coins um and you know from that perspective you can see something like uh like dye used to have the first two it used to have decentralized um and stable to an extent it was actually

quite stable for a while until it got bigger now it doesn't have uh decentralized uh or stable uh i mean it has a little it has more decentralization than the centralized ones but i just discussed how it's basically um you know or backed by like 40 usdc right now um and it it kind of like has its stability because of that but it gave up more it's decentralization there and then the scalability has always been an issue because if you think about it the maker as a system to generate die is actually just a cheap debt system so people generate die not to use the stablecoin as a stablecoin necessarily but to actually do something with it so not to use it as like a i guess like a currency so to speak they use it to yield farm

they use it to go leverage long on crypto assets such as eth so from that point of view it's very hard to scale this up because if your only source of i guess like demand for die is the cheap debt demand that maker gives you uh sorry the cheap debt kind of feature that make it gives you well then yeah it becomes hard to scale that up there so that's just a yeah brief history i guess of stable coins um there's a lot of kind of like stuff that's got that's kind of worked on a lot that hasn't i think centralized stable coins are very um i guess attractive to people because of the fact that they're very easy to keep stable because of the fact that you can just back it up with dollars in a bank account but the flip side is that they 100

centralized there's like no ambiguity there they don't try to hide it or anything like that um and they're and they're also scalable because of the fact that they're only limited by how many dollars or you know the the um the issuer has in the bank account essentially uh so yeah hopefully that kind of like answers that question and the second one here when you encounter someone outside of the crypto world that thinks it's a scam what do you say to them uh and they're looking for an eighth elevator pitch so i actually encounter this quite quite often actually um and i i think i spoke about this on the refill the other day that i encountered someone a few months ago that basically kind of said to me it's like what's going on like what's going on with this crypto stuff it all seems like a scam like all i hear

about is like this stupid stuff like dogecoin and you know honestly if all you're hearing about is dogecoin and all this other stuff going on then of course you're going to think it's a scam the way i i kind of give my elevator pitch is that i try to relate it back to other technologies that people are familiar with and the most obvious one is the internet so i basically say to people i say well look look at the internet how many scams are on the internet they're on rampant like how much spam mail do you get because obviously everyone has email i just said to them how many how many kind of like spam email do you get like when you go to your spam folder you can go through it and see all of the scams that are there now um that's what and then i explain to

them this is what happens when a system is open and permissionless and like anyone can can do whatever they want on it and they kind of they get that once i relate it back to the internet so then i start explaining to them why i say to them while ethereum i i try to explain um ethereum to them and i i kind of gloss over bitcoin they they do ask about bitcoin but i just i kind of like say well you know bitcoins like this this money that no one controls um but then if i say that they go into like oh how how's it money and all this and i have to go through like the whole motions with them so i skip straight to ethereum and just explain what ethereum enables and because that's obviously what i'm most interested in and i said that ethereum is basically

like the internet but for for money for finance and i tell them uh basically that you know you can build any financial application that you want and you don't need a bank to do it and that's when they really piques their interest when they hear that that you don't need a bank or anything like that um just because that hasn't been a concept that they've been familiar with before because they think because everyone's programmed you know throughout their whole lives to think okay well you know the the money that we have uh the government issues and we put it in a bank like that's what you're programmed and kind of like conditioned into your entire life and then when you tell people that you can do all of this kind of like uh finance and and money stuff outside of the government they wanted to

learn more about it so that's how i kind of start off and then i just dive deeper into the different apps that you can use um into the different things that can be built why it's decentralized and i simply explain to people that there is no central owner because people are running the the code on their computers and i actually the way i explain that is i explain torrents and i say to them well you know pretty much everyone has pirated something at some point in their lives so i say to them i'm like okay well do you download you know pirated movies and you know they sheepishly say yes uh some of them and i say okay when you do that you're actually downloading that from a distributed set of people around the world so people are seeding that uh file to you and that

these people could be anywhere in the world and um i i typically say to them if you know if they remember they can go check in their in their torrent client and they can see the peers and they can see where they are and where they're coming from uh and some of them have already familiar with peers and then i say them well this is kind of like a similar thing to ethereum where pretty much like uh there's this thing called full nodes they hold the copy of the network and they basically keep up with the network and validate it and all that sort of stuff and that's how we remem it remains decentralized and then they they might ask a question like you know uh oh sorry then i might go into examples with with torrenting as well where i say to them you know how many

times have you seen because they'll inevitably ask you know can't the government shut this down and i say to them well the government has tried you know many governments around the world have tried to shut up pirating down and torrenting but it always uh exists and always persists and i say to them that's simply because of the peer-to-peer nature of it like you can't unless you shut down the internet you can't shut down piracy you can't shut down file sharing um and the same with ethereum unless you shut down the internet you can't shut down ethereum uh you know and then from there you go like i do the motions and i go deeper if they want to go deeper so i guess like the main overarching kind of through line there is that i always relate it back to something that everyone's familiar with and that is

most obviously the internet and depending on the person they'll want to dive deeper some of them you know not everyone wants to dive deep but some of them scoff at it some of them say oh wow it doesn't sound very interesting i try to make it sound interesting but you know there's always never be people who don't really care about that sort of stuff and that's fine um but i've never encountered someone in real life that basically after i've talked to them about it still thinks it's a scam because i i just explained to them that what you hear on mainstream media is not representative of the industry at large and it is not representative of the things that i'm working in and what i focus on um so yeah hopefully that answers your question dr biscuit's there i'm kind of like my elevator pitch is i

think and generally i think that's how you know people maybe maybe some of you you struggle with like how to explain this to people outside the ecosystem just always relate it back to something familiar because it's very easy for people to anchor themselves to something that's familiar and then relate it back to a new concept that is how i learn a lot of the time i always look for ways to anchor something new to something that i already know and if there's not a way it becomes a lot harder for me to learn something so yeah just a little bit of advice there but anyway i'll take another question from the audience if anyone has one or else i'll go down the sheet um yeah i have a question it might be on the sheet so like you know with the big news i've

been coming out from el salvador and how older governments are trying to see bitcoin as legal tender or as we serve how do you think like um ethereum can play a part on the government side or do you think it's going to play a part on the government side um like for me it makes way more sense to use like a layer two solution with a say like a silver coin to you know to do transfers but like how does let's say d5 or like ethereum especially if you do with the rollovers roll up scan like you know be part like let's say oh this nation is going to drop it to you like how would you see that scenario happening yeah so i think that so going i guess going back

to the el salvador news and i did talk a little bit about this one of the refuel videos but i think that just because it's legal tender doesn't mean anyone's going to use it and i agree with you that it's better like stable coins are better for this but i guess with el salvador they want to get off um us dollars or they want to try and wean themselves off of it because they're very dependent on them so i get that um but relating it back to kind of ethereum and defined seeing governments kind of um accept it or like build or kind of like um you know make eight legal tender or something like that i actually don't think we need that i think the fact that d5 is already so much better than traditional finance the fact that we all know that d5 is going

to kill traditional finance it's already won like it's just a matter of getting that adoption i don't think we need governments to to kind of like i guess like um you know integrate it directly with their with themselves with their systems to give it their blessing i think the only thing governments need to do is not regulate d5 too hard because they're going to regulate it they just need to need not to choke it you can kind of put some handcuffs on on things you can kind of like do something with like the fiat on ramps i mean they already regulate the fiat on-ramp so i don't know what else they're going to do there but i'm sure they're going to come up with some some archaic stuff some governments around the world but in general i think that because the businesses are going to want to build on

ethereum on d5 with roll-ups and things like that that adoption will come naturally from the fact that d5 is better than the existing system not from some government forcing you know you to use it or forcing you to accept it or basically making it or enshrining it into law and you know maybe this is a bit of an unpopular opinion here but i actually think the fact that bitcoin is celebrating el salvador essentially decreeing that bitcoin is now legal legal tender and you know you have to accept bitcoin if you're a business or whatever i actually think that goes against the principles of what we're building i don't give a if governments uh basically say oh well ethereum can be used in our country no i mean that's not negotiable at the end of the day the the reason why we're building decentralized tech is to get around all of this it is to

get to a point where this can't be shut down or regulated in any way and you know you can regulate the the the parts that you can like the fiat on ramps and things like that but a truly decentralized system like uniswap well you can't regulate that you can't stop that the only way you do that is by essentially you know taking over the ethereum network and good luck doing that especially under proof of stake so yeah i guess like to answer you answer your core question there is basically i i just don't believe we need the blessing here from them and i do think they're just going to adopt it because it's so much better than the existing systems and if they don't they're going to lose a ton of economic activity to other countries so we might see smaller countries start integrating defy

into their financial system you know a lot faster than the bigger ones but at the same time i i just don't think it needs governments to to kind of uh come in there and usher it along i think all it needs is businesses to basically see the value in it um you know see that that it's scalable that it's private privacy is a very big kind of um thing for businesses they need privacy before they can do anything and we're seeing that already play out we're seeing them do um explorations of it we're seeing banks publish research posts on d5 they know that it's a tech to pay attention to i think they just need to see it play out in the wild more they just need to see it scale and then once that happens we'll have this adoption naturally so hopefully that answers your question

there yeah i i just want to pay back on that that i think i guess e3 m2 needs to be battle tested and you know especially with the roll-up solutions and maybe as i see it like i can see countries adding instead of like just issuing bonds they will issue like smart bots on lithium network where you know they can definitely make better deals or returns that the current systems they have right now yeah i believe sorry and yeah i guess that's exactly what i said about like just these systems just being better than the existing ones and that's why governments businesses you know whoever it is in the world individuals are going to use it and and that's that's really the bold case is that it's just so much better than the existing system uh and on your note about like the battle

testing and things like that uh it i guess like it depends which area you you kind of like talk about because eth2 is obviously like a big effort there's multiple parts to it right now the proof of stake system is being battle tested on its own under the beacon chain once we merge eighth one into it essentially what the merge is is just basically merging the uh existing eth2 and eth1 networks into one where the uh i guess e2 network the proof of stake uh validates the eth1 network so there's not much changing there but then when sharding comes in and roll-ups and things like that we obviously have a lot of battle testing to do there as well so yes that's another consideration i think that these businesses and kind of like governments are kind of paying attention to and will kind of like that'll be

something that that kind of makes it so they can't deploy just yet they need to see that these things are secure they work as advertised um but that yeah obviously comes with time so again going back to what i was saying earlier about all this stuff being a marathon and not a sprint it's for for this reason as well where you need uh people to feel confident using this sort of stuff and we do it as well as individuals you know in d5 um there are only select few protocols that i use and there's there's kind of like over 100 d5 protocols on default polls for example and i i don't use many of them like uh because i don't trust many of them so i think that's the same thing for for governments and probably more true for governance governments and businesses because they

are handling things that aren't their own like businesses are handling money that isn't their own so they're going to be more conservative there at least the good ones are i know there's some dodgy ones out there but yeah so hopefully that kind of like answers your question there as well awesome cool all right on to the next one from the sheet here so uh patrick asks what are your favorite crypto podcast youtube channels that you consume on a regular basis so i'm going to be a bit vanilla here and just say like bankless is obviously one of the top ones that i kind of consume uh they do kind of i guess i don't listen to everything from bank list because they do definitely overlap with a lot of the stuff that i talk about but the guests that they have on i love the way they interview guests

david and ryan are awesome at it they they really come into it coming to their own during the guest episode so i really love listening to those um the defiant's really great as a kind of a newsletter i don't listen to the podcast normally too much because there's so many things to listen to so i do read the newsletters though and things like that um the blocks are kind of like coverage of the space in general is the only media site that i kind of go to i don't really go to coindesk unless there's some kind of article that's on coindesk that i want to read um but generally yeah the block uh for for kind of news out there in terms of other youtube channels find maddox is great for breaking down complex topics into really easily digestible video so videos sorry um so

if you want to learn more about like just basic stuff um and dive deeper into it they make it really really simple so i really love that channel uh there's another channel uh called into the cryptoverse by benjamin benjamin cullen that's a trading channel it is the only trading channel that i watch it's not necessarily drawing technical analysis or anything he does a lot of analysis on longer term trends like macro trends looking at uh kind of charts he does a lot of videos actually i don't watch them all i just really watch the eighth ones he does videos for you know btc does him on ada and and uh i think he did some on avalanche and things like that but generally i watched the eighth videos but lately he's been doing fundamental videos as well which i've really enjoyed um he really knows his fundamentals as well

as he's trading that's a big channel right now i think almost half a million subscribers um and maybe i should mention like the ones that i avoid and ones that i would advise people to avoid uh the really big one like this might be obvious and maybe you guys don't watch these at all but basically the one the big ones like bit boy for example that just like shill everything right and they just have these ridiculous thumbnails where their mouth is gaping open and they got like 100x coins soon and like they've got you know xrp logos flying everywhere i i avoid those like the plague there is nothing you're going to get out of those at all like i might be buyers but you're going to get like infinitely more value out of my refill videos then you're gonna get out of that so i

avoid those like the plague um and i avoid basically a lot of the trader channels too because at the end of the day the way i view technical analysis is that if you draw enough lines on a chart some of them are going to be right eventually and some of it is a self-fulfilling prophecy as well or at least most of it is um and a lot of traders just don't know what they're doing at the end of the day um so i generally just don't follow many of those as well but yeah hopefully that kind of like gives you a glimpse into to stuff that i kind of i guess listen to and watch but the way i get most of my knowledge actually and and pretty much everything that gets covered in the refuel and that i write about really is twitter there's a lot of things in on twitter if

you're following the right people and you jump into the right twitter threads there's a lot of knowledge on there that you might miss because it's maybe not like from the most popular accounts the some of the smallest accounts are the most knowledgeable they're just not trying to growth hack or anything or trying to become an influencer they they definitely just want to kind of provide knowledge out there and that's how i learn a lot as well and discord channels i spend time lurking a lot of discord channels there's a lot of good conversations that go on the daily grade discord for example i love i love kind of reading through those and participating in those um and also uh research posts in general like there's a i mean there's so much kind of things to read out there like paradigm puts out an amazing amount of research bankless i

mean david hoffman's writing i love he puts out a lot of great pieces um you know there's so many more out there that i'm kind of forgetting right now i mean just looking at my tabs i'm just looking at my tabs right there's so many um and a lot of the funds actually put out some great pieces too um sometimes they'll be shilling their bags but you know that's to be expected uh and then you know there there's rarely a point where i'll actually read white papers i think a lot of white papers are just very fluffy and don't really give you much info outside of like i guess the person who wrote the white paper trying to just flex their skills i mean we recently saw that with curve v2 where uh michael the founder of curve just basically flexed his math skills on

everyone and was like you know this is so complex and i don't even know no one can understand it except me and i'm just like well what's the value of this to me like i can't read any of this so not to say that it's not like it doesn't have its place but yeah so hopefully that gives an overview patrick of kind of like the stuff that i pay attention to and how to avoid some of the stuff that uh that is just gonna be poisonous i reckon for for your mind and and and all that sort of stuff so yeah uh but yeah i'll take one from the audience now or this and maybe anyone else has has kind of something that you listen to or you suggest that people should be listening to or watching to get more knowledge of the crypto space in general

if not moving on to the next one from the sheet here so i had one from knowledge fight who says what are some defy apps say the top five that you highly recommend newcomers to d5 check out so i always recommend maybe the safest apps and the ones that have been around for a while and the ones that actually give value to people that is immediately apparent so these would be something like uni swap right everyone pretty much like everyone who gets into crypto's first i guess exposure to it is a centralized exchange and what do you do on a centralized exchange you swap things around you swap cash you know for for a token you swap a token for another token blah blah blah so showing them uni swap and basically saying to them well you can do all the swapping that you do on a centralized

exchange but on this thing called uni swap which is fully decentralized you retain custody of your assets you can do it from like this this wallet like metamask or ledger whatever you want to whatever you want to do it out of um that immediately clicks with them because they've already got something to anchor it to as i was mentioning before it's very easy to explain stuff to people when you anchor it to something they're already familiar with um second would be a money market so whether that be rv or compound and maker isn't technically a money market but you know it's the same kind of concept where you put clarel in you get kind of you can borrow things from it so um i i show them those next and i say okay well i explained you know this is how you get a loan in in d5 right now but it's not

i mean lawyers are going to yell at me if they heard me saying it's a loan because it's not technically a loan but this is essentially how you kind of like can borrow against your uh against your collateral and i explained to them this is what you could do at a bank right you can go to a bank and borrow money and then i say to them instead of the bank taking your reputation as collateral the uh these protocols take your you know eth or you know bitcoin or some other tokens as collateral to issue you or to allow you to borrow these other things here and then i explain you know and then they asked me okay why would i want to borrow some stable coins on my uh if i had to put up like 150 percent of worth of collateral and i say well most

people do it to essentially do what's called leverage long on on a token which means basically um borrowing against their existing uh kind of crypto holdings to buy more crypto and then i explained kind of like how that's risky because you can get liquidated and things like that so those are like the the top two things and then you can move down the list here i mean uh there's times when i've i've talked about alchemics and how with alchemists it's a self-paying loan so once you have like the um the money market kind of i guess concept down in their head then you can explain alchemics and how that kind of works i might show them curve and say hey there's all these different stable coins within within d5 here's how you swap between them and then maybe i'll show them like a dex aggregator and say

you know how i showed you that uniform thing earlier well there's not just unisop there's all these other ones and something like one inch or matcha or slingshot they're going to give you a a kind of like the best price on the network so those are really the kind of things that i stick to i try to i try to stick to the simplest and and most battle tested protocols on ethereum uh simply because uh i don't want to be ushering noobs into like the super risky stuff and i i always kind of like disclaim it with saying you know these things are risky regardless of how long they've been around there's always smart contract risk and things like that and you know don't put too much of your money into things don't borrow too much don't essentially get yourself liquidated or wrecked or anything like that um so yeah

those are basically the top five that i would recommend to to brand newcomers to d5 and then they can naturally dive deeper um but generally my my general advice is to them is always whatever money you want to play with whatever you're doing just make sure you're okay with losing it all for whatever reason um and and you know start small and then scale it up over time spread money out across things if you have a yield farm don't just put it all into one yield farm and just yolo it or whatever um because i and i explained to them how there's been like massive hacks in the past and how things can kind of go wrong there so hopefully that answers your your question knowledge fight um and i'll take one from the audience if not i'll keep going on the list here uh i have a question uh so i was reading

through uh the general uh general channel channel earlier and i saw driverless and justin from grip plus having a conversation about hardware wallet security and best practices so i just wanted to ask you personally do you have a checklist or precautions you take before transacting anywhere on ethereum yeah so i i pretty much always go through a hardware wallet i for most things like i i shouldn't say always like there are some instances where i have naked funds on my metamask where it doesn't go through my hardware wallet but they are very little funds it's not much at all it's just for for little things um but generally for any especially for any high value transaction i will always

go through a hardware wallet because if you don't and if you just keep funds in your metamask it's much easier to kind of like i guess exploit that and to hack you i mean some of you might have seen some um i guess like famous artist i think his name is render or something like that um uh got got uh hacked recently or or uh because he opened a file that he shouldn't of and they basically cleared his metamask out i'm not sure exactly what the technical details are there but the metamask wallet essentially is much easier to empty than a hardware wallet i mean it's essentially impossible for someone to steal funds of your hardware wallet without them having physical access to it because for those who don't know the way a hardware wallet works is your private key lives on a separate chip

on the wallet on on the device so when you actually click confirm transaction what you're doing is you're signing the transaction with your private key that lives only on the device so if you don't sign something that is you know if someone tries to steal your funds they can't because even if they issue a transaction you have to sign it and and you know if you don't sign it nothing kind of goes through here so that that's why hardware wallets are recommended to be used because unless someone has access to it they can't kind of like steal your funds but i should disclaim this by saying that what they can do is if you have your hydra wallet connected to metamask or if you if you're on a website that is not the real kind of like unisop for example they can actually inject a transaction

into your flow where they basically trick you into signing something that you didn't mean to sign and this this is what happened to the nexus mutual founder um hugh carp where he basically uh was like a man in the middle attack where they replaced uh the transaction data or i guess like the the transaction that he was doing with uh with a different one that went to a different address and he signed that with his hardware wallet so it's not like 100 foolproof so the best i um i guess like the best line of defense there is maybe something like i mean you were discussing how um they were talking about the lattice one the hardware wallet there where it gives you the full information on the screen of exactly what you're signing um that that would be like a way to defend yourself against those sorts of

attacks but also you can do something called offline signing where you can actually have a completely separate pc that has your um as your private key on it you can kind of grab the transaction sorry do the transaction manually from that that kind of uh i guess like pc that's offline so there can't be any man little attack on there and then bring and then kind of like sign it uh and and then bring that signature back and post it to the ethereum main chain using one of the tools out there like um my ether wallet or my crypto lets you do this and things like that so there are multiple ways to do it and there's different complexity of course but for most users they're not going to be targeted by these man in the middle attacks with their kind of ledger wallet or with

their lattice but generally to be the most secure you would essentially check what you're signing every time and some hardware wallets i don't think ledger will tell you this it won't actually tell you the full details of what you saw you're signing it will just give you some contract data or whatever which is not going to help most people um i think the lattice uh right now or soon in the future will basically show you exactly what's happening it will say you are basically say you're sending sorry say you're doing a swap on like uni swap it will say well you're swapping this token for this token it will give you the contract address so if you're really paranoid you can check the contract address against eat the scan and say that it's the real one and say that what you're actually doing is what you intended to do instead of

uh essentially that you know being man in the middle attack there so hopefully that that answers your question there's a bunch of guides around this actually out there um there's one from my crypto a very comprehensive guide on their blog on medium i haven't got the link handy but if you google it i'm sure you can find it uh but yeah those are like the main ways uh that i can think of right now that you would protect yourself and the main ways you can interact with the ethereum network okay great thanks sir awesome all good i'm getting tagged in something on the general chat let me have a look here um someone said scoop you could use a retweet on the ol f uh olaf launcher um there's some other questions here

uh just looking through anyway i'll continue from the from the sheet here actually so uh what uh marco47 has asked the question here and he he says thoughts on this article so i'm just going to bring up this article and the article is tied titled nothing is worse than proof-of-stake uh published july 2020 by someone called fact checker 9000. now if this is the same person as a guy called fact check my post on twitter this is is not going to be a very great article it's 11 minute read but there's a tldr at the top so i'll probably i'll address some of these points um so the first point they bring up is proof of stake is permissioned by internally held tokens owned by a central party that can deny entry to independent external parties

um i'm not exactly sure what they're saying here i think maybe what they're saying is that because it's a because the the tokens are inside the system right internal like where the eth to acquire the eth you have to acquire it from the network you can't you do something like with mining you actually acquire the hardware from outside of the network it is permissioned in some way because of that because a central party can deny entry to to independent external parties i don't know how that can happen no central party can deny entry to you um if you are staking on your own the only way that you can be denied entry is if you're using a centralized provider which is to be expected and it's not it's got nothing to do with the ethereum protocol or the proof of stake itself um it's got to do with the private data

that you're using so i think that's a bit of a weird point there that maybe i'm not totally understanding it but definitely very weird um so uh and the second point here there is no mechanism in proof of stake that forces anyone to ever give up control uh to give up control they already have ever now i see this i don't even know why i'm addressing these points these are just silly but anyway i'll address this the mechanism uh in proof of stake that to force someone to give up their control i mean what mechanism exists in proof of work to force someone to give up their control there really isn't one that's inbuilt into proof of work i mean if your hardware is outdated you are forced to buy new hardware sure but you factor that into your cost when you set up a mining farm you factor in

deprecation cost of your hardware every large scale mining farm does this even the smaller miners will do this so from that point of view um you know yes okay they're forced to kind of like change their harbor but they're not forced to give up control but but what control do they already have the network is decentralized in both bitcoin and ethereum and the proof of work and under proof of stake ethereum is decentralized as well um so i think what they're saying here is that uh because essentially like once you stake you never have to actually exit uh and you you know you can just take forever that's kind of like a a kind of detriment and the thing is though not everyone's going to stay in staking forever like why would they just like not everyone's going to mind forever i mean at a certain point people want to

you know shut down their mining business because it either becomes unprofitable or they just don't want to do it anymore same with proof of stake maybe eighth goes to 10k and someone's like well i don't want to keep these 32 ethan staking anymore earning like seven percent or whatever it is i want to cash out 320 000 i mean that's that's how people would exit staking is because they wants to cash out like i i just don't get this argument that there is no mechanism that forces people to exit staking there is it's called the price of eth going up and they want to cash out or maybe they don't want to stake anymore for whatever reason they they need the money or maybe they uh they essentially just want to cut down on their validators they want to have like 10 validators or something if they

if they have that they want to have like one or two for example so there are mechanisms that exist they're just different mechanisms to proof of work here the third point so there's only four points so the third point is that proof of stake gives the internal central parties a mechanism staking to guarantee perpetual growth in fraction of control that they have now this i think is talking about the fact that because the stakers are the ones being paid the queens they essentially grow the fraction of the supply that they own this is the same for miners like i what i don't understand the argument here the people mining the you know bitcoin or ethereum blockchains they're the ones getting the tokens uh the newly issued tokens and they're the ones kind of like getting uh

so and everyone else is getting diluted because of that so i don't get this argument either and um i think this goes back to i guess maybe the rich get richer argument to it where people kind of normally say well you know in proof of stake there's no running costs or whatever so people can just perpetually stake and keep restaking and things like that but there are running costs for example the running costs i mean so so the running across a bit more nuanced the the the normal running cost is you still have to pay for electricity you always have to pay for a lot less but you still have to pay for electricity um and the eq the maintenance and equipment costs and a lot lower you still have to pay for internet obviously and things like that um and you still have to pay for like if

you want to be a truly decentralized staker and run your own nodes you still have to pay for like storage to store the blockchain and things like that as well that's part of the i guess like the running costs uh sorry the the maintenance uh costs if you have to upgrade hardware and things like that and on top of that the cost really is opportunity cost if your eighth is in staking then your eighth isn't somewhere else so your atheism being kind of like traded you're not using it as collateral somewhere yes there's going to be staking derivatives but that's different it's not like the actual eth and you know that's going to come with different sets of trade-offs and risks there as well so um it's it the rich get richer argument i think is a poor one i think that that the fact that they're

saying you know you give up sorry you um you basically uh the rest of the eighth holders get kind of diluted by this this is the kind of same thing that happens in proof of work the rest of the the holders get diluted um because the the coins are going to the miners now the the beautiful thing with ethereum though under um you know after 1559 gets implemented and after staking is implemented what ends up happening is that the stakers get the eighth that's true right the newly issued eighth but because the stakers are only getting a portion of the fees and most of the fees are being burned the fee bone actually affects every eighth holder every eighth holder is uh is is benefiting from that deflationary pressure on each so i would actually argue that proof of stake is better

for creating equality in terms of like the ownership of the network because you don't have to be staking to benefit from the deflationary properties from 1.559 and i would also argue that stake is are much more long-term aligned than miners are because they are they normally kind of have much more kind of overlap in terms of using the network um and doing things on the network rather than just mining it and i think in proof of work systems a lot of people don't even use the network you know i know i know there's a lot of miners out there that haven't used ethereum they just view mining as like a business then the day and they say okay well we'll mine this chain because it's the most profitable but if there was another chain that they could mine they would go do that whereas you know within e-staking

there are probably plenty of other chains out there right now that may pay more than eth does in terms of like a yield like seven percent on staking is rather low because there are other chains out there that will just inflate their token supply and give you a higher yield but you pay for that because you get diluted heavily so your tokens actually end up being worth less um and obviously it's not eight so it's a whole different ball game there so i think hopefully that addresses the third point and the fourth point is that proof-of-stake slashing variants are self-damaging and incentivize attacks um i'd have to read more his detailed kind of like point on this to get what he's what exactly he is saying here um but maybe i can just address that uh that the slashing is self-damaging i i don't understand how it's

self-damaging slashing when done correctly um is is punishing bad actors and it is provable by the network that this actor was bad they either double signed or they tried to do something on the network that they shouldn't be able to do under the rules of the network so that that is working there but maybe they're also referring to um what happens when a validator goes offline um and they lose eighth because of that that's that's not kind of like uh called slashing that that is that is called the inactivity penalty so if you're an active you slowly lose each over time and if and if you go offline um and a bunch of other people go offline you lose more eighth because that could be considered an attack um so i don't understand how this is self-damaging where you're only punished when you do something wrong

if you're not online validating well then you shouldn't be getting paid and you should actually be losing money because that would incentivize you to get your validator back online and being slashed for doing something malicious well i mean you're just getting punished for doing something wrong whereas in proof of work you don't actually get punished for doing something wrong if you are doing um if you if you have uh i guess like majority of the of the mining power you don't get punished for it the only punishment you get is the opportunity cost like if you not even if you have the majority hash power if you're a minor and you mine on a stale chain and you try to fork the the bitcoin blockchain um and you don't have the majority of the power there then all you're doing is um is it actually

you are self-damaging because you're you're hurting yourself because essentially you could be mining the correct chamber for some reason you're mining a different chain and you're getting nothing out of it you can but you're and you're losing the opportunity cost of uh of mining the actual chain to get the actual tokens there and also there's no slashing for that kind of behavior as well so if you do attack the network then you're not punished for it your asics aren't burned down your asset miners your gpus aren't burned down you're essentially get to do the attack as much as you want and battalion calls this a spawn camp attack where you can't be essentially removed from the uh the network which is a death knell for a lot of uh for for projects i mean there's a lot of proof of work chains out there that right now could be

spawned spawn attacked into perpetuity there just isn't the incentive to do so whereas for something like bitcoin i think one day the incentive will be uh in ethereum on proof of work uh i mean ethereum won't be on proof of work by the time these attacks come in but i believe that eventually there'll be an incentive for a nation-state to attack bitcoin or try to attack bitcoin and there's no way to fork them out as i mentioned earlier you would have to change the hashing algorithm which basically hurts even the good miners so you would essentially have to bootstrap bitcoin from the start again from like uh i guess like uh from uh from from the beginning and that would i mean i would actually say that would potentially kill bitcoin uh so yeah that's something to consider as well but uh i guess like you can go

google this post if you guys want it's called um nothing is worse than proof of stake by fact checker on medium i haven't read the whole post i just read the tldr there but this fact checker person is a he yeah they are fact check my post on twitter i got this account banned because this account threatened to murder me i think on twitter and i reported them for that um and this account is is very uh well known within the ethereum community um at least by some of us some of the people i talk to as someone who has been kind of like attacking and fighting eth for very long time and doing so in a very aggressive way so yeah i don't think i would be reading this blog post i think the points that they brought up are a bit silly and hopefully i've

debunked them there for you uh marco 47 there but anyway moving on from that i'll take another question from the audience otherwise i have a few more to get through here actually and we're at a an hour 15 already so yeah um if anyone has one from the audience if not i'll move down the list um yeah i'm curious what's your take on mev under the proof of stake yes so um i guess maybe my tech isn't the best here i think the best take on this was on the bankless podcast with charlie noyes um phil diane and georgios constantinopoulos i think is his surname i think those three uh talked a lot

about eth2 and mev or just mev generally on that podcast so i would highly recommend going listening to that but i think in in eth2 um i i i think i covered a thread that someone wrote about this there's there's it's it's only early days for mev and eth2 so and and staking in particular so we don't know exactly how it's going to play out the the positive is that the mev will be going to stakers now and and that means that staking revenues uh sorry staking apr will go up which should incentivize more i guess like eth to be staked which means that security of the network goes up but on the flip side mev is a very uh dangerous thing if it becomes like too top-heavy where most of the network kind of like or at least most of the rewards going to

validators are coming from mev and it becomes in their interest to do things like real org blocks or kind of like do some stuff on the network that doesn't get them slashed but essentially is not healthy for the network so yeah it's still very early days but i do recommend going listening to that podcast on bank list to get a full answer there all right moving on to the next one from the sheet so uh from brian brian peace he's had two questions here one of them was about wallet security uh which i think i answered when i was answering the question before so uh brian just go reference that answer that i gave to m cos here and the second question was um what is an ethereum client why does ethereum have multiple clients and what factors would affect someone's choice to

use a specific client so what is an ethereum client well i mean it's what you run uh to run like a full node on ethereum so there's a bunch out there there's geth or go ethereum uh there's open ethereum which is actually now being i guess like sunset or deprecated uh in favor of aragon which used to be known as turbo geth there is another mind there is basu and there's a bunch of other clients out there like i think ethereum j and there's a few other minority ones out there so why does ethereum have multiple clients well ethereum has multiple clients because we want to have resiliency on the network so if one client you know falls out of sync or goes down the network can keep running this has happened multiple times in ethereum's life where at the end of 2016 something called the shanghai dos attacks happened

where uh the go ethereum client was attacked by um denial of service attacks which basically took these nodes offline um and the only way the ethereum network was able to exist and to keep going was because there was two major clients there was the the parity client which which kept going now parity turned into open ethereum uh which obviously has been deprecated now and parity as the company now works on polka dot so they're not maintaining that client anymore but back then uh they were pivotal ago ethereum and parity were critical and these are eighth one clients that i'm talking about i'll talk about these two ones in a sec um and what factors would affect someone's choice to use a specific client well at the end of the day there's a bunch of different factors some of them will take up less disk space than others

for example aragon will take up less disk space than a vanilla geth vanilla get client here some of them will just be overall more efficient eragon is going for efficiency some of them will be better at running a an archive node um some of them will will give you you know more features a lot of this stuff is definitely targeted towards developers and more technical technically minded people um and and the another major factor is that by running a minority client so at the moment go ethereum dominates the network by by running a minority client you improve the decentralization of the network and you improve the resiliency of the network so that's why you would want to run a different client rather than the dominant one now going into eth2 i'll answer the same questions for kind of like eve through so um well except

what is an ethereum client like i'll just go i'll run through the e2 client so that there's four dominant e3 clients there is prism lighthouse uh uh uh uh damn the names are escaping me right now there's prism lighthouse uh uh lodestar and um what's the fourth one here uh uh take tekuteku yes so there's four there's four kind of main ones there and um why again this the the answer to why it is if you have multiple clients is the same as um as as eighth one and what factors should affect your choice with an eth2 client there uh is is a bit different to an eth1 client um so one big factor that would affect your choice is profitability so some clients are more profitable than others because they're more efficient they they

kind of like handle the operations on with staking better than other clients um but they're not too far apart i mean it's i would say it's not that noticeable of a difference to to kind of i guess like um uh to to kind of run a different one a different client based on that but again same answer about client diversity and resiliency you definitely don't want one client dominating the network different clients will give you different features take up different amounts of storage space get towards different users i know teku is did geared towards like enterprise clients and people who need a more enterprise ready solution whereas uh lighthouse and and and prism um are more kind of like hobbyists and things like that i think some of them prioritize running being able to run on like the most bare

bones hardware possible so something like a raspberry pi uh as well so i think that's what load star is focused on um actually no load star is i think the the fifth client this nimbus is the is the major client here uh from from status so uh yeah there's so many they used to be they actually used to be nine and i think it will cut down to four or five um over over time but yeah those are all the reasons of of like why you would run different ones in eth2 uh and things like that so i i personally run uh prism um i've been meaning to change over to lighthouse actually because prism is so dominant on the network um so but but yeah generally and and also the different eth2 clients and if one clients run on different environments so some of them

will run on windows some of them won't run on windows but they'll all run on linux and like mac os and things like that some of them will run in like uh better in different kind of like operating systems so that's another thing to consider as well here so hopefully that answers your question brian um i'll take one from the audience otherwise i'll move on to the next ones in the sheet hello hey hey mate um yeah you know i just um last couple of weeks i guess i've been you know reading a lot of threats in twitter around um the i guess a lack of decentralized stable coins and you know taking some shots to die let alone you know

the uscc and usct um and the other day i was watching them the panel with banquets you know the d5 guys you know santiago spencer and vance i think and they also mentioned you know that you know the center you know the hope of the centralized stablecoin wasn't dead at all and there might be you know some some projects working on something so yeah what's your take on the you know decentralized stable points or let's say purely decentralized stable coins uh need yeah so i think i i spoke a little bit about this uh before when i was discussing uh i guess some of the stuff that i've seen on twitter as well but you know for for a stable coin to be truly truly decentralized it needs to like if it's a collateral based stable

coin it needs to only be backed by decentralized collateral so um for example eth is the only decentralized collateral i would argue on on ethereum now some people will argue there's others out there uh there's other tokens out there that are decentralized because they have no you know admin keys or back doors and they're sufficiently distributed and they have good liquidity and all this sort of stuff and there might be some tokens like that but i would say for the purest form of a decentralized stable coin that could not be shut down under any scenario would be one that's backed by eth but in saying that even in like i guess the maker system for example even if we were still under single collateral die where eth was the only thing backing up die the the the system is still at the mercy

of the mkr token holders because the maker system is governance heavy whereas there's been other examples like liquidy there's another protocol out there that's aiming to be governance light where it's only backed by eth right now i'm sure they're going to add other protocols in there but there's no that the government the token doesn't really give any governance rights or anything like that and the mechanisms are all kind of like uh self uh i guess like uh sorry self uh self sustaining but liquidy i think suffers from a problem where it will always be off peg between a dollar and a dollar ten um for various reasons so again that's not like a truly stable coin right and this goes back to what i was saying before about how there's you know three factors to the holy grail of stable coin like decentralized stable and scalable um and you have you

know it's like a vitalik um i guess like scalability trilemma where you could you at best you can only get two of three and if you were able to get three out of three provably then you would have hit the holy grail of um scalability or or or stable coins there's also stuff like the algorithmic stable coins you know i mentioned faye protocol before that um also has governance in it and you know it had a rocky launch too um but they're trying to do something that's just backed by decentralized collateral but again the reason why maker didn't just stay with single collateral dye is because they felt that they couldn't scale die up enough with just using eighth because they figured that eth has a limited uh sorry has a has a market cap that limits um i guess like its potential as uh as a single kind of collateral and

also uh people have other assets that they want to use to generate diet with as we've seen play out already there's plenty of diet being generated from other assets than eath right now so in that way diet has been able to scale further because of that um so those are kind of like the main things and i think that i don't know if we're ever going to get a truly decentralized stable coin that is both scalable and stable i think it is an extremely hard problem i think that there's many things that need to go right i think that if anything the the closest i've seen for something that i would say would be uh you know something that i could see playing out over the long term would be something like rye but rye is not technically a stable coin it is pegged to itself

it is stable to itself and it uses complex and new mechanisms to achieve this but it is fully backed only by eth right now and i think they intend to keep it back to only by eight and i intend to keep it governance light so i think that there's enough experiments out there that we're going to get close enough to what we what we want something like that's ideal but i don't think it's like a binary thing where you can say oh well this is like 100 decentralized or this is like zero percent decentralized i mean some things you can say at zero percent um you know something like a a centralized stable coin is definitely zero percent decentralized but um i don't think we're gonna get to a point where you can say you know this is a hundred percent decentralized literally no one could shut this down

um because at the end of the day there are always points of attack there are always ways to kind of i guess um uh kind of uh exert centralized control and um if you if and with stable coins it's particularly hard because you're trying to achieve uh scalability and stability as well as decentralization so i'm i'm like excited to see how it plays out but i think it's going to be a while before we actually get there awesome sweet i'll move on to the next ones from the sheet here so uh bayes asks two questions uh so the first one is will sharding and rollouts be able to efficiently resolve ethereum's current issues while maintaining decentralization uh short answer yes uh because the reason why

we're uh i guess like going uh sorry scaling via sharding and rollups is to preserve decentralization that's the whole reason and the way that that happens is that with sharding we scale by essentially splitting the blockchain up into different shards 64 initially maybe more later and then with rollups we can use these shards as what's called data availability layers where the rollups can post more data to these shards instead of just one um you know each one chain for example and get more scalability out of that so i definitely think that the uh the future is roll up centric where essentially uh roll-ups sit on top of ethereum post their data to um you know ethan eth1 over the short term and then over the longer term shards and things like that

and we get to maintain the decentralization that way uh the second question here is thoughts on eath killers and if there's ever a chance that something better than eve could come along um i this is this is a long one i'll try to be short here because we're coming up on on time and i want to get to the rest of the questions um most eighth killers are total they're either scams or very ill thought out projects or opportunistic money grabs or very just bad ideas i'll just put that out there the ones that are interesting um uh i've there's like oh god there's not many of them because the ones that aren't scam so okay there's three categories actually the ones that aren't scams the ones that aren't like you know necessarily really bad projects the ones that aren't you know money grabs i would argue aren't

actually an eth killer because what they're doing is pretty much all of them are basically marketing themselves as a more scalable ethereum but the way they're achieving this scale is by giving up decentralization and in turn giving up security because they'll grow the route of something like delegated proof of stake where they have a bunch of super nodes that run the chain and then if if push came to shove these super notes could be shut down which would basically stop the chain or whatever could happen there and it goes back to what i was saying at the beginning of the ama where i was talking about how the social layer needs to be very strong you need a and have a strong social layer to recover from attacks you need to be able to run a full node and you can't run a full node on these

super super super node chains because uh it's not built that way because the scalability comes with the trade-off of not of people not being able to run a full node on their retail hardware on their home pcs so from that perspective i would say that pretty much every single eath killer is trash and doesn't actually kill each it doesn't even compete with eth um i would say that the closest competitor that ethereum has if i had to pick one is actually bitcoin because i think that bitcoin has a better chance and this and i actually think there's a near zero percent chance that bitcoin does this but i still think bitcoin has a better chance of implementing smart contracts and being able to take ethereum's market share than an eth killer coming along and being able to take ethereum's market share over the long

term now in saying that um there are going to be there's going to be a parallel distribution where there will be other networks that exist that uh basically um fill niches and feel different things for whatever reason i think a lot of them don't have any reason to exist because you can just get away with using a database but because there's money to be made because that monetary incentive always exists there's always going to be these chains every single cycle every single kind of like yeah decades they're going to exist but eventually the market wisens up people wise enough and you keep getting that kind of like this gap between them if you look at the gap between ethereum in terms of market cap and its closest competitor i'm just going to look at queen gecko right now if we skip cardano because cardano is a

is i'm not going to call it a scam but it's definitely not something that i would look at for quality they don't even have smart contracts so if we look at ethereum's legit competitor its next closest one is polka dot it has a 20 billion market cap ethereum has a 280 billion dollar market cap which is much much greater than polka dot and i would even argue that polkadot right now isn't even really doing anything because pocono doesn't have smart contracts as far as i know they just started doing their powertrain auctions and things like that so they're still very far behind if we're talking about another network that has uh i guess like activity that isn't totally 100 centralized because you'll notice i'm skipping over bsc as well here because i don't consider bsc to be something that is going to be around like long term either

um and i don't consider that to be in the same arena here number 13 solana 10 billion dollar cap yeah that's you know 28 times to get to ethereum's market cap so you can see the market is already kind of saying that it values kind of like ethereum at values either values are a lot higher than its competitors um so from that point of view i think that there's basically a near zero percent chance that anything ever kills ethereum i believe there's a near zero percent chance that any project actually gains like anywhere near the amount of activity that that ethereum gains um and you know if you kind of look at i mean some people bring up oh well polygon is a separate blockchain because it has its own validator set it's not like a true layer too it's not a rollup or whatever um but in saying

that polygon is not maybe it might not be technically aligned with ethereum but he's socially aligned with ethereum there's a reason why polygon has so much activity on it you'll notice that there's a lot of projects that never went to bsc but went to polygon and deployed to there because of the social aspect of it and again this goes back to what i was saying about you have to have a strong social layer because that is what matters at the end of the day so the proof is in the pudding the previous is in the activity in the market caps uh so at the end of the day long story short i don't think that anything that i'm seeing right now has a chance at killing ethereum overtaking ethereum becoming bigger than ethereum so hopefully that answers that i don't care if people think i'm ethereum maximalist

for saying that you just need to look at the the activity i mean i i do videos on this and they get daily grade data pump um for example like of the value being said or for example ethereum sales more value than any other blockchain even bitcoin uh it does more fees than any other blockchain even bitcoin um and and and it does just so many other things like it's got more users got just like you know it's got some millions of holders and things like that there's so much that goes into it i know i'm in a little bit of a rant there but hopefully that kind of answers your question base um i have a few more on the sheet to get through uh but i'll take them from the audience first if not i'll keep continuing down the sheet here cool cool all right i'll move on to one

from lefi who said could you give us your best explanation of what ethereum is at a higher level aimed at the new crypto crowd okay i think i answered this earlier when i was answering a question from someone else about my elevator pitch from dr biscuits so leafy if you want to see my longer form ants off um definitely go back and watch and listen to dr biscuits if you haven't yet it'll be time-stamped um but essentially i guess like the highest level thing that i could say in the shortest amount of words that i could say it was i tell people that ethereum is a new network to build stuff on like the internet and i say to them instead of building websites you build financial applications as just a very simple kind of like high level explanation obviously you can build other things on

ethereum but i start with the the financial use cases because of the fact that those are like obviously the most used and the most relatable for people so that that's basically my highest level pitch is that it's just a new network that you can build things on instead of websites it's financial apps so hopefully that that kind of gives you a super high level uh thing there um uh take one from the audience if not i'll keep moving down awesome next one from digital henry here who says any good framework resource to assess protocol project risk for investing uh i he he actually linked the post where uh from from bank list but it was he said that it was it was pretty bare

bones it wasn't enough here um this would borderline on me giving investing advice so i'll try and keep this kind of like higher level here essentially the way i assess a protocol or a project is a few different ways um and i might have written about this in the newsletter before but feel the high level ways look at the the team behind it right it is the other team reputable do they have um a good track record is this kind of like their first startup or is this like their 10th do they have successful exits from other startups have they sold you know startups before they have they worked in businesses before are they first-time founders is the project idea good is it bad those kind of things um what is their project actually solving a fundamental problem do they have competitors i mean really

evaluating i guess like a project on ethereum is the same as as you would evaluate a business in general you just simply do like a checklist essentially of what what a project is and that's not to say that if a project checks all the boxes it's going to succeed because there's a million reasons why projects fail and really the only way you can tell is by monitoring and sticking and kind of like being part of the project for a longer period of time so for example there's a lot of popular d5 projects that that have been around for a while but like over the long term some of these will fail like even the most popular ones will fail over the longer term for one reason or another uh and i think that uh people get the false sense of security during a bull market where

they see that a project has like all this tvl and they're like oh my god like there's so much tvl in it i mean i wrote about this yesterday in the newsletter where i said that tvl is a really bad metric for measuring projects in terms of wanting to invest in it in terms of seeing traction because tbr is very easily inflated one of the the best ways i guess you could say that projects uh i guess like inflate and i wouldn't say best it would be like the most aggressive ways that they inflate their tvl numbers is by using token incentives like liquidity mining to do so and obviously during pool markets liquidity mining is very profitable and very lucrative so the tbr can go it can go into a project as fast as it can exit it some of you might remember a project

that launched a few months ago uh something called bdp or big data protocol it had billions of dollars of tvl in it within 24 hours and then a week or two later it was gone like people just withdrew because the farm was dead so there's this kind of like locust farming going on that can trick you into thinking a project actually has a future when in reality it doesn't and in reality it's going to die like very quickly especially um with liquidity mining incentives um and especially if it's aggressive and you know there's plenty of examples of this littered around right now and on top of that tvl on its own doesn't paint the whole story because if you look at something like unisop v3 it can have less tvl but actually more fees going to the protocol because of its capital efficiency

so you know just because something has a lot of tvl doesn't mean that it's generating more fees and doesn't mean that it's going to have a good price to sales or price to earnings ratio compared to another project for example so there's there's so many different things to consider there and this is why investing in anything um outside of like btc and eth is really really hard because btc and eighth in my mind are pretty much gonna be around forever like i don't have a doubt in my mind about that but um even though i don't hold any bitcoin um i i still think bitcoin's gonna be around in some form forever um but pretty much all the other d5 projects the the the newer they are the riskier they are because of the fact that and not just d file but like you know any project

out there because there's a million reasons why i can fail there's a million reasons why uh you know the the metrics they have today could be gone in a month there are so many things to consider and there and and you know teams can even run out of money for example like that's another thing so from that point of view and that's why you see actually these things trade as if they have a lot of risk risk attached to them yes they'll give you higher returns in a bull market but you will get slaughtered in a in a down market or a bear market even the best protocols out there like i think rv is down 60 from its top like ave is one of the best protocols in in ethereum in terms of like defy as well um and and there's numerous examples of

this but on top of that you also if you're investing in a token you need to know what you're getting into with regards to what the token supplier looks like at the time of investment if you put money into a protocol that only has like five percent of its tokens circulating that other 95 is coming to market eventually and if the the fully diluted market cap is much larger than the circulating one well those two things have to kind of like um you know come together at some point and as more tokens unlock over time whether that be through liquidity mining programs or whether that be via team or investor tokens unlocking or whatever other way that those tokens are never be inevitably going to find their way to the market which add cell pressure which means that you could buy at like say you buy a token at a dollar and then

it ends up at 10 cents but the market caps still the same because the market caps just have to match right the fully diluted and circulating just had to match but the thing is is that you bought at a much higher kind of like price because of the the the disparity there so yeah not investment advice as i said but hopefully that gives you like a bit of an overview of what i look at when i'm looking at projects and maybe it explains why i hold majority eth a lot of the time um because there's really not many projects out there that i would actually want to hold long term because they have so much risk attached to them and if i'm not and and my benchmark is eth it's not usd so if i'm not out performing eth then why am i holding this thing

essentially so and also there's other personal things to consider like for investment like um tax as well like are you in a tax-friendly jurisdiction where you're not taxed on capital gains i'm not like my tax is ridiculous so i don't really you know flip-flop out of investments i take a longer-term view on things but you know i know that people in in certain parts of asia like singapore and stuff like that they have more of a quicker kind of like trading attitude where they get in and out of positions much faster because they don't pay capital gains tax so that that is like another consideration that i think a lot of people miss is that you know tax plays a huge part in a lot of people's investing decisions and as the gen spartan says it's like a debuff if anyone's played um you know some some uh some world of

warcraft before a debuff is something that kind of like lowers your stats or lowers your ability to do something or prevent you from doing something better than someone else and living in a in a tax-free jurisdiction is like a buff where or a capital gains tax-free jurisdiction where you have an advantage over those that don't live there so i don't live in that kind of jurisdiction so hopefully that answers your question digital henry um i have how many more do i have i have four more on my sheet here um otherwise uh but i'll take one from the audience first if not i'll just move through this all right moving on to the list so knowledge fight asks any regrets in crypto since becoming an influencer of sorts on crypto twitter and the space in general

uh when i read this i was like oh this is an interesting question and i and i i i thought about it for a little bit earlier i have zero regrets about becoming an influencer or becoming like a large part of this ecosystem because it was my goal from the very beginning i had a plan that i set out for myself maybe three or four years ago now where i basically said i want to become one of the top people in the ecosystem i want to become one of the most well-known people and i want to do it through education and that's what i did and i achieved my my goal and i feel like i achieved a pretty big goal in my life so definitely don't regret it at all uh and it's not just like personal satisfaction it's also obviously on on kind of like the

monetary side as well the money that i've made has enabled me to essentially do what i do uh without a boss you know i can be my own boss and that in in general is just incredibly freeing and there's there's a few people that i know within the ecosystem they're in the same position as i am it's just the amount of freedom you get from that and and what you're able to kind of do uh once you have that freedom is is amazing i mean for me i get to give back with things like this i get to do like these amas i get to do my refuels i get to do the newsletter i get to do all the stuff with ether but i get to advise whatever projects i want i get to work with whatever projects i want you know and i get to give back to a

community that gave me so much so yeah i have zero regrets about becoming an influencer i think it's the best thing that ever happened it honestly changed my life so but it's not for everyone i would say that it's i'm painting like a pretty rosy picture right now you have to have a thick skin i get on all the time i get made into a meme all the time i get abusive dms all the time i get caught up maximalist all the time but i have a very thick skin i'm australian we don't hurt very easily i can take it but there's a lot of people out there who don't have that and if you don't have a thick skin and you can't hand like if you're if especially if you're um someone who's a private person then getting all that attention might be daunting to you because you do get a lot

of attention uh i get dms all the time and i i answer as much of them as i can but it can be it can be stressful for people who get dms and they might be like oh my god i have so much things to talk to i'm going to feel bad if i don't reply to this person all this sort of stuff and then you also have a lot of people wanting stuff from you you have a lot of people messaging being like hey bro can you tell me what tokens you're holding tell me what to buy hey can you advise our project just some scam or whatever and some of you may remember there was an instance i guess like a few months ago where i got myself tangled up in some things around a few a token called few which was uh people

it was it wasn't a scam or anything like that but it was a pretty i mean i'm not gonna go through the whole story but it was a pretty um a shitty time for me because i essentially got cancelled or attempted to get cancelled like i had all these people on twitter piling on and and kind of insulting me and telling me i was a scammer and that really really hurt because i had tried my very very hardest through the years of becoming an influencer to make sure that i did nothing or that could be considered even close to something that's scammy or dodgy or whatever and some of you might have seen in the general channel of the disc score the other day where i was saying i want to sell some gtc because i need to take some of um some of some some risk off the table

here and it's life change and some of it's a life-changing money for me but i feel bad because i don't want to be seen as like dumping on the community i don't want people to see that i'm bad and think that i'm bearish on like get coin or whatever because i got a pretty sizable airdrop but i'm not at all i was just taking some money taking some profits because there's nothing wrong with that but those are the things that that you have to deal with when you become like a very public person but the i think for me the the good things outweigh the bad very much so um you know things like being able to go to a conference and and everyone recognizes me at an ethereum conference pretty much like everyone that i talk to knows who i am um that's not to brag or anything but

that's the paint the picture of it's very easy to strike up a conversation with anyone because they come up to me and they say hey man like i know you from twitter and like you know the ether deadly gray whatever you know thanks for doing all you do and it's just like really heartwarming and it's really easy to talk to people but as i said like there's good and bad slides to it but i wouldn't change it for the world i don't regret it at all so hopefully that answers your question knowledge fight um it's yeah it changed my life and it's the best thing that ever happened to me but i'll take another question from the audience if not i'll keep moving through the list here all right on to a question from monkey king who said if i deposit eth into the ethiopian vault what is going on behind

the scenes with my eath and by depositing into this vault am i passively earning eighth so i think yearn currently has a few different eighth vaults out there right now so they have three i think um they have like the normal 8th vault where you can deposit each i don't know if this is active right now they had this at some point but i don't know if it's active currently but they had a vault where they would take your eth they would deposit it into maker they would draw die against that maker sorry that eth and then put that dye into curve uh and then farm uh on curve like uh like the civ tokens and automatically stack it for you and then buy ether fit i don't know if that's currently active but that was a very popular one back in the day so that was the first volt the second

one that they have is the st8 volt or the st vault which essentially takes your um eth or or st kind of like um and put and puts them into like curve i think it takes your lp tokens actually but essentially what it's doing is it's farming um or automatically farming the st pool on curve which currently has uh crv l and ldo token rewards on it and then there's the s8 volt which essentially um uses synthetic eth or synthetics eth and does the same thing on curve i'm pretty sure um and farms like crv tokens and some snx tokens as well so those are the three different vaults there might be more out more there i haven't checked lately but that's essentially what's happening uh it's either eighth denominated or

uh i think most of the time it's eighth denominated um but even when it was like state farming stable coins it was still buying ether because at the end of the day if you're in a a i guess like an eighth yield farm you want to be returning back eath and that's like how you would do it there um so hopefully that answers that question there uh monkey king uh i'll take uh one from the audience if not i'll move through actually there's more than okay there's another four questions i forgot to scroll down a little bit here um maybe i'll if someone starts a question just shout out because i just want to get through the ones on the sheet here we're coming up on two hours so i've got to end this soon um but yeah if you want to ask a question just shout out but if not i'll

keep running through the list here um so one from roger that double o2 here who said a friend has bought a few dozen eath via coinbase since i introduced her but she's financially very conservative uh what is the uh what is the lowest risk strategy to earn passive income on this eighth with minimal risk compared to her current approach um what would you what would you show her so the lowest risk yield that you can get on your eth right now would be staking i would say staking on your own um would be the lowest risk like absolute lowest risk uh second would be staking in uh in an exchange like even though it's totally centralized sticking with an exchange like coinbase i'm not talking about finances of the

world i'm talking about coinbase if she's already got eth on coinbase and sticking with coinbase would be relatively low risk not as low risk is staking on your own of course but still relatively low uh and then from there you start getting into like a whole spectrum of different risk profiles where you can stick with something like lido which again is uh is a centralized staking service or a distributed one which will just put your eth into i guess like one of these um uh staking service providers but you get st eth in return which allows you to do stuff in d5 with then you have things like you can our liquidity provide in uni swap but you expose yourself to impermanent loss risk you can put this into one of the um the urine vaults but the urine vaults are kind of like uh i guess like right now the eighth

year involves i don't think you're returning too much you get smart contract risk from that of course um soon you'll be able to do like an alchemics uh kind of fun with with al eth that's going to expose you to smart contract risk as well of course so you know i guess like the lowest risk thing is just staking if and depends on how much ease she has if she has 32 eighth or if she has um uh more than 32 weight and she's comfortable locking it up i guess for a year uh not for a year sorry for for a few months until the merge goes through because obviously it's a one-way bridge to eth2 right now with staking then i would uh recommend that she uh she does that uh if not if she's got less than 32 or not comfortable with that

just stake with ex with coinbase uh and those are the lowest risk minimal risk things you could do with your eath right now so on to the next question here from log mag who says i think all the eighth killers can be run as roll ups on each such as solana cardano polkadot whatever for instance one could fork solana so that all the validators will be on a roll up where used uh we're using fancy hardware they can provide high proof of history transactions ordering and speed with eight security what's your opinion yes i totally agree like that's the beauty of layer two systems that they can actually be programmed to do whatever you want them to do essentially what's happening is that you can do whatever you want with your layers you can design it however you want the only thing that you don't have

control over is it's it's kind of like security where you basically outsource that security to ethereum because you you want ethereum to secure your system so technically you could build these as roll-ups but you probably wouldn't get the same scalability because roll-up scalability is still still limited by ethereum's layer one and there was a stat that arbitrarium gave on the bankless podcast the other day that said if there was a bunch of roll-ups out there i don't know how many there are but if there's a bunch of them out there all doing like you know thousands of thousands of transactions per second all this sort of stuff the most you could get across all of them averaged out with uh the layer one uh i guess capacity that's available today on ethereum it's 4 500 transactions per second now i

know solana advertises like 50 000 that's because solana's incredibly in my mind it's not decentralized it's very centralizing because of its supernode system um so you would still be limited by ethereum's layer one but in saying that you could run these systems as a roll-up of course uh but that's the trade-offs that you would take there so hopefully that answers your question there um uh two more here one from aegon targaryen who eltag who says if layer two has become a huge hit and start capturing huge chunk of the transaction volume which in turn reduces base layout on chain activity does that essentially reverse the expected deflationary ultrasound effects of erp-1559 put another way if transactions move to layer two does that mean that less fees get paid on layer one

um i don't think so so i i mean i don't think so i'm talking over the longer term um short term there's a bunch of different factors that go into gas feeds but like longer term let's just let's just kind of like paint the longer term picture here the way uh something like the ethereum layer one works is that it will always optimize for the highest value transactions so you've seen a lot of things get priced out lower value transactions that literally can't afford and aren't profitable to do on layer one such as swapping around nfts uh like uh trading cards that are worth like a dollar obviously isn't worth it to do it because the transaction fees would would eclipse the the um the value of the nft that's not happening all the web three stuff isn't happening at layer one but arbitrage opportunities that are

worth more than the fees that are being paid the profit is more than fees that's going to be done at layer one people doing yield farming where their yields are better than the fees that they're paying that's going to be down at layer one liquidating someone because the liquidation is worth more than the fees that's going to be done all those sorts of things anything that's worth more than the fees is going to be done and then over time you'll see a kind of increase that that eventually the fees will get like to a point where it's really high and it'll price out everything except those high value use cases now what is the highest value use case that's going to exist on ethereum it's going to be roll-up proofs because roll-up proofs are going to contain thousands and thousands of transactions in them whether they be low or high

value and in aggregate that's going to be a very very high value transaction so a layer 2 rollout provider is going to want it needs to post that transaction to ethereum to inherit its security so they're happy to pay these very expensive fees so i think the long term future will be a layer one that's dominated by wales and uh the layer two roll-up proofs but that's okay because the end users will be sitting at layer two get the the experience that of a theorem that we all know and love today without the higher fees so and these and and obviously the the eighth being burnt with 1.59 is burnt on layer one so that we will still get the deflationary ultrasound properties of uh of ethereum because we're getting that security uh uh security uh payment from these layer twos from the whales as well that exist

on there and from the bridges too like the the hot protocol and connects and things like that that bridge we'll be doing layer one stuff as well so hopefully that answers your question around that i think i'm gonna do a dedicated video on that eventually i really want people to understand that layer one block chains like bitcoin and ethereum optimize for the highest value transactions by design um and that was that's the way it's always going to be because there is limited space there um and as i said layer two roll up proofs are the highest value transactions that can exist um so and and i guess like uh mav stuff is is is highest as well but now with like flashbots and things like that and mv is a whole another topic you know it kind of like diverges a little bit but with one five five nine even if

miners don't go through the direct public mempool and go through what's called a dark pool or flashbots they still have to pay uh uh east to uh to the uh to the base chain to layer one and that is still gonna get burnt as what's called the base fee so hopefully that answers your question there i'm going to answer this last one here and then if anyone else has got some from the audience i'll take those if not we can wrap it up so this one comes from anonym who said client diversity is an issue i've heard people discussing including you staking services whether through coinbase and kraken should be using multiple clients but not sure if they are i can't find on any info on which client they are using or if they are using multiple clients for less tech oriented who are staking

on their own with avado they have to use prism integrating other clients with avado if possible would also help with client diversity is there any coordination efforts to have this done to your knowledge so i will say that i think a lot of staking service providers are actually using prism because it's the easiest for them to use but in terms of like coordinated efforts around getting them to adopt more to adopt other clients rather than prism and to kind of improve client diversity there is and i'm pretty sure there's an initiative at the ethereum foundation for this right now i think that there are a few small working groups out there contacting these providers and telling them being like hey you know or getting feedback from like hey why are you using this client you know have you considered using this one you should for client diversity and

you know doing more education around this so there is efforts i just i don't really have any everything handy right now i have heard of efforts going on i think that we could be doing more on this front i think that if you're a customer of one of these thinking service providers you should ask them and be like hey what are you using okay well if you're using prism maybe you should change the lighthouse or change something else um because we need to improve network um health and kind of like network resiliency here so hopefully that answers your question there anonymous um i'll take any last questions from the audience if not i'll uh i'll end it here but yeah feel free anyone to ask anything you want hey anthony how's how's it going hey mate how you going i'm good good um this question might be

irrelevant to you with uh your home search but i was wondering if you might have any idea what it would look like to bring kind of real world assets onto blockchain and like with mortgages as an example yes so actually that's already been done with maker uh so they have uh real world assets uh integrated through um i think uh one of the providers i can't remember exactly the name right now but i'm pretty sure the real world asset that they onboarded was a a mortgage or a kind of a basket of them so that has already been done um but in terms of like what that looks like essentially what it looks like is just an iou right because the actual kind of property rights for that mortgage or for you know an asset that exists outside of ethereum

is the existing legal system so the government was is basically um enforcing those property rights uh and that differs from something like eth because the property rights of eth are enforced by the ethereum network because eth is not issued by um it is sorry it is issued by the ethereum network it is digitally native um so that's what kind of like the the off chain assets look like and there's going to be plenty of these providers out there some of them are going to be some of them are going to be good um but like it's going to take a while to get there as well because there's a lot of trust involved too because at the end of the day if the the the um the representation on change is just an iou it is not what you have claimed to if you say if

you um kind of like accidentally send that to someone else or if you get hacked and someone steals that asset from you that asset is not theirs the asset is still yours because your ownership of it exists in the real world in in meat space it does not exist at that token so that token's value is essentially nullified and you would just get reissued a new iou token essentially not sure exactly what that looks like when you start doing you know things like money markets and stuff like that but that's what makes them more risky i guess and also the value of that token can be nullified by the i guess real world um um instantiation of it where someone could say well this isn't this you know thing that you have this reward asset isn't worth anything anymore and the token is not worth anything

anymore so yeah hopefully that answers answers your question there yeah it does it sounds like it's a pretty uh complicated thing when you're trying to translate the real world to to the blockchain in that way yeah there's a lot of risks that you basically introduce and there's a lot of centralized points to introduce it's not a clear-cut thing um uh but but it's going to happen and i think that it's fine that's going to happen i think that it's fine that it's centralized there's no other way to do it because you can't issue physical ownership rights over something on ethereum because ethereum security doesn't secure like your mortgage or doesn't secure your right or to your house right your deed to your house is secured by the government enforcing property rights through various different means

uh normally through having like uh like a like um like through force basically if someone comes to take it you know someone comes to your house and says i own this house and they squat there well you call the police and the police come and take that crazy person away whereas on ethereum what's enforcing their property rights over your eth is is the ethereum network itself is the the miners essentially um and the stake is in the future so yeah it does look a bit uh it is it is much more complicated to bring the real world assets onto ethereum great thank you all good uh any last questions before i wrap it up for today cool cool i guess i'll wrap it up there then well thank you everyone for

listening again here there'll be another ama in two weeks of course and this has been recorded so i will be uploading this to youtube shortly with time stamps a very generous community member has has been doing them lately which is really cool to see um but yeah so until next time definitely uh you know stay safe hopefully the market's treating you well and i'll catch you all in a couple of weeks thanks everyone