The Daily Gwei Refuel #6 - Ethereum News & Updates - eth2 Beacon Chain live, EIP-1559 and more!

Transcript

hello everyone and welcome to another episode of the daily way refuel where we recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today is the 2nd of december 2020 and today is the day after the eth2 beacon chain went live so that's been a crazy kind of 24 hours in the ethereum ecosystem and i'm going to talk a bit about that today but before we move into that i did want to do a quick market recap so as we can see here on the eth chart we definitely had a little bit of a eth2 pump as i mentioned yesterday that i thought we would have you can see it on the chart here right we went from basically about 600 or 595 since the last episode went up to all the way up to like almost 640

and then you know it kind of like crashed from there and we went down to like what was it here 560 after that within i think it's about an hour an hour and a half and the funny thing is is that this actually coincided with bitcoin hitting almost 20k again so you know bitcoin was at its all-time highs uh eth2 hype was was running wild like we were approaching launch you know and and we had this run up and i was looking at it being like you know this doesn't feel organic right if it was organic the price action would have already happened uh you know it doesn't just happen because oh everyone just suddenly clues in that e3 is going live right so you know i saw that and then i was saying to some friends i'm like guys i think this is gonna this is gonna crash

right i don't trade on this sort of stuff and obviously this you know enough nothing i say here is investment advice but you know i've been around the block a few times so it was funny to see that play out and then you know you can see on the chart here we went down bounced all the way back up to 620 and then back down and we've just been ranging since then uh you know as i've said every time we're still in an uptrend this doesn't change anything uh i i think that you know we're gonna go we're gonna keep going higher and i think that we just had to kind of like reset this and get get rid of the hype right and get rid of the kind of like hype uh driving the price primarily so there was that uh and as i said bitcoin

same deal like like you look at the charts they're both 30-minute charts they're basically identical uh you know bitcoin went to 20k came down to like 18.5 the did the same run up to 19.5 again came down and just been kind of ranging ever since so yeah that's that's basically the same pattern on ethan bitcoin there and the d5 pulse index i think is actually been performing better than that uh you can see here it's still kind of like in a general uptrend right right now um you know i think it kind of like didn't really care what ethan bitcoin were doing it just continued its own uptrend which it seems to want to continue to do right now so going to be interesting to see how that plays out for sure

all right on to the eth2 news so yeah we uh we went live yesterday the beacon chain went live it went i mean the launch went really well it went off without a hitch you know i was on the live stream with the ether guys um with the d5 dad from yield tv uh slash d fight that youtube channel and a bunch of other really really cool ethereum people and we were watching this go live um and you know it happened we saw on this page if you were on it earlier on on beacon chain or beacon c-h-a-i-n is the main kind of block explorer x block explorer i use so if you're on this page you would have seen a kind of like a graphic with a bunch of blocks in it here which was basically you know what what

the this kind of website does to monitor the health of the beacon chain early on and immediately we saw validators coming online you start proposing blocks or testing the blocks and things like that and we had you know immediately following the launch or about like a few minutes after we we got up to 85 participation so there was 85 percent of validators you know proposing and the testing to blocks and then since then we've actually gone all the way up to 97 which is amazing uh that means you know 97 of all validators um are uh uh are validating and are on the network and doing what they should be doing uh and the network's been going uh well ever since people are earning eighth right uh people are making money uh you know it's still locked of course

and and you can't you can't kind of like cash it out yet or anything but people are earning rewards they're staking their ether the first time ever so that was all super super exciting um and you know for those watching on youtube you can see here that you know the blocks are coming through blocks are being finalized the network health is is is quite amazing right now as i said launch went much better and much smoother than even like the most optimistic people expected because on the test nets we saw that the launches didn't really go you know as smooth as we wanted them to they were never 100 it was more like you know 90 or something like that whereas i think it's safe to say that the the main net launch of the beacon chain is basically 100 at this point it went as well as we

could have hoped for uh and i think that's got to do with the fact that there's actually actual skin in the game now right people have real eth on the line you know you don't want your validator to be offline you don't want it to be you know doing nothing or or throwing errors you want it to be proposing and testing to block so you earn rewards and you don't you know basically get penalized for it so yeah amazing launch there uh and for those who don't know there's actually a field in uh when you're when you're a validator a field of text that you can fill in with like a very short kind of sentence um and you can put whatever you want in there so anytime that you propose a block your kind of it's called graffiti will basically go into that block and stay

there forever and you can see it on block explorers and things like that so the first ever kind of like block that was proposed was done by someone called mr fahrenheit uh he was in the eat staker discord and his first graffiti was mr mr f was here uh which is apparently a reference to queen uh which was which was quite funny um but you know it was quite funny that this is like the genesis kind of message right mr f was here uh and you know i speculated that people are gonna be making memes about this they're gonna uh you know they might go as far as like making a kind of like cult religion around this i don't know maybe you know we've seen kind of religions pop up for for sillier things than that um you know throughout the internet like you know you can think i'm not talking

about just structured kind of religion i'm talking about religious organizations in general or like you know i guess any community can be regarded as like a religion um you know and there's like followers of it right that could be people like you know who's mr f right um you know maybe maybe not but it's just a fun little thought experiment there uh and and since these blo uh kind of like this block there's been more graffiti coming in and things like that and people are putting all bunch of random messages in you know i'm not sure if if uh this website beaconscan.com has a kind of uh maybe they have a section for i don't think so um they have a chain liveness section which is really cool so it shows you how healthy the network is

seems like the network has been like in amazing health pretty much the entire time which is which is really cool to see as well another website i like to keep track of is this one here of course i'll link all this stuff in the youtube show notes uh and the podcast show notes but this is the eth2 fork monitor from alex stokes so this basically monitors all the clients and the chain and will report if there's a kind of fork um going on in the network now we haven't seen that uh which obviously is very good seems the the chain is very healthy as i just showed so nothing to worry about here but still a cool cool kind of website to to keep an eye on especially if you know there is a fork this is where you can quickly go to to see what happened and what block

it was up there's a new uh twitter rewards bot called eth2 rewards bot uh or at eth2 the number two bot that you can follow this was created by the same guy who created the bot that was following the deposit contract uh his name is real mills or ryan miller i'm pretty sure so definitely um props to him for creating another another really cool bot here so what this does is it basically tweets out every now and again the current reward reward rate so as of 12 hours ago it was 18 the participation rate which is 95 the number of active validators which is 21 over 21 000 and the more interesting information to me is the wait time so for those who don't know there's

actually a wait time to get in to the beaker chain to start validating the beacon chain can only accept 900 new validators a day and currently there are over 6 000 validators waiting to be accepted which means that the wait time is about a week so if you deposit 32 ethno you're going to be waiting a week before your deposit is accepted and before you can spin up your validator so you know this was obviously not the case until the minimum was reached so you know once the minimum was reached uh anything after that was put into the queue and the queue obviously gets longer the more people in it right uh i mean that's very obvious but uh you know we could see if uh with exchanges now you know coming out with these staking products as i discussed yesterday with

the coinbase staking we could see more of these uh longer queues as time goes on um you know as more people kind of like quote unquote fomo in or or start staking their eth so that's something to be mindful of if you want to get in better to get in now rather than wait uh you know i'm pretty sure this wait time is over a week at this point like this was posted 12 hours ago you know maybe if i check out the rewards bot here it hasn't been a tweet since then i'm assuming this is going to tweet like every 12 hours or something um but yeah and and definitely get in uh sooner rather than later i think because you don't want to be missing out if you're planning on staking and you know at this point you're missing out on a week's worth of rewards but

that comes with the territory this is how it's designed so yeah definitely go give this this bot a follow as well it's really cool uh ryan watkins so ryan uh i spoke about this yesterday the missouri crypto eth2 report that they've put out um so ryan watkins is is basically one of the main people that wrote this report uh and he's put out a really nice thread today about how eth2 transforms uh you know ethereum the blockchain but what does it do to eat the asset now for those who have been following kind of a lot of the work that myself eric connor david hoffman ryan sean adams have been doing around this we've really been pushing this kind of narrative of eth being like this this super asset right this this

kind of asset that does all these different sorts of things so you know it can be a story value asset it can be a capital asset it can be a commodity so examples of this is basically commodity it's like oil in the real world right so eth as you used as gas storage value of course is like gold and things like that you know eth used as a store of value i think we're seeing that already especially with all the eth users collateral within d5 and then you have capital assets that generate a return on income now with staking ether has become all of all of these three things at once right you can stake your your your capital asset or your eth to earn each rewards in eth2 you while while doing that you can hold it as a store of value

and you can also use the eath as as for transaction fees right and as oil now obviously ether isn't like oil yet it's not burned when you use it as transaction fees but with eip1559 that's going to change so yeah we're we're getting there right this is a really good thread from ryan here i actually go i actually recommend going to follow ryan he his amazing uh does does amazing research at masari and a lot of it's ethereum focused so he's a great follow here um but yeah he basically explains how this all this kind of happens and how with eth2 the uh the overall issuance of ethereum is going to be dropping a lot more uh and then you know he goes into how like uh

basically what i just mentioned how like if he's taking on all these different properties on on the way to eth2 so definitely go check out this thread uh they have a discussion happening i think maybe it already happened or it's going to happen today um with camila russo david hoffman uh ryan watkins and marish uh maharish schmidt i think that's schmidt i think that's how you say there is her name um basically focusing on the shift of proof of stake and what it means for eve as an asset so recommend checking that one out as well all right well i'm going to refresh the page here so vitalik put out this kind of uh this dot i guess like a bunch of stats here around eth2 uh and basically it's it's kind of like

starts on decentralization around eth2 so for those watching you can see here that basically the participation count is over a kind of 3 000 in terms of our unique uh depositors the nakamoto coefficient is up from 25 to 34 which measure which is a measure of decentralization uh the herfendale score is down from uh point zero uh point zero one six four two point zero one two six and down is better because that means uh thirty perce uh the network is more decentralized uh in terms of like the amount of capital with with um unique depositors so i remember when i tweeted about it a few days ago

10 the top 10 stakers held like i think 35 or something of the total east state and that's come down over time i'm pretty sure that's under 30 now um so yeah this was just some really interesting stats from vitalik i'll link it so you can go take a better look at this um uh so that you can you can take a better look at all these charts and stats here all right still keeping with eth2 here since that's what the last 24 hours has been about this actually just happened about an hour ago so a validator the first validator got slashed on on eth2 uh and they didn't get slashed for the wrong reason or anything this was this is the right reason uh they got slashed for block equivocation which means that they were basically trying to run redundancy on their validators which

meant that uh i think they might have double signed on on a block so what this means is that if you have you're not one validator running on one pc and then you have that same validator with the same validator keys running on another pc and they both attest and pro like sign kind of the same block you're going to get slashed for that because that is an attack vector so and this you know the the penalties for this have actually come down so this person only lost 0.258 so it's come down for the first iteration of the beacon chain but as we get to uh you know as we we ramp up and the beacon chain becomes uh you know more decentralized and is live for longer the the actual penalties are going to be a lot higher for this

so this is something you never want to do if you're trying to set up redundancy for your validators i i really think that it might not be worth it for at this stage unless you really know what you're doing because the penalties for being offline are very very favorable right now um i remember seeing a tweet from vitalik that said that you can be offline for basically 30 of the year and your validators will still be profitable so you know if you're offline for 30 of the year right that's like a third of the year or just under so three months um uh more than three months i think four months um you know three to four months uh like why are you offline for three to four months right um you know it's very rare that you're going to be in that position so

definitely better to just let your validators kind of go offline for a few hours maybe if they go off offline while you're sleeping rather than trying to set up some fancy redundancy uh processes and getting yourself slashed right because that's a much bigger penalty all right uh this thread from cooper today again eth2 thread i thought this is very interesting uh cooper's an awesome follow as well so definitely go follow him on twitter it's koopa troopa uh you can go find him i mean i'm sure i'll link the thread in the show notes anyway so you'll find him there so he basically goes and breaks down what phase zero actually means uh what you know what what's great about the beacon chain and its implications so this is really good for those of you who may be confused about you know

what's the what what why do we care about the beacon chain right why do we care about phase zero what's coming after uh how are we going to get to a full e2 obviously with with shards as part of phase one and then phase two is state execution a lot of these things are still very technical and and i don't blame you for not knowing what they mean uh so cooper does a very very good job of kind of breaking it down here uh so definitely go check out his thread but i guess if i was to put it into my own words phase zero beacon chain you know if you think of building a house it's like the foundations of a house so you need to have these in place before you can build the house on top of it like you can put all the

plumbing in and you put all the the wiring in and and the actual put the house together right you need those foundations so that's what the beacon chain is phase one the shards you can think of like as i said the plumbing the kind of like the wiring the the um the walls and things like that and all that sort of stuff right and then phase two which is state execution is putting it all together basically and what state execution means is it's basically a fancy way to say what we have on eth1 today is is doing like transactions on the shards right whether that be a transaction of just sending ether tokens or a transaction of a smart contract like depositing um you know ether to compound or something or like some other smart contract stuff

that's what we mean by state execution so that's a very simple way of explaining it i obviously there's a lot more to it than that but just to give you some context i figured that i would i would try and describe it as best i could all right next on the agenda here so this isn't it isn't just eth2 but this is a really really awesome tweet from vitalik so this is a roadmap that he put out back in march a roadmap diagram and he's updated it today with a bunch of progress bars so as you can see in the image for those of you who who are watching you can see here that each of these items on the roadmap has a progress bar uh in green so you can see you know it's

really fun you can see where my cursor is that phase zero launched right and that's fully colored in and all the prerequisites before it were colored in as well and then up you know up towards the top you can see some eth1 eth1.x stuff that's going on you know everyone's favorite eip1559 you move down you have account abstraction you have a bunch of other really important things there so basically this will give you a kind of like a bird's eye view of where we're at in the ethereum roadmap and and kind of like what it means uh going forward and then i i think the bottom half here is is is things that maybe um people have heard of but you know these things aren't as important to the eth one and eve two road maps as the top half they're like nice to haves and kind of advanced

research they're not critical to the eth1 eth2 roadmap so yeah this is this is really cool i recommend going to check out the full diagram i'll link it in the show notes because it's it's pretty hard to see on this on the um the video i'm sure uh but i also wrote about it in the daily gray as well so you can go and the news delegate newsletter which you can go read and check out i had some comments around it on on there as well all right last thing to talk about so this report by tim roughgarden on eip1559 has been talked about for a while now so tim roughgarden is a professor at columbia uh sorry columbia university uh and he's a theoretical computer scientist

uh he is well regarded within his field for doing a deep dive analysis on things like erp 1559 so that's why he was kind of commissioned to do this he produced a very long report and his 58 page report it is obviously going to be super technical so i do not recommend you spending your time to read 60 pages of the report unless you want to because there's no need he actually did a really amazing job of summarizing it in his thread there's 14 tweets here basically the key takeaways are that he doesn't think that there are any issues with erp 1559 he thinks that they bring a lot of positives to the network both from a user experience perspective and a and the fact that it burns eth i

think his only concern was that it might introduce a new attack vector that uh where was it i think it was somewhere here here we go variable size blocks enable a new attack vector but apparently it is very very expensive to do this so it's not a major concern so very very positive right this is just another piece on the one five five nine road map it's what we needed uh to convince a lot of a lot of people about one five five nine if it was game theoretically sound and all those sorts of things and as i showed on the roadmap before we have one five five nine at the top here which looks to be about 65 percent complete so i think you know it's probably 70 75 complete now with with this

with with this research report out i think the last 25 is is is implementation there's a few things that need to go into each one uh as prerequisites before one five five nine can go in which is going to take a little while but i i fully expect this to go live uh you know hopefully late later next year um hopefully not early 2022 i think that would be too late i think we can get it done by late next year but it remains to be remains to be seen obviously like getting dates in ethereum's roadmap is quite hard at times but this to me you know we have eth2 the beacon chain going live we have the eighth one to e2 merger and then we have one five five nine i think they're all equally important right i think they're very

um very intrinsically linked in terms of importance and uh and and and kind of like their importance for the network overall so very very happy to see tim rufgan complete his report here and i and i said my thanks to him for taking this on board and giving us a kind of non-crypto perspective right this as far as i'm aware tim doesn't spend all day every day in crypto or in ethereum or whatever he he he spends it in the traditional kind of like uh computer science uh world where he's got more context and brings a fresher fresh set of eyes to this stuff so yeah thank you tim for for doing this report uh as i said the thread will be linked in the show notes you can go check out his thread and check out his report if you would

like all right that's it for today everyone thank you for listening don't forget to subscribe to the youtube channel so you don't miss one of these episodes it's also available in podcast form so you just have to search the daily great podcast on google or something and it'll come up with the podcast there so if you prefer to listen to it um but yeah obviously you'll get a lot more context if you just if you just watch these episodes but i understand that some people like to listen to it in the background which is which is completely fine so definitely go check that out as well uh and yeah go subscribe to the daily grain newsletter and join the discord if you haven't yet and yeah i'll see you guys tomorrow