DeFi resiliency, Ethereum culture and more - The Daily Gwei Refuel #125​​ - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily way refuel where recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 20th of may 2021 all right everyone the day after the day after the big crash of 2021 biggest crush that we have had since covert uh since i guess march 2020 here so let's uh let's take a look at what happened so something that i've been seeing people talk about a lot over the last 24 hours was how well the d5 ecosystem handled the crash because you know there's always a lot of talk about d5 and how risky it is and basically you know how these cascading liquidations means that a lot of stuff can become under collateralized or there's not enough liquidity in the system

you know all these concerns and they are legit concerns it's not just like people trolling and trying to like poke holes in things that that that shouldn't be kind of um poke holes into uh but i think it handled it extremely well uh even georgios here from from paradigm put out this tweet and he said is nobody going to talk about how well ethereum's d5 ecosystem handled the cascading liquidations these days now you know go back a year and guess what happened uh well i mean you don't have to guess what happened if you remember what happened in march of 2020 the maker dow system one of the most popular or the most popular way to get leverage in d5 uh actually became undeclaralized because the keeper bots that were meant to bid on the collateral one's positions when um you know where under collateralized need

to be liquidated didn't work as they they should have right and of course they need to print more mkr tokens to cover the shortfall and all this sort of stuff and people got hurt now i haven't heard a story of anything within ethereum defy of of people losing kind of any money they shouldn't have or things not working as it should have and even all the layer two things are working quite well as well i saw diy dx and loop ring and diversify all that sort of stuff worked really really well as well so um and this just i guess this is a testament to how far we've come in the d5 ecosystem right and how well we've um we've built this this stuff and how resilient we've built it because at the end of the day you know if this stuff isn't built to survive

those those massive crashes then it is not a proper financial system and i actually think that you know we survived this without circuit breakers like for those of you who may be aware in traditional finance in the stock market there's these things called circuit breakers that actually stop a uh a start a particular stock or or an index or whatever from going too high or too low so if it's if it's dumping really quickly it actually puts a trading halt on you know it lets people kind of gather themselves up and basically you know i guess clean the leverage out of the system more gracefully and things like that and then trading restarts now this doesn't happen in crypto obviously there are no circuit breakers there is nothing like that if the price is falling it can fall very very quickly due to these cascading

liquidations which is exactly what happened yesterday when you know we fell down to an eighteen hundred dollar eighth or i think it was eight about nineteen hundred dollars and a 30 000 bitcoin huge dumps across the board and we had a lot of uh i guess like volatility after that you know the volatility continued to today i woke up and the price was back to like 2200 after going at like 2700 and now we're back at like 2 900 and yeah the volatility is still quite crazy but defy is handling it well yes the fees got out of hand or whatever but that is part of the system right the the fees are just i think i think like for end users are a temporary thing once we get layer 2 is live and everything like that it's going to be all fine there but i

did want to kind of like give a shout out to chain link for for the for for their oracles because chain link oracle's power a lot of this ecosystem they power all the rv markets they power a lot of the other kind of money markets out there and a lot of other things and they handled this crash very gracefully all the price fees updated as they should and everything ran just fine so you know chain link i think we're the real mvps without because at the end of the day if you have oracles that don't update correctly or up you know um have a wrong update it'll take too long to update or whatever it it introduces systemic risk uh into the d5 ecosystem so i think chain link where the real mvps here and chandling god replied uh kind of like with with a breakdown

here that the the data fee the data feeds just updated um everything like business as usual there was there was kind of nothing uh nothing going on here and for those who don't know chain link aggregates a bunch of different uh feeds from different providers and kind of gives spits out a price based on that and all that you know seems to have been green during the whole market downturn here which is quite incredible honestly and i know it's still like they reduced the cost of it recently to post this oracle data on chain but it's still quite expensive to do so so you know even though the gas fees got up to like 2 000 grey plus channeling oracles functioned uh very well there which is really really cool um and you know alan here uh the founder of yield uh basically oh sorry yield protocol here

and basically said that uh put a tweet out it said massive dip and not a single protocol blew up incredibly bullish uh and of course he was talking about uh protocols on ethereum and not on other chains like uh robert lesnar put out a a kind of like reply here then said that venus on bsc kind of blew up but um yeah so on ethereum nothing blew up i get like like we did in march 2020 it was just you know i mean it's kind of amazing like how not literally nothing blew up and everything went fine and and the markets sorted themselves out and everything like that i really do think that that's an incredibly great indicator for the future and and and it instills trust in a lot of people too right it instills trust in not only individuals but companies and institutions saying that this ecosystem

is not a joke right it is incredibly resilient you can build products on here and you'll be fine so i think that is is an incredible testament to that and i think one of the products that actually uh i guess uh you know survived the the the the the best and one of the newer products was the flexible leveraged index from uh the index car pr now for those who don't know this is basically a tokenized uh leverage position that basically levels you up two times on ether and this survived just fine it didn't get blown up you know didn't get liquidated or anything like that it functioned just fine and i think uh you know there was a lot of concerns around this product saying that oh what's going to happen in a flash crash is it actually going to get liquidated right can can the system that's

in place uh kind of like re-collateralize fast enough and it did it did it worked flawlessly uh for for from everything i saw so that's just another testament to these newer products that are out there right now that essentially uh you know aren't as battle tested and you only get battle testing by you know the last i guess the last 24 to 48 hours happening and all that good stuff so yeah just incredibly bullish overall to see such amazing kind of uh resiliency from the d5 ecosystem as a whole here so yeah i guess i'll leave it at that for now i'm sure you'll see some more post mortems and not not post moderns but like more kind of like summaries of what happened you know how everything went so smoothly from different people i mean i know chain link god has a bunch of different

threads that he put together where he explains why chain link did so well and what how their system is set up and all that sort of stuff so you can go check out his twitter for that for that sort of stuff and he's a good follower as well for all things chain link that's for sure so sandeep from polygon put an interesting tweet where he said i was talking to some market participants today and he was saying this yesterday they were saying when the market went down from 3 500 to 3 000 to 2500 to 2000 blah blah blah crazy thing i noticed is that they talked about markets in eath prices and not b btc signs of mental flippings before markets flip for real question mark uh i thought this was interesting and i replied saying the eath standard right because i really do think that

if you're talking about crypto native stuff uh you're talking about eth a lot of the time not only because of d5 but because ether has become such an amazing asset to use uh within uh you know both in centralized exchanges and and d5 as as collateral right as money as trading pairs uh you know everyone needs it to kind of pay gas fees and all that sort of stuff so we're kind of having this thing where eath is becoming the centerpiece of the crypto ecosystem as an asset and btc is becoming this niche and i've spoken about this a lot where i believe that btc is a niche it's you know it can be digital gold or whatever and that's something that appeals to people but uh you know it's just it's so small and it's so i mean it's not it's not a bigger dream

right i always like to say dream bigger dreams and that's exactly what ethereum and ether doing bitcoin is not going to have a a d5 ecosystem built on top of it um and you know whatever i mean i've seen some defrag products claiming to build on bitcoin whatever that is is going to be you know incredibly underwhelming it's not going to be anything like the ethereum d5 ecosystem and as we've seen lately a lot of the other ecosystems out there um you know a lot of the other chains are failing to gain traction i think like even bsc uh is is actually falling apart right now i've seen a lot of tweets about people saying that the um the chain's forking a lot it's it's you know if clients are having trouble keeping up with the head of the chain um which means that the chain's becoming

uh unstable and things like that so you know not a great bedrock to build your products on definitely and i think a lot of the serious d5 devs out there aren't even touching bst which makes a lot of sense and at the end of the day if you want a bsc kind of like experience with um you know much more security and an ethereum aligned team you go with polygon i think right you know i mean i've talked about polygon a lot and about how you know it's not a roll-up or anything like that it is essentially a side chain or a commit chain whatever you want to call it um to ethereum but a very politically aligned one and one that's uh you know takes security uh and uh and user fund security seriously and isn't just like trying to you know isn't unstable or anything like

that actually has a lot of um checks and balances in place for things like that but i mean you guys know i'm an advisor to polygon so i won't shield too much there but i just think that yeah ethereum and eth are the center point of this entire ecosystem and will continue to be into the future so brian from sarah basically put out a tweet yesterday where they announced that they are scaling serara which is a nft platform for i think football or soccer whatever you want to call it here they're doing it with starkware now um i think you know i've seen a few people be interested in this uh in the dailywear community and talk about this uh so it's really cool to see that they are doubling down on ethereum here they're not moving to another blockchain or an nft blockchain like like flow

which i mean you guys know i don't really consider flow to be a blockchain or what they have to be nfts but i won't go into that now uh but his tweet mentions a um uh interesting thing so his tweet reads like this gas fees suck but but at sararia we serara i think that's how you say it anyway uh we believe in open platforms and don't want to compromise on security that's why we're doubling down on ethereum with zk roll ups with starkware we're going to change the nft game in july 2021. i love teams like this like honestly these are my favorite teams in the entire space like some of you may know i'm not really into sports or anything like that so i don't follow that closely but that doesn't matter to me like serara i think has gotten a lot of

traction a lot of people love sports right especially uh football soccer um so and and i just love that they're doubling down on ethereum here and and choosing to scale via layer 2 instead of going to another platform these are the teams that actually understand what's going on you know there's others out there obviously immutablex i'm a big fan of and god's unchained and all the partners that they have going on there um you know and i've spoken about before it's like if you can get the low fees fast transactions on layer 2 ethereum then there is literally no reason to go to a new ecosystem like it's much harder to go to a new ecosystem another blockchain or whatever you want to call it here so yeah i think that's really really positive but as they say here this is going to be going live on july

of 2021 so if you're a sorari user definitely this is relevant to you you can go read the full kind of blog post here and a description of like what this is all about and how this is all going to work i'll be linked in the youtube description uh below so hayden adams did a bit of a retrospective of the last 48 hours where he said crazy day in crypto how did unisoft perform so there was no downtime obviously unlike most centralized exchanges which most centralized exchanges did go down i think ftx was the only one that didn't have any issues binance had issues coinbase had issues you know uh bitmex and a bunch of other exchanges i think had issues as well but uh none of the dexers on ethereum did

and you know the gas fees were high but as long as you paid the fees uh you were fine right you could you could use uni swap so and there was an insane all-time high daily volume of 6.3 billion dollars and 2.7 billion dollars worth of volume in unisop v3 alone uh on on just 900 million tvl here so and as ed hayden says here the demand value prop of d5 is already very clear at this point right i mean anyone who's doubting d5 right now and i put a tweet out today where i said if you don't believe in if that d5 is the future we can't be friends i mean i i said that as a joke but seriously if you are denying d5 now if you don't think it has a massive part to play in the future in terms of like financial

instruments and all that sort of stuff there then you're just not seeing it like you're just not getting it and you're just gonna be left behind uh because d5 keeps growing and it keeps growing at an exponential rate the high fees haven't deterred the growth of d5 at all i mean i put out a screenshot today of crypto fees website where there was like really high fees on ethereum and people were complaining like high fee revenue people were saying well this is uh you know this is actually not bad why are you bragging about this i'm like well that's missing the forest for the trees yes obviously this price is out a lot of users but at the same time it shows that there's incredible demand for ethereum and ethereum based products which means that once we get layer two's up and running and people can uh like

more later two's up and running with you know obviously arbitrary is launching very soon that generalized layer two we already have like um awesome uh platforms like polygon we already have awesome layer two platforms like dydx and optimism's coming and all this sort of stuff like diversify ring you know you know the gist yeah once we have that i mean it's it's amazing because those wouldn't have gotten built without demand like if there was no demand for um for d5 if there was no pain points if there was no scaling issues then the layer twos wouldn't have gotten developed and deployed you can look back to when guay was like you know under 10. there was no motivation to build a scaling solution there was no motivation to build layer twos there just it just didn't exist you don't build infrastructure before you

have a kind of demand at the end of the day because demand drives the building here so i think you know when you react and see that and you're like oh it's pricing out users and everything like that just remember how early we are because it's the same thing as saying oh well dial-up internet is you know pricing out users because it's more expensive and it basically if you want to get like the the much better experience the higher data caps and everything like it's super expensive it's like well yeah it was then costs came down over time they always do with technology it does not stay expensive especially when there's this much demand for it so i think keeping that in mind is very important as we approach the rollout of layer twos as we kind of like uh get get more involved with this

sort of stuff and and have more growth here but yeah crazy day for you new swap crazy day for all the dexes i think sushi swap did a bunch a lot of volume as well and a bunch of other d5 protocols out there so really awesome to see that and i can't wait to see what i guess like the total volume of uh this month shakes out to on decentralized exchanges i bet it's going to be maybe as much as like the total volume of uh the rest of the year combined uh well but we'll have to see there's still 10 days 11 days left of of may uh we'll have to see how that shakes out so speaking of uni swap john palmer here uh announced that he has launched fish.vote which is an app to make union swap governance more accessible so what fish do vote let anyone do is

create a crowd proposal that others can support if proposal receives 10 million delegated votes it becomes a formal uni governance proposal so this is really cool i think any tools that make protocol governance easier and democratize it further is is very welcome here because obviously 10 million uni uh is worth a lot right i don't know what the current uni price is let's just say it's 30 dollars it's probably not but let's just say it is that means that uh it takes 300 million dollars to kind of put up a proposal here but what unisop allows people to do is delegate their uni tokens to people that they want to vote for them not give their tokens to them obviously but delegate their voting power essentially now the we need tools to make that easy for people to do we need tools to people

to go for people to go to and like view their proposals view the people wanting to basically act as like i guess you could say elected representatives for their uni tokens and things like that and that's exactly what fish.vote here is doing and there's a bunch of other tools like this out there um you know snapshot is a very popular tool for governance right the the compound governance system as a whole is very popular and gets forked by a lot of different projects uh there's a few others out there the names escape me right now but i think governance uh dow governance in general is going to be a a very big theme over the next couple of years it is becoming very serious as well because the treasuries of these dows is so big and and the apps themselves just keep growing and keep generating more and

more cash flows for the protocol i know you know i was talking about the index call before uh their revenues are growing every day i think they're up to like fifteen thousand dollars a day in revenue now and that's just gonna keep growing and there's a bunch of other protocols out there that have you know more revenues than that obviously make a doubt uh has stuff like that and and uh you know the surplus of that goes to burning mkr tokens but there are treasury kind of like proposals that go through as well uh and then sushi swap obviously pays it out to stake is i mean there's so many of these protocols now so governance is becoming extremely important and being able to delegate your tokens to other people is becoming important because the barrier to end to entry on like fully on chain

governance systems needs to be very high uh you know in terms of token requirement because if it's not it means that just anyone can create a proposal and then it can be games and all this sort of stuff so i think this is the right approach making the i guess like uh minimum token amount required like very large because then you have people basically acting as protocol politicians and vying for people to delegate their their tokens to them so that they can basically do what they feel is the best is in the best interest of the protocol so yeah really cool to see these extra tools getting put out here i hope to see more of these um you know built over time i'm sure we will like there's so i mean there's so many tools like i'm just thinking of of all of them now i mean

there's a project that uh that i guess like i came across on twitter that i thought was interesting called orca protocol uh they are doing a lot of stuff around governance i mean the governance space is just getting started i would say that we're still very early there i know there were some early attempts from like aragon and and some other projects but i don't think that they have kind of gone anywhere i think they were very very early um not to say that they're bad or anything like that but they were very early and it doesn't seem like they kind of like captured the mindshare that they hoped they would but it doesn't mean people are giving up here so very very cool to see this and i hope to see more tools come out not just for uni top governance but for all kind of

governance here all right so last up we have a tweet that scott lewis put out today that i'm going to spend a bit of time going over so essentially what he said was scammy ecosystems attract scammy co-founders and more scammy co-founders create even scammier ecosystems ethereum culture attracts authentic founders culture is a bigger moat than many realize i've spoken about this a lot right in the past both on the refuel and in my newsletter where i basically say ethereum culture is the most important thing that ethereum has going for it and it is the reason why ethereum is number one still in terms of like usage as a smart contract platform and will remain number one into the future you know

ethereum has a lot of problems to solve but it's not a perfect system it has a lot of headwinds but ethereum will meet them head-on and we have the right people to do that in the ecosystem so what i want to do for the next few minutes is basically define a little bit of ethereum culture and contrast that with the cultures of other kind of chains and ecosystems out there and and and how they differ and then bring it all back to why ethereum wins okay so ethereum culture what is it well i mean at the core of it it is open right everyone is allowed to participate in in the ethereum ecosystem whether you're a scammer right whether you're a builder whether you're a visionary all of them are allowed to build an ecosystem not all of them are welcome but all of them are allowed to build an

ecosystem because ethereum is a neutral platform right ethereum has its fair share of scams don't get me wrong but in saying that the ethereum culture and ecosystem actively weeds out these scams and calls them out and make sure to ignore them and teams don't like working with them right so if you kind of look at the the whole landscape the top teams in this ecosystem are not scammers right the top protocols are not scams the the the whole culture around what people use and people trust their money to are not scams so um and that that just comes from uh the people within the ecosystem weeding out this sort of stuff whereas there are other ecosystems out there which which on the face of it have either very you know have just outright scary projects or very dodgy

projects in general i'm not going to name any in particular but you're going to obviously know what i'm talking about but when you have ecosystems and chains where rug pools are literally happening daily right i know they happen on ethereum but they happen more so in other ecosystems literally daily where users are losing tens of millions hundreds of millions billions of dollars of funds right uh you know over time and your ecosystem and your social layer isn't wetting this out isn't calling this out isn't caring about this is actually encouraging this because you maybe have like a culture where it's like okay you got rugged in this scam just try another one right it's like a casino culture and i've spoken about this thing before about how there's two separate kind of i think markets in this industry there's the casino market where

there's people just playing in those markets just you know putting it all on black wanting to win big whatever they're not here for the fundamental side of things but then there's the the fundamental side and the fundamental culture and these people are here for way more than money they want to build world-changing products at the end of the day and i think ethereum has a monopoly on that and the other trains have uh monopoly on the casino stuff i think the other chains actually took away a lot of the scammy and casino stuff that was happening on ethereum and and kind of ported them over which i which i thanked them for like i i really hated a lot of that stuff that was going on on ethereum but that you know that was uh that was uh very healthy i think to happen and kind

of the ethereum ecosystem essentially acted as like has an immune system which basically forced out these scams and and forced them into other platforms that didn't have that immune system didn't have that culture because you can think of it as kind of like a i mean i'm not going to use a virus maybe that hits too close to home but you can think of it as something that like you have to weed out right and then you just basically push it onto a weaker organism like if you remove something from your system right and then it goes and infects a weaker organism and that organism kind of like dies off because of it well that means that they weren't as strong as as the one that weirded them out and that's exactly how i view ethereum culture we weed things out we get rid of this

sort of stuff we take ourselves seriously and we don't try to we don't get bogged down by this sort of stuff and every time a hack happens um they the the ethereum ecosystem doesn't say haha okay whatever let's move on to the next thing they do post mortems they try to make users whole the rest of the projects learn from this um and that builds a very non-scary non-grifter ecosystem and a very uh kind of like great uh and strong social layer and from what i've seen the ethereum community you know in some instances can sometimes be a little bit toxic but generally is very welcoming and friendly and i think that started from the very beginning and to keep that culture i mean it takes effort right the bigger the uh the bigger an ecosystem gets the more chance it is to turn i think

toxic depending on how i guess community leaders treat this sort of stuff there are a lot of community leaders within the ethereum ecosystem i count myself myself among those and i try really really hard not to be toxic like sometimes you know i might come across as a little bit toxic on twitter or whatever sometimes i'll say things um you know about different ecosystems that maybe come across as as mean or whatever but personally i always try to be as non-toxic as possible and i always try to stick with the science and the facts and i think that's what a lot of people in the ethereum ecosystem try to do so this is exactly why ethereum culture is what it is that is why ethereum has a monopoly on on good culture because you don't want to go to these other ecosystems because they just don't have

that like could you imagine someone um and i'll call out an ecosystem here but just for an obvious example but could you imagine a hardcore ethereum builder who really believes in the ethereum mission and vision going to be a c right that's not going to happen like the and and not even just a builder but like anyone who who's part of the ethereum social layer who really believes in the ethereum mission they're not going to be a c right they're never doing that because bsc does not um you know uh does not have what they want and also if they were to go there basically they'd just be surrounded by all these crap that they don't don't want to deal with right they don't want to be a part of it's essentially like um you know if you go there you're you're basically you feel like

you're part of a scammy ecosystem and it feels really gross and ugly and you feel like you're participating in something that is just really bad for humanity and maybe i'm being maybe i'm over exaggerating here maybe i'm being a bit hyper hyperbolic i know i've said that word wrong someone's going to call me out for that but whatever but i really do believe that uh the culture of the the social layer of these systems is way more important than people give it credit for uh and that's why i think you know stuff like bitcoin i think bitcoin social layer is completely broken it is incredibly toxic they think it's a they think it's a feature that that they're toxic i think it's a bug i think it's a reason why bitcoin continues to lose market share and i think it's a reason why bitcoin continues to

kind of like just fit in and fill into this kind of like very unimaginative niche that is digital gold i think bitcoin could have been much more than what it was uh than what it is sorry but people wanted it to be what it is today and you know the the people left in that ecosystem are quite toxic but anyway i think i'm going to leave that at that for now i think a lot of you know like i guess um you know a lot of this stuff because i've spoken about it on the refill before i speak about it a lot on twitter just follow the the legit builders follow the non-scammy people if you if you're here to make money that's fine but there's making money and then there's gambling you can make money by not gambling i mean i know plenty of people who have

done this you know they bought eight they stacked eight they bought defy tokens that they believed in and everything like that they built things you know even even that like uh uh you know i know the the bankless guys have done really well here but in particular they built a whole business around being legitimate ethereum media and then and you know they have a whole team now and everything like that and that was amazing to see uh you know personally i was able to build wealth through just like fundamentals based investing and sticking to to to the ethereum ecosystem and now i get to provide all this free education for all of you guys uh and you know i i don't see that happening within the you know other ecosystems right i don't see the daily you know insert ecosystem here right or anything like that i don't see you

know uh you know a bankless like any other ecosystem i don't see all these social kind of layer things in these other ecosystems and that's the major reason i believe why so many people stick with ethereum and ethereum is still home even if they deploy to other chains or whatever ethereum is still home ethereum is still where everyone wants to be the culture of ethereum is unbeatable it's incredibly welcoming it's very hard to feel unwelcome in the ethereum community unless you for some reason have done something to make yourself unwelcome like unless you ran a scam right or unless you tried to run a grift on people or unless you treated people like you know you're an to them whatever it's just generally very hard to feel unwelcome but anyway i'm gonna live it at that and i think that's it for today's episode so

thank you again everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone