Dencun updates, What is 'value' and more - The Daily Gwei Refuel #668 - Ethereum Updates

Transcript

hello everyone welcome to another episode of theway refuel where cup the latest news in ethereum ecosystem I'm your host Andy the 6th of October 2023 all right everyone let's get into it so first up we have an update on denune testing so as you guys know uh devet 9 for denune is uh he's he's basically up and running now it's been running for I think about a week or probably more than that and this update comes from marck who is a team lead who is their team lead at nethermind so he said here our spamming blob tool showed issues on devet 8 we ran in Ran Ed again on devet 9 and encounted issues in various client pairs including a few broken nodes and missing slots from many clients there are more things happening um with fuzzing testing and meev boost testing and all that and they found bugs in the

nethermind implementation um but have been have been fixing those bugs and continuing testing here so this is basically what testing is all about right guys finding these bugs finding these issues ironing them out uh obviously before anything gets to main net or even like the public test Nets because as I said this is a Dev net this is not the public test net yet um and yeah this is just a great little update here from Merrick now of course someone asked in the comments are we still a go for 2023 for denune or not and Merrick said my best guess is early 2024 so yeah definitely not going to be 2023 um at this point in time I think especially because as far as I know there has been no public test Nets um uh being scheduled for Forks yet uh as I said like they they're targeting early to mid

November for that so it's it's definitely not going to happen in October I don't think um but we to kind of keep an eye on that and see what the timing is around that uh but yeah it'll be early 2024 now which as I've said plenty of times before it doesn't really matter I mean the fees are so cheap on l2s right now if you know if you're worried about or not worried about if you if you're excited for 484 4844 to go live like I am too and for that to drop fees a little bit more on the on the l2s there but the l2s right now they're so cheap to use I mean you can actually look at the the website L2 fees. info I'll bring it up on my screen here just to see how cheap they are right like you've got let's look at the the most

popular ones you've got optimism which is 6 cents to swap tokens and you have arbitrum one which is 9 cents to swap tokens um and all of them are under 15 cents basically to to swap tokens here except I guess like Looper ring but that might be a bug and sending eth is less than 5 cents now you know some people will say well it's not as cheap as we can get it and it's obviously not as cheap as we can get it right we're going to get it much cheaper than this and it's also not going to be affected by our one gas spikes when uh 4844 goes live but I think as I've said before it kind of goes back to the discussion of like how fee sensitive are the users that we have right now right because if you look at the fee sensitivity of users

I think that the difference between like 5 cents and 1 cent isn't that big of a difference because if you're a user that doesn't have um that much money to to play around with you're not going to be doing like multiple swaps per day right you're probably going to be doing a swap maybe one swap a day or one or or a few swaps a week uh say you're using crypto as like payment rails for example so I think that it's it's kind of negligible the difference there not not to say that we shouldn't get fees lower than what they are but you have to kind of realistically look at the current user base and and the potential F future user base and see where we land there and at the end of the day um the the future user base where the ones that are like

extremely fee sensitive let's say they need things to be to be completely free and and fees not to be uh not even to be something they that they worry about that's going to be in Into the Future as well but as it exists the current user base and the near future user base that I think we're going to be onboarding they're not going to be sensitive to fees like this like 5 Cent 1 cent I I I think that's basically the same thing especially because you also have to look at like the the expected value from a transaction that you're doing so for example I I use this example a lot in the past if you're claiming an airdrop and let's say the airdrop is like $100 right $100 worth of a token you're claiming it and it's costing you like even5 or $10 in gas

fees to claim it you're going to spend that right you're probably going to spend up to like a certain amount like whatever you you you feel like spending but probably probably even more than $10 $15 on fees to claim that airdrop considering that airdrop is is free money right so at the end of the day really is about the expected value of the of the transaction and what you're willing to pay for it and that goes back to I think everything in life right like you buy things that you uh so you pay for things the amount of money that you think is worth it right sometimes you you buy things out of fomo sometimes you do it and you regret it later but a lot of the purchase that we purchases that we make are dictated by how much we want to spend on them we look at something we

look at a product and we're like okay well I want to spend this much on this product cuz you know this is how much it's worth to me the same is true for for Block space because as I've said before ethereum and it's layer 2os they sell block space that is their product and it just depends how much it's worth it for you if it's worth it for you to claim a $100 air drop um because you claim the $100 airdrop maybe it cost you $10 to claim another $10 to swap it to to Ether or usdc and then send it to an exchange to cash out to feed or something like that like even if you spend $25 on fees you're still netting out $75 right you're still better off with $75 so it it's all about the kind of expected value from this and of

course that's like a very easy thing to work out because you can put a monetary value on it obviously using the analogy of like I guess real world purchases it's a bit harder like for example you go to the grocery store and you have to choose between two different brands of rice and one's you know half the price of the other one uh and uh you know you you would depending on what kind of like uh value you're getting out of that or what what you feel like doing what you feel like purchasing there you either go for the cheaper one or the more expensive one but there's not I guess like a monetary thing there whereas with claiming an airdrop for example there is like you know the actual monetary value and it's very easy calculation to do but I think when it comes to other things it

becomes a little bit harder but also within crypto like air drop is just the most obvious example there are plenty of other examples for example let's say you want to buy $100 of a token and it's going to cost you $10 to do that well if you expect to make more than 10% of your money on that token on speculating on that that token um maybe maybe more than that uh if you account for selling it back to e or usdc so let's say more than 20% because let's say it cost you $10 either way uh if you expect to make more than more than that then it makes sense for you to to to pay that and it's the same with like centralized exchange fees for example I see people who are investors not Traders Traders are more fee sensitive here of course but I see a

lot of investors say oh you know I I got charged a 1% fee here but only 5% fee here does that really matter like in the grand scheme things because if you think about it right you even if you if you're paying like a 1% fee if you're buying eth today you're obviously expecting to make more than 1% back on your investment with eth right like you're expecting to make a lot more than that so again it's it kind of comes down to what you're willing to pay and obviously other things go into it as well like with with with caliz centralized exchanges it's not just the fees it's also how trustworthy they are whether you want to leave money on them or not or have money on them at any given time things like that right that also factors into it but it's always funny to see

people people's different opinions on things and and kind of like how they value different things depending on both from an investment perspective but also from kind of a discretion discretionary spending perspective where you know buying your groceries is not an investment right uh maybe you could say it's an investment in yourself like you buy groceries and cook dinner at home instead of eating out because it's healthier right I guess like that is a different form of investment but it's not a it's not a monetary investment right and you can go down this Rabbit Hole in any different number of ways you want to uh about value I think the the um the term value and like the concept of value to humans is is incredibly interesting to be honest and I could keep going on about this forever but I'm not going to but this is generally how I

think about it when it comes to to fees generally right people will pay what they are willing to pay for based on the expected value and expected outcome here um but that's not an argument not to lower fees definitely not right um but at the same time as I said you have to kind of see what the user base is today what the short-term and near-term user base is and then you can kind of say well it's not like a huge deal that denune I'm going back to the main topic I was actually talking about it's not a huge deal that denune is not coming out you know in November it's it might be coming in like January February right it really doesn't make any difference in the grand scheme of things uh but yeah that was the original topic that I was talking about got a bit sidetracked

there but I mean if you do enjoy uh th those discussions feel free to continue the discussion in in the daily way Discord Channel about this this concept of value it's just something that's always been interesting to me and since I've been in crypto it's obviously been at the front of my mind for a long time now um and there's also a a anime that I watched recently that explored this concept in a really weird way it's the anime is called made in abyss and this was uh season two of that anime I don't suggest watching it unless you're into like weird anime because it really is one of those weird ones but it explored the concept of value and I I just really liked how they how they explored it even though it was even though it was weird but anyway I'm getting sidetracked again

uh got to move on from that one to something that I came across today called the eth research bot so this was introduced today it's a Twitter account you can see here they've described it it's a twitterbot powered by gp4 designed to keep you updated with concise summaries on the newest and most exciting eth research posts on the ethereum Research Forum so if you actually click through to the account here I've of course followed the account and I highly recommend you doing so as well you can see uh their first kind of summary here so they give you basically the title uh which is in this case ZK Unis swap who it's actually by the author and explain like I'm five and the important takeaway so this is a really cool bot just for summarizing the multitude of different kind of research that get posted to ethereum research

over time uh and and doing it in such a way where they've even got expand L on fives where they obviously allow you to share this because you can retweet it on Twitter and and and like it and share it with your friends and I can cover it on the refill of course easier for me to cover it here uh but it's a great use of an of an AI bot here so I recommend going and checking it out and actually um following the account yourself I'll link it in the YouTube description below there I think this ZK unisoft thing is yeah I've got it over here so maybe if I bring this here there's a good segue into it so I actually came across this from Diego who published this on eth Research uh he said introducing ZK Unis swap a first of its kind zkm now usually

I would go to the eth research post or read the Tweet thread by by the author here and try to understand it understand it myself but with the kind of like eth research bot here I don't have to do that I can just look at the tweet from the bot and there's an explain like I'm five right at the top here so it explains it by saying ZK unop is a research proof of concept that introduces something called a ZK AMF a variant of amm that integrate zero knowledge proofs in protocol it uses a ZK co-processor to offload the computation of swaps allowing for cheaper and more efficient execution of swaps off chain and then there's a bunch of important takeaways here as well which is very very cool to see I guess my most uh important takeaway from this or I guess like my my most exciting

takeaway from this is that I think that as I've said before there is a lack of innovation within a lot of defi right now I think a lot of the bigger dii projects are just just coasting along which is fine there's nothing wrong with that but the Innovation is happening with the smaller projects with these more kind of pie in the sky things that may not be totally possible today but exists as proof of Concepts and something that can be introduced in the future and this concept of like offchain swaps it does exist today obviously you cow swap is the Premier Premier example then you've got Unis swap X and there's a bunch of other ones out there but this concept of like offchain swaps is definitely something that I think is going to be um the the kind of uh in the spotlight for the next couple years at

least because it is also a contentious topic because there are plenty of people out there who really like offchain swaps they like the fact that it can it leads to gasless swaps it allows you to Source liquidity from multiple different places it allows you to uh ensure that you don't get failed transaction stuff like that but the concerns are around centralization of course because the swaps are done off chain no one can can rug you because you sign what you want to swap for basically and there are other incentives in place especially you know with cow swap for the Searchers to actually Pro process your order but the concern becomes that and and I've seen this concern brought up on Twitter a bunch of times but let's let's kind of map this out to the to what the end game of offchain swaps would look like may

there's a possible future where essentially all of the liquidity providers the offchain liquidity providers and market makers uh have to abide by some kind of like legislation or regulation that forces them to only process orders that they have kyc their participants for so essentially you end up having kyc liquidity pools and it kind of Def defeats the entire purpose of decentralized exchanges to begin with because decentralized exchanges live or breathe based on the liquidity that they have and if all the liquidity just moves offchain into these kind of like centralized market makers then uh you have uh you don't have very good guarantees around the decentralization of that liquidity now I don't think there's like a particularly High chance

of that happening I feel like that we're going to have a balance between onchain liquidity and offchain liquidity but the offchain liquidity is uh is very very juicy especially for things like uh layer 2os I've explained this before about how you can have um and we do have things where you have offchain liquidity that allows you to bridge between the different l2s and The Logical end state of that is basically that you can swap from any L2 uh and stay on any L2 that you want and Source liquidity from any other L2 out there now that is a huge Boon a huge positive but as I said there are concerns around centralization of liquidity leading to things like kyc and um and also Blacklist and stuff like that that's where things start getting very kind of murky and and and stuff that and things that I think as a

community we need to be aware of but yeah it may be far into the future it may never happen but just something to be aware of uh anyway there all right offchain Labs has posted uh their first quarterly uh report for prism in quite a while now so as you guys know offchain Labs uh acquired the Prismatic Labs team quite a while ago and Prismatic Labs is responsible for building and maintaining the prism client well the members of Prismatic Labs which is now part of chain labs are responsible for that now in this quarterly update you can go read this for yourself they give us a bunch of different updates on things that have happened in the uh for the prism client here they've got a tldr in in the Twitter thread which I'll link in the YouTube description below but a lot of stuff has happened here and you know

it's funny because a lot of this stuff is very technical it's not user facing but it uh it is really great for people who run the prism clients um even if you notice it or not and some of these things for example are you know you've got here boosting at testation aggregation time uh Beacon API improvements faster hashing of the beacon stay so just making the client more performance um and then they've got a r map for the rest of the year they have some exciting features coming with with denb which is the consensus layer side of the denune hard Fork such as uh deposit contract snapshot uh uh deposit tree backward syncing ethereum protocol research and more here now so as I said these are more technical things definitely not user facing stuff but if you're running the prism client they definitely help you and make your client

more performance and possibly uh get get you more rewards as well by having better attestation Effectiveness and and stuff like that so you can go check out the full quarterly report for yourself I'll link this in the YouTube description below for you to do so all right now speaking of ethereum validators uh one thing I wanted to go over today is that the validator entry queue the queue that was at what like 90,000 at one point you know a few months ago is now down to just 7,100 and according to the when merge.com website if you scroll down here this queue will be cleared in 2 days and 15 hours so yeah pretty I guess like fun journey to get here the validator queue has basically been empty the entire time but that entry queue has been has been full

for for quite a while now but I've explained before how I think that the that was a oneoff thing where we' see the entry queue go up to like 90,000 for a bunch of various different reasons actually I can I can kind of like repeat those reasons I've got them up on my screen here if you just give me one sec I'll find it for you where is it here yes so so those reasons were you know post withdrawals we had the mass reshuffling of stake you know for example Kraken retail users got Force exited and had to re-enter um if they wanted to continue staking their eth we had an influx of eth into staking that was waiting for the drisking event of withdrawals lots of attention on eth staking because of uh that upgrade that went live and then Rocka pool's uh lb8

upgrade went live as well which resulted in uh more validators obviously being added to the queue as people converted from 16 to8 uh kind of uh uh mini pools there so that was a one-off of event in my eyes we're not going to enable withdrawals again right we're not going to have a massive drisking event like that again uh the the the things that might may happen again maybe for some reason coinbase caves and shuts down their staking product and has to force exit users but even that wouldn't put us back to where we were because it would have to be combined with all these other things happening now you know typically the counterargument to this is people saying to me well what if we get you know the bull market happens again and yield Skyrocket because uh the onchain activity goes nuts and me goes nuts

again and validators are earning you know 10% plus yield okay sure there'll be an influx of validators but I still don't see us getting to that massive kind of like 990,000 entry queue again and if we do I'm happy to say that I was wrong but yeah I don't know I'm kind of on the fence about that I'm I'm leaning towards not seeing that again but regardless of that as I said the entry queue is going to be empty in 2 days and 15 hours which means if you have been waiting to potentially shuffle your stake around um maybe you were with uh with a a an exchange or Lio or something like that and you want to spin up a rocker pool mini pool or you want to spin up a solo validator you can do it now and you only have to wait Less Than

3 days I mean you don't even have to wait until this happens but I've also got friends who have been waiting for this um and and they're pretty big eth stakers they've been waiting for the queue to go down for them to rotate out of their St so as I've explained to you guys before if you're a big Staker and you're earning a lot of a lot of money the opportunity cost of waiting like 2 months is huge right because you lose out on two months worth of gain so essentially what these people did was that they had their um eth and st e where they were obviously still earning rewards and they they're converting those to solo validators uh now that the queue is basically Less Than 3 days because the opportunity cost is is is is much lower now it's less than 3 days uh

rather than what whatever it was um you know up upwards of two months there so so yeah I just wanted to give you guys an update on that there I also had the rider. Network website up here just to prompt me to remind you guys that there's a lot of discussions happening right now about kind of like lato and lists and stuff like that on Twitter I just wanted to quickly remind you that I'm going to be talking about all of this with Eric so that podcast or the the next delway drive-through with Eric will be live tomorrow we didn't record it today but we're we've rescheduled to tomorrow and it'll still be out the normal time that uh like the Saturday morning us time that I that I said to you guys yesterday I don't know exactly what we're going to touch on because we

never really have like a a um an agenda going into it we really just kind of speak about what comes comes to mind but I think the main points we're going to touch on is about whether we should enshrine an LST or not enshrine an LST and what the actual concern around Lio is because I see tons of people always talking about Lio being you know a concern but not many people actually talking about what actual concerns there are like what is the actual attack Vector here what could lier actually do to damage the network so we're going to actually run through those as well um as well as the enshrined LST stuff so be sure to tune in to that episode as I said we'll go live tomorrow uh there now moving on from this to another update from nethermind so the nethermind client is

now synced with the Base main net and optimism main net so very cool to see this we're getting I guess like client diversity at layer 2os as I've talked about before with nethermind jumping into The Fray here I think I mentioned this last time on October 3rd maybe a few days ago when they actually teased this out but yeah if you if you want to run the nether mine client and sync with Base main net and optimiz Main net you now can and I'll link that in the YouTube description below uh for you to check out there all right Tao has a really great tweet thread out today called based rollup FAQ so basically if you want to know all about what a based rollup is then this is the thread for you and and this was something that uh I think I I brought up quite a while ago because

Justin Drake did an ethereum research post about this but the tldr on this um without going into too much detail is essentially that the rollup would be rollups transaction ordering would be controlled by the the kind of like settlement l itself so by ethereum layer one itself instead of the sequencer that exists as a separate client at layer 2 right so that's like the very high level gist of it but there's more that goes into it especially when you start talking about me and and data availability and stuff like that so Tao goes through this in this FAQ which is really great honestly I highly recommend checking this out I'll link it in the YouTube description below um but this is this is also falls into the discussion of enshrinement and what I was talking about the other day about how there's this kind of discussion about what to

enshrine in the core protocol and what not to enshrine the concept of an enshrined rollup is similar to a base rollup except that you would put a zkm For example directly into ethereum layer one and it would basically it completely be controlled by ethereum layer 1 there' be no way to do sequencing outside of ethereum uh uh uh layer one uh consensus and there'd be no way to do data availability outside of ethereum layer one for my understanding of that so for all intensive purposes it would be the same thing as ethereum layer 1 because it would be part of the core protocol but that's probably pretty far out um don't know if that's even going to happen it just depends but yeah if you want to learn more about base Roll-Ups this tweet thread is definitely for you I'll link it in the YouTube description

below for you to check out all right an interesting tweet from Benji here today who works at optimism lab so he just gave us a update on what the past 5 months of optimism has looked like so the optimism ecosystem has been very very busy so you you can see here that the fault or fraud proof Alpha has been worked on and obviously that's live on testnet as I talked about yesterday they introduced the law of chains which was was the kind of governance for the super chain ecosystem and they launched the super chains they began the retroactive public goods funding number three which is still ongoing gave away grants uh you know Bedrock launched of course that may seem like an eternity ago but it did happen in the last 5 months um and then there's more in the uh kind of I guess like a um a Twitter

thread here such as new clients uh research expansions nfts so much going on I mean this is crazy and you know the reason why I bring this tweet up is because there was a a little bit of a discussion I had with someone in the daily G Discord Channel if you go to the other chains Channel um I had a discussion with RVD PR about how ethereum layer 1 he he kind of was talking about how ethereum layer 1 is is not moving very fast compared to I guess like other layer ones like salana for example and then I got into this conversation with him where I basically said well the whole point of ethereum layer one is not to move fast right ethereum layer 1 is not being built for end users anymore it is being built for layer 2os and where we move fast is at

layer 2 and that's exactly what's happening here you can see past 5 months what just optimism alone has done right this is not including all the other l2s out there of which there are many they can move fast right but ethereum layer one it is a feature for it not to move fast and it is also part of its design for it to only service l2s and to service its own obviously security resiliency and reliability ethereum layer 1 is not meant to be an execution layer as I've said before it's not meant to be uh compared to monolithic layer ones monolithic layer ones are very similar to uh l2s in that they're trying to be execution environments but also the monolithic l1s are trying to be everything you know the settlement layer and stuff like that whereas ethereum L1 is just trying to be a really strong

settlement and data availability layer right so from that perspective I I just never kind of like I thought it was um as an Apples to Apples comparison between ethereum as exists today and other layer ones now of course people will say well you can do execution on ethereum layer 1 uh and it's been that way since Genesis I'm like yes it has but that is to me at this point in time time technical debt and the reason why I say it's technical debt is because ethereum has gone through so many different phases uh in its kind of road map in its kind of design it was a Pioneer and still is a Pioneer in so many different things but if ethereum was built today as uh with all the knowledge that we have of of all the last kind of like years since ethereum launched it would be built as a

completely different thing to what it is today I I I'm pretty convinced that it would be built just as a settlement dat availability layer and it wouldn't allow execution on layer one because it would just have all the execution happening at layer 2 but because it didn't exist like that because it's it's technically in my mind technical debt it's going to be there for quite a while which is not a bad thing mind you um but in in saying that that kind of like bolsters my point around how ethereum layer 1 is not optimizing for execution it is optimizing for settlement and data availability for layer 2os layer 2's optimizing for execution and they're doing that in a really big way but they it goes beyond execution as well layer twos can also be Cent layers like you can build layer 3es on top of layer twos

they're obviously not going to be as a strong as a sement layer as ethereum layer one and they obviously do ultimately settle down to ethereum layer one but there is that kind of um connection there and on top of that layer twos can do so much more than what ethereum layer one can do um Beyond just execution uh Beyond just building execution environments to lower fees they can do things like what arbitrum is doing with stylus right allow you to to program smart contracts in things other than solidity in in web Assembly not just evm right um they can do fully private l2s like atic is doing I mean you I'm just repeating myself here cuz I say it's all time on the refuel but really when you look at it that's the comparison that you should do layer tws are the execution environments they

should be compared to the monolithic l1s out there that are also optimizing for execution environments ethereum L1 really the only comparison that I can really see to be honest would be maybe Bitcoin um because Bitcoin is a settlement layer but it's not a very good one it can't really settle much it it basically settles BTC uh transactions and some kind of weird things with like ordinal and and some brc2 token stuff they have going on but it's very hacky and not very good it's not it's definitely not like what it is with ethereum um but in terms of ethereum with other layer ones out there and in terms of like real competition for being a settlement layer for like the modular kind of um uh design that ethereum has I'm not really seeing any others out

there that are following in that path uh so yeah just figured that was worth bringing up there but you can go check out Benji's tweet thread I'll link it in the YouTube description below for you to do so there uh but yeah I just I think that's going to be it for today but just the last couple of minutes actually that just something that came to mind just before that I figured I'd talk about since I've got some time here um the market stuff uh it's kind of like funny watching the fact that I don't even see crypto Twitter talking much about the markets anymore uh and honestly my crypto Twitter is is a mess these days really today I went on there and it was just like Li debates and bad takes to be honest and I kind of tweeted out saying that if there's one thing that's going

to make me quit Twitter it's probably like Lio debates but it probably goes beyond that it it it extends to the fact that the amount of just stupid stuff that I see said on Twitter after so many years I mean it's always been like this but after so many years it just burns me out um but it's funny to see that the market talk isn't really something that's being talked about and I kind of draw a a comparison to 2019 where or even I guess like into early 2020 where a lot of the discussions were like this there was a lot of drama there was a lot of kind of like contention on on crypto Twitter there was a lot of debates that really went nowhere and crypto Twitter is the worst place to debate anything um and the market was just quiet during that whole

time I think funny enough the cure for these debates at least to distract people from from having having these debates on Twitter is for the market to go up because then the market talk just drowns out the um the these debates because as I said I don't think crypto Twitter is a good place to have these debates it is probably the worst place to have these debates because Krypto Twitter is what I like to call a peanut gallery it is just a spectacle guys like no one cares about accuracy the people only care about having their own biases confirmed they want to ratio each other they want their team to win really at the end of the day I think crypto Twitter is an arena the people on crypto Twitter are the spectators of that Arena and there's always some kind of main characters every day or every week that

are fighting in that Arena having these Spectators uh watch on and at the end of the day the spectators just want to be entertained accurate information be damned so I think that's worth keeping keeping in mind but you watch how that all gets drowned out as soon as the market starts going up only again right it's always funny how that kind of plays out there but anyway on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all next week thanks everyone