dYdX L2 enters alpha, Optimism live in March & more - The Daily Gwei Refuel #65 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i recap the latest news new ethereum ecosystem i'm your host anthony sosano and today is the 25th of february 2021 all right everyone some really big news over the last 24 hours i'm super super pumped to go through it all so i'll start with the biggest news optimism uh the scaling technology coming to ethereum they're building optimistic ethereum which is using optimistic roll-up technology they announced that they're going to be coming to mainnet in march right march is only a week out they didn't give an exact date here but you know we're potentially only a couple weeks away from having optimism on mainnet which is absolutely amazing and they also hired a bunch of really great people as well you can see here in their blog post you can read through it um i'll link it

in the description but they hired a bunch of really awesome people here and people that have been around the ethereum ecosystem for a while as well which is really really cool but i mean this is coming at like the perfect time right uh you know we've obviously i've been talking about scaling a lot on the refuel and you know every it's everywhere right now it's like ethereum needs to scale right where's the solutions and we already have some live and we have more going live every like every week seemingly now and now optimism's come out and said we're going live in march and they're going to be live i'm assuming with synthetics because they've been doing a lot of stuff with synthetics uh through their test nets they've teased uni swap and chain link before i i bet they've got like other projects that are going to launch with

them as well uh kind of like i guess in stealth right now they don't want to give it a give away the that they're launching on them just yet so i imagine there's going to be a lot of hype around that if i had to say i'd say maybe you know we're only you know less than two weeks out from a launch year i don't know why i just kind of like think that they probably want to get this out sooner rather than later and they also announced that they've uh they've got a new investment new fresh investment from uh a16z um as part of a series a so uh that that's really awesome as well so they've got like capital obviously to to to get them over the line but this is huge and i i mean i don't think this is the only

thing going live i think there's other stuff going live in march as well or in april definitely over the next few weeks that is going to take ethereum kind of scalability to the next level there is literally um you know i i feel like in the next few months we're going to basically not like solve scalability but it's going to be a thing of like okay you know ethereum needs to scale to wow okay ethereum has all this cool technology that can scale it let's get everyone onto there right let's just get the adoption done which i think is gonna happen sooner than people think so yeah incredible news out of optimism today i was super pumped to wake up to this actually this morning i was like oh my god like they actually are launching so much sooner than i thought they thought they would i

thought maybe april or may sort of thing but to have them going live in march is absolutely awesome so yeah congrats to optimism i guess on the raise and announcing this and all the new hires i can't wait to see this live and speaking of scaling technology that is going live diy dx announced that their uh layer two exchange powered by starkware is now live in a limited alpha format so you can sign up and be on the waitlist to go live with it but i mean it works right just because it's in alpha doesn't mean it doesn't work or anything like that or or it needs to kind of like um be be test or whatever this is on main net and the reason why i think it's in early access is because obviously they don't want like people just plowing in like you know hundreds

of millions of dollars into it and then something go wrong with it but basically what dydx is for those who don't know it's a it's a it's a decentralized exchange focused on perpetual products so perpetual products are extremely popular in the centralized kind of exchange space and they don't really work on if you're in mainnet because of the fact that order book audible kind of exchanges don't really work on the ethereum main net so they definitely need a layer 2 home for that and now what dydx is offering on their layer 2 implementation is basically zero gas cost for traders zero gas costs right not even like you know cents or whatever zero gas cost so you know that's better than what the i guess like quote-unquote competitors uh chains are offering like low fees this is zero fees with the security of the ethereum

network which is absolutely amazing um there's low trade fees as well and minimum order sizes instant trading advanced order types like really liquid order books i'm sure they've got a market maker network set up there you can get up to 25 times leverage this is absolutely massive like seriously this is just as big as optimism use if not bigger um because you know i mean probably just as big i wouldn't say if not big i think you know because this is on different technology on star quest technology using zk roll ups it is you know different to optimism because optimism's using optimistic roll-ups but this is you know an exchange that the ydx has been around for a while their growth has been really great over the last few months and they've just been hampered by the ethereum right because there's only so

much growth you can get out of player 1 being limited to like 15 transactions per second now they're going to have thousands of transactions per second on a fully scalable and secure layer 2 ecosystem so this is just so so bullish i mean at a time when it is very much needed the ethereum ecosystem is delivering scaling and you know you might think this is a recent thing where people are like oh okay you know scaling has been a big topic of discussion over the last month and all of a sudden all these things are coming to maine there why weren't they here before and to be honest like this stuff has been talked about for years developed and researched for years and i actually wrote my pe my piece in july of 2020 called the ethereum scaling war effort in that piece i basically said that you

know the gas fees were high because of yield farming it kicked off and i suspected that they would continue to be high and there was no going back to low gas fees just because the ethereum network became such a hotbed for uh kind of economic activity so from that kind of frame in in the post i basically went through all my points as to why i thought the high gas phase were a good thing and one of the critical points that i that i mentioned was that it makes it kind of like to fire under the arses of all these teams to get to layer two and that's what they've been developing over the last few months they haven't just sat on it anymore layer two became like the pretty much one of the top priority roadmap items for all the the d5 projects in ethereum not just d5

actually all the projects in ethereum and now we're seeing the fruits of that labor companies like starkware and optimism and you know loopring building their own solution and the multitude of others they are there and here and now they are ready to service these customers which is just amazing so yeah i mean i am so absolutely pumped for this you can hear it in my voice this is some of the best stuff to happen to ethereum in such a long time and by i think by the end of this year the the kind of perils of high gas fees for and for most end users is going to be gone right ethereum's not going to be known as like the whale chain anymore it's not going to be known as like the high fee chain and i really think this is really bad for ethereum

competitors because their only claim to fame or their only claimed improvement is the scalability improvement really most of the other stuff is frivolous that people don't really care about people really only care about the scalability aspect now if you have layer 2 that is just a scalable if not more scalable than these other ethereum kind of competitors that is secured by the ethereum based chain then why would you go anywhere else so this is incredibly bullish i don't think people realize how bullish this is i don't think people realize how much of a shelling point all this layer 2 technology is for the ethereum ecosystem and what i mean by that is that why go and risk building another chain with no users if you can just build on layer 2 get this get the you know the the the kind of like same or better scalability

with the security of ethereum so that's what's happening keep an eye out over the next few weeks for more of this news coming out i mean i'm definitely going to cover it every single time on the refuel to keep you guys updated uh because i think that it's worth paying attention to this above all else right now i mean to me there's a lot of stuff happening in ethereum right we have the nft explosion we have eth2 still being developed we have eighth one improvements eip1559 all that but scaling is the most important thing right now by far there is nothing more important than scaling ethereum because if ethereum doesn't scale it will lose eventually like i can guarantee it will lose right but the thing is is the reason why i don't think you know the high fees are bearish right for now or like the the the

kind of like usability hits the bearish is because ethereum is scaling we are scaling across so many different kind of places with so many different technologies there's hundreds if not thousands of people working on this now and they're so smart they've been the ecosystem for a long time they believe in the ethereum mission and they want to scale it so yeah stick with it a little bit i promise you by the end of this year like i strongly believe that the higher gas fees will not be a problem for end users anymore you'll be able to sit on layer 2 and do all the cool stuff you were doing on layer 1 you know basically free which is going to be incredibly bullish for the overall ecosystem i think but anyway i digress i'm getting too ahead of myself here i think but at the same time i mean it's just very

hard not to be excited about this stuff right now another piece of exciting news out of the chain link ecosystem was that their off-chain reporting uh or all kind of abbreviated as ocr is now live this is a scalability upgrade for chain link because it reduces the gas cost of the chain link price feeds by 90 now this is amazing because for those who don't know it actually is actually very very expensive for chain link node operators to post the price feeds to the main net because because the rest of d5 basically relies on oracle's right especially chain link oracles you cannot cheap out on the transactions you cannot say oh you know i'll just wait like an hour for my transaction to go through and i'll just pay less gas because that's fine no the articles need to be updated they

need to be updated regularly and this costs tens of thousands if not hundreds of thousands of dollars a day a day right because of the fact that the ethereum network is so congested now what this uh chain links off chain reporting does is it basically aggregates all the signatures together and only posts the proof of um the signatures to them to the main net so you can see here on on the kind of graphic here it explains it off chain all the chain link nodes kind of post their uh their kind of price feeds and that gets kind of computed off chain and then just the proof of all of that gets posted on chain so it's still just as secure just 90 cheaper so this is just i mean this is the power of cryptography i mean i i spoke about justin drake's podcast with bankless

a few weeks ago and how that's a highly recommended listen because cryptography has typically been a very theoretical field with no kind of like great applications um from for most of it like cryptography obviously backs a lot of the the stuff that we know and love but a lot of it was still theoretical and didn't really have a practical use case now it does with ethereum with d5 with all this kind of stuff we're doing with blockchain it has a very practical use case and this is just one of them and you know reducing the gas costs uh by 90 by using this this novel technology is absolutely amazing so really bullish uh news out from chain link on the scalable scalability side as well so i put out this tweet today and i read out the tweet i said could you imagine coming into the ethereum space

over the last few months finally getting your head around how dfi works only to be hit with the craziness of nfts this ecosystem is insane um this is just funny to me because like catching up with defy from xero right you say you're coming to the ethereum ecosystem you're brand new you have to first learn how ethereum works right so there's that aspect to it but then you're trying to learn defy you head down the youtube rabbit hole you maybe watch a few daily wave videos right maybe read a few of my newsletters you might check out ether bank list defined that all that good stuff right that takes some time it takes months and you get your head around how dfi works why it's world cha world changing and why it changes the game with regards to finance then you just hear these things about

nfts you're like what the hell is nfts now and then you go down the nft rabbit hole which i actually think is deeper than the d5 rabbit hole because nfts have a much broader kind of appeal to much more people as well um in terms of like the foreground defined finance is more of like a background thing that most people don't really think about um within their day-to-day lives whereas nfts are like a form of entertainment which you do think about kind of day-to-day depending on you know how you know how much you're into like the creator space and stuff like that so that is just another rabbit hole that you know is just crazy to be hit with while you're while you're new to the ecosystem and i mean there needs to be a zero to 100 guide or a 101 guide for ethereum

basically i know bankless has some stuff i know um defy dad has some stuff the divine also has some stuff and and stuff like that um you know i don't have any structured stuff just yet in terms of like on the daily wear on ef i want to do stuff like that but there's so much to do right like you have to think about it you have to first explain how ethereum works and then you have to explain how d5 works from under the hood then you need to explain each default app then you need to explain um all the infrastructure powering all of this right so depending on how deep you want to go down the rabbit hole it can take a considerable amount of time and then after all that by the time you've caught up there's some new use case like nfts that just comes out of

kind of nowhere i mean nfc has been around for a while but like the popularity is only spun sprung up over the last i guess three months or so so yeah i don't you know i don't envy anyone coming into the ecosystem right now in terms of like having to kind of like catch up and feeling overwhelmed but at the same time they get to experience all this stuff for the first time again which is always exciting so yeah if you're one of those people i mean you're listening to the refuel definitely just keep you know listening to me ramble on check out bank list check out d5 dad he does his youtube channel and he does yield tv as well check out the defiant check out all of that um because that's it's just a really great resource for you to kind of you know i guess really great resources

sorry for you to keep track of what's happening because it is definitely really hard and don't feel disheartened if you can't keep track of things you know it's it's like me i spend like every waking hour in the ethereum ecosystem i really don't do anything else these days maybe i'll watch a show every now and again or play some video games sometimes but most of it is spent in ethereum and i still can't keep up either right i you know the half the reason why i do these refuels is because it helps me keep up with the ecosystem as well and keeps me on top of things and educating is actually a really nice way to kind of refine your own knowledge too so yeah don't be disheartened if you can't keep up right now because not even i can keep up and i doubt

anyone can keep up it's like trying to keep up with what's happening on the internet it's just impossible so you know if you've only got a limited amount of time find something that you enjoy right whether it's nfts or dfi find a little community within that and spend some time there don't try to be everything to everyone don't try to be involved with absolutely everything yeah you'll miss out on opportunities in terms of like investments and stuff but you'll be able to hone in your kind of like craft on one particular thing that you actually kind of understand deeply and want to be involved with deeply rather than spreading yourself too thin which i think is pretty pretty important so ryan sean adams from bank lucia put out a really interesting kind of comment and i won't read the whole comment here but basically it's more than a comment it's like a

story of when he was kind of like a validator for i guess cosmos as part of his validator company um and for those who don't know uh cosmos is a distributed proof of stake system uh similar to other systems like eos where you basically as a token holder you delegate your stake to these super nodes essentially to run the network for you now the tldr is that ryan's experience as a cosmos validator left him jaded and made him more bullish on ethereum now i mean i'll let you read this it'll be in the youtube description um the full post but basically the reason he says this is because there was a lot of insider dealings there was a lot of kind of like shadiness going on there was a lot of catalyzation and this is what happens when you have a distributed proof of stake system

because there is no sense of individuality it's basically you have to kind of like either become a validator and get people to delegate to you or you have to delegate your stake to someone else so and becoming a validate is very hard because there's a lot of insider deals that go on right there's a lot of like pay-to-play sort of stuff going on and unless you have like a name for yourself or unless you have like a company that you run it's very hard for you to become a validator now in ethereum with specifically ethereum 2.0 you can become a validator right and and not have to like just with the 32 8th minimum or when the decentralized solutions go live you'll be able to stake with less than that so you know the 32 minimum to be a validator like yes it's about 50 000 or something

right now that is still a way lower barrier to entry than trying to become a validator in one of these dpos systems and there are actually like tons of disparate validators on the ethereum network right now and don't get me wrong i mean on the e2 network don't get me wrong eth2 state can still centralize on exchanges and stuff like that but i think it's a bit different where exchanges don't really have the um incentive to work together right at least most of them uh to collude or to like do things like that whereas these kind of validators on dpos systems do because they can basically say to each other you know you know delegate to me or like just let me have all the stake and you know we'll share the fees like through back room deals essentially we'll share the block reward so there's

that whereas centralized exchanges a lot of them don't really play nice with each other like i can't imagine like coinbase and binance playing nice with each other right for example they're they're definitely like you know very harsh competitors so there's a lot of that too but yeah read this you know it'll be linked in the youtube description you can go give it a read for yourself i think it's very important to understand the context around why ethereum proof of stake is very different to distributed proof of stake because it just cut you know it just turns into a cartel and that's not what we want what we want for like a base kind of money system right a base layer that we want to be maximally decentralized right and we wanted to be neutral and kind of censorship resistant that you just don't get that

as part of um as part of like distributed proof of mistake basically so for scantis uh posted this blog post today from xerox and this is actually a blog post that xerox published back in september of 2020 but it's called scaling d5 at layer one and it's basically a very deep dive into all of kind of ethereum scaling challenges uh and it's it's amazing i read this piece back when it came out it's about a 17 minute read as you can see here but this piece is absolutely amazing if you want to know why it's so hard to scale ethereum while retaining its decentralization and security properties this is probably one of the only things you need to read to give you a very nice summary of it so i definitely recommend

going and checking this out of course i'll link it in the youtube description for you to do so but you know this is going to give you the knowledge that you need to be able to fight the fud as well like fight other kind of you know people or other people from competitor chain saying ethereum can't scale blah blah right this will give you the ammo for that which i always you know i'm very big fan of because knowledge is power right so definitely go check this out i won't ramble on about this too much because i won't do the post justice i just think you should read it for yourself for sure so trent van epps posted uh to twitter today that he's been working with tim baiko which is the eighth one kind of core devs uh uh coordinator here and also the lead on eip1559

so he's put together a list of all the projects that are in favor of eip1559 and you can see here the list of support from all the big projects right we have one inch and rv air swap right you keep going down the list compound curve all these things make a doubt you know synthetics uh all this kind of stuff right and then you have some some neutral parties like ether scan right which obviously makes sense to be neutral i think compound is neutral as well um infuria is just like uh abstaining didn't give a position but they said that they'll be ready to support it if that's what the community wants and everything like that so yeah i think this is really good because obviously there's miners pushing back against this and i actually saw today that spark pool has announced their opposition to

eip1559 which means now over fifty percent of the hash rate is in opposition but as i was explaining the refill before i'm calling the bluff on this i think it's total i think they're just trying to kind of play you know whatever hand they have here and i just don't think they have any cards right i think that the ethereum ecosystem outside of miners holds all the cards i think the game theory will hold i think it they will all mine the one five five nine chain i i just i can't believe i i have to kind of like i have to look at this and kind of see this because we have precedent for this if you go back to 2017 during the bitcoin bitcoin cash split right that was way way uglier than what this is now and just before the fork was scheduled to go

live the bitcoin cash camp right um okay let me take a step back the way it worked was that in 2017 there was a camp and a significant amount of the mining kind of patch power that wanted to basically fork bitcoin right and increase the block size but you know for not as a separate network like bitcoin cash but actually for bitcoin itself right and create uh and make bitcoin have bigger blocks now they right up until pretty much the day or like two days before the hard fork was scheduled to happen they were adamant about this then they completely changed their tune and said oh okay well we won't actually fork you know bitcoin and force everyone to adopt bitcoin we're gonna fork it off and just create our own network called bitcoin

cash right and that's what happened there now it was an ugly split don't get me wrong there were hash wars there were price wars it was not pretty right but at the same time it's precedent right and precedent matters in this space more than you will believe right so i think that it's gonna that's the same is gonna play out with with um one five five nine eventually we're gonna have like this capitulation from miners because they realize they haven't got any more hands to play right i don't think they're gonna fork off into their own little network maybe they do for like a very short period of time and then when they realize none of the projects have followed them none of the ecosystem has followed then no infrastructure providers have followed them right they're mining a dead chain and no exchanges have listed the token

i you know that's when they'll just come back to mining on the on the 1559 chain so this is all empty threats to me i don't believe that there's going to be any kind of like attack on the network right it just doesn't fit in with the game theory it does not make sense for miners who are concerned about a pay cut over one five five nine to basically blow themselves up right to basically say well we're not gonna mine on this we're going to you know blow the network up we're going to basically um do do something really bad on it we're going to attack the network why the hell would you do that right you not only are you getting a pay cut from one five five nine right but you're basically shooting yourself completely in the foot because you're getting nothing and you're basically making it so that

the miners that are with your mining pool will probably just leave and be like well i can't trust this mining pool anymore they're just you know using my hash to do things that you know maybe i don't necessarily agree with so yeah for anyone who's concerned about this don't be i mean i'm pretty confident that you know this is a nothing burger and they're just bluffing i'm almost 100 confident like obviously there's always that small percentage chance that it happens because some miners maybe you're just like want to go all kamikaze and blow themselves up whatever be my guest but the game theory and the economic incentives point to miners adopting one five five nine right um and then just going along with it because a small pay cut from one five five nine uh relatively small as opposed to literally blowing themselves up and

getting nothing i mean you can already tell what the direction is here so yeah i'm not concerned at all so yeah just uh i'm really glad to see all the kind of like projects supporting it well like publicly because that adds a lot of support in general the exchanges are pretty much like some of the king makers as well i mean i wouldn't say they're the king maker in that what they say goes but they hold a lot of weight right but the exchanges usually follow what the rest of the ecosystem wants so i i expect you know eventually as we get closer as we get a date coinbase and and all these other stuff will come out and say we'll support it and surprisingly right now binance's mining pool is actually in support of one five five nine so you know i don't know if they're

going to change that to opposition because they've been kind of attacking ethereum lately so maybe they will but at the same time i think binance is aware of the game theory behind this and they know that you know they're just gonna mine on the one five five nine chain anyway they're not gonna try and blow ethereum up because they're profit maximalist at the end of the day and the theorem is still extremely valuable to them so there's no i i just don't think there's any chance or at least like a tiny chance that this happens so yeah good to keep that in mind so we had another uh d5 project announced itself today called dfx finance so i think they've been around for a little while now kind of on twitter but they announced the funding round of five million dollars led by poli chain and true ventures and

they also brought on a bunch of angels as you can see in the other tweet here um but what dfx finance is it's a decentralized foreign exchange protocol so for stable coins um we need this badly within d5 right i am sick of being having to use usd for everything i am in australia my native currency is aud i have to pay my taxes in aud so anytime i use usd i have to account for the fluctuation in the usd aud rate and i absolutely hate it so this is a very welcome kind of addition for me here i can't wait to see them go kind go go live here um and and kind of grow obviously growing liquidity for new stable coins isn't easy but i have confidence that you know we that there's enough demand for this sort of stuff that we're going to see

more of it play out so obviously they um oh so they are actually they already launched the liquidity mining program with with three other stable coins uh cad to c i'm assuming that's the canadian dollar uh euro um and the singapore dollar i think so come on guys where's the australian dollar please i'm i'm guessing they'll put that in soon but i think we can bootstrap this ecosystem here because the demand is definitely there for it so for all my fellow aussies that are listening into this i'm confident we'll get an aud kind of stable coin soon and um i'm looking forward to seeing how that that happens and how that grows because i would love more than anything to be able to yield farm with aud instead of usd because it'll save me so many headaches on the tax side of things so eth2 hit over one hundred thousand

validators which are committing thirty two uh thirty two eight each to the network uh totaling i think three point two million eight at this stage uh 3.1 million as you can see in the screenshot here so yeah as i was saying before right dpos you know there's only a handful of validators usually it's like 21 or something i think cosmos has more than that but in terms of like validators that control the network um or control the majority of the stake it's usually a small number so yeah this is a hundred thousand eight two validators over a hundred thousand which is just going to keep growing as more people kind of stake their ethio so really really awesome to see um i'm excited to see this grow you know i guess like when coinbase goes live with staking as alex says here we'll uh we'll see how much they add and

i said kind of yesterday i think or the other day when coinbase uh announced their wait list for staking i said that i think they're gonna stake like one million eighth or something like that um maybe they will maybe they won't i don't know but you know there's a good chance they're going to chunk uh they're going to stake a a healthy chunk of eat as well so that's going to be interesting to keep an eye on for sure so uh the block has launched their new defy dashboard uh as part of their data section here uh that basically measures a bunch of different kind of uh metrics across the d5 so you can see here if it loads uh that you know they're measuring protocol revenue of different default apps based on the daily revenue the monthly revenue uh cumulative uh d5 revenue by the recipient

uh and annualized defi revenue by protocol and things like that this is just another amazing addition to their kind of data dashboard they've got here i mean i've talked about it on the uh the the the data pump video series that i do and i'll be covering it in next month's edition as well but basically these are some really nice dashboards i check these regularly and you can see the growth here on d5 right the the the protocol revenue growth and everything and the and the d5 revenue growth has just been absolutely awesome and i think this is a really great way to keep track of protocols that are growing in revenue but maybe their token price isn't really doing anything because people aren't paying attention to it and then that's how you get some alpha as well so yeah kudos to the block for

for launching this i'll link it in the youtube description you can go check it out for yourself as well so ryan watkins from asari has posted that ethereum is on pace to settle 1.6 trillion dollars of transactions in just the first quarter of 2021 and you'll remember that i said uh that the on one of the refuels a while ago um that in 2020 ethereum settled one i think just over one trillion dollars now we're settling 1.6 trillion dollars in just the first quarter of 2021 and we haven't even gotten layer two solutions live yet in a big way right um and you know just because uh the layer two solutions uh don't settle uh like most of their value to kind of a theorem directly they're still settling to ethereum as part of their um kind of proofs that they have

to post to ethereum so that is all additive but the fact that we already have 1.6 trillion in the first quarter is incredible and if we annualize that out right we can get to like six or seven billion dollars just for for 2021 i i suspect that's going to keep growing uh and you know it's absolutely incredible that we're settling this much value and can you imagine when eip1559 is in you know these fees are going to be being burnt right we're going to be adding so much fundamental value for it for eth on this side so incredibly bullish here and ryan also notes that in the last 12 months ethereum has also settled 2.1 trillion dollars in in transaction and you can see the nice little kind of chart he has here that my face is blocking on the video but you can see

you know on the right hand side just how much the growth has been explosive right and we've all felt it the growth obviously comes with pains like the fees and things like that but still very very awesome to see all this growth so yeah kudos to to ryan for putting this out i really love whenever he puts out one of these charts because it's just i mean this this just reinforces the fact that ethereum is going to be the world's kind of global sediment layer for all types of value and the most secure one at that so yeah really really awesome growth to see here all right that's it for today's episode everyone thank you again for listening and watching if you haven't done so give that video a thumbs up subscribe to the channel join the discord channel and subscribe to the delegate newsletter and i'll

catch you all tomorrow thanks everyone