EF Academic Grants, Diva DAO announced - The Daily Gwei Refuel #613 - Ethereum Updates

Transcript

hello everyone welcome to another episode of daily refuel we're a couple latest news in ethereum maker system I'm your host and the ninja it has the 29th of June 2023 alright everyone let's get into it so we have another update from coinbase today regarding their uh SEC lawsuit or the lawsuit from the SEC against coinbase so Paul Grohl posted today that coinbase filed their answer and notice of intent to file a motion to dismiss the sec's case against coinbase uh you can read the response for yourself uh and their arguments uh speak for themselves as poor poor girl says here so of course I'll link this in the YouTube description below but I think that the tldr of this is that coinbase is arguing that the SEC has overstepped

its bounds in what it's charging coinbase with and what it's going after coinbase with and because of that the lawsuit should be uh dismissed altogether or the um the case generally should be dismissed altogether I'm no legal expert but I doubt that a judge is going to Grant this like a full dismissal of uh the sec's case but you know knowing what little I know about lawyers generally I think this is kind of what they do right they're they're basically it's it's like a negotiation tactic right it always is it's it's basically asking for a lot and then uh over time kind of accepting less and less until you get to a point where you're happy with it um but because you started at like one end of the spectrum uh you you kind of were able to to walk

back stuff but still get more than what you uh maybe you originally would have got if you hadn't asked for everything and and yeah so I mean you you can read the the whole thing yeah this is there's 177 Pages which is quite insane I don't know how much of this is like unique versus just boilerplate stuff I know that in a lot of these things there's just uh boilerplate stuff in them um but with uh what I think this is is basically uh coinbase's response to each and every uh uh thing that the SEC has actually gone after them with and you can actually see as you scroll down you can see the SEC what the SEC says and then the response right this is very long because I mean it's 177 Pages because it's got a response

for each and every point that the SEC has gone off to coinbase with which is just insane like I could never be a lawyer like imagine having to troll through all this paperwork all the time just to basically hopefully get to an outcome that is good for your client or good for the you know the firm that you work for it's just insane I don't know how people do this much respect to them for it I know that lawyers have a a kind of weird reputation in the world uh you know some are good some are bad I guess that's the same thing with every industry but yeah if you want to read each of coinbase's responses um you can it's in this um in this filing here which I'll link in the YouTube description below but as I said the tldr is basically that coinbase argues the

SSC has overstepped their bounds and that seems to be the main argument here but they have gone the extra mile and have basically responded to pretty much everything that the SEC has gone off the coinbase four so interesting Light reading no not Light reading of course but interesting reading for possibly the weekend if that is your thing uh as I said it'll be linked in the YouTube description below for you to check out all right our Rodrigo vascia who is a project manager at the ethereum foundation has shared today that the ethereum academic grants round 2023 is now finalized 43 projects with research teams from 21 countries were selected to receive over two million dollars in funding so you can check out all the projects for yourself and

all the different categories and what they were funded with uh by going to the blog post but just uh to give you the tldr there were I believe eight categories here uh and two million dollars or 2.3 million dollars was dispersed amongst them they're seven categories sorry I counted the the total a row here is a category so seven categories with 2.3 million dollars dispersed amongst them uh the categories with the most projects were society and Regulatory and economics and Mev 12 projects in the former 10 in the latter and then you had a spattering from uh two to six projects in each of the categories of cryptography execution layout form verification P2P networking and security uh and all getting varying amounts of of uh grant money here so you can check out each and every one of

these projects in the blog post which will be linked in the YouTube description below and you can see what they're all about what they're working on but great to see the ethereum foundation continue to fund uh all sorts of things in I guess the researchers development space of not only ethereum but just academic kind of blockchain or crypto research generally I think this kind of stuff is severely underfunded and severely under under allocated to and I think the ethereum foundation is definitely one of the leaders in this space for allocating and could you imagine if instead of uh you know instead of uh VCS and funds throwing hundreds of millions of dollars at the or billions of dollars at these uh other l1s that really go nowhere though I instead throwing that money at things like this the world would probably be a much better place but obviously when it

comes to a being a VCR fund you want to get a return on your Investments and a lot of the time that is coming from a token if you're investing in an L1 or pretty much all the time it's coming from a token so the incentives are warped then sadly I think that's the way it's going to be forever really but there are obviously a ton of initiatives around our public goods funding uh I've talked about uh them a lot in the past you know git coin protocol Guild all that sorts of stuff and the ethereum foundation grants is another one and there's a bunch of others out there as well anyway I'll link this in the YouTube description you can go check it out all right next up we have the announcement of the diva Dow today so for those of you who don't know uh diva

is a new liquid staking protocol that is powered by a distributed uh validator technology so uh they announced today the diva Dao as I said and they have airdropped uh tokens so 10 of the total token Supply to 15 000 unique ethereum stakers and ecosystem participants now to see eligibility uh for this you can go to this docs page here and you can see that Diva OG contributors ethereum stakers community members and ethereum staking development developers we're eligible for this airdrop you can also visit theclaim.divar.community URL here to connect your wallet and check if you've got tokens I think the maximum amount Pro address was 12 000 Diva and it has a billion uh Diva token Supply they're not

transferable right now so there's no value or anything attached to it I don't know when they're going to be transferable I think I saw some numbers uh thrown around but I don't know exactly when um when uh when this was going to be going live for trading here and unfortunately they say here due to Legal uncertainties surrounding staking operations in the US and Canada U.S and Canadian Nationals are excluded from the early distribution and several other sanctioned countries have been excluded as well I I don't know what that means for like the air drop and and and generally just uh kind of how they would identify these folks uh it kind of seems I don't know a little bit weird to me that they would they would do this but yeah I I'm sure there might be some more

documentation around this if you look around for it or maybe even join their their social channels and ask about it uh but yeah anyway back to what DV is as I said it's a new liquid staking protocol powered by distributed validator technology you can see here uh the validated design is that resil it's it's aiming to be resilient nodes are fully disposable self-healing ability to recover full Network liveness by regenerating keys and redundancy up to 500 times better uptime thanks to dvt4 fullbacks aggregated smoothing rewards quick ejection of Bad actors as part of the incentives and penalties and Trust to minimize architecture with a can't be evil crypto economic system and collateral guarantees from operators so I have yet to dive too deep into

diva itself and I'm not endorsing it or anything like that but I figured it was worth putting on your radar one for the airdrop too because that's a new liquid staking protocol coming online which is always pretty exciting in my opinion uh and it's being powered by distributed validator technology which is something that obviously is uh is very important are there are projects working on this like opal Network and SSV so great to see a diva taking I guess a more Niche approach to liquid staking here in and and kind of a different approach to what other liquid staking protocols has taken in order to capture some of that growth but also make a better liquid staking protocol but anyway you can go check out the thread and the blog posts and everything else I'll link it all in the YouTube description below

all right so you guys remember the other day I was talking a lot about how to define you know full ethereum security or secured by ethereum for different l2s uh that exists today and may exist in the future and I I feel like L2 beat the website has probably done the best job so far of defining this and they've Incorporated a lot of other people's thoughts into this but really my conclusion the other day was that there's no kind of definition of what's secured by ethereum means and different people have different interpretations of this but I came across this interesting graphic from Dono today who's a who works in research at l2beat uh basically showing the different levels of ethereum security that you get depending on the different properties of of different l2s

so you can see here that each of the l2s has their own dotted line uh which is is basically a dotted dotted line uh Square which goes around each of these properties that they have so for example with arbitrim Nova it has ethereum security for liveness and censorship resistance but it doesn't have it for data availability because it stores its data not on ethereum L1 it stores it off chain right whereas something like arbitrine one uh its dotted line uh box CL light line Square uh is it going around liveness censorship resistance and data availability because it's uh it is on L1 of course the data is posted to L1 a based L2 so an L2 that is basically in shrines uh or using the beacon chain

validators of ethereum L1 as its sequencer uh it has its box going all the way around uh everything I just mentioned as well as ordering finality so transaction ordering and receipt finality and as well and then you can see Sovereign Roll-Ups uh is another is another category here which don't have uh don't inherit censorship resistance or liveness or receipt finality from ethereum but inherit uh but can put their data on on ethereum and ordering finality also so on using ethereum there and then you have dydx as well as another example so why I thought this was interesting was because these five properties are definitely probably the

most important when it comes to defining how these l2s or Roll-Ups or whatever you want to call them uh inherit ethereum security but they're not the only thing because as I mentioned the other day the big thing is the multisigs right it's the governance of these things and I'm going to talk more about the governance of l2s in today's episode as well I've got another tweet to reference that but really if you have let's let's say you're a based L2 right but like let's say that you have some part of your protocol that has a multi-sig attached to it that can do something like I don't know steal funds or something like that well in that case like you're not really

inheriting ethereum security and it's kind of a weird dynamic because you could argue the same thing for every protocol that has a multi-sig but that's just one interpretation of it and I'm not saying it's the right or wrong interpretation I'm not even saying it's my interpretation but that is one interpretation of it so if we move away from that and we accept that just because a project has governance around it or has a multi-seek around that doesn't disqualify it from inheriting ethereum security then we come back to these five core properties and that's how we Define ethereum security now this is a good start I think it might it definitely needs to be refined but I think this is a really good start of basically putting a proper definition

behind what ethereum security means because as I said the term is being thrown around a lot no one really knows what it means uh there are different interpretations of it but as well even though you've got these five properties here there are different interpretations of each of these properties which you would have to Define and a lot of this goes into semantics debates semantics arguments and not everyone agrees on what all the all the terminology there but as I said Good Start we need to define the actual properties and then we need to formalize this and get that kind of like widely agreed upon before it becomes something that uh that can be referenced in any serious capacity but it all starts from here and given that donor is research at l2b definitely probably one of the only people that is

actually looking at this and working on this from a first principles approach so I figured it was worth highlighting for you guys there and you can go check out the actual kind of um little diagram here for yourself a little image here for yourself I'll link it in the YouTube description below all right I'm Gonna Leave the governance chat actually till uh the end of of the of the episode uh so I'll get through a couple other things I wanted to get through first then I'm going to talk about L2 governance because that's pretty important so first thing is that uh o1 Labs here who uh is the I guess like one of the builders behind Mina protocol have submitted a proposal to optimism for the application of Mina's zero knowledge proof stack to op stack fraud proofs this application is built on the groundbreaking mips ZK VM uh that

they're building as part of uh the Mina protocol roadmap now for those of you who don't know what Mina is it's basically another L1 but they're using all all forms of fancy ZK cryptography to power their L1 and honestly I I feel like Mina is the very definition of a research project I don't think their L1 is ever going to get any serious traction but they have a lot of really cool technology that can be applied to ethereum and they are very open to sharing it with the ethereum community and even proposing things themselves uh which is what they've done here and they even describe why is this cool they you know they say yeah we created kimchi our plonkish proving system to help bring zero knowledge proofs to the web 3 and web 2 Worlds the new mips functionality allows apps to be written in general

purpose languages in addition to the native and performance snarky JS um and our response to the op request for product leverages the years of testing kimchi uh has gone through as part of uh Mina as well as synergies between ethereum and the leading ZK app developer community of Amina it's the best of many worlds you can learn more about this it'll be linked in the YouTube description below but just great to see some cross-pollination here between an L1 and L1 that is in ethereum and L2 I've said before like plenty of times and I think that that I mean as much as I think that pretty much like all the other smart contract l1's uh of uh are mostly pointless um I think they're pointless from uh trying to get like developers and users

and trying to be or kill ethereum perspective but from a research perspective a lot of them actually have a lot of interesting things that they're doing that ethereum can incorporate it into their stack I mean just some off the top of my head obviously Mina with the ZK stuff Solana with transaction parallelization that's really cool I think um and that can be applied to to l2s I don't know if we're going to do it at L1 but definitely can be applied to l2s um and even dfinity had uh Randall which was applied to the beginning chain is actually in production on ethereum right now like it's part of the ethereum network uh there was a bunch of other things I can't remember off the top of my head all of them but ethereum learns and adapts from from these other lines and incorporates the technology into its

stack and I think that's great and it kind of is a roundabout way uh VCS funding these things as well because they're funding the l1s which there are funds that building of that technology and then ethereum incorporates it and it goes back to that original meme that Bitcoin has came up with where they said that all the other chains were just test nets for Bitcoin Bitcoin would eventually incorporate all the technology from the other chains which obviously didn't materialize and probably won't materialize but ethereum really is doing that it doesn't take everything you know it takes only the things that it feels are valuable and that's what it's been doing for quite a while now so cool to see some I guess like cross-pollination here as I said between Mina and op or optimism you can check this out I'll link it in the YouTube description and below

all right something funny I came across was a tweet from Arkham Intel here so just to get some backstory before I go into the tweets uh you may have heard about this custodian called Prime trust that basically lost access to some if not all of their cold and hot wallets that stored crypto for various different um uh entities within the crypto ecosystem and then they were using customer funds to buy back that crypto in order to fill the hole and it's all come apart recently and obviously they've committed uh oh well I mean they've um they've been accused of committing massive amounts of fraud we're gonna see what comes out of that but I guess the side effects of them losing access to the keys that controlled these wallets is that there

are wallets now with that have funds in them that a lot potentially or almost certainly lost forever unless the keys are found again and you can see this tweet here from Arkham Intel where they said we believe a wallet with a token portfolio worth over 45 million dollars consisting of 95 percent eighth so 20 three thousand eighth is a prime trust Legacy wallet and is currently inaccessible to their team matching the court filing here so this is quite funny because if these keys are never found that means that there's twenty three thousand seven hundred eight is permanently gone right no one will be able to ever access this eth again there is not going to be any bailout here uh guessing the private key I mean if someone could gets the private key it would it would be probably be a bad thing for all for the entire ethereum

network not just uh not just not just this wallet um and it effectively means it's burned but what I find funny about this is that when you compare this uh ether mount to the amount of heat that is actually burned as part of erp1559 it doesn't really mean much because this is 45 million dollars here right 45 million dollars or I guess or 44 million dollars worth of eighth and 23.7 000 if we go to the ultrasound dot uh money uh website here and you go I guess like if we scroll down to the burn here and you go over the last 30 days we've burnt 70 000 each over the last 30 days alone right so just to put that in context for you we we've burnt more than triple the amount of eth in the last 30

days than was lost here so even though people will frame this as bullish and you know it makes even more deflationary it doesn't even hold a candle to the actual burn and if we go since the merge which is coming up on a year soon right but this was 287 days ago so what nine months or something we have burned almost 800 000 eth which is what you know doing my naive math here you do five times at 40x it is almost it you know it's a bit less than 40x the amount that was lost here so really I feel sorry for people who have probably lost money here with um with prime trust just being I don't know doing weird stuff

after losing access to these private Keys here um and I don't really care if it's bullish or bearish for Eid because I don't really think it puts a dent in anything um but I just figured it was worth highlighting because I wanted to show you just how it doesn't hold a candle to the amount of heat that is burned by one five five nine which I thought was that was pretty funny to see there all right so here's this a governance tweet that I wanted to talk about so Jacob Alia Sofia put out a tweet today saying we thought scaling was the final-ish frontier of blockchains but turns out l2s take us back to the age-old frontier of governance specifically who gets to approve code changes and I recently think the answer is l1s gave us a cool answer to that and

we should stick with that so I think that our one governance is a mess for a lot of uh l1's out there where they either have a central body that controls everything and it makes it seem relatively smooth or it's so decentralized that it just nothing happens and I guess like that's Bitcoin but there is a happy middle ground that I think ethereum has found this kind of Goldilocks zone where the governance is really decentralized uh there is a broad set of stakeholders that are involved in governance but things still get pushed through the ethereum roadmap still gets executed on changes still go into the network with relatively no drama around it so if an it could we potentially get

an L2 to the at points like could we get an L2 to the point where it can upgrade like ethereum now obviously an L2 won't be able to do things like hard Forks like ethereum can uh Because unless it's like a sovereign L2 or something like that but what it can do is it can come up with this rough consensus or or kind of like these soft consensus for governance instead of doing token holder governance now is that going to happen I don't think so and the reason I don't think so is because the incentive for it to happen is good for a theory I mean so the only incentive is that it's good for ethereum whereas there's anything for it not to

happen and the incentive for these l2s to have token holder governance is a lot stronger because obviously if the if the what these projects want to issue tokens they have to issue them as governance tokens uh to you know for regulatory reasons or for for just general other reasons and they basically need to say well the token can be used in governance and then the community can vote on various different things and to drive value to the Token blah blah blah it's also take responsibility away from the teams themselves now can an L2 exist totally without a token sure it can can an L2 exist in a truly immutable way where the only way to essentially Fork the L2 would be to create another bridge and then convince everyone to move over sure they can just like you could do it

with unisop right where basically you could uh say okay well uh you know I mean unusual does this with their different versions but say you create another uh uni swap you call it something else you Fork it and you say this is the real uni swap for that to happen what you would need to do is you would need to convince everyone not to use the other uni Swap and use your new real uni swap you would need to get all the liquidity you would need to get all the you know the brand and everything you need to get everyone to accept that's the real uni Swap and this goes back to something that was being discussed maybe a couple months ago now around how to's generally and how they do governance and also what is uh the actual L2 well for a lot of the time the

l2s the bridges are very important but in order for you to convince someone that your bridge is the real like bridge to that L2 you have to you know you have to convince everyone you have to convince everyone to move across um and it's not a small feat to do that so in reality I think what we're going to see is on chain token holder governance for these l2s and I think that's okay as long as the governance is limited in what it can do if the governance can literally change anything then I think that's kind of bearish because you don't want to give the token holders too much power because at the end of the day token holder governance has a ton of problems with it I don't like it for ethereum L1 I think it's okay to do for deeper applications for

l2s I think the jury is still out on whether it's going to work or not I know there are other l1s with on-chain governance um already such as tazos uh and and a bunch of others out there but I I don't I I mean I don't like it I haven't been a fan of it for quite a while um but but we'll have to see I mean the l2s they're going to be doing different governance approaches they're going to be doing different things different valuable cool mechanisms for their tokens and stuff like that so it's not going to be a kind of one size fits-all thing here but uh I I'm just very curious to see what they come up with because as you guys know optimism's been doing a lot of experimentation around governance recently I've been doing really well I believe in in my opinion

there arbitrim uh launched their token endowed recently and they're doing experiments uh polygon is going to be announced their plans for their governance shortly as part of their polygon 2.0 roadmap ZK sync published their ZK Credo thing then the ZK stack thing and then they've been talking a lot about governance as well I believe Stark Nets and stockways started talking about it so like all of these different l2s are already talking about it but at the end of the day governance is is very hard it is the hardest thing I think in crypto it is the final frontier of blockchains to get right and ethereum so far has gotten it right I believe it really is amazing that ethereum ethereum's governance works but it does um so it remains to be seeing which l2s

get it right and which ones get it wrong and which ones result in hostile takeovers which ones result in resilient networks uh and I'm just generally curious to see how that all plays out there all right finally here just a shout out that I recorded another daily gray drive through episode with Eric Connor today it will be out on Saturday for you guys Saturday morning if you're in the US uh it'll be a bonus episode uh obviously on top of the the regular refills that you get we talked about a lot of different things in this episode I won't spoil too much for you but we did Focus I think at least half of the episode on Market commentary uh generally Eric has a lot of great insights here and that's why I wanted to talk to him about that on that episode and it's generally something

that I don't talk about too much on the refuel as well so it was refreshing to talk about it with him and about where we are in the market cycle you know what what the future holds and everything like that so I mean tldr is that it was that was quite bullish it definitely wasn't a bearish episode but yeah and I won't spoil the rest of you you guys can check that out on Saturday so keep an eye on your YouTube feed and your podcast feed there to see when that goes live but I think on that note that is going to be it for today so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone