EIP-4844 updates, OpenEden unveiled and more - The Daily Gwei Refuel #561 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the dailyway review where he kept the latest news in ethereum ecosystem I'm your host Ian this designer until the 4th of April 2023. alright everyone let's get into it so I know you're probably sick of hearing about this but I think it's worth doing a little bit of a follow-up on the arbor trim uh governance kind of drama that I talked about yesterday because I did get a bunch of feedback about my opinion on what happened and I'm always welcome open to feedback and I'm always welcome to discussing it we had some Lively and good discussions in the daily wear Discord Channel today about this but uh what I wanted to I guess clarify for people was my overall position on this and why I think people are still getting confused about this and have a missed

understanding about it so I would say that my overall position on this and why I sounded too forgiving on my on yesterday's coverage and that's basically the main criticism that I got was because I actually don't think that they did anything wrong right and when I say they here it's it's a really broad term because because of the second thing I'm going to talk about and that's the fact that people don't actually understand uh from from what I can tell that there are separate entities at play here when people say oh arbitrim did this or arbitrim did that who are you referencing right like there are different stakeholders as part of this ecosystem now so after the Dao and uh the token was I was kind of created the

arbitrum ecosystem split off into two main uh groups there's the arbitrim foundation which uh was spun up for uh before the token generation event uh and uh before the Dow was spun up and then there is off-chain Labs which is the original company that built arbitrim and still obviously continues to build arbitrary to this day now legally physically logically the arbitrim foundation and off-chain labs are supposed to be uh completely separate entities right from from all those um all those parameters that I mentioned like legally and stuff like that they're supposed to be totally separate and I did mention this yesterday but I think it's worth reiterating that point that is uh a legal requirement basically or basically what the lawyers will tell

anyone trying to spin up a a dow and a token is that the original team cannot be uh the ones that uh uh sorry the original team the original company needs to spin out of kind of structure like a foundation or something that the foundation issues the token and creates the down all that sort of stuff right and then pays it out to the relevant parties like that so that there is a the term used arms length kind of our distinction between the the the the two uh kind of entities here and I think that's the main thing people are missing because you don't see this stuff right this stuff is not discussed out in the open this is all done behind closed doors and this is done for pretty much every big and even relatively um big or relatively small token and DOW

launch all of this stuff happens in the background the lawyers get involved they uh come up with a way to logically separate things so that the team is legally protected uh from any uh kind of complications down the line uh they are protected on the regulatory front as well or at least they try to be as protected as possible and because there is no clear guidance from The Regulators on these sorts of things the lawyers tend to take a very conservative approach here so that's the context I think you need to follow on to my next point which is around people having an issue with the vote itself now I said yesterday that I believe that it really boiled down to overall a really shitty Communications issue now I want to Define that a bit further because I think people got confused when I said

that so where I think the communications breakdown was was that their decision to allocate those 750 million ARB tokens to the foundation was made before the Dow was created it was made before the token was generated it was part of the initial thing that was uh the initial part of an initial bunch of decisions that were made before the Dow and before the foundation uh uh the sorry the um the token went live now because of that that means that the arbitrim token holders are token holders and the Dow governance process does not apply to that decision right it never did because that decision was already made now where the the communications breakdown was was that

that was a big Communications break down there because I don't think the um off-chain Labs or the arbitrim foundation communicated that clearly enough to people that that decision had already been made uh and and the vote was uh purely symbolic purely a way of formalizing it and as I said ratification of the decision that had already to be made so that's where a lot of the breakdown of the communication came from and I did say yesterday that that is a totally fair to um to kind of I criticize the arbitrim ecosystem for there's nothing wrong with that with criticizing that uh they made a big error in judgment there by about communicating that better but what I'm seeing people complain about is that oh well the up token's actually not worth anything if they can just ignore the vote but that that's the

point I'm trying to get at here they're not ignoring the vote so to speak because the vote is not on the decision the vote is a symbolic kind of thing you want to call it decentralization theater it's literally in my opinion only being done to appease regulators and this happens a lot in lots of different projects where they'll do this kind of decentralization theater because they have to do it to appease Regulators or to look like they're making a best effort to uh to essentially be regulatory compliant which is again a consequence of there not being clear guidance around this stuff so to you and me as crypto natives it looks stupid right it looks really really silly that they're doing this sorts of stuff you're thinking to yourself why are they why did this even become a thing why did a

AIP one even go to a vote from the token holders if the decision had already been made and the outcome didn't matter yes that's completely stupid and I agree with you it's dumb but that's just the way these things work right now and and it's an unfortunate consequence as I said of the lack of regulatory Clarity so I'm not trying to make excuses here or anything like that for the actions that were taken I do think that even putting the AIP one out for a ratification vote whatever they want to call it was dumb as well it's another big Communications uh issue there but the fact of the matter is that the actual decision of where those tokens were allocated to had already been made uh and there is and people are going on about legal repercussions for off-chan

labs and stuff like that there's no from what I can tell legal basis for that because again the decision was made and the tokens were allocated before all of the Dow stuff got stood up before the token went live so because of that they technically and and I think technicalities is uh at the heart of um the legal system here right they technically uh did nothing wrong right the facts were that the decision was made beforehand um maybe you could say that or I guess legally I don't know about the legal side here maybe legally you could press them and say why did you even put this up for a vote uh if the decision had already been made and that's totally fair as I said to criticize them for but I think generally people really need to understand that uh the governance

process the token voting process for the decision to allocate those tokens was uh was was was never meant to be a thing and uh and it should never have been launched as a vote because it was never going to affect the outcome because the decision had already been made so hopefully I I've been clear on on that um and I don't want to spend too much time on this topic because there is a bunch of other stuff to get through that I think is is very interesting more interesting than this topic um but yeah I just want people to to realize that that is the facts right those are the facts as I understand them and I verified this with various people I've had many discussions with people over the last 24 48 hours with a lot of people I respect um and really after walking them through

all of this sorts of stuff as I've just explained to you guys uh they understood my point of view here and the thing is you can understand my point of view and still disagree with me that's totally fine I actually don't want to try and convince you um in such a way where you're just like give up on on disagreeing with me just because I've exhausted you in a debate or something like that I hate when people do that where they basically just give in because they can't be bothered debating anymore they've just been exhausted and not I don't think it actually pushes anything forward I think what that does is it it basically silences people and I don't like that so if you still disagree with what I'm saying if you still think that I'm wrong about this please let me know but do let

me know in the Discord Channel because on the YouTube comments uh it's harder to have a good conversation there because YouTube comments aren't made for that so in the Discord Channel you can tag me there uh and I'll I'll get back to you on that um um if I'm sleeping the uh it'll probably be a few hours before I get back to you but I'm always down to have conversations about this because I don't claim to be the All-Seeing CR that knows everything and that everything I say is right I just give my opinions of the way I see things that's what I've always done on the refuel and everyone is free to agree or disagree with me or maybe you don't even have an opinion that's fine too the funny thing is is like most people actually don't have a strong opinion about things it's really the

people that do have a strong opinion that are quite loud about it and I think that's totally fine I mean I have a strong opinion on a lot of things but I tend to live by the Mantra of strong opinions weekly held and what that means to me is basically have a strong opinion about something that you actually believe in and you've run through the reasoning behind it and you've come to a conclusion based on a logic and facts but if there are new logic and facts presented to you that make a lot of sense and actually uh uh and actually kind of like go against what you what you thought was true then uh you should be able to change your mind and change your opinion on something and not just be stubborn about it that's the way I try to live with things maybe I don't

always succeed at that I'm not perfect obviously none of us are we're human but I think it's always good to have the discussions anyway and try to get your points across anyway on that note I'm going to leave that one at that as I said please do ping me in the Discord Channel if you want to have a deeper discussion about this I'm always happy to do that all right on to some more positive news here so Peter from the guest team has been teasing a bunch of EIP 4844 related stuff lately well this is a dashboard where Peter says oh it's captioned it with synthetic stress test for my 4844 blob transaction pool attaches zero to four blobs to every inbound transaction on mainnet and dump it into the blob pool results 10 gig

worth of pending transactions at a churn rate of 150 per block equals 80 milliseconds hit after block processing negligible RAM usage this is very cool uh from from my understanding from my reading here this is basically Peter testing out the load the erp4844 would put on the Geth execution layer client here and if it will actually lead to any significant bump in Hardware requirements and it seems like it won't it seems like it doesn't as it's currently specced out and I believe that Peter's actually hitting this with a much larger capacity that what than what would actually be going into uh blocks when this has been launched on mainnet here so it seems things are running very smoothly now this is really exciting to see as well because uh this is basically

like private devnets that uh that the developers are doing right now and it usually goes um the spec and the research is being done private Dev Nets are being spun up then you have public devnet then you have private public test Nets um being or short-lived test Nets then you have the Long Live Test Nets that are upgraded uh sapolio and Gurley and then you have it going to mainnet so we see that process happen with pretty much every set of network upgrades that come to that eventually come to mainnet and that's why this is very promising to see so I guess thank you to Peter for sharing this it's really great to to see a progress being made here on Proto dank sharding or erp4844 he also shared a a tracker for Geth for ARP 4844 he said a

lot of work is scattered in a couple of pull requests on GitHub that will need to be pulled out to review and merged in a smaller reviewable chunks no it's not a public to-do list it's a progress tracker so you can check out this as well which I'll link in the YouTube description below and Terence from the offtrend labs team had his Thread about the latest Erp 4844 call all the notes Here which I'll also Link in the YouTube description below but generally uh things on 4844 are progressing very nicely I I am currently under no uh I think um or I see no indications of this of 4844 not being included in the next ethereum Network upgrade which we'll hopefully get by the end of this year it seems progress is being made at a rapid Pace yeah everyone's very excited to

ship this it is a huge upgrade coming to the network it is obviously a much bigger upgrade than something like Beacon chain withdrawals but it depends on how you look at it as well for me big and chain withdrawals is huge in the fact that it's the final kind of uh piece of the puzzle to complete ethereum's transition to proof of stake and it has a lot of second order or Consequences for the network such as the great reshuffling that I've spoken about before um but but uh but other than uh but but uh also 4844 is a big upgrade for different reasons right it it it's the first version of dang sharding being uh deployed to the network it is something that a lot of different teams within the ecosystem have worked on not just core developer teams and it is also going to

uh scale ethereum right the the thing that we're all here to pretty much do it's going to help with scaling a layer twos which I obviously I'm very much looking forward to but anyway you can check out all those eip4844 resources I'll link them in the YouTube description below all right so I did mention this MAV uh boost relay kind of attack that happened yesterday with a validator that decided to uh still basically steal a uh relayers um money here or kind of like a Builders I should say money here and it was over 20 million dollars well yesterday when I covered the news it was still very fresh and there wasn't much information out about it well today there is more information out so Samsung has a great thread talking about this

about how it it actually worked what the attacker did and how this is something that uh was assumed that wouldn't happen and now has happened so it's kind of changed the game a bit around Mev boost so you can check out Samsung's thread I'll link it in the YouTube description below now as a consequence of this attack the validator that actually participated in this attack was slashed because they essentially were slash for what's called proposal equivocation which is uh as Terence explains yeah when an eligible proposer makes two or more conflicting uh block proposals which means that they went against uh the network rules and they were slashed because of that now of course slashing this validator is actually just the cost of doing business because they were

Slash from what I can see for one eighth uh they were obviously kicked out of the validator set but their profit was over 20 million dollars from this attack now this attack was not an attack on the ethereum protocol itself I think I should make that clear it was an attack on the Mev boost infrastructure that people use for building blocks but what ended up happening was even though the validator was able to get the money from the Mev Boost network they still didn't play by the rules of the ethereum network and the ethereum network was able to slash them because of that now as I said before this slashing didn't really do anything because essentially it punished someone for doing uh something that they were that they profited from but they didn't profit from the network itself

they profited from the sidecast software known as Mev boost I think that's a very important Point people should be aware of that the um that the attacker didn't actually profit from exploiting the ethereum protocol it profited from exploiting the Mev boost software that that allowed them to do this and look there is different ways to look at these sorts of stuff and there's a lot of open questions here and there's a lot of smart people thinking about this and talking about this I've seen a bunch of conversations happening today um but I think that the facts need to be laid out there so people don't say oh wow the ethereum protocol was attacked and people stole money because the the protocol was attacked no that's not what happened the attack was on the Mev boost infrastructure uh which has since been patched actually by the way so Chris

Hager here from flashbots put out a uh or shared a link to a GitHub pull request that will update the Mev boost relay code base which will mitigate some of this attack now from my understanding it doesn't mitigate everything in this attack but there was kind of conflicting information about this on Twitter so there was someone saying that it wouldn't mitigate the uh an attack happening uh where uh where a validator or a pool of validators was able to propose more than one block in a row so essentially uh proposers know ahead of time when they're going to propose a block now for example coinbase has you know 10 or something 20 12 of the of the

total share of staked eth or validators I should say so they potentially have a pretty high chance of being able with all their validators to propose two blocks in a row now from my reading on this uh and I don't know if this is true or not because there is conflicting reports here I don't I don't think it's true but someone said that because of that uh this patch doesn't actually protect against the that attack so for example if coinbase wanted to I'm not saying that they would they would do this but if they wanted to they could perform the attack over multiple blocks now for a single validator that's controlled by only uh kind of one person and they've only got control over one validator for them to propose multiple blocks in a row the chances of that happening are extremely low like it's a one in uh what

550 000 chance like every uh every uh kind of like uh block I actually think it's even less than that because once once you account for what are the chances of proposing more than one block in a row and you actually look back I actually don't think that a single validator has ever proposed more than one block in a row because the chances are so in infinitely small so it's not even worth worrying about that but obviously when it comes to someone that controls a lot of validators or a large percentage of them they have a much better chance now still like any in one individual would find it very hard to control a huge amount of validators right because it's very expensive to do that but that would still be a problem now as I said there's conflicting reports about that attack

Vector because I did see another person saying that that attack Vector isn't actually possible because the network would reject that block as not being the one that was uh um that was the the most voted on the most attested two so anyway that goes beyond my understanding of the actual consensus protocol or consensus mechanism that ethereum uses and how it actually uh works at a really deep level but yeah just keep your mind open to that I'll hopefully be able to share more on that as uh as as more analysis is that on this attack but I'll link these three resources in the YouTube description below for you to check out right so speaking of steak is having uh La uh I guess like staking pools having a large share over the network I talk

about this a lot on the review and superfuse had a great tweet about this today where he said asking all ethereum staging providers to limit themselves to 22 of validators isn't some arbitrary number this threshold means at least four entities must collude to reach Network consensus with 66 of validators ideally 66 would require uh far more than four entities but shrug uh and then superfist says turns out some folks have dare me because the math that says it takes for entity seems confusing and then you just lists out here each entity would control 22 percent uh and then it would exceed uh 66 here and the fourth entity wasn't wouldn't even need to control 22 to do that I've said before on the refill that I think that it's

kind of hard to know an exact percentage of what would be an acceptable percentage for in any one entity to have control over validators on the network I've said before that I think no more than 10 per entity would be would be cool 22 is is the minimum I think or sorry I should say the maximum uh whereas ten percent would be the probably the ideal case five to ten percent which I I do realize is a bit of a pipe dream I don't think it's ever going to happen like that but there is a a kind of like uh non-arbitrary thing you can point to and that is the 66 number so ideally we want to get as many entities as possible uh to have to collude in order to control more than 66 of the network as it currently stands you would need

look this is where this is actually where I disagree with a lot of people so people will say that and I've said this before that Lido is 30 on the network and that means that that's one entity I don't actually agree with that because Lido as an entity the doubt doesn't actually control the validators so if they wanted to attack the network they wouldn't be able to because the validators are controlled by uh by the uh the different and the different entities or 30 different entities that are validating as part of the Lido Network now of course uh uh there are certain functions that could be invoked to do a complex attack on the network in some kind of way I would need to dive deeper into that to see if it would be actually possible to somehow take over the 30 entities uh validators and use

them for nefarious purposes as part of the Lido network but let's just assume that you can do that right let's just assume that you can't I'm not saying you can because I as I said I don't know enough about the architecture to speak to it either way but let's just say you can do that so if you can use Lido uh to at Lighthouse 30 of the network right and then I'm just bringing up here on raider.network and then you have coinbase is 13 uh you get up to a 30 oh what 35 just to round it up you get cracking 42 binance uh 48 and then you go down the list uh you pretty much need just eyeing it right now 12 entities to get to 66 so we're actually pretty good right we're actually in a pretty good

place right now we're much more than four we're at 12. obviously it's not ideal to only be at at 12 right and uh obviously we would like it to be a lot higher than that and I think it will be in the future I think we're gonna we're gonna be able to to get it to much more than 12 entities but it's definitely much better than four but this kind of like self-limiting to 22 of the of our total stake share or total validated shares to say on the network is uh not just plucked out of someone's behind right it is uh definitely a non-arbitrary number so I just wanted to point that out to people as how people come to this uh come to this number and how it's uh it's not just arbitrary all right so some really really positive news and I'm very happy about and I love

that I get to report on this most of the funds have been returned to the Euler protocol so pretty much all the funds except I believe uh what was it there was uh I think if I look up here I had the numbers in front of me before and I just want to I just want to see here if I've got them no but I think that the vast majority was returned except for like a few hundred each or something like that that was sent to um or sent through tornado cash so this is an absolutely amazing outcome uh and and we couldn't have asked for a better outcome I think as an ecosystem on this note here I think as I said 99 or something of the funds was returned which means that users were pretty much almost completely made whole and the Euler Pro Labs team can just begin

focusing on uh hardening the protocol restarting the protocol and continuing to build it out so just a really really really great outcome for Euler here for D5 for all the users I can to be happier about this and also I couldn't be happier about being wrong like I was very wrong remember I said that I figured that there was a low chance that the funds would be returned because the hacker had started washing them through tornado cash well I'm so so glad that I'm right I I probably you know what I I'm not gonna say I've never been happier to be wrong but I'm very very happy that I'm wrong in this instance so I'm very happy that a few deadly gray Discord members that were caught up in this were able to get their funds back especially because as I've said before the worst thing that can happen to you

in crypto is being out of position when uh the the market has kind of bottomed and is trying to I guess go up right I'm not saying that we're in a new bull market or anything like that but the worst thing that could happen to you in crypto is blowing up and blowing up comes in many forms one of those forms is unfortunately losing money in a smart contract hack now those people get their money back uh and they'll be able to continue being exposed to the crypto ecosystem and they'll be able to continue uh enjoying uh everything uh the ecosystem has to offer so I'm really glad about this so just wanted to put that out there this Saga has come to an end right an interesting protocol that I came across today is something called intmax which seems to be building a ZK a

roll-up and they're saying here they're building a ZK roll-up for all kinds of web services and finances now the reason I came across them was because they announced a partnership with or a collaboration with Scrolls Cutting Edge Community First ZK evm technology so yeah they're essentially partnering up with scroll to build alongside them to use their technology here and there's a blog post describing what this is uh which I think is really really cool now I don't know too much about intmax so I can't comment on what they've been doing as I said I only came across them today um and I can't comment on how obviously legit they are or anything like that but if they're working with scroll I I would say that they're legit because scroll is a very legit team I know a lot of the folks at scroll you guys know I'm an

investor in them uh they are one of the best teams in this ecosystem and they've as I said they've partnered with this new project that I came across called it Max and they're actually going to be doing an event in Tokyo on April 17th uh from 8pm to 10 p.m uh alongside scroll so you can go there ask more about them and get to know them better and apparently they plan to launch their Alpha version of it Max on ethereum mainnet in Q2 so basically April May or June and they say here stay tuned for more information and join our community so you can go follow their Twitter page to keep up to date with what they're doing uh just super excited to see more ZK teams working together right another interesting product that I came across today was something that has

been built by open Eden so Eugene uh one of the I believe founders of open Eden tweeted out a thread today saying today I'm happy to unveil open Edom open Eden the first smart contract Vault managed by a regulated financial institution to offer 24 7 direct access to U.S treasuries treasuries our on-chain vault is a natural product Market fit for crypto treasuries Dows defy protocols and VC funds today so you guys know I've been a big advocate for a real world assets coming to defy and well this is a protocol bringing real world assets to defy and one of the biggest real world assets uh us treasuries so this is an absolutely huge Market this is not something I think to be taken lightly I think this is something that is going to

definitely push the space forward push D5 forward yes it is not going to be decentralized yes there's probably going to be kyc and AML yes it's probably not going to be available to everyone but that's the kind of thing that happens um uh with these uh so with these products right uh and the fact of the matter is that Trad fire is a very closed ecosystem and bringing things on chain while allow them to be I guess more open than their tradify counterparts still comes with drawbacks but that shouldn't take away from the fact that bringing this stuff on chain is definitely a huge positive and definitely a way to bring a lot more money into the crypto ecosystem a lot more users and a lot of users that are not necessarily crypto natives but uh Trad fire natives that will get exposed

to crypto and get exposed to D5 while doing this so here you go this is how it actually works so how does their vault work well kyc to get approved in 15 minutes so as I said there obviously is going to be kyc on this deposit usdc into the t-bill Vault uh and mint T build tokens instantaneously and redeem t-bill tokens for your usdc so that's the process there it's pretty painless actually which is pretty cool I think this stuff neat definitely needs to be painless to be able to do this and to be able to do this at scale um and then they continue Eugene continues on this thread uh about uh what they believe t-bill tokens to be it'll be more institutional grade more defy more transparent more compliant uh and then more institutional grade oh

sorry and then he defines each four of these things here in the thread one thing that I I think I I is really cool is to focus on this institutional grade so he defines this as as having a Fiat on and off ramp with uh DBS uh the largest South East Asian Bank a bank and circle uh the broker custody is saxo and ibkr one of the largest brokerages globally tax is done by KPMG legal heinies a leading law firm in BVI the British Virgin Islands fund admin is done by a Singapore licensed fund admin Cai now all of these um companies and institutions and and kind of enter TCR you may not have heard of pretty much all of them except KPMG I've seen their name thrown around a bit and maybe DBS

obviously you've heard of circle but the rest of them you probably haven't heard of before these are big companies and big entities in the tradify space the fact that they're coming into D5 via products like this is extremely bullish guys I can't stress this enough this is very bullish for the ecosystem this is how we Bridge the D5 ecosystem with the tradify ecosystem and grow it much more than where we are today you know we got up to 100 billion tvl in ethereum based D5 at the top of the bull market that's bloody peanuts guys we're going for 100 trillion plus we're going for a potentially a quadrillion dollars in the derivatives market like we are so small still and we need these Trad five firms we need this this big money and these big institutional grade investors and players to come into the ecosystem

in order to get D5 to the next level and that's exactly what uh this is doing so anyway I'm gonna stop gushing about this product I just was really really happy to see this because I truly do believe that reward assets are the next big thing for defy they are already huge I mean the biggest Assets in D5 today or in crypto today that aren't crypto assets or that are assets that you speculate on are stable coins right and they're real world assets usdc usdt and all the other centralized level coins are real world assets they just I use on chain of those assets sitting in a bank account so obviously it's huge but yeah you can go check out this thread from Eugene I'll link it in the YouTube description below all right last up here we have an

announcement from Dune analytics they're launching their Dune SQL uh feature a brand new homegrown default query query engine it's specifically tailored for crypto data and will be the foundation of a faster more powerful and more usable Dune so anyone who builds Dune dashboards or likes tinkering around with them this is definitely relevant for you just wanted to highlight it for you guys because doing analytics is one of my favorite platforms to use for getting insights into a number of different things within the crypto ecosystem I should disclose that I am an investor in doing analytics I invested in them quite a while ago because I saw the vision here I saw what they were trying to do and they've just kept kicking goals over the years I'm I'm very I'm a very very happy supporter of them uh but yeah you can go check out

this thread with more details about what this is and how they've improved on things I'll link it in the YouTube description below for you to do so but 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 tomorrow thanks everyone