ETH ATH, layer 2 chat, MEV + Flashbots and more - The Daily Gwei Refuel #97 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i recap the latest news in the ethereum ecosystem i'm your host anthony sasano and today's the 12th of april 2021 all right everyone big weekend big a lot of stuff to get through uh before i do that i just wanted to give a quick shout out here to bankless i filled in for ryan sean adams on bankless weekly roll-up uh kind of podcast slash video uh last week so if you want to check that out i'll link this in the usual description i was pretty fun it's about 90 minutes of of david and i just talking about what happened in the previous week in crypto in general not just ethereum so yeah it was it was a really fun kind of thing here and i and i thank the bankless guys for

having me on there and yeah as i said you can go check this out in the youtube description so a new all-time high for eth uh i think we had two since the last time i uh i kind of um did the refuel from if i'm remembering correctly so the new all-time high i think is 21.99 uh on the dot there that's what i saw on coinbase pro and you know i guess at this point it's just kind of like okay well cool you know another all-time high and then it you know eth likes to do this thing where it gets to all-time high and then just dumps off it right doesn't doesn't keep going it just like dumps below it uh and that's just kind of how it's always kind of been or at least as far as i can remember being you know

over the last few months uh which is fine i think and obviously the market is very hot in general right now it's really funny because when you actually look at the the wider market and what what is hot and what's not right now um the eth kind of i guess market is is kind of quiet right now right like not just eat the asset but like the ethereum ecosystem itself like it's really wild to see the ethereum based d5 projects their tokens have just been quite um you know trending quite sideways or down for i guess the last couple of months and then you look at the wider ecosystem and you see like just all these things kind of just like going up ridiculous amounts in value and it's crazy and you know i really think that um you know when you when you kind of look at this

stuff it's always it's always funny because i've written about this before in the newsletter but basically there's this this thing that i call a sentiment pendulum where the the pendulum will kind of like swing you know it'll swing like back and forth you know from time to time but in crypto you see this play out in the markets a lot a lot where you know one sector of the market will be kind of like you know trending sideways or going down or something and everyone will be like oh you know it's dead you know it's gonna it it's going to zero like it's finished right like i've got to sell now i'll get out of this position and we saw this play out after defy summer last year if you remember you know even wifi went down from like whatever it was 45k to like 7k in like a

month right and then it just reversed immediately from when it got to 7k and like went up to i think maybe 20k or something in like a couple of days um so the markets are very hot very frothy and now i think we're seeing that play out um with um kind of these other things obviously there's a new there's a lot of retail investors coming in right they they're kind of first exposure to this space or at least not just retail users but new users in general their first kind of exposure is centralized exchanges right so you know obviously coinbase is the largest in the us and a lot of people are kind of going on there but i think binance has a pretty good uh kind of coverage now of of different countries obviously they've blocked out the us because of the fact that

um you know then all that service us customers they have finance us which the volumes are okay but they're nothing kind of like special i was looking at at it last night i think they do like 600 million dollars at 24 hour volume and and for reference i'm pretty sure um the the normal finance site does tens of billions of dollars of 24 hour volume um last time i checked so yeah it's a pretty big kind of discrepancy there um but if we if we kind of look at like all the i guess tokens that have been going up a lot in value it's just wild to see like a lot of them are just these tokens that haven't hit their all-time highs yet and they're from like the 2017 era of coins a lot of them are dead projects and and just have been just around us what

people like to call like zombie projects for quite a while now but they're going up because there's just so much froth in the markets right so of course you know i mean he's still going up and he's still hitting all new all-time highs but it's not like going up a lot for example it's not like you know posting 100 gains in like a week sort of thing whereas a lot of these other things kind of are and yeah i just think it's a function of like that that pendulum the pendulum's kind of swung to these kind of like you know other things that that are just going up a lot in value and i do believe that it's going to swing back eventually and it's going to catch people off guard of course like there's a lot of people who you know like to trade these markets and

they get kind of caught off guard they're like ah you know and then they chase like pumps and things like that and that's why you know over the long term a lot of people that that trade end up worse off than they would have just just holding you know either like i guess btc or eth for example so from that perspective i fully expect that to happen again and you know i've been saying lately on twitter just all these people saying you know it's going to get flipped by you know b and b and ethereum is going to die ethereum's dead it has so much competition blah blah and usually when i see those sorts of things you know i kind of look at it i'm like okay well people are getting too cocky now and the market hates cockiness i don't know if all of you have noticed

but you know for all of my times being in crypto whenever any kind of like community gets really cocky it ends badly for them it always does like look at what happened the other day when um you know the bitcoin maximalist had that clubhouse room where they say they were celebrating that the east btc ratio was under 0.03 um but then it like immediately reversed uh and is like at 0.036 or something like that after that right so you know you might think that or the market's a lot bigger than these petty little things but it's not just i guess like the petty little things it's like a culmination of everything that happens and the sentiment is is obviously what drives a lot of these markets because there's a lot of um you know retail investors that that like to kind of go in and out of

positions there's a lot of leverage so if you can trade off that sentiment and harness it uh you can make a lot of money and i think there are a lot of people that have a lot of money and do and a lot of big traders that do trade off of this and they probably see you know the discourse and they're like okay well you know people are getting too cocky now this kind of area is overheated i'm going to move you know my profits from there into other things so that's that's kind of how i see it always playing out here and you can look at the charts you know you just look at the ratios between different ecosystems and different coins and it kind of always i think plays out like that and and to be fair you know i mean talking about cockiness and and

different kind of ecosystems having like massive egos you know ethereum enjoyed being you know very dominant for a very long time and now ethereum has some some competition right and and competition that is kind of gaining some some market share so and that's that's that's a good thing i think at the end of the day like competition is never a bad thing um you know but but i think in general like gets to a point where people just like get way too ahead of themselves and and it's funny how that plays out uh you know we saw a play out in 2017 too with eth almost flipping bitcoin right and then what ended up happening was that everyone was like well okay he's not gonna flip bitcoin i'm gonna sell my epr and then um i'm gonna go into bitcoin or whatever because it was like under

it was i people are underexposed to it so i think that's what's happening across the ecosystem right now in the markets i'm not a trader myself but i do kind of pay attention to a lot of this stuff because it's just interesting and it piques my curiosity a lot uh but yeah just lately it's been it's been funny and you know it's always it's always funny to see like the memes and everything you know i'm on twitter all the time talking about decentralization and why it matters and things like that and people like to make fun of me for that and that's fine you know it's not like i'm just started talking about this stuff now i mean i've been here for a long time i've been talking about it forever uh and and you know it's just funny to see like the sentiment and

and kind of like see you know the new users versus the kind of like the older users who have been here for a while and see how that kind of changes there but in general i think it's you know over the long term it's it's fine it's positive people learn you know people people kind of like get burnt yeah i mean if you actually look at the a lot of the way a lot of people learn from these sorts of things is if they get burnt on things too and that's how i learned like i'm not going to say that i was someone who was it was who didn't fall for pump and dumps once upon a time as well or didn't kind of chase things that i thought were going to be big and turned out to be nothing there was a lot of that in 2017 and all

just fizzled out right so i think over the long term you see what's lasting what has value like i'm 100 confident that ethereum is going to you know be last and have value for a very very long time and i'm confident that some apps on in indeed are going to do that as well less confident than i am as ethereum as a platform because the application layer is a lot more competitive um but yeah i mean just from that perspective it's just like easy for me to kind of sit back and be like you know this is just a lot of noise we'll wait you know over the long term see what sticks around see what doesn't and and you know that's that's another thing that's really exciting about the this industry i think is that it can change so dramatically in a matter of months and being around to

kind of witness that you know is quite fun at the end of the day so yeah anyway i think i'm rambling a little bit there just a bit of market commentary after i guess like the crazy kind of last few weeks that we've been having across the entire crypto markets there so another thing i've been seeing lately is a lot of people are now trying to spread this kind of fud about layer twos on ethereum and they're calling them insecure right um and it's it's funny to see this because uh as i said on this tweet here it's pretty encouraging to see it because we've moved from like the narrative that ethereum can't scale to the narrative that layer twos are insecure because now people have seen that layer twos are real right there are layer twos live on ethereum today they work they're

scalable so people are like so you know the haters are like well uh crap we have to we have to pivot you know pivot the narrative pivot the fud and now it's like layer twos are insecure and you know you typically see this from competing ecosystems and that's fine i mean these ecosystems have to sell narratives as well uh but like obviously i'm gonna fight back against that and a lot of people in the ecosystem are gonna are gonna fight back against that as well um but you know and then i say here you know that real progress is being made whenever the haters are moving the goal post and and really like this this has happened for everything i mean it's happened for eth2 you know a lot of people for a long time said that eth2 would never launch right and then the beacon chain

obviously launched and then these kind of like people have said oh well it's not really eth2 because the merger hasn't been done yet it's like well okay yeah but we're gonna do the merger soon right and then when the merger gets done i'm sure they're gonna come up with something else it's just noise it's so much noise it's so much crap it's such a useless waste of time to even like entertain these sorts of things and the only reason i bring it up is because i want you know all of you to be aware that um you know you spending your time with the these kinds of things is just like it's just like a waste right it's it's the only positive thing is that you if you can see the narrative kind of changing and the um the fud pivoting you know that something

is going well right so you know if the fudge stays the same and you know a lot of the times uh the the things that people call fudd are actually like valid criticisms people just call it fudd because it doesn't fit their narrative but in general you know ethereum saying ethereum can't scale was never like a valid criticism because ethereum has always been able to scale it's just that we didn't want to sacrifice the centralization to do that so it took longer to get to a point where we could scale while preserving that decentralization and it's the same argument that was lobbied at bitcoin for a long time and obviously you know bitcoin is scaling in certain ways but they've kind of like i guess nestled into the digital gold narrative which doesn't require massive scale whereas ethereum does right ethereum requires massive scale

because of the it's an application platform at the end of the day it's a value settlement platform um and we don't want their fees to be to be really high obviously right so from that point of view just just good to see this kind of progress being made here um and i i mean i'm sure this is going to continue as soon as like the layer 2s kind of are alive and you know in a much bigger way and prove to be more secure or at least like prove the haters that they're secure because they aren't insecure from being there there are obviously properties to it that you know there's always attack vectors and everything like that but the layer twos as a lot of you are aware of they inherit ethereum security because they basically rely on ethereum for that for their security and for their decentralization

so from that perspective layer two is when constructed in the correct way don't get me wrong there are ways you can construct layer twos that make them make them insecure but you know properly constructed zk roll-ups and optimistic roll-ups and um are very secure and even like things like side chains that commit to ethereum like polygon which is actually called a commit chain uh because it actually um inherits it doesn't inherit ethereum's kind of validator set or its security but what um what polygon does is that it actually uses ethereum for its staking kind of validators so the smart contract that controls the the staking lives on ethereum and every 30 minutes to three hours uh the polygon chain is committed to ethereum and so the state is committed so that if

something was to go wrong you could actually just like use ethereum as like a backup so to speak so it's not directly kind of like it's not it's not like roll-ups which are directly kind of reliant on ethereum and and and and kind of like uh secure by secured directly by ethereum um but it is it is a lot better than just you know your vanilla side chain which just doesn't do anything on ethereum right does everything kind of you know on its own chain sort of thing there so yeah good to see this progress being made here so uh speaking of i guess scalability in general instadap has announced that they are live on polygon here uh and this is because ave is there so now instadap has a way uh to kind of utilize polygon which uh they basically instadab gives you a way to interact with aver on

polygon um so you can basically do uh refinancing between kind of like uh i guess the theorems layer one and and polygons layer two kind of here um so yeah if you are using ave on polygon and you want a really easy way to kind of manage your positions and kind of like you know take out new positions close positions instadap's a really great tool for that um and you know instadap's obviously available in ethereum as well as well here um so definitely go check them out if you haven't yet i'm sure a lot of you have checked out instead apple used it before it's a very popular app on ethereum and they basically give you ways to as i said manage your positions across rv on polygon but like across many different d5 apps on on ethereum right now like unisop and compound and things

like that and just it's a very nice interface as well so it makes it super simple to do all this stuff and i highly recommend going and checking it out there so nader from uh edge and node here which is part of the graph protocol ecosystem has put together a complete guide to full stack ethereum development here so this is a super deep dive introduction to building apps with solidity um the programming language that ethereum uses and react which is a kind of like non-crypto programming language here um and basically you can see like how long this guide is here obviously this is for developers or aspiring developers like this is a very kind of long intro and deep dive here but you know this will give you kind of like a nice getting started and kind of like

building these uh with building uh basically ethereum apps here which is really really cool you know i was just reading a tweet actually before that was someone said basically you know it doesn't take long to learn kind of like solidity programming and if you do you can make a lot of money off it too because if you build an app right that a lot of people get value out of um you know and you don't even necessarily have to have a token you can build lots of different apps that that provide value to people and then just like take a small fee or you can build apps that do things with like mev which i'm actually going to go into in a little bit because i know mev has been the talk of the town over the weekend um but yeah i mean if you are

aspiring to be a developer this is definitely a guide that i would check out so definitely go give this a read here obviously i'm not going to go through it on the refill here um but obviously if you're not a developer you don't really care to be a developer uh that's someone like me this is probably not much use to you but it doesn't matter i think at the end of the day the developers aware where it's at right and we need to encourage people to to become ethereum developers or as many people as possible to become ethereum developers um so yeah definitely go check this out so chris from maker dao has created this new site called l2beat.com what this basically does is it tracks the at the moment it's tracking the total value locked in layer twos on ethereum yeah as you can see here there's about

300 million dollars locked majority of that being loopering with 182 million optimism with 93 million which is all uh synthetics right now dydx at 12.4 million uh which is which is really great to see so soon after their launch uh zk sync with 8 million aztec with 443k and fuel with just a couple of dollars here but i don't think fuel is is really live in any kind of like great capacity yet but anyway good to see this site come out i would love to see more metrics here like volumes on these exchanges right i would love to see fees paid i would love to see fees paid to ethereum by the roll-ups and things like that but you know this is just the first iteration of it really great to see you know i i mentioned last week how the block has their layer two activity

dashboard as well a lot of it is just tracking total value locked right now as i said i wanna see volumes right i want to say fees paid like even though the fees are small or non-existent i still want to see that activity and i want to see the fees paid to ethereum's main net buy these layer 2 solutions and you know on top of that i was discussing this in this in the daily grade discord channel as well it is going to be harder to kind of know what's real and what's not on layer twos in terms of kind of activity because some of these layer twos are offering free trading right there's no gas fees so what you can do is you can essentially kind of just like wash trade on the chain right and like and like fake the volumes essentially this is what we see typically on the

low fee uh blockchains out there that that kind of offer these like dirt cheap fees and it makes sense for people to kind of you know fake the activity for one reason or another i think we're gonna have to find a way to kind of uh filter that out on layer twos i'm sure there are ways to filter out you can do pattern matching and things like that but it's definitely something that we're gonna have to consider whereas total value locked is much harder to kind of fake here you know people can just deposit money into into a layer 2 solution maybe to pump a token or something like that but you know i don't really think that that works over the long term maybe it works in the short term um and you know there's opportunity cost of capital as well like if you put

100 million dollars in loot ring for example because you're trying to pump the lrc token that means you don't have 100 million dollars to do something else on ethereum so it's really not worth it at the end of the day uh but yeah interested to see how this site evolves here and thanks to chris for kind of making it speaking of layer twos uh dydex is continuing its growth here it did 16 million dollars and 24 hour trading volume i think on saturday here but i believe so um and and the current kind of uh 24 hour trading volume record is held by loopering at 35 million i think the lydex is gonna is gonna kind of break this you know sooner rather than later um you know they're kind of growing pretty fast here as i mentioned last on last week's refuel

they went to mainnet uh so public main network you know there's no i don't think there's any capital limits of people kind of um i guess uh is getting into diy decks right now maybe wrong there there may still be capital limits but i don't think so um so yeah it's just it's just a matter of like adopting this thing getting more awareness around it uh and and getting more people on board especially kind of like various market makers and and more ecosystem participants which i'm sure they're going to come on board over time and we're going to see this grow out there so really really great to see dydex growing here with 16 million dollars of 24 hour trading volume as a new record for them so ben edgington uh put out his latest what's new in eth2 update here uh you can go check it out and use the

description of course this is the uh i guess eth2 update bible it's where i'll or i get all of my eth2 update uh updates from uh there is no better resource than this i don't think he basically uh collects all the information you need to know about like the beacon chain uh alter which is the first uh kind of hard fork going live soon for eth2 the merge uh rayonism which is uh the eighth one to eth2 kind of uh merge effort that's being done as part of the ethereum scaling uh hackathon to basically get a demo or a test net of this merger up and running with a stretch goal of sharding happening on there as well then a bunch of other kind of links here to what ben likes to call the great explainers which are educational

materials uh media kind of spots for eth2 stuff research the the calls you know these two calls that have been happening i mean there's everything you would ever want in here so if you haven't done so yet be sure to subscribe there's a subscribe button at the top right here basically an rss feed um if you want to check this out you can it'll be linked in the youtube description below all right so the biggest i guess thing to happen over the weekend and something that everyone has been talking about is this concept of mev and you might have heard of these terms like flashbots or pga bots and you might have seen that gas fees are down and got down to like the 60s uh over the weekend you know they're usually lower on the weekend but 60s

doesn't really happen very often now there are a lot of people attributing this to the adoption of what's called flashbots now before i can explain to you what flashbots is i have to explain to you what mav is now some of you may know what it is so i'll just give a quick kind of a high level overview here but mav stands for minor extractable value now what this is is basically value that not just miners but anyone can extract on ethereum based on certain activity so for example uh you might have heard of a concept called front running which basically means that when you submit a transaction say you're submitting a trade on uni swap and you're trading some some die for eth right what can end up happening is that

someone can front run that trade right and and kind of like make a profit by doing so by kind of um doing a front run doing an arbitrage transaction between different liquidity pools on ethereum now this might mean that you get a kind of like worse off price than you would have got um maybe only by like a little amount but your transaction is still going to go through and everything and that's going to be fine but the reason it's called kind of mav minor extractable value is because the miners have a very big advantage here now why do they have advantage with mav well because miners control the transaction ordering in a block so every transaction that ever gets kind of done in ethereum goes into what's called the mempool now the mempool is like the waiting area before your transaction gets included in

a block so you might know that an ethereum block happens every 15 seconds and when you see that your transaction is pending it's waiting to go into an ethereum block now if you paid the rapid gas transaction fee you'll be um you you there's a higher chance that you're going to be in the next ethereum block essentially so in 15 seconds or less your transaction is going to be included and and there you go it's done now if you pay like a lower gas fee it might take a couple blocks to get in but eventually it's it's going to go in right unless you pay like a really small fee and you're kind of stuck and then you have to do that speed up mechanism that you see in metamask when you press the speed up button to pay a higher gas fee but essentially that's that's what

happens now now now because the miners can control the transaction ordering in a block and because the miners don't have to accept i don't have to necessarily only include transactions that include a fee attached to them what they can do is they can include zero fee transactions so they can basically put in their own transaction at um you know at the front of the line so they can basically skip through everyone else and basically say oh well i don't care that this person's paying much higher gas fees than anyone else right i'm going to put my transaction at the basically at the front of the queue and it's going to be the first one that gets included in a block and i'm going to pay zero fees for it so obviously that's a very powerful ability to have now now that you kind of understand how mev

works at a higher level you um you can basically begin to understand how flashbots works now what flashbots is it's basically an initiative a piece of software that was created it's open source and everything like that but it was created to democratize mev or at least that's how it's being sold now what this means is that basically gives anyone an opportunity to have direct access to mining pools to basically um get get access to these zero fee uh kind of uh arbitrage opportunities all these zero fee kind of mev opportunities or front running sandwich attacks you might have heard of all these kind of things before now what this means is that instead of paying gas fees directly on the ethereum network and participating in what's called

priority gas auctions or you know participating in the normal kind of transaction flow where you have to outbid other people to get your transaction included what flashbots allows you to do it is essentially allows you to bribe the miner outside of the mempool to include your transaction so the flow would look like this you find an mav opportunity on ethereum you think wow okay i'm going to exploit that because i'm going to make x amount of dollars if this succeeds uh and i'm gonna do this by uh you know harnessing flashbots which means i'm gonna submit my transaction to flashbots they're going to submit that and then i'm going to pay kind of like a a kind of bribe on top of that to this miner and then the miner is going to include this transaction

into a block for zero gas fees right the order mining pool will include the transaction for zero gas fees now you know you might have come to the realization by now that this is why gas fees are trending lower because now all the people that were doing mev um on kind of i guess like the the ethereum mempool because they were they were in the same kind of transaction waiting pool that everyone else was they were having to do these things called uh with pga bots they were having to do priority gas auctions they were having to compete against everyone now they don't have to compete based on gas price anymore they basically i would assume they compete uh they compete based on the bride they pay to the miners so what ends up happening now is you have two

transaction waiting pools you have the one that that flashbots has right which is the zero gas fee bribe the miner geotrans actually included and then you have the mempool which is where all the regular users are now i think you know we don't know if this is like a net positive overall right mev can be toxic i don't think uh you know i think long term we need a better way of solving mev than quote-unquote democratizing it um but i've explained on the refill before the mev is actually very very hard to solve for because to the way you would solve it is that you would randomize the order that the transactions get included in a block right you would take away the ability for miners or even stakers to order transactions and you would

randomize it now i don't know why this isn't possible today i'm not smart enough i haven't looked into it enough but as far as i know it is not possible to do that today in a in a in a provably random way where they couldn't be gained there are obviously people working on this it is something that i think you know cryptographic researchers like justin drake um expect to be solved eventually and there's a bunch of other researchers working on this i mean solving mev is one of the hardest research problems in the space right now so obviously it's going to attract some of the smartest minds in the space but in the meantime we have flashbots which basically allows uh you know all this to happen now if you want on-chain proof of this happening you can see here from alex alex from nansen here he

basically posted this chart that shows the percentage of blocks with at least one zero gas price transaction in them now this has obviously skyrocketed during kind of like the last few few i guess like weeks i mean even just the last couple weeks it skyrocketed in april from about five percent up to uh 35 if i'm just eyeing the chart here correctly now the reason why i think this has finally taken off is flashbots was was is relatively new it's only been around i think since maybe february or march but on top of this if you if you kind of like uh think about what happened with erp one five five nine and mine is being like wow okay one five five nine is going to cut into our revenue because it's burning a portion of fees and then people telling them well just look at mav right just look at

all the opportunities within mav and you can make some extra revenue from that i think that's what's happened the miners are finally kind of using this mav apparently like 60 of all the hash rate is now um you know plugged into flashbots which means that uh you know this is kind of the effect that we're seeing play out here so the tldr here and the net effect is that yes gas fees are going to be lower now or at least until activity picks up again and kind of like the gas phase just trend higher in general again but you know that's why the gas fees have been lower at least that is the i guess like you know it's still i mean it's it's a theory but there is like very hard evidence behind it but it's still like just a i mean it's a theory with evidence but

still no one's 100 sure but it's highly likely that this is the reason and this is only going to continue uh mav and and the amount of value that can be extracted by mavs absolutely massive and that value just comes from the fact that there's a lot of fragments of liquidity pools on ethereum like you think about it unisop has its own liquidity pools sushi swap has its own liquidity pools curve has its own liquidity pools so any kind of arbitrage transactions between those can be front run can be sandwiched can be you know basically emived as much as you want now you know people can do this using flashbots and it can be done in a quote-unquote more democratic way uh it can be done in a way that is not paris you know totally parasitic to uh to users by

essentially i guess bidding up the transaction fees really really high i'm really really curious to see what happens with the transaction fees now when uh you know say that each price drops like you know rapidly in a day say it drops like 20 in a day and we get those that classic like spike and gas fee so like a thousand way because everyone's trying to do arbitrage and everyone's trying to do uh trying to save their positions from liquidation and everyone's trying to liquidate everyone else will we get like a much less of a spike in gas phase because of the fact that the flashbot stuff is here i think so and then you know if it doesn't happen and then by the time one five five nine is implemented then i think it's even more true because one fight what one five five nine does

is it's it kind of like smooths out the the fees in general as well so you know flashbacks coupled with one five five nine means that users are going to enjoy a cheaper kind of transaction experience on layer one and they're also going to enjoy a kind of better experience with uh gas fee use a user kind of uh experience and user kind of interface here so yeah that's the story of mav and flashbots there's a lot more to it than that i know a lot of people are still confused by it i'm not going to say i'm an expert on it by any means but that's the higher level of how i understand um you know how mev works and how what mev is sorry and how flush bots works within that realm there you'll be seeing a lot more people talk about this

all the galaxy brains within the ecosystem are working on it and if you want to get involved there are plenty of ways to do so if you just google like mev or flashbots it's all open source it's all open research you can get involved if you uh if you're someone who likes to tackle hard problems within the crypto ecosystem and speaking of mev as well there's a really great thread from robert miller here on basically what sandwich attacks are and how to take money uh from the sandwich bots so apparently uh robert here spotted that uh a uh someone was able to take 100 eath from sandwich bots then a second uh person was able to jump in and make an extra 300 each uh by exploiting other sandwich bots here now i'm not gonna read out this

whole thread i it's a it's a longish thread and it gets a little bit technical but i highly recommend going and reading it because it's a wild story i mean sandwich bots are just absolutely kind of kind of wild here and you know they're true to their name if you think about it a sandwich um you know basically the the kind of like end user gets stuck in the middle and then the sandwich bots kind of like close in on it and it's kind of like it's it's a way it's a form of mev it definitely extracts value here but i'm not gonna do it justice by explaining it on the refuel so definitely go check out this thread from from robert here if you want to learn more about that one all right to finish up here i finish up here i wanted to kind of discuss

uni swap and why them going to layer 2 will be a game changer for the entire industry i wrote about this in the newsletter today you can go check that out if you want to read my long form thoughts but i'll give a tldr here so i put out like a tweet here where i basically said uh and gave my reasons why i think it's going to be a game changer uh unisop has already confirmed they'll be deploying on optimism optimism's l2 now this could happen as early as may you know shortly after the v3 release goes goes live it doesn't have to wait until july until optimism goes live with the public main net because they can go uh optimism sorry unisop can go live on on optimism's private mainnet all the same now it's a big deal because no other app has the brand awareness that uni swap

has by far i mean if you kind of think about it pretty much like anyone's kind of first interaction with ethereum d5 is uni swap because units is where you exchange things right and unisop is the most popular app has the most brand awareness as i mentioned now unisop also accounts for 60 of all the centralized exchange volume on ethereum still like if you look at the chart it's actually it's actually pretty insane that unisop has still been able to retain that market share and that's simply because of the network effects it has around that it's huge and i also believe that this will show off the power of layer 2 on ethereum there's going to be so many more people that look at this and they're going to see wow ethereum can scale wow holy crap like i didn't realize that you could do this on ethereum

and they're going to realize the power of of layer 2 and i know there's other solutions already live i know loop ring exists i know diversify exists i know dydx exists obviously but they are not anywhere near as big as uni swap like that's just the truth the truth of the matter uh as as as you can see unisop has 60 of the dex volume still and because of that they're going to be able to bootstrap an ecosystem on layer 2 probably faster than any other app can and wherever uni swap goes you know i think a lot of the other apps are going to go as well so you know obviously unisop has confirmed they're going to be on optimism i think you know i i don't think it's just going to be optimism and that's it i think other solutions are going to

exist and there'll be there'll be bridges between it but obviously optimism is going to play a very important role here because of uni swap and unisop is a leader in this ecosystem or at least one of the leaders if not the leader uh you know even though it's not the biggest app by total value locked it is the biggest app by brand awareness by far and by number of unique users by far as well so yeah those are some thoughts there as i said it's in today's daily grade newsletter if you want to go read some more thoughts about that all right everyone thank you again for listening and watching that's it for today be sure to subscribe to the channel give that video a thumbs up join the discord channel subscribe to the newsletter and i'll catch you all tomorrow thanks everyone