ETH futures ETFs, Dencun Devnet9 live and more - The Daily Gwei Refuel #665 - Ethereum Updates

Transcript

hello everyone welcome to another episode of delway refuel where C latest news in ethereum ecosystem I'm your host and S and the 2nd of October 2023 all right everyone let's get into it so this episode's probably going to be a bit heavy on the ETF side of things because there is a bit to talk about so as you guys know there has been a lot of these ethereum or E Futures ETFs being applied for and basically rushed through by the SEC which is kind of funny to see for its own reasons but essentially a lot of these um ETFs these Futures ETFs which I think you can see the list here yeah you can see the list here um a lot if not if not all of them should start trading today or tomorrow now of course these aren't spot ETFs their Futures ETFs so

it is kind of unknown what effect they're going to have on the price of e obviously the market was a bit hot over the weekend but like that's not signal to me to be honest that's like a narrative trade um not to say that I'm bearish or anything but in terms of measuring the direct impacts of these ETFs on the eth price I mean it's kind of an open question right now because as I said they they are Futures ETFs they are derivatives they are not uh spot ETFs right where obviously spot ETFs are much more bullish but I have said in the past how I think that spot ETFs um you know an e spot ETF is definitely going to follow especially because the futur ETFs have been approved TR or basically going to get approved today or tomorrow and start trading but other than that I

think the the most important thing or the the most exciting thing that I want to talk about was this this announcement out of Van e over the weekend now of course Vanek is one of the companies um that are going to be launching it in E Futures ETF and they announced over the weekend that they are actually going to donate 10% of all of their profits from this ETF to the protocol Guild for at least 10 years that's crazy like like when I first saw this I woke up to this I was like holy that's that's awesome because I mean it's awesome for so many different reasons but I think for me like immediately what came to mind was that wow we actually got one of these big trafi institutions to be aligned with ethereum to the point where they're actually giving profits to the

protocol Guild which go back to obviously funding core developers and researchers so essentially these big one of these big trafi companies is funding public goods on ethereum using profits directly I guess made from creating a product that speculates on the price of eth and obviously the price of eth is is very much dictated at least longterm by the efforts of uh the core developers and researchers by upgrading the network implementing things like the merge and 559 and everything else that goes with it right scaling stuff like that so the fact that they were able to see that and put their money where their mouth was uh or is uh is is amazing to me and not only that I mean they did this whole thread around this and they basically

explain what the protocol Guild is uh you know why why they bullish on it why they want to actually support this uh and they've mentioned some of the communities that are already supporting the protocol Guild and they're also doing a Twitter space this Wednesday the 4th of October at 1:00 p.m. eastern time with the protocol Guild to dive de deeper into the topic so not only are they giving money from their I guess giving profits from this ETF to the protocol Guild they are also getting more involved with the community by getting on a Twitter spaces with the protocol Guild and I'm assuming um Trent veps and probably Tim bico will be be on there with them uh which is just Next Level to me and they also put out this this tweet at the end of the thread here where they said if trafi stands to gain

from the efforts of ethereum's core contributors it makes sense that we also give back to their work we urge other ass managers slf issuers to consider also giving back in the same way if this starts a trend I'm going to be so happy because obviously the public goods thing is a very kind of Crypton native thing it's been very crypto kind of like Centric where we've had gitcoin we've had optimism do their retroactive public goods funding we've obviously got the protocol Guild and a few other initiatives out there but it's really been kind of like inside baseball there hasn't really been outside entities getting involved with that right maybe sometimes in some of of the um gitcoin grants rounds that that was matching from some outside entities but usually it was The Insider kind of entities the

ones that that are Crypton native now obviously Vanek is not crypto native right it is a tra I mean for all intensive purposes it is a trafi uh company they were founded in 1955 long before crypto existed so for them to do this and Signal alignment with obviously ethereum public goods funding should in my view and hopefully in my view encourage other companies to do the same now of course not every company has to do the exactly the same thing here they don't have to give 10% of their profits for from the their eth products for 10 years so the protocol Guild they can really come up with whatever they want to maybe they just do a one-time donation to The protocol Guild or maybe they do donations spread out over time or something like that like there's literally various different ways they can they can do things here and it

doesn't have to actually be just a protocol Guild they can support public goods in a number of different ways on ethereum uh but Vanek doing this here I think is just a brilliant marketing strategy as well because I said in my tweet here I I said you know I'm not going to be buying any of these e Futures ETFs but if I was I'd only buy vanex one like why would I buy any of the other ones uh over Vanek like all the other ones are still going to make profits off of me but at least with Vanek I know that 10% of those profits are going directly to the protocol Guild for 10 years so I would definitely um uh do that and recommend other people do that as well like if someone came up to me and said hey what you know Futures

ETF should I buy for eth i' be like well buy van X1 and I would explain why of course but then I'd also tell them to do their own research about how the fund is actually structured obviously um and and what the fees are and stuff like that but as I said like it's the only one that I would actually uh kind of like recommend over all the others just because of that ethereum alignment and of course uh I mean I'm hoping they do this when they eventually get a spot ETF as well because the Futures ETFs as I said before like they're not I mean a spot ETF always people obviously no one crypto native is probably going to buy a Futures ETF unless they're like a pure Speculator like I don't expect many invest like eth native investors to buy this unless they're trying to do some

kind of tax advantage stuff especially in the US with the 401K um but when it comes to like a spot ETF that is something that's much more interesting to Crypt natives because Crypt natives want to buy and hold the actual asset right they don't want to buy derivative so and they want to do that in a tax advantaged way as well so when the spot ETFs go live then of course Vanek is going to be one of the people one of the companies applying for one for sure I'm not even sure if they've applied for one yet but they definitely uh want to have one uh and I'm sure they would do the same thing with the spot ETF as they done with the Futures ETF so again I would say you know if you want to buy the spot ETF go ahead and buy the the

Vanek one um and also as I as as I was saying the spot ETF is much more appealing to crypto natives so they're much more likely to go by that over over a Futures ETF now of course the ETF stuff it goes Way Beyond crypto ETFs are an incredibly popular product in in uh the US especially because it uh you can access them in the um the tax advantage accounts like the retirement accounts and that's why it's such a big deal because it unlocks so much Capital you know obviously there are tens of trillions of dollars in the tradire Eco system just uh in retirement accounts and stuff like that but if we're talking about the amount of money that could go into these Futures and spot ETFs for both Ean BTC in my mind it's in the tens of billions at least I think over time

like obviously not all at once but I guess we'll see this week what the kind of demand is for a Futures e ETF uh because they're launching today or tomorrow right uh but I'm talking over the long term over the years obviously um if it's in a retirement account you're planning to buy it for the long term right decades uh for decades long because uh that you definitely want that to appreciate over time to access it when you re retire sort of thing so yeah just generally a lot of I guess like bullish kind of a lot of reasons to be bullish here about this but as I said like the van1 is the gold standard to me right now um just from that pure perspective of the fact that they're donating profits to the protocol Guild but in saying that if you are planning

on buying any of these products please do your own research on each of them see how they're structured see what the fees are like you know don't just ape into it because they're supporting the protocol Guild of course but as I said that is like a huge Plus for me and makes the van1 the gold standard uh for me but I mean it's pretty easy for me to say that because I'm not buying it if I was buying one of these things I would um I would definitely go do do additional research but honestly if van X1 wasn't uh you know appealing to me and and other ones were I probably wouldn't buy the other ones anyway like this is not a product that really appeals to me anyway like a Futures ETF I never trade derivatives or Futures products or anything like that I'm just a spot

investor I just invest for the longterm on spot markets but uh I also do that in my retirement account too but I've done that not through an ETF product I've done that by having a self-managed retirement account and I just bought eth with that and Stak that you guys know that uh but yeah exciting times ahead over the next few days let's see how these ETFs when they launch these Futures ETFs how they shake out what the demands like there and I'm very very curious to see now if we get a spot ETF sooner uh for eth sooner than we otherwise would have as I've said before I feel like a Bitcoin spot ATF is locked in for q1 at this point uh I you know it's a high likelihood to me that it's going to launch in q1 it could still launch this year mind you could still

launch towards the end of the year or something like that but the SEC has delayed all of them and have given themselves until January I think that's the final deadline for one of them and then March is the final deadline for pretty much all the rest of them so yeah if it launches in January I wouldn't be surprised at all if they all get approved there and then the question is when's the e8th ETF going to be approved like is it going to be in 2024 or are we going to have to wait for 2025 the the ticker is already running the the clock's already running on a lot of these um spot e ETFs that have been applied for uh but you know it depends we'll have to see what the timing is like we'll have to see what the SEC feels like doing if they're going to

approve them or not but that would obviously be hugely bullish as well so I'll be keeping my eye on that and letting you guys know what happens there but anyway moving on from the ATF stuff to something out of coinbase today so coinbase has been granted a full license in Singapore so that means coinbase will be able to operate out of Singapore going forward which is a pretty big deal and again just shows that coinbase is branching out from its us routs and trying to get presence in every country around the world or as many countries around the world as they can of course uh this this is also um something they've been wanting to do for quite a while because binance got a lot of market share in these in these markets that coinbase wasn't in and obviously bance has been having a bunch of

troubles recently for a little while now I think ever since FTX blew up um not that I think binance is going to blow up like FTX did but since FTX blew up I think a lot of people when it comes to centralized exchanges have really reevaluated reevaluated which ones they trust which ones they want to use and coinbase to me has always been the gold standard but unfortunately coinbase is not available in a lot of jurisdictions around the world because it has been very us-centric uh and it's been a bit of a challenge for them to get these licenses but it seems like they are are expanding pretty quickly here they're able to land licenses in places like Singapore which is known for being a bit of a crypto Hub there and other places around the world I'm sure they've been trying to get licenses

there and this is how they chip away at binance's dominance honestly like if if you have the if you're in Singapore and you have the choice between like binance and coinbase and you're worried about risk uh and you you the risks of using centralized exchanges I feel like you choose coinbase especially because um when you think about a lot of the assets that people want to trade coinbase has a you know a lot of the assets a lot of the most popular assets and then the long tale of assets which binance historically has been kind of the place to trade a lot of that stuff just trades on on chain now right it CHS trades within defi tra trades on on layer 2os like base for example so coinbase doesn't really need to list these Assets in order to expand into these markets all they need to do is educate these

markets about uh base their Layer Two or about layer tws generally and say hey we don't have this asset but you can go trade this asset on base right I don't know if they're legally allowed to say that but I'm sure they could have some kind of page that basically hints at it or something like that but uh yeah if I had the choice obviously between coin coinbase and binance which I do have the choice but I use local Australian exchanges rather than coinbase right now but I always go coinbase like I'm not I've used binance before uh I've used binance a bunch of times actually but I've never kept any any funds on there I always withdraw immediately I just not that I think that binance is insolvent or it's going to go under anything like that but when it comes to centralized exchange risk I already don't trust any

of them pretty much um but if I'm going to trust any of them to to handle uh my assets especially if I'm trying to like Buy in size or cash out in size I I'm definitely not going to trust binance over local exchanges that I've used here or something like coinbase um just for obvious reasons I think I don't have to I don't think I have to explain my reasoning there behind that but great to see that coinbase has gotten this license in Singapore hoping to see them expand to other countries uh as time goes on all right so vitalik shared one of his very uh I guess uh what's the word I'm looking for here very interesting blog posts over the weekend where he always poses these blog posts as questions and this one is no different he asked should ethereum be okay with

enshrining more things in the protocol now I've talked about this a bunch on the refi before and about how ethereum has this kind of minimalist or subtractive design philosophy where it doesn't want to enshrine too many things at the core protocol and it wants to push them out to the uh guess wider Community to build them out now of course this is most obvious with things like layer 2s and lsts and other such things like that but the things that falic focused on in this post specifically were a bunch of different things so one of them was account abstraction uh one of them I think was uh was Z in shrining zkm so enshrining possibly a a layer 2 uh in in ethereum enshrining private mles propos a builder separation uh liquid staking and a bunch of other ones uh here so if if you

haven't read this yet I highly recommend reading it but I think that the blog post leaves more questions than it answers because a lot of the stuff to enshrine it is quite complex and I think that reading through this the only things that I actually thought were beneficial to enshrine was um account abstraction or ERC 4337 or parts of it um as um as falic list because a lot of a lot of them are technical things like gas efficiency and and code bug bug risk and stuff like that uh and then of course uh PBS in shining PBS or propos a builder separation because we've seen how crappy it is to have like me boost as like a sidecast solution to ethereum rather than enshrining it so those two things are the most obvious to me um

private men pools it's a bit trickier to do definitely something that we would like to do but again trickier liquid staking I I honestly don't think liquid staking should be enshrined at all I I do like the fact that we have a vibrant liquid staking Market even if it is dominated right now by by one player obviously Lio um I still rather that than enshrining something at the core protocol because there are so many other reasons why having the uh the liquid staking be above the protocol than enshrining it than just technical the social stuff is very important because you get projects competing with each other and that makes for better decentralization and better node operator sets in my mind obviously as I said lto dominates but I feel like if we enshrined it it would actually be worse

from a not OP radar centralization perspective I know that might be something that people don't agree with me on but I do feel like it would be wor worse because think about it there' be no motivation really for people to I guess like go to um go to war essentially for their own favorite project right there'd be no Li Community there'd be no rockable Community there'd be no people like um like Diva and and swell and and all these other protocols out there uh vying uh to get market share right so essentially what what would probably happen uh would be that the enshrined LST would get captured or basically coales around who makes it easiest to stake because for example the centralized exchanges would have access to the same LST the same enshrined l

that everyone else has access to so the differentiating factor just becomes how easy it is to stake and of course the centralized exchanges can offer the easiest staking experience possible so I do believe that if we had an enshrined LST it would have just been completely dominated by centralized exchanges and it would have been much more centralizing than um having a vibrant ecosystem of lsts all competing with each other and people will say well you'll have centralized exchanges that compete with each other we already have that and there's really only two dominant plays coinbase and binance Kraken is pretty small actually I mean I think rocker pool is almost bigger than Kraken um and and rockol is considerably harder to stake with than than Kraken if you turn talk about scaling scaling it and it's not you know one click like it is with uh with Kraken I'm talking about

being a node operator more so than um just buying kind of like AR right for example but AR demand is is kind of or Ari Supply is constricted by note operators and then it's constricted by and not operators are constricted by demand for R8 and stuff like there's a lot of complexities that go into it right so when you think about it like that as I said I feel like the core of the issue is node operator centralization and what is the worst outcome enshrined LST or LST is above the protocol I feel like insr LST would be the worst outcome for node operator centralization uh but I mean it's kind of hard to prove that because we don't have an in shrined LST but I think that we can maybe look at other networks to see what they've done maybe not so much with in shrined lsts but with things

like delegated proof of stake where essentially there is only a certain number of uh of of of validators that are like the validators that people delegate their stake to um and they're not it's not even real staking in my mind but like delegate their stake to and there's no slashing or anything like that there's no real punishment for anything going wrong there um and the the economic security is a lot lower because of that and then the centralization of no operators is a lot higher too so this is a debate that's going to go on forever I don't think we're ever going to get like a strong answer but it's all about kind of what you believe and what I believe as I said is that enshrining at LST would be more centralizing than if we than the approach we have today uh but also it's impossible for me

to prove that so it is a belief there but anyway you can go give italic blog post to read for full details and all of that stuff I'll link it in the YouTube description below for you to do so all right devet 9 so Denon devet 9 is now live you can see this screenshot from Terren here that he's syncing devet 9 devet 9 with prism and gu and if you want to participate in this devet you can uh there's the URL here which I'll link in the YouTube description below but from what I've seen devet 9 seems to be chugging along quite nicely I haven't seen anyone bring up any major issues about it or anything like that this is obviously a Dev net and not a public test net but you can see how it's been running there are a few block explorers

here as well as a blob Explorer too obviously because we want to be testing out the blobs and see how they see how how a Dev net would handle them and then obviously how a public test Net's going to handle them later on so you can go check this out I'll link it in the YouTube description below but I'm not sure how long they want to run this devet for before maybe spinning up another devet or moving on to test Nets I don't know if there's going to be a devet 10 there might be but it might be really shortlived I feel like they want to get to test Nets um as soon as possible obviously they're targeting early to mid- November right now for the first test net and at the start of October so I I'm expecting to see more conversations around that pop up over

the next couple weeks on the relevant cor devs calls so I'll keep you guys updated on that but for now I think Dev net 9 uh seems to be running well I haven't seen any major issues reported uh but if you have please pass them on to me I don't have an allseeing eye unfortunately I just see what I see uh but yeah you can go check out this link I'll link it in the YouTube description below for you to do so all right ethereum.org is back with the second edition of the ethereum.org writers cohort which is a 3-we online writing program for everyone interested in writing about ethereum this will consist of weekly calls three articles and a community to help you along the way so you can go to ethereum writers cohort.

card.co of course I'll link that in the YouTube description below but you can go here and apply uh by putting in your Discord username and your email and you can learn more about what this is here so really I mean if you're someone who's looking to give back to the ethereum community or looking to get more involved with the ethereum community and you're a half decent writer this is definitely the way to go because ethereum.org is the first stop for pretty much everyone that will that will Google ethereum like you Google ethereum right now the first result is ethereum.org um I mean I guess technically the first result will be some ads that pop up but I've got ad blocker so an ad blocker so I don't see them so yeah I mean the first non-ad result would be ethereum.org and it's a it's a huge site now I mean I've talked

about before how ethereum.org used to be pretty pretty Bare Bones but it is massive now there is so much information on this website I've just got it up on my screen right now you can go dark mode here I'll just enable dark mode for to to to make sure your eyes don't get burnt out here but I mean you go to the top use ethereum these are all different pages here learn about ethereum de developer documentation Enterprise um related things Community related things there's everything here that you need to learn about ethereum and if this does if this page doesn't have the full details on it it usually links to another kind of website or page that gives you more more details about this so yeah but anyway if you're interested in being one of the names that writes the uh the relevant things for ethereum.org the

relevant articles for ethereum.org you should go um submit an application to this I'll link this in the YouTube description below for you to do so right interesting tweet that I came across here from zerx designer who said rbow group wallet so this is obviously the rainbow wallet Mobile wallet here but it he's calling it group wallet which is basically it's a multisig but he's calling it a group wallet now I don't know why this has never occurred to me before but this terminology is so much better than calling it a multisig wallet the term multisig means absolutely nothing to most people like if I said to my mom oh do you have a multisig wallet she would have absolutely no idea what I'm talking about right if I say wallet she'll know what I'm talking about maybe not in the context of crypto but everyone knows

what the word wallet means now put group in in next to that and say group wallet people can infer what that means they can say oh okay a wallet shared amongst a group like it's not hard to infer that even if you have no idea what a crypto wallet is but for someone to infer anything about a multisig wallet you would already have to know what a multisig wallet is you can't just come up with it like I I I couldn't quiz someone on it that doesn't know what it is and for them to just infer it or to to assume what it is um especially because I'm saying multisig I'm shortening multi signature right but even saying multi signature wouldn't mean anything to most people so I think that this is one area of terminology that we probably do need to change in wallets especially where we either call

it like a group wallet or something else but calling it like a multisig wallet probably isn't going to to to go over very well with the um the wider crowd it's not going to lead to kind of like Mass adoption here definitely not because it's just a term that doesn't really mean anything uh on on the face of it and that's how all good kind of like terms are I guess created where they actually do mean something on the surf on the surface and people can infer what they mean as I as I mentioned to you know everyone knows what a wallet is everyone knows what a group is put those two words together you can infer what a group wallet means whereas you people know what the word multi means obviously but no like in the context of like multisig or multi signature like honestly go go ask

someone that you know that doesn't know anything about crypto if they know what a multi- wallet is they're going to be like oh I know what a wallet is but I have no idea what what multi- wallet means right right and then ask them what what do you think a group wallet is and they'll get that straight away like there's there's no way that they're not going to be able to assume what that what that is at least um in in my view there but it also extends Beyond this right like a lot of the terminology that we use within crypto is not going to scale like even the terminology that people may think will scale like layer 2 for example that's not going to scale people people aren't even going to really know what they're using under the hood they're just going to know the apps

that they're using for example uh if you're a Unis swap user us that right you're using Unis swap you're not on let's say arbitrum for Mass adoption to happen you're not going to know what arbitrum is you're not going to know what ethereum is you're you're not going to know all the little intricacies of like what to what what uh standard your token is using you're not going to know what an erc20 is or what an nft um standard is you're just going to know the nft name right you're just going to know it's a token and you're just going to know what the token's called maybe you want to buy uni or or you want to buy link or something like that right you're just going to know what those tokens are um and then the abstraction is actually going to go even further

than that where essentially you might not even know you're using Unis swap it'll literally just be in your wallet that says swap assets and it's not going to tell you what you're using I mean it can if you if you maybe enable some Advanced features but the simplest view of it will basically be here you can swap your usdc for some link or whatever you want to buy for some eth whatever it is uh and and vice versa and then that just happens in the background all instantly probably gasless at that point because the layer 2's might might just subsidize it at that point or maybe the wallet subsidized because they take their own cut and the fee the gas fees is built into the cut that they take from that transaction because for sure they're going to take the the cuts here I mean the um metamask already does this

right with their swap feature uh and it's a really great way for them to monetize so they can just build the gas fee into that or they can just like make it so that they have an offchain um uh uh uh an offchain kind of like set of market makers like what cow swap does or what Unis swap X does or we call them searches that essentially do gasless swaps but just build the fee into the price that they give the user so all of this is background or backend stuff that's not going to be shown to the user and that's the way it should be there is no way that most people are going to have that we can expect most people to learn this stuff in order for Mass adoption to happen I'm sure there's going to be still tens of millions of

people that know about this stuff but if we're talking billions of people most of them are never going to going to learn it and they don't have to they shouldn't have to because at the end of the day a good product a good service is something that makes it as easy as possible for the customer to use now of course is there um Alfred in that no of course not the alpha the extra money that we all get to make from this ecosystem and the extra profits that we have both monetary and social come from the fact that we dive deep into this stuff at the end of the day you know during let's go back to defi summer in 2020 if you knew how to read a contra smart contract and if you knew how to inter interact with ether scan you were ahead of most people in

crypto that already knew how to use like unisoft for example right I already knew knew how to use a crypto wallet because reading a smart contract really there's no reason for you to be be able to do that unless a developer an auditor uh and interacting with ether scan is very daunting to a lot of people because it's it's the Bare Bones thing right it's it's bare to the metal and especially running your own node to do that too so these sorts of things if you did them in defi summer you made a lot of money like I have friends that did this they made a lot of money because they could read the smart contract and know that they weren't going to get rugged right there was no back door in the smart contract and they got into it at the start with the token rewards were the highest and

then if it got popular they got lots of token rewards they got lots of apy right uh and they were able to to make a lot of money from that but of course the further out you abstract that the less money there is to be made but at the end of the day like that's the speculative side of things when it comes to actually um making products and services that uh real users U can not real users but like users can use for real world applications for things outside of speculation we have to abstract away all of that nonsense right it's not something that is going to scale to mass adoption and I think it starts with terminology and and expands beyond that and gets built into the tech so yeah I'm going to be trying to refer to multi- wallets as like group wallets from now

on especially when I'm talking to people that may not be as crypto Savvy as me or may not be a crypto native definitely group wallet makes a lot more sense uh there but I think 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 it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone