ETH staking chat, 4844 Readiness Checklist and more - The Daily Gwei Refuel #581 - Ethereum Updates

Transcript

hello everyone welcome to another episode of The Daily gray refuel where we cup latest news in ethereum ecosystem I'm your Hurst and this designer it has the 9th of May 2023. right everyone let's get into it so apologies for missing yesterday's episode everyone I'm missing a few episodes over the last few weeks uh yeah and there's no real reason why just sometimes I just do not have the time to do them and honestly I know it kind of like hurts whenever I announce in the Discord channel that I'm going to miss an episode it hurts me as well that I that I'm not able to do it I love doing these episodes and every time I'm not able to do one I kind of try to make it work but sometimes it just doesn't work out but of course I'm always back uh the next day or the day

after like I am today so let's get into the news from the last few days starting off with a tweet thread from the protocol Guild so the protocol Guild was deployed one year ago as of May 8th uh they deployed their zero X Blitz vesting contract and kicked off the pilot uh so today well May 8th marks one year of experimentation with the mechanism uniquely tailored to incentivizing ethereum's core protocol work and during that time ethereum's ecosystem and Community stepped up bigly with 15 million dollars worth of donations which is pretty cool because uh if I remember correctly the target for the pilot was 10 million so we went 5 million over Target here and you can see the protocol Guild is thanking a bunch of uh teams and individuals here who donated uh of

course I've been donating my Oda rewards to the protocol Guild I also donated all the proceeds uh that came from the nft mints that we did the um the first anniversary daily Gwen of team in not to the protocol Guild but to a similar effort that was going to core devs so it's just been great to see obviously core dev's getting a lot of funding uh through that uh that other uh grant that was set up and also the protocol Guild here now I've mentioned before how the protocol Guild has big goals they want to go Way Beyond 10 million in funding they want to go potentially up to a billion dollars or more in funding uh for the core devs and researchers and what's really cool about that is if you do like a naive kind of napkin math yeah and say that there's 130 core protocol

contributors right devs and researchers and if they've got a billion dollars and you divide that by 130 then each one of those members would get 7.7 million dollars over over time now of course it is not evenly split uh not everyone will be a part of the um you know not all of those 130 people will be part of uh uh the protocol Guild forever because they come and go right uh and it is split depending on the amount of work that's being done amount of contributions that are being done but yeah I just did it like an even kind of split there but it's it's definitely not an even split you can actually see the split on the protocol guilds do an analytics page I believe and the protocol guilds website I believe as well but still if we had a

billion dollars uh you know there'd be millions of dollars at least going to individual researchers and and core developers which I think is really really cool now uh what's really what's really cool about this is that it's funding I guess core development and research without having to issue more tokens to do it and I spoke about this last week where essentially there are chains like Z cash which give a percentage of the block reward to the core development team uh I don't know if it's in perpetuity but they've been doing it for quite a while now obviously with the ethereum it had a it had a token sale and then uh and then it launched its token and a bunch of those were allocated to the ethereum foundation who sell from time to time I mean I'm sure you guys saw them selling

the other day or sending a bunch of eighth to Kraken the other day um and then yeah there's been ideas floated around about funding public goods from the gas fees instead of burning the gas fees and I discussed last week why that is not really a great idea so I think the next best idea or at least probably the best idea that we've come up with so far is the protocol Guild where people can voluntarily donate to the protocol Guild um the the different projects in the ecosystem can also allocate a portion of their tokens whether that's at token generation or just paying it out from the treasury to the protocol Guild in order to reward the people that are building the network that they're building their products on so I I do think the protocol Guild is by far the best effort that we have come up with to

date in in the in the scope of funding core Dev and research obviously Bitcoin has done a lot of work in that area as well but they have a broader scope here it's not just for core devs and researchers get coin is trying to be for a lot more uh a lot of different kind of organizations individuals and and projects whereas the protocol Guild is is definitely squarely focused on ethereum core protocol contributors uh whether they be researchers or developers so just great to see this growth in just a yell of existence can't wait to see what the next year is like for the protocol Guild all right so a superfuse put a tweet out I believe yesterday where he said first of December 2020 the beacon chain launched 22nd of September 2022 proof of stake replaced proof of work with the

merge the 12th of April 2023 withdrawals from staking were enabled and the 7th of May 2023 those who wish to withdraw completed the action and the withdrawal queue has been emptied proof of stake is done so yeah yesterday we did have uh zero validators in the withdrawal queue so it's basically empty as as superfood says here whereas we had almost 30 000 people wanting to enter staking or validate as I should say not people out wanting to to stake here now if I go to the beacon chain website and bring it up I think it's gone up a bit on both ends yeah so it's not zero anymore but you can see here that essentially it is 30 800 validators that want to get into the active validator set and only 48

validators that want to exit the uh the the kind of um the beacon chain right now which is just huge guys like honestly I've said it before and I'll say it again it's just amazing how uh like cleanly this played out where we didn't really have many people withdrawing we had the force withdrawals from Kraken we had a few lsds withdraw to do the Arbitrage opportunity but for the most part it has been up only for the validators and the eve Stakes within the network here which has just been absolutely amazing to see as you can see here we're at over 18 million each stake with almost 31 000 pending validators which I believe the cue for that I think is like 18 days right now or something like that uh to get in so if you were to try and spin up a validator today I

think it's around 18 days you'd have to wait for your validator to be active in the network so just a crazy wait time there it's almost three weeks now which is uh which is pretty insane now speaking of withdrawals as well I should mention that later put an update out about their V2 today which includes withdrawals for Lido so uh they say here Lotto V2 will be live after the vote enactment on May 15th so I think that the V2 I mean from from what I can see he'll be going live on May 15th if all goes to plan here so not too long now for later to enable withdrawals about six days from today and then we can start uh really seeing the kind of um great reshuffling player and then it really is on all the projects to compete

with lighter all the other LSD projects to compete with later I know rockapol's been having a bunch of really great growth lately uh and and uh looking at the kind of breakdown of where steak is going is is pretty is generally healthy lighter is definitely still getting more inflows I mean if I bring up raider.network and I show you what it looks like right now you can actually see this for yourself if you go to network overview on the left hand side then you scroll down you can see the uh validator activation distribution by entity you click this little pie chart here and then once you open that you can see where the validators are going so the top is unidentified validators which is standing at about 34 right now of the ballet is entering uh unidentified that doesn't mean that they're all solo

stakers it just means that we don't know obviously which party they identify with but obviously their solo stickers fall into that category in second place is coinbase 17.3 percent Lido at 16.6 Ledger live which is interesting at 8.3 percent uh rocker pull at 7.4 and then you can see it it goes down from there but you know what it's actually generally kind of healthy I think I obviously would like to not be seeing so much they can't continue continuing to go into Lido and even coinbase at this stage but that's not surprising to me what I'm really liking seeing is the fact that it's not like 80 percent lighter in coinbase for example right where it's it's about 30 right now or 32 33 into light on coinbase and other other services

um like Ledger live and rocker puller competing with me especially rockable the decentralized service is competing here and the unidentified validators being I'm assuming Solo validators or just uh maybe maybe institutional validators that want to stake on their own and things like that uh it's great to see that playing out as well and if you go and look at the exit distribution by entity I mean it's kind of noisy you have coinbase at 52 I think the coinbase validator is exiting due to the Arbitrage opportunity between CB 8th and eighth I've noticed that CBA constantly trades at a discount for some reason uh there are there seem to be people who just Panic sell CBE into a liquidity pool push the price down someone buys it up and then immediately arbs it through coinbase uh because they're able to

to essentially uh up that spread there and I mentioned before how the only people that can do this are ones with a coinbase account so maybe people who have CBE that don't have a coinbase account uh have to exit on the secondary market and they don't care if they have to I guess like incur some slippage because of the fact that uh they just want to get out of their position now this unfortunately does bring a kind of a two-tiered Marketplace here where essentially if you had CBE the only way you can get out of it is through the secondary Market instead of going through coinbase because you don't have access to a coinbase account for one reason or another it's kind of like shitty but I guess that's the product right at the end of the day no one's forcing you to buy a CBE or stake with

coinbase or anything like that and that's another point I guess for decentralized taking if you stake as part of rocker pool or if you stake on your own as a solo validator you don't have to worry about any of that right like you can do the Arbitrage opportunity as well anyone can do it it's permissionless to do that uh with rocketpool um through the mini pools and stuff like that uh so yeah it's just another I guess kind of tick for for rocker pool and other decentralized services there but if we go to to rated.network the main page and see mistaking breakdown right now all services are kind of growing right now uh I I think that it's going to be interesting to see what Lido looks like approach withdrawals I'm not expecting any kind of sudden major moves uh when Lido enables withdrawals I'm not

expecting like all this stake to come out of later and go somewhere else as I said before it's going to take uh it's going to take a while it's going to take other staking protocols being more competitive than Lido it's going to take a lot of work on on multiple different fronts I I mean I have confidence that we'll get there but it's not going to be an overnight thing as I've explained before and one other thing I wanted to point out about staking as well is that the APR has just skyrocketed lately for for staking so pretty much every staking service is paying what seven to eight percent or you know actually seven to nine percent if you look down here uh at backward APR over the last week uh now obviously this is abstract this is extrapolating out a yearly APR to the

last week which isn't really accurate but you can see here seven to nine percent because of the major and execution layer awards that have been going to stake this year now I don't think this includes things like token rewards on top of this so I don't think this includes the rpr rewards that you get as part of rocketpool um so to factor that in I think you have to do that manually or you can probably find it on the rocket scan website as well we'll just go asking The Rocker pull Discord and they'll be able to help you out there uh but yeah the APR has gone up because of the execution layer rewards and I've explained before how uh it's kind of funny how the more it that is staked the less consensus layer rewards everyone gets but usually more it'll be staked because there is more

execution layer rewards up for grabs which there has been because we've been out like what an 80 plus wave for for a week now or something like that because of their Pepe meme coin and other such things happening on the network uh the execution layer rewards have been quite juicy uh and obviously that has attracted a lot of Eve stake into the protocol as well I don't not I do sorry I do not I was going to say I don't I do not expect the APR to maintain this High especially in in a kind of like terminal state where essentially fees even if they're if they're at 100 way I I would expect this APR to fall to like three to four percent or something like that even potentially lower than that I really don't foresee how uh over the long term as long as the market is relatively

efficient which I think it generally is over the long term that APR States because that is a huge APR for for eth I mean if you are an eighth ball and you expect eight to go up over time so you don't mind holding e through the volatility well if the APR is eight percent you're earning eight percent or eight percent more eighth so say you staked 100 ACR you're earning uh well I mean obviously if you're staking 100 eighth uh that would not be uh as a solo Staker but say you're staking 100 Aces form for ease of discussion here and you're getting eight percent you're getting eight a year now that's ether nominated and let's say 8th goes 2x right like it just it compounds your returns as measured in US Dollars and I think that's incredibly attractive or

Fiat generally I think that's incredibly attractive for a lot of people and obviously it's attractive people who want to just stack eighth generally compound those rewards do all that good stuff there uh but yeah Lido we'll be going live with withdrawals on May 15th all right so we have a tweet from uh Dorothy here sharing an EIP 4844 a Readiness checklist so this is interesting I've gone over these Readiness checklists before of other major upgrades or other major eaps that have come onto the ethereum network obviously the most famous being the merge Readiness checklist well the 4844 one looks pretty ready to me there are ticks everywhere here and you can actually see that on both the execution layer and the consensus layer most

clients have a branch on devnet right now and some are working on a mainnet branch as well so you've got links here to all the trackers and the implementation uh links which I'll share in the YouTube description below uh the spec level open issues and client level open issues there only seems to be a couple on either side here which is very promising apis are done testing is in progress obviously there's a bunch more down here that need to be done such as Shadow forks and obviously forking test Nets and and then yeah in the end going on to mainnet but yeah everything's moving quite smoothly here I think I'd upgrade my 40 844 chance of inclusion into Cancun to like 99.5 at this point uh as I said the only thing that could

prevent it from happening is some catastrophic bug that wasn't found early on that gets found or some something catastrophically wrong in the spec that needs to be changed and takes months to change or something like that I don't foresee any of that happening to be honest so I don't know the Cancun timing what that's going to look like I'm Still Holding Out for for it happening this year I I still think it can happen this year because we're only in eight uh April we're only in May guys like so when you think about it we're in May a lot of the Readiness checklist is already checked off there are already uh clients available on devnets and there are working on the the mainnet branch so let's say we start forking or start kind of doing test Nets in July let's say July instead of next month because I I

do think we can get some test Nets up next month but let's say July and then we Fork the uh the longer lift test Nets in like September for example or like late August and then we do a main net date in like November I mean I'm giving like worst case timelines here I don't see how we don't make something like November if uh if we keep this current pace so definitely can see Den Kuhn uh going live in in November or earlier than that uh and then after that we obviously won't see an upgrade till the new year but the fact that we can get two major upgrades live this year uh I I think that's very very cool for ethereum I think that's that's just miles ahead of what we've been able to do in the past and as I've said before 4844 will

be the first user-facing upgrade that uh it affects all users on a major kind of um on a major level since erp1559 I think so erp1559 went live in August of 2021 so it'll have been I think two years or over two years since we had a user facing uh well an upgrade that users are actually going to feel now I said before that 4844 on its own is not enough obviously the layer twos and the Roll-Ups they have to take advantage of it so uh and as I've said this before it remains to be seen which Roll-Ups are going to be ready on like day one to take advantage of 4844 uh maybe maybe one of them are maybe multiple of them

are maybe another none of them are we'll have to see I would imagine that they've been following along with this quite closely and they want to get this live as soon as possible so the ideal case would be the two major Roll-Ups right now obviously being arbitrim and and and optimism to have 4844 support out of the box on on day one which would lower their fees by I mean it should lower their fees by at least 10x which is a huge Improvement I mean the fees are already still very cheap compared to mainnet but that would be a huge Improvement getting them uh 10 times cheaper than what they are now at least obviously they can push it further than that along with any other upgrades they do through the l2s themselves like more compression upgrades stuff like that will remains to be seen what they do

there uh but yeah anyway you can check out this Readiness checklist for yourself I'll link it in the YouTube description below all right so I spoke about nethermine's new upgrade the other day which was a major upgrade for the client well the ethereum on arm Twitter account has shared uh this tweet saying an ethereum full node up and running in 11 hours Netherland is getting better and better performance improvements memory reduction absolutely brilliant work we are switching our validators from Geth to nevermind in the coming weeks so this is really awesome because the last time I think never mind I was doing it on a my low powered Rock 5B I think it took 24 hours to sync from scratch so if if um the ethereum on arm account is doing

this in 11 hours on a rock 5B board which I assume that they are that is huge guys like that is a massive Improvement 24 hours to 11 hours and then you've got Lucas here from the denim team saying will be even better with future up updates still a lot of things cooking this is awesome I mean sync time is one of those things that I think that isn't like a huge deal but is a very very nice thing to have especially to encourage people to switch over from their existing client especially if it's Geth to never mind so I'm very very happy to see such a massive improvement from the latest upgrade I haven't actually run a never mind um sync from scratch on my machines yet I have another rock 5B board that I could use I don't want to be messing

around with my other uh my live board right now so I might get that other board out and and run never mind and see how long it takes on the board and see if I can replicate this 11 hours here because if I can that would obviously be very very uh very very cool and as I said Lucas here from the team said that more updates and improvements are coming so if you are still running Geth consider running never mind guys there are there are actually guides out there if you Google switching from guest to nevermind that allow you to basically keep running your guest client while syncing never mind uh so you don't have to go offline or anything like that and then you can just switch over once nevermind is synced here but you can Google for those uh and you can find the

results there all right so the ethereum attestation uh service has tweeted out a new feature you can now attest and verify any type of document or file and they say here you know why would you do this well it's going to be increasingly hard to tell what's real or not real with AI now our creators can easily generate a hash of their content attest to it and let others verify it against the hash and then they continue by saying there are several use cases this is helpful for uh attesting to a hash of a software release podcast and video files documents and PDFs images and any type of file and here's how it works upload any document type the EAS service generates a unique hash you can attest to the hash and then share for others to

verify so you can try out the new content verification feature for free on sepolia right now and it's also available on optimism girly and arbitrim this is something that I think has been talked about for quite a while where people were saying how are we going to be able to discern the difference between what's real and what's not in the age of AI especially when it comes to video and images and things like that well one way of doing it is by having the person generating the the content file attesting to it so for example let's say there is an interview with the president of the United States and let's say one the one interview is real one interview is not real how would you be able to tell the difference if they're not real one is as real I mean it seems as real as the real interview because

it's AI generated um with you know voice video all that sorts of stuff well the way you would do it is that that real video would have an attestation attached to it that basically says yes this is uh I mean the White House could attest to it and say we attest this is a real video whereas the other one if it doesn't have an attestation on it even if it is real but it doesn't have an attestation on it you can basically default to not trusting it because uh it's not attested to by uh or or the hash doesn't match uh what what the White House has attested to here and I think this is really the only way to combat the rise of these kind of like AI generated videos and images obviously it's not going to help in every situation because there are still going

to be lots of people out there who just believe what they want to believe when it comes to this sorts of stuff especially when politics is involved but it's still very very powerful awful because even you as a regular user on Twitter or something you can put on Twitter hey you know I've uploaded this file I've attested to it using my my Twitter profile or using my ethereum my public ethereum address I could say okay I am sasol.8 you everyone knows that I own sasol.heath I'm attesting to this it's real this document's real and this image is real whatever is real I'm putting my kind of weight behind it putting my word behind it so to speak a reputation behind it which I think is incredibly powerful and the use cases are endless here as I've said before I am extremely excited about ethereumatic Station Service I'm also very excited

about the the use cases that it can enable outside of EAS itself so outside of just the testing to things here and there it can enable real world use cases where we can bring the attestations that we're used to in the real world that we don't even think about on chain and we can start to build a fully on-chain Financial system that isn't just based on over collateralization that you could potentially have things like on-chain credit scores we can potentially have things like um who being uh Banks being able to come on chain and give loans out and things like that like it just opens up a world of possibilities here so very very cool new feature from the ethereumanta station service yeah you can check it out I'll link the thread in the YouTube description below

all right so gravatar protocol has unveiled themselves here so what gravity is is a decentralized borrowing protocol built on ethereum offering interest-free loans secured by liquid staking tokens or lsts and more like I say here as we approach launch soon we'll unveil in this and upcoming thread some novel and exciting new features we designed so this is basically as a tweet says here an eth Centric borrowing protocol for LST so the goal I believe of the protocol is to make the lsts more liquid uh basically among themselves so obviously there's stf and R8 and CBE and B eth well what if there was like a borrowing protocol or a money market that allowed you to use each of these

things as kind of like a collateral type as um a to borrow it to to do all sorts of Arbitrage opportunities stuff like that that's what gravatar is trying to do here now it seems that their tweet trade got a little bit cut off here they deleted a bunch of tweets um but they continue on the Tweet by saying gravatar will issue loan bones in Gray or gray an over-cladralized debt token with volatility dampening mechanisms similar to LUSD so they are a fork of liquidy protocol gravitar will however support multiple collateral types and have mint caps in place ensuring protocol stability and they go over their novel features CR so novel feature number one is that there is going to be a 0.5 borrowing fee charged up front on each debt or debt increase obviously similar to liquidy here but to improve the short-term borrowing

experience the fees refunded Pro rata if users repay within six months with a minimum fee for one week's interest this effectively sets the cost of borrowing on gravatar at a very competitive Max 1 APR short and long-term borrowers complement each other and aggravatar's goal is to be the best borrowing venue for both so very very cool new project here you can go check them out for yourself I'll link them in the YouTube's description below all right maker has announced the spark protocol launch now I've I think I've talked about spark protocol before on the refuel but starting on May 9th today spark protocol will be available to all defy users so uh an end user die Center defy product product deployed on ethereum with Supply and borrow features

for each stf die and S die so basically spark protocol's first version called sparklend is a lending Marketplace specifically designed for supplying and borrowing crypto with a focus on die its users will be able to interact with Spark's front end directly connecting Maker's liquidity with a complete defy solution uh spark is connected with makers d3m module which makes uh which allows for the direct wholesale credit line in die which injects and automatically balances fresh dial liquidity into sparkland and enables its users to access the bets best rates in the market in short this means that through Spike land users can now borrow a die at an initial 1.11 annual rate due to the direct injection of liquidity from maker rates to not increase with utilization no matter what your size is

this is really cool because it's basically integrating uh Maker's ability to Mint and and burn dye as a protocol into uh a kind of money market basically or a lending Market essentially and makes it so that you can have a much more predictable rates here that aren't subject to the whims of the General market now as I said I've spoken about spark before on the refuel but you can read more about uh spark here in this thread but it is available to all users starting today but I'll still link the thread in the YouTube description below for you to check out all right so there was a bit of drama I guess over the last few days because ethereum's gas fees are high right and obviously whenever gas fees are high for a

consistent period of time people start complaining about it and people start having in my opinion some of the worst takes I've ever seen on uh on on gas fees and just like crypto and blockchains in general and that prompted me to put out this tweet which is uh not a normal length tweet it's a it's a longer tweet here but I'll read it out just so you have context about what I'm talking about so I said I think people generally miss the forest for the trees if they think that speculation isn't an overall net driver of growth for the crypto ecosystem why do you think the crypto ecosystem is as big as it is today it's mainly because of the speculation this drives more money and attention into the ecosystem which enables the other use cases and increases their chances of success without the opportunity of making money

most people would be completely disinterested in both the speculative and non-speculative use cases of crypto they'd also be very little incentive for people to spend a lot of money to fight for crypto like what coinbase is doing uh speculation is a net good for crypto and Society so I'm gonna be the first to admit here that when I first got into crypto in 2013 with Bitcoin I was in it for the money right I was not in it for the technology I was not in it for being a Cypher Park I was not in it for changing the world and taking down the fed or any of that sort of stuff I was in it for the money I saw that you could buy Bitcoin it went up a lot right and you could potentially make money on it that's that's and I think that applies

to almost everyone in crypto I think that most people come into this industry with that mindset at least at first then over time right A lot of people not everyone but I think a fair chunk of people get do more research right they get interested in the technology maybe they join the ecosystem maybe they they end up being more of a long-term investor than a short-term Speculator but overall they bring activity and money and attention to the network to crypto generally which means that crypto has been growing through speculation for as long as it has existed we know that because every single time we have a bull market we are left with more people more money more funding more projects than we were before that bull market happened that's just how crypto has grown so far

will this always be the case I don't think so I think eventually you hit like a patero and diminishing returns kicks in in a very extreme way and crypto just becomes like any other industry where you have gradual growth but crypto is a high growth industry because and a highly speculative industry because it is still rather small it is still its adoption curve has a long way to go still right and I'm not talking about people buying coins on exchanges I'm talking about people actually using the on-chain products we're nowhere near uh mainstream adoption in in that sense because we still have to build a lot of the infrastructure out but we also need to build apps people actually want to use and make them easy for people to use as well but that doesn't take a take away from the fact that speculation has

been the main driver up until this point and probably will be for the foreseeable future and there's absolutely nothing wrong with that now how does this relate to ethereum gas fees well at the end of the day ethereum as a network right is permissionless sensitive resistant incredibly neutral you can use it for whatever you want to you want to gamble on a on a meme coin you can go gamble on a meme coin right you want to go uh uh uh kind of like do some real world star stuff like borrow some dive from maker and go buy a car with it you can go do that right you want to go register an ens name something totally non-speculative and non-degenerate you can go do that as well but the one kind of thing the one through line through all of that is that you have to pay to

do this right you have to pay a fee to do this ethereum sells one product only really it sells block space now that block space has different properties attached to it as I mentioned decentralized uh decentralization sensitive resistance credible neutrality that's what ethereum's block space has attached to it and ethereum's block space is limited it literally has a hard limit on it called the gas limit and once that gas limit fills up which it pretty much is always full you have to bid against other people in order to uh um uh in order to get your transaction included now as more people bid there prices go up and then it prices out use cases and and users now this what this does and why this is a huge net positive

and I've talked about this on the refill a bunch of times before but why this is a huge net positive in my view is that it it kind of like lights a fire under the ass of people building scaling Solutions or looking at the scaling Solutions and just scaling ethereum generally and because gas fees have been high for such a long time now even you know even even at 10 way they're not cheap right it's still quite high for doing uh most uh I mean you can do most things relatively cheap but like there are certain use cases that are still priced out there but because of all of this we had a ton of money attention brain power going to scaling ethereum and now we have a vibrant scaling ecosystem and I do not think that would have happened if we didn't have high

fees on ethereum layer one so I think that's obviously a really great thing for for ethereum there but again the reason why people have paying the the the fees is because they want access to ethereum's block space naturally over time because ethereum it had block space is limited and it's a settlement layer the highest value use cases uh that people are willing to pay for and I'm not talking about highest value in the sense of like a morally kind of correct value or what you consider valuable I'm talking about what people are willing to pay for that is the only uh kind of source of truth that we have if people are willing to pay a hundred dollars to trade for a meme coin on uni swap that is the value of what memecoin is to them and and the market you can't just say oh

well you know this is just pointless use cases it's all noise it doesn't matter if you want a credibly neutral Network and a decentralized network a permissionless network where anyone can do anything they want on that well that's what's going to happen people are going to vote with their wallet literally they're going to pay the fees that is what what's worth it to them and that's what's going to happen it's gonna it's gonna Skyrocket here now of course a lot of the fees are influenced by other things such as Mev and stuff like that as well but the Mev opportunities only exist because the regular users are willing to pay the fees to do the transactions and to get sandwich attacked and to get front run and all that sorts of stuff there so there are always still paying users at the end of the day now naturally that's going to

price out any other things that people don't consider valuable enough to spend fees on to or to spend High fees on right and that's exactly why we have layer twos so you can go to Layer Two yes and on as cheap as they're going to be right they are going to get cheaper over time with 4844 and other upgrades but they act as a way for people who can't afford layer one uh block space directly to go and buy the layer 2 block space right so uh so which which Taps into layer one the analogy that I like to use is uh is Android and now I I I Android and and iPhones for example so but with Android specifically you can go buy the latest high-end Samsung phone uh if you can afford it right you can go get it and you can enjoy it or you can go buy a

50 Android phone right uh and if if that's all you really want to buy or if that's all you can afford you can go buy it and you can access uh the same Play Store you can access almost all of the same apps a 50 Android phone and a high-end Samsung phone which I don't know how much they are these days but obviously thousands of dollars they're going to run the majority of the same apps right obviously you know some games aren't going to run on the 50 phone as opposed to the the two thousand dollar phone for example right but a lot of the same apps the popular apps like the social media apps and stuff like that they're going to run on both uh one device is a lot more expensive and people buy that device if they want it one device is a lot cheaper they buy

that devices they want that and the same applies to iPhones you can buy more expensive iPhone or the cheaper one at the end of the day they're products that you buy and you choose which product that you can afford and which one that you think is worth your money at the end of the day maybe you can afford the Samsung you just think to yourself well why would I buy this I don't need all these features right just like it's the same thing with ethereum layer one if you don't think that it's worth the fee to pay on ethereum layer one well then it's just not worth it to you go on Layer Two and pay the fee there if you if you think that's a better kind of use of of your money or if you can't afford it right which is true for a lot of

things for most of the people in the world they can't afford everything just because someone can't afford a Lambo doesn't mean they sit there all day complaining about it oh I can't buy a Lambo so I'm going to go buy a a Mazda or something right or Toyota well yeah okay that's just the way of the world that's what happens if you don't have the money to buy a Lambo and but you don't have money to buy a Toyota you're gonna go buy the Toyota right you're not going to sit there complaining about it all day every day but that's what people tend to do with ethereum gas fees and I think that people just miss the fact that L1 is a premium settlement layer it is not meant to be the user layer where everything is cheap the the cheaper layers and the cheaper block space is

available at Layer Two and go and higher layers and it's going to get cheaper over time so people just need to accept that layer 1 gas fees are never going to be cheap they're never going to be cheap for the majority of of people they're never going to be cheap enough for the majority of use cases that's just the way ethereum is designed with its roll-up Centric roadmap so people either have to deal with that or they can keep yelling into the void it's not going to change anything or you can go use another Network which is another hilarious point that I wanted to bring up where people basically said that oh I'm just going to go use this other network I'm like okay go use the other network no one's stopping you but the thing is is that like most of the other networks there's actually nothing

happening the reason why people are paying to these fees on ethereum is because that's where the action is right you don't go to somewhere where the action isn't and and where it doesn't have the product that you want and go in there and and say I want to buy this product you don't go to a grocery store and say to them hey I want to buy a car well no they're not going to sell you a car because they don't sell cars just like a lot of these other blockchains don't anything they they sell block space but their block space is worthless because there is no products on there or no I guess apps I should say that's taking up that block size that people actually want to use and interact with it's the same concept this is not something new this is not something

revolutionary there are products and services there are what people are willing to pay for them and there is a a market set rate for that product or service for ethereum Block space it is set by the free market and there's no arbitrary gas um a gas fee set on it the gas limit is not arbitrary either that is in place to preserve decentralization and yes it can change it can go up and down but at the end of the day the bidding for that that gas the bidding for that block space is done by the open market and if you can't afford it or you don't think it's worth it there are other options for you but as I said like if what you want to buy is on ethereum L1 if that Meme coin you want to buy is only on L1 well if you want it bad

enough you're going to pay the fee for it right it's a harsh reality but that's just the way the world Works guys I I don't know why I have to explain this and I probably don't have to explain it to to all of you but just generally that's how I think about these things and that's why it kind of gets on my nerves a lot when I see people complaining about it because they they don't understand a lot of different things about ethereum they don't understand the roll-up Centric roadmap I don't understand blockchains generally they don't understand what products blockchains sell they don't understand that ethereum L1 is not being optimized for end users it's being optimized as a sediment layer and they don't understand why people actually want to use ethereum over their own favorite chain and at the end of the day that's because ethereum

offers the best products and services for those people and that's all it is so if you want people to use your chain or your favorite chain build something that people want to use but anyway I'm going to end that rant there because I went on for way too long um there's just one last thing I wanted to talk about which is actually not got to do with ethereum uh funny enough it's got to do with Bitcoin ordinals now this has been the Talk of the Town I guess for the last week but for months now and I wanted to talk a little bit about why I think ordinals and just all the activity happening on bitcoin through Taproot it is actually bearish um now I'm not just saying that because people I mean people think I hate Bitcoin I don't hate Bitcoin but I'm not

just saying that because it's Bitcoin and ethereum I don't think that what Bitcoin is doing is competing with ethereum in any way but the reason why I think it's bearish is very similar to the reason that uh halprest does so he puts out a tweet here where he said for a long time it was much more straightforward as an institution to own BTC versus eth you knew exactly what you were getting and eth was more in flux now that BTC is finally starting to confront the decisions ahead uh its path is much more uncertain while even on the other hand is largely ossified in many ways it is more straightforward to own eath at the moment especially with the multiple imminent BTC Supply overhangs would imagine the institutional pendulum begins to swing further in the direction of eth as a result so I think it's quite

funny how the tables have turned here right now the way Bitcoin is I guess acting as a network and where people are using it to Mint these brc20 tokens and all this other stuff Bitcoin it looks like a dollar store version of ethereum it doesn't look like something that would challenge ethereum in any way what they have is extremely limited it actually can't challenge ethereum in any way uh enables some kind of Novel use use cases but nothing like what ethereum does right and people are building these things in such a way where it's just it's ridiculous the way you actually mint a brc20 token is so convoluted I looked at it and I'm like what the hell like what's going on here but but generally Bitcoin sold itself in its main narrative has been that Simplicity

that you know 21 million coins digital gold uh payment system for for the world right uh you know story value all that sort of stuff there but now with all this extra stuff being bolted on uh they're doing nfts now they're doing uh tokens now they're doing this and that people look at that and they're like well I mean it they literally is just doing what ethereum is doing in a much worse way so why is this actually good for Bitcoin people say oh because it's good for the fee Market I'm like okay maybe short term but like there's no way to know if this is going to be long-term sustainable or not I honestly don't think it will be because I think that usually you have a short-term speculative Mania around kind of new use cases and new things that happen but to have a long-term sustainable ecosystem

is very hard right it's very hard to do and you can't build something like you can on ethereum on bitcoin uh even with taproots features that it that it introduced so I'm looking at it right now and I'm thinking wow Bitcoin has actually lost its simple narrative because it's no longer just the digital gold or a store of value it's now this kind of thing that no one really knows how to define anymore like is it trying to be a story value and digital goal like a hard money or is it trying to be like ethereum you know what is going on here it's in this kind of weird limbo state that no one knows what's going on and that is going to skip investors I think I really do think that's going to scare investors because they're going to look at that and be like well I used to

think BTC was was certain I used to think it was fine because it was going to be like God it wasn't going to change I could hold it in my portfolio and forget about it for 10 years but now with all this stuff happening there what's going to happen when Bitcoin has to tackle with Mev what's going to happen uh when the the change starts becoming unstable due to to various different things that are happening and there already has been some of that some of that going on you know how is Bitcoin going to deal with with these issues how is it ever going to be a payments Network the lighting network doesn't actually doesn't actually work so what's going to happen here so I think those questions are going to be more and more at the front of mine for a lot of people

and it's going to scare our potential investors off and it's going to make the narrative around Bitcoin a lot more convoluted than it has been whereas ethereum as how it points out is it's largely ossify in that like it has a defined roadmap there are things coming to to its uh to this network but the major things have already come the merge is done Chappelle is done right previous stake is in uh um 4844 will be done into the uh uh and and then there's a defined roadmap a lot of it's being de-risked ethereum knows what it is it is a sediment layer with a roll-up Centric road map where scaling via layer twos which are live and everything's going well there ethereum has been dealing with things like Mev and client diversity and uh keeping the change stable in terms of uh you know High fee

environment stuff like that so ethereum has dealt with all of these things from many years and and I think people are going to see that and be like okay well Bitcoins just getting started with these issues and there's really no confidence that they're going to be able to overcome this and also Bitcoin as a network doesn't capture any of the fear of a new into BTC the token because it doesn't have a burn mechanism like ethereum does and I think they're going to start doing a lot of these comparisons and be like okay well ethereum and ether actually the more stable bet at this point and I and I truly do believe that and as I said like I don't hate Bitcoin I think ordinals I mean even though I think it's like Bitcoin is discovering fire in 2023 I think they're interesting in the Bitcoin

bubble like if all you pay attention to is Bitcoin obviously ordinals is interesting to you I think that some of the stuff that people have come up with is kind of funny because they're basically being constrained by the network in such an extreme way that they have to come up with convoluted ways of doing things you could do in ethereum relatively easily but I don't believe it to be something that is long-term sustainable that's long-term positive for Bitcoin I really do think that this is actually long-term bad for for Bitcoin um because it basically kills that main narrative that is had for a long time that it's simple and the funny thing is the Bitcoin Maxis are the ones saying this as well as this is probably the first time in history that I've agreed with the Bitcoin Maxes on something they're right Bitcoin should

remain as simple as possible and for what it wants to do right the fact that it's become all this complex noisy stuff now is not actually good in my mind from a narrative point of view and and from a fundamentals point of view I think over the longer term but anyway that's my rant about ordinals there if you disagree with me I'd love to hear your thoughts in the daily great Discord Channel or in the YouTube channel as I said I have no problem with Bitcoin I do not hate it I just think that they tried to be one thing for so long and now they're trying to Pivot to being this other thing which looks like a really Dollar Store version of ethereum I just don't think that's going to play out positively for them just like I don't think it will play out positively for

ethereum if ethereum said oh well screw L2 scaling we're going to do L1 scaling now and then just look like a cheap version of those monolithic chains that are out there that already do L1 scaling right that that would be similarly I mean if ethereum ditch to draw up-centric roadmap and Scout and try to scale L1 I would actually abandon ethereum like I know that's a strong statement to make but that's how strongly I believe that the L1 scaling roadmap uh as a monolithic chain is not the way to go um so yeah I would criticize ethereum for the same thing but that's what I feel like Bitcoin is doing it had its defined kind of narrative it had something that people understood people were comfortable holding BTC because of that outside of its security budget issues which I've discussed before but generally people were okay with it now

it's become these complex convoluted thing that is going to take a while for people to reason about and maybe understand but at the same time I don't think that he's going to uh sorry he I don't think Bitcoin is going to be able to to find that and settle into that I think it's going to be viewed as a dollar store version of ethereum and I think that it's going to be um a really uphill battle for them there anyway I'm going to leave it at that for today this has been an extra long episode so I hope you enjoyed it but that's it thank you 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 Channel and I'll catch you all tomorrow thanks everyone