ETH strikes back, 4844 explainer and more - The Daily Gwei Refuel #699 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the gr refuel where cup latest news new the maker system I'm your host and the 5th of December 2023 all right everyone let's get into it so kicking off today I was reminded of something today actually by super Fizz on Twitter so he tweeted out saying uh Beacon chain Genesis depositor pup holders are some of the most committed and Allied participants on the network these users deposited before the beacon chain even existed and I believe they deserve to be part of every future airdrop and I forgot about this uh Genesis up I have one of these of course because I was a beacon chain Genesis depositor and I'm sure some of you guys out there were this as well but the reason why I wanted to talk about this was because I think poops are a really

cool product generally and I think they're a really cool product for doing Cil resistance as well so for example if you wanted to find a group of really early committed ethereum to airdrop your token to for example and something that can't be cbed and and and something that you have like relative certainty wasn't CED at the time because there was no real uh I guess like um there was no real uh uh purpose to doing that at the time right then this would be perfect because you're really just targeting the most hardcore and most plugged in etherians who basically claim this paup after uh being uh being a beegan chain depositor uh Genesis depositor here which I think is is really cool um and most of them would have been Solo stakers or pretty much all of them would

have been solo stakers which is which even goes a step further right so this is a unique case where you've got a pup that represents all of that and then if you are a new project or you are a project that wants to align yourself really closely with the ethereum community um airdropping to your token to these people could be one uh one way of doing that now I'm not just saying that because I want to get you know airdrops for for basically holding this paup but it really extends Beyond th just this one paup right it really extends to basically the criteria for all airdrops and how I really wish teams and projects were more creative with how they actually distributed their air drops on on ethereum here I know that every team has their own way of doing it and you have to filter through all the

airdrop farmers and it's become I mean airdrop farming has become an industry in of itself at this point but generally there are a ton of different ways you can you can do this there are a ton of different ways that you can find early committed ethereum users um but I think the teams are mostly preoccupied unfortunately with trying to filter out all the airdrop Farmers rather than trying to find the most I guess like aligned people that they can airdrop to because when it comes to airdrops especially you know these days You're damned if you do and you're damned if you don't right if you don't do a token then people are just going to keep asking for token forever and your business potentially uh can be cannibalized by a project that does do a token and I think the perfect example of this is open C and blur openc never did

a token right or hav't hasn't done it yet and everyone has expected a token for years um but open C's valuation has collapsed their market share has collapsed and blur took a lot of market share away because they had a token they had token incentives there and this doesn't always work right these vampire attacks definitely have failed more times than they have worked but that's the risk you kind of run by not doing a token and then if you did do a token so for example let's say I openc did a token there would be plenty of people complaining that they didn't get enough of an airdrop or that the token distribution's unfair and so on and so forth right so that I guess is an orthogonal issue to just airdropping generally but it's kind of funny to just walk through all the Dynamics here and

how teams have such a hard time designing their airdrop because not only do they have to design it for uh the you know to be as Fair as possible they also have to filter out all the airdrop Farmers which as I said it's an industry now and it's becoming really really hard to filter them out and with the Advent of AI now and all these AI tools coming online it's going to be even harder because people can just train these AIS uh to basically look like real users and then it's going to be basically the teams doing the airdrops having to employ their own AIS to filter through it and then it's just a complete mess so I think that you know we may be able to rely on historical stuff like these pups but at the same time you can only go back so far right I mean you could go

back and only airdrop things to people who participated in the ethereum Ico for example but there are plenty of people who participated in that Ico that aren't around anymore I mean it has been 10 years well almost 10 years it'll be like 10 years next uh mid next year or something like that since the Ico uh so a lot of those people definitely are gone by now or ar us plugged in by now and you know then you go you go on the path of okay do these people actually deserve an airdrop they bought the eth Ico they're probably pretty wealthy at this point unless they sold e you know immediately after it started trading or something like that so there is definitely a bance there but I there is no easy solution there is no perfect solution here it is an uphill battle and

I think a lot of teams generally try to avoid uh getting into into in the weed SI because it just takes up a lot of time for them as well it takes time away from other things like actually developing the product uh and it turns toxic very quickly as well so yeah I don't envy the teams uh that that don't have tokens yet because they're dealing with this and even the teams that say they're never going to have a token like for example coinbase has said that they have no plans for a base token like the thing is is that even if there is a 0.00001% chance that Bas will have a token one day I actually think the chance is higher than that I I do think that Bas will eventually have a token um maybe far into the future maybe earlier I think it really depends on regulatory

Clarity but regardless of what I think even if the chance is super super low if the cost to farm that airdrop is relatively low and then you're happy to pay that cost on the off chance that you do get an airdrop one day then you're going to farm it especially for something like bass which you can assume because it's an to because it's tied to coinbase um it would be worth a lot right from the get-go and the airdrop would potentially be worth a lot as well so there are all these different Dynamics at play here and that's why it's become an industry because there's just money on the table to be had but as I said before this is something I don't envy teams for because you're damned if you do you're damned if you don't and if you do you have to basically run through

all the emotions and then uh you do it and then people hate you anyway so yeah anyway just uh I wanted to use fizz's uh tweet here as a springboard talk about that because it is something that I think about a lot uh and it's in token distributions generally and about how I actually miss the days of icos because I I actually think they're fairer than the way that token sales are done these days like as someone who participates in a lot of obviously uh early stage Investments that later convert to tokens uh in My Angel Investing it's not fair like honestly it isn't fair um I think that the much fairer model is is IOS even though those were gamed and farmed as well it's just a different type of gaming because the the early stage Angel invest I mean that's also gamed and a lot of

the big lead investors come in and swoop up most of the round anyway because they've got money and they just come in with it and then they they head to the team hey we'll give you this money and then you know if you're a brand new team you're like oh yeah I want that money because that'll let me have runway for like five years or something like that so complex issue lots to lots to kind of unpack there but I'm not going to bore you guys with with the rest of that for today's episode because there's a bunch of other stuff to get through there's actually a uh I guess I don't know if I'm going to call this a bullish rant or just like a rant that I'm going to go on um for for a little bit here but I came across this tweet today that Ryan sha

Adams from bankless of course put out where he basically made the case for why eth being priced at 2.2k is hilarious AKA uh just ridiculous that it is still priced so low and he went through his reasoning here and you can check this out I'll link it in the YouTube description below uh for you to do so cuz I'm not going to read out the whole tweet but it was basically saying things like you know eth uh as a network uh makes a lot of Revenue and a lot of profits because of the the high Fe revenues eth's deflationary you know eth has a real yield with the staking rate which I which I'll actually discuss in a sec eth is proof of stake eth is getting an ETF so the risk reward here of buying e instead of other assets is really really good and it actually is really

really good in my opinion as well I mean this is not investment advice and you guys know I'm like an ultra eth bull anyway right uh and I'm I'm going to be bullish on eth anyway but I think if you look at the landscape right now and you look at all the other assets out there and then you even compare eth to bitcoin obviously because if you comparing it on a risk adjusted basis you have to compare it to bitcoin I still think from this point on eth is just such an incredibly undervalued asset compared to the rest of crypto right now like there is no it makes no sense that eth is worth um you know M as much as it is right now compared to BTC it's it should be worth more and if we're using BTC as a measuring stick I mean I believe that

eth should be worth more than BTC but if you want to be I guess I'm not going to say realistic cuz I I realistically think it should be more worth more than BTC but if you want to play the the side of it of of of an investor that's not playing favorites with ethal BTC but is just look looking for the the best risk adjusted return like I don't know how you can look at eth right now compared to bitcoin compared to other ecosystems and come to the conclusion that eth is fair valued I don't think it's fair valued at all I think eth should be worth a lot more than it is uh for a number of different reasons not just for the fundamental reasons but also for the reasons of I mean like the the fundamental reasons being the fact that you can tie things like revenues to eat

the asset but also the other less obvious things like E's use as a money eth's use as a store of value all of the other use cases that are coming for E through reaking and igen layer like I know that there are a lot of concerns about reaking generally on ethereum but if we're looking at it without the concerns we're just looking at at a purely kind of um fun positive fundamental driver for ethereum as an ecosystem and ether as an asset it is stupidly bullish guys like I don't think people realize how incredible reaking actually is as a primitive and as I said we're ignoring the risks for now just for the sake of the argument but think about what shared security enables think about the fact that you're not only sharing the security of some shitty random Network you're sharing the

security of ethereum you you have the ethereum node operator set which consists of tens of thousands of entities at your disposal who are experienced in running infrastructure and then you have billions tens of billions of dollars worth of eth to tap into to uh to get your Economic Security from in order to spin up any service you want because Ian has the concept of AB s's where you can spin up anything you want there's IG da there's going to be oracles there's going to be Bridges there's going to be sequences literally anything you want now if you're a team out there thinking to yourself I want to decentralize all these parts of my stack how do I do this well you're going to look at Igan layer and be like well I can actually just tap into ethereum security and decentralize my stack through igon layout and that's going to

happen and that's going to be a huge unlock for ether as an asset because all of that flows back to eth all of the the activity of that flows back to eth as an asset and then all of flows back to ethereum as a network as well so I think people are really severely underestimating just how M how much of a bullish driver that's going to be and that feeds into the fact that eth is extremely undervalued in in my opinion here I think that this is just classic short-term market dynamics playing out where people are still playing the BTC ETF trade right we're in uh end of year or like December period where eth is normally weak against BTC so there's that Trader kind of uh sentiment there uh and no one wants to be the first in either like the Trad ERS that that are

trading this stuff they don't want to be catching falling knives they'd rather enter in once uh the chart looks better so to speak right that's just the way they think and this may be a foreign kind of concept to you if you're not a Trader which I I don't think a lot of you guys are um but it is the way they think then and things can change overnight I mean ether's been underperforming BTC for quite a while now pretty much like for 6 months now um since it it went back up uh mid year but the thing is that can change really really quickly and it can change in in in like a week or not even and then from there eth can just go up only for for a while I mean I I linked the chart in the um daway Discord Channel today where I

basically showed that every single December since eth started trading or every single like Q4 since eth started trading except one so last year eth has actually gone down against Bitcoin and then in January it pivots and Rockets up literally like there are eight years of that's eight years of data to pull from it's not just a once off so there is a lot of seasonality here there is a lot of cyclical stuff happening here and I think that the reason why last year was an outlier was because of the merge the merge obviously had people like bullish on eth and they had people bullish on eth against BTC and it was a it was it was an anomaly because usually eth BTC you know creaters in a bare Market but last year it actually didn't the whole Bare Market it basically stayed flat and then it's just been bleeding slowly this

year but I as I said I think that's like a market Dynamic thing it's the BTC ETF stuff but these things pivot really really quickly and I do think that the The Narrative obviously goes away as soon as BT gets the ETF because everyone's just like okay well you know BTC got the ETF there's no more narrative there's no more telling people oh BTC is going to get an ETF yet it's still bullish because it's it's reality now and we have you know these passive flows coming in via the ETF but the the market always wants a narrative it doesn't want the reality it wants a narrative so as I've said plenty of times to you guys what do you think happens after the BTC atfs get approved the narrative immediately shifts to e ETFs immediately like you're going to see it happen literally overnight and

that's what I think that eth based on I guess like short-term movement will definitely start performing or at least maybe start performing a little bit before that as people try to front run that uh there but yeah purely from like a fundamental driver perspective eth is stupidly undervalued I'm still buying eth guys like I haven't slowed down my buys even though I would have loved to buy even more below 2K I'm still buying here like I'm not buying as much as I can I mean I don't have that much fat to buy with anymore I mean I'm buying basically using funds that I'm getting from some uh some uh kind of yield farming that I'm doing and I also at the same time obiously getting getting more eth from my validators which is very nice I like mind you it's it's probably the best way to stack eth because like I

I'm I'm doing it and getting rewarded for my work on the network um and and it's just fun um but generally yeah I don't know I I feel like I'm I'm I'm preaching to the choir here but I think Ryan's uh tweet really nailed it on the head and the engagement that he got in this tweet was actually pretty insane I mean 1.6 million views with uh 5,600 likes 1,000 retweets a lot of comments of course cuz there's going to be people disagreeing with him in there blah blah blah whatever far but it was actually surprising for me to see this tweet get so much engagement to be honest and I'm glad it did because it means that there are a lot of eth BS out there still that've just been drowned out by the noise over the past few months but I think eth is going to have a Revenge Arc

uh very soon and I think eth is going to perform very well over the coming years now I did mention I wanted to talk a little bit about E's staking yield and real staking yield um but first I will kind of talk about this tweet that I put out today and I mentioned this yesterday but eth has been net deflationary since basically the merge and has the trend has been down only like this is one of the most bullish charts in crypto to me I don't care what the Market's doing the market is wrong like I'm like literally the market is 100% wrong on eth right now I I I haven't felt like this um since uh late 2019 early 2020 and you can go look at the price of eth back then anger look at e against BTC back then to see how right I was about that

feeling so I haven't felt like this since then in terms of the market being wrong um but yeah this is this is one of the most bullish charts in crypto for me but obviously like not all of the eth is is burned it's like 70 80% of the eth is burned it depends on the Bas fee versus the tips um and then the rest of it known as tips goes to validators and then another portion of the execution layer rewards the me rewards goes to validators as well so I actually put out a tweet that I don't have up here today where I basically explained how this work where the validator rewards come in two parts you got the consensus layer rewards which are new eth emissions so that's brand new eth being minted by the network to pay out the validators then there's execution layer rewards which

make up tips which is unburned fear revenue and meev related payments through the meev Boost network now the execution layer rewards are what's considered a real yield they're not it's not a yield being paid out by the issuance right by the inflationary rewards it's yield being paid out by users of the network by the people using the network to do their transactions people use using the me Boost network obviously uh sorry the Searchers using the M Boost network for bundles and then to throw that bundle throw those bundles to to validators and then on top of that the E that is burned right the 70 80% of the Fe Revenue that is burned that goes to all eth holders so not only do you have as a validator the tips plus meev as a real yield you also have the very

real effect of the burn on eth which uh over over the longer term uh basically cushions eth's downside that's my my strong belief on it I don't think it has as much of a I guess like um effect on the upside as much as it has an effect on the downside where essentially because there's obviously less Supply out there and there's a consistent burn and it's a great narrative too uh you essentially have like this cushioning of eth to the downside and that obviously is good for the long term because it means that eth doesn't go down as much which means that it starts from a higher floor which means it can go higher there's a bunch of Dynamics in that but valid eth validators you know uh get all of that right get that as a real yield now this is going to be incredibly

enticing for trafi because obviously the first ETFs that are going live are not staked eth ETFs they're just normal spot eth ETFs but do you think they're going to stop there the next thing they're going to do is find a way to do Stak e ETFs right and it's not going to be hard for them to do this like they're going to get it done and then we're going to see a lot of eth going into staking and obviously the rewards for everyone comes down generally but really if you believe that the ethereum network is going to continue to grow you believe that uh these institutions are going to keep using the chain and paying the high fees on layer one uh then there's going to be a lot of rewards going to validators and this real yield is going to be very enticing to the investors in the tradire

world who love passive income right um and that is going to be really bullish for eth too so not only do you have all the stuff that I mentioned before we when I springboarded off Ryan Sean Adams tweet there but you also have the burn you also have the fact that the there's been a massive issuance reduction of eth since the merge which hasn't played out yet in my opinion because we haven't seen a massive demand Spike on eth yet but you also have the real yield narrative too and the yield narrative is the main narrative that I think we should as the ethereum ecosystem be hopping on a lot about I mean obviously ethereum is more than a yield bearing Network you know eth as an asset is bullish for more than just that reason but when you are talking about the investable case for eth those are the

points that you should be hitting on definitely the fact that you can get a real yield and the fact that eth is net deflationary uh I know that may sound like magic to some people but I've actually put out a tweet before where I've explained how this works where essentially you know the issuance the new issuance um is really low and the fee revenue is really high so that that is why we burn more than we issue right and the reason the validated rewards are are so high is because the issuance is spread out over the entire eth Supply whereas the um in terms of like the percentage of the total um the total supply of eth going up but in terms of the total e State uh the issuance is a lot higher for the stakers so it's like 3% or something for the stakers or two to

three uh probably probably more like 2% these days or something like that um uh to the stakers but it's like less than 1% across the entire network and then you have the tips and me on top of that you get high yield for stakers you get a you know deflationary uh asset because of the eth burning um and you also get the the fact that people can ask where does the yield come from and you can literally point to where the yield comes from like there's no there's no hiding it right it's all public it's all open you can see where it's coming from so yeah anyway I knew I I know I said at the start of this that this wouldn't be a bullish rant but it turned into a bullish rant like I made myself more bullish maybe I'm going to go by buy

some more eth after after I finish the refuel today but anyway hope you guys enjoyed that uh and I know you know some of you have been saying lately you know when's eth going to going to catch up it's been underperforming BTC blah blah blah just give it a bit more time guys like I'm not going to guarantee anything here but I have a strong feeling over the next year at least um it's going to perform very very well uh against you know you know against USD but also against other assets in crypto all right so I was talking about Igan layer before they've got a new announcement today that they've created a new Twitter account just for their igen layer da or IG da solution here which you can go follow I'll link it in the YouTube description below and they've also announced their launch

partner program which uh they have featured eight rollup Partners using IG da for data availability so to kick things off on this they've uh done a case study on layer n which is a L2 that I've covered on the refi before which actually funny enough started out as a layer 2 for salana but it's obviously pivoted to ethereum here and they're using IG da for data availability while using ethereum layer one for posting their proofs and for their bridge and everything like that uh but great to see that I de already has eight Partners that's that's pretty crazy and you guys know that I'm really bullish on Igan da because of the fact that it Taps into ethereum's shared security via restak eth and I believe that that's going to make igda the most secure data availability layer uh it remains to be

seen what the costs are like I feel like the costs are still going to be really really low and and very competitive um with the other data availability products out there but really when you talk about da as a as a primitive as I've said before you only have a few Solutions out there that are going to be I guess like long-term Solutions you have Igan da you have Celesta um which is live I da is not live yet and then you have a veil which is also not live and a couple of others out there I'm forgetting the name right now and then of course you have ethereum L1 as a DA layer which it's getting better with 4844 and it's going to get even better with full full dank shotting but that's going to take a few years to to play out here but yeah I think that Igan da is

definitely going to be a very big deal should go follow the Twitter account if you want to stay updated on all of the stuff that they're doing I'll link that in the YouTube description below for you to do so all right speaking of EIP 4844 the scroll team has put together a nice blog post on on scroll here so actually Muhammad from the scroll team the scroll research team I should say has put together a really great blog post on uh data availability in a 4844 world so you should definitely go check this out I'll link it in the YouTube description below um but this is a little bit technical as well I mean it is actually more than a little bit Technic technal it's quite technical it gets into the weeds of exactly how 4844 works and how scroll is going to be working within the confines

of of 4844 and taking advantage of it so if you're interested in learning all about that you should definitely go check out this blog post I just wanted to shout it out for you guys I'll link it in the YouTube description below for you to check out all right so Kane from synthetics has put together a great little tweet thread here today talking about a bunch of projects that he's excited on in and around I guess like the synthetics ecosystem and the optimism ecosystem generally but not just exclusive to that so you can go check out his full thread for the list of projects that he's bullish on um I generally don't highlight threads like this because I don't want to you know play favorites with projects and I don't want to kind of shill any any particular project here but there are a lot of projects in this

thread and that's why I kind of um I that's why I kind of um uh uh want to bring it up today and really the one that I would disagree most with here and I disagree with a couple of others but I'm not going to name names here but the one I disagree most most with is pyth not because it is a salana project or anything like that but because it is backed by jump crypto and I consider jump crypto to be a really bad actor in the space and there's plenty of evidence of their Shenanigans in the space and and and what they've been doing in the space I mean uh it's not hard to find that you can just Google it um but like just to give you a hint they were very intertwined with both Tera and FTX uh and yeah obviously we know what happened

with Tera and FTX so yeah I don't I don't trust jump um at all and they're a big of pyth so by extension I don't trust pyth really um and it remains to be seen maybe they can kind of break away from those chains and build something cool I haven't looked too much into it but I would say that's the only one I really strongly disagree with there are a couple others here that um you know I may disagree with but at the same time looking at them um I haven't looked into all of them very closely either and uh yeah I mean I just wanted to highight this thread for you guys to go check them out yourself because Kane obviously has his pulse on the ecosystem as well so you definitely go check this out I'll link the thread in the YouTube description below for you to do

so all right last up here was just an update on the ethereum documentary called ethereum the infinite Garden so Linda Shay here who is one of the producers behind this documentary said our ethereum Doc is in its final stages of editing and we're collecting help people who contributed to the mirror Crown fard want their names to be credited in the film please fill out the form if you contributed and haven't given us your name credits already so yeah do that it's linked here I'll link it in the YouTube description below but this is one of I think three ethereum documentaries or ethereum related films coming out over the next few months I'm not in this one but I was in another one that I don't think has been announced yet um maybe it will be uh but yeah I love seeing these things because this is

how we get the ethereum message out to like a wider audience to more of a mainstream audience and to people who may not have been paying attention to the ethereum ecosystem before maybe they just see some see some headlines in the mainstream media and stuff like that and they have an ill view of ethereum but these documentaries especially ethereum you know the infinite Garden here is is all about highlighting the positives of ethereum the the social layer the the the fundamentals the technical stuff and not not really focusing on the price and stuff like that because that's the stuff that we need people to be aware of because most people are only aware of of the price action of of crypto obviously because that's all the media focuses on so I I'm really excited for these documentaries to to go live over the next few months and I'll obviously keep

you guys updated on on all of that and how that goes and where you can watch them all that good stuff there but I've got a few minutes left here just one last thing I wanted to talk about which is I guess kind of in relation to my bullish rant before uh about eth um you know I I kind of have I wouldn't call it an issue with with uh kind of certain people who do this but it's something that like grinds my gears so to speak is that when people talk about eth as an asset there's always these kind of three sides to it so there's the side of like okay you're really bullish on eth because of such and such and such reason but then the other two sides are you're bearish on eth and ethereum because of just crappy reason reasons and one of

that those sides is the Bitcoin Community or the the the majority of the Bitcoin Community they come at eth and they hate on eth and ethereum and they're bearish on it and they don't actually understand why they're bearish on it I think they just bearish on it because it's not Bitcoin okay whatever fine but then you have the other side of it which is literally everything else right all the other layer one communities um all the other people who just don't think ethereum is is a good design or ethereum is broken or you know high gas fees blah blah blah all the same fud so you have basically this this this kind of pins thing where you have the Bitcoin is on this side and you have like the the other layer one people on this side um and then you have ethereum in the middle and these two groups are

just always attacking ethereum right always fighting ethereum they're always kind of bringing ethereum down always saying why they bear rich on ethereum and yet and yet I will end this on a positive note and yet in the face of all of that right eth is still the number two crypto asset by market cap number three is pretty far away if you exclude stable coins obviously right the ethereum ecosystem as I explained yesterday still thriv driving more than ever in if we're just looking at onchain Stats but look at offchain Stats it's even better eth as an asset is poised to do very very well over the next couple years as I talked about before and ethereum as an ecosystem hasn't slowed down I mean the amount of builders that are still coming into the ecosystem is is huge like I'm I'm I I see it all the

time so even though we have like this pincer effect of ethereum we've got like essentially some you know walls closing in on us all the time ethereum is still thriving so what does that tell us what that tells us is my favorite cash phrase guys The Narrative can be more powerful than the reality but reality is reality right reality is something that plays out over the longer term the narratives disappear they change they're not sticky because of the fact that they are narratives and in the face of all of that hate that that ethereum gets it gets in the face of all of that fud if ethereum can keep succeeding and keep being as valuable as it is which it has for many many years now then it's chances of success just go up exponentially and there's nothing really to be worried about but I always see

people worrying about about this they're just like Oh The Narrative of ethereum and eth is so bad on Twitter it's like who cares like okay yeah it's bad but who cares um because that narrative doesn't mean anything hasn't changed anything the fundamentals are better than ever the usage the onchain fundamentals are better than ever the fundamental fundamentals of eth are better than ever eth is about to get an ETF alongside BTC guys like there is so much stuff that re reality Trump's narrative for and if all you do is sit on crypto Twitter all day and read the narratives of course you're going to be bearish on ethereum and eth but if you look at the reality you can't help it be anything but bullish right anyway I told you I was going to end on a bullish note and that's the note there 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