Ethereum merge date set, Tornado Cash dev arrested - The Daily Gwei Refuel #426 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel worry cup the latest news in ethereum ecosystem i'm your host the anthony sosano it's the 12th of august 2022 all right everyone let's get into it so some big news over the last 24 hours as i mentioned yesterday there was a consensus layer call and we we're going to probably get to ttd uh mainnet ttd announced on that call and we did so the ethereum mainnet merge has been scheduled for around september 15th 16th a bit earlier than i guess the week of september 19th that was that was originally quoted which is very very cool to see obviously so in about i guess like less than five weeks now ethereum will be a full proof of stake network uh i don't know i don't know what else to say i've been talking about this for so long now i'm kind of like

lost for words but it's finally kind of happening we finally have a hard date here i guess like ttd the the the ttd number has been decided and this still is considered quote unquote a soft date like it's going to be i guess like set in stone on the all core devs call next week but i guess that's more of a formality this is pretty much confirmed and you know depending on i guess like what ttd does and what kind of like the hash power does around that ttd number it could happen earlier it could happen later but the target the target is september 15th to 16th now if you want to keep track of all of that and keep track of the countdown you can at bordeaux.wtf here which is the website that you've been able to keep track of basically all the test nets kind of being merged

so you can see here the ttd number and to achieve it uh basically this is how much terra hash on the network was needed uh right now it's expected to happen based on the current uh kind of like difficulty uh september 15th 4 44 am utc so i guess that's like only a few hours difference between the girly uh merge in terms of timing but as i said this can and probably will change as we get closer to it because miners will will go offline and there's all and there's also kind of like uh uh some something happening with some of the miners uh the the five gig limit on the dag is being hit so we might see some miners fall off because of that as well but we'll have to see we'll have to see as we get closer what the uh hash

rate looks like and what the difficulty looks like as a consequence of that but yeah we finally have a hard date uh therefore for the mainnet merge which it's kind of funny because it was announced and like it kind of reminded me of i guess i guess the beacon chain launch in 2020 because the big enchanting technically launched in i guess like i mean it wasn't really a bear market but like the date around it i think was announced when eth was still like i don't know 300 400 or something like that so it was definitely not anywhere near its all-time high at that point um and it launched december 1st 2020 eighth was about 600 600 back then and it's kind of i'm feeling a similar thing now where we're obviously still in a bear market yes we've come up

a bit from the lows but uh you know this is happening in in five weeks so who knows where the 8th price is going to go to from here are we going to have like a hype pump because of the merge narratives i don't know like i'm not trading this obviously i've just been stacking eve as i normally do but it's kind of interesting to see that both of these kind of like major upgrades have been launched in or in kind of like bear markets and and then you can kind of look at the other view of things where eip1559 was launched in i guess like people are calling it the dead cat bounce in 2021 obviously one five five nine came out in august uh and we had already topped in like may of 2021 so yeah i mean the funny thing is it's like because the

upgrades are not targeted for specific market conditions they just kind of like happen whenever they happen uh we get these kind of like things that we can look back on so yeah i'm just i'm super excited that it's actually happening in a bear market and a bull market it would have been way too noisy uh it it still is quite noisy i'm still seeing a lot of people repeating those misconceptions that i've spoken about uh about kind of like the staked becoming unlocked and the uh i guess like uh the the merge lowering gas fees and stuff like that i'm actually seeing the staked eighth being unlocked misconception uh being more common like uh these days than the than the gas phase thing and i think that is because people are trying to trade this event right people are trying to kind of like maximize i guess like the alpha here

that they're gonna get out of this and people are gonna try and sell the news so to speak so they're gonna try and sell before other people do so maybe there's a bit of psyops going on there with traders and stuff like that i don't know like i don't really pay attention to that i think there are a lot of people that still do truly believe that all of the staked is becoming unlocked at the merge and obviously that's false you guys know it's false but maybe people it's going to become a self-fulfilling prophecy where people sell off each because they're like oh we're about to be dumped on you know that 10 plus billion dollars sorry it's more than 10 billion it's a lot more than that uh of ethies getting unlocked and it's all going to be market dumped like when you just think about the logic

that people kind of like put into that it's kind of kind of weird right so yeah anyway it's not you guys know it's not you guys know withdrawals aren't enabled for 6-12 months after the merge uh so yeah there's that uh and there's also the bellatrix fork time got um got kind of put forward here so uh net battle tricks which is the hard fork for the execution layout the layer that we all use today to get it ready for the merge we'll be going live at uh a kind of like epi epoc 144896 sorry battle tricks is for the consensus lane not the execution layer uh at the sixth of um of september uh at around 11 34 a.m utc so that's just about 10 days before mainnet merge so that got confirmed as

well all right so a couple of other tweets around the merge before i move on uh there was this one from ansgar here who basically said fun comparison on the call today being the consensus call we move the merge date ahead by four days from the 19th to the 15th of september and that's kind of funny for me to see as well because it's usually the other way around right but the fact that we've moved forward a little bit is really cool uh sorry ahead a little bit is really cool uh and then he says those four extra days of proof of work would have resulted in a hundred million dollars of additional eth issuance the protocol guild core dev funding org has raised a total of 10 million dollars in its entire existence and then he continues by saying listen deciding not to have in

protocol core development funding is a really hard choice to make that's how much we value ethereum's credible neutrality and like this is something that i've spoken about a lot before but like consider this if there was like a block reward of just five percent going to core devs then their core debs would have made five million dollars in four days right they would and and that's like that's just that's at these prices right like that depends on kind of like what the price of ethan eighth is but that's just a crazy amount but the thing is is that because ethereum values credible neutrality so highly and it doesn't want to favor any one group in the ecosystem or in the kind of like network we don't have that there is an example of a high profile network having block reward funding like zcash um but i

think i i don't know if i'd say that z cash can't be considered incredibly neutral because of that but you can go look at the z cash price uh it doesn't it it doesn't really perform very well and there's not a one-to-one mapping here but i think it just adds to that kind of like thing of okay well you know we know where the eath that gets mined is kind of like going we have like a relatively confident view on what's going to be happening happening to that eighth most of it's going to be sold off for miners and then in proof of stake we have the same kind of like uh relative confidence of what's going to happen to it we can say okay well the a lot of not a lot of eight but like the the the eighth that's getting sold is probably just going to

be sold for tax purposes and then uh the other kind of like eighth awards aren't really going to be sold for anything but profit taking because there's not really those high costs uh in proof of stake as there are improvement works so it's just easier to reason about whereas if you have like a i guess a block reward kind of um kind of like funding mechanism here it'd be kind of harder to reason about because you could you could basically go two ways with it you could say okay well they're just going to keep dumping the eighth as soon as they get it to fund development or you could say well it's in their best interest to hold eth because their development obviously adds uh kind of like um value to the network which should logically increase the earth price over time so if they actually hold the e that

they're getting it would be worth a lot more in the future so it's kind of hard to reason about what's going to happen there in terms of in terms of like market pressure but at the same time there's also the credible neutrality thing where it's like okay well if there is a block reward kind of like funding in there like how is that getting split up between core developers and does it lead to a slippery slope of the core developers basically saying well you know let's bump it up to 10 or 15 or 20 right so there's all those kind of like things that fall into it and it also uh kind of like uh maybe even from a legal point of view makes it look like uh whatever whoever the core developers are are that kind of like um entity that people are relying on to generate uh

value for the network and and it could there could be obviously an argument made that is security and that kind of like respect but yeah anyway i just thought this was a great little comparison here showing that there is a ton of money being made by miners uh and if we had a block reward going to core developers we would solve all their funding forever but it would come with a host of other issues uh so yeah i thought that was a little great little comparison here all right so uh finally on the merge stuff the state full works uh girly merged uh sorry it's definitely works merge nfts uh the first set was revealed today so as you can see in the tweet girly merged success means it's time to announce the first artist in a new home of the heart so these are the fire of us

five artists that are participating in the merge nft series run by the state full works account here and obviously all the proceeds are going to the protocol guild slush slash the eighth chord devs uh and there's a bit more info in here uh about this but you can go kind of like check out these artists for yourself i just wanted to highlight that for you guys it'll be linked in the youtube description below all right now on to some depressing news it has come out today that dutch police have arrested a suspected tornado cash developer now this developer has been named uh by i believe banteg on twitter he's the only one who's named them um but i don't think it really matters who the developer is i think what matters is the fact that

the dutch police have arrested this developer for i guess like facilitating money laundering and for profiting from it uh that's basically the some of the charges against them and the reason why i say this is depressing and really bad is because what we're now arresting people for writing open source code right i know that you could make a comparison here and say well people who who kind of i guess um create malware get arrested all the time it's like okay yeah but it's different in that malware i mean this there's there's an intent there right when you create malware your intent is to do something bad like to hack a system or to fish someone right there is intent to do something bad there but deploying something like tornado cash to the

ethereum network and allowing people to kind of like mix their um their funds to achieve uh you know more privacy the intent there is to build a privacy tool right to build a decentralized open source neutral privacy tool the intent isn't to facilitate money laundering right the intent isn't to facilitate illegal activities and even if it was it'd be very very very very hard to prove that like there's no i mean unless you can kind of like find evidence that these developers have uh of these developers kind of like encouraging that activity or kind of like wanting that activity to uh to exist on on on the system then uh yeah it's kind of like very hard to to prove that so you know i guess like in legal cases it's all about intent at the end of the day in kind of like criminal

cases like if you're trying to prosecute someone and you're charging them with something well you have to prove that they that that's that they did that you have to prove that your charges uh are based in reality beyond reasonable doubt if it does go to court and we all know that a lot of things don't go to court a lot of things are done with kind of like plea deals and stuff like that without the parties accepting guilt which is a whole other discussion but i think if this is the slippery slope that we're going down where you can be arrested for developing tools like tornado cash right that don't have the intent of doing something harmful because as i said you can make a comparison with something like malware but there is definitely a an intent behind malware right if you're if you're kind of like developing it and

distributing it um then there is an intent there but i guess even making an argument there with and this was actually a hot topic it probably still is within the cyber security community if you're developing malware for fun right to learn how it works to kind of like teach yourself how how to kind of like debug it and decode and stuff like that like you're not criminally liable and no one as far as i know there hasn't really been i think that maybe has been like some instances here and there people being arrested over that but arresting people for just developing code uh you know just just the code itself is insane because as i said it's all about intent like just developing something doesn't really mean that you're you're intending to use it for criminal activities or intending to use it for bad things or anything

like that and i know that's obvious to all of us but i feel like this goes beyond um tornado cash i feel like the u.s government and i don't know about other governments around the world they kind of like seem to be doing the strategy of of a chilling effect what i and what i mean by that is i think that they what they're hoping is that they can scare enough people into not using these tools that they don't have to outright kind of like ban this sort of stuff they can just keep clamping down over time and they can care they can scare people off building and using these tools and to be honest like that is a pro that is a tried and true approach like they i i think or tornado cash uh people kind of like ran for the exits they

tried to withdraw their funds out of there because they didn't want to be associated with it anymore you know i'm sure tornado cash is usually just like basically plummeted because no one wants their addresses being blacklisted from other apps and stuff like that so it is having the desired effect now as i mentioned yesterday or i think the day before on the refuel you know what does it look like when the us government goes even further than this and they start sanctioning uh kind of like things not just tornado cache but like just other apps within ethereum uh and start sanctioning entire networks like i'm thinking about it now like is how is z cash and monero going to be i i guess like uh protected from this like if they're going to sanction tornado cash for being a privacy reserving tool why wouldn't they do the same to z cash and

monero and and the thing is is that centralized exchanges uh if they haven't already are probably going to list those assets because of the fact that they're tied to a kind of like that activity there and they don't want to risk it sort of thing so that chilling effect is definitely playing out it's really shitty and it's going to take years to sort this stuff out guys like even if someone challenges this in court based on constitutional grounds in the u.s it's not a short process it takes years and the thing is is that like the treasury department and the u.s government know that they know that during that time this is going to have that intended chilling effect and they're probably hoping that by doing this they slow the adoption of crypto down enough that it doesn't kind of become a concern for them and then they'll probably try and

sneak in something like a cbdc right so these are pretty big concerns and i would say that out of everything that i've experienced in crypto the sanctions of tornado cash is probably one of the the kind of like scariest things for me because of the fact that this is the u.s government definitively saying hey we're not above sanctioning open source code which is what this entire industry runs on and it's really exposed a lot of apps as dyno decentralizing name only as well which is which is really sad we i mean we knew that they had admin keys we knew that the front ends were centralized but it's really kind of like just bringing all that to the surface now for everyone to see so that's i guess like there's a silver lining there where more of these apps might be kind of like uh might try

to decentralize faster which is which is really cool as well obviously we need to do that obviously i've mentioned it plenty of times but nation states are the final boss if you can't resist nation states well then you're not actually decentralized it's their only true test of decentralization i believe is resisting nation states and the funny thing is tornado cache the code is still running on ethereum right it you're still able to use it the miners are not censoring tornado cache transactions and i doubt they will when a doubt validators will um maybe there are kind of like some miners and some validators that will eventually uh kind of like drop those transactions but the thing is is that the network is censorship resistant so if someone kind of like doesn't accept that transaction another mine another validator or miner will pick it up and kind of like validate it

so it's it the censorship concerns on that front aren't too big but the concerns around kind of like centralized exchanges and services and stuff like that banning your address is is very uh concerning obviously and actually on that note as well uh you can see here that diy dx has actually begun blocking people from using their service for compliance reasons which basically means that if you have interacted with tornado cache i'm pretty sure your uh kind of like address is getting banned and there is going to be false positives here where maybe you didn't interact with tornado cash at all and you get caught in the crossfire for whatever reason i think this is like a pretty big overreaction to be honest but dydx seems to have always been very very very

cautious of regulations obviously their airdrop uh us citizens weren't able to get the airdrop that they did and all that sort of stuff um and you know l2b actually quote tweeted this and said that they you know this is why we built dydx.l2bit.com which allows you to trustlessly exit completely circumventing the official ui so basically being able to exit from the dydx zk roll up here which is obviously a benefit of roll ups but more so benefit of robots that don't have like a centralized key and can't kind of like stop you from withdrawing uh because of the admin keys and stuff like that uh but yeah so all in all this is just really sad really dark days for crypto i think but also as i said silver lining here it's probably going to push apps to decentralize faster not just the

smart contracts but the full stack there it's going to probably lead to court cases which are going to set precedent it's going to lead to kind of like challenges of this stuff probably more money from thrown at kind of politicians via lobbying because the industry is not small guys it's a trillion dollar industry there are a lot of vested interests who don't want to see uh kind of like crypto go away and there's plenty of people working in crypto at this point so i don't know the us government seems to be taking a very uh a kind of like um i don't know what's the word i'm looking for a very ill-thought-out approach in terms of by doing this they're hurting themselves long-term maybe it's beneficial short-term into to kind of like achieve their desired effect but at the same

time if they actually sat down and started this technology it's not all about everything being decentralized and being and everyone being able to use the network with no kind of like consequences and criminals being able to money launder and all that sort of stuff it's not about that at all it's about building better systems and tools that are less prone to capture that are more transparent that are that are kind of like more open to being used by everyone that give individuals freedom and when you look at the us and you look at their constitution and you look at what their values are or traditionally have been it fits in with all of that so i don't know what the kind of strategy is there on the us government's behalf maybe they just don't understand this technology enough which i i pretty much would put

my money on that they don't understand this technology enough and they probably looked at tornado cache the way they look at something like the pirate bay and say okay well to nanocache all these addresses we can just kind of like sanction them and we can kind of like arrest the developers and then it goes away sort of thing just like with the pirate bay but the funny thing is about the pirate bay and torrent sites in general is that they've never gone away like you can arrest the people you can kind of i guess um i go after them you can sue them you can throw them in jail whatever you want to do to them but you can't kill the idea and the idea of of of torrents it hasn't been killed at all i think obviously we had better services come along that offered the same kind of

like product or a similar product uh that you kind of like paid a monthly subscription for such a spotify and apple music and you got a a kind of like a more streamlined and i guess legal experience uh but the at the end of the day like the torrent side still exists the pirate base still exists it's kind of like you cut one head of the hydra off to sprout in its place and i think we're going to get to that point with um these defy apps the front ends may get centered and shut down but then you know all these other front ends are going to pop up to to kind of like combat that because at the end of the day if your smart contracts are truly decentralized on ethereum then uh you can't just stop them by shutting down the front end yes

you can basically uh have a bit of a chilling effect there and make it harder for people to access it but people will still be able to to access it at the end of the day so so yeah anyway i'm gonna move on from that for now we'll cover it again if there's more details coming out about that as i said this uh kind of a news just came out so we're still kind of like unpacking it here but i'm sure there'll be a bunch of takes over the weekend about this all right so interesting post from lodestar today about a light client so this post is titled the road ahead for ethereum lite clients this is a new pro so it's not just a repost from the team here you may have been hearing about light clients recently especially in the face of the

tornado cache stuff uh it kind of like makes it so you don't have to run your own full node in order to uh kind of like have your own rpc to interact with the ethereum network and these like clients have been kind of like a long time coming for ethereum and still being worked on hopefully we can get to them in the next couple of years it's definitely not an uh kind of like thing that is an easy thing to achieve and you can kind of like see uh the status quo here in this image of kind of what it's like today uh but yeah i definitely recommend giving this blog post a read i'll link in the youtube description below if you want to learn more about like clients all right speaking of blog post uh live.phi has a blog post about the bridge stack today which they're

basically giving a snapshot of the bridging ecosystem in q3 2022 including the bridging trilemmas types of bridges and design trade-offs nft bridges and open issues and challenges this is a long read about 18 minutes this is an updated i guess blog post uh to the one that i've probably i shared a few months ago around bridges so you should definitely go give this a read and check it all out if you want to know all about bridges basically i mean we i've just i've talked about them for a while on the reefy one said how they haven't you know all bridges are created equal and how you should learn the differences between them well here's a blog post for you to read to learn the differences between them so that's an uh kind of like nice weekend read to add to your reading stack there i'll link it in

the description below for you all right so uh the next milestone in uh starkness development here is live on mainnet so recursive proving of a general uh computation is now live or recursive stocks the tldr is that uh it scales stockx apps as well as stock net with a single proof it boosts scale and delivers benefit in cost and latency uh a rare and exciting occurrence of scale and latency moving in tandem and not being a trade-off it's that's the stage for all three other benefits so you can read their blog post on recursive proving as well which was published quite a while ago i believe um uh okay this okay okay i get what they're doing here so if you click on recursive proving it just goes uh kind of like back to the

same blog post because it's recursive ah derp anyway i do believe they had like another blog post a while ago on this sort of stuff but that was quite funny anyway read this read this kind of post for more details here on how it works and like what this means uh for for kind of like end users what this means for the the stock net and stockx kind of technologies here but very cool to see this live on mainnet i believe it's been a long time coming they've definitely been wanting to do this for a long time that's why i mentioned that blog post but i like that they they did that little joke in there that was good that that caught me off guard there but maybe i was bolder for you guys now but you guys got to see me live uh go through

that but anyway i'm not gonna keep going on about that moving on to an update out of orbiter finance today so they are tracking uh arbitrary nova on their website all the metrics around it so you can go to their website here i don't believe they're linking it here so if i go to orbiter.finance i'm pretty sure it will pop up if i click on our l2 data up here yep so you can click on l2 data and kind of scroll down i believe to arbitrary nova if i am uh kind of like oh this is arbitrary here where there's arbitrary okay so you can see kind of like stats around it such as kind of roll-ups by daily transactions and and things like that as well um i'm i'm looking for kind of like the detailed view here i might be blind uh but i'm not seeing it right now which is

okay uh maybe if i go more uh okay yeah yeah okay there's more okay if i click more there's more kind of like detail here so you can see this is arbitrary nova right here they've got other other rollups listed here but this is arbitrary nova so total transactions total accounts tvl uh transactions for the day uh active accounts and new accounts so we can look at i guess like the last week to see the growth here and then we can see obviously other networks such as arbitrary optimization one i should say optimism zk sync and the rest of the ocr and there's also uh the daps data as well for layer 2 dapps and new contracts i hadn't seen this before actually i'd obviously been relying on oh there's dark mode i'd i've been relying on dune analytics which has got a lot of great

data of course an l2 beat but orbiter finance isn't just a bridge uh kind of like a website anymore they're also providing a bunch of l2 data which i haven't seen elsewhere are kind of like displayed like this so very very cool to see this you can go check it out for yourself i'll link it in the youtube description all right so i've got a few minutes left here i did want to talk about something else today in relation i guess to bo or to to the kind of like the merge right like obviously the main net merge date was announced and we have kind of like all these narratives that are going around right now these i guess like bad narratives that are going around right now when it comes to the merge but it's not just those misconceptions that i've spoken about it's also with i guess like

certain communities out there shifting goal posts and i wanted to discuss this because i think it's quite funny and i think it's a good way of kind of like looking at things so my kind of way of looking at things is if the critics are always moving the goal post then they're not good critics and an example of this is for the longest time you know bitcoin maximalists have said that proof of stake was never going to get shipped on ethereum well we are basically there of ship i mean we should we did ship proof of stake technically right but they moved the gold price back then to oh you know it's not actually a proof of stake ethereum network because there's two networks now blah blah so they moved to that you know ethereum's never going to do the merge now it looks like the merge

to them now look they can they're finally noticing that the merge is actually going to happen they're starting to move the goal post again and now they're moving it to some kind of like i guess like fake concern around the theorem like oh ethereum's going to become insecure now because of this like okay if you hate ethereum if you think it's a scam why do you care and they'll say oh it's because of the end users we don't want them getting hurt it's like okay but like their end users uh you know you saying that it's kind of like weird because you hop on a lot more about help on a lot more about ethereum than the actual scams in this ecosystem so that example of the shifting goal post i think is a clear way to tell who is a good critic and who is not a good critic because

good critics will all will stick to the criticisms and then admit they were wrong they won't just move the goal post and not admit they were wrong about certain criticisms and just move on to the next thing and i'm seeing a lot of them recently as well um kind of discover things like the uh the exit cue or the deposit queue for getting into the staking getting into staking saying that it's kind of like just a ponzi for for number go up and stuff like that it's like guys like this has been known about for four years since this spec came out like this is not new have you not looked into a theorem proof of stake before and that to me is just evidence that they haven't so again that's another kind of like red flag that goes up and kind of like says

okay well these people are just like absolutely bad critics they've got no idea what they're talking about they're not even worth listening to i'm all for not getting stuck in echo chambers but there's no point listening to bad critics who just always move the goal post because they're just going to keep feeding you bad information they're going to keep feeding you their own bias and you're not going to really get anywhere there's plenty of good critics that you can listen to when it comes to i guess like ethereum they are mostly within the ethereum community it's very hard to find outside critics for ethereum that are actually honest and and kind of bring up good criticisms but it's just hilarious to me and i haven't just seen it from the bitcoin community i've seen it from so many they're finally clueing in to exactly what a kind of like a theorem

proof of stake is and they're trying to poke holes in it now and it's like guys like this has been known for so long why are you now just trying to poke holes in it is it because you finally come to the uh the realization that wow they're actually going to ship a full proof of steak network it probably is that and they have to move on and find the next thing so i just wanted to kind of talk about that because of the fact that it's very very important i think if you are trying to make sure you don't get stuck in an echo chamber but also make sure that you're getting good data good information good criticisms coming to you so you can kind of like sift through them and see what's valid and see what's not and you have your own views of course on

on all of that there but uh but yeah i'm not gonna go on more about that i mean i could rant about this stuff for ages but i'm not going to because i know it's it gets a very ranty at times so i think i'm gonna leave it at that for today thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give me a thumbs up subscribe newsletter join the discord channel and i'll catch you all next week thanks everyone