Ethereum summer, DAO chatter and much more - The Daily Gwei Refuel #158 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today's the 6th of july 2021 all right everyone let's get into it so a lot of positive price action over the last 24 to 48 hours huh it's good to see eth you know charging up again especially against bitcoin that's been wild to see but even even cooler to see is that d5 is making a comeback it's definitely feeling like people suddenly woke up to the fact that d5 is still here it didn't go anywhere it's still growing and it's going in a really big way i mean i've covered it extensively on the refuel you know i think the biggest theme that we're seeing right now is the instant institutionalization of d5 which i've covered before with rv pro and compound treasury and

there's a bunch of other products coming out as well i'm assuming pretty much every d5 protocol or at least every major one is looking at how to service these kind of institutions and big businesses and things like that so in you know i was thinking about it today and i put out this tweet and i said you know july august september feels like they're going to be some some radical months for ethereum because we have eip1559 going live as i mentioned yesterday it's probably going to go live august 4th um if not or on if not then on august 11th there's going to be d5 somewhere around 2 which could i think is being fueled by this institutionalization the fact that people finally realized that d5 is still here to stay it you know during a bear market if i i mean the tokens may go down but there it

may go down but the usage stays flat or goes up i mean a lot of the protocols actually kept getting uh you know their volume stayed say pretty good like i i the decentralized exchanges were still doing billions of dollars worth of volume the money markets were still doing loans like everything was functioning just fine uh and on top of that we have an nft renaissance going on uh you know people say oh nfts are in a bear market uh you know it was all just like a fad but no i mean nfts are definitely not in a bear market you know maybe some parts of it are the things that you know everyone you know a lot of people said 99 of nfts would go to zero and that's still true but there are a lot of projects out there that are making waves

and building communities you know the ogs like crypto punks are still doing very well uh and i think just that the bubbly nature that we saw has kind of subsided for now and we're seeing more genuine kind of things happen in the nft space and of course axi infinity is part of that as well uh in kind of like the gaming arena and they've seen some incredible growth lately so there's that going on and then of course layer two summer is the final thing here which i've spoken about so many times on the refuel i'm not going to rehash all the layer 2 stuff going on but i've i've noted many many times that the next you know two to three months is going to be really really big for layer two so we could have some kind of layer two summer going on and what this means is that the stars

are really aligning for each and ethereum at the end of the day these got sorts of things hit on um either problems with the ethereum network and and kind of work to fix it such as layer 2 coming along and fixing the scalability um or they are basically just showing that the ethereum network is still getting adoption still growing and it is still kind of like chugging along even though the the prices might be down and we're you know we're still not 50 off all-time highs but still you know 40 45 off all-time highs or whatever uh you know at the end as i said the nft space is still growing exponentially their d5 kind of ecosystem is chugging along and you know i i was actually thinking about this today and i was thinking about the term super cycle and it became a bit of a meme

within the crypto ecosystem where people thought that super cycle meant that there wouldn't be any downtrends in crypto anymore there wouldn't be any massive dumbs it would just be up only forever and you know fair enough i get like that kind of line of thinking but to me it was never about that the super cycle to me was always about the adoption cycle i think we're at the point in crypto where we're just going to see adoption for the next 10 plus years of these technologies it's going to come you know in waves for sure it's not going to be this like one straight up kind of um curve but within that you know if we if we zoom out in a few years and we kind of like see how the adoption happened it's gonna look like it was just like a a straight

curve instead of bumps along the road and this adoption is happening not just with nfts and d5 but also with doubts and and you know things like social tokens web three i mean and it's not even just happening on ethereum like i'm not going to say that ethereum's got a monopoly on everything happening in crypto but obviously a lot of it is but there are other things on other kind of networks happening as well and i just think that's what super cycle always meant to me of course prices are going to go up and down do whatever just from the fundamental reason that people want to take profits i mean if you're sitting on it 10 times on your investment uh on something like eth you're going to want to take some off the table and if enough people want to take take profits then we see these kind

of dumps because there's never enough liquidity to cover uh people wanting to take profits but it works the other way as well if enough people want to form a win and buy back in and and stack more ethan they'll do that and i didn't even mention the fact that the merge is happening obviously within the next hopefully nine nineties months or something like that and that's because i think that you know it's too far away from where we are today to really talk about it just yet but that's coming and it's coming in a really big way and then edith is still going into staking i mean we just crossed six million each staked i'm expecting that to get to at least 10 million um by the time the uh i guess uh the merge rolls around for sure and then post the merge i'm not sure how much of that will be

unlocked and sold into the market there will be some inevitably but there are kind of like limits on that as i've explained before only 900 validators can exit or around 900 validators can exit per day which is 900 times 328 is how much it could theoretically be sold if they wanted to sell it into the market but also with the merge immediately uh after it i mean there's no like withdrawals yet there's a separate kind of hard fork going to happen after the merge goes through to enable withdrawal so that might take another month or two or something like that uh you know i'm hoping it happens faster than that but again the merge would just be kind of like done and then still people wouldn't be able to kind of move their funds around or sell their eighth from staking whatever but i don't know if people will actually

want to do that as i've mentioned before people are looking at this 6.5 percent apr that we've currently got as like the bl end all of eth staking which it it isn't because when the merge happens all the fees that aren't burned under one five five nine and all the mev uh capture is going to go to stakers so that apr is actually going to go up a lot it's it's it's probably going to go to 20 percent plus now if you're getting 20 plus on your eath like how many people are going to want to unlock their eighth from staking and and sell it and and and totally it depends on what the price is as well you know if the eighth price is like 10k plus at that point well you can be sure a lot of people are going to be kind of uh unstaking because

people staked when eth was like 300 or 500 or something like that so if it is that 10k that's a 20x on there on their money they're probably going to take some profits there so we're gonna have to see how that plays out but generally you know i only mention like four things here and there's so much more with ethereum and coming to ethereum and so much more happening in that ecosystem i mean you know just just today there was a crypto bank called signum bank that's now offering an ethereum 2.0 staking service this sort of stuff it may seem small in the grand scheme of things it may seem like something that's just all hype and no substance but the more of these kind of companies that we see adopting these sorts of things the more eat's going to be staked and logically that follows the

more secure the ethereum network is and the the higher the price of eth will go of course as well and the more financialized it will become as an asset which is obviously good for the network because of the security of the network as well so we're going to see more of this coming out and this is a swiss crypto bank for those who don't know uh and there's already plenty of staking services of course and you could argue crypto banks like coinbase and and binance or whatever are uh uh filling that role as well but you know we're gonna get to a point where we eventually see jp morgans of the world and and and uh you know and all these other kind of banks around the world uh the centralized banks of course kind of do this sort of stuff and i know we're trying to disrupt banks but

the hilarious thing is it's like a trojan horse where by supporting this sort of stuff they're they're kind of like inviting in their own destruction at the end of the day which i don't know if they realize it or not it's probably just something that they add because they've got demand from clients or whatever but still it's going to be really exciting to see how that plays out and finally on this front you know um the eighth kind of balance on all exchanges reaches reached a 2.5 year low uh yesterday i think you can see on this chart here that this stretches back to i guess like mid-2020 when is that when it was at 26 million ethon exchanges now it's approaching 20 million so six million eight has come off exchanges and i've gone over in the data pump videos beforehand a lot of that

ethan's actually gone into smart contracts on ethereum or gone into d5 of course so it's become more productive there and that's always been my bet and a lot of people's bets on the crypto ecosystem is that we bet on productive assets at the end of the day and eth is the most productive asset in crypto so why not continue betting on it and continue kind of by i guess um uh uh doubling down on it because that's exactly what we're doing we're trying to take power away from these centralized institutions put that into d5 and put that into crypto and kind of like grow the pie there so really really uh awesome to see that playing out there uh and you know i don't know if this is gonna go up i mean if the price goes up this normally goes up because people are cashing out you can see at

the end of kind of may there are mid to end of may it spiked obviously because people are sending to exchanges to sell because of the big crash and things like that and there are obviously considerations to be made here i mean willy woo made some some points here where he said two key considerations is that uh this has gone into like d5 and things like that and and staking of course as well now that's something that i've discussed as well in the past where i've said that i think this metric is maybe not the best for measuring you know if the eighth price is going to go up or not because of the fact that it's very different to something like bitcoin when bitcoin leaves an exchange and goes into you know onto the bitcoin network you can be relatively certain that that's going into cold storage or

it's not going to be sold anytime soon whereas with ethereum if ether is leaving in exchange well that doesn't mean that the ether is not going to get solved maybe that 8 is living in exchange and it's going to get sold for some stable coins on a dex or something like that or maybe it's going into liquidity pool where it's active or maybe it's being used as collateral you like you don't know what it's actually doing but we can obviously measure we can see in staking there's over 6 million eth in d5 i think there's almost 9 million eighth you know and then we can kind of look on chain and see all these other addresses that are cold storage or not and i've gone through this before i wrote a newsletter about this uh in the delegate newsletter the other day but i i think when you're looking at

these metrics uh you do have to keep those considerations into account and that's kind of like a major difference between bitcoin and and ethereum here is that when people like as i said when people go to go to bitcoin then sorry we drove their btc from an exchange it's very different to when people withdraw eath from an exchange there so i wanted to quickly mention this sugar swap thing that that the ship project launched because they launched with a uh externally owned account basically being able to control the entire protocol now that's what ela stands for and what an externally owned account is is basically just a normal ethereum address so in ethereum you have two account types you have a normal ethereum address like like me and you have like a normal public private

key pair and then you have a smart contract address which is not eoa so uh when something is controlled by an ela it means it's just controlled by one person um and you know that one person can essentially uh rug i guess if they wanted to and this kind of thing here so uh this was fixed but at the at the i think this was posted a few hours ago this could happen but then bantek kind of said it was fixed and the devs reached out and transferred the owner role to a sixth of nine multi-sig um and they also plan to implement a time lock so it's not too bad now but what i wanted to kind of bring up about this was the fact that when you look at this and look at these kind of new projects you have to be really careful here and

this is why people lose a lot of money and why they get rugged is the fact that they ape into a fresh project or a fresh new kind of set of smart contracts without knowing that this is going on because why would you know this unless you can read the code and look at it yourself then you're not going to know this so they just do it because it's it's fomo it's whatever and we saw a lot of this play out on you know the firstly in d5 summer on ethereum then we saw it play out with bsc and i think there's a bit you know a bit of a going on on polygon as well and i think this is going to play out on layer two and keep playing out i mean it's just it's very easy to scan people in this ecosystem

so i did want to just put that on your radar that when you kind of like see these brand new contracts from projects such as shib right or like projects that aren't considered the d5 blue chips you know it might it's a higher chance you're going to get rug or something something bad is going to happen than than in something like a d5 blue chip but still generally my role with new smart contracts is that i try not to put like all my funds into it at once or like you know make a huge bet on her because there could be a bug even if it is one of those uh d5 blue chip projects or whatever even if it is the best project out there even if it is like something like maker that has been around and never been kind of um never had any hacks or anything

like that it can still happen so maybe don't get a false sense of security there definitely something to keep an eye on but you know glad to see that they put they transferred it to a multi-seek at least and there's going to be a time lock obviously a multiseed itself isn't enough because the multiseek would just be owned by uh you know owned by the same person because that person could just be all six or all nine signers but a time lock is usually the best way to do it here where basically for any changes to happen on a protocol it would it would be delayed by say 24 48 hours whatever you want to have the time lock um put in place so whoever's monitoring it can say oh well this is change going through and if the change is to basically still everyone's money well before that goes

through you can just take your money out of the protocol and you know that'll be fine but still that's really bad people who aren't monitoring and if it's only a 24-hour time lock then it's definitely not enough time for people to to kind of react to it so still good to see them doing this rather than keeping it as a normal ela yeah so tim kang uh who's helping out the universe uh xyz project here put i put out a tweet that said i dislike talking about my finances but as a founder of universe xyz i must share i've invested five percent of my xyz tokens and i take a zero dollar salary and i'm now committing twenty percent of my five percent which is one million plus to a personally vetted developers fund to build new tools for the decentralized nft and music industry

now he talks a bit more in detail about this in this thread which i'll link in the youtube description but what i wanted to focus on was just the fact that this kind of stuff is so cool i love this stuff i love it when project founders or dows or like you know whales or whatever you want to call them come in and say okay well i'm going to put up funds for uh open source software development i'm going to help out in any way that i can i mean i i push bitcoin all the time you know whenever there's a grants around i always push it to you guys and make sure that you donate but i think it needs to go beyond that i think every project should have a grants program and i've spoken about a lot uh this in the past where like rv uni swap

i mean the ethereum foundation like every big kind of uh dao or project or foundation needs to have these kind of things to fund the development in this ecosystem because of the fact that a lot of it is open source a lot of it doesn't have their own token and a lot of this work is generally done you know on a on a i guess like a a cheap basis where they're not the developers aren't paid very much or on a free a free basis where they just develop this this kind of these kind of tools that are used by a lot of people and then eventually they might issue a token because they're like well i want to keep developing this but i can't do it because i'm not getting any funding for it so i need to issue a token so in saying that we obviously don't want

everything to have a token there are some things that obviously don't need a token ever but there are some things that are very critical developer tools for example within ethereum i don't think they need a token but that's very critical we need people to keep working on better developer tools we need people to keep working on better languages like in improving solidity as a language and viper and all that sort of stuff that stuff's not going to have a token and if it does the token's probably probably not going to go anywhere and it would water down the work i believe so we need to keep funding things like that we need to make sure that these people stay uh i guess like in this ecosystem and keep developing this critical stuff because without them we wouldn't have all of the luxuries that we have and

the people who issue tokens probably wouldn't be able to issue the tokens without this sort of stuff so i'm really glad to see tim kaine doing this it's just i guess generally falls into the theme of this is what we try to embrace within the ethereum ecosystem is this openness of sharing the money around sharing the profits around reinvesting in the ecosystem not for profit but you know as a not a not-for-profit kind of endeavor here but the profit you get is basically that you hold some of the the crypto tokens or whatever they are uh whatever crypto it is essentially it could be ether could be some defy token could be an nft and the logic is is that by helping out and doing this stuff for free you'll pay dividends in another way that's kind of like how i play it as well i mean a major reason why

all the the daily grace stuff is free is because i basically subsidize the costs uh from my investments essentially over the years and i've said before deadlywear is my way of giving back and um you know i'm self-sufficient because of my my investment in ether over the years but without that i wouldn't be able to do this for free i'd have to charge for it if i wanted to do this kind of like as i'm doing it now so that goes for not just me but a lot of other people that are doing all this stuff for free you know we've got to eat at the end of the day right so i i think that um this is really awesome to see this and i'm hoping more individuals do this because i've seen a lot of dours do it but not so many not too many

individuals uh there are some in the coin grants arena and things like that but this is a huge chunk and i i i'm not sure if it's his 20 of the 1 million or uh 20 20 of his 5 equals 1 million i'm not sure about that i assume it's about one million dollars which is really awesome that's going to fund a lot of different things here so i'm really glad to see that and uh i'm excited to see where where this money goes so speaking of dows uh and and you know everything that falls into that austin griffith uh detailed today on twitter that uh they we he said basically says we created the build guild the to stream eth to open source developers and artists creating ethereum it has grown and i think i need to make an llc uh but i'm from

wyoming and they just passed the new dow law should build guild be a wyoming dao who should i talk to now uh this goes back to what i was just saying about how there's a lot of people in this ecosystem funding open source developers and now obviously with this build kill it's gotten too big to just be a i guess an unofficial thing it has to be something more official whether that be an llc in the u.s or a dow now uh i don't know if going uh and registering as an official down and wyoming is the best kind of uh i guess course of action here i've i mean i heard about wyoming making dows kind of like you know recognizing them as legal companies or whatever but i think that it basically isn't very much different to our llc i haven't looked too deep into it but i

don't think it's that much different so my kind of vote would just be to create just a dao in general like make a dao that's not registered to any kind of government or or regulating body whatever and make it so that it's just regulated by the ethereum network and maybe you can issue tokens or maybe you can issue voting rights to people that have uh interacted with your app or interacted with other apps like say you issue voting rights to this dow the build guild dao uh to people who are involved with git coin for example and the git coin stewards and stuff like that i think that would be really cool so um but this is just continuing the trend of more and more kind of like of these things instead of creating llcs or limited llc is a limited liability corporation in the us it's the best way

to incorporate in the u.s from my understanding um when you're just getting started but uh you know i think that a dao is even better than that i think that a dao living basically stateless and ethereum becomes its digital nation uh is even better than registering in any kind of like meat space uh a regulatory body so maybe i don't know if austin griffith watches these things but i didn't reply to him saying that he should just do uh a dow you know vanilla down on ethereum but i think he should and i think that anyone pursuing this sort of stuff should do a dow on ethereum i mean i don't plan to do a daily grade dial but if i did it would be on ethereum i wouldn't register a daily great company with you know the the local kind of uh i guess um

business uh registration office in australia or anything like that or the asic um not asic there's uh i can't remember what the what the body's called right now uh but essentially i wouldn't do that i would create a dao just like what bankless did like bankless didn't incorporate in a a nation state they incorporate they didn't incorporate but they they made a doubt the bank was there obviously and they issued bank tokens and things like that so i think that's the better path forward i i just i feel like it goes against the ethos and the spirit of this community and of this ecosystem to inc you know just incorporate into like the meat space area instead of i guess keeping it within a within ethereum because you basically lose the magic right like i i feel like if you did a dow and it

was like okay well we're registered in wyoming as a dao uh this this and this applies to us we have to abide by these days and these rules it would actually turn off a lot of people i feel like that would uh would definitely turn off a lot of people it would turn off me i just want a natural dowel on ethereum i don't want any of the regulatory baggage i don't want to have to worry about if i'm doing something wrong or if you know regulators can come after me for for doing something with this with this dow what all i want is for something to be totally regulated by code on the ethereum network having no connection to the outside world uh in terms of um you know being able to be policed or regulated and that would that's what i would feel more comfortable with at the

end of the day and i think we're going to see more and more of this happening like these experiments happening some of them will go the wyoming dow route some of them will go the fully on chain ethereum they are which we've seen you know a lot of projects actually do that lately especially within the d5 arena and some will be hybrids and there'll be just so many experiments here we haven't even scratched the surface of of the hours i believe i think the owls are still very messy it's still very rapid experimentation but we're going to get to a point where uh some dowels like start to function like well well well-oiled machines and i actually know you know what i think we're already at that point with some of them i believe maker dial functions very nicely yes it moves slow slowly but it actually functions very

well i believe some of the other d5 dials out there uh function very well um two get coins down i think you know even though it's newer i think it's it's on it's on the right path and things like that so in saying that we've been in the rapid experimentation phase and now we're maturing in the dow space and it's gonna get even more uh wild from here i believe and it's gonna get even more mature and it's gonna be fun to see fun maybe not the right word but interesting to see what governments are going to do about dao is going forward because these days some of these days are very big they've got billions of dollars in their treasuries they're you know they're they're technically kind of like having people on the payroll so to speak so will governments and nation states come after these sorts of things and try

to regulate them try to get them to pay tax you know things like that it's going to be wild to see what happens there and i'm very interested to see how dows evolve in the coming months and years so just a shout out here never mind is running a survey for ethereum developers that will take no more than five minutes to complete so if you're a developer uh the the other one is looking for your feedback uh to better understand future requirements from developers in terms of improved dev tooling documentation and more so you can check out this form it'll be linked in the youtube description for you to go and and fill out but one thing i did want to talk about here with regards to this is what i was saying before about how there's a lot of i guess teams like near the mind like

core protocol teams that aren't making any money from a token like the never mind um team or geth or like any of these protocol uh kind of like teams don't have native tokens attached to their protocol technically the token would be eighth right but they're not getting eighth out of anywhere like they're not i mean a lot of these two developers aren't founding members of of ethereum they didn't get like massive eighth bags at the start of ethereum they came in much later but they still developed and they're still getting paid out via grants and monetizing in other ways but a lot of them got their their start from grants and a lot of them got their start from from vitalik as well i mean for some of you who don't know vitalik actually donated a thousand eighth back in 2019 i believe to a bunch of different teams and back

then that was only worth a hundred thousand dollars or something like that uh or maybe a bit more than that depending what the price of eighth was because the price of eighth really was between one and two hundred dollars during 2019 at least most of it um but you know i think a lot of those teams actually kept that ether kept a nice chunk of it and now they're sitting on some some nice treasury there from vitalik but it's not just that they got grants from the you know the ethereum foundation from various ecosystem kind of things bitcoin grants of course as well i remember donating to those teams early on and things like that um and these are the kinds of things that need to continue to be funded by these these kind of things because we don't want these clients issuing their own token the incentives get pretty

perverse there if a client team was to issue its own token i don't even know how that would work it would get very messy i believe and it would definitely go against what we're trying to build into the ethereum network and the resiliency we're trying to build here so we still need to to kind of fund those things through various means and that's exactly what we're doing so yeah again if you're a dev and you want to give feedback on how nethermind can improve your experience through dev tooling documentation and things like that uh definitely go fill out this form and for those who don't know nethermind is an ethereum clients and eth1 client they're one of one of the uh one of the clients alongside geth and eragon which was turbo geth and a few others out there of course i mean open ethereum's now being deprecated

but they've been working hard at it for quite a while they're very involved with the ethereum ecosystem so yours your help uh for them would be very valuable so yeah definitely go check this out but i think that's it for today's episode so thank you again everyone for listening and watching be sure to subscribe to the channel if you haven't yet give that video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone