ETHGlobal 2023 details, Layer 2's on fire and more - The Daily Gwei Refuel #511 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Daily gray refuel recap the latest news in your theorem ecosystem I'm your host and this asano and since the 21st of December 2022. alright everyone let's get into it so today eath Global announced their 2023 each global hackathon season so this is basically the details of pretty much everywhere that eath Global is going to be both virtually and in person in 2023. now uh there's a few events here right uh and I don't know which ones I'm going to be attending just yet but there are a few exciting locations and it seems that most people are getting very excited about eth global in Tokyo which is going to be taking uh uh taking place from April 14th to April 16th and I'm pretty excited about that one I may go to that one I loved Japan when I was there

especially Tokyo and it's very easy for me to travel to Tokyo even though the travel time is quite long it's a I mean depending on the flight I can I get it's either 13 to 16 hour flight but the time zone change is like one or two hours so definitely a location that I don't mind taking a long flight for for because of the fact that I won't have severe jet lag due to the time zone change so that is on my maybe list uh definitely there but there are other great locations as well like Istanbul here in uh May 26th to 28th uh in Toronto June in June in Paris in July which is going to be around uh HTC which obviously happens in Paris New York in September uh eighth online in October so obviously Global there and then there'll be one that's

centered around Devcon wherever the Devcon location it is but anyway you can go check out the blog post for yourself so check out all the locations here but for those of you who don't know eth Global really is a kind of a hackathon that's run it's definitely geared towards uh developers and onboarding developers into the ethereum ecosystem and letting them basically build something get it judged by some of the best Builders and people in the ethereum ecosystem and it's a very very very successful organization very successful uh kind of events that get run out of here but as I said I am definitely uh thinking about going to Tokyo here for the Global events since it's relatively easy for me to get to but there are plenty of others here that cater to everyone around the globe so you go check this out I'll link it in the

YouTube description below all right we have an update from uh Chris here from flashbots today so their flashbots have shared their code and key learnings on running Geth inside sgx with the community so this is a blog post and a little tweet thread that Chris has put together if you're interested in flashbots's Research into sgx and what they've done with it you should definitely go check this out now sgx is an Intel technology that's been around for a little while it's used sporadically within crypto I think the thing that it's used for the most right now or at least kind of like the highest value thing it's used for is to secure the avax bridge it has come under scrutiny that it's not the best tool for the job for that for that case and people have said that there's lots of

issues with it I'm not technical enough to explain those issues so you may need to Google that but the reason why flashbots is experimenting with it is because I I from what I've read they plan to use it in their Suave architecture so Suave is their decentralized I guess like block building Network that they're spinning up or at least I'm going to be spinning up in the future so that's why they're doing a lot of research into it so if you're interested in I guess like learning more about sgx and and running being running inside uh sorry running Geth inside sgx and all the stuff around that you should definitely check out this thread and blog post which I'll have Linked In the YouTube description below for you to do so all right we have a little uh update here from l2beat today that said the

last two months have been special for layer 2 in terms of activity both layers of ethereum process the total of over 152 million transactions 58 of which happened on L2 albertron optimism combined are also becoming close to flipping our layer 1 daily transactions so we have more layer 2 transactions happening than layer 1 transactions which is really cool I mean this really does just show the ethereum roadmap uh working and the ethereum kind of scaling I guess ecosystem coming together the ethereum scaling uh I guess like thesis coming together very very nicely here and there's a graphic here that shows this the layer two transactions are actually dwarfing layer one transactions right now now I've explained before how the reason why this takes place is basically because of the fact that layer

1 gas limit is very low compared to these layer twos and we expect the layer twos to essentially completely dwarf layer one in terms of number of transactions now there are different ways to measure on-chain activity there's number of trends actions and this kind of value transfer this fees paid I've gone through all these metrics before but if you're talking about just purely number of transactions and taking and if you take into account just Roll-Ups only especially post Proto dank sharding we can expect to see Roll-Ups basically accounting for you know in the next couple years 99 of total transactions here because as I've said before ethereum layer 1 is very limited in the amount of transactions it can process due to that gas limit and the highest it's actually ever gone I believe is uh is uh just shy of 2

million and that was actually the other day with all those tether transactions that took place um but I mean two million transactions a day we're expecting these layer twos to do thousands of transactions per second eventually which would equate to tens of million Millions hundreds of millions of transactions per day so you can see how we I get to that 99 number uh just by extrapolating it like that now that's not going to come you know next month or anything like that it's probably going to require proto-done shining because obviously fees are probably too high for or those transactions per second to to actually uh make sense because there's not only what the chain can handle but that's what the chain actually has the demand to process because as I said before we actually have more decentralized block space today or

decentralized and secure ethereum block space today then we have room to fill it and I've said this for quite a while now and I wrote a newsletter about this a while ago we're actually at the point where where we are starved for demand to an extent uh which means that more Focus needs to be put on the app layer and building better apps that take advantage of these Technologies and I think that's going to be a key thesis going forward is that we're going to see a lot more focus on the app layout than traditionally we've seen on the I guess uh protocol layer so there's been a lot of altar ones that have pretty much all failed that haven't really done anything haven't really gone anywhere uh and I think there's going to be a lot less focus on that there's going to be more

focus on layer twos as protocols but there's also going to be a lot of focus on the app layer and building apps that take advantage of all this newly unlocked scale that we have now not all of them are going to be financial apps I expect a lot of them definitely to be financial apps and a lot of financial activity happening there but there are going to be things like decentralized social media uh file hosting um uh decentralized websites generally that are going to be happening on these networks now file hosting is a bit of a funny one because it's file hosting is a different thing I I don't think you could run a file host on Roll-Ups I think you wouldn't need like a validium or something like that you might be able to do it in that in that world but even then it gets a bit murky but in terms of

meeting the demand of what these robs are going to be able to provide post Proto dang sharding I think we're going to see an explosion in as I said decentralized social media probably gaming as well is going to be a big factor the nfts definitely I think are going to be a big thing happening there but uh it's on us to find the apps to fill that space now and I think with only lasting product Market fit that is that has been proven in crypto so far is defy and specifically stable coins and just uh these kind of things being used as money nfts definitely but to a lesser extent I think right now than D5 because a lot of the I guess wind has been sucked out of the room oh sorry I should say air has been sucked out of the room with nfts lately but I still think nfts

are fine long term um but but yeah it's on us to find the uh demand to fill this scale going forward all right an update out of Tycho today they wrote a blog post on roll-up decentralization they covered what it means why it's important and an overview of what it takes to get there and there's a summary of the main points in this Twitter thread as well but if you're wondering how Roll-Ups can decentralize and what it looks like when they're actually decentralized then this blog post can become your new Bible it was written by Matt finestone who's one of the founders of Taiko here and I highly recommend giving it a read it's great it goes through thing even things like trade-offs of a decentralized roll-up and and why some choose to be centralized for a while and why you know

some have a decentralization roadmap that's going to take years to play out and the differences between I I things like ZK and optimistic so yeah definitely go check this out just wanted to highlight it for you guys I'll link it in the YouTube description uh below uh but yeah give it a read it's definitely well worth it another thing that I think you should give a read is this thread on account abstraction from a stockware so they've said account abstraction is transforming crypto say goodbye to seed phrases and hello to multi-factor authentication plugins fee payment in any token and more welcome to the new era of simple and secure transactions now I've talked about account abstraction uh a fair bit on the refuel before I remember highlighting a thread from Argent that was basically one of the best threads I'd ever read uh that I linked at the

time in the refuel was probably a couple months now but I'm sure you can just search account obstruction on arjun's Twitter and find the thread for yourself but it's definitely something that I think is getting more and more attention and will only continue too because it's extremely powerful and as starkware States yeah CAD abstraction is a revolutionary revolutionary new technology that enables users to have full control of their cryptocurrency or making transactions as secure as possible now obviously that's a lot of buzzwords there but basically they continue by saying rather than relying on cumbersome methods like seed phrases which often become obsolete account abstraction allows apps to build authentication features users like are accustomed to such as face ID and pin codes and multi-factor authentication for example users can set conditions for a series of transactions to be completed

at predefined times and can even keep a list of scam addresses that are automatically blocked it also introduces quote-unquote plugins which act as an app store for accounts enabling users to choose features most important to them and to harness the later latest crypto technology that emerges so the the general theme of account abstraction here for maybe you've kind of glued into it is giving more control back to the user over their entire ethereum account than what they have today allowing them to do things that they're familiar with as stockway mentioned TR like integrating with face ID which is pretty powerful because like a lot of the apps or most of the apps if not all of them that have been updated on the App Store integrate with face ID you've always got the option of selecting face ID or pin

only and then it obviously falls back to it to a pin so imagine if you had that option with uh your your native ethereum while it didn't have to actually be built into the wallet software itself it was built into the ethereum wallet itself so because there's a difference here between it being built into the interface layer of the wallet that you're using such as Arjun for example I know Arjun has face ID but Arjun also has smart contract wallets so for example instead of it building it being built into the app itself into the interface layer it would be built in to the smart contract uh the the um ethereum wallet Logic the ethereum account logic and then be able to be tapped in from there that's extremely powerful and it makes it more secure and makes it more stable it makes the wallet

more user friendly and that's one of the reasons why people are getting so so excited about account obstruction especially as time goes on and we can do that at Layer Two it's a lot easier that we can do it a lot easier than we can do it at layer one so definitely something to keep an eye on as I said go search for argent's thread as well just search Argent and count obstruction you can probably even Google and come up with the thread but also give this thread from stockware a read which I'll link in the YouTube description below for you to do so all right so optimism uh put out a tweet today which is their year in review for 2022. they said as we better do to 2022 we thought we'd take a look back at another prolific year of optimism so pour yourself a mug of your favorite hot

beverage and let's review 2022 at optimism to together there I mean I think 2022 has been optimism's uh strongest year by far I mean even just looking at these things like uh number of uh I guess like transactions per month on the optimism Network look at this growth guys like this is crazy at the beginning of the year they had 1.3 million transactions in January 2022 per month now they're up to over 10 million right so it's like eight to nine X increase uh during a bear market like this whole year has been a bear market and then even after we uh set the you know capitulation bottom for eth in June of this year uh it it kept growing it only had a down month in July after that by a little bit and then since then it's

kept going and you can see in November the growth is absolutely exploded it's almost doubled from October here so having a lot of great success there and they've also been doing a lot of work with erp4844 of course being on the Forefront there I mean uh Proto dang shining half of the Proto dank sharding I guess like people who came up with that work at optimism Proto Lambda works at optimism so obviously he's very involved in it there but optimism as a team is very involved in it too uh you can see the total value of assets held in optimism has increased from 116 000 East to almost 1 million eth in that 12-month period all these Integrations that they have the fact that they did the um their token and their Dow governance module yeah optimism has had an absolutely massive year out of growth

here and it's just amazing to see I know that they uh they definitely have stiff competition with arbitrim both of them being the leading optimistic Roll-Ups by far but I think that celebrating both of them is is in order they've both grown very nicely together I'm hoping arbitrim does a year in review as well so I can highlight that but yeah this is this is optimism's one here but yeah just such a such a big big year for them and a big year for layer twos and as I've been saying for a while now that the fact that layer 2's are having such a big year in a bear market and developing so well in a bear Market building ecosystems in the bear Market they're going to be the premier place to be in a bull market guys like if you thought the Old Town ones were crazy in last year I

really do think that the next time the bull market comes around uh the l2s are going to be where where it is I think the l2s are probably going to kick off the next bull market in terms of creating things that uh bring demand back as I was explaining earlier we just need more things that create more demand more lasting demand and with this extra scale I think we're going to get there so I'm super excited about the continued growth of l2s I'm super excited about the apps that can be built on these things that I haven't been able to be built before and I'm personally having a lot of fun on there I use these these layer twos quite regularly now trying out all these different apps that are on there it's really fun just having those like Fast uh almost instant transactions and very very cheap transactions

compared to layer one so I have to have to give up less eth right even though even though layer one's relatively cheap right now I'd rather not give up either way I don't have have to so definitely doing a lot more on layer twos these days but as I've said to you guys before I don't keep a lot of my value on layer two one because most of my eighth I mean almost all of my eighth now is staked I have a a bunch of eighth left in um in ethub uh which you can see on chain uh this is part of The Ether thing before obviously we shut down ether recently that I'm going to be uh going to be solo staking soon it's currently most of it I think is is in Lido I think we put it in there like a very long time ago before

rocket pools even launched please don't cancel me it was put into uh into stf a very long time ago and I'm gonna get it out of that and put it into solid stacking and probably spin up some more mini pools as well I'm at four right now I want to get to at least five um but uh but yeah other than that like I'm keeping you know a decent sum on these l2s as I said before I don't want to keep a lot on there because they're still very early but I'm moving more and more there to to l2s as time goes on and I'm using them more and more and I'm having so much fun honestly like and I just can't wait until we have like a D5 summer kind of event on one of these out twos which just brings all that demand

in and then all the users kind of use it and say and be like wow this is amazing like uh ethereum actually scaled right I know there's going to be a bunch of users that don't even realize they're using ethereum that's totally fine the ones that do will be like wow ethereum actually scaled these l2s work really well cheap fees fast transactions an ecosystem that they want to play around with a community that actually gives a you know Tech that keeps improving a token they can speculate on that's actually very important for people that they can speculate on a token um so obviously there's op token there's other L2 tokens out there today as well uh but yeah that's all coming and it really does feel like it's all coming together I know right now we're in the very very depths of the bear market and

it feels like uh you know everyone's questioning the the value and the use cases of this ecosystem but I feel like if you're in the ethereum ecosystem you aren't really questioning that and I I obviously not questioning that at all I mean I think I vote uh my vote of confidence in ethereum comes from obviously the refuel but also the fact that like I'm just throwing all my Ethan to staking stacking as much either as I can but also explaining my thesis behind that about the fact that I truly do believe that these l2s are going to lead to the next era of uh of crypto the next you know the next massive gut of demand is going to come from these l2s uh and it's going to be a very bright future ahead for ethereum I believe all right so speaking of things that are

going to be bringing in more demand to crypto unisop announced today that you can now purchase crypto on the uni swap web app using a credit debit card or bank transfer at the best rates in web 3 thanks to moonpay so this is amazing right going directly from Fiat to UNI swap through moonpay as a bridging kind of service here is incredible I mean imagine being like okay I want to buy some eth but I don't want to have to go through a centralized exchange I just want to go directly to UNI swap uh you can do that you can go on there pay with a credit or debit card or a bank transfer uh through the moon pay service and then go directly to UNI Swap and buy your eighth uh like that from from unisop or maybe I guess I should use a

token that that maybe isn't supported by moonpay natively here uh such as a token that you've seen and you're like oh damn it I'm out of cash right now I need to need to obviously get uh get some money in get some eth uh into sorry get some feared into eighth and then I can trade that eighth or whatever like I want on uni swap very very important very important onboarding people as well because at the end of the day like we need to integrate these Fiat on-ramps like natively across all of these D5 apps across all these wallets and everything like them because that's how we get people in people we need to make it as like as easy as possible one to two clicks I've always said to you guys if one to two clicks is what we have to do someone has to go to the union swap

web app they need to be able to have their wallet ready and need to be able to just get from Fiat to crypto with as little hassle as possible no waiting times no confirmation times none of this stuff we'll get there eventually I think there is still wait some waiting times and Confirmation times with moonpay especially if you're a new user but in in saying that we're going to get closer and closer to that until it becomes so ubiquitous that value is just going to trans just going to flow so freely around the web it I mean that's the whole point right of these technologies that we're building is that value can flow so freely around the globe so so freely around um through through different people as data does I mean the internet did that for data for information well now we're doing it for value with ethereum with D5

with crypto more generally and these services like moonpay acting as that bridge between the old and the new world are what we need and I'm just super excited to see them uh going to integrate with uni stop here today um and speaking of more Integrations metamask has announced that you can now swap directly on optimism without leaving metamask on the mobile or extension so connect to optimism uh obviously change your network here add the network and hit Swap this is really cool this is that one to two clicks that I'm talking about guys like this okay let me take a step back here for a sec this one to two click thing that I've been talking about for a while comes from the web 2 world where a lot of apps are like one to two clicks away and you can do whatever you want I mean for

example with Twitter it's not even one to two clicks it's like open up Twitter all right okay technically it's one click open up Twitter on your phone I don't count that as a Click by the way opening the app I'm talking when you're actually in the app open up Twitter press the home button and it refreshes your feed and you can start scrolling that's one click want to tweet one more click to click the Tweet button in the bottom right hand uh bottom right hand um corner of your screen write the Tweet click tweet right it's one two two three clicks Max to do anything on the app that's what we need to do for crypto because we're never getting to mainstream adoption unless we do that yes there is a certain extent where people have to learn new ways of doing things and have to learn new words and

learn um new uh kind of like um mechanisms such as how a wallet works and and they could fund their wallet and like and maybe Gas Face to a certain extent but it doesn't mean we can't simplify the process as much as possible in order to make it easy for people to onboard we don't want to scare people off with all these buzzwords and jargon and everything the way everything in technology is ever scaled is by basically dumbing it down and I don't mean and that in a bad way but dumbing it down to a point that allows anyone to get involved with it almost anyone to get involved with it without getting frustrated that's the whole point right we don't want to frustrate great users we don't want to make people angry they want to cause some Stress and Anxiety we want them to have a seamless onboarding

experience to do what they want to do to swap assets to connect to these layer twos like optimism to use what they're familiar with and just do what they need to do which I think is uh what uni stop is doing with their onboarding through Moon pay and that's what metamask is doing here with their native swaps on optimism all right so I saw an interesting tweet here from Adria here today who said how I use the GitHub Fleek and Heaven's tools to create a decentralized website on an ens name uh note if I can do this anyone can you can read this trade for yourself I'll link it in the YouTube description below but this talks to what I was speaking about before with the theme of as we get more scale as these tools get more built out and as we kind of get more of these um these building

blocks in place there's going to be a lot of different things that we can do that we haven't traditionally been able to do and one of those is hosting decentralized websites on using ens names using the existing infrastructure that we have and making it so that it is scalable is usable it's reliable and so that we can we can actually host things like the centralized front ends for people to use I've talked about before about becoming a fully self-sovereign ethereum user and but there are ways to become like a semi-sovereign ethereum user where you still use your own ethereum full node as your RPC you still have like a harder wall that you use instead of a hot wallet and you sign everything from your own account you self-custody everything but you maybe don't use your own front end you use a

decentralized front end or even if you use a centralized one I mean it's it's kind of okay right so there are like semi stuff fully Sovereign and then sorry I guess semi-solver and then there's fully Sovereign there's different flavors here for people but I think that having decentralized front ends is a holy grail for this ecosystem it needs to be done and the more of these Technologies they get built out and more than more of them that get developed the closer we're going to get to to get there but I just wanted to hide this thread from from Drea here today uh because I thought it was very interesting and it's kind of like a step-by-step guide on how to do this yourself if you're interested in it so definitely go check this out I'll link it in the YouTube description below all right so uh Tim rough Garden from

who works at head of research at a16z and fun fact worked on Erp 1559 shared today a link to a YouTube channel where videos from the Columbia crypto economics workshop co-hosted with the ethereum foundation are now up there are talks from people like Barnaby uh who works at ethereum Foundation uh robust incentives Group which I've highlighted before Phil Diane uh the inventor or I guess like one of the co-founders of flashbots here Dan crad Feist half of Proto dank sharding an ethereum researcher uh you have uh Aang's guy here Works in ethereum protocol r d at the ethereum foundation Justin Drake needs an introduction uh and Elaine uh she here who's been working in crypto economics for quite a while and of course talks from Tim rough Garden so

definitely go check this out I've heard rave reviews from everyone who's watched them that these talks are absolutely amazing crypto economics is a relatively new field studying I guess it speaks for itself right economics within crypto systems and it's actually very fascinating very interesting and something that I I definitely get a lot of value out of these videos but also have a lot of interest in because I've talked about I guess ethereum's uh crypto economics a lot on the refill like a lot right I've talked about things like the issue introduction with the merge ultra sound money uh staking how that plays into things the yields and how the yields are variable but how like the how they kind of balance themselves out deflationary eighth all these sorts of things and how to design these systems to be resilient and stable

for the long term and that's what these talks kind of touch on as well so you definitely go should definitely go check this out I'll link the talks in the YouTube description below but I've got a last few minutes here uh that I've I've left open a little bit because I had a topic I wanted to talk about today it's not about the markets or anything like that but it is talking to what I was talking about with the layer twos before and how we need you know we need more demand to fill up this block space and and all that sort of stuff there I think that when talking about that subject sometimes people will say to me well what if we can't find that demand for that block space What If crypto we're just going to remain a niche what if we've already kind of gotten to this the

the demand ceiling of crypto and I mean it's fair to say that in a bear Market especially because especially I mean especially if you're a first cycler you may be looking at this sort of stuff and being like you know where's the demand gonna come from where are these apps going to come from and I I forgive you for thinking that way but the way I think about it and maybe you want to put yourself into this Frame of Mind is that no one really predicted something like defy summer we knew that D5 was cool there are some hardcore Believers that thought defy was going to be massive right and going to take over the world and a lot of us still do think that but no one predicted defy summer to and not repeating how crazy it would get and how much demand it would drive same is true

for nfts there were those hardcore Believers but no one saw the nft Mania coming not at all right then we have this layer twos that are live do you think anyone right now I mean the majority doesn't really see these l2s blowing up with demand and and basically reaching capacity on their own and and providing all these new use cases all these new apps the rather hardcore Believers like me who think that this will happen but there's a lot of people that don't so I think as I said like put yourself into the frame of mind of that you can't predict what's going to happen in the future demand can come from places that you least expect or you don't expect that when you give people tools to build things with they're going to keep building like some people are going to build things they're going to

build interesting things they're going to build things that couldn't be built before with the lack of scale that we had and you're going going to run into a thing where you may think for a while that we don't have the demand to meet that block space but then all of a sudden there's a new use case that comes out or something gets really popular and then we fill all that block space up and we're back to uh kind of square one we're like well we have to scale again right and it's always been like that with these Technologies where you hit a ceiling and you have to keep scaling and you hit another ceiling and it's just a cat and mouse game of of the demand outstripping the supply so to speak and we still have that with a lot of technology today so when you think about

it like that when you when you ex when you kind of realize that you can't tell the future you can't you can't predict everything there are unexpected things that are going to happen there are things that people are building now or not build sorry that are building now that will get really popular in the future they're things people aren't building now but may build in the future that that no one can even see coming you can kind of understand why the hardcore Believers like myself aren't concerned aren't worried actually believe that there is going to be demand for these sorts of stuff and even if in the worst case scenario in my mind crypto remains uh only useful for uh defy and stablecoin payments and nfts that alone is still an absolutely massive use case

and still going to lead to massive demand I believe but I'm going to leave it at that note for today hopefully it gives you something to think about but uh but yeah thank you for everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to the newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone