Fat ETH thesis, The Merge updates and more - The Daily Gwei Refuel #277 - 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 21st of december 2021 all right everyone let's get into it so just a quick shout out here i recorded a new bull case for ethereum podcast with the bankless crew and cyrus unesc and dc investor here so this is episode three of the bull case for ethereum obviously we talked about a lot of bullish things got to do with ethereum i'm sure many of you have listened to this already but you know the funny thing is while i was going through and recording this kind of podcast with these guys we kind of like went back and looked at how ethers and asset has evolved right over the years and we spoke about the three core pillars of

each value accrual and that's something that i've spoken about for for a long time now and we only had really two of those uh sorry one one of those pillars for a long long time so the three pillars are um east it's kind of like used as trustless collateral within d5 or beyond d5 right just eats use as trustless collateral uh in general um you had uh staking and you had a transaction fees slash erp one five five nine with transaction fee burning now for the longest time we didn't have staking we didn't have one five five nine they i mean i've talked about these pillars since pretty much like early 2019 so for almost two years we didn't have uh staking and then for you know over two and a half years we didn't have one five five nine so really a lot of its value accrual

kind of like i guess like through 2020 and some some of 2021 had a lot to do with a ethereum executing on its roadmap and either accruing value because of those roadmap items that have been executed on and so far everything's gone to plan you know the next big milestone is the merge of course and then a few other things after that but i think that uh given that the merge is such a large kind of like milestone for the ethereum network but on top of that there's a massive issue introduction as well i struggle to see eth kind of like not being much higher than what it is today maybe not so maybe much higher is the wrong kind of like way to to talk about it but i struggle to see not being higher than what it is today um around the merge i

struggle to see if not being over 10 000 to be honest like um obviously not investment advice but when i think about everything else that's happened like we had uh staking one five five nine and then um and then the merge i think about the price points and and and the price eighth was at at those certain amount of certain periods of time but you know we could even go back further and you can look at what each price was during you know ico mania and then after it so during ico mania it went crazy because there was so much demand for eth as an asset to participate in icos ethernet the 1400 then back to 80 dollars and then it didn't really do much uh and neither did you know most of the crypto market not not even really bitcoin during the the bear market of 2018 2019 but i think a

lot of the reason why eth was able to catch like a really strong bid um leading into i guess like 2020 was um a d5 was a major catalyst but also the upcoming upgrades i don't think that 1559 was really playing into it at that time there were still people at the end of 2020 that said oh one five five nine's price theme everyone knows about it why would it cause east to go up in value so what i so if we kind of like pinpoint what what price eighth was and kind of like where we are and where we were in the ethereum's roadmap you kind of had um the ico mania but then we went back to 80 dollars and then hung around one to two hundred dollars but then d5 started um getting a natural bid for each right it was used as trustless premium

collateral within d5 that was a natural kind of bid there wasn't artificial it didn't result in increased cell pressure for eight like icos did so that was a nice value driver there then the uh drum started beating about staking you know stacking was actually around the corner this time like it you know it wasn't like 2017 where people said it was around the corner and then it took another three years it was actually ready um it wasn't obviously the merge but it was getting the beacon chain line people could stake the wreath that i believe um had a nice um effect on its price leading up to it we got to about 600 and then after that eth exploded even more because a lot of eth got locked up people were looking at that and being like wow okay if all this it gets locked

up then there's not going to be much to much to buy on the market i need to get eth and then the drum started beating about 1559 for example and people were like okay well one 559 is actually going to happen it's a thing it's been developed it's on test nets it's coming very very soon and there was a lot of hype around that uh even after we had that massive crash in in may right uh we i i actually attribute one five five nine uh in a big way to leading eighth to recovery from there and either outperforming bitcoin as well so leading up to it you know eth wentz uh uh uh has gone up since then and eighth went up leading up to it and and continues to kind of like grind up over time right we're around four thousand dollars right now so i think the same

dynamic is playing out with the merge i do think that eve has a very very good chance of being over ten thousand dollars at least leading up to the merge which as i've said before should be sometime in q2 i my personal estimation is june but we'll see if that plays out there because that is yet again another major catalyst for eth uh as an asset because of that triple harvening it is the biggest catalyst i believe it is bigger than staking one five five nine and uh defy uh try it uses trusses clutter within d5 put together like i don't even think those things come close i really don't think people understand how much of an impact this uh issuance reduction is going to have considering it's not just an insurance reduction for people who don't don't sell their eth

it's an interest issuance reduction for miners who do sell their eat and they sell it because they have to they force the sellers and i've gone through this so many times on the refuel before but i still think so many people are missing this this is guys one of the main reasons i buy eath all the time right because of the fact that i see it i see it so clearly it is the for me it is the most asymmetric bet you could ever make um uh that i've ever seen really i mean maybe there's better bets in the future but this right now so few people a few people understand the dynamics so many more new people are going to come in they don't even know about kind of like ethereum right don't even know about 1559 and staking and all that good stuff

there uh and then you have that merge kind of like playing into it i don't know i just that was kind of like my main takeaway from this this episode with bankless here uh but there was a lot of other stuff in there so you should go give it a listen but i just the more i think about it the more i talk about it i just it seems insane people don't realize this but i don't think they do i think that the information asymmetry within crypto is so extreme and then you have everyone outside of crypto who has absolutely no idea what's going on i would actually wager that the number of people who understand all of its value accrual properties um or at least are aware of them and understand them is extremely small i would say less than a thousand people at this point like and that may

seem crazy to you but there's one thing to be aware of something and there's another thing to understand it there are a lot of people who are aware of one five five nine but they didn't actually understand how much eth was going to get burned i i just i cannot get the memory out of my head of people being surprised on twitter about how much eth was being burned when it was literally known it was known information there was no guesswork involved maybe a little bit of guesswork around how much of a percentage would be burned but we the estimates were about 70 to 80 percent and we've kind of varied between that so given the amount of you know i guess like lack of understanding over one five five nine i think that the merge is even worse like i just don't think people realize this but i'm gonna

leave it at that because i'm getting a bit too ahead of myself there but uh i just struggled to to see um eth kind of like not be higher i'm like you know probably much higher than what it is today leading up to the merge maybe after the merge there's a it's like a sell the news event over the short term because that's just what happens in the markets over the short term but i believe over the kind of like longer term it's gonna have such a profound impact coupled with one five five nine and the narrative or deflect of a deflationary eighth is going to be so strong that i think it's it it's going to capture all the attention of all types of investors not just crypto investors but investors outside of crypto who are getting their feet wet if you tell them

that you know this this currency is actually truly deflationary because of natural demand to use the network not just some artificial thing they're going to understand that eventually and they're going to to to buy eighth i i i believe so yeah anyway leaving it at that uh on the topic of the merge tim baiko put out a blog post today on the ethereum foundation blog about the consorty test net that you can go join i mentioned this uh yesterday so basically you can join this public test net break it if you want you know try to break it i guess uh see how you know see how the clients run see how everything goes uh but yeah really really awesome to see this as well i think my internet's working tonight so i can actually click into this so yeah you can see here basically using it's pretty

straightforward there's a bunch of kind of support and feedback available available on the discord channels and other kind of places here and then uh the next steps are detailed here as you guys know next step is obviously to monitor this um make sure it's all stable and then move on to uh you know more test nets from there and hopefully a main net uh in q2 so scott lewis put out an interesting tweet today where he said every chain and execution layer that adopts ethereum standards evm and web3 will contribute additional value to eth and this got me thinking this is a question that comes up a lot and it's the question of do these evm chains whether they're layer twos or other block chains or side chains do they contribute value to eth

as an asset and i think they do i think it's a i think it's another one of those things where it's very nuanced you have to actually understand where the valuable cruel is coming from for eth because you could easily say okay well you know avalanche c chain it's an evm compatible chain they have their own native token being avax how does that contribute value to eighth as an asset right doesn't you know it doesn't that the avalanche chain doesn't settle on eth uh it doesn't kind of like get a security from from eth and the avalanche ecosystem obviously wants the avex token to do well for you know the same reason ethereums want eth to do well so where the value accrual comes from is the interconnectedness between these networks so for example when you abridge bridging over to the avalanche c chain

or when you're bridging back right you're from from ethereum you're burning eighth because you have to pay transaction fees to do this right when you when you're bridging over to the sea chain you have to pay transaction fees on the east side not just you like anyone doing the bridging right not just individual but entities as well in order to do that now ethe is also being used in these ecosystems as collateral right not maybe not as trustless because it's uh kind of like when you bridge across it's kind of like an iou on these other chains but essentially uh it's being used as collateral which just increases the demand for for eth it's being used in liquidity pools on these other evm chains right then also if we look at the developer side of things well the evm is just continuing its dominance with network

effect it just more more devs are learning solidity more and more people are learning the evm and learning how to use it and play around with it um and the evm is just becoming a dominant part or i guess like it already is a dominant part but just remaining a dominant part and continuing to grow of the crypto ecosystem now people will say solidity and evm are inferior to other kind of languages and virtual machines and that may be true from a strictly technical standpoint but like look at javascript in the web 2 world javascript for all intents and purposes and from a lot of developers i've spoken to is a bad language it is a bad it is a bad scripting language people don't like using it but because it grew uh very early on it got a lot of network effect everyone uses it now and yes there's

kind of like different flavors you can get frameworks that are built on top and all that sort of stuff there but it's all javascript under the hood and it still persists to this day uh i still think and i think this is going to be the fate of solidity and the evm it's just i mean there's too much money involved for starters right where spinning up your own evm chain is pretty lucrative getting and it's really easy to get projects to deploy on you if you're an evm chain but i do think that a lot of that value is flying back to ethe because of the interconnectedness because of the bridging because of the fact that it's hilarious i think most of the tvl on avalanche's sea chain has actually come from ethereum so you know people have bridged across well they're going to bridge back right eventually like maybe

they don't stay there they bridge back to ethereum because there's opportunities on ethereum or maybe they go to an l2 because there's opportunities there and then that l2 is paying uh for ethereum security and obviously burning eth by doing so and valuable cruise to eth so i think that the age of kind of uh chain maximalism ended a long time ago but these days it's even more kind of like apparent how just backwards it is to be a kind of like any chain maximus and that's why this is why i kind of get a little bit upset when people call me an eth maxi because i'm not i'm a decentralization maximalist but i understand that these other things are going to exist i don't think they're scams well you know some of them are but like most of them i don't i put out a tweet the other day

where i said avalanche like solana teran a few other kind of like l1s out there i don't consider them to be scams or being built in bad faith but i'm just much more interested in watching the ethereum vision play out and being a part of that but the thing is anything that's evm to me is actually part of the ethereum vision right it means just ethereum is everywhere and especially if it's interconnected which they all are like everything just bridges to everything now i've spoken about before how i think that it's going to be a power law distribution there is over the long term there is definitely going to be big winners and lots of like little small lots of smaller winners but right now the market in particular is trying to figure out who's going to be number two to ethereum like i think the market has priced in

ethereum as number one uh and i i mean not totally priced in but i feel like the market understands that ethereum is number one and it's got not going anywhere but number two is still up for grabs right there are so many chains out there that could go for number two and this also includes layer two chains guys this doesn't just include um these other kind of like layer one block chains the market is looking for a number two smart contract chain that can be an arbitrary an optimism is a stock net a zk porter or zkc an avalanche or solano whatever that can be anything at this point and that's why you're seeing so much speculation in these kind of like markets on these chains because uh there's no there's no given yet and being number two to ethereum is still a very very big deal because as i said

before if ethereum goes on to be worth 10 trillion dollars what would number two be worth 10 of ethereum maybe well then it's worth a trillion dollars right a trillion dollar market cap uh when a lot of these kind of other networks are 10 to 50 billion dollars in market cap that's still a very nice growth trajectory there and some of them are even smaller than that so you can kind of see how people are kind of speculating here um but yeah i know i i thought this was a great tweet from scott really got my brain kind of like moving on what the fat eat thesis looks like uh going forward so paulie now put out a funny tweet today where they said roll up centric ethereum is aztec arbitram reddit consensus mastercard boba cartesi diversified diy dx fuel hubble noodle x loop ring medicine army optimism polygon

zero uh nightfall hermes and maidan reddit sorry stockx dark net zika opero zk singh zika sorry swap ck sync habitat w and then pollinator says oh bollocks ran out of space already so i see what they did here they basically listed as many roll-ups or as they could and then ran out of space to list more because there's just so many and i've said this before to you guys the ethereum l2 ecosystem is going to absolutely explode and and it's going to you know there's going to be forks there's going to be original ideas there's going to be kind of new tech coming to coming to play but it is going to get crazy it's going to be like how there was a lot of l1 over the last few years except it's going to be l2s now because l2s are even simpler or even easier to

set up now it's funny because when you go to uh uh if you when you kind of like look at um the tweet that i spoke about the other day from from dom or domothy they basically said that um spinning up an l2 will be as easy as kind of like spinning up uh you know a smart contract on a theorem or a token on ethereum i should say and that's exactly what it's going to be so expect to see much more or many more l2s come out especially roll ups and it's just going to be such an incredible ecosystem that's going to develop here and it's not just going to be things like uh that are unique you know just in crypto there's also going to be companies like mastercard as i went through yesterday that are going to be getting involved as well so really i really like this tweet

from paulie now just put the the point succinctly here that the roll up ecosystem is huge and only going to keep getting bigger the new york times shared a piece today uh with the caption here tech executives and engineers are quitting google meta amazon and other large companies what they say is a once in a generation opportunity with crypto and then they titled the piece the new get rich faster job in silicon valley crypto startups so this article unfortunately is payable for me so i cannot uh i cannot show you guys it but i mean essentially what this is showing is what i've kind of like written about in the newsletter before the web 3 or web 2 i should say brain drain where the smartest people and the most capable

people from the web 2 ecosystem that are working for these mega corporates are moving to web 3. and they're doing this because one it's much more interesting there's a lot of there's a lot of new problems to solve it uh two it's um trying to decentralize things where centralization has become such a problem in today's world and three it's incredibly lucrative if you join one of these early stage crypto projects uh uh you know and then they issue a token which comes a lot faster than a company does when it goes to ipo then you stand to have like a huge payday sooner the average time to ipo is seven years so if you join a tech startup i mean your chances of that tech start up like from from the early stages has already got a very um

i guess like uh uh a small or low chance of succeeding um but then you also have to wait a long time for it to go public for you to actually recognize that uh that gain um if there is a gain there to be had whereas in crypto there's still kind of like the same chances of the startup failing or not right it's a low chance that it succeeds but you get liquidity you get uh kind of like quote unquote the ipo with the token generation event a lot sooner and i think that's what a lot of people are interested in on top of the other things i mentioned obviously there's a lot of really really cool issues and problems to solve within crypto that haven't even been kind of like worked on any big way yet i'm not even just talking about scaling and

privacy but like doing web 3 doing decentralized social media stuff like that the right way where it doesn't end up looking like web 2 is a hard problem it is not a solved problem it is something that a lot of smart people need to work on to get us to where we want it to be so i think that's why a lot of uh these kind of i guess like engineers and tech executives are quitting these other companies because they see that google meta and amazon they're never going to be decentralized they can't work as decentralized organizations they have to be centralized whereas there are a lot of uh products within crypto or services within crypto that can potentially be decentralized or they can create one their own on their own they can kind of like change the world that way instead of trying to change a mega company right

because google meta and amazon i mean they're not startups right they're just mega companies you're a cog in the machine when you go to work there even as like a you know a top engineer you're still just the cog whereas if you're a top engineer and you join a crypto startup you're you know not only do you get to have like much more much more of an impact but you also get much more of a kind of like lucrative opportunity as well and get to be part of the web 3 revolution which i think is really cool so yeah i know there was a bit of drama on twitter today about web3 like jack um the former ceo of twitter kind of was saying that web 3 is all just vc owned or whatever i mean the funny thing is he's got a point about

certain things because if you take web 3 to mean like all of crypto not just the web 3 ish apps of crypto then you could argue that like there's a lot out there that are owned like there's a you know the tokens are owned by vcs and stuff like that but i think that's missing the forest for the trees because really if that is such a if if that is actually an issue for people they're not going to use these kind of like apps they're not going to be able to get a community their dowels aren't going to aren't going to work and they'll just kind of like either get forked or fade to obscurity so yeah i mean we'll see how that shakes out there i don't want to talk too much about jack's comments i think he's just kind of like uh misguided there i think he'll

come around eventually hopefully i mean i know he's a very big bitcoin and he just believes bitcoin is the thing but we'll see we'll see how he goes there so zk sync put out a tweet today where they said zk sync is not our technology it's yours our licenses are free and open source we don't create proprietary tech or gatekeep who can and cannot use our protocol or fork it we don't have a patent lawyer because we don't need one mata labs aspires to become replaceable and then they're going to say it's easy to compromise on decentralization inclusion freedom and network resilience some don't value these things as much as others we always have and always will i love this open signaling lately from certain teams about these sorts of things these sorts of things because i know there's been a lot of drama around

certain licenses obviously there was the unisof v3 kind of license that happened because they didn't want people you know that was valid for i think two or three years because they didn't want people just forking unisop v3 and you know uh uh monetizing it like what happened with sushi swap which i've i discussed that when it first happened and i was kind of like i see the you know the for and against then arva did it recently with their business license um but then some teams like zika sync take a kind of like radical approach where they're like okay well we don't care like we're just gonna build the best product ever using this technology and if someone else wants to come and fork our technology and build something better then you know go ahead and do that i get that but at the same time what

really irks me is that there's open source and then there's the spirit of open source right so things being open source anyone can copy it anyone could do what they want like in crypto people just fork things slap a token on it make some money but then there's a spirit of open source and the spirit of open source it basically says you don't do that right it's kind of like uh the honor code of open source where it don't do that don't fork the code and you know monetize it in your own way and kind of like try and try and kind of profit from it but do fork the code and try to improve it and then resubmit it back into the open source community and let people kind of like play around with it for free and and and kind of like work off of your work so i

think within crypto because you can slap a token on anything it just becomes really hard not to go for like a business license or some other thing which protects the code that you've created from from forking so i see both sides of the argument i i'm happy to see zk sync doing this i have no issues with them kind of like saying that everything is you know free and open source but at the same time this just means that there's going to be plenty of copycats of of their code they're probably going to be short-lived they're not going to really accruing a network effect but maybe there is one that a cruiser network effect has a loyal army of supporters and just continues to scale ethereum better than than zk sink can who knows right i feel like that with the layer 2 ecosystem it

becomes much harder than with something like a defy app because of the fact that the roll-up stuff is pretty specialized and required and you know the roll-ups are basically an entire ecosystem not just one app or at least kind of the generalized ones are so we'll have to see how that all plays out uh there so brantley from the ens team put out a tweet today where he said i don't want this to get lost in the shovel today but the dns domain suffix provider xyz released a super cool app today if you have a dot eth name just add dot x y z to the end and it takes you to an automatically generated page for your ethereum account eg brantly.ethe.xyz so you can see here brantley's page it's pretty cool actually if i go to this page it's going to load up for me i'm pretty sure

um yep taking a little bit to load here uh there we go yeah yeah so you can see this page heads brantley's kind of like automatically generated page with his profile information on here um and with a collection of his nfts that is super cool actually i really like that the fact that it's automatically generated makes a lot of sense as well um because no you know obviously people don't want to just sit here and basically uh uh you know add everything themselves but then you also have uh his other addresses that he is added here so for those of you who don't know with ens you can add other addresses here and get paid to that so you can add he's got a bitcoin litecoin and dogecoin address as well as an ethereum address so that's really really cool but just another really cool feature of ens here that's

been added i really do like this i mean i think i should uh try mine out i haven't actually looked at mine yet but yeah i'm definitely gonna uh gonna check that out uh but uh uh yeah good to see ans getting some more kind of love here and the xyz domain i don't think it's been out for for that long i remember it came onto the scene a few years ago and everyone was like oh okay it dot xyz there that's a bit weird but whatever it's like tld's for everything these days but yeah just another really cool feature out of the ens ecosystem here all right so finally uh there's a tweet here from danny ryan asking are you a p peer-to-peer networking wiz uh do you have a a a love for hard problems are you self-driven and want to change the

world then join us as uh uh join us on the ef consensus research team so you can see here that they're looking for a networking engineer for the consensus research team it's fully remote you can work with the ethereum foundation here now um if you have the skills definitely to apply i i did mention last time that you could reach out to me and i would try and forward it on to danny myself i tried to do that for a couple of people and then danny's for another role and then danny said to me uh we've had like 800 applications we're probably gonna have to close it there so the sooner you that you apply to these things the better because i'm assuming it's like a first in kind of like best dressed sort of thing so maybe it's it's worth monitoring this website here the

ethereum.bamboohr.com in order to kind of like monitor for ethereum foundation jobs because these are some of the most in kind of like uh demand jobs out there i mean who doesn't want to work for the ethereum foundation to be if i wasn't doing this i would probably try to get a gig at the ethereum foundation i would love to to work there it's fully aligned with what obviously i believe in obviously they're fully aligned with ethereum so yeah i can understand why there are hundreds if not thousands of applications per role but yeah don't let that discourage you definitely still apply to this uh if you you know if you're interested in being a networking engineer here but you know it's not just the ethereum foundation that he's hiring i just want to remind you guys again literally every single team is hiring you know the funny thing is even if they

haven't got any open roles or positions up and even if they don't you know aren't kind of like saying we're hiring they are hiring if you if kind of like you can prove your worth to them and prove that they need you right in some kind of way they will hire you this has happened plenty of times before because teams are always hiring it's just a matter of can you prove to them that they need you and that you can do something that they aren't doing before and it's adding value to their project if you can then you can kind of like create your own role and this has happened you know as i said plenty of times before i've seen it play out lots and lots of times in ecosystems so yeah don't just kind of like apply for one job you can obviously always visit

cryptocurrency the cryptocurrency jobs website there's a lot of stuff there and daniel the founder is also active in our discord channel so you can you can tag him there and ask him questions as well if you want i'm sure he'll be able to answer those uh but yeah i mean never been a better time to work in crypto i believe i think 2022 is going to be an absolutely amazing year for crypto like i have such a great feeling guys especially q1 i don't know why but like as i've been moving these last few days i've just kind of like been thinking through my head i've been listening to some podcasts and stuff and everything in my head i'm just like q1 is just i mean q1 and even q2 just it's going to be so exciting we're going to have like l2s continue to to to grow right i'm

sure a few of them are going to do tokens which is going to be interesting i'm going to have the merge stuff continue to progress and hopefully get like an actual window for the merge like a you know a confidence window we're gonna have uh things continue to grow such as d fire and nfts and i think the q1 in terms of like market performance is gonna be much better than what kind of like november and december have been uh for a number of different reasons i won't go through them all now you could listen to the 8th bull podcast to get a bit you know to get a bit of context around that but yeah i'm just like very very confident that q1 is going to be great for crypto so i'm very much looking forward to it we're almost at the end of the year yeah what is it

the 21st of december only uh not even two weeks left of the year that's that's pretty crazy right uh but 2021 has actually been a really good year for crypto too i mean as i said eight start of the year at i think like six or seven hundred dollars or something like that it went to 4 400 and you know now is ending the year around 4 000 that's going to be a really nice yearly close but it's not just 8th it's done that you know there's a lot of other things that have kind of taken off we had the initial traction of l2 which has been really exciting a lot of other work you know happened obviously one five five nine went live and all that sort of stuff and last year i actually did a full recap of the year on the on the youtube

channel if i have time i'll do it again um recapping 2021 and everything that happened it just uh it depends on like if i've finished moving in like i've unpacked a lot but like really i don't know i mean i'm sure many of you have moved before but this is the first time i've done it it's taken so much longer than what i thought it would it would and i'm like so tired maybe you hear it in my voice i'm recording this at like 11 p.m my time so just being at it all day uh but yeah very much still worth it but anyway i think i'm rambling a bit there i'm gonna end at that that for today so thank you 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