Fear and Greed, Hop Protocol explained and more - The Daily Gwei Refuel #138 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where recap the latest news the ethereum ecosystem i'm your host anthony sosano and today is the 8th of june 2021 all right everyone let's get right into it so uh last night i was lying in bed and i saw that this new kind of twitter account popped up called uh ethereum fear or the ethereum fear and greed index now for those who don't know uh there has been a bitcoin kind of like fear and greed index out there for quite a while and basically what this indicator does is it measures the general sentiment of the market um according to like the the market movements of different kind of crypto assets out there now you know people will kind of look at this and say okay well well you know we're in extreme fear territory

that means that the bottom is now and people can like buy up here and make money and if on the flip side we're in the extreme greed territory that means that that's a top signal you should sell blah blah now i haven't done any back testing on this i don't have access to historical data for the bitcoin one uh or even for the ethereum one um so i don't know how much you know efficacy there is to something like this but what i wanted to talk about today was just kind of like the general fear and greed of the markets and how that plays into basically everything i mean i wrote about this in the delegate newsletter today as well so you can go check that out but essentially i guess like what i what i think about when i think about fear and greed is that

the emotion of fear is much stronger than the emotion of greed when you when you really think about it you i mean i know i do but like you probably feel worse when you see your portfolio fall for a 50 in value rather than when it kind of like doubles in value right so if you if you kind of go from like 10 000 to 20 000 you you feel good right but you want more than that but if you go from like 10 000 to 5 000 you feel really crappy you're just like oh my god that's that's really really crap i just lost you know half my money and you don't know when it's going to come back and you just feel like you know this fear right we've all felt it before you know all of our portfolios if we didn't if you didn't sell all of our

portfolios got basically halved if you were sitting in eighth um or even anything really i mean more than half of you were sitting in other kind of um kind of tokens and coins out there so and this is kind of like what drives the overall kind of bull and bear markets you know when everyone's kind of greedy but not on like the extreme great side yeah but people are greedy and they're like okay well you know we know that's going to keep going up we're really bullish generally um we think our new bull market's coming and then it kind of like becomes a self-fulfilling prophecy on whereas on the other side you know people start getting fearful they don't want to buy anymore right like when you're greedy and and you feel like the market's really bullish you buy more right and you put more

money in and you take more risks and generally that's kind of like what keeps the bull market going for for quite a long time but that's the same thing can play out during kind of like bear markets or downturns in that that fear uh seeps in and then people start thinking themselves well i need to protect what i have so i'm gonna sell now uh you know some people will sell the bottom some people will sell before the bottom some people will try to buy back in some people won't all that sort of stuff so there's that and there's also on the flip side is that uh there's two other things that make kind of like fear more powerful and and the reason why bear markets are so brutal is uh the second thing is that people will wait for the price to go back up and and to sell

so this is why you get these things called dead cat bounces where the price goes back up to some high level but then doesn't maintain it and just dumps and goes you know way lower than what it was and that's because people aren't bullish anymore they were just waiting for that to spike back up so they could sell into it essentially because they're like well i want to protect what i have um and the third thing is that people aren't putting new money in they're not bullish they don't want to um you know they're not risk on they don't want to get more exposure to crypto now this is all short medium term stuff like long term i mean generally unless you're buying like extreme tops it's it's fine and it's hard to tell what the top is going to be like you know no one picked the top at 4.4k

that i know of um maybe there were some traders out there who were saying oh well we're a bit heated we're going to go to 3k um but you know we went to like 16 1700 um in like a week or something like that so i don't think anyone picked that no one picked like it falling so much and now we're hovering around 2500 uh bitcoins hovering around 33k i think or something like that so you know from that perspective when you kind of look look at the way the market has just changed like dramatically in a month it went from like you know everyone was euphoric everyone was making a lot of money everyone was like super risk on and putting lots of money in and all happy about it now we're in the opposite side of things where like people are fearful and

as you can see from this kind of like indicator here currently or at least the last time this was posted we're at like the neutral stage and i think there's been an update since this tweet um yeah so there's been a couple of updates where we kind of went from neutral interfere territory and that's because the price dumped again today right we were at like i think 28 2900 uh about 24 hours ago and then today the price started dumping again we went down to like 2400 or something like that you know and i i still think that's kind of like fine we're just sitting in that range that we have been between 2 and 3k which kind of like makes sense um i guess like after a brutal drop you usually see like ranging happening but still people get fearful right because they're like well what is you

know what if this is going to go below 2k what if it's going back to like you know triple digits or whatever so people can start getting fearful they start selling based on this fear and this is where the term panic selling comes from as well it's like people just just get really panicky um whereas you know obviously uh um on the flip side people get really greedy and and kind of like take loans out take leverage out i mean leverage on the way up is like really frothy and that's why you see that you know all these longs end up getting like absolutely destroyed when the market turns down because people just got so greedy and have taken all this leverage and all that sort of stuff plays out there so yeah just a bit of just general market commentary again i don't think

kind of like i've got anything to say um you know based on kind of what the market's doing right now i think as i said it's just ranging i don't know if it's going to go down below 2k i don't know if it's going to go above 3k in the short term obviously long term you know still obviously bullish like i don't think i even have to say that anymore um but in the short term you know while we're kind of like ranging like this i don't think anyone's going to be greedy i think i don't think anyone's going to be risk on people look for a signal they're like you know maybe if we go above 3k again people will be like okay well is the bull market back on or you know but they'll still be cautious because they'll be still thinking to

themselves oh this is just like a relief rally or a dead cat bounce we're gonna go back down you know if we get over 4k again in the next couple months are people going to be risk on again i think so i think if we were able to get over 4k again and like reach the old uh i mean the new all-time high of around 4.4 k i think the bull market would definitely be back on in a big way uh because people would just use that as a signal to say well you know we recovered from such a brutal dump in you know relatively quickly uh so let's go risk on again but until that happens you know the ranging's going to persist and i think the ranging is is fine if you're a long-term investor i mean i'm not this is an investment advice but

if you're buying now you should still be prepared for downside like if you're buying at 2 500 you should really be prepared for 50 plus downside i mean i did this in 2018 where i bought ethe at 220 in october and it dumped to 80 by december and i was mentally prepared for that i said to myself i was like i'm in this stuff in this kind of thing for the long term like i don't plan to to ever sell my eighth back then you know i kind of said to myself well i'm not going to sell an eat to the next bull market anyway and i know that's coming because of all this kind of value being created here but in saying that like now i'm at a position where i'm just like i don't really care what price i buy at because i'm never selling my eighth but

you know your situation might be you know very different to mine so when you do buy just be prepared that you know for that downside risk there like yes you obviously buy because you're you think the ass is going to go up but it depends on what kind of investor you are if you're a long-term investor then generally you know you might be buying or dollar cost averaging in overtime as you kind of get more money in to buy but you should still be prepared for for further downside not to say that it can happen uh sorry that it will happen but it can happen there's always the possibility of that you know no one as i said no one was saying that ethan was going to 1700 at 4.4k and he put the 1700 a week later so always be prepared for the worst um

and also the best i mean you know being prepared for the worst can can sound a little bit negative here but i think as long as you're immensely prepared for both scenarios to play out and you're a long-term player i think generally you're going to be okay uh and you know focusing on the price is just one aspect of this ecosystem the beautiful thing about ethereum is that you can focus on uh you know so many other things without focusing on the price you can focus on all of the use cases i mean d5 nfts dows all this sort of stuff you can get involved with communities everything's still very vibrant i mean i haven't seen much of a drop off on my metrics that i monitor people are still reading the newsletter people still watching these refuels generally people are still active and i

think that's because they know that there's real fundamental value drivers here um especially within the ethereum ecosystem now if you talked about something else like maybe the bitcoin ecosystem um or like a lot of other smaller ones their communities are probably you know fleeting because they were just here for the gains in the bull market but i think ethereum is at a point now i mean bitcoin's at a at a pretty good point now where it has a very big group of of uh true believers and true community members who actually want to hang around and you know use all the kind of like cool stuff that's being built and help where they can and really these down markets are the best times to make a name for yourself i mean you know there's less noise out there uh much less noise out there and you can basically find these gem

gems of projects that you really believe in and really think are going to be big dedicate your time to them and you know get rewarded for it as well and and if you hold on to their tokens if you if you buy tokens and stuff you may be rewarded down the line now obviously that's the on the on the more risky side if you kind of like speculate on tokens but you can still kind of uh work for these protocols and work for these dowels you're going to have like risk-free exposure to these sorts of things besides your time you're really not risking any capital there so i think you know that that's what i did during 2018 2019 i focused a lot on growing kind of my own personal brand to where it is today you know i i might do a video on this one day on

kind of like how i went from basically unknown within the crypto community to where i am today uh because i think there's a lot of people out there who want to do this and actually this brings me on to my next kind of thing that i wanted to talk about was a tweet from trent van epps here who said that you're if you're just are you interested in working on ethereum but worried you're not technical enough well trent has zero dev experience or computer science experience he's uh and he can confirm that there's tons of space for educators communicators ecosystem managers project and project product managers um just simply dive in because we're waiting for you and this is exactly what i'm saying you and this goes even further to say that you don't have to be a developer like i think there's this kind of notion within this ecosystem

that you have to be technical you have to be a developer you have to basically have like a computer science background all this sort of stuff no like there are so many people that i know that don't have this at all trent is obviously one of them i'm good friends with trent um but myself i am not technical really i learned all of this stuff kind of like with on on the job so to speak my i have no finance background uh my technical background stops at developing wordpress websites like i was never a coder like a real code anything i did kind of dabble in it but you can learn all this stuff on the job and you can learn the high level stuff you don't have to basically do the coding yourself if you don't want to if you think that you're not you know

that's not something you're interested in doing then don't uh as trent says here you can be an educator an educator comes in many forms you can do videos you can do podcasts you can do blog posts you can do twitter threads you can do so many different things you can do graphic design whatever marketing also same thing comes in very different kind of flavors there project and product management community stuff like there's so many things beyond like business development there's so many things beyond development in this ecosystem and these people are actually probably more sought after than developers at this point uh for a lot of projects and i have a lot of projects contacting me for marketing community people all the time um and unfortunately there isn't actually very many um good ones out there so if you're someone who spends a lot of time

in this ecosystem and you think that there's something that you can do i'm telling you right now you don't need a background in marketing or community management or anything like that if you have been active within some discord channels if you've kind of like been active within the community if you have the knowledge of of i guess like the crypto ecosystem and the ethereum ecosystem your legs ahead of anyone else and your league's ahead of people from the web to wealth as well because i think what a lot of people miss is that the the requirement f i think the the core requirement for working in this space is that you basically understand the space because if you don't understand how crypto and the ethereum ecosystem works then you're probably not going to do as well as as someone who does it and it's not to say you can't learn it

of course you can learn it but you already have a leg up if you're active within the ecosystem so definitely you know if you're someone who's sitting on the fence about this i'm happy to kind of like uh you know talk to you a bit uh if you want to dm me on twitter or or discord or whatever i'm happy to kind of like give some give some context there but generally all it takes is is to just go for it at the end of the day there are plenty of projects out there that are happy to you know either train people on the job help you out wherever or or kind of like leave you to kind of like you know do it as you as you kind of like feel is is the right path for it here so yeah definitely have a think about that

if you're thinking about working in this ecosystem i can't think of anywhere else that would ever rather work than in this ecosystem there's just so much going on so much fun stuff happening it doesn't matter if the market is bullish or bearish uh the fundamentals and and kind of like the the the journey that ethereum is on is still uh there's still a lot left to be explored there so yeah it'd be cool cool to see more and more people kind of coming into this ecosystem and jumping into non-developer roles here so alchemix today on twitter announced that the alcx farming rewards are back on for the alcx pair here so if you were kind of like farming this this kind of pair on sushi swap you actually have to migrate your liquidity from the alchemics kind of dashboard and migrate your slp tokens your sushi

liquidity provider tokens to uh sushi swap yes so if you haven't done that yet uh you know you'd be sure to do so you also get sushi rewards and you get double alcx rewards as well right now uh and they also teased that al eighth or all ethel whatever you want to call it is coming very soon so this week so sometime this week i'm not sure when maybe the weekend maybe during the week who knows but uh that's what a lot of people have been waiting for like obviously um people who've used alchemics knows that there's al usd but al-8 is basically a way to use your kind of like eat this collateral and then keep stacking eth while doing so which i think is really really cool and especially you know during a down market where if you want to stack eighth at these prices

uh this is probably like some some something that might interest you if you're into stacking etr so definitely go check this out if you haven't yet and migrate your liquidity if you haven't yet so samuel from arari capital today announced that the rari capital have introduced something called a grant station so uh rari is interested in funding uh different kind of grants for different kind of projects out here but they're most keen on privacy so kind of like tornado cash ferrari users and decentralization user built front ends for fuse which is their money market on on rari capital here so and a bunch of other things like chatting user analytics artwork foreign language mods integrations and and so much more so there's a kind of list here for grants

for batch one that you can see here on this notion dock this will be linked in the youtube description of course and there's a discussion going as well all grants will be approved by the dow uh and and of course uh but yeah i think this is really cool just another kind of like grants program coming out of a d5 app if you're interested in making some kind of like money or what i think that they pay out in rari tokens um and you're interested in kind of building things and just getting more involved as i was saying before uh you don't have to be like a developer or whatever i mean i know that they're saying here they're keen on developer focused things but they still you know they want other things like foreign language mods like translations for their site artwork you know

um user analytics integrations not none of this stuff really requires developing or coding or whatever like that so definitely go check this out and check out the kind of batch uh sorry the grants patch here to see if this is something that uh you're interested in uh there's a few things here i'm just scrolling through it right now i think this is really cool uh so and rubber capital is definitely a legit project within the d5 space so definitely go check that out so ali on twitter today put out an interesting tweet where they said roll up is the parachain killer uh now for those who don't know paratrains are basically these things uh the this concept of like i guess like app specific chains or app specific blockchains or in the polkadot ecosystem so what they can do is essentially you can create your own

blockchain um using the powerchain kind of framework using substrate which is a development framework and then you can connect to this power chain into polkadot uh to share polkadot security so their distributed proof of stake or delegated proof-of-stake system in in polkadot now the reason why ali is saying that rollups are the parrot chain killer is because with roll-ups there is zero cost or rent to plug into ethereum because they are naturally uh i guess already secured by ethereum because you're just saving uh the roll-up kind of like proof to ethereum here or posting the proof to ethereum here whereas on a para chain they must raise a massive dot bond so to actually bond themselves to po to polka dots so the polka dots relay chain it's its main chain you can think of the

relay chain like the beacon chain for eth2 but for power chains to bond into it they have to basically put up a massive stake of dot and i don't know how massive this is but it's definitely not cheap it's but i think it's millions of dollars um so they have to do that and to do that they do what's called uh i guess uh initial kind of like um a token offering where they basically sell tokens for dots and then use that dot to bond into the polka dot kind of like ecosystem here um i i personally like i've known about this for a while since polkadot was first put forward i've always been bearish on this idea i think that it's ridiculous i think that it kills permissionless uh building on these kind of networks and i think that it kills the neutrality of

things it just basically means that whoever has the most money is able to build to kind of tap into the polka dot security and if you don't have money to essentially bond dots well then you can't tap in and you can't be part of the pokedot ecosystem you're essentially your own blockchain um and also ali says that there's zero governance risks with roll-ups um whereas if you're an undesirable power chain you can be evicted so polkadot has an on-chain governance system so if they don't like your power chain say you create a power chain for darknet the dark net market and say okay well we're gonna do all these kind of transactions on here we're going to let people buy drugs and other kind of contraband if the polkadot kind of governance system didn't like that they could kick this paratrain off the network and

you know i probably think they would and this is another thing that i have been kind of bearish on within polkadot is the fact that this could happen because this can't happen for wall-ups no matter what roll-up you build the ethereum network cannot kick you off they cannot buy you from posting proofs to the chain uh because of its censorship-resistant properties and because it is not an on-chain governance system here so that's why ali says that the zero governance risk in saying that i wouldn't say the governance risk is zero i would say that it's near zero but it's definitely not zero because technically if the community wanted to within ethereum they could bar someone from doing something on ethereum now not to say that this would ever happen but i'm just saying it's technically possible so

i wouldn't say there's zero governance kind of risk here there is definitely a non-zero chance even though it is incredibly small and basically impossible basically zero but it's not you know zero so if we're going for correctness it's not it's not like a hundred percent zero yeah um and with rollups you get immediate liquidity because you can bridge kind of in and out here and you also get immediate finality for zk roll ups and optimist and and with power change you get optimistic uh uh finality here and now uh what that means is that like with zk roll ups you get the the finality of the ethereum chain where it basically says yes okay this is final this is secure and the security is all handled by the ethereum chain whereas with paratrains it's optimistic and fraud proofing is not even implemented yet um

this isn't a bash poked or anything like that but i mean i have been bearish on polkadot for quite a while i sold my dots a long time ago for eighth i held them since 2017 like late 2017 since the ico because back then i actually thought it was an interesting idea but then as you know the years went on i kind of uh kept looking at it and i was like yeah this is really weird and and kind of like bearish i don't know how this is going to work and i i thought that it was already vc captured because of the vcs had a lot of the the tokens and they were staking them and i didn't like the delegated proof of stake system because we saw it play out with eos and saw how bad it was and saw how how it how it becomes a cartel over time

so just generally i just became very bearish from polka dot and that's not to say that i don't think some of the tech that they've built is really cool i think the substrate platform that they've built is pretty cool for developers i've heard but generally i'm just not very bullish on that i am very very bullish on a roll-up uh centric ethereum coupled with sharding in eth2 obviously and i think that's the best approach going forward um but yeah i don't think that polka dots approach is is very good and i don't personally think polkadot has a long-term future here i think that they're competing in a sea of other ethereum competitors um and they're definitely not at the top of my list for who i would say is winning you know in terms of like uh you know who's close to coming second to ethereum

it's definitely not polka dot but anyway i'm happy to be kind of like proven wrong here and maybe you have a polkadot bull thesis or whatever but yeah just uh i'm definitely more bullish on ethereum and it's roll up centric roadmap and speaking of road uh roll ups there is uh there is i guess when we talk about roll ups and layer twos in general people are bearish on the fact that they can't communicate with each other which i think is wrong because there are already protocols out there that allow users to communicate cross chain and cross l2 and one of those is called hot protocol so i've talked about i've spoken about connects a lot before but not so much hot protocol so you can see here that uh litter cohen i think his name is here i think that's how you say it sorry

um it basically says uh basically put together this thread on how hot protocol works so for those who don't know hot protocol is a layer two kind of bridge system where you you can basically go from one layer to the other it also works cross chain and things like that um and they aim to be able to do this very fast like basically near instantly so i i showed the other day on the on the refill that um polygon 2 ethereum withdrawals using hot protocol is one minute and 30 seconds instead of three hours which is obviously a massive improvement here and in this thread a little cohen goes on about uh kind of like why um this is not a centralized solution this is actually decentralized and how it all works the tldr is that essentially there are market makers that sit between the layer twos and take on the i guess

like withdrawal delay risk but and i think a small fee for this but the way they can do this and the way that you can basically have um instant liquidity on uh sorry instant kind of like acid transfers or near instant between layer twos is that you get issued an iou token essentially that the market maker takes the risk at risk of on so you you basically and they show it in this chart here you know if you're alice and you want to go from ethereum to to optimism you would send four eth to the hop uh protocol bridge they would issue you uh four hour eth or four h sorry for hoppy for hour eighth i was reading something else there for hop eighth which basically represents a claim on the four eighth you would take that for hop eighth to

the amm where the market makers are providing this liquidity you trade it for four eighth the market maker gets the four hop eighth which is equivalent to four eighth um and then you get that four ethon optimism now the reason why it's equivalent to eath is because the market maker can use that for uh that that kind of like um for hop eat to claim the eat once it's been kind of like processed and um because there's obviously a delay on it going through uh like withdrawal delays and things like that um and you know whether that be cross chain or cross l2 so go read this whole thread we'll be linked in the youtube description but i thought this is really cool because i do truly believe that if we are going to be in a multi-chain ecosystem

i don't think it's going to be particularly multi-chain i think it's going to be multi-l2 then bridges between the l2's is going to be critical so hot protocol and connects other projects to keep an eye on here for now there are other projects out there i think maybe in stealth maybe i'm missing one that i'm not thinking about right now i think thought chain is also um tackling this but i haven't looked too much into that um and i i think they're more tackling like cross chain rather than cross l2 whereas i think hot protocol was definitely focusing on cross l2 here so yeah anyway i'll link this in the description you can go check out the full thread speaking of l2s arbitram had another massive announcement today that they have partnered with the graph to offer developers the subgraphs so they can collect and access

data on the arbitrary one network just like they can on ethereum this is absolutely massive i mean i've talked about the graph before and what service they provide to ethereum basically all of the data that you see on uh you know front ends of your favorite default apps is mostly powered by the graph so like all those apy numbers all that kind of like um additional context you have on different default dashboards things like zapper you know pretty much powered by the graph so obviously we need that at layer two and that's why arbitrary has powered with the graph here so i think i thought this was really really cool uh and just another kind of like team that arbitrary power has kind of partnered with and we're not far away now i think from mainnet arbitrage for public users obviously it's on main it for developers

but i'm really really excited in the next couple weeks hopefully we see something there but anyway i'm going to leave it at that for now moving on to the next update so the ethereum name service team has announced that they have donated 180 eth to bitcoin grants which i think is worth doing the head math right now half a million or something like that right now um so and this is because the ens is a non-profit uh not sorry a non-profit public good they got it start with git coin grants and now they better fund it funded they want to give back and i think this is really cool i mean this is a massive amount of eth being donated here and with the bitcoin grants matching ground coming up on june 16th i believe the next grants matching round it's gonna mean that there's a lot

of funds up for matching here so i thought that was really cool if you want to kind of read more about this i've got a whole blog post here that kind of goes through the rationale you know what what they what what how they came to this decision what they hope to achieve with that and things like that it's a short blog post so i'll link it in the youtube description and you can go check it out so the ethereum push notification service or epns have teased today that they're going to be on ave on polygon it looks like so they've tagged both rv and polygon here and you can basically use uh i guess the push notification service on these apps soon i i believe where you can get like push notifications for things like your rv kind of health factor being too low and for you to kind

of like top it up or if there's liquidations available uh on the iber platform and you can maybe go be a liquidator or something like that so i thought this is really cool uh i think epns is one of the uh coolest projects in the space right now uh and disclaimer here i'm a small seed investor in in ep and scr but i invested because i think it's just a really cool idea i think that push notifications really haven't made very much inroads yet within ethereum because no one has really bought the uh sorry no one has really built them but that's exactly what epns is doing here they're building them out they've already got integrations with i believe uh unisop and things like that so um you know with rv as the next stepping stone here and on polygon as well it's going to be really valuable to

a lot of users i believe so yeah looking forward to seeing uh kind of that play out and that be delivered to mainnet all right finally here i wanted to give a quick shout out to this video that pooja shared on twitter which is basically a video of danny ryan vitalik buterin going through the details of the first beacon chain upgrade so named altair now uh you may know alt from my refuels i've been talking about this and from my newsletter where i basically mentioned it is the first major e3 network upgrade going live mid-year-ish so july-ish i believe or august-ish and if you want to know in-depth about what's coming to the upgrade you can go check out this video so i won't go through at all all the kind of like um all the kind of things happening all the

features happening this video will give you a complete breakdown so i'll link this in the youtube description and you can go check it out for yourself and i believe that is it for today everyone so thank you again 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