icETH introduced, Polygon's new LM program and more - The Daily Gwei Refuel #349 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where we cut the latest news in the ethereum ecosystem i'm your host anthony sosano and today the 6th of april 2022 all right everyone let's get into it so an update on the uh axe infinity ronin bridge hack so axe infinity or sky mavis the company behind axe infinity has raised 150 million dollars in a funding round led by binance with participation from animaka brands a16z crypto paradigm and a bunch of others here so the round combined with sky mavis's balance sheet funds will be used to ensure that all users affected by the ronin validator hack will be reimbursed so you'll remember that the hack was quite large it was uh you know hundreds of millions of dollars and um you know it left a big hole on the ronin side chain where it

needed to be filled and it's been filled i always look at this sort of stuff and think it's awesome for users it's a big positive but man there's a lot of money in this ecosystem now of course binance and others didn't just throw this money at sky mavis and said here plug the whole it's all well and good i'm sure they got some preferential deal treatment here whether that was to buy equity in the sky mavis company or buy axs tokens or buy our ron tokens or all of it right as part of this deal i'm not sure exactly what the deal terms were but this isn't just a charity thing uh of course so i mean i'm very happy that this has happened but you know i wonder what the threshold is for you know how big a hack needs to be before

it can't actually be covered like is it a billion dollars is it two billion dollars is there a certain amount that will just not be able to be covered and i think it maybe it doesn't really depend on the amount and more so depends on the project so for example there was i remember a project called big data protocol or something like that that had some ridiculous liquidity mining program and it managed to attract over a billion dollars of tvl um quite quickly now i haven't heard of this project since then i don't know if they're legit or not or anything like that but you know what if that kind of like got hacked and what if the funds got drained from that would that that poll been able to have been plugged and i i don't think so i really don't so i think it really does depend on the

project rather than the amount stolen because there are some projects out there that just won't be able to to get the money in order to plug the whole even if it's five or ten million dollars they'll probably you know if if they can't find outside money if they don't have the money themselves to plug the hole or if they can't find some other way to do it then it's it's just not going to get plugged even though it's a smaller amount than something like you know the ronin validator hack or the wormhole hack that we saw and don't get me wrong guys like uh i i don't i don't i'm not trying to kind of like moralize whether it's kind of like good or bad that these kind of things happen i'm just trying to get to a point where i can reason about how big the hack

needs to be uh for it to not be covered and it's a shitty thing like imagine you know if the hack was so big it was like a five billion dollar hack and and so many people's funds were in it and it was just too much for it to be covered maybe some of it was covered maybe a portion of it was um but you know imagine a scenario where it's just so big that not everyone can kind of be made whole and there will be stuff like this happening i reckon i don't think this is like a a kind of like a far-fetched thing to say because these bridges especially as i've mentioned plenty of times before hold so much money in them they are just absolutely massive targets for attackers especially the ones that are just secured by multi-sig so just something to keep in mind there but i'm very very

glad that you know sky maurice was able to find the funds in order to to plug the hole here because it's user's funds at the end of the day uh it's it's kind of like um it's not just one user it's like all of the users on on their own and kind of like sidechain a lot of the users playing axe infinity and a lot of the people playing axe infinity trading axes you know breeding all that sorts of stuff and and doing everything on there are just regular everyday people then not necessarily quantum quote crypto people because the axiomfinity ecosystem was able to attract a lot of outside people that weren't into crypto at all and aren't necessarily into crypto things like d5 and dows and and stuff like that they just like playing this game they're like earning money from it uh and and and

doing kind of like all the all the breeding and other stuff that that goes on in the game there so yeah cool to see this just wanted to kind of like update you guys because news of this only broke a few hours ago so it's it's still fresh and uh yeah good to see this uh this hole is being plugged here all right so i woke up today and everyone was going on about gas fees spiking to like thousands in gway again uh and i did i missed this i think it went up to like 3 500 plus away um for a short period of time and of course it was because of an nft mint uh it was uh the vaynerchuk or garyvee's brother i think was doing an nft project and it went absolutely bonkers i believe more fees were kind of like lost to failed

transactions and and got burnt than the project actually made um if i kind of like scroll down oh i can't remember the tweet i don't think i've got the tweet on my feed here but uh basically uh yeah there was there was a tweet about how like just um a lot of money just got kind of like burnt um because of this kind of like high gas prices um and i think was about four thousand eight that got burned from this nft project uh in like an hour i think in the ultrasound money thing here yeah four thousand four hundred eighth was vaporized in an hour so it was burned in an hour 4 000 of that i believe was uh this nft project which is just crazy right that's a it's a crazy amount of money and a crazy amount of eats to just be burned in one

hour there so that happened there and then we also had a new burn record in one block so 106 eighth was burned in one block due to the the gas prices being this high or the base fee being this high and uh we had two of those in a row like you can see here that uh there was a hundred and six eighth uh in in one block and then a minute later 116th again uh uh which is which is just crazy which beat which beat the kind of like record um which is just i mean when you when you go like think about this guys like that's that's like that's not a small amount of e that's a lot of e that's that's uh that's a crazy amount and it really is crazy to see like how much either we burn every time sort of this stuff happens and the last

burn record was set uh seven months ago with 95 8 being burned in a block and i believe that was an nft mint as well so i mean just insane to see that nft mints are still doing this sort of stuff and still able to attract you know such fervor what's even more insane to me though is that this nf team was done on layer one i believe that gary v or his team or like his company whatever have done nft mints on layer two before and have done them on immutable x so why did they go back to ethereum layer one it doesn't make any sense to me they left money on the table because so many people were willing to spend so much money to get into this thing so they could have made even more money for themselves and they just gave users a really shitty

experience like yeah okay cool you burned a lot of eighth that's all well and good um and we thank you for your sacrifice but at the same time i just from a user experience perspective it didn't make much sense for me it to me that they did they did it like this and maybe it was the path of least resistance for them i'm not sure but yeah it ended up in us kind of like setting new burn records per block and burning over four thousand eighth in an hour which was just crazy but uh but yeah crazy to see that just wanted to kind of like highlight that for you guys all right so i saw this tweet from uh frank chaparra he shared this out uh where he kind of like captions this screenshot saying in which citigroup researchers note that usdc and you and

tether stable coins pegged to one dollar have underperformed and struggled against us equities what what like and then i quote tweeted this by saying and people say the merge is priced in and my point in saying that is that there are so many people out there you know especially outside of the crypto ecosystem that have absolutely no idea what's going on for city group researchers to say this means that they have absolutely no idea what a stablecoin is and it literally takes them two seconds of research to to kind of uh to kind of see what uh what what what a stable coin is and it's just i mean this is so bizarre like when i read this i'm like really is this actually a thing always frank just like late april fool's joke but this is real um and then you know frank went on to

say that several uh uh several people reached out to him to say that that type of stuff made them leave city and apparently a bunch of people have left uh about 15 moves from uh from city to a range of crypto companies so yeah i mean the the brain drains real there but you know as i quote tweeted here when i said and people say the merge is priced in guys like if if citigroup researchers who are i guess supposed to be you know smart and supposed to kind of like know their when it comes to this sort of stuff are getting something as simple as you know stable coins wrong like do you really think that they could even understand the implications of something like the merge let alone each token token economics let alone um you know the burn let alone anything when it

comes to ether and ethereum like as i've said plenty of times on the refill you guys are so ahead of everyone else it's insane and i think a lot of people are just now trying to wrap their head around especially these institutions just trying to still wrap their head around how bitcoin works and what makes bitcoin valuable let alone what makes ethereum uh the ethereum network tick and what makes it east valuable let alone understanding the implications of things like the merge and burning eth and and all that sort of stuff so it's all coming they'll get there eventually but the thing is is that you're still front running the opportunity here by by being in the ecosystem so early like think about the fact that they don't understand bitcoin they don't understand stable coins they don't understand ethereum like how long is it going to take for them to

understand those and then think about how long it's going to take for them to understand things like defy um things like nfts just it'll they'll get there don't get me wrong it's not like they're never going to understand it but it's going to be so far into the future that by the time that they kind of like clue into it they're basically buying our bags so to speak right and i've actually talked about this before where i've said this is where the wealth transfer comes from where a lot of the old money just kind of like is in these institutions and these institutions invest uh you know this old money on behalf of of the people that held them the older generations and they're going to be buying crypto a lot later so a lot of the early adopters are obviously young people and when they you know and these

kind of institutions coming in and buying crypto by doing so they're pushing the prices up and the young people who got in earlier benefiting most from from the prices going up of course so that's where most of the great wealth transfer is going to come from basically this extreme information asymmetry and this extreme kind of lag between the uh early young no i mean not everyone's an early young adult there are adopters of all age groups here but on kind of like a macro scale you really have like young people tend to adopt new technologies much much quicker than the older generations do uh and typically it hasn't actually been a wealth transfer because there wasn't like value attached to it there were stocks attached to tech companies and yes there was some value some wealth transfer there but a lot of

these tech companies went through the traditional kind of like path of raising up to like a series d or series e then going public and obviously uh you know trading of stocks and stuff like that until recently has not really been something that people did they just kind of did it through their broker whether they were young or old whereas now you know young people are much more involved with investing especially on the crypto side of things you're able to get access to tokens at a much kind of like earlier stage or at least opportunities in a much earlier stage of their life cycle and all the information is out there for you to kind of like digest and understand yourself and do all your research yourself uh in real time whenever you want and uh there's a massive lag between you you doing that and the older the older

generations or the older money doing that because they'll probably never do that themselves they rely on these institutions such as citigroup to do that for them but if citigroup can't even get stable coins right at this point in time like stepper coins are the easiest thing to get right in this ecosystem literally the usdc and tether are both pegged to one dollar there's your explanation of the stable coins right i mean it's not even a difficult thing so if they can't even get that right good luck getting anything around ethereum right for a very long time and by that point if you're probably worth trillions of dollars in market cap and they'll be kind of like buying into an asset they could have bought a lot earlier if they just took the time to do their research this isn't rocket science guys like really at the end of the day

uh you know a lot of ethereum stuff is technical but actually understanding the kind of like eighth valuable cruel properties is is i mean it can be explained to you at a higher level i believe it is not something that requires a phd in rocket science to understand so i don't i don't really get why people don't don't kind of like uh look deeper i'll just dig a little bit deeper here it could be laziness it could be just like fear of the unknown you know i talk to people in real life all the time that as i you know i've explained this before where i basically said that i think i've said this on the retail before where within 10 to 15 minutes of me explaining you know crypto and ethereum to people they have a totally different view on it than when they than what they had before

because all they hear is the mainstream media kind of like headlines they hear the scams they hear the pump and dumps and they don't hear all the stuff about the technology and yeah as i said within 10-15 minutes i give them the the the rundown the high-level rundown and then you know most of the time they're actually pretty interested in it sometimes they're just like oh this isn't for me whatever blah blah um but i think 100 of the time they all come away thinking of crypto differently than they did before and that's simply because i mean the mainstream media is not going to talk about um tech most of the time like you know them just talking about the merge and is is kind of like surprising enough to me and i think the only reason they're doing that is because it has price

implications they're not going to talk about stateless ethereum and sharding and vocal trees and all that sort of stuff they're not going to talk about uh layer twos unless kind of like they're talking about layer twos in the context of making money on them with tokens it's just the way it is guys at the end of the day so see i've gone off on a little bit of a tangent there but i just wanted to kind of i guess illustrate just how much information asymmetry still exists and will exist for probably decades to come and there's lots of alpha to be had in that so uh so yeah anyway moving on to the next kind of thing i wanted to talk about here from tim biker has put together an eighth a roadmap faq so this is not exhaustive and i think he literally just

put it together over the last 24 hours based on a twitter thread so definitely not uh you know not extensive not exhaustive but does answer a bunch of questions around things like merge withdrawals of staked eath and sharding so if you're interested in and kind of like learning more about that i learned a few things from this so definitely give this a read i mean if i'm learning things from this you guys are definitely going to be learning things from this so so give it a read but uh i thought this was cool i'm sure tim's going to keep adding to this over time there are definitely a lot of things in i guess like ethereum roadmap land that have a lot of question marks around them one because it just hasn't been documented you know that accurately yet and two because a lot of it's evolving

and moving right the theorem roadmap is not a static thing it is an evolving moving target and it's always going to be a challenge to keep up with it if you're not really in the weeds and obviously i do my best to try and relay things to you guys but at the end of the day i am still once removed from core development i get all my information second you know secondhand i'm not like tim biker who's like right in the thick of it you know you know it's basically part of the core development of of the protocol uh so i always rely on the information that they put out because they have much more context than i do and i'm glad they do i mean doing stuff like this just on a whim is really cool this is what i love about the ethereum community is that this kind of

like stuff just gets done it gets done for free no one paid tim to do this he's just like oh okay well there's some confusion around this i'm just going to put together a quick document uh and i'll have and you know i'll have an faq here i'll just spread my knowledge get it out of my head onto paper sort of thing and i love it i love i love this sort of stuff so definitely go check this out i'll link it in the description below all right so we have an update on the vertical trees test net update here from julian uh so you can kind of go to this uh note start ethereum page here which is kind of like the latest update on uh okay well it's it's basically the latest state of vocal trees and it's not loading for me right now it seems that

it is overloaded i think uh this website no it's not a theorem but i know there it is there it is so uh this is kind of like going over the test net that they did on april 5th called i think that's conjuri or something i don't know guys you know i'm so terrible at pronouncing things but i'm sure you guys will correct me on that uh but yeah it goes over you know the achieved goals here the issues found and next steps this is really cool that this is being worked on already because this is more of a longer term ethereum roadmap item replacing the existing tree structure with with vocal trees i think it's vocal trees or vocal tries one of the two i'll probably alternate between the names there uh but if you're interested in keeping up to date with that i think julian is the

best best follower here for that that i've found so far and definitely give this a rate it's a short read but it'll give you some more context around this because this is definitely something that will help ethereum as a network uh probably i don't know if it's gonna implement it next year the year after but it's definitely on the roadmap and is definitely part of uh you know a big part of the roadmap as well so always good to keep keep on top of this sort of stuff all right so trent van amps has put together another thread around the merge this time about the merge and gpu miners now i was actually talking to trent about this and i kind of like ran an idea by him it was kind of like a i i wouldn't do this myself but it was kind of like a trade idea and i thought to

myself what would happen you know leading up to the merge and like immediately after the merge will the a flight of gpus come to the market because obviously there's a lot of gpu miners out there or will they go mine something like etc or one of these other chains um or will they repurpose their gpus for other things like um zk proofs and stuff like that uh and then that's what this thread is about training is basically giving his thoughts here it's quite a long thread as well and there's a lot of great thoughts in here so i recommend giving it a read but the reason i thought of this as a trade idea is because while there's a ton of gpus fighting the market um then it will nvidia stock go down because there'll be less demand to buy these new gpus from nvidia everyone will

just be buying these used devices and it might lead to a short-term kind of like uh short-term depression in nvidia's stock price as i said i'm not taking this bet at all i'm not a trader but it's just something i came up with which i i think led to trent putting out this threat i mean the timing lines up i didn't ask him if he put out this thread because of the conversation we had but i think it's a really great thread and you should give it a read because there are a lot of question marks around what's gonna happen with the miners after the merge and look honestly i mean not to sound like a dick but i don't care what happens to them after the merge because they don't have anything to do with the ethereum ecosystem anymore but they should have been planning for this for a

while as well right they they knew this the merge was coming their new mistake was coming so whether they go mine another chain or repurpose their hardware to do as i said ck proofs and stuff like that uh it remains to be seen what they do with it or you know a lot of them are probably going to sell off their gpus i reckon on the secondary markets uh but yeah it remains to be seen what happens there but anyway trent has a bunch of um data to back up his points in here as well so yeah it's a great little great little tweet thread here i'll link in youtube description for you to check out all right so stephen goldfed up put out a tweet today saying l2 is really shine when ethereum gas prices are up arbitrary is configured to shield its users from short-term gas spikes and you

can see here this is a screenshot from l2fs.info showing that arbitrary's fees didn't spike during that massive kind of like gas spike to 3 500 way due to that nft drop now how did they achieve this well they have a system that basically detects when these base fee spikes happen and they basically say well let's not post any of our batches any of our layer two batches to layer one ethereum until this subsides because it usually subsides very very quickly because of the way the kind of base fee mechanism works and and by doing so they save their users from having to pay those high gas fees for no reason because you know the delaying posting of a batch by a few minutes during these kind of like spikes is not uh it's not a big deal right uh it still gets posted it's just that they

wait out until the the base fee goes down and they wait out and it means that they don't have to pay the ridiculously high fees just to get a batch in a couple minutes earlier or something like that there is no critical need to get a batch in you know a couple minutes earlier than otherwise would have uh so that's how this is kind of like working here now you know you can see here optimism uh uh optimism's face spiked with the with the base feed because i i don't think they have this implemented i don't think zk sync or or even loopering or aztec network have these implemented jets uh but they will i mean i mean it's very simple thing to do all you have to do is set up a thing on your sequencer that kind of like monitors the the base fee through

some api and basically says okay well if the base fee suddenly spikes then don't post uh you know just add t5 add t5 minutes to posting your batch and you know check again and if it comes down from there then post the batch to to layer one ethereum post it to mainnet and it'll be all well and good so i like this this is a really cool system i mean arbitrary is just like killing the game right they're just they're just really really on top of things but as i said these other l2s are going to do it as well there's no i mean there's no no point for them not to do it unless they really care about getting their batches in like as fast as possible which as i said like yeah okay it'll give you some marginal better kind of like security and finalization on your

transactions like faster i should say not better because your batch will have been in like a few minutes before otherwise would of but is the trade-off of making users pay a really high fees worth it probably not right the whole point of a layer two is to reduce fees uh and i don't think and i think users are happy waiting a few extra minutes if it means that they can still pay the cheap fees there so very very cool to see this and i yeah thanks to steven for for highlighting this all right polygon has announced the launch of their new liquidity mining 2.0 program or the key mining 2.0 campaign today so essentially what they've done is they've taken their learnings from their original liquidity mining program which was actually quite successful this is what propelled the polygon pos chain to uh to prominence as well they did a

very successful liquidity mining program but they've taken their learnings from that and launched their first ever kpi based liquidity mining program so what's new this time uh the dapps that are going to be given tokens are selected based on kpis like weekly average users or total value locked all the apps that never got liquidity mining before are now eligible it's fully transparent and verifiable requires no kyc and one cannot game the system so how is it beneficial for dallas building on polygon wanting to migrate to polygon and on teams can apply for the campaign due to no kyc uh each month the distribution is evaluated and dap's working hard i get more location the next month and projects choose where to use funds so the first allocation of projects which is 28 kind of like teams here

have been detailed and each of and their shares have been detailed as well you can see in this pie chart which of course you can see in the uh i'll link this that in the youtube description uh but yeah i mean i think this is really cool as i've said plenty of times to you guys before liquidity mining needs to get better there needs to be innovation here because it's just a mercenary farm and dump scenario a lot of the time it does not lead to long-term sustainable growth it leads to basically a lot of mercenary capital coming in farming the rewards dumping it and then moving on to the next farm but i still do believe that liquidity mining can be used in a very healthy and sustainable way to bootstrap growth of uh of new projects and to keep that grow and keep that growth kind of like going

and not just kind of results in a you know a spike in growth and then a complete dump and especially kind of like around tokens as well you you want to do liquidity mining and you want to get tokens out there but you also don't want that to suppress the price because if the price goes down you know it keeps going down it's really hard to build a community it's really hard to build a long-lasting developer community as well because of the fact that they're just like oh well this token just keeps dumping no you know everyone's angry about this everyone's in the discord channel complaining and they kind of get turned off from that so really really cool to see some more innovation on the liquidity mining front from polygon here and i'm curious to see how this works in the wild obviously a lot of this sounds good in theory but

we need to see how it plays out in the wild before we kind of like celebrate any kind of success here so i'll be monitoring this i'll keep you guys updated on it and check out this thread for a full breakdown of it it'll be linked in the youtube description all right so the index co-op has launched their latest product today called the interest compounding eth index or ic eth so i see is the first yield product built on set protocol uh index card builds their products on set protocol uh this tokenized strategy amplifies your eight staking yield by harnessing the best of lido's liquid staking and rbas money market into a simple erc20 token now they're calling it super staking your eighth so it's currently earning over ten percent apy on your eighth and you can see how it works here it deposits lido's liquid

staked each token as collateral on average recursively borrows wealth through avere swaps for more st es obviously this is a leverage strategy here going going on here it's a it's a bit more risky and then they these are the benefits it's uh decreased risk but not eliminated risk of course gas efficient ease of use and composable within a d5 i really really like these products that we see coming out around staked eat guys like i remember i mean even i mean i think over the last week i've been talking about this a lot where people underestimate how big the staked eat ecosystem is going to get because you have vanilla steak which is already going to be a massive industry it's all well and good then you have all of these leveraged steaks eat and all these kind

of like yield burgers that are going on top of it and you have structured products and you have institutional grade products and you have you know probably products that are going to be like super djinn offering 30 40 50 percent plus apy on stacked eighth but obviously very risky and it's just going to become an absolutely massive industry i mean i checked today and i remember mentioning that the validated queue was uh i think just below 14 000 and we've been clearing that at about 1200 validators per day since then but it's back over 14 000 it's 14 159 right now the validator queue um so people are staking the wreath there's a ton of fomo here because of these products i i think because of the fact that you can get over 10 percent yield on your eat with minimal risk i mean there is additional

risk here obviously vanilla staking eat is the least risky thing and there's additional risk whenever you do leveraging compounding and doing yield burgers but i think this is a big driver of it on top of the institutions that are probably getting interested they're thinking of products and and a way to sell those products to their customers there's going to be all types of other structured products around this guys the eats taking industry is going to be bigger than we can all imagine and i wouldn't be surprised to see uh you know 20 30 40 million each steak within the next maybe 12 months especially when we when we merge if post-merge yields are going to be nuts like especially if the fees start going up again on layer 1 which they have been recently the unburnt fear revenue going to stake is and then the mev being

extracted and stuff like that i mean wow wow guys the the apy could be 10 over 10 percent on vanilla steak eat then adding all these yield burgers and you're talking 20 plus percent low risk yield on your eath uh an eighth denominated yield right with an increasing eth price is due to the everyone's taking their eighth more eat being burned of course uh the triple harvening that's happening with with um with the merge it's just getting crazy guys like i just i cannot believe that more people aren't talking about this still like it's just the most obvious and crazy thing to me it's i mean it's the main reason why i'm still buying eath at this point like i obviously i bought a lot of my 100 200 and uh and buying at this price is

obviously a lot higher but i i just can't look at all the bullishness around 8th and everything around 8 and think to myself oh yeah i'll let that go oh yeah i won't buy more eth no of course i'm going to keep buying uh but yeah anyway i'm going a little bit off track there getting too bullish again but i love these products and it's really cool that index corp has put something like this out uh because this it's competition right we obviously had um there's galleon dell with the ethe maxi product there's a bunch of other projects out there as well we need more competition in this space because it means that the yield will the yield burgers will get safer less risky and also offer more yield because of it as well so very very cool to see this check this out i'll link it in youtube

description uh for you to go possibly ape into but as i said be cautious just know what you're getting into because there's always risk with these products uh but but yeah index cop has been around so it's not a rug or anything like that they've been around for a while and really cool to see them come out with this new ic product today all right just the final shout out here i talked about this the other day but i did that wizards of apac uh twitter spaces with uh uh with the 8th down under uh i think it's down under down under the the account here uh today uh yes they are under um and you can play the recording here if you weren't able to catch it live because it was done 6 p.m australian standard time which is like when everyone's pretty much

sleeping in the rest of the world so definitely check out this recorded it'll be linked in the youtube description basically what we talked about was i mean the first part of what we talked about at the start was like my background you know how i got into ethereum what's captivated me about the ecosystem then we obviously talked about a lot of ethereum related things like the merge and layer twos and stuff like that uh probably a lot of it would be repeated stuff for for you guys that listen to the refill every day but the first 20 or so minutes has a lot of stuff that i don't usually talk about so if you're interested in that definitely check out this recording it'll be linked in the youtube description below but i think on that though that's gonna be it for today so thank 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