Market sell-off, Optimism updates and more - The Daily Gwei Refuel #212 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily great refuel worry cap the latest news in the ethereum ecosystem i'm your host anthony zasano and today's the 20th of september 2021 all right everyone what a weekend and right now as i'm recording this a bit of craziness going on but i'll get to that in a sec i just wanted to give a quick shout out here that coffee uh from the discord channel has organized another community chat in the daily grade discord channel which will be happening this wednesday at 8pm australian eastern standard time which i know is i think it's like early morning for the u.s and uh i think lunchtime early although ish for uh for europe there and asia around the same time so if you're awake and uh you know want to just quick uh chat to myself a bunch of others in the delegate

discord uh the last one that we did was quite fun i mean there's no agenda or anything we just like basically should pose a thing on the on the channel and it's it's just really fun to to lay back and it's a lot of australians in there because we're all up at that time of course after dinner for us but yeah be sure to join i'd love to see you there on on wednesday 8 p.m australian eastern standard time this wednesday the 22nd of september all right uh actually before i talk about that i just wanted to quickly give a shout out i did a quick kind of podcast with staking rewards here that's now live on youtube i did this about a couple hours hours ago a couple hours before recording this we basically talked about eth2 staking ethereum generally and aip1559 for about 45

minutes so if you want to go check that out i'll link it in the youtube description for you to do so all right so i put out this tweet just before i said crypto twitter now macro experts again so this was in reference to what's been going on in china and the kind of like chinese real estate companies that seem to all be collapsing and people are calling for the global financial crisis 2.0 people saying you know we're about to repeat 2008 blah blah i'm not going to say that i know anything about the chinese real estate market at all to be honest i don't know anything about uh kind of like the company's collapsing i hadn't heard of them until uh basically the last few days and i have absolutely no idea what kind of like long-term effects that's gonna have on the crypto market i think

that uh in the short term right now it feels like there's a lot of i guess kind of like panic going on and that's never really a good time to be paying attention to anything you can't really get a read on the market let alone just like overall sentiment because everyone's just kind of like freaking out over it and i think that's a little bit overblown um it's funny because this stuff has been known about for for a few months from from what i've seen but it's just kind of coming to light now because it's playing out in the in the markets and stuff like that so that is what people are pointing to as the reason for the crypto sell-off right now uh and it's a pretty good reason i mean the us kind of like stocks a week as well because of it people kind of like

worried that this could fl uh on flow onto the rest of the uh worldwide economy and it could have a longer term kind of like on flow effects here i'm as i said i'm not an expert in this stuff i have no idea what's gonna happen that's kind of like the explanation i think for why why we've been seeing a bit of a sell-off here but you know we'll have to see the the sentiment in kind of like crypto and in the crypto markets is pretty similar to what the sentiment in the stock market is it's kind of like day-to-day up and down narratives everywhere stock market works a little bit differently because they have like open and closing times like over the weekend you can only really trade the futures contracts on uh for the u.s stock market for example and then i think the market opens in about an hour

from now so 9 30 a.m eastern time and we'll see what the market does in live trading the people are saying ah you know the markets are gonna like have a massive sell-off because of uh because of all this stuff happening in china and you know i'm not convinced personally i don't i don't know i'm not a trader so it doesn't really bother me either way but um you know that's kind of like the explanation as to why you know we've been seeing this this sell-off recently and it's funny because whenever i kind of see these sell-offs i just kind of go to the chart and i i quite literally zoom out on the chart i'm like okay i'll switch to the weekly chart let's see what's up let's see what the weekly chart looks like and i know what it's already going to look like because i

know what price eighth was a year ago i know what price it is today and i look at it i'm just like this is just funny because there are so many points over time like not even just the last year but like let's just say like the last three years for example of crypto how many points in time can you point to and remember like how much panic there was back uh you know back in kind of like the the i guess like end of 2018 is a perfect example here when the mark the crypto market in particular was selling off like pretty heavily and we hit like 80.8 in december of 2018 btc went to like 3.5 k after going to 20k and 8 went to you know obviously 14 100 uh just less than a year prior and i don't really remember anything from back

then to be honest i don't remember the feelings at that time i don't remember uh kind of like who i was talking to i don't remember the sentiment of of crypto twitter it was much smaller but i mean i think i was still reading reddit back then i don't remember any of it to be honest um and that's because it's irrelevant it absolutely means nothing like it i mean i do remember buying some eighth back then but that's it and i don't remember um all the other kind of feelings around it and that's because as i said it's inconsequential it is a short-term narrative thing and it didn't really matter in the long term yes we had like a longer term bear market in like 2019 and things like that but honestly most of that yeah i don't even remember the the sentiment like what people were kind

of like feeling i do remember that people were feeling down about things and kind of like it was just like uh sorry down about the price but the building was still going on and everything like that and 2019 was it was a great year for me personally but the day-to-day happenings like you just don't remember that sort of stuff we're not wired to we actually i i i i think this is a thing we're wired to forget the bad things and just remember the good times um because our brain doesn't necessarily want to just remember the bad times for the rest of our lives so there's that aspect to it so times like today and today isn't even the worst of it recently i mean it may uh of this year like when we when we kind of like dumped from 4 400 to 1700 in a week that was

much worse than what we're seeing now and like even that feels like a lifetime ago now it feels like a blip and uh it's still fresh i guess fresher than most things but you kind of like zoom out and you just remember where we've come from and and you know and and kind of like seeing this dump today and just like any kind of like dumps in general you kind of think to yourself well i mean you know there is sell offs from from time to time it can't go up forever but the longer term trend um not for everything but i i believe for eighth and and and a few other assets is definitely going to be up for you know for for for the foreseeable future especially in in an industry where it's kind of like growing so quickly and it's funny because we also have like

in the us uh you know money printing's still going on other parts of the world as well there's a fed meeting this week i believe um i think tuesday and wednesday u.s time where they're going to discuss like i don't know a bunch of fed things that could affect the market and if they say well they're not going to taper they're money printing they're going to keep print they're going to keep doing it well that could be good for crypto right they could that could be good for for markets in general and then who knows and and if anyone tells you that they can predict what's going to happen on a macro economic scale they're lying to you like no one can predict it there may be some people who get it right from time to time but the general trend is that like it's very very hard to trade

macro in like and trade based on macroeconomic events because there's just so much emotion confusion um you know fud that just flies around it's just very very hard to trade these things and i think what ends up happening is what we're seeing now where people sell off because they're scared they're panicking whatever and then no one's bidding because they're like well i'm gonna wait for this to calm down what's the point of buying now when i know that this panic in the streets i'm just gonna i'm gonna kind of like wait till till all this blows over wait till we understand the situation a bit more not kind of be reactionary here so eventually you get to a point where everyone's like okay well i mean is that it like is that are we over now okay cool and then you see the price starts

going up again and people are like bullish again and we've seen this happen in crypto plenty of times the sentiment changes literally within an hour the sentiment can change like we could be dumping really really hard and then all of a sudden all these bids come in right and you have like all these kind of like a big amount of money just come in and buy and kind of like rocket us back up this is exactly what happened when we went from 1700 to like over 3 000 in in like a month i think it's just hilarious how quickly we went back after being bearish for for a little while and everyone being like oh the bull market's over blah blah whatever um and you know i remember i was one of the people who were saying i don't think it was over at all and i still don't think it's over um

just because of this kind of like macro stuff i think in the short term all the markets will sell off together when there's this much kind of like uncertainty and confusion but then over the kind of like medium to longer term uh it just kind of like corrects itself and all the markets trade independently of each other but it's funny to see like the correlation between stocks and crypto right now especially over the short term but we'll have to see what happens going forward i think that i still think that later in the year is generally really good for crypto so i don't see us like kind of being bearish for too long here especially considering how much is happening and kind of how much interest is in this space i don't know i feel like during these kind of like macroeconomic sell-offs it's hard to

tell short-term but long-term that nothing's changed there but anyway i'm gonna i'm gonna kind of like wrap it up on the market commentary there's a bunch of other updates to get through but i figured i'd just talk about it since it is topical right now it's something that the discord channel is actually having a lot of chats about you know there's people on both sides of the kind of of the of the discussion there's actually a pretty good discussion if you want to get involved be sure to check out the channel there all right so aztec network have a few updates about aztec 2.0 so v2 has been live for six months already with over 5.5 million dollars being sent through the network since launch and with uh one eth cap so you'll remember that i think i mentioned this when this first kind of like got

released that there was a one eighth cap on what you could do on this network which obviously severely limited uh what you know uh the usage of it severely limited the amount of capital that could come in but they're increasing this limit to 100 000 now per transaction so no more one eighth cap uh it's now much more than that it's about what 32 33 34 8 whatever the price of eighth is at a time here but obviously much more than the one eighth per cap there uh so oh well yeah here you go they've actually quantified it they're saying zk money now supports private transactions up to 38th uh and two ren bt uh 100 000 die and two ren btc here which is cool so i can't accounts will be need to be migrated uh to to kind of like take advantage of

these changes they had audits done for this and there's bounties for the network as well so cool to see aztecs still making lots of progress here i know that they aren't as i guess like talked about when it comes to the layer 2 space because they're a roll up as well but they are definitely one of the most important ones because of the privacy aspect to it and you know i they are definitely moving i guess probably slower because a lot of this is bleeding edge they're doing privacy roll ups which is like next level right it's on top of what it's like what i've talked about before zkzk rollouts where it's basically using zero knowledge for privacy within a zero knowledge roll up it gets uh it gets you know it gets complex from there and you need to make sure the security is is paramount so

that's why there's limits and stuff like that but cool to see them kind of like lifting the limits here and allowing for more transaction uh kind of throughput all right so tim baiko put out an all-call devs uh recap thread here that you can read through uh but one thing i wanted to focus on with this thread was the merge so he says here that um mikhail is kind of working on the specs for the first interop devnet between execution and consensus clients you can expect them early next week so in plain english uh this is a spec for basically the um execution uh clients which is the eth1 clients geth aragon you know i mean uh nevermind stuff like that and consensus clients which are the eth2 clients your prism your lino you take her and all that sort of stuff so these

specs will be due early next week which is this week uh technically now um and then from there the devnet can be built around these specs and we can have probably uh maybe a longer standing um merge devnet which is cool because we need that i mean we need all these devnets and test nets to be done we need them to be longer lasting so that we can kind of like test everything there is to test about the merge before we can even think about kind of doing any kind of i guess like mainnet related stuff or essentially giving a date for mainnet as i've said before i expect it to be in kind of like sorry not to be ne this year i i i think it's like a 50 50 chance it's going to be q1 it's like a coin toss at this

point uh q2 i can see being like a pretty high chance so if it doesn't happen in q1 i can see q2 being pretty much like a 90 plus percent chance that the merge happens are probably more than that if it you know provided nothing kind of goes wrong nothing fundamental happens but uh some fundamentally wrong happens but it's kind of like always hard to tell because with ethereum um core dates and we expect and layer two dates there's always something there's always something unforeseen because of these this is all bleeding edge research and development this is not something that's been done before there has never been a merge of networks of this size i don't think there's ever been a uh in crypto there's ever been a merge between a proof of work and a proof-of-stake network uh especially given the fact that uh it's it's very

risky because of the fact that okay well you're basically firing the miners right um with this merge so are they gonna do anything uh are they gonna do anything to mess with the network leading up to the merge how do we defend against that and there's actually a few different things that they've thought of i saw one thing where they said instead of using a block number to oh sorry instead of setting a block number to determine when the the merge fork happens they would base it on the difficulty the mining difficulty of the network i think that's what i read so there are already lots of discussions uh kind of happening around this a lot of thoughts happening around this but essentially uh um you know as i've kind of like mentioned before once altair ships on eth2 which is happening i think early october um

then all of the e3 and 81 researchers and developers are going to be focusing on the merge pretty much i think almost all of them will be focused exclusively on the merge so we're going to have like the i guess the smartest people in ethereum working on this it's going to be great to see how it all comes together and shakes out and i'm confident they can deliver this in a timely manner i don't think it's going to like um be a thing where we have to wait till like q4 of next year for this to happen i'm actually pretty you know i know i said 50 50 for q1 but i actually think that we can get it done in q1 um but i say 50 50 because until i guess i see more of these devnets and test nets up it's kind of like a coin toss but you know q2 i

could say definitely be you know definitely not being later than q2 but don't quote me on that because i know you know we'll get to q2 and then people will be like oh you know you said you don't think you can go uh later than q2 and it gets delivered in q3 or something so yeah definitely don't don't quote me on that but i always like to be optimistic about these things uh but yeah i mean this the rest of this thread kind of talks about this in more detail and got a link to a bunch of different resources so i'll link this tweet in the youtube description and you can go check it out all right some really exciting news out of optimism and this is the news that they were teasing that i was talking about last week so it's not that their

white list is being removed as i speculated last week but for good reason so they introduced uh what uh a blog so so they put the a blog post together here titled the future of optimistic ethereum and in this blog post they detailed that they're going to be upgrading the network in october to be able to be evm equivalent so not only evm compatible it's going to be evm equivalent which means that any contracts that run on ethereum layer 1 using whatever tooling that's available using whatever infrastructure is available is going to run exactly the same on optimistic ethereum now this is something that arbitrarily doesn't have arbitrary has their arbitrary virtual machine but it doesn't have evm equivalents that's not necessarily a bad thing but it does make it a little bit more difficult for developers but with

evm equivalence on optimism they'll actually it'd actually be super super easy for developers to just like one click deploy to optimism what they've already got working on ethereum layer one which is amazing i mean it's honestly pretty awesome that oe has uh sorry optimism has been able to do this for their optimistic ethereum network and as i said it's going live in october and as i said before about the this is a good reason for the the white paper uh the the white list to still be in place well you obviously don't want apps deploying to your old infrastructure because then you'd have to migrate them across to the new infrastructure so why not wait until the upgrade is in place then remove the whitelist and kind of open the floodgates and i actually think this is going to be the you know an amazing

amount of kind of like apps are going to come to optimism as soon as they do this so say like mid-october or something they didn't give a date in october but say it happens in like mid-october they upgrade the network and then like a week later once it's all running well and good they say okay well the white list is gone have at it you're going to see all the top ethereum apps just deploy here straight away if it's truly as they say one click deploy evm equivalents no need to change anything at all no need to kind of like point to different kind of like um infrastructure providers or don't need to worry about your tools not working with it if it's if it's as they say here even true evm equivalence i can see optimism um getting a lot of adoption very very quickly so i'm super

excited about this i think it's really awesome that they've been able to get to this point in time this is pretty awesome from an engineering perspective as well from what i've seen like i don't know the details on the engineering side of course not a developer but from what i've seen developers are really excited about this engineers are really excited about this and you know that makes me excited so great to see this announcement from oe and this doesn't mean that kind of like optimism optimism's network isn't growing right now either i checked the unisop stats the other day they're doing on average i think 10 million dollars a 24 hour volume um which is which is really awesome for a layer to network uh especially one sorry for a layer to exchange on a la2 network that's uh not open just yet right it only has a bunch

of apps on there like lyra and synthetics and i think a few hours like one inch but nothing like what we have on mainnet um same goes for arbitrary they do have a bunch of other apps that optimism doesn't have right now like curve and such but definitely not the bustling ecosystem that we have on layer one that's going to take a bit longer to kind of roll out there but still very very awesome to see this so i guess like congrats to the optimism team for getting this across the finish line i guess like in the next few weeks this is uh uh really awesome and i i wish them the best on kind of like uh getting this to mainnet all right so crypto fees put out a i guess like a brief update last week saying that they were previously under reporting arbitrary transaction fee

revenue so with the updated data model that they're using you can see that arbitrary actually had significantly higher fee revenue than bitcoin on september 12th so this was i guess the date that everyone kind of like rushed onto arbitram and there was like all these farms happening and everything like that um but you can see here that arbitrary did 612 thousand dollars worth of 24-hour revenue on september 12th which was uh over 200 000 more than than bitcoin's entire network so this is crazy layer twos are going to do more fear revenue than you know individually than bitcoin will do as like an entire network and you can see obviously ethereum has been doing like much much greater fee revenue like 40 50 x greater fear revenue than bitcoin has been doing and the reason

why i think this is fine not just because i want to poke fun at bitcoin but bitcoin relies on transaction fees for security ethereum does not right and um you know these layer twos due to an extent because they need to generate revenue in order to pay uh layer one for its security but that's not an issue because these layer twos um are going to be used heavily because there's incredible demand for them because there's incredible demand for blockchain compute which is what these layer twos uh do like the execution compute smart contracts cheap uh kind of like transactions all that sort of stuff so from that perspective you know bitcoin doesn't have that at all bitcoin just has the demand to move bitcoin around while and this is what what's always kind of been funny to me if

you're saying that fear revenue is going to secure bitcoin and the only way bitcoin fear when you can go up is if people use the network um and the only way people can use the network is to move bitcoin around but then you say that bitcoin is for holding bitcoin it's for hoarding it's digital gold you're not actually supposed to do anything with it um but then you say oh but you can use lightning network to pay for your coffee all these kind of things just like clash together and don't make sense they don't reconcile so from that point of view i actually think bitcoin's fear revenue is not going to get much higher from here i think it's going to keep stagnating or go or kind of like reducing and i think a lot of that activity is just going to go to ethereum like it already has

people are going to use ethereum layer two networks to move bitcoin around as well whether that be in the form of wrapped bitcoin or whatever it doesn't matter if they're gonna do arbitrage and stuff like that they're gonna just bypass the bitcoin network altogether and uh you know it's really bearish for bitcoin in my eyes but it's just funny to see like how the layer twos are already doing so much i mean even optimism on that data 331 thousand dollars almost as much as bitcoin and you know if you add that those layer twos together almost a million dollars then you add all the other ones that aren't tracked right now like uh dydx and diversifying immutable they're still paying gas fees uh because they're rollups and you just add all that together that's millions of dollars of fear of renew which is is probably more than like just adding all

the layer twos together that's probably more than any of the kind of like uh other smart contract chains including like you can see here bsc including all the other ones you've heard of and stuff like that so yeah i mean this to me i know transaction fees are a pain for a lot of users and i'm not saying they're good what i'm saying is good is that low over a low individual transaction fees but high aggregate transaction fees so it's okay if users are paying like you know under a dollar for uh swaps on these uh what once we get there like 200 for four different kind of swaps or even a couple dollars for swaps um but it's not okay for users paying fifty dollars for a swap but it's okay if the aggregate volume or the accurate revenue of these layer two networks is very very high

because they can do more transactions than ethereum layer one can do which means you have small individual transactions high aggregate uh transaction transaction fee revenue sorry small individual transaction fees and high aggregate transaction fee revenue and that way it just works very very nicely so yeah cool to see this cool to see crypto fees updated it is definitely one of my favorite sites i i visit it quite regularly um but yeah i am i i'm looking forward to seeing what other updates they put forward here as well so nifty island this is a project that i've been kind of like monitoring for quite a while uh i think i mentioned that like on the first day they kind of came out on the refuel but they put out a kind of like last week a sneak peek of their terrain generation system so for those

of you who don't know what nifty island is they're basically trying to build a virtual world a virtual metaverse so people can have their own kind of like islands and kind of like shape it to what to how you want it to be have your own kind of like metaverse items on there um and kind of live in this world and you can see here there's like a terra terrain generation system or a terraforming system um for your like world or for your island and stuff like that and this is obviously an early sneak peek and stuff like that but this is really cool to see i i love this sort of stuff i was a big kind of like minecraft player back in the day i really loved building stuff in minecraft and just like letting my imagination run wild um and you know if i get to do that

in kind of like a crypto based game where i can kind of like create things or buy and sell items and stuff like that it just adds a whole other element to it so i'm really looking forward to seeing how nifty island shakes out and you know i'm really looking forward to having my neon palm which i got uh on display there in my uh kind of like katana sword too my nifty island blade uh that i can kind of uh display on my island as well so i'm looking forward to playing around with this when it does eventually come out and there's any dates yet around this but i mean you can join the discord channel join the community if you want to get involved at this early stage as well all right so m stable staking v2 is now live so you can now earn mta rewards

swap fees and balancer labs lp tokens by staking your mta if you have that there so disclosure i'm an advisor and investor to m stable we just wanted to get that out of the way but staking v2 has been in the works for quite a while there was staking v1 um that kind of like uh i i guess had existed since i think late last year and staking v2 uh brings with it a bunch of different features and there's also a migration guide as well here if you want to check it out uh but basically the trdr as i said the users can stake their mta to earn more mta rewards and balance out pull tokens there's vote delegation um there's a cooldown of three weeks for withdrawal so just good to keep in mind there and there's also quests to earn multipliers at scale

earning and voting power as well i think there's some nfts as well involved too so kind of similar to the zapaquest features as well so if you want to read the full details of this there's a blog post here that'll be linked in the youtube description of course uh but cool to see emstable still chugging away here um as i said like i'm i'm close to the project um and i'm just really loving to like liking all the stuff that's coming out of them lately all right so last thing to talk about was something that i wrote about in the delegate newsletter today and i put this tweet out i think like on the weekend where i said ethereum is changing the world and most people have no idea that it even exists um this is funny to me because whenever someone outside of crypto asks me

like what i do for a living i always start with and i hate that i have to do this but i always start with oh do you know about bitcoin because you know i just assume that nine times out of ten these people are probably never going to have heard of ethereum before but bitcoin gets covered extensively with on within the media um usually for bad things like whether they cover scams or exchange hacks or like the price going down or the price going up right um but ethereum doesn't just doesn't get much coverage or hasn't traditionally it probably gets more now than it used to but i always start with yeah have you heard of bitcoin they'll be like oh yeah i heard of it here and there and then i'll be like oh okay well i work in the ethereum ecosystem and they're like oh

what's ethereum is that like bitcoin and i'm like oh okay here we go here we go cecil's going into turbo kind of like uh uh lecture mode about ethereum and i usually get carried away with it like i do on the refuel sometimes where i'll just kind of like red pill someone on ethereum but i'll give them the lowdown of like what it is what you can build in and stuff like that and you know some of them will not really care or lose interest or most of them actually probably lose interest rather quickly and kind of like it goes it goes you know above their head because this stuff is inherently complex um to kind of like understand and kind of like get your head around depending on kind of how deep you want to go here but some of them some people are genuinely

interested and they they want to know more about it and like holy like this is awesome like how is this even possible and the funny thing is as i said here like most people have no idea that ethereum is doing things like d5 where defy is not just some kind of like thing that we're playing games in to earn some yield d5 is working to basically as cathy would put it on the bankless podcast hollow out the financial system like just disrupt it completely and replace it with something radically better it's not just d fights nfts like reinventing culture reinventing the way people kind of like um i guess coordinate around around culture around art around collectibles and things like that same with dows and social tokens and then the whole web 3 space like all this is happening in a in

a bubble at the end of the day like we're all in a bubble that most of the world has no idea they even exist they don't they can't even see our bubble they just kind of like see some some things on the media sometimes about like talking about our bubble being like oh you know the price went up or or you know like someone got scammed here or you know mark cuban talked about this like if a celebrity talks about crypto for example other than that there's no kind of like they don't come into the bubble they don't peek into it they don't even see it and they miss out on a lot of this stuff and to be fair i don't think most people actually have to worry about a lot of this stuff or care about a lot of this stuff they're going to be using it

eventually anyway like pretty much everyone will be using d5 eventually without even knowing about it uh people will be using nft without even knowing about it people may even be part of a dow without even knowing about it it's just all going to be i guess like abstracted away from the end user at the end of the day and that's how we get mass adoption anyway so it's not a big deal there but still when you really think about it and you kind of like really come to terms with the fact that ethereum is changing the world um and like you know most people just like you have no idea it's kind of like happening in parallel to them them living their lives just like a lot of other stuff i mean to be fair i have no idea about other things that may be changing uh changing the world right

now you know as much as i love kind of like watching all the space uh stuff happen space related travel happen i don't have time to pay deep attention to it so i'm probably missing a lot there in that bubble and those people in that bubble probably feel like they're changing the world which they they definitely are and then there's you know people in the medical industry people doing research on anti-aging stuff like i don't keep up to date with the data days of that because i just don't have the time um but i know what's there it's interesting but uh you know the people inside that bubble probably think to themselves holy this is going to change everything um and like really feel it i just like how i feel about ethereum and just like how a lot of you you would feel about ethereum as well so

i don't know i just thought that was something interesting i actually tweeted this out at almost 3am my time so maybe this was just me half asleep in bed being like oh my god ethereum is so awesome i'm going to tweet this out to everyone um but but anyway i think that's 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