The Merge updates, Immutable X updates and more - The Daily Gwei Refuel #374 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where we cap the latest news the ethereum ecosystem i'm your host anthony's assigner and today is the 30th of may 2022 all right everyone let's get into it so i just wanted to talk through something that i kind of saw over the weekend which was kind of like a bear thesis for eth posted by uh andrew kang who works at mechanism capital here a fund in the crypto space now he's got kind of like a screenshot of a bunch of dot points here that he posted to twitter kind of giving his i guess bear case for ethan he starts by saying eighth has a major uh has a major flows imbalance now what i want to do is kind of run through each of these points and and kind of like teach you guys how

i go through these sorts of things and how i reason about it and how i can kind of really quickly uh kind of like come up with the conclusion that it's basically fud um and and you know if funny enough he actually posted this kind of like at the bottom of of kind of like eighth like the 1700 bottom that we just had like i don't know if that's gonna hold but he posted and then we started going up again so i was like you know this is hilarious the timing here but basically i want to go through each of these points so he what he what he kind of like means by a major flow's imbalance here is he means that there's more people well he believes that there's a lot more people selling than buying and he kind of starts by saying you know these are the people that kind

of like are buying eth right now and he says short-term scalpers because round numbers fading sentiment et cetera aka the short-term traders right uh and then the second point is no one else because all other eth believers deployed their dip capital and previous 1000 dips now look he's literally just kind of like given two points with no data to back it up at all he's just like said things so that's the first thing that that always kind of goes up in my head it's like okay well anyone can say whatever they want but is there actual data backing this up is there actually actually kind of like a thesis behind there is there actually kind of like any reasoning behind it at all and really there isn't so kind of like when when he when he said this i was just like okay this doesn't

really make much sense like there's no data backing this up like what are you even trying to say here um and then then he goes on you know who are the people selling and this is even worse like he says institutions that realize eth market opportunity is below expectations the fundamentals are deteriorating such as network activity and fees and growth inverting okay so like when i see something like this i just i'm puzzled because if you baseline i guess like network activity across every single network right now you know in crypto whether it be ethereum bitcoin any other network out there then you look at what the kind of market is in like we're in a bear market obviously and you baseline it to that then obviously network activity is going to be down like the less people that are in the ecosystem the less activity

there's going to be on chain the less fees ethereum is going to be generating as an example here uh and then that's kind of like what you know what what's going to happen right their network's just going to kind of be used less so network activity goes down but you've got to baseline it to the market they were in if ethereum's network activity was going down during a bull market then i would say that andrew has a point but it's not it's going down in line with general market sentiment general market activity so and then you know just the broader point of saying fundamentals deteriorating what do you mean like what do you mean fundamentals deteriorate nothing has fundamentally changed for ethereum at all like the road map hasn't changed just because the price went down the merge timeline hasn't uh time maybe not time i'm gonna

talk about the merge in a bit but like the merge hasn't changed like it's still happening right um the later twigger system is still kind of like happening like like when i see these sorts of things it just gets so puzzled i'm like what fun are you talking about network activity and fees well yeah they go down or up depending on what the market is doing like that's just what happens because these networks are economic financial networks less new money coming in or i guess like less market activity less activity on the chain i don't know why this is hard for some people to kind of like get and then you know he says growth inverting i mean we had lots of growth and now we have a bear market so let's baseline it are we over the long term higher than what we were

we are right the growth is still there the network activity is still there ethereum is still generating millions of dollars a day in kind of like uh fear revenue at layer one layer twos are still growing yeah so i i just don't think that's a point at all really um and then he goes on to say other people selling include institutions that got wrecked by luna and other assets need to reduce risk and or getting net outflows from lp redemptions now if you don't know kind of like how the fund and vc kind of like world works he's got a point here um but i think this is not really a point towards ethers as a point towards just like crypto in general so for example if there were funds where there were a fair few funds they got wrecked on luna and got lost money on lunar ust they may

have lps which are called limited partners basically people who invest in the in kind of like the fund saying oh well i want to pull my money out now right and if that money is not in like a stable coin or is not in fiat well then the fund has to sell off other assets and i think we saw we actually saw a bit of that i think that's why eth went to went to 1700 and why btc went to it went down as well i think that we just saw you know broad selling from that but the thing is is that like that's not a long-term thing that's a short-term thing and for every seller there's a buyer so these funds and whatever can be offloading but people are buying this up right so i and i don't think that's a permanent thing at all that's just going

to be a short ter i don't think it's going to be a medium term thing i think it's just going to be a short term thing um and i and i would assume that a lot of them have already kind of like not maybe not finished selling but like a lot of them have sold the bulk of what they probably wanted to sell at this point but that point there i think is the strongest one out of all of his points but at the same time it doesn't just apply to e that applies to literally like every asset that these funds were kind of like holding that they needed to sell off and in all honesty the funds they're probably going to sell off the assets that they're least bullish on and they're probably going to be least bullish on some of the other like crap

out there that we've seen fall so much and they'll be going to sell that first rather than their eighth right um and then his next point go uh andrew says retail that sell because prices go down and they are bleeding in multiple directions i mean yes but again this doesn't apply to just either like retail if if retail investors are panicking and just selling everything they're going to sell everything that they hold and a lot of them don't just hold each they hold multiple cryptos like including bitcoin including a lot of the other tokens and stuff like that um but you know even still on nets they're probably going to sell b2c and eth less than they're going to sell their other assets just by virtue of the fact that beta c and ether going down less like could you imagine someone holding an asset that's down

you know i guess like 50 in in a in a week or something versus 8th or btc right like they're probably going to sell off that asset rather than that it depends on what they have conviction on and things like that but again this is not unique to eat so i don't know how this can even be put on here as like an eighth kind of like bear case like that's a crypto bear case right that's not an eighth big case so again just a weird point there uh and then uh his last uh nice last point i guess he's got another point here where he said project treasuries are selling because they realize their runway is shrinking by the minute hearing many projects have had poor runway playing and actually kept most proceeds in eath okay to a certain extent yes but at the same time what project treasuries

people will point out oh there's some nft treasuries that raised in ethan and they needed to sell to kind of like get runway like fair enough but that's nowhere near the amount of heat that was raised by something like icos right the reason the major reason why eth went up in 2017 was icos a major reason why it went down in 2018 was icos because the icos had these massive eighth treasuries that they kept selling during 2018 and that drove the price down the nft treasuries in east they're nowhere near as big as what the icos were not it's not really in the same league i don't even think it's worth comparing the two because it's just so different and on top of that in 2018 like there was a lot of arguments to be made that there was no reason to hold eighth like they were

like you know ethereum was dead the eighth wasn't gonna crew any value and even like some of the biggest eight balls but i believed like you know what's next faith sort of thing so there's that to consider as well so even if these nft treasuries are starting their eighth one they don't have anywhere near amount of the amount of eight that ico treasuries had and two there's so many other uh so many more reasons to halt each than they were in 2018 so comparing the two i think is a bit bit um weird andrew didn't compare the two in east in his uh kind of like tweet here but i've seen other people do it i just kind of like wanted to um wanted to kind of like uh uh speak to that and then he says short sellers i mean okay but short sellers are selling everything again it

doesn't just apply to eth and they're short-term speculators they're not long-term kind of like investors uh miners yeah okay fair enough but again same applies to something like bitcoin and the thing is he actually inadvertently gave a bull kcr that minor cell pressure is disappearing in a very short period of time in the next few months it's gone completely forever within ethereum so i don't even think that that's a good bear case at all right and then lastly people that wanted to sell earlier but wanted a bounce again fair enough but that like is not unique to eth so when i and this is kind of like how i run through and i'm just like i asked two major questions i'm like is this unique to eth and does this actually uh have any data backing it up right and pretty much none of these

points here are unique to eth um and none of them really have something to back it up besides maybe the institution selling off assets but again that's uh not unique to eight so you know when i say stuff like this i just feel like people believe it at face value because it looks like it's been presented in in kind of like a logical way and kind of like you you you like when the price is going down you kind of like give more credit to bare feet to the bearish outlook not not maybe not you guys but like people in general just give more credit to the bear thesis because the price is going down which again is just like a really weird thing that people do but just generally i just thought this was like pretty trash like for a bear thesis right like and i feel like he put

this together um kind of because the price was going down it was just like very very weird so that's kind of like how i run through it all i hope that was kind of like a bit educational for you guys there on just like how i think through these things but it becomes second nature eventually and honestly like it's always good to test your own thesis test your own kind of like ball thesis especially on on things and it's fine to do that but you need to test it with like reasoning you can't just test it with a few dot points and you know people just saying things like if you took what andrew was saying here at face value and believe that without doing any of your own research without reasoning about any of these points then okay for sure you would believe that

that was like a really really bearish case for eth but i just went through and kind of like systematically uh debunked each of these kind of like points um you know i mean i could go into more detail but i don't obviously don't have a limited time but you know i just kind of like when i look at these sorts of things i just i can't help but laugh because it's like where was this like when ethan was over 4 000. like why is it is it suddenly um suddenly a bear case now and the most hilarious thing is still to me reading that like he he one of his bare kind of like uh cases was that network activity and fees are down like of course they are bro like the market is quiet like i don't understand how this is like i don't even understand how he put that

out there without reasoning about it himself like it just puzzled me really really bad so i just wanted to kind of like go over that with you guys but anyway i'm going to move on to some some kind of like i guess more exciting news from the weekend and that was stuff around the merge and particularly around merged timing and the difficulty bombs so you can read this tweet thread here from tim biker which goes to the all-called devs call that happened on uh friday night here or i guess like friday night for me friday whatever for you for you guys but basically the tldr i'm not going to read through the whole thread obviously the tldr is that like the core dev says base have basically agreed to delay the difficulty bomb to august so from june to august now for those of you who who may not

have been uh have been paying attention the difficulty bomb has already kicked in and i'll show you how you can how you can find this i'm just going to bring up the chart here i forgot to get it up before so the difficulty bombs kicked in which means block times have actually started going up already so if i bring this chart over here for you guys if i put it here you can see this is the average uh block time chart now those spikes they'll give you one guess what those spikes are in the chart you guessed it difficulty bomb right so we had this one here which lasted a while back in 2017 block times went up to 30 seconds now normal block times back then were about 14.5 seconds today the normal block times are 13 seconds but that was kind of like a big spike

there then again a big spike here right and then again another big spike here well i mean bigger than the normal case right of a spike here for the difficulty bomb there then the difficulty bomb was delayed until uh kind of like basically today uh and now we can see that you know we have block times of around 13.3 seconds and now they're up to about 13.8 seconds so the difficulty bomb has begun to be kind of like kicked in here uh and you know that's going to keep going unless we kind of like delay it now i did say to you guys that i think block times would have gotten up to about 20 seconds in august which would have been five uh i guess like 6.5 seconds more than you than normal here uh and but users may have started feeling it because essentially if the

block times are going up that means there's kind of like uh i guess like less um less space for oh sorry that means the kind of like scalability goes down so to speak because the blocks coming in slower fee is probably going to go up because people want to do you know do things quicker than the other people and then the people outbid each other and we have the normal kind of like fee market right so that's the chart that kind of shows that but yeah the tldr is that the difficulty bomb is going to be delayed until august uh and the merger is still being targeted for august but given that they have to now do a difficulty bomb delay which isn't a difficult thing to do guys like it's very very easy for them to do the the the i guess like the most

difficult thing is just coordination but given that that they're gonna have to do that that's gonna take a little bit of time away from everything to do with the merge that's gonna lead to a bit of kind of like coordination overhead the uh the merge may push into september because of that now i did say that i was highly confident that august would happen but i did say that if if the difficulty bomb was to be delayed then i would expect the merge to also be kind of like pushed back a little bit now that's not to say that the merge still can't happen in august it could it could happen on like late august i i i would rule out like early or mid-august um given that this kind of that they've decided to delay the difficulty bomb and i actually think that delaying the

difficulty bomb uh is the correct choice because i think the the problem is is that as i said like the block times would get like to 20 seconds or 20 25 you know depending on how long it would take it would go 26 plus seconds um and that would kind of like slow the chain down and users would start feeling that so you know given the fact that it's very easy to delay it why not just delay it and if and if it kind of like results in a one to two week kind of i guess push back of of the merge then i mean it's it's kind of like worth it and i do think so so at this point in time i would say that late august is still a possibility but it's more likely to be early september in my eye in my mind uh just given this

reality and now again we have uh shadow fork six happening tomorrow i believe the 31st of may and we have uh robsten going ahead on june 8th the shadow fork i expect to go through smoothly i don't expect any kind of like trouble with that or any kind of like surprises there robston again i'm not expecting any surprises but that's going to be kind of like the big test like if robson goes through really smoothly we obviously will move on to the next test nets like sepolia and gurley and if those all go through smoothly then i think yeah early september could be it could be kind of like uh the target there i was still pretty set on august like if those things went smoothly if it wasn't for this difficulty bomb delay and i remember i said this like if the difficulty bomb wants to be delayed then

i would expect the merch merge time to be pushed back but this is my estimations again guys like this is not the estimations of uh of anyone of anyone else this is my own personal ones uh but i would er on the side of kind of like early september but again it's not like it's it's much longer like really i mean would you like are we really going to feel like a mid to late august um sorry early september rather than mid to late august i don't think so so definitely uh just keep that in mind i know you guys are probably not kind of like trading around the merge maybe some of you are but i think most of you are long-term investors so either way that's not really not gonna kind of like uh i guess uh hurt your positioning here at all um but just kind of like from a

knowledge point of view i would yeah i would definitely bet on early september over over kind of like late august at this point in time but we'll have to see maybe they can do it by august you know maybe they'll surprise me and kind of like they can coordinate around august but i think they definitely want to give everyone in the ecosystem enough time to be ready for it so probably a month at least uh which you know for the merge and you know given the fact that they're being ultra conservative about this sort of stuff yeah i would say early september is more likely here but you can read tim biker's kind of like core dev uh all core devs call kind of like thread breakdown for more details about this i'll also link this chart in the um youtube description below you can go check this out if you

want to as well all right so i spoke about that seven block reorg that happened on the beacon chain last week and i kind of like went through a high level of overview of what happened but barnaby from the ethereum foundation here has put together an absolutely amazing blog post visualizing that reorg and going into detail about exactly what happened how it happened well you know what uh why it probably won't happen again in the future and the fixes that are kind of like in place for this i so i just wanted to kind of like highlight this and say that i highly highly recommend you go give this a read it's very very simple to follow i i think like it is technical it does go into a lot of things that you may not hear about often but the thing is is that it does that because i mean

this is inherently technical stuff like it's protocol level stuff but i think barnaby did an absolutely amazing job explaining all of this and visually as well like these are these are gifs here so uh this top one is a gif so it'll actually animate exactly what happened but as i kind of like discussed last week this isn't something that will result in any delay of the merge or has any effect on the merge it's already a solved kind of like issue it was just the kind of thing where the nodes hadn't upgraded and that you know they needed to upgrade but essentially uh everything's you know everything's fine it's not a big deal but definitely read barnaby's blog post for a full breakdown on that all right so superfias posted on twitter today a reddit comment uh from space insider who who's kind of like said the

validator acceptance rate has increased from 1125 per day to 13.50 per day now as you guys know this is because that as more validators are kind of like accepted into the beacon chain um up to a certain amount uh once it reaches a certain amount we can add even more uh validators to the network at a time so it started off at 900 per day then it went to 11.25 per day now it's at 13.50 per day which is really really awesome to see uh the validated queue i believe is under 1 000 right now i think uh what ended up happening was that a lot of the inflows from lido stopped coming in because the st peg uh kind of like de-pegged there so essentially what what happens now if you stake with lido if you put eighth into

lido and then get st out you immediately take a loss you take a point to a point three uh uh sorry point zero two point zero three kind of like eighth loss or two to three percent loss because of the fact that the st uh kind of like peg is still it's still kind of like a i think point nine seven point nine eight so it's not uh it's kind of like not one for one still um so people stopped kind of like sticking with lido for now but i mean i i'm not going to argue about whether that's a good or bad thing i know there's a lot of discussion going on with lido right now and i will cover more on that in the future i think once this governance proposal with lido goes through about them limiting themselves on the network i want to see the outcome

of that um and i'll probably discuss it then but uh very very very cool to see that the um the validator churn kind of maximum validator kind of like that can be entered into the beacon chain has increased uh the next increase will happen when there's 458 758 752 validators and it will increase from 1350 to 1575. so cool to see this uh i think there's going to be a lot of validators coming in through a few other kind of like services i know that uh rocketpool's doing a lot of good work uh stakewise i think the swell network's going live soon you know i i wouldn't count like the uh the validated queue being kind of like almost empty now as any sign of the future i think uh it's a sign of basically lighter inflows slowing down but probably not inflows more generally

and as the market heats up again i expect inflows to kind of like pick up again as well so we'll just have to kind of wait and see what happens uh there but very very cool to see that the acceptance rate was increased again today so i often get asked why the minimum required ether amount to stake is 32 and people say you know was this an arbitrary kind of like amount picked was it picked because of the the price of eighth like you know uh the price of eighth was much lower when it was picked you know or was it picked for such and such reason well no the the actual reason why the 32 requirement exists it's got nothing to do with the amount of eth it's got to do with the amount of validators the beacon chain can handle and this is due to two key

properties so beacon chain can only handle a certain amount of validators before it starts becoming unstable because what all the validators need to do is they need to stay in sync with each other right they need to kind of like vote on the same things they need to kind of um you know stay at the what's called the um the head of the chain now the the two things to consider when uh considering how many validators can be active on the network at any one time is is is signature aggregation and and networking related uh things now these are very technical things you can actually read about this in um in the spec uh in the annotated spec as well from ben edgington um but essentially as as hardware gets better and as we get better at kind of like doing signature aggregation and networking on the beacon

chain we could actually lower that 32 eighth requirement and the goal is to actually lower that to something like sixteen eighth or eighth or maybe even four eight one day we definitely don't want it to be uh you know obviously too high but we we definitely need to keep it high enough to uh you know based on the validated account to make sure that the chain remains stable so in the maybe in a year maybe in a couple years or something it could be reduced to 16 by virtue of the fact that hardware's and has gotten better we've optimized better on the client side and think and and kind of like the core developers and core researchers uh feel safe knowing uh you know being able to admit more validators to the network yeah and that would obviously open up participation to more people but the

thing is okay so the thing is is that like even if let me pose a scenario too i think people bring this up all the time because they're like you know 32th is out of reach of most people you know how can people solo stake if 30 to eight costs uh what is it whatever it is today two thousand if either two thousand dollars sixty four thousand dollars i get that right but let's let me let me oppose the scenario to you guys let's say the minimum eighth requirement was dropped to 40. now this is probably going to be a while before it drops to 40th because it require it would require a lot of improvements but let's say in five years the minimum eighth uh amount required uh drops to drops to four eighth all right four eighth at two thousand dollars but that's eight grand eight grand right i

think you know uh most middle class people could could i spare that right like in in in first world countries that's fine uh well not spare that but like that would make the investment right okay that's either two thousand like if eight is that two thousand and five years something is wrong so let's take the bare case of what it would be in five years and i think that would be ten thousand i think it's probably gonna be higher than that but that's my own personal belief but let's just take the bear case so four eight or ten thousand dollars is forty thousand dollars okay there goes most people that can solo stake again right so the solution in my mind is not to lower uh i mean okay one of the solutions yeah uh is to lower the minimum eighth kind of like required amount but it's not the only

solution because of the fact that you can lower it as much as you want but the thing is if ethereum succeeds the eighth price at what it's trying to do and if theorem keeps growing which we all think it will the eth price is just going to keep going up and up and up so in saying that you need the i mean you need to work towards lowering the minimum amount required but you also need to make it easier for people to kind of like solo stake in other ways such as uh with decentralized staking pools so something like rocketpool right we need to encourage those solutions as much as we need to kind of like look at lowering the minimum eat required amount and in saying that as well lowering the minimum eth required amount to stake would also lower the required amount for

something like rocketpool as well which would you know it would have downstream effects which would be really cool too so just some things to consider but there's this thread from togwall here uh going over this and going over this in more detail and more technicality so i highly recommend giving this a read i'll link it in the youtube description but those are all the things to kind of like consider there so yeah i just kind of like wanted to highlight this thread from from toggle and kind of like explain it in my words as well all right so another great thread from bar tech here about uh how rollouts put transaction data on on the l1 chain i know this is costly obviously right now but post 48.44 which is proto dank sharding uh fees will go down but let's see what it can go wrong if data is not

posted on chain and that's exactly what bar tech kind of like goes through in in this threat so i highly recommend giving this to kind of like read here to understand that if if data is not posted on the same uh kind of like chain that the um that that the uh the proofs are being posted to if data is kind of like posted elsewhere so if it's not settling on ethereum it's settling some it's getting posted somewhere else then it is not a roll-up anymore it is a validium or it is an optimistic chain and bad things can happen so the i think from from my understanding one of the worst things that could happen was that your funds can't be stolen but if the data is not available so for some reason if the data is off chain and you can't get access to that data because the

nodes are offline then your funds essentially become frozen so you wouldn't be able to withdraw your funds no one can steal your funds but you wouldn't be able to withdraw your funds so i mean it's kind of like useless who cares if no one can steal your funds if you can't even withdraw them right so that's why i like i am personally very kind of like uh strict about not referring to things that don't post data on chain as a roll-up because they're not like they shouldn't be equated with those things from a security perspective but bartek does a better job than me explaining it in this thread so i'll link it in the youtube description and you can go check it out all right so i put out this tweet today where i said uh inside me there are two wolves one that is hyper giga bullish on

each and can't stop buying it whenever possible and one that is hyper giga bearish on 99 of tokens and coins and wonders how anyone can be redacted enough to buy them redacted's like a meme on twitter not to say the other uh the other r word um but basically it's kind of like funny trying to reconcile these two points because i think like i mean obviously i'm really really bullish on eighth i've gone through the bookcase for eighth many many times before i'm not going to rehash it then but i am so bearish on so many coins and tokens i think that the majority of them should literally be worth zero i don't know why they're not worth zero um not i mean it's hilarious like even something like terror classic is not worth zero anymore it's worth like 900 million or something it's just crazy like these

these things just just play out right but the thing is is that when i kind of look at the rest of the ecosystem i'm just kind of like well i don't think these things are going to drag 8th down with them but like there are people holding these things there people have a thesis on them there are people who think that these things are going to um you know outperform usd and outperform eighth like no like as i've explained to you guys before most things will not outperform either the long term even the things that people were like really really bullish on for like a month or two and then you know and then it kind of like goes down only from there i remember one of the kind of like um things that people were really bullish on especially during d5 summer was was uni

now unisop is obviously an amazing project keeps growing uni token doesn't you new tokens been down only against eth and even against usd right um and then you can kind of look at ens and other hyped up token projects amazing tokens not doing too well diy dx again project really good turkey not doing too well there's plenty of examples of this so even the most hyped up things that people were like really excited about for maybe a month maybe two months maybe even three months they've just failed to to outperform eighth and and obviously like now it's a bear market but the thing is is that uni came out at the end of 2020. okay it went through the whole bull market it went up in usd but still underperformed eighth and now in a bear market it's going down more than eight so it's

underperforming even more and then on the recovery it's going to recover if it does recover much slower than something like ethwood so i'm not saying i'm bearish i'm just using union as an example i'm not saying i'm bearish on uni um particularly i'm just really really bearish on so much stuff out there that isn't even part of a successful project like uni's token title is a successful project and that we all kind of like believe we'll be successful into the future i know there are some people who don't think uni swap is going to be successful i'm just using it as an example please please don't kind of like take that as it's kind of like anything it's just an example to illustrate my point here um but there are like plenty of projects out there that have tokens associated with them but the project's

going nowhere and those tokens will be down only forever they'll be overshadowed by other tokens and other projects and uh everyone will just lose money on it basically or unless they kind of like sell maybe they can make some money or whatever but essentially that's kind of like what happens with most tokens and you can if you need proof you can just go look back at 2017 and 2018 and see what were the most hyped up tokens back then like i can think of plenty off the top of my head like gollum for example was was very hyped up go look at gollum today uh there was status which was a really hyped up ico i mean even just on the um the nft side crypto kitties right all that sort of sorts of stuff it's all pretty much dead now uh and but the

thing is the status project's still going believe the golem project's still going um cryptokitties i mean the creators of that created their own blockchain and then uh did some a bunch of weird things but you know there are still things kind of like going but the tokens are just dead right for one reason or another but you can go look and kind of look for yourself as well what you can do is you can actually go to coin market cap and they have like a historical snapshot feature where you can look at what this what the kind of like top 10 or top 20 or top whatever looked like in say you say you want to do the higher the last bull market do like november or december of uh of 2017 uh and kind of like look at what was there and then look at it today and look at it against

usd and look at it against eth most of those things are not doing too hot so that's just an exercise if you guys want to go do that but anyway i'm going to power through the rest of these updates because i'm up on the 30 minute mark here um actually this is something that i probably can't power through because i had a few thoughts about this but hazu quote tweeted a token terminal here which has like a picture of how it started versus how it's going for r there so ave the application started on ethereum now after the application is on various evm chains and layer twos and then has quote tweeted this and said sometime in the next one to two years there will be a flipping from fat protocol thesis to fat application thesis the space is way over invested in l1 copycats i totally agree with this i

think that too many people piled into the l1 trade and at the expense of applications i think that there are a few application tokens out there that are undervalued i'm not going to name them because i don't want to give any investment advice but i do think there are some out there that are undervalued i haven't bought any of those or anything like that but in contrast to these l1s which just are so overvalued there needs to be kind of like a flipping here uh and there was some great discussion in the tw in the um kind of replies here uh into hazu's thread that uh sahaja's tweet that i would recommend you go look at but the tldr of my thoughts on this is that applications are king makers for chains the change of the best applications on them are the ones that are going to win there are too many

chains you guys know i think this already there's too many l1 chains uh there's probably going to be too many l2 chains eventually but at some point but eventually i think that we're just going to coalesce around you know one settlement layer which i believe is going to be ethereum and a bunch of l2s that are going to settle to a theorem there will be application specific l2s that do well um you know here and there but i think the juggernauts of the industry will be ethereum as the settlement layer and the layer twos as the execution layers and all that sort of stuff there and there will be other chains like enterprise chains and bespoke chains and and these other sorts of things that all exist but if we're talking about like what accrues the most kind of like activity and value i do think it's just

going to be a ethereum and a small handful of kind of like l2s like they'll one trade in my eyes like not just because i'm an ethmaxy but just it was it was just silly and you can look at in the prices like how silly it is like a lot of these things are just down only like i mean phantom i i went through phantom i think a few weeks ago it's it's just wrecked absolutely wrecked like not just the price but it's ecosystem is dead harmony the same thing i don't hear anyone talking about harmony anymore um avalanche actually did an interesting thing recently where they cannibalized their own activity because uh what ended up happening was that an avalanche project called crabdara or kabada or something or some crab game moved off of the avalanche c chain which is the avm chain to its own

subnet and basically the avalanche sea chain activity collapsed overnight it went down by more than 50 percent i think there was a study that was done that showed that that the crab game accounted for 50 just on its own but that was just its own contracts that wasn't including all the other contracts that it was interacting with such as the dexes and things like that so what ended up happening was that game moved to a subnet and all that activity moved off so now the avax on chain activity on the c chat so the avalanche chain activity is really really low and this subnet basically has the activity but the thing about subnets is that they don't pay the c chain for their security they're not like l2s they're essentially separate blockchains um that use kind of like validators from the c chain or the c

chain validators can opt in to validate on these subnets and these subnets can have their own tokens so like there's just kind of weird stuff going on in these other l1 that just the tokens like make me so bearish on their tokens like i was i was already bearish on their tokens but like it's even worse now um and it remains to be seen what the l2 tokens are gonna look like right like i got no idea and it remains to be seen what happens with thematic token obviously it's it's tied to the polygon pos chain right now but they're going to have l2's coming out so i don't know what's going to happen with that and i don't want to comment on things like the magic token because you guys know i'm an advisor the polygon and i get compensated in token so i don't want to

i don't like talking about things that i kind of like have a heavily heavy vested interest in uh besides eight of course um but uh you know it remains to be seen how the l2 tokens are gonna fit i don't know uh there are already some out there like um uh like dydx which i actually consider more to be a d5 token than an l2 token even though they're on their own l2 uh loop ring i consider to be probably more d5 than l2 even though they have like a whole l2 ecosystem it's kind of like weird how people kind of like bucket these things but it remains to be seen what the tokens like optimism and arbitrary do oh by the way i i i feel like optimism is going to launch their token this week i just i have a feeling you guys know i'm an i'm an investor in

optimism but i haven't like heard anything this is not me giving you guys like any privileged information i just feel like from what i've seen the information that i've seen publicly like this public information kind of feels like it's going to launch this week so we'll see maybe that's going to be kind of like what kind of like ignites maybe the next phase of the bull market i don't know we'll have to see there but yeah just some of my thoughts there uh and just the last few things before i wrap up for today i just wanted to highlight that immutable protocol fees are now live now immutable uh for immutable x they have a really cool model for their protocol fees that i suggest you guys going to read about i've talked about fees before and how they're going to work on l2 versus l1s and how you know we can

prevent spam and all that sort of stuff there so i highly recommend going giving this blog post to read um on the fees i'll link it in the youtube description i'm not going to go over it now because i'm out of time just wanted to highlight that there and then also immutable has put forward a proposal to the apecoin dow to the board ape stuff to uh get the um i guess like bought apes to move to a layer two on ethereum basically to move to immutable instead of to another chain so you can go read this proposal it's really really great i like it it makes a lot of sense i think it would be beneficial to everyone if they if the um board ap goes just to move to an l2 instead of another chain obviously because it keeps it in the ethereum

family so definitely go check out this proposal and last up here i just wanted to shout out the the theorem foundation is currently searching for a hiring coordinator to help find great people for their community of teams and projects so if that's something that you may be interested in or something you think you have experienced uh in the past or you think that you could uh be a good fit for uh you can go check this out i'll link this drop in youtube description below and then you can go check out all the requirements and everything and maybe even apply if that's something you think that you could do but i think on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subscribe to the newsletter

join the discord channel and i'll catch you all tomorrow thanks everyone