The Merge updates, Layer 2 growth and more - The Daily Gwei Refuel #438 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delegate refuel where you cap the latest news in the theorem ecosystem i'm your host anthony designer and today's the 30th of august 2022 all right everyone let's get into it so just a heads up that there will be no refuel uh tomorrow tomorrow being wednesday uh and friday it is my fiancee's 30th birthday on thursday so we're going to be doing some stuff to celebrate so i unfortunately won't have the time to do the refuel on wednesday or friday so i will do a refuel on thursday but then a monday's refuel will cover a friday saturday sunday uh well technically it'll cover like thursday friday saturday sunday so yeah look forward to a possibly or probably extended refuel on monday uh yeah just keep in mind there won't be one on wednesday or

friday but there will be on thursday anyway we have the official announcement from uh i guess like the ethereum foundation twitter account about the mainnet merge now obviously uh this came out about a week ago but this was shared by the ethereum foundation twitter account just today and uh it's got a few things in here that i think i have i haven't covered yet so i think i've covered it but just worth kind of like reminding people uh the balatrix upgrade which is for uh the beacon chain for the consensus light is scheduled for september 6th now this is not the merge i've seen some people get confused about this and think that this balatrix upgrade is the merge it's a separate upgrade or separate hard fork for the beacon chain in order to get it ready for the merge which is obviously

happening around september 15th uh the second thing is timing so i just said you know the merge is happening around september 15th that here's the time that's been thrown around but there is a kind of like wide range it can happen between you can see here the official post gives the range between the 10th and the 20th of september uh we don't actually know the exact date simply because of the fact that it's based on ttd and not block time two of the websites that uh that you can use to track the merge sorry the merged timing is bordell.wtf which you guys are probably familiar with i've talked about it a bunch here this is saying that the merge is scheduled to happen on sept uh september 15th at around 2 40 a.m uh utc uh and uh sorry between 2 40 am utc and 12 uh 23

pm utc there's this other website called 797 dot io slash the merge which is actually saying that it's going to occur on this september 14th at 1 43 pm utc now why the discrepancy well because of ttd it's based on hash rate and obviously estimating out based on hash rate is is not going to give us a precise answer and you can see here that actually the ethereum hash rate went up over the last i guess couple of days and this might account for that i guess like acceleration towards that ttd and it happening on september 14th or at least kind of like estimated to happen on september 14th instead of uh 15th and i mean this is kind of like a really noisy chart but the hash rate did did go up right and i mean this is not

this i don't suspect that this is new miners coming online or anything like that it's probably miners switching off other networks coming back to ethereum i saw that the etc ethereum classic hash rate actually doubled uh and i guess that's just miners trying to kind of go to that network because the price went up a little bit of atc and kind of uh get get some profits there but if the price goes down then it becomes more profitable to mine ethereum then they just go back to ethereum right so the profitability of of mining is obviously obviously varies from from day to day basically uh and that's why you see this this variation uh in in hash rate so i think this would explain the reason why it's sped up a bit here and if more hashrate joins it'll speed it up even more and that's why it's very very hard

to to estimate exactly when it's going to happen because hash rate can drop off as well which would push it out uh so yeah i mean we've got a tdd set the hash rate shouldn't vary too much it should happen around september 15th but don't be surprised if it happens you know a few days later or a few days earlier it's just par for the course with this sort of stuff i mean i don't think we're gonna get in the situation where it doesn't happen for a while because all these miners have dropped off and we've pushed out to october or something i don't foresee that happening but there definitely will be variation based on on this the kind of like hash rate kind of coming and leaving as it normally does uh and just depending on kind of what's more profitable i mean if etc for

example was to double in price in the next week while you expect a lot of hash rate to leave ethereum and go to the ethereum classic chain to level it out in terms of profitability um but if atc was to fall by 50 or over the next week or something then you would expect hash rate to come to ethereum so as i said it's hard to kind of gauge this because of the fact that hashrate is notoriously volatile but that's why there is a discrepancy between bordell and this other website 797. just wanted to point that out there because i saw some people on twitter confused about it today so yeah i mean as we get closer to the merge it'll be easier to estimate this stuff uh well as we get closer to ttd i should say but yeah i mean we're still a couple of

weeks out here so it's difficult to get a very accurate uh reading but it's still expected around september 15th there all right so prismatic labs has published a blog post called everything note operators need to prepare for the ethereum merge so if you are a solo staker node operator whatever you want to call yourselves you should definitely give this a read just to make sure that you are ready for the merge i've talked about the merge readiness checklist before i've talked about some of the things that you are required to do such as making sure you're running a local execution execution layer client making sure your jwt token uh is is set your fee recipient is set and i guess like optionally making sure you have an mev boost uh um a sidecast running along alongside your validators because if you

want to capture mev that's the way to do so but yeah you can go check out this uh blog post from prismatic labs here specifically for prism obviously uh just to make sure that you haven't missed anything um and you can also check out the merge readiness checklist as i've talked about before all right so the ef ecosystem support program shared today about the uh merge data challenge which i talked about uh i believe a few days ago which is offering up to thirty thousand dollars in prices for data visualizations analysis and new tools to uh i guess i communicate the mountain of data the merge will produce so you can get all the details from this blog post on the merge data challenge and if you are a data wizard maybe you have uh have been making doing analytics dashboards or maybe you've been playing

around with nansen you should definitely have a go at this i mean as i said there are prizes up to us thirty thousand dollars uh usd here and you know that's more money for eth right so you should definitely have give it a go if you are used to kind of making visualizations and working with ethereum data of course and if you do if you do make these things feel free to share them in the daily great discord channel i always love checking out new doing doing analytics dashboards hill dobby actually shares his from time to time which i really appreciate i've shouted him out on the refill a bunch of times because he makes great dashboards but yeah feel free to always jump in there and share them with me and with the community i always love seeing that sort of stuff i i love

checking out the data i mean uh i guess like long-time daily gray watchers will know that i used to do a data series called the delegate data pump and i don't think i've done an episode of that for quite a while now uh and also the ama series man i've been lazy there but uh maybe i i'll get back to that soon but yeah if you if you do have any dashboards you want to share with us definitely jump in the into the discord and share it but have a go at this data challenge because the prices are very juicy all right so there's been a lot of chatter recently and i've talked about it a lot too about how layer two's uh i guess sapping activity away from layer one right and that's what we want to see we want to see users migrating from layer one to

layer two because at the end of the day these low gas prices are not going to last forever i fully expect layer one gas prices to probably not go back to up to like hundreds of way but probably you know 40 50 way i fully expect those average gas prices to come back once the the bull market comes back you know in earnest and because of that you want to be on layer twos before that happens so you don't have to pay the i guess extra fees to onboard into layer twos uh but i think more people are waking up to this now you can see here in this tweet shared uh on on on of a picture of optimism and arbitrary transactions over the last 30 days uh they've been averaging around 300 000 per day which is 25 of the ethereum main net which is awesome to see now there is

a bit of nuance here that i want to talk about the ethereum main net and this all kind of like pisses me off a lot when the alt l1 uh people do this the ethereum main net can only process a certain number of transactions based on the gas limit so as you guys know like different types of transactions use different amounts of gas and the ethereum gas limit is uh you know ethereum has a certain gas limit that can go up and down and because of that essentially there's only so many transactions we can fit into each block due to that gas limit and then obviously each day uh which is the accumulation of all those blocks uh so essentially ethereum is is capped like it can't go any higher than that and that's why fees go up because we've

reached the limit and fees will go up to because people outbid each other to try to try and get into a block now if all the transactions were i mean i think the average transactions for ethereum is like 1.2 1.3 million a day but that's all different types of transactions that's you know amm swaps that's money market stuff that's nfts that's simple eat transfers but if all the transactions were just simple eat transfers which only cost 21 000 gas it's actually the cheapest thing you can do on ethereum then we would have more than 1.3 million and we would have a lot more than that but that's not the way the ethereum network works that's not the way any smart contract chain that has a fee market would logically work so when comparing transactions per day from ethereum mainnet to these layer twos you really

do need to realize that these layer twos are inherently going to be much more scalable than ethereum layer one uh and these other l1s are inherently going to be able to process more transactions than ethereum layer one because most of the time or pretty much all the time they trade off decentralization for more scalability right they they up the their version of their gas limit and they can process more transactions per day because of that that's why i've always said that these kind of metrics are naive to take them on just face value you need to take the metrics all together and i fear revenue is obviously one of my favorite metrics but i think that that's going to prove to be a weak metric for layer 2's post proto dank sharding because of the fact that it's going to be so so cheap for layer twos to put

their cool data on layer one that uh their transactions are gonna fall dramatically and we're probably gonna see an uptick in spam because of that or an uptick in in junk transactions i guess you could call them because of that so you have to take it all as kind of like as a collective uh and measure users and a number of users in different ways in saying that right now while layer twos are still relatively you know expensive they're not the cheapest they can be they're not the most expensive they can be they're kind of like in the middle i think the per day transaction counts is still very accurate so 300 000 per day which is 25 of ethereum for optimism and arbitrary both the networks is really really cool i love seeing that um sorry this is combined not uh not not not each of these networks are doing

this is combined uh and obviously we have arbitrary odyssey going uh sorry albert from nitro going live tomorrow as you can see steven goldfed are uh reminding us here which is going to increase the capacity of arbitrary by about 10x i believe so they're going to restart odyssey and i expect arbitrary transactions just to shoot up again optimism still has the optimism summer that they're running with all the token incentives uh and you know both ecosystems are building out very nicely here as i said i think while transactions are still uh relatively expensive due to that uh relatively expensive call data uh call data cost it means that we we can kind of look at this and and have relative confidence that it's not junk or spam transactions because it would cost too much to do that so i'm looking forward

to seeing this grow to millions of transactions per day on these on these kind of like layer 2 networks it shows that there is still growth happening that looking at layer 1 ethereum is just really not the way to go anymore and i and speaking of data as i was speaking out before i think that a lot of the dashboards that i've seen for growth are focused on only ethereum layer 1 which just seems nonsensical to me they should be focused on ethereum layer 1 and the layer 2s because at the end of the day the layer 2s are an extension of ethereum layer 1 they count towards ethereum's activity so we should be measuring them in aggregate in saying that we should also be more nuanced about it and look at what share of the layer one ethereum network layer twos are taking up

because as that continues to grow we can see like the migration uh happen in real time as well but all in all the migration is not going to happen overnight it's going to take you know a certain period of time there are going to be i guess like non-true layer twos such as arbitrary nova for example and immutable x which i mean if you want to call a true layer to a roll up immutable x and arbitrary nova uh are not roll ups uh the polygon pos chain obviously is not a a roll up um but those things kind of like work to scale ethereum as well and kind of like work to scale uh the user base because arbitrary nova is targeting more of those social uh gaming applications uh there is immutable x obviously targeting nft and gaming polygon pos chain does a bit of

everything i think they're very much focused on nfts and gaming but they've also got a vibrant default ecosystem uh but as i said they're not a roll up or a layer 2 or anything like that uh but that can easily you know eventually be ported over to a zkvm or something once the technology's there so it's just a lot more nuanced than looking at ethereum layer one these days and i just really hate when people look at ethereum layer one and be like hey you know ethereum layer one transactions aren't growing it's stagnant it's like well because it can't like unless we raise the gas limit there can't be an increase in transactions per day on ethereum that's why looking at fear revenue makes sense for ethereum layout it makes the most sense if fear revenue is up it means there's more demand to use the network

is fair revenue is down it means there's less demand to use the network but at the end of the day the ethereum network has been at capacity for years now um even at the lowest gas prices it's still at capacity that's because ethereum layer 1 is still a vibrant ecosystem lots of people still use it whether the gas prices are low or high uh and but but in saying that people are using these layer twos as well so it's all just kind of like coming together as one big ecosystem and we need to look at all the metrics across that to get a nice snapshot of what ethereum activity looks like going forward uh but yeah leaving it at that for now as i mentioned arbitrary nitro goes live tomorrow uh and uh stephen goldfed here put out a tweet to use an airplane analogy we've built a brand new

engine to power l2 that's pretty cool but only half the story the arbitrary one airplane is already in flight tomorrow we're swapping the engine mid-air i mean in terms of significance i don't okay i don't think the albuterm nitro is as significant as the ethereum merge obviously but if you take it as like a vacuum nitro is to albertum one what the merge is to ethereum like it's that big of an upgrade i think so i'm obviously very much looking forward to using albatroom straight after nitro is live on the network uh because i want to experience all all the all the improvements that have come to the network i mean arbitrary is already great like i use i use a bunch of the different layer twos i use i mean i do use arbitrary and optimism a lot because they have the the the um most bustling

ecosystems but i use all of them i like to test them out see what they got going for them see what the ux is like i mean armature one's already great it's fast uh the transactions aren't you know aren't like layer one expensive they're i mean it's relative between albuquerque and optimism but the costs are going to come down their scalability is going to go up and uh and i believe the security is going to go up as well which is very very cool so looking forward to that happening tomorrow as i said before there's no refill tomorrow so i'll be reporting on this on on thursday so we'll hopefully it is a successful migration there all right so speaking of polygon they i think this was already announced that they were powering uh facebook and instagram's new nft integration uh but this is now live on uh on insta on

facebook and instagram so you can connect your wallet uh to either app and start sharing your nfts today as metta which is facebook and instagram's parent company says here now i believe that the interface for this i saw some screenshots of this uh when you connect your wallet it's kind of like it just looks like a normal web 3 app uh where is it uh no that's not a screenshot i saw a screenshot before of being able to select a bunch of different walls there was like wallet connect in there metamask i can't remember what other wallets are in there but that was really cool to see uh mahalo from from polygon here uh basically you know he said it's awesome to see polygon powering this even more so because along the way we understood that meta is now aligned with the core web 3 values and we learned about their

exciting plans for for the future here so if you want to read the full press release you can it'll be linked in the youtube description below but i think this is a pretty big deal guys like we always talk about adoption and getting these big existing web 2 companies to integrate with the ethereum i guess chain and with uh not with the the well we at least with the ethereum chain but with crypto more generally uh and we want them using things that are part of the ethereum family so i'm very glad that they went and and chose the polygon pos chain as the first kind of like chain that they're using here because there's a vibrant user base on there uh and i think that it's you know obviously those low fees there as well uh make it work uh very well the two so

great to see that oh and here we go there's actually a list here of the wallets that are supported so they're supporting rainbow uh metamask truss wallet coin baseball and and dapper wallet uh which uh and ethereum polygon and flora are the support of blockchains uh which is which is cool to see so i think uh yeah this announcement today is about them going live on on polygon that's what mahalo was was highlighting here uh but yeah great to see that they're getting involved i know people have different opinions on facebook and instagram i mean i'm not going to make my opinion here i haven't used facebook and instagram in such a long time i mean i have them but like the only social media i really use is twitter uh for obvious reasons but i think like they're still have a lot of users right like and instagram

especially definitely has a lot of people who would be interested in something like this i don't know about facebook like nfts on facebook yeah i mean i think it's worth more on instagram obviously because instagram is much more catered towards the media side of things rather than facebook which is i don't know what facebook is catered towards these days as i said i haven't been on in a while seems very disjointed but still cool to to see these go live uh on on polygon today all right so speaking of layer twos uh miriah or mario here someone's gonna make fun of me for my bad pronunciation again has partnered with starkware to create a zk starks based ethereum layer to scaling solution which powers their gaming platform marketplace and wallet so i think this is the first instance of another company

using starkware's technology uh to build a layer to scaling solution other than dydx like obviously there is the idx but they've i don't know they haven't abandoned stock way but they've obviously announced plans to do their up chain but i think this is the the first uh uh um first one outside of dy dx unless i'm misremembering i don't believe anyone else is using uh starkware's um uh roll-ups i i think this is a roll-up right because obviously uh there are other things using starkwear such as diversifying immutable x but they are valydium so i believe this is a roll-up uh let me have a look here i actually only saw this just before are they saying layer 2 protocol but like people have been using layer 2 to refer to uh volidium's and um

uh and other kind of like such constructions instead of a roll-up actually no i think this is a validium or because they're saying up to 9000 transactions per second which is what a mutable x talks about as well uh yeah no i i definitely don't think this is a kind of like a roll up here if i if i kind of like google roll up no uh volidium no i don't know they're going to talk about the technology it's it definitely seems to be a validium but i'll um i'll kind of like dig deeper in that off offline because i can't see anything that immediately jumps out here but this is an nft platform so i would expect it to probably uh have to go on a validium because the zk roll would be too expensive for an nft platform regardless of all of that still very cool to see

another layer two or i guess like another see i struggle here because depending on who you talk to you'll get torched for calling and a validium something that stores its data off chain a layer two but i feel like the layer two term like i don't know guys i i don't know if we're gonna win that battle like i i want to be technically accurate when i describe things but i'm seeing you know respected people and respected uh companies referring to like validiums as a layer two and i'm kind of like okay well is the layer two term just referencing it can reference something that stores this data on chain and of chain and then we just call this something that kind of like stores both its data and it's um transaction proofs on chain at roll up and like do we differentiate like that i

i don't know like i don't know but it's still very cool to see the the more volumes launching like i think they're they're fine products uh but yeah that terminology always gets me tripped up but i just don't i i try not to like annoy anyone when i talk about these sorts of things because as i said depending who you talk to you'll get torched for referring to things in the wrong way but i think that the terminology was are the hardest ones to win it's just whatever people refer to it as i mean at the end of the day we retired uh the e2 terminology months ago but everyone still uses it like even some of the a lot of the eth core devs and researchers will still say eth2 because it's just that catch-all term that has been around for a long time

and fighting terminology is very very hard uh i know from experience it's very very hard as an educator as trying to be as technically accurate as possible doesn't matter at the end of the day what matters is what people refer to it as in saying that i don't think we should allow things that are like completely separate to ethereum to call themselves layer twos like we shouldn't call other layer ones layer twos to ethereum um because they don't that they really have nothing to do with ethereum right whereas i can i can accept bending the rules for a volidium or or like an arbitrary nova for example something that does not store its data on ethereum but i still think roll ups are going to be the long-term winner anyway with things like dank sharding so yeah anyway go check this out i'll link it in the

description if you want to read all about what maria is here all right so a volts uh protocol has put fixed borrowing live uh today so essentially uh the launch of fixed borrowing uh means traders can convert variable variable borrowing positions on rv and compound into fixed borrowing positions so this can be done within a few clicks on the volts ui here so if you do have an rv or compound position and it's variable on a variable rate you can change it to fixed rate with volts protocol here so the initial pools will cover ave usdc other eighth compound usdt borrowing positions providing opportunity to lock in fixed stablecoin borrowing or fixed if borrowing costs in the build up to the

merge so if you as i said if you have those positions open you can definitely go check out this uh ability or this feature on vaults protocol i'll link it in the youtube description below all right so our feet announced today that they are live on the polygon mumbai test net so i want to disclose here that i am an angel investor in fee i think i've talked about them once before on the refuel uh but i wanted to highlight that they're live on testnet because they've been working hard for a few months now so they describe themselves as the web 3 world uh created directly from ens domains and wallet activity activities enabling the easier visualization of on-chain identities so the reason why i found this protocol like very interesting is because i am really bullish on on-chain identity i

think that obviously there are things to be worked out such as privacy and usability but i think that in general you your on-chain identity your on-trend profile you know for example mysasso.eth is me is my reputation is part of me and it's something that i'm going to use across all web 3 stuff for the you know foreseeable future so i want i would love a way to visualize that i would love a way to get more creative with it to get more interactive with it and that's what fee is doing here by allowing people to visualize their on-chain identity and build potentially cities web 3 cities from your kind of wallet activities here so as i said they're launched on the polygon mumbai test net today which you can go check out you can basically open the app here i don't know if it's going to work for

me because i'd have to connect my wallet which uh am i on uh my saswell.ethe wallet i'll probably do it live on there for you guys i haven't done this yet uh let's connect my wallet here uh uh let's see it's gonna tell me to change networks yeah switching network to uh the mumbai test net okay now let's say anf is not found okay okay it's probably because uh it's it's on uh yeah on girly okay it's uh definitely not going to work unfortunately live on air here but you can go test this out for yourself uh and port everything over i'll definitely do this off air um but yeah if you want to learn about what fee is you can check out their website as well it's got a bit more information here as well as links to joining the community uh and

partnerships and reading their blog and everything like that so definitely go check that out if you haven't yet you can actually see the graphics here of what this could potentially look like based on your on-chain activity right you could have like a whale if you were uh if you were a whale right or you could have like a uni-swap um a little uh unisop signage there if you use uni-swap and i mean you can think about like these are just the very simplistic things but you can think about how far you can take this and how you can have very unique things depending on what you've done like for example were you a genesis validator was your validator spun up at beacon chain genesis that could be really cool were you a genesis uh wait were you a receiver of eth at the ethereum on genesis like that would be

very rare right and then you can kind of like expand this yeah and you could create like a whole metaverse here where you visit other people's cities you do things in them you can uh extend it out to do building applications within it like it's all this is really definitely part of the metaverse but the possibilities can potentially be endless here so that's why i kind of like back them i'm excited about it i don't back many of these sorts of things like nft projects uh i generally steer clear of them because a lot of them are definitely scams and a lot of them are definitely grips and a lot of them just make no sense but i do think fee makes sense and i do think it's something that people should be excited about so definitely go check it out i'll link it in the description

below all right last up here i just wanted to give a shout out to this amazing podcast that justin drake has done with uh bankless all about ethereum censorship resistance and censorship in general honestly like i wish i was as smart as justin i wish i could distill these things down these concepts down as well as justin does i highly highly highly recommend you go listen to this podcast it's a couple of hours it covers so many things that i've talked about on the refuel but just in more depth and with more technical clarity than i can give obviously because justin works full-time as an ethereum researcher uh but yeah i just just 100 go listen to it go do it after you finish listening to this i think this is the last thing i'm going to talk about so go do it as soon as i finish

the refuel here and on top of that you can actually look at um his slides i believe he yeah he he's got a bunch of slides that he um presented at edcon about this as well which you can find in the replies to uh to this tweet here um and uh yeah just definitely go kind of like check it out go give it a listen highly recommend that i learned uh you know a fair bit myself but it's not just about learning it it's about reinforcing uh the concepts in my head as well like the way i'm able to distill things down why i'm able to cover such a wide breadth of things on the refuel is because i'm exposed to it multiple times a day like all the merge related stuff that is in my head i have literally been exposed to it every day

for like years now it's just years worth of built up knowledge that has worked for me i don't know what kind of learner you are but you know even if you know something even if you're aware of something and if you've heard and heard it a hundred times i still think it's worth listening and and hearing it again potentially from different perspectives potentially in different kind of technical clarity and different terms and that's exactly what justin drake has done here about the censorship resistance and censorship in general on ethereum and it honestly made me bullish on the future of ethereum censorship resistance because we have so many solutions coming to help and uh with with kind of like obviously the ofac stuff and any other censorship potential that comes to the network especially under proof of stake so go give it a listen i'll link it in

the description below but i think that's going to be it for today 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 uh join the discord channel and i'll catch you all on thursday yeah not not tomorrow on thursday uh thanks everyone