MEV-Burn FAQ, Real-world assets chat and more - The Daily Gwei Refuel #592 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Daily gray refuel I already kept the latest news new Theory maker system I'm your host and this is honor until the 26th of May 2023. all right everyone let's get into it so starting off today's episode we have a fresh recap thread of the latest ethereum all core dev's call from Tim baiko here now what they covered on this call was mostly got to do with the removal of something called self-destruct which I'll talk a little bit more about in a sec uh some 4844 spec changes op code management and potential final Cancun editions now the self-destruct stuff is mostly or pretty much all got to do with developers it's not something that an end user generally kind of interacts with or really cares about so if you're a developer if you're

someone just curious there is a great thread here from uh d-dub D dorb I think is how you say it uh where they say next version of ethereum or the um the dencoon upgrade will remove a self-destruct allowing a future transition to vocal trees the ethereum team uh had asked them to establish to what extent will this break existing protocols and this is their summary of uh of what they found so basically this shows that there are some protocols that will unfortunately be broken by this because they're using self-destruct as part of their code base but the impact can range from low to high and you can see in this table here that some projects are impacted more than others and obviously a lot of these projects can just upgrade or change their

contracts around to to basically Rectify this now this is something that ethereum as a network has done in the past where basically removing or changing an OP code has resulted in certain contracts breaking and I don't think I mean they're assemble to say this goes against the immutability of ethereum I think like there is an argument to be made there but at the same time the self-destruct op code actually leads to more negative stuff than positive stuff on the network and it actually harms the network so removing it is being done for the health of the ethereum network and it should never have really been put in in the first place and it has been recommended not to use self-destruct for a long time now as part of your code base and anyone ignoring those recommendations did So at their own risk because there is strong consensus around

removing this uh this kind of op code here so as I said it is most likely I believe getting removed or changed in in such way some way here and you can read this thread to see all about that and the impact on that but that's what was basically discussed for most of the call yesterday there's also some news on 4844 I believe that they're getting ready to spin up devnet6 I think there was something here from Tim about yeah devnet6 will be the last 4844 exclusive devnet and then after that they'll start pulling in other eips to test as well so so far the devnets have only been testing 4844 but obviously they want to begin testing on the other eips that are slated for inclusion in the Dan upgrade and then after the devnets we'll move on to private test Nets and then or

I guess like permission test Nets and then a permissionless test net and then the the live test Nets and then mainnet of course I'm still expecting this to go live on mainnet uh probably Q4 at this rate I'm not sure exactly when in Q4 but but Q4 nonetheless but you can read Tim's thread for the full recap of the call as well as his thread from the dorb for and the impact of what removing self-destruct will have on the network all right moving on to a quick FAQ from domothy so this FAQ was answering some common questions that domothea has seen about the idea of burning Mev now Mev burn has been the Talk of the Town I guess for the last few months especially since donothy first proposed that it has gone through a bunch of iterations and

changes since then um so that's why Donald you put together this FAQ that basically answers all the questions you have around it and this is pretty detailed I highly recommend giving this a read if you're interested in learning all about uh Mev burn and maybe you have questions that are answered on here as well uh this thing that stuck out most to me was something that was highlighted in the daily gray Discord Channel as well so I think that there was a calculation done that if we had burned the Mev uh yeah so yeah as of early May 2023 it is estimated that burning the Mev since the merge so since since September 15th last year would have resulted in the supply of eth declining roughly three times faster so

it would been a huge I guess like burn on top of the already Big Burn of eighth since the merge if we had burned Mev instead of giving it obviously to to uh validators and the Mev Boost network now in saying that as I've said before I still want to reiterate this point that Mev burn isn't being done primarily to drive value to Ether to just to burn eighth so that we can burn more eighth and and make even more deflationary it's being done in conjunction with things like uh PBS or proposal Builder separation because we want to remove as many of these negative externalities that Mev generates on the ethereum network as possible so Mev burn is obviously one way to do that and you can read this FAQ from Dominique to get a full breakdown on that below now

speaking of PBS there is a new post here so Mike who works at the ethereum foundation has put out a tweet saying I'm super stoked to share a new piece written with a Justin Drake on the past present present and future of PBS so if you're curious about the relationships between Mev boost epbs and optimistic relaying you can check out this post on each research now again highly recommend reading this post for yourself it goes through basically the pros and cons tons of epbs so propose to build a separation here and how that will lead to a healthier and more Mev resistant uh ethereum network uh and it and I mean it's quite a lengthy process quite technical but it's not so technical that

you need to know fancy math or anything like that so I highly recommend giving this a read if you if you haven't yet now as I said like this goes hand in hand with something like Mev burn and this is going to be a big big part or of the general kind of I guess work being done on the core protocol next year so this year was all about getting withdrawals done laying the groundwork for vertical trees uh and also obviously putting in 4844 I think next year and possibly the year after that is definitely going to be mostly about these uh much more I guess like less and user-facing things uh and more I guess like core protocol core Network facing things like PBS like Mev burn like single slot finality like vertical trees because a lot of this stuff all feeds

into each other this current design for epbs as far as I understand from this post can't actually go forward without single slot finality being put in the network and it's part of the The Scourge uh kind of roadmap item here which also includes things like Mev burn now Mev burn is not from my understanding and necessity for this but it's something that they would obviously like to get in at the same time and this is going to take a bit of testing of course uh so I don't know if it's going to happen early next year it may end up happening late next year but this is something that is going to obviously be the focus of Court developers and researchers uh for next year and possibly the year after as well it is critically important that we get this sort of stuff uh deployed onto the

network and make sure that we can make the ethereum network much healthier I ranted about this I don't know if it was this week or last week about how people were saying that they wanted the Mev payments to remain because they were getting nice rewards being an eath Staker or an eth validator and I basically said that I think that ethereum Network should do what's best for the the network or the affirmaker system should do what's best for the network first and foremost then worry about the other uh I guess stakeholders in the network because at the end of the day if Mev isn't dealt with in I guess like a proper healthy way The Logical end state of the ethereum network and of any Network that has Mev on it which is pretty much any Network that has

anything of value to be extracted uh ends up death spiraling and it could potentially kill the the network altogether because it leads to instability of consensus that is basically the worst case scenario and what and the Practical outcome of that is realgs and riog's obviously not great uh and not great for a number of different reasons and I've discussed this before but having things like single slot finality and PBS and Mev burn are going to greatly diminish those risks as well as just making the ethereum network overall more healthy and making it so that the ethereum and this is particularly um important for ethereum core developers and researchers so that don't have to pay attention to these out of protocol software known as Mev boost because as I've explained

before Mev boost is out of protocol or sidecar software but it is so dominant across the network over 90 of validators I think use it that it basically is part of the core protocol from a perspective of a court of Alpine researcher having to test things using Mev boost and making sure they account for edge cases with Mev boost making sure they account for the Mev Boost network being able to work with any uh further upgrades after a hard Fork so it is definitely something that I think that the core devs and researchers are interested in just enshrining as part of the core protocol with PBS instead of allowing to exist the sidecast software because then it becomes a lot easier to reason about and manage when doing things like

upgrading the ethereum called protocol and it becomes much healthier for the network overall but anyway as I mentioned you can read this new post here I'll link it in the YouTube description description below for you to do so all right so Eric Connor today put out a great tweet that I thought was worth discussing he said years ago assassil zero X and I often discussed the three pillars of eat a valuable accrual those three pillars are trustless collateral for D5 staking returns via network security and fee burn based on usage it's beautiful to see them all working cohesively today eth is a thing of beauty so the amazing thing about this is that we were discussing this all the way back in 2019. it may have even been 2018 when we were discussing this and

what's amazing about that is that each use as trustless collateral within D5 in 2019 was very muted there wasn't much going on at all and it was really dominated by just maker I think maker had like over 90 of all the tvl of ethereum based defy um there was no proof of stake Network that was live that went live in in December of 2020 and there was of course no fee burn because that went live in August of 2021 but in saying that these things that we were talking about were in progress from when we were talking about them in 2018 and 2019 and that was our major ball case at the time and obviously the price of ethos pretty depressed during 2019 it had a little pump uh I guess like into the middle of the year but then bled out again uh later in the year and obviously bled out

pretty hard against Bitcoin as well uh but we always believed in these three core pillars for each value or cruel that fed into things like each becoming a store of value and accruing a monetary premium and and stuff like that uh so I I think that when we look back on this and look back on how far we've come it's just great to see that they're all working so cohesively today right we have a massive D5 ecosystem with ethereum within ethereum that just keeps growing and growing as as time goes on Earth is still used as pristine collateral within that ecosystem and now obviously we also have lsts which are used as collateral as well uh staking returns obviously people of steak has been live for quite a while now since December 2020 we had the merge go through and the API has shot up because

of the execution layer Awards going to stake instead of Miners and and proof of work is a distant memory at this at this stage for ethereum and then fee burn based on usage well we've had that for a while now it's almost I mean it's going to be two years in August since we've had erp1559 and it is worked it has worked way better than we ever thought it could like in 2019 the fees on ethereum L1 were not that high so the most optimistic I think uh uh fee burn projections when we're not we're nowhere near what they were what they have been since 1559 went live because D5 summer came in 2020 and that's when the high fee started um so that's just been an amazing success as well and that's all fed into everything else within a within 8 as an asset such as it becoming as I said a

story value and having a monetary premium and also just looking back and seeing how hated eth was as an asset back in 2019 and even 2020 to today where eth is considered the premier asset to own within crypto I mean obviously you have BTC as well but there are a lot of people out there who are very very vocal about eth being um you're better as an asset than BT say obviously I am one of those people right uh and we've seen this bear Market how the each BTC ratio has really stayed relatively flat whereas in the last spare Market it nuked like almost 90 percent I think from its from its high uh which I think is an incredibly positive signal for each value accrual not just against USD but against BTC

because as I've said when you're measuring different assets within crypto and you're trading and investing in them you want to have obviously a Fiat Benchmark but you also want to have a crypto Benchmark and the only two crypto cryptos that I Benchmark things against are BTC and eth I only Benchmark uh most things against eighth but then I obviously Benchmark eath against BTC and if I if eth is not outperforming b2c over the long term then it was no there was no point only either BTC but in saying that you also have to factor in things like staking returns you also have to factor in things like holding eight gives you much more exposure to other ecosystems like like ethereum and L2 screws and other l1s and that brings me that more opportunities to to profit

and make money uh so I think I mean ethos has outperformed Bitcoin for most of its life and I I expect it to continue doing that especially into a bull market uh but it's just night and day difference between what it was in 19 2019 and 2020 to what it is uh today so yeah just great for Eric to bring that up then it kind of was a bit nostalgic for me as well because a lot of you will know that Eric and I ran something called ethub uh and we ran a podcast called into The Ether which was a weekly recap of all things that were happening in ethereum where Eric and I just bounced off of each other for 45 minutes and talked about everything that was happening I missed doing those episodes uh maybe it comes back one day I don't know but I know those were the episodes

where we discussed a lot of these things but obviously I've continued on the work with the daily way and continued to carry the torch there all right so this is one for the developers out there or anyone interested in decoding the evm so bytes032 has put together an evm handbook so basically this is uh pretty extensive Handbook of everything got to do with the evm and all the moving parts around that such as solidity uh memory storage all that good stuff there so not much more for me to say on this other than we should definitely go check this out because I figured it was just very interesting for people who were interested who were interested in learning about the evm and especially developers out there but for someone

like me who I guess it's less Technical and not a developer it's it's not something that I will be using personally but it's definitely something that I think that you guys should go check out so I'll link that in the YouTube description below for you to do so all right so you can now participate in the kzg ceremony if you have only sent 16 transactions uh or more in the past so I've been covering the kzg ceremony for many months now we are almost at a hundred thousand total contributions we're at 99 700 and you know the most amazing thing about this is that I don't know if I said it on the refill but I did say to some friends that I expected us to get to at least 100 000 total contributions throughout the entire contribution phase of the kzg ceremony

and we are pretty much there so just amazing to see that turn out I know there are uh you know there is a lot of contributions that are probably attributed to uh people farming an airdrop when there's not going to be an airdrop for this but obviously people don't want to don't want to um uh take the chance of maybe there is one you know even if there is like a 0.1 chance of some kind of airdrop then I guess it's worth it and the funny thing is is that the kzg ceremony um uh I guess like coordinators themselves don't have to airdrop anything other people from other ecosystems and projects can basically say okay well you're eligible for an airdrop of our token because you contributed to the kzg ceremony so it still works in either way here but the contributions I think um will be sorted

and filtered out and and things like that as well and obviously will know uh um uh we're trying to the strong ones which ones are the weak ones but as I've mentioned before you only need to have one honest contribution out of the entire set it's a one of n trust assumption out of the entire set for the kcg ceremony to be secure and trustless so if you trust that your contribution was uh uh was done properly then that's it you don't have to trust any of the other contributions out there which I I thought is pretty pretty cool but uh but yeah if you have an address that has only done 16 transactions you can now uh contribute to the kzg ceremony and maybe you tried to contribute originally back a few months ago and you weren't successful well there are zero participants in the queue right now or I

should say in the lobby because it was it's not actually a queue so you should be able to contribute straight away so I'll leave this link in the YouTube description below for you to do that all right so Ryan berknitz has given us an update on the tokenized U.S treasury bills that are thriving on ethereum so he's put together this little fact sheet where he said TBL has gone from zero dollars to 200 million dollars in three and a half months there's half a dozen good competitors with more coming and the yield is around 4.75 plus uh so but today direct access is usually whitelisted for qualified investors both us-based and non-us based but yield Arbitrage and treasury's looping similar to St eth looping and driving up stablecoid stable coin yields towards

t-bill yields see unintentivized 3.8 usdc yield on uh on flux uh which is a fork of compound V2 and stake fight also has uh made an excellent t-bill dashboard for you to track this so this is really cool I guess that's natural that this sort of stuff would be taking off within uh D5 right now considering that a treasury yields are so high obviously when rates were low the treasury yields weren't great but now that the rates are much higher treasury yields are much more I guess appealing to people and it's great to see this coming into into ethereum and growing so fast I mean zero to 200 million three and a half months uh is is great I mean I think I believe a lot of that is unincentivized as well most of it's probably unincentivized and as I said

there is this dashboard here from Steakhouse that you can go check out the uh everything got to do with this like the protocols doing it and you can see here the the protocols and different products doing the uh the the bills here uh the market caps of each of them so it seems like ondo and Matrix stock are the leaders uh right now and you can see that there you can see the growth over time so I mean it's really just been like up up only most of it most of the growth here and then there's a bunch of other metrics yeah so I mean I'll link the dashboard in the YouTube description below for you guys uh but this is great to see I've said before that I thought that this year and next year particularly we're going to be a really strong Yale really strong years for real

world assets within the ethereum ecosystem or in the ethereum D5 ecosystem and there's actually one other narrative within D5 that I I've been paying a lot of attention to lately and that's this concept of uh I guess minimal defect protocols and what I mean by that is D5 protocols that don't rely uh on oracles that don't rely on governance that don't rely on these centralized points of failure these true kind of D5 protocols that can be rather autonomous to something like unisop for example where it can be immutable it can be autonomous it doesn't need an oracle it doesn't need centralized control and centralized uh you know pseudo-centralized governance and and stuff like that uh also you're a decentralized governance I should say so I think those two things are definitely something to pay attention uh to

especially the real world asset stuff because at the end of the day as I've said it can't just be like the crypto native assets like if we want to expand D5 we want the D5 to become the global backbone of a new Financial system then it has to incorporate every asset it can't just be limited to digital assets and I guess like digitally native assets we have to digitize or bring the other assets such as stocks and treasury yields and bonds and and real estate and everything like that into the crypto world into the D5 world and that's how ethereum becomes the global settlement layout but just being that backbone but for that to happen obviously we need people to go out there and do it and it's great to see that there are

projects working on this and they're actually getting traction they're not just dead in the water and trying to get traction they're actually getting traction even though it's obviously relatively small at 200 million but it's more about the growth trajectory which has been pretty fantastic here and obviously uh uh you know I expect this growth to continue and I think it will if rates remain high for quite a while the treasury bill yields will actually uh be quite popular I think for a while and even if they um even if they go low again hopefully we get some clarity around tokenizing things like like stocks and being able to trade them so that's more real world assets that can come on chain but we already have a huge amount of real world assets on chain in in stable coins obviously usdc usdt and other centralized coins but I personally

am much more interested in non-currency uh real world assets because those are the things that we haven't traditionally seen been uh brought into crypto just yet but anyway you can go check out all this I'll link it in the YouTube description below all right Monet supply has put out a tweet uh in case we missed that saying that usdc is now around 25 of die backing down from over 40 percent one month ago and 50 plus percent for much of the past year the dichloral basket is becoming increasingly Diversified this is really great to see I think that the caveat here is that while usdc is down there are other stable coins like gusd and usdp which have kind of filled that

Gap and other centralized stable coins I should say um and there are obviously other reward assets as well as you can see here that have filled that Gap too so most of the basket from what I can tell here is still centralized assets but the thing is I I said this a while ago I said that it's a concern when it's only one centralized asset being the backer of most of the I guess like being the collateral from roast of the die but it's much less of a concern when you have uh disconnected centralized assets being backing up the the thing right so if you have like 10 centralized assets backing die in equal proportions let's say they all have 10 share each that is much better than die being backed by 50 plus percent just of usdc and 50 of uh

maybe decentralized collateral maybe 25 eighth and 25 something else right so from that perspective this is a lot healthier it's a lot of healthier version of die and as I mentioned before dye needs to scale and needs to continue scaling and I don't think it can do that by just having eighth only as collateral or just decentralized assets as collateral needs to have everything and I'm fine with that but I think people just need to be aware that dye is not a truly decentralized stable coin anymore but that's that's okay I actually don't think that a stable coin has to be truly decentralized for it to be successful we've seen plenty of examples of this but I do do think we can do a lot better than what we've seen with usdc and usdt they're great they're server purpose but if we want something that's a lot more

resilient and actually you know not just totally centralized within one company or one entity then we obviously want to see things like die succeed and be backed by many different types of collateral which is exactly what we've been saying and I hope that this trend continues so great uh tweet from Monet Supply here just to put this back on our radar all right Astoria has launched so they announced that they have launched today the 20 or I guess yesterday the 25th of uh of May here so Astoria is a novel nft backed lending protocol and I've talked about them on the refill before and I've also disclosed that I'm investor in them before so basically Astoria is a borrower Centric platform with instant liquidity fixed terms and no forced

liquidations you can simply borrow from the supported Collections and there are a bunch of popular nft collections that are supported here uh liquidity providers that deposit one eighth into the uh into these pools here will receive an LSD token redeemable in July for a piece of physical blotter paper uh which you can see here as well so there are incentives going on here uh to to basically obviously incentivize usage in the estaria protocol uh and uh yeah you can go check this out for yourself at the link here at estario.xyz but this is really cool I'm glad to see this this is live I know there are other nft I guess uh money markets I guess you could call them all the borrowing ending platforms out there but Astoria obviously I'm a backer in them so anything I say is

you're probably going to be bi-str but Astoria is is great because I think it's been built by true crypto natives that have built products before and that have been very involved with crypto before um one of the founders is Justin Bram who you'll know from his YouTube channel where he did a lot of great D5 videos uh he's very very knowledgeable in all things uh crypto and then also Joseph De Long who was at sushi for a while and before that he was in ethereum core developer so these people have a lot of experience in Building Products bringing them to markets and a very crypto native so I just love seeing that I love seeing that they've built something uh uh uh exciting in the nft infrastructure space and I'm very curious to see what kind of traction they get especially in this massive nft bear Market that's currently

underway because yeah nfts pretty much in the worst spot that they've ever been in but the funny thing is is that they're still in a much better spot than they were just a couple of years ago so it's more of that kind of they have their slow growth period area then they have like their massively inflated uh growth period and they come back down and they they have this kind of like peak of disillusionment where most people aren't interested in it anymore but people are still building stuff to add more value to the nft ecosystem which is exactly what a Styer is doing so I do think a star is going to be a big player uh when obviously interest comes back for for nfts in a big way which I don't think is is too far away I do think interesting nfts comes back

with the general bull market because there is a lot of value there not just for things like Collectibles but anything unique that can be brought on chain so definitely go check out estaria for yourself I'll link it in the YouTube description below all right last up here just a shout out I am doing a Twitter spaces with opal Labs next week we're going to be talking all about solo staking staking in general distributed validator technology uh my experience and the people that are going to be on the spaces with me is experience with setting up an oval cluster and be being part of a distributed validator uh set here so if you're interested in that I'll link it in the YouTube description below and you can set a reminder it's going to be at 4 P.M on uh Thursday June 1st so 4 P.M uh

Australian Eastern Standard time but if you go to the link to the Twitter spaces you'll actually be able to see the time in your in your local time and of course it will be automatically recorded anyway so if you miss it you can check it out there and I'll be sure to link it to you guys once it happens but yeah this is going to be happening next Thursday 4 P.M Australian Eastern Standard time but 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 newsletter join the Discord Channel and I'll catch you all next week thanks everyone