Polygon and Nike team up, Uniswap growth and more - The Daily Gwei Refuel #487 - Ethereum Updates

Transcript

hello everyone welcome to another episode of The Daily gray refuel where he kept the latest news in ethereum ecosystem I'm your host Andreas 15th of November 2022. alright everyone let's get into it so I'm not really going to be talking about anything FTX related today I think I've gone over that whole situation enough on the last two refuels right it's about you know two hours worth of content there just talking about that whole debacle obviously there's still a lot of information coming out but I don't think any of it is critical at this point I think everyone pretty much has the full story now right in terms of them obviously declaring bankruptcy and not having customer deposits and all that sorts of stuff so I'm going to get back to our regularly scheduled programming firstly starting off with something that is

related to FTX right but is uh something that I want to talk about just generally and that's a tweet here from uh Boaz who said thanks to kyc AML regulations the criminals at FTX now have the name address and passport details of millions of individuals and on top of that these details details could potentially come out during the bankruptcy proceedings and be made public and that could attach these details to people's balances on FTX as well at time of the uh withdrawals being closed right so this is just another Mark against kyc and AML regulations you guys know my general view on this and I I guess like to to recap just for those who don't my general view is that if kyc needs to be

done which obviously there are instances where it does need to be done and proving who you are and improving your identity is definitely very valuable I think it needs to be done in a way that preserves people's privacy and the way that we can do it within the ethereum ecosystem is through use of things like sismo ZK badges for example or just using ZK Tech in general to basically have it so that you can you retain the uh your privacy by having all the data kept on your own device and then you're able to share uh proof of that data with certain services to basically prove who you are now obviously this is a much better way of doing things because it doesn't create a honey pot the the service that you're proving who you are to doesn't have any of your actual details they just have a proof right a

ZK proof that says you know you are who you who you say you are and that avoids all of this now something like this will probably get implemented eventually I'm pretty confident in that but I don't know how long it's going to take I don't I I feel like it's going to take a while for that to happen obviously the tech isn't mature just yet and there's a lot of uh Kings to to iron out but we have to do better I mean the fact that these exchangers have to ask for kyc and AML details and if they don't they get you know obviously in big trouble but the thing is it creates a massive honey pot and so many of these exchanges have gone under or just very dodgy we don't know which ones are selling our info and which ones aren't I mean it's very hard

to prove that so yeah just generally I think we need an overhaul of that whole system but I think kyc uh hopefully well I mean hopefully it only within the crypto ecosystem it only stays with the centralized services kyc for anything defy automatically makes it not D5 and I'm not talking about the front ends there will definitely be front ends in the future that tap into D5 protocols but requires you know some form of kyc but I guess what I'm talking about is the actual D5 contracts themselves like if any D5 back end like Danny D5 related contract has kyc on it well then it can never be D5 right but you know that that's I guess like classical kyc what if these contracts had kyc in the way

that I just described it where you could preserve your privacy and prove who you were uh with a ZK badge for example could that still be considered D5 there are instances where this makes sense and I think the biggest one is uncollateralized lending where essentially instead of collateralizing with uh we you know with with eth or something like that or with it with another asset you're collateralizing using your reputation you know who you are now I've always taken issue with the term unlateralized uh lending for um just because of the fact of the matter is that nothing is ever uncollateralized just because you're not collateralizing it with uh you know assets you are federalizing it with your personhood so to speak your identity your reputation and your freedom because I mean in the in the real world with banks if you

don't pay the bank back in the worst case scenario you could end up in prison for that right uh if if the bank wanted to take it that far depending on the money that you own and if you couldn't pay uh but most of the time you don't end up in prison but you still end up in a really bad place you know you can declare bankruptcy yourself or you uh you basically say well I don't have the money to pay these back but the debt is still there which means that power could be given to these institutions to garnish your wages so that it's basically forcibly taken from you to pay back that debt so and obviously those are like the worst case scenarios but they happen and the reason why uh banks are confident in and and and uh able and the reason why we have credit score

sorry the reason why we have Banks can be relatively confident and the reason why banks give different lending rates and different amounts of different people is because of something like a credit score so doing a credit score in D5 is something that we should be able to do but we could do do it being a privacy preserving way without needing to people to identify themselves to the protocol not having to have any big uh you know honey pot of storage of kyc information we can do it through things like as I said sismo ZK badges or something like get coin passport or any other number of uh things that are that are trying to build decentralized identity or decentralized credit scoring options because at the end of the day the the Deep Fire ecosystem can't grow to service the world on just

collateralized lending most lending is done in a uh uncollateralized way and I'm just using those terms because they're easy terms to use but I think you know what I mean you know obviously collateralize you have to Collateral you have to put up an asset a hard asset such as you know ether BTC or some other asset out there whereas unclutteralized D5 lending uh would require some level of of identity and Trust because you can't offer uncollateralized or I guess the same lending or you can't offer credit I should say credit's the correct term here you can't offer credit to an anonymous person uh online uh just some some random address online because you have no guarantee uh that they're going to pay that money back and you have no way to chase them for that money whereas

if you had a decentralized identity system and you had a decentralized credit scoring system there would be recourse there because you know who your counterparty is they just don't have to give you the their information to store and to potentially lose so I think that's super valuable but yeah very sad for people who did kyc and AML with FTX potentially their um details becoming uh public here and not just that I think the biggest uh I guess the biggest worry here is those details being linked to balances so I know that there has been estimations that maybe five to ten percent of funds will be able to be recovered through these bankruptcy proceedings but essentially people could still infer that the the people who had large sums on FTX still have large sums elsewhere and they become a potential

Target which is obviously not ideal but we're going to have to see how that plays out hopefully during the bankruptcy proceedings there's no need to publicly publish uh uh uh kind of like a spreadsheet or whatever it is linking these things together but there might have to be just by virtue of how these things work but we'll keep tabs on it as time goes on as I've said previously the bankruptcy proceedings are not going to happen overnight they're actually going to take quite a while and I wouldn't be holding your breath for it if you had funds on FTX and even if you had haven't uh just generally it's not going to happen for for quite a while here all right so moving on to some news from slingshot so uh this is a pretty timely uh move from them they said say goodbye

to C5 slingshots non-custodial D5 wallet is now available for the first to the first wave of Android users now I've covered their wallet before I believe I've played around with it on uh on iOS in test flight so our test flight is the kind of I guess testing beta environment on iOS and they've also replied uh saying that it's coming to iOS in a few days so if you do have Android you can go check out uh and you and and you were and you signed up to to get access to the slingshot wallet check your email uh the first wave of invites for Android users went out and iOS is coming in a few days here and for those of you who have been following slingshot for quite a while you'll know that they have been doing not just this wallet but they have

a decentralized exchange aggregator and they've been live for quite a while on various networks in the ethereum ecosystem and and on polygon POS chain as well so yeah definitely go check out their wallet uh if you were invited to it and if you weren't I'm sure the second third you know more waves will be coming up for Android users as well as iOS users as time goes on all right a couple of updates out of uni swap Labs uh over the last over the last day or so so they put out a tweet saying new users of unisop's web app reached a 2022 high self-custody and transparency are in demand and users are flocking to what they know and trust let's keep building and you can see here in terms of daily new transacting wallets uh we

had a record of 55 550 daily transacting Wallets on on uni swap here this and the universe web app reached a new high as well so this is really cool because uh I think the what I've gone through this before but I think that one of the biggest positives of the FTX Fallout really is the fact that people are going to be taking self-custody more seriously I saw a tweet from um from someone at uh I think it was TechCrunch who talked to someone from Ledger and they said that they had their biggest one-day sales in history I think yesterday or the day before and that's obviously as a consequence of the FTX collapse now I'm trying to get um answers about uh about

the lattice one as well the good plus lattice one from people I know there to see if they had uh some some some bigger sales days which I expect that they did uh because obviously the legend isn't the only manufacturer of Hardware wallets but this is really positive this is something that's actually got me really really excited because we've been talking about not your keys not your coins for a very long time we're talking about the importance of self-custody for a very long time but such is life and such is with everything people tend to listen once something goes wrong like if you look at actually outside of crypto a lot of the uh regulations not just Financial regulations but regulations in general a lot of the protections put in place they're usually done after the fact there usually has to be something bad that happens then people are like oh

like let's do something about it and I think that's what's happening now where the f-tex collapse has uh has basically made everyone aware of the dangers of keeping your funds on entities where even if they seem like super legit there's a re uh there is a chance a high chance a relatively High chance of you losing all your funds so that unless you're an active Trader and you need that liquidity on these exchanges there is literally no reason to just keep it there uh Cold Storage even the most trusted exchanges I've gone on record and said that I think places like coinbase and Kraken you know fully regulated in the US are fine but I still wouldn't leave my funds on there I still would rather self-custody because one there's no point I'm not an active Trader it would just be sitting there

doing nothing and two the risk is always greater than zero of of these things um you know going going uh going bad like not to say that they will but it's never zero percent now that's not to say that self-custody comes with no risks either but I'd rather remove the risk or the custody risk completely from the equation then then have it there no matter uh what kind of like um what platform it is but one thing that people Miss is that your funds being on an exchange is aren't only at risk of the exchange becoming insolvent or getting hacked or running off of the money they're also at risk of the exchange just arbitrarily freezing your funds for whatever reason it could be that the government has ordered them to freeze your funds because of whatever reason

they've deemed The Exchange could be freezing you because they believe you to be involved in criminal activities or something else they could indefinitely freeze your funds for whatever reason so those are the the two major risks and I think the second one doesn't get enough attention so generally as I've been saying over the past past um couple of refuels please please please if you are not uh if you have no reason to have your funds on a centralized Exchange in terms of as I said if you're not an active Trader or anything like that buy a ledger buy a lattice one store your funds on a hardware wallet that is in my opinion is the best way to keep yourself safe the only thing you really have to do is make sure that you secure your seed phrase you can even lose the the hardware device itself it could break it

could it could stop working altogether but as long as you have your seed phrase you're fine now of course that is the single point of failure that seed phrase if you forget uh that the the seed phrase or if you misplace it or if it uh you know if your house it catches on fire and and you've written it down a piece of paper and that paper burns up that is obviously the main risk but that's why you should practice good C phrase management you know not just keep it in one place uh keep it you know you could split it up like kind of a horcruxes from Harry Potter's an analogy I've seen used where you split up parts of it with different people but there are risks inherent with that as well because you may give it to someone and then and then they lose it and then you

don't have all the pieces or maybe you give it to a few people and they all collude to steal your phone bonds that can happen right so you're never going to be at like zero percent risk here uh zero percent risk of losing your funds but you want to get as close to zero as possible and I think that the only way to get there uh is through self-custody even though there are risks associated with self-custody uh everything carries a risk I mean just just living carries a risk I was like if you really want to get down to the price of it like just doing anything carries a risk at the end of the day so it's all about lowering your risk as much as possible and I think that there in 2022 there is literally no reason to keep your funds on centralized entities if you have uh

the choice and the know-how and the ability to keep your funds on a highway wall and as I've said before I don't actually think it's that hard to do that but and that that's the ending of that little rant there about self-custody uh but it's really really cool to see unisop uh kind of growing here and Hayden actually put out a tweet showing even more growth where he said uh we was quote tweeting Alex asvanovic from nansen here who said unitop has more volume on Eighth than any centralized Exchange over the last 24 hours and then uh Hayden quote tweeted this by saying uh Dex is starting to replace uh Sexes total ethusd or Stables volume on binance is 1.9 billion uni swap is 1.1 billion and clearbase is 0.6 billion so unisop really is like continuing to

dominate here and the volumes show that volume is definitely uh something especially on ethereum mainnet that is incredibly hard to fake because to fake it you have to um spend money even for the lowest tier pairs such as the stable stable uh pairs on uh on unisop it still costs money and not just money in terms of unusual fees or LP fees but also gas fees on ethereum that's why I say on ethereum Main and it's very hard yes uni swap is on other networks like optimism and arbitrum the polygon POS chain and uh I think a couple others but that's also like expensive because of those LP fees but on optimism and arbitrim it would still add up with gas fees as well so and and obviously binance and coinbase has fees

associated with their pair S2 in terms of trading fees and things like that which I guess are LP fees in unisop land um but uni stop just continues to dominate and it's an amm right like binance and coinbase are not amms they are clubs Central limit order book systems so they're actually very different systems uh but it seems like uniswap is uh is winning the game here or continuing to dominate here which is awesome to see because it is a true decentralized product on ethereum as part of the ethereum ecosystem and it's not just them I really do think that more and more of these D5 Protocols are going to get more and more usage just as people become more aware of self-custody more aware of what they can actually do on chain you know funny enough there are tons of people who really think crypto

just goes as far as buying a coin on an exchange and thinking that it's a currency and the more people that adopt that that that coin uh the better it is and the more that coin will go up that is actually like believe it or not the surface level thinking that a lot of people have about crypto because I mean it's still called cryptocurrency to the outside world and you do the amount of people that have told me in real life they that you know they say to me they basically say oh you know how can and you've probably heard this a million times but they say how can BTC be money if it's so volatile and that question you know of itself is such a huge thing to answer but it shows that these people still think about our cryptocurrency just as as currencies alone now

obviously uh uh you know some of them are just pure currencies they're not really trying to do anything else but most of them are not most of them are actually pseudo equities in different protocols uh and some of them are go you know transcend every uh thing that we know about to what an asset can be such as eth and kind of is an amalgamation of all that stuff so I think when you're when you're looking at all of that it definitely um uh and kind of like teaching people about self-custing what they can do on chain there is still a large set of people the majority of people who are yet to come into the ethereum ecosystem and yet to experience all this stuff and I do think that the FTX collapse is going to encourage that as time goes on all right so another massive BD

announcement out of the polygon ecosystem uh which may you may have not seen get considering how noisy Twitter's been but uh my halo here the co-founder of polygon announced that Nike is building their web 3 experience exclusively on the polygon POS chain this is just another absolutely massive BD partnership uh that that um uh the polygon has landed here and you know I've been thinking about this a lot lately I guess over the past few days because as I said I think it was last week on a refuel or maybe the week before polygon usually competes with uh other ecosystems to land these these um BD Partnerships right and some of the other ecosystems include Solana and Avalanche and and uh Aptos and some others out there but polygon is so

strong right now right like and and because they're part of the ethereum ecosystem that makes them even stronger and then their competitors are looking very very weak like Solana for example is looking very weak right now and that's a very good win-off opportunity for polygon to take their you know existing awesome BD uh team and turn that up to 11 by basically uh the bit by um by Landing more of these Partnerships simply because the competition is weaker so I thought that that was a something that was I guess like an unintended consequence of FTX going under because the Solana ecosystem was so close to them we're seeing this uh we're gonna see this play out I think but it's not just them I mean Avalanche looks very weak right now I believe as well uh I know some people will disagree with that but honestly just looking at the metrics

and looking at the developer activity it seems that both optimism and arbitrim have just completely leapfrogged Avalanche and is are doing much better the moment are looking much more sustainable than them uh so you know people can disagree with me it's fine but this is just based on what I've what I've been looking at so yeah I mean just a huge uh partnership that's been landed here uh with polygon it's got to do with nfts which I forgot to mention that before uh Nike's being involved with nfts for quite a while now actually uh but they're going to be doing this in 2023 on their new what's called called a swoosh at web 3 platform which is a destination for virtual apparel and other nft based products with the first drop due in January so you can go read the article for full breakdown of this

I'll link it in the YouTube description below alright so Terence from prilabs has a short thread here about how erp4844 improves staking decentralization he says 4844 which is Proto dank sharding changes data availability resources to lower call data misuse it makes homestaking more uh more viable thanks to bounded disk usage scaling 4844 versus decentralization with withdraw with withdrawals is not a zero-sum game with homestaking concerning recent events a good argument for prioritizing scaling is if we can not not host more users on ethereum than the Reliance on centralized platform stays the same hence which hurts users and hurts ethereum I think this is a really good

point and I would actually add to this that given the the collapse of FTX and given all the concerns around centralization right now I'm even more keen to see Beacon chain withdrawals go live because I do think we're going to see even more people withdrawing their e-stake from the essentialized services because they've just lost trust in them right so that's another again again again positive unintended consequence of the FTX collapse and uh I know I said I wouldn't talk about FTX much on this uh on this refill but I think it has a lot to do with some of the events that are happening uh lately outside of it right as part of the ethereum ecosystem so it's definitely still looking forward to the beacon chain withdrawal stuff for all the reasons I've outlined previously but I hadn't thought about 4844 improving staking decentralization

before and I'm glad Terrence put together this thread because it makes total sense to me that that this would happen now obviously the gold standard of decentralization on the beacon chain is having as many home stakers as possible and uh obviously as I've mentioned before I think there will be a you know not not small sum of people who have 32 East now uh accounting ve that they may have staked with the centralized provider that they're waiting to withdraw from that centralized provider put it together and do a solo stake operation at home or maybe even get inv with something like a decentralized taking provider such as rockapool so definitely looking forward to all of that uh and thanks for thanks to Terence for putting this thread out all right so uh Frolic here announced

today that f e f s is now on mainnet so you can now browse and upload on-chain files at eth fs.xyz uh Frolic says that they have been working on this project since February and needed that needed a good place sorry has been work they've been working on a secret project since February that needed a good place to put reusable on-chain assets uh they had put the project on pause over the summer while they did a bunch of freelancing and job hunting and then uh Dom's uh Rose appeared and lit a fire under me to get this project going again etherfs started out as an exploration building in public on Twitter and in the math castles Discord shout out to all the on-chain Maxes for the feedback along the way it's built upon a Content addressable file store leaning on store

two for gas efficiency if you know of any assets already living on chain via store 2 let them know and then they continue on yeah I'm not going to read the whole thread here but uh but yeah this is really cool to see that another I guess non-financial application has been launched on on the ethereum magnet with 8th fs.xyz which you can go visit yourself actually and check out yourself and there's kind of a file explorer here uh which you can see file uploader to upload your own file you can connect your wallet and all that good stuff there but yeah more of these non-financial applications please like this is exactly what we need I mean Financial applications are all well and good and obviously D5 continues to get better over time and continues to strengthen and it's uh I guess um product Market fit has never been more

more apparent to people but I personally like being in the secret system for so long and seeing so many D5 things come and go and seeing them grow like I would love to just see more non-financial products uh get actual growth and get actual product Market fit I've been following along with lens protocol a bit lately as well and that seems to be doing really well uh but these other pieces such as FS definitely add a lot of value to the ecosystem as well so you can go check this out for yourself I'll link it in the YouTube description below all right so Danny Ryan put out a tweet today just uh giving a reminder that the layer 2 grants round is still open now this was announced on October 25th that I talked about this at time of announcement but it is still open so

this was uh this Mission deadline was in six weeks from that date I believe the deadline is November something uh I I can't do math no December 5th so you still have a bit of time here you have about 20 days to apply so if this is up your alley if this is something that you think uh you could add value to or you could be potentially accepted into accepted for a grant definitely go go check it out just a friendly reminder there I'll link this in the YouTube description and below all right so an update from l2b today so they said starting today we decided to Mark projects with unverified contracts uh read to warn anyone about the danger of interacting with such code once the contracts are verified the Highlight will automatically go away hopefully

this will encourage current and future teams to always verify the code and therefore be more transparent to the end users this is very important because if occur if if a piece of code is open source but but kind of like not verified on chain you can't really trust its validity you can't really trust that it is what they say it is and it mirrors kind of what's on chain here so I'm really glad to see l2beat uh uh kind of highlighting this in a really obvious way on their website and if you go to l2beat.com you can actually see it live here as you scroll down which ones don't have uh unverified which ones have unverified contracts and what and which ones do have verified ones so thankfully most of them have verified contract which is really awesome to see and all

the like the major ones definitely do but there are still some out there that definitely need to verify their contracts and I'm glad that l2beat is highlighting this and man l2b just continues to improve over time that you know they they're um relatively I wouldn't say they're slow but they don't release like updates every day or anything like that they tend to uh wait a bit and and work on stuff for a bit and then release a really important really impactful update that users can get a lot of value out of uh one of their newest updates was something that I covered the other day which is their activity type here which basically tracks activities across uh ethereum main net and all the layer twos and other such constructions around ethereum and they also have their Bridges section as well with Bridge TBR and risk analysis the risk analysis

thing honestly is is I think the most important thing on this website because it keeps l2s honest it allows users to check out these l2s and what they've what we know what what kind of centralization vectors they have and where they are in their decentralization journey and I think that's very very important for anyone who cares about security of their funds and and things like that so yeah just wanted to I guess like four and over L2 beat a little bit there but you can go check out their uh kind of like new labels on the unverified contracts here but great to see that most projects don't fall under that uh that that kind of category currently all right so awaki put out a little Meme here that I really that really kind of spoke to me today uh in the wake of all

the FTX stuff over the last week so this is the meme of the two people looking outside of the bus and the left side sees Darkness the right side sees kind of like uh light and positivity on the left side it's got past lunar 3ac FTX on the right side it's got future ultrasound money ZK slash dkvm digital democracy impact Dallas funding for public goods and dowels in general now this speaks to what I was talking about yesterday with regards to how ethereum is in such a strong position right now it has such a strong future ahead of it it has been kicking goals all this year in the face of all the negative and bad that's been happening right so I won't rehash what I said yesterday but I'm really glad that I'll walk you put this out in meme format because look at

that look how much stuff we have to look forward to and this is like such a small percentage of the things we have to look forward to uh going forward for ethereum I mean you really only have to bring up vitalik's ethereum flowchart roadmap that he's that he put out the other couple weeks ago the updated one that I that I shared on the refuel to really get yourself excited about all the things happening and coming to ethereum and and on top of that then you can go look at all the l2s and what they're doing right we have optimism Bedrock coming soon Arbor trim Nitro has uh has been live uh hopefully they turn on Odyssey again soon right I remember saying that I thought they would turn on Odyssey soon after Nitro but it seems they haven't so hopefully that's coming sooner rather than later then you have

all the zkbm stuff to look forward to layer threes layer fours non-evm L2 ecosystems like Stark net there is so much happening in the ethereum ecosystem like that honestly uh the FTX stuff is just and and all these other stuff on on the left hand side of the meme is really such a distraction it just and it really is amazing to me how ethereum definitely had its period where things were blowing up and that I think that was during D5 summer where we ethereum as a network had like an extreme d-gen period but I'm really glad it happened then and not I guess this year or last year because in in 2020 D5 summer there are a lot less people involved it really was just the remaining people from the bear Market there was hardly many new entrants he that participated in D5 summer it was a

lot of the same money floating around and it was a lot of people coming from other ecosystems I remember a lot of BTC bridged over during that time as well so there was a lot of bitcoiners coming across um but I'm really glad ethereum has seemed to have over the last couple years uh gotten away unscathed from most of these sorts of stuff and not not only that but has also just continued to thrive and continue to add value to people and and go through things like the merge you know so perfectly it really gives me hope for this ecosystem and as I mentioned the other day I put a tweet out where I said the only reason I'm still in crypto is ethereum without ethereum I'd be gone there's nothing else in crypto that appeals to me right now that uh that kind of gets me

interested in things that makes me feel optimistic about the future of this ecosystem it really just comes down to ethereum and I think that that sentiment is shared with a lot of people in the ecosystem right now but again I'm preaching to of the choir but I'm going to end it there 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 tomorrow thanks everyone