Restaking chat, New crypto PAC and more - The Daily Gwei Refuel #708 - Ethereum Updates

Transcript

hello everyone welcome to another episode of the delway refu where C the latest news in the etherum ecosystem I'm your host Anthony S tday 19th of December 2023 all right everyone let's get into it so kicking off today we have some fresh ETF news this time it's about the Bitcoin ETF not the eth ETFs although I did see that there was some spot e ETF news that the applications from a couple of the issuers were delayed um and I think that their delay date was on supposed to be something like the 25th of December but they were delayed today which is no surprise obviously there is no way that uh the SEC is going to be approving spot e ETFs before the spot BTC ETFs um but the news today is in regards to this I guess like debate that's been happening on crypto Twitter and this kind of back and forth

between the issuers and the SEC around how these ETFs would actually be issued whether it would be issued based on a cash create process or an inclined process now it seems like the SEC has basically strong armed all of these issues into going with an in kind process which I've seen some back and forth about this on crypto Twitter uh some people saying you know it's worse for taxes some people saying that uh you know cash crates is is better uh sorry I think they have to go with cash crates not incl kind some people saying you know incline's better and honestly like from the the everything that I've seen the tldd is that it doesn't really matter especially for the size that these uh these kind of ETFs are going to be operating at the net result is is not really going to matter e either way

there um but there is always an option for these uh ETFs to be converted to an in kind model uh later down the line which which could happen right I mean the doors always open for that but the reason I bring this up not just because it's some boring administrative stuff when it comes to ETS but the reason I bring this up is because you can see here that Eric banana said that black rock was last in line here to go cash only and he said that's basically a wrap debate over in kind will have to wait it's all about getting ducks in a row before the holidays good sign because I believe that this week is the last operating week for the SEC before they go on holidays and return obviously just before uh I I guess like or just on on maybe Jan 8th uh the week of jun 8th

there which is the expected date for all of the approvals to happen now this is some dubious speculation on my behalf but if all the Ducks are basically in a row now and and everything is kind of to the SEC satisfaction then there is a nonzero chance I mean I wouldn't put it as a high chance but there is a non-zero chance that the ETFs could get approved this week right now why would the SEC do this maybe they just want to get it off their plate and they don't want to have to have this overhanging until the new year or something like that um and and and the thing is is that like because it's a a small chance of happening you know it might have a market impact because maybe the market isn't expecting this so I'm not sure you know if they're

going to do it or not as I said it's dub a speculation and I don't think it really matters in the grand scheme of things but if it does get approved this week I wouldn't be surprised now of course approved doesn't mean that these things are going to start trading I think it takes at least one to two months after approval for these things to start trading which means that if it did get approved this week it probably wouldn't start trading until at least late Jan early Feb um and same is true for getting approved during the the Jan 8th week or the week of Jan 8th it'll probably take till sometime in feed for these things to actually start trading so all during this period there's still just going to be speculation happening and and it's kind of begs the question and I think this is why the markets are

in a bit of a funny place right now is because markets don't like uncertainty and this is a lot of uncertainty because no one knows you know if if they do get approved I mean I think the market is convinced that they're going to get approved but right now the market doesn't know whether the approval is going to be a sell the news events whether it's going to be like a rotation event like he's BTC just going to stagnate for a little while and then other things are going to go up like the market just doesn't know right now so I think that once they get approved that takes a bunch of uncertainty out of the market and we have like maybe a reset of of the market in terms of maybe we go up and then come down and then go sideways for a bit and then the market kind of

Finds Its bearing again and and we start going up again or maybe we don't go down and the Market's like okay well it wasn't a sell the use event and we continue up to all-time highs or something like that I think that's that's the main kind of concern right now and that's the main uh kind of uncertainty in the market right now so we won't know obviously until they get approved as I said nonzero chance that they get approved this week um but it's a small chance like I wouldn't give it a high chance at all but I I still think you know it's very very good odds very very high chance that these are going to get approved by that gen 10th final deadline there especially since the Amendments here and the changes to these ETFs with the back and forth of the SEC

have been going on for weeks now and as Eric says here it was getting their ducks in a row before the holidays which means that if they wanted to guarantee an approval by the Gen 10th date they needed to do all of this so obviously there's been a lot of back and forth um and it's um and we're now here where basically speculating on exactly when it's going to get approved now there is one other kind of thing in the mix here that actually leads to a bit more uncertainty and it's around the grayscale gbtc uh trust now people expect this thing to be converted to an ETF but at the same time they don't actually know if this will happen at the same time as the other as the other ETFs going live because it basically gives grayscale a pretty big Advantage I think because they already

have a lot of BTC in that trust I think it's like 600,000 BTC or something in that in that trust right now so if they were given the green light to convert that to an ETF that would mean that they have a head start and all the other ETF issuers so there might be a thing where all of them get approved the grayscale one gets approved as well but there is a clause that says that grayscale can't convert their uh their trust to an ETF until uh a later date just to give the other ETF issuers a chance to compete uh and again that's more uncertainty but at the same time if the SEC approves them even if it happens at a later date if the SEC approves that conversion the grayscale premium or sorry discount I should say the gbtc discount should collapse uh and and should basically be

near 0% and that would mean the eth E discount as well should be near 0% because people will say that okay well if the uh gptc is getting the conversion then that means e will as well once the the round of spot e ETFs get approved and then that's just a huge amount of uncertainty off the market as well there so yes lot lots of stuff happening you know the next few weeks could be quite volatile because of it you know holiday period people like to take advantage of that less people are going to be online there's going to be less liquidity uh and if the ETFs do get approved this week that's just going to be another thing that plays out during the holidays but I if it doesn't get approved this week and we're still waiting till Jan 10th that's still going to get played

out on the market because people are still going to be speculating on it getting approved H either way yeah I think the next maybe 3 weeks at least are going to be are going to be a fun one in the market maybe it just goes sideways maybe the market is so uncertain that it doesn't want to go in any direction it just wants to go sideways but there will be volatility around any kind of uh uh I guess like announcements with regards to the ETF being approved or not there's still a chance that they won't get approved but I think at this point Market is convinced I'm pretty convinced all the ETF experts are convinced that the these things are getting approved it's just more around uh timing now all right so coinbase has announced an initiative with a bunch of I guess VCS and funds in the crypto ecosystem so

what this is it's basically a pack in the US uh for I guess like the what's the Pack's name was here I think it was called Fair shake or something like that uh if I remember the name correctly uh so essentially what they're doing is that they donating to this this pack uh yeah Fair Shake pack you can see it here there actually a website for it so they're donating to this pack in order to fight for crypto policy or for positive crypto policy in the US now this isn't a small chunk of change they've managed to raise $78 million in just Q4 so far and these uh I guess like donations came from very popular VCS and funds such as a16z such as coinbase themselves of course you can see here Krakens in here as well uh Paradigm you know even players like Ripple and and

individuals like the winlos twins they've all participated in this and put money forward uh and as I said that is a huge amount of money there and it's basically crypto getting its uh I guess like spot in DC in in the in the US political system here because unfortunately whether you like it or not this is the way it works you have to buy your way in basically and you have to grease the right uh the right Palms so to speak uh and I think that the fact that they were able to raise this in just Q4 alone and the fact they're going to keep raising money uh towards this is a hugely positive thing especially going to an election year where essentially obviously de Democrats want to stay in power but at the same time a lot of the high ranking Democrats are very hostile

to crypto you know Elizabeth Warren being the most well-known one and then on the Republican side of things from what I've seen a lot of them are quite friendly to crypto so if we can make crypto this you know a big enough issue for them to care about it by going through these uh these kind of um lobbying efforts right then it could become an issue that gets brought up uh during debates which it already has I believe one of the Republican candidates brought up uh crypto during a debate recently but if we can just get this to the Forefront and get more people caring about it and get more politicians caring about it then we could hopefully change the the tide here I mean I don't expect someone like Elizabeth Warren to change her tune if she did I'd be surprised uh but obviously I'd welcome it because

that would mean that our biggest I guess enemy within the the political system would uh would obviously uh not be you know enemy of crypto anymore and that would really help us within uh within Congress in the us but as I said I don't expect her to flip anytime soon if she ever does so it's more about getting the people that are on the fence you know that don't have a a a strong stance either way and getting them to be Pro crypto and this is how you do it you do it with money you show that you that the industry that you're representing is a force not only from the social side of things but also from the money side of things and this does this is a huge show of force I mean $78 million in just one quarter raised um is a huge show of

force here and a huge amount of money and I I think that that will end up being hundreds of millions of dollars by the time you know maybe the the election rolls around next year because yeah next year's it's going to be crazy guys like us election years are always crazy I mean it's it's funny to me as an Australian in Australia our election cycle is like six weeks so you have six weeks of like the political ads and stuff like that and then in the US it's like what 12 months at least or something like that at that very least I mean seems to start like at the 18 month before the election Mark so yeah it's going to be a very hot election next year not just just for crypto but I think in general in in the US obviously there's a lot of hot button issues right

now and it seems like the that the uh the country is more divided than ever from the outside looking in seems like that that is kind of a trend going on worldwide right now sadly uh but when it comes to crypto as I said like generally the higher ranking Democrats have been hostile the Republicans are more Pro and there are a lot of people in between in the middle don't have a positive or negative view of it that but they need to be educated on it and we can bring them over to our side because if you they only have they don't already have an opinion on it they're much easier to sway uh to to our side of things than if they already have like a very Stern opinion against it right but anyway you can go read more details about this I'll link it in the

YouTube description below uh for you to do so all right so just wanted to highlight this really awesome website that was created by a few daily gay community members uh today so you can see here uh Al Coco and ZK Ben have created this website called dope cryptos sites. XYZ now you recognize ZK Ben because he runs the daily guay TV uh Twitter account where he posts clips from the daily gay uh and Al ccoo is pretty active in the Discord Channel I'm sure some of you guys have seen him on Twitter as well but basically what this website is is it's taking all of the links that I mentioned on The Daily guay and putting them in a central repository so you can see here how many actual links there are and how many kind of resources there are

I mean I'm just scrolling down on the page here there are so many now of course you don't have to scroll down there are there are ways to kind of put them into categories here so you want to know about things to do with Rocka pool you just select Rocka pool as the category and here you go you've got like an RPL dashboard on doing analytics you've got investment thesis piece all these sorts of things so really the goal with this site um seems to be that anything I mention uh any resource I mentioned on The Daily way instead of you having to go fish through daily gay episodes to find it you'll be able to go to dope cryptos sites. XYZ and find them all here so huge kudos to El Coco and ZK Ben uh for doing this um and any others that helped with this this of course uh

this is really awesome and yeah I mean I didn't commission this or anything they these guys just did it on their own I love seeing this stuff because this is the power of the ethereum community to me they just you know people just do things on their own no one's kind of holding them back no one says you can't do it uh and it's really humbling that they basically using the um the content that I uh put out in order to populate this website and as I said there are so many resources here you could get lost in here for weeks months you know just going through everything that's on here so you can go check that out I'll link it in the YouTube description below for you to do so right of course today was the day that Igan layer raised a bunch of its

LST caps and also introduced a bunch of new lsts to its platform here I know there was a bit of a race to get in it didn't end up turning into as much of a gas War as I think people suspected it to be I think and I think that was because there's a lot of different lsts on the platform now so if you go to rest. nethermind doio nethermind has built a dashboard for tracking this and you can see which lsts are are in uh and kind of the quantities and the amounts here obviously St is leading because St has such a large kind of um presence on the network right as as as opposed to other lsts out there um but second place is actually native eth which is pretty cool to see and I described this the other day the reason it's second place

or a big reason is because ether is basically taking in Native eth and and using it um and reaking it with um with uh with IG lay here and then r e and CB e are basically neck and neck uh swell e is actually up there as well SW e is uh is I think third uh it seems like yeah they're third behind St and Native eia which is great to see because they're also doing the liquid um the native liquid reaking token so they're doing a bit bit more stuff there similar to what ethery is doing here but on this website you can actually also see a timeline of what this looks like so each time the cap is raised you can see it kind of spiking up here um and then there's a bunch of different metrics that you can check out I'll link it in the YouTube

description below but this is a huge amount of assets in IG ler guys I mean I don't know if they're going to raise the caps again before they go live with Igan da which I think is slated for sometime in q1 which is obviously the flagship igen layer product here but I mean I don't know what this is off the top of my head in terms of the total um dollar value here of this because I mean if I'm just eyeing this eyeing this right now I think there's like what 200 and I don't know maybe almost 300,000 eth in there or something like that so let's just say 250,000 just because I don't know exactly and if we do that times what 2200 I don't even know what the current price of eth is I'm a bad eth Maxi today the 2240 all right let's do 25 250,000

dim 2 2400 um and then let's do that so yeah it's 600 million so yeah $600 million uh I think is in is in IG right now reaking uh not as much as the blast kind of L2 I mean it's not it's not an L2 the blast multisig I should say um but this is a huge amount of Economic Security that can bootstrap the Igan lay Network here and I guess like I really like the way IG lay has done it with the with the tvl caps and I really like the fact that uh they're going to be going live with a product really soon it's not just going to be a oh we'll do a product sometime in the future and they haven't uh I guess like uh put stuff out there where they're like oh you can refer friends and earn more points and things

like that or they haven't promised any token or any air drops or anything like that so it was done in a must m much less dgen way but at the same time they've obviously attracted a lot of tvl because one people are trying to farm the airdrop two they definitely want to be part of Igan layer as early as possible because there are potential um some Juiced yields to get from that and three it's just something new to do with your lsts right if you're sitting there and you've got an LST uh and you're wondering okay what can I do with this yeah okay you can put it into a money market you can leverage it um you can hold it and then just sell it if you want uh into into dollars because you think the Mark's going to go down or you can put it into IG layer and basically

as I said like potentially f a potential air drop and get that Juiced yield uh get those juice yields when Ian layer goes live sometime soon but as I said I think q1 is when they're targeting I da launch um but yeah we'll have to see how that shakes out there you can go check out this dashboard for yourself I'll link it in the YouTube description below for you to do so all right Liam here who is one of is an advisor to optimism put out a tweet today where he said the L2 usage of C data gas as a percent of all gas in January of this year it was only 0.5% in December uh this month it is now 20% and there is a dune analytics chart here that you can see and I've showed this a bunch of times on the re 2 before about

basically the percentage of L2 or or cor data uh that's taken up um as opposed to normal kind of ethereum gas or normal ethereum Network share here so because of inscriptions it has spiked up to over 20% recently but even before inscriptions it was going up because L2 usage obviously has gone up a lot um recently and it was sitting between 10 to 15% of all usage of um of of the gas share of of the network here um now what's cool about this uh there's two things cool about this one obviously shows that people are willing to spend uh you know even even like higher fees on l2s like any if the fees go up to like a dollar or something like that people are still willing to spend that on fees so I've always found it puzzling that people say oh you know these fees

are pricing people out it's like yes but the thing is is that there's always someone paying for them so essentially what you have is like you have this this balance of people that are willing to pay for it other people who can't afford it and they go to where obviously the fees are cheaper things like that it doesn't matter if it's l2s or other l1s so there's always this kind of balance act with with capacity and with fees and all that but at the same time the second thing here is that a lot of this uh I guess like gas usage is going to reset with the introduction of blobs which is obviously coming with EIP uh EIP 4844 or or denune hopefully in March or April next year uh and the reason for that is that you expect a lot of this activity to move to blobs right you expect a lot

of the rollups to be putting their data in blobs instead of call data because it's going to be cheaper to do so at least at the beginning but there is also a risk here that blobs don't actually end up being cheap because they get spammed with inscriptions and I I talked about inscriptions yesterday so I'm not going to rehash my thoughts on that here uh but when you think about it like that you know you start to think okay is this going to be a short-term thing is it going to be a long-term thing what's the what are the costs actually going to look like right because as I mentioned yesterday you can't stop people from putting anything they want uh into blobs as long as it satisfies the rules of what you can put into blobs it it's not just exclusive to l2s and there's really

no way that you could make an L2 exclusive I guess um transaction type without basically committing censorship I mean technically if I mean I mean this is basically impossible to do but technically you could basically uh get all the validators to censor any transactions that aren't L2 related to uh to the kind of blobs I mean it it would be a it would be a mess I mean I'm pretty sure that's impossible to do like if we're talking from a pure theoretical perspective it could be possible but from a practical perspective it's basically impossible so then it comes back to the question of okay well uh it just becomes a bidding war again and l2s and rollups they're going to outbid the inscriptions anyway because they need to use this whether it's core data or blobs they need to use this but then it's it

begs the question of what the longterm looks like because I do think that the inscription stuff while it's new and flashy and and and and and whatever I think that it still is just a lot of speculation right and speculation it changes over time it doesn't and then speculation has boom and busts so it could be a thing where inscriptions just loses favor for a while blobs go down because it's just rollups using them and then inp come back and start spamming again uh because the speculation picks up again and there could be a an interesting thing here where essentially what happens is that there's like an Arbitrage opportunity between C data and blobs for l2s and they they elect to use either one depending on on which one's getting spammed or what the traffic's like and stuff like that so yeah it remains to be seen it's it's going to be

cool to see how it all plays out uh but yeah still still cool to see that L2 usage obviously is trending up here not just the l2s themselves but also L2 usage of L1 G gas all right so you guys may remember Nifty Island I talked about this project a long time ago um I think it was like when it first came out I was aird dropped one of the Nifty Island Palms or whatever um which I still have by the way on on sassle E but uh so Nifty Island uh announced today they're actually launching on the 17th of January now I honestly hadn't heard much about this project in in quite a while um and I was trying to follow it along but I didn't I didn't really hear many updates from them but yeah apparently they're launching their open beta uh for

for their um for their uh their game here on the 17th of January and they're saying it's a play to airdrop campaign like no other is coming now there's no more details than that right now I mean maybe if you go into the Discord Channel you'll be able to get more details here but they have a nice little trailer which you can watch I'll link it in the YouTube description below but I'm excited for this these guys have been grinding away for years now they didn't give up they don't seem to have like soft rugged like a lot of projects do or anything like that where they just basically pretend to continue working on the project and and walk away uh they they seem to have built something here and I mean the trailer is really high quality and obviously we have to wait till the 17th to see exactly what the

actual game looks like but I remember playing early Alpha builds of it uh and it was it was pretty cool to play out in the open world and you know obviously you're you're going to be able to play in this world with the nfts that you have such as like pudgy penguins and apes and and uh and and uh and cool cats and punks I think as well and stuff like that uh but yeah I guess I just wanted to highlight this for you guys because you guys know that I'm really big on um on on uh crypto games if they make sense like I I wouldn't say like I'm someone who pays a lot of attention to crypto games because a lot of the crypto games I just don't think make a lot of sense but the ones that do end up making sense

I think are going to be huge and as I said I don't know all the details around Nifty Island right now I'm just kind of highlighting it for you guys because it might be something that ends up being ends up being a big deal and obviously there's a possible air drop to farm here as well I mean I wouldn't even say possible they've literally said there's an airdrop campaign that they're doing here I don't know what that's going to look like like but hey it gets the people going right it it really does get the people going and it's it's a good growth tactic at the end of the day like I mean I I I I I I sometimes knock the the aird drops and the speculation stuff that goes on in crypto but I think that's just because I'm a boomer these days at the end of the day I totally

understand that it's a really great way to grow your community and and really great way to grow your ecosystem but it has to be done right as well there are air drops that have been done in the past that were really bad and essentially killed any community that the project had because people got really annoyed and might be a bit of entit entitlement here people just not getting as much of a air drop as they thought they were going to get and they're entitled about and like ah I didn't get as much free money as I should have gotten now I'm going to leave your project and hate your project but as I always say guys like you know you got you got to deal with the kind of reality here and and the reality is is that that's how it works a lot of the

time in crypto you need to really make sure that you reward your early supporters even if they these supporters are just supporting you because they're speculating on an airdrop at the same time they're out there Shilling your project every day right they're talking about it they're getting more eyeballs on it they're your marketing department really for an early stage project so I think that when you take that lens uh and you look at it from that point of view uh it it's just necessary evil right but anyway you can go check out the trailer for yourself for Nifty Island and I guess I'll update you guys in about a month when it goes live on exactly what this is all about all right last up here a bit of a bullish rant probably I'm going to go on for the next few minutes so David

Hoffman tweeted out today very simple tweet he said things you're not bullish enough on eth and reaking now of course you guys know I'm huge on reaking I mean I was just talking about Igan layer of course but just in FYI Igan L isn't the only reaking protocol I think there's two others one of them I think is called Babylon the other one I've forgotten the name right now but obviously Igan lay is the the most wellknown and the market leader at least right now even though it's not even live it's obviously the market leader because it has all that that restak eth um in in you know $600 million that we just worked out uh but beyond that we're talking about things that you know people aren't bullish enough on obviously I think people aren't bullish enough on eth right now at all I think I think that eth has been

so slept on for at least the last 6 months right and I I do think eth is in store for a really really explosive 2024 from multiple different angles and I've talked a lot about that on the re field before so I'm not going to not going to repeat myself here on that front but I think that that a lot of the bullishness around it is also going to be driven by stuff by New Primitives like reaking for example and I I think I talked about this the other day but reaking really opens up a new primitive that shared security primitive and the reason why it benefits eth and the ethereum ecosystem is because eth is the asset being used as part of that right there's going to be so much demand to basically restake and there's going to be people buying eth to restake and then it's going to

increase the amount of eth that's obviously in staking it's going to increase the overall Economic Security of the ethereum network and it's just going to increase the usage uh of eth as that kind of like uh story value collateral asset that so many people already use it for we're just kind of branching out here and the reason why I'm really bullish on a lot of the stuff that's going to be building with uh IG layer or using kind of igen PODS and and avss and stuff like that is because as I said I think I've said this a few times now what it does and what I what really the the main value prop of igen ler to me or shared security to me is is the fact that a lot of the long taale of things that want to decentralize can now decentralize and they're not going to

get like all of ethereum security I mean it's arguable how much security they're going to get from this right but I think it's less about like security and more about being able to tap into even a subset of node operators of the node operators on the ethereum Network in order to bootstrap your network and then from there you can just keep adding new new node operators using your own token as incentive obviously um and then people will Farm it and they'll get yield and and and all those sorts of stuff right so it really is this this kind of primitive that we haven't really seen uh before I mean I think there have been other attempts at it within other networks like for example I know polka dot has shared security with their relay chain um and they have a certain model for that and Cosmos obviously has been a

Pioneer in that space for for quite a while now but I think think the reason why those two things haven't really worked out is I mean one the Mind share is just not there the developers just aren't there as well and two the um the assets uh Adam and Dot are not worth anywhere near as much as eth right as as an example here and does not is not a store of value like eth they're not money like eth uh they're not used in liquid staking protocols like eth as well so being able to to to restake the LST tokens is a huge thing too so e just has so much Lindy around it moneyness effect and around its story value effect I think that's what the main driver is here and that's why reaking at least for the very foreseeable future at least a

couple of years at the very least is going to be an eth exclusive thing and it's going to drive a lot of value to eth as an asset so yeah those those are the things that I think people are definitely sleeping on obviously eth as an asset overall I think that next year people are going to wake up to it because the price is just going to move up and they're going to uh funny enough basically get sidelined and they're going to fomo in I I think that's that that's going to happen not investment advice just a just a theory I have I've seen it time and time again and then reaking I still think people are sleeping on even though they obviously put a lot a lot of money into it so far they're sleeping on just how many use cases can come from reaking how many new

things can come from reaking and how that could be that could lend itself to a potential speculative Mania around all of that uh there but anyway those two things totally agree with David people aren't bullish enough on them um and you'll hear me talk about them for a long time now I think I'm going to do uh an a really bullish e rant soon I'm kind of working on a bit of a tweet that I want to put out around this and I'm going to obviously cover it on the refu when I put it out uh but yeah I mean you guys probably have to wait for the the next episodes for that but I think on that note that's going to be it for today's episode so thank you 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