State of eth2, Curve cross-asset swaps & more - The Daily Gwei Refuel #40 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the daily gray refuel where i recap the latest news in the ethereum ecosystem i'm your host anthony sosano and today is the 21st of january 2021. all right everyone uh there's a bit of a sell-off in the markets over the past i guess 12 hours or so yeah we've come down from you know oh well this is the last 24 hours right we've come down from like the all-time high um back down to under 1200 here at time of recording um you know particularly bad over the last uh 12 yeah 12 hours or so down from 1390 to under 1200 now i mean this is typical crypto so i'm not going to like hop on about this or anything but the reason i wanted to quickly just mention the price is because

i put out this tweet today and you know it's funny looking back and zooming out on things so i wrote in the tweet that in march of 2020 during that massive crash that we had you could have scooped up some eighth for 90 bucks right and even for a couple of days it was hovering around 100 you didn't have to catch the exact bottom but you could have you know scooped some up for about a hundred dollars so the funny thing is about this is that if you had bought it around you know even like if you had bought at 90 90 say right and then you know a few hours ago the price was 1300 you had made like 13 times your money essentially uh in in like 10 months or 11 months i've got written here um so it's always good to zoom out in

times like these obviously sometimes it doesn't work like during a bear market you know if you bought the top of the last bull market um and you held down to like 80 dollars you've obviously you know lost over 90 of your money but i think in general you know time in the market beats timing the market so you know the longer you're in the market you know even if you bought you know even if you bought at the very top uh you know you you're almost back in profit you were back in profit like um you know a couple days ago most people didn't buy at the very top top right you know even if you bought it eight hundred dollars right um just a few weeks ago you got back into being in profit and that's after you know obviously a long time maybe two to

three years um but it's always just good to zoom out because if you pay attention to you know the the day-to-day movements of these markets a lot of it is noise a lot of it isn't going to give you any context of things it's actually going to warp your view of the market so just a little bit of advice there on how to view the markets not how to invest or how to trade just how to view the markets from from a different perspective because you know i do the same thing we all kind of like love to just check the price every day right especially when it's going up you know that feels good but then when it's going down we're you know we're like oh my god what the hell but you can see here right that twelve hundred dollar eighth is like

three days ago like the 18th of january right we were at that three days ago so um when you zoom out like that you kind of can see how these these kind of you know dumps here can can look like nothing right um and then you know this is the one hour chart and if i scroll out to like the one day chart and then fix up the chart here right it doesn't really look like anything yes okay this is a pretty pretty red candle here but you know we had one of those you know just a couple of weeks ago or even less than a couple weeks ago then we trended back up you know there's plenty of these you can see them all on the chart here there's plenty of these red daily candles and then you can go i mean if you zoom

out even more go to the monthly chart and like look at this we're still in the green like massively in the green right um so you know the further you zoom out the better it looks uh you know over time especially during even even during bull markets so just something to keep in mind that i wanted to kind of bring up um you know just as the markets seem to be selling off right now which is you know it feels crappy but always zoom out that's what i always like to say so josh stark and evan van ness put out their year in ethereum 2020 recap today uh it's quite a lengthy blog post here it's about a 14 minute read i read through the whole thing um i suggest you go do the same it's it's a brilliant kind of blog post it will give you a recap of what happened

in 2020 not so much about um you know what i did in my 2020 recap video where i went through like what launched you know the projects that launched gave my thoughts on it they kind of go through the themes here of the year so how ethereum basically overtook a bitcoin in in a few different metrics like you know settlement uh value settled on the network fees paid all that sort of stuff then they move into the ethereum creator economy like nfts and art and things like that that that kind of boomed in 2020 i think towards the end of 2020 it definitely boom j you can see from here from the chart uh then the other big theme was d fight obviously especially decentralized exchanges which again grew extremely quickly towards the

you know i guess second half of the year of 2020 and then uh on to ethereum scaling upgrade so layer two especially and obviously eth2 as well that was another big theme of 2020 and then uh yeah i mean they go on and they summarize you know what what they think it all means but basically i highly suggest going to give this a read i really liked how they broke it up with different themes and segments about what we saw in the year because i do think d5 was was big and it was probably the biggest thing for ethereum of 2020 and what drove a lot of the growth um but you know nfts the creator economy was huge eth2 launching obviously was very very big uh layer two scalings you know got got got hotter throughout the year um and then ethereum overtaking

bitcoin on a bunch of different metrics uh was was huge right i mean that kind of coincided with the default growth so deep i would say d5 is responsible for a lot of that especially stable coins and things like that um but yeah so this is great go give it a read um i'm not doing it justice by just summarizing it it's got a lot of great stats in there and it'll give you some context right it's good to zoom out as i said just before to get get some context around not just price but like how far we've come as an ecosystem because even if i just show you the the chart of um even if i go to like the decentralized exchange chart right we were doing like you know kind of meh volumes until mid 2020 right we we were all bullish on

it like a lot of us that are in the ecosystem were bullish on d5 bullish on decentralized exchanges we kind of knew that this was going to be the next big thing on ethereum we knew it was going to be lasting and provide a lot of value but until recently we didn't see that materialized right and then once we did it kind of like you know it shows the strength here of of ethereum and d5 um so it's really great to see that put into context um you know and kind of zooming out over the last few months so an update from danny ryan on the state of eth2 uh this is quite a long blog post as well uh it's available in uh english and mandarin so you can go give this a read it dives into basically you know as the title says the state of

eth2 you know how what where we're at today with um the beacon chain how it launched how much he's taking you know the status of it how it's going kind of um and then he and then it moves on to focus on like what's coming this year in in eth2 uh and also he talks about eth1 and how each one fits into this picture um and then he talks about how the different phases that you've probably heard of of eth2 like phase zero phase one phase two they don't have to be kind of like sequential they can happen in any kind of order obviously phase zero the beacon chain has already happened so but we can actually do the merge before we introduce sharding for example um or or we could do sharding before the merge or we could do this before that so it doesn't have to happen in a

specific order it's just whenever it's ready basically so uh that was really cool to see and he explains it quite well here and then he explained it goes on to explain like you know what sharding actually means in this context so you might have seen that we're going for sharding of data first um and then execution and state sharding kind of comes later because it's it's more it's a more difficult problem it requires more research and development there but the sharding the data gives us more scalability at layer two which is what we want of course so he goes you know and he explains about that kind of talks about the state of e2 clients kind of on the state of one five five nine uh aip1559 and stateless ethereum uh and a bunch of different things here so

really great summary here i highly suggest that you go and read it if you want to know where eth2 is today and there was also a blog post yesterday that i spoke about from uh from sigma prime that went on about kind of like where we were today in e2 as well and kind of like what it looks like from an engineering and development perspective going forward to get this full kind of road map done and it's just really great to see all these teams putting up this content talking so so candidly about this because they seem very very excited and committed to the mission you know more so than ever right they launched this beacon chain that's that's great and everything it's a huge part of ev2 but they want to see it through to the end right they want to get it done right

because they want you know i mean at the moment there's not much to it right the beacon chain validates itself right you stake can you validate you know the beacon chain um staking balances and all this sort of stuff whereas when we get to the later phases we have um actual user you know interfaces on there state execution smart contracts all this sort of stuff we can actu users actually get the benefit but for now you know it's kind of um you know limited but i think you know the developers the researchers are very very dedicated to getting this whole thing rolled out so yeah obviously very looking forward to that in 2021 and 2022.

i think the merge will happen in 2022 2021 will probably see sharding going live and eip1559 for sure um but the merge is both complex and it needs to be done right the first time there can be no kind of screw-ups here um i mean there can be technically in terms of like if it's screwed up we can just revert it and try it again but that's just messy as hell you don't want that to happen so you know well technically there can be a screw-up and the ethereum network would probably recover from that i think we'd much rather not have that so it's going to require a lot of test nets it's going to require the beacon chain to be live for at least six to 12 months i would say to make sure that it's stable and can

handle eth1 and and not kind of like buckle under the load or anything like that so yeah and danny talks about this in this blog post as well so definitely go give it a read so sigma prime released a new uh kind of lighthouse released today the lighthouse is their e3 client so if you're running the lighthouse client be sure to go and update it here i mentioned the other day that prism uh prismatic labs had really released a new version of prism as well so if you haven't upgraded and you're using prism definitely go do that it's always good to to you know upgrade here um because as you know the procedure says these kind of things contain stability improvements right they contain bug fixes a bunch of other improvements you know

potentially making your validator more profitable depending on on the fix and stuff like that so highly recommend going and upgrading if you haven't already so an interesting tweet here from uh kodadan.eth he put out this tweet basically saying that um another developer called nick mudge has bridged avez interest-bearing a tokens to matic network which is which is a side-chain network and he even created a pool on a decks called quick swap decks uh to swap between usdc and mausdc or matic uh m a usdc yes so matic ave usdc which is the matic version of ausdc um which is really cool i mean

he says here defy meet layer two um i've gone on about this so much and and you know i feel bad whenever i have to correct people on this but matic is not layer two it is a side chain there there are specific differences and and very important distinctions to make there um but you know i think that's just a failure on the community's part that we haven't done enough education around this so that's why i bring it up enough but i'm not going to hop on about it now um you know matic is a scaling solution it's just a side chain rather than a layer two but that still doesn't take away from the point that you know ave is bridged into this kind of side chain so you know you can potentially get more scalability on manic network than you do on the ethereum main net which is the

whole point of these side chains um and then it allows you to do all these things so it's really cool to see this implementation already done on there i don't think it's an official implementation it doesn't seem like nick works for for aven it works for avigachi which is like another project that that's building on rv um and so does this koda dan person as well so uh yeah i think that you know they obviously work closely with the ave team but not the official rv team and i'm still curious to see what layer 2 solution or what scaling solution in general aveda decides to use whether it's you know a side chain or layer two like you know optimistic or zk roll up i think they're waiting i don't think it's as urgent for abe to move to layer two as it is for other apps

because if you look at others growth and what they actually offer in terms of products their growth is is amazing they're still going up their product is a money market where pretty much it doesn't really make sense to do small value transactions anyway so the gas fee is not really going to eat into your profitability here or what you're doing a lot of people tend to do these large transactions right um you know anything a few thousand dollar transaction definitely justifies the gas fees considering that the rates that you get as well um so i don't think there's that much of an urgency at this point five whereas like something like uni swap obviously it appeals to more than just big traders right it appeals to lots of small retail traders who want to do maybe a thousand dollar trade and

you know the gas fees candidate into that at times you know 50 up to 100 gas fee depending on how uh how clogged up the network is um same with synthetics right so i think certain apps require scalability sooner than others and rv and compound and money markets in general i think can wait a little bit uh it's not critical for them so still curious to see what layer two solution they decide to to go with and what what scaling solution they decide to go with i think we might see them end up on optimistic ethereum because synthetics and unisop are going to be there but at the same time you know zk roll ups already have like a pretty vibrant ecosystem too so the jury's out here i don't know um you know obviously the other day i spoke

about how uh one of the other team members said that uh or hinted at optimistic ethereum but who knows if that's going to materialize he might have been trolling us so we'll see we'll see uh but yeah i just thought this was interesting that someone's just you know building on are their permission permissionlessly with matic as well and kind of you know playing around with this and showing what can be done i just thought it was really interesting so an interesting tweet from andre today uh that was quoted quote tweeted by dejen spartan here so andre's tweet i mean this this guy can just tweet out an ethereum transaction hash and get everyone talking but basically what it is it's the the curve uh synthetic swap that across cross kind of protocol swaps that

i talked about the other day and at this point i think not enough people are talking about how incredible this actually is and how amazing this feature is so you can see degenerate down so what ended up happening in this transaction was 9 million usdc was traded for six thousand six hundred and eighty nine synthetic eth using curves so this the transaction flow is is as you can see here the the usdt is traded for susd on curve and then the susd is traded for s eth on synthetics right so you can go from like do a large order through this cross asset swap at very low slippage because you're going through the um usdt and susd pool first and then s usd to s8

because their synthetic assets uh the slippage is basically non-existent because because of the fact that it's a synthetic um swap on synthetics exchange and on top of that there's a there's a fee of course but this is the fee that goes to the synthetics platform which is 26 859 of a fee for this transaction which i think is point three percent or something like that um so a nine million dollar transaction you don't mind that you're paying 27 000 of fees i don't think um right you just have to think about it in a percentage term not an absolute kind of value term um but yeah i mean this this is one of the biggest things to happen in a while in d5 and uh you know i always like putting a light on things that i don't think are being spoken

about enough or being paid attention to enough obviously this kind of thing isn't going to appeal to the everyday trader it's really just going to appeal to whales and trades of large size but the whales and the traders doing large size and the kind of market makers that also do this are the ones that basically provide a lot of the liquidity for d5 so giving them more options to go in and out of things to do various things on d5 to provide more liquidity you know all that good stuff there's nothing kind of like bad about that that benefits everyone not just the whales so really really exciting to see that um i think that we're gonna see more and more of these swaps happen um as you know more and more market makers and whales clue into this sort of stuff because i think you know it's funny i

was actually discussing this with some friends earlier about you know how early d5 was until recently in terms of just in the crypto ecosystem you know up until a few months ago before we had d5 summer even people in the crypto ecosystem didn't know what d5 was so if you think of if you think about that how crazy that is that something that had had existed within ethereum pretty much everyone in ethereum knew what defy was um and then you know obviously there's other crypto communities they didn't know what dfi was they didn't know how big it was you know maybe they thought it was a scam because uh you know depending on what bubble they were in um they might have believed it was a scam or whatever but now we're at the point where like defies an inevitability and more and more people are coming on and more and

more traditional finance people are coming on and people from the centralized exchange and service space are also coming on which is extremely bullish and those are the people that these products are going to appeal to um definitely because of the fact that a lot of them you know especially coming you know from the traditional finance space they're gonna be you know market makers funds you know traders like big trade hedge funds and big trading uh kind of prop shops coming in to d5 and thinking okay well is there liquidity for this you know can i do this can i do that and liquidity matters a lot for these guys because slippage can be brutal right i don't think there's any decentralized exchange right now out there where you can trade 9 million usdt for six thousand

seven hundred eighth essentially without incurring some serious slippage maybe that maybe there is for this pair but if there was i don't think the person would have done this trade or this trade was still cheaper because of the fact that this there might have been more slippage um so yeah this is just really great for those large trades um and as i said that trickles down to everyone else in the ecosystem it's not just for the for the whales so definitely pay attention to that i'm curious to see more of these trades go through and to see how how this evolves so git coin put out this tweet today basically thanking their matching partners that make bitcoin grants possible you know it kind of got me got me thinking some more like look at all these ecosystem projects right and

and i guess you can call them angels like um uh fernando from balancer um andrew uh from dharma capital uh basically you know there's a group of people and uh projects here that are putting up funds uh to get coin grants as matching and those will go out to the rest of the ecosystem to fund open source development open source media and all these sorts of things uh which you know i've spoken about it before but this is just i mean so incredible right and the fact that you know the reason why we have so many of these kind of um teams and people donating money and match in matching funds now is because of the bull market you know the more capital that comes into the system means that the more money can flow into these public goods and and the more generous

people are you know you can see it not just from like ucoin grants but also from all the projects getting funded in general like all the funds spinning up you know investing millions of dollars into new projects and everything like that that's because of the fact that there's a bull market and and the prices have gone up so you know it's incredibly reflexive like that and i'm sure during the next bear market we're gonna unfortunately you know depending on how deep the next bear market goes we're gonna have the a thing where you know git coin grants rounds like maybe not going to be as big as the previous rounds in the bull market and that's i think that's just natural i don't think that's something to be concerned about but make the most of it while we've got it i think i want to see more projects i

want to see every you know d5 project with a with a war chest or with a treasury to you know matching uh providing matching funds i mean the other day i spoke about how unisop has a 500 million dollar treasury i want to see them use that in get coin grants like come on let's do it right uh that's that's a huge treasury i'm sure you can spare 500 000 maybe a million dollars hey you hate uni governors maybe you want to do that um to give back to the community i um you know obviously unisop has already done a lot but why not do some more a million dollars out of 500 million that's nothing right um if i'm doing my math right in my head it's like 0.2 or something like that um i think i'm doing my math right uh yeah that's like nothing and and as i

said the other day that treasury of 500 million is actually 2 billion once it all vests out so yeah i i and unicef's not the only one synthetics has a massive treasury and they're obviously already doing it you know um year and finance 2 are doing it you know balancer labs harvest the ethereum foundation you know and we've been seeing centralized exchanges in here like kraken and binance which i thought was was really cool um so yeah i mean it's just great to see this it always warms my heart as someone who has benefited greatly from bitcoin grants through both ether and the daily gray and as someone who has given a lot of money on git coin grants as well and had my donations matched uh i just i love it i get coin is one of my favorite uh platforms on ethereum one

of my favorite apps to use and it just provides so much value and joy to the community and it's basically all positive some you know it's all going to projects that kind of need it um to open source projects that like do all for free do it as passion projects and things like that and allows them to build more open source software allows them to do more open source content on the media side of things so yeah just wanted to kind of i guess talk a bit about that because as git coin says here uh these matches are the the heroes ethereum needs all right last thing to talk about today so yesterday i spoke about and and how excited i was about loop rings new fast withdrawal feature from layer two to layer one

where it was basically withdrawals to from layer 2 to layer 1 within 30 seconds which you know obviously is mind-blowing um so philippe from xerox horizon games or i think it's just called horizon horizon games yeah yeah yeah um he basically put out this tweet quote tweeting loot brings announcement and says this is one of the best features of zk roll ups you can even do redeposits in your withdraw transaction like this so he gives an example here you can withdraw token a from the zk roll up z he's calling it uh trade token a to token b on uni swap on the layer one main net and then deposit token b into the zk roll up and you can do that in a single mainnet transaction and step two can be anything on main net

so we're getting closer to this point where we can do these more you know i guess you could call them composable transactions between layer one and layer two um because we haven't really been able to do that uh because of the slower withdrawal times and that's been a massive worry uh people you know thinking of breaking composability and all that sort of stuff but i think that you know as we get these more fast withdrawals out there as we get them down to basically you know i'm sure there's a way to do it and maybe there isn't it hasn't been released yet but i want to get to a point where we can securely do a atomic transaction from layer 2 to layer 1. maybe maybe it's impossible i don't know i don't know enough about the technicals and what i mean by an atomic transaction

is basically do it all in one block right one ethereum block where you do what philip is it said here and basically uh trade and do whatever you want within one ethereum block like you would with a flashlight for example and then it still go back to layer two i'm sure that's possible in some way i'm not sure if it's possible in a fully decentralized secure you know copy of layer one main netway uh but we'll have to see uh so there i thought that was really interesting um i i love these examples of things you can do because it kind of shows people the use cases right and it shows people just what's possible here uh and as i said yesterday super excited about um loop ring doing this uh fast withdrawals because it's gonna make the user

experience a lot better people are going to realize the power of layer 2 a lot quicker and they're just going to move forward as an ecosystem here so really great to see all of that all right everyone that's it for today thank you again for watching and listening you can subscribe to the youtube channel if you haven't yet give the video a thumbs up join the discord channel subscribe to the daily grade newsletter and i'll catch you all tomorrow thanks everyone