Tesla buys BTC, St. Louis Fed ETH report and more - The Daily Gwei Refuel #53 - 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 9th of february 2021. all right everyone let's get into it so very crazy last 24 hours i think right i mean i'm sure you've all seen this by now but tesla announced that they have bought 1.5 billion dollars worth of bitcoin now uh you know this was funny because over the past few weeks elon musk has really been quite active in the crypto space particularly with doge right he was kind of like i guess you could call it pumping dogs or like promoting doge and kind of like talking about it uh and at one point he had bitcoin in his bio as well uh and you know i think when he put bitcoin in his buyer it kind of

kind of the word bitcoin or hashtag bitcoin and his bio um the price spiked up a bit and then it came back down and people were like speculating like did he buy btc or did tesla buy btc or did one of his other companies buy it and you know the rumor mill kept going and you know i think obviously it's been confirmed now that tesla did indeed buy 1.5 billion dollars of btc using their cash reserve so they used i think about 7.7 of their total cash reserves to buy this btc and obviously you know the crypto markets went wild after this bitcoin hit a new all-time high eth hit a new all-time high um so it's been a crazy last 24 hours that's for sure now i think outside of kind of just this direct purchase from tesla

from an investment point of view what this is and why i kind of said on twitter that i think this is the most bullish thing to ever happen to crypto is because this literally this one event i believe is what has just made crypto mainstream because tesla is one of the biggest companies in the world right elon musk is the richest person in the world and if if he is like confident enough and he is signaling to the rest of the world that he is comfortable enough holding this asset on his company's you know balance sheet then and he was able to convince like the board um the board of directors and like other kind of like people within his company this was the right kind of move then you know why can't these other companies do it right why can't these other public companies do it

are they going to be left behind you know are you no longer kind of like on the right side of i guess like history by not buying you know btc and other crypto assets so it basically legitimizes the entire space right which i think is extremely powerful i mean nothing else could legitimize our space as much as uh the world's richest person putting btc on their company's balance sheet you know short of like a a a a large a large country adopting kind of like btc or eth or whatever as their nation's currency this is probably the biggest thing that we're going to one of the biggest things we're going to see happen in crypto forever right this is going to be you know every kind of like history book on crypto and everything it's going to be basically like a whole section on and

about how the great i guess you know um crypto adoption kind of like got kicked off right um i don't know what you would call it but yeah i mean as you can kind of kind of hear i think you know this has made me extremely bullish and you know i i had some people ask me it's like okay well they bought btc what does this mean for kind of ethereum and eth and i'm like well i mean it's incredibly bullish for the entire space not just bitcoin because if you you know i like to use this analogy remember what you know a lot of people like when they get into kind of crypto as a new person what's the first thing you do right you buy btc right you don't go and buy each straightaway a lot of the time you'll buy btc first because that's what

you know that's what you've heard of first you know even vitalik the founder of ethereum bought btc first right um given that ethereum didn't exist but he went on to create ethereum because um he wanted to fix some problems with bitcoin but that's kind of besides the point here the point is that they get into btc first and they're not just going to stay within the bitcoin and btc ecosystem they're going to branch out and i can guarantee you that we're going to see public companies putting eth on their balance sheets sooner rather than later i do not think it's going to take them another kind of like few years to get to that point i think they're going to do it within the next one to two years if i'm being honest and it might even happen faster than that right i think you know uh there was an interesting

tweet on twitter that i saw as well from suzu that basically said signs of of um kind of like i guess euphoria and froth in the markets are indistinguishable from adoption because if you compare this current cycle to 2017 it is very very very different in 2017 you did not have any of this stuff happening there was no billion billionaires and billion dollar companies the public companies putting btc on their balance sheet there was no defy there was no um you know kind of um use case for ethereum outside of icos right it was it was extremely frothy for all the wrong reasons this time around you know of course the typical crypto stuff happens you know trash is pumping again and we have like bull market mania going on

but this time around we have something that's kind of lasting value on ethereum and d5 and we have btc basically being used as it you know the bitcoins wanted it to be used right they wanted to be used as like a reserve asset basically the digital gold and kind of those narratives are playing out in real time right now so if anyone kind of thinks this isn't bullish for the rest of the crypto ecosystem i think it's just good to keep that in mind in that this is just the front door that they're coming into this ecosystem with this is legitimizing not only bitcoin but the entire space to the rest of the world and i think we're not going to be hearing much uh from the mainstream media i've got basically saying you know uh you know bitcoin is dead ethereum's dead it's a fad it's a

toy it's going to zero i think the days of of kind of those things being popular talking points uh are pretty much over at this point um because you know you had this the richest man richest person in the world giving legitimacy to this thing and you know it's very hard to kind of battle against that and not just for like the media but also for individuals that see this right they might it's a it's a pretty great marketing vehicle too because i've said before that i think most people have heard of bitcoin but i think they've heard of it you know maybe in a negative light or in passing you know it depends on the context of where the they've kind of heard about it so if they're hearing about it in the context of elon musk putting you know buying bitcoin with tesla's kind of

balance sheet uh i mean tesla's kind of reserve cash reserves sorry that in itself is just like a massive positive signal so yeah i mean i could go on for a very long time about why i think this is going to kind of basically catapult crypto to main street to basically being mainstream uh and basically being part of every part of everyone's lives and things like that it's still going to take longer than we would like because there's a lot of growing pains right the technology isn't exactly ready i mean when it comes to ethereum uh and d fi i mean we're still building out eth2 we still have to build that layer two ecosystems we still have a lot of work to do on the user experience side of things education especially there's tons of work to do there right there's lots of work to do on the

regulatory front you know don't let the fact that uh elon musk or btc kind of i guess like fool you into thinking that regulators aren't still going to be coming for this technology they are coming and they're going to be coming pretty hard at some point soon so we need to fight that battle there's so many different battles that we still need to win that you know i i do think we're going to win them obviously but i just think you know let's not get ahead of ourselves just yet right even though i'm saying that i think this is the most bullish thing to ever happen that's because i think we'll look back on this moment and and kind of say to ourselves okay that's exactly when crypto went mainstream right but we still have a very kind of long road ahead of us i think

but you know i i i guess i explained the other day that other why i'm so bullish on ethereum and why i've never been more bullish and this kind of just confirmed it for me and cemented it for me that i just think that we're just getting started here and you know that's not to say that we can't have our classic crypto bear markets right where things go down 90 95 and then we have two years of crappy price movement that can still happen and to be honest i expect that to still happen given that um you know humans don't change really human emotions don't change and markets are driven by human emotion so i still think we're going to be seeing that play out over the next few years but at the same time i do think that we're going to see uh things

become i guess not maybe maybe more stable right and what i mean by that is that we we're going to have these kind of frothy markets but i've explained before how i think that now that we have d5 a lot of money is going to stay within the ecosystem right these institutions and these public companies that are buying btc are just going to dump it at the first sign of weakness they're going to hold it for for a while they have like multi kind of like decade investment horizons horizons you know most of them at least not all of them some of them will probably dump it or whatever and some of them might just offload um some during a kind of like down market to kind of cap the risk there but you know these investments are not just made at the tip of a hat it's just

like oh you know one day elon woke up and thought i'm going to buy a billion over a billion dollars worth of btc no i think he had deep conversations with many people within the ecosystem and outside of the ecosystem and kind of came to the conclusion that this was a good bet that tesla should make so yeah i think that was uh that was a you know i think that's a prudent decision to be honest i obviously i'd like for it to be eth but as i said everyone's kind of first or at least most people's kind of first kind of foray into crypto is bitcoin and buying btc and that doesn't last long you pretty much jump from btc to something else really quickly as an individual you you can probably jump to it within a couple of days right as a brand new

individual to the space institutions and public companies will take longer but as i've said before the jump from from non-crypto to crypto is much much larger than the jump from btc to eighth right so yeah keep an eye on that and i'm sure like as i said within the next one to two years maybe even sooner than that we're going to see this kind of stuff play out for ether and ethereum and and d5 as well and it's going to be really really great when we do see this play out basically and on that note uh the other piece of big news that came out in the last 24 hours with this was the saint louise fl louise lewis fed uh basically put out this research report on ethereum and d5 which was an incredibly bullish uh research report

he's pub it was um authored by a guy called fabian shah i'm probably saying that wrong but you know that's how i'm saying it uh and basically uh published on the uh this federal reserve bank's website it's quite a lengthy kind of piece here obviously i'm not going to read it out for for all of you but what caught my eye about this i kind of like skim through it already is the fact that it is very very good it doesn't just kind of bring up buzzwords of blockchain and all this technology and and try to like i guess explain things just in a wrong way it goes in depth and it goes so in depth that they actually explain how you know how um amm models work right with with diagrams of like the the classic kind of um mechanisms that go into uni swap and

other amms like that right the x y equals k model that we've all probably heard of and then it goes on obviously to describe smart contracts to describe how dfi can enable all these new financial primitives like flash loans and things like that there's just so much in here and the fact that it's just it's well researched and it's not just your surface level kind of boring report is incredibly bullish especially incredibly bullish that it's published on this federal reserve bank's website because as i was saying about the elon thing and the tesla thing this sort of stuff legitimizes our space more than anything that we can do because this is coming from institutions that are viewed as like trusted right that are viewed as kind of um uh the institutions that people can kind of

look up to and and kind of like trust that they know what they're talking about and things like that and also on top of this it's funny because fabian starts with this report by saying and i quote the term decentralized finance refers to an alternative financial infrastructure built on top of the ethereum blockchain so two parts there right he calls it out as an alternative financial infrastructure so that's exactly what we call it right we call it a parallel financial system or an alternative financial system that's going to potentially replace the traditional system and then he says built on the ethereum blockchain right which i thought was very interesting because usually when you see these these kind of research reports people for one reason or another like to

just bucket defy into sorry bucket kind of ethereum into all the other kind of protocols that are quote unquote doing d5 and then just like basically equate them which is wrong in my eyes because really none of the other protocols have much traction or any traction whatsoever with d5 it basically is all ethereum so i'm very happy that fabian kind of called out ethereum by name here and continues to do that throughout the piece i think there's 22 mentions of ethereum i think dye is mentioned over 30 times as well it's very heavy focused on the you know the ethereum d5 apps well of course because you know that's where all the default activity is happening it's for it you know it has notes on scalability and and all this sort of stuff so definitely go read this piece i highly

recommend it um and yeah i guess just on a higher level here as i was saying before about this stuff legitimizing the space i think not only does it legitimize the space but it also educates people on this stuff that wouldn't read i guess you know maybe they do it they won't read the daily gray right they won't watch these youtube videos they they're probably not even going to read bankless or the define or any of that sort of stuff right they're going to get their information from these entities that they're already familiar with so we need more of this i think because this just reaches more people than we can because it's coming from an entity that people are familiar with rather than someone brand new and someone who i guess like quote unquote shields this stuff for a living right

so i think yeah i think that's that's really important and i think this is really bullish so this this might be something that you can share with people who ask you what is defined what is ethereum and you know you don't have to share something coming from like people within the ecosystem this is coming from a federal reserve bank which a lot of people in especially in the us will be like oh okay if it's coming from them then you know it must be legit right a lot of people think like that that's just this is the way the the things work so yeah definitely an article that you can kind of send to your friends and family whenever they ask about ethereum and d5 so eth's uh futures launch on cme had their first day of trading yesterday and arcane research posted out some stats here so basically

the first day of trading for cmes eats futures ended with over 30 million dollars of volume and 20 million dollars in open interest now this might seem low because we do billions of dollars of volume um uh on within i guess like the centralized exchanges on crypto already right and even on the the decentralized exchanges but you know some of you may recall that the volume for btc was incredibly low when it first launched their futures product as well it took time to build it up and now the cme btc product i think is number one or at least at the top uh at least in the top three uh by volume for futures products and there's no reason why eighth can't get there either so yeah good to see some really really solid initial traction here but i'm going to be monitoring this and see

how fast it grows i think it's going to go pretty fast especially as we're in like this bull market now because you know i guess like the um btc futures launched at the tail end of the bull market last time and the eighth futures are launching it basically what feels like the beginning of this bull market or at least the i guess beginning to mid of this bull market so it's going to be interesting to see how fast this grows so the index co-op announced today that they have integrated transact finance which is a platform for fiat on-ramps so that you can now buy the dpi the default pulse index directly with fear now i want to quickly disclose here that i am an advisor to set protocol which is uh or set labs which is one of the companies working on index co-op

um and and was originally the ones who launched the index co-op with with default pulse so obviously have a bit of a bit of a bias here but i this was something that i kind of like was wanting to see for quite a while uh with i guess the dpi having a fiat on-ramp is incredibly important now the dpi isn't actually on any centralized exchanges yet so uh and you know that not not from like lack of trying on the index co-ops part they're trying very hard uh but obviously getting on centralized exchanges is not an easy task so and that's the only place you can have a fiat on ramp you can't have that on you know d5 right even if you have like usdc or or die or stable coin kind of purchases which which you which we do

for dpi that's not fair that's just kind of like you know digital dollars or stable coins or whatever right so going directly from fiat to dpi is a huge deal i think it means people can get defy uh kind of exposure uh directly from their bank account and i think right now our uk and eu residents can kind of do this uh so they can purchase up to ten thousand uh uh euros worth of um or pounds sorry worth of dpi per week uh and indian residents can also uh purchase up to one million rupee of uh dpi a week using tranzacr so obviously there's limits to this right but it's still still a very good first step and i hope to see more d5 products integrate kind of fiat on ramps uh because

this is the only way you're gonna get new people in right they have to come in through fear there's no way around that so they're either gonna go through centralized exchanges or they're going to go through one of these kind of i guess fiat on-ramp uh applications like tranzact so yeah really great to see this from the index co-op today so this is a bot that i've spoken about on the refill before that i've been monitoring for quite some time the l2 dex wars bot now you remember last week i had a look at this bot and i was explaining how loop ring was only doing um 10 million dollars of volume over the last 24 hours last week well turns out today they did 30 million dollars uh i guess over the last uh 24 hours uh which is a three times increase in not even a week

right and i was saying last week how i believed that layer 2 decentralized exchange volume was going to explode and go and grow much faster than layer one did simply i mean for two main reasons one uh necessity right high gas fees pricing at users layer two is a hot thing people are moving to loot rings exchange and not just loopery but these other ones as well like diversify nash and leverage and all these these sorts of kind of things yeah but then on top of that the second major reason is that people are just more used to decentralized exchanges now people are used to liquidity providing right people used to trading on them they know what to expect so because they're more used to it it's it's just way easier for them to kind of adopt uh loot rings uh kind of layer two model here or diversifiers

layer two model or whatever so really really great to see the growth just kind of explode and honestly i didn't expect it to happen this fast either i thought we'd see maybe like 10 million then 15 million and 20 million right but we've gone three times in less than a week which is incredibly promising and i hope to see this continue um you know maybe we can get to 100 million dollars over the next few weeks of 24 hour volume on loop ring and then some of the others can catch up as well i would like to see more kind of distribution here between the others uh obviously loopering is is kind of like i guess leading by a big margin here but i think that's simply because i see everyone suggesting loop bring to to kind of people and they have a really really

great platform a really great onboarding experiment experience for people as well so definitely um you know i talk about loopering all the time in here but i think simply i talk about it a lot because it is the best example we have today of layer 2 kind of um technology for people to just go and try out because it's obviously a hot topic and it's just very easy for me to recommend to people whenever they ask me about it and on that note as well i mean matthew feinstein from loot bring put out this tweet that basically says uh the blueprint decentralized exchange is doing more transactions than cardano avalanche and polkadot so it's doing 1.6 times more than cardeno 2.4 times more than avalanche and 2.4 times more than polka dot and this is what i was explaining in yesterday's refill about ethereum

competitors you can go verify this for yourself this is not me fighting this is not me coming up with crap just to justify my kind of ethereum bias right this is real the transactions on these networks are essentially non-existent because there's just nothing to do on them um yet maybe they do develop an ecosystem i'm not saying they they won't but the thing the the the kind of like fact of the matter is is that cardinal doesn't have smart contracts yet right so it can't really do anything besides staking avalanche is extremely new it's the same kind of thing i'm pretty sure they have are they going to be integrating smart contracts soon or they already have it i'm not too sure i haven't looked in too deeply and polka dot is a bit different because polkadot itself is not a smart contract chain

it relies on parachains kind of talking to it to do smart contracts um so that ecosystem's still developing but you know the fact that i guess these systems have been out longer than loop rings layout to exchange i think all of them have um and loot rings already kind of like way ahead of them is testament to the fact that ethereum has all the network effects and it's just so much easier for people to onboard onto loop ring from layer one ethereum than it is for people to leave layer one ethereum and go to these ghost chains where nothing's happening right it's just it's very hard to bootstrap these ecosystems so i'm glad that matt put out this tweet because i thought it was just very interesting and i hadn't even done the comparison myself but i went and verified this and i was like wow that's actually kind of crazy

because i was doing some more research kind of today my today about like uh the different ethereum competitors right because i know yesterday on yesterday's refill i spoke a lot about them and i i really just wanted to do deeper research into them to make sure i wasn't missing anything i i always like to to kind of verify that and it it really is that they just they just don't have much activity happening on them at all and you know i i'm not saying it's going to be like that forever but if ethereum has like literally so much activity happening on it that you know people are paying 20 25 million dollars of gas fees a day more than that i think 30 million plus gas a dollars worth of ethan gas fees a day to use it and then you have these other chains that are claiming to be you know

low fee transactions super scalable and literally no one's using them that says something right that and and i don't understand how people can't see that but you know i think i'm preaching to the choir here everyone watching this is probably big fans of ethereum but we'll see what happens with these other chains we'll see if loop ring keeps getting away from them and we'll see if they catch up maybe they have things coming in the pipeline like i know cardano has smart contracts coming i mean people on twitter like to remind me of that every single day but we'll see what happens we'll see how just how strong ethereum's network effects are here all right last thing is a really nice tweet here from fubulubu which i thought was was was quite cool so he basically uh and i'll quote out the tweet he says

i wanted to take a moment and thank the ethereum community for investing in viper lang via gitcoin grants uh we took a long-term str hold strategy of ether a year ago and we finally have enough runway for new full-time contributors to come on board over the next few months thank you now for those who don't know the viper programming language is an alternative smart contracting language to solidity on ethereum so solidity is the main smart contracting language that everyone kind of uses but viper is an alternative here that's being developed by fubulubu and his team and basically saying that all the donations that uh i guess um they got through bitcoin grants last year they put into eth and obviously that ether is appreciated and now they have enough money to fund kind of uh full-time contributors

which is just amazing to me right i mean this is what i guess um eric and i did with ethub and kind of i've done with uh i did with daley guay through bitcoin grants is that we kind of bought eth with it especially with ether because ether we we we bought eighth much much lower than it is today we we everything that we got from get clean grants we put into eath and i think we were buying ether like one to two hundred dollars most of the time and obviously that's appreciated a lot since then and that's kind of helped us to sustain ourselves and sustain you know what we've been doing with kind of ether what i've been doing with the daily grain stuff like that and obviously we're not the only one who's done this i know there's other people that do this as well with bitcoin

grants and it's it's obviously risky because the price can go down of course but you know a lot of this was done during the bear market and that's the kind of stuff you want to do right you want to make sure that you can kind of land grab what you can during a bear market so when the bull market comes along you get the kind of most benefit out of it so yeah i just thought this tweet was really good and he's definitely not alone um in kind of this feeling here uh and then for those who kind of like maybe developers listing in definitely go check out viperlang i've heard it's really great um you know i've heard that i think yearn's using it because fibolubu works uh for yearn or at least basically like uh works with yearn as one of the the kind

of like full-time kind of contributors there uh but he's also working on viperlang too so yeah definitely go check it out if you're a developer here um and yeah that's it for today's refill everyone thank you again for listening and watching if you haven't subscribed yet be sure to subscribe to the channel give that video a thumbs up join the discord channel subscribe to the daily great newsletter and i'll catch you all tomorrow thanks everyone