Trillion Dollar Security, Layer 2 chat and more - The Daily Gwei Refuel #857 - Ethereum Updates

Transcript

Hello everyone and welcome to another episode of Daily B Refuel where recap the latest news in the Etheum system. I'm your host and this is not the 10th of February 226th. All right everyone, let's get into it. So, apologies for not doing an episode yesterday. I just ran out of time to do one yesterday, so I'm doing one today. But also, you guys got two bonus I mean a bonus episode last week for two episodes last week. So, I think I'm doing okay. And I know some of you probably thought, "Oh, there we go. No episode on Monday. He's already kind of gone off track. He's not going to have an episode this week." But no, there is an episode uh and I think I mentioned this when I when I kind of talked about this at the start of the year where I said that like I'll aim for

every Monday, but if it doesn't happen on the Monday, it should happen on, you know, the Tuesday, Wednesday, Thursday or or Friday, even the weekend sometimes, right? So, it just depends on uh kind of timing for me here. But what an interesting week over the last week. I mean, I'm not going to spend too much time on the kind of like L2 debate that has popped up since Vitalik's tweet cuz I did a whole episode on that which I assume most of you guys have already watched uh last week, but there has been some kind of discussions around that, some new discussions that I did want to cover and some takes that I did want to cover. Uh but uh yeah, I mean it may take up like a lot of this episode as well because it is a big topic of discussion, you know, for various

different reasons. I'm sure you guys have been following along with the discussions. a lot of FUD, of course, a lot of people reading into things uh that just aren't there, which just I mean, it's not weird or surprising to me at all. Uh but it is frustrating that like this just is going to be a I mean it's just always going to be a thing, right? Where, you know, someone says something and then people take it in in various different ways, uh depending on, you know, their own inherent biases, depending on monetary incentives and all that. And that's what we kind of like love and hate about crypto. Like we love the fact that it brings together so many different things like economics, politics, you know, psychology, technology, like all these sorts of things. It brings these fields together into you know one kind of like boiling

pot if you will of of different fields. But then on the other hand you have the fact that a lot of people's opinions and a lot of uh I guess people's takes on things are completely driven by uh by money, right? And then then there's the other end of the spectrum where it's driven by ideology. So you you kind of try to sit in the middle or like you try to see what you know who sits in the middle and kind of listen to them. Uh I try to sit in the middle, but I know I don't do a very good job of it sometimes, especially because I would say I sit much more on the ideological side of things. So I let that cloud my judgment sometimes. I would say that I don't sit on the money kind of side of the spectrum that much these days. Maybe

I used to, but it's not really something that informs my views these days. Uh like the bags kind of view. Uh that's just not how I look at things. I am definitely someone who is is way more on the ideology side, but then I also try to be practical about things as well. And that's another thing that I guess people have kind of been going on about for a little while with Ethereum is that we spend too much time in ideology land and not enough time in practical land. And that's a fair kind of take. Um, but I think that's just because of the fact that the reason why a lot of us are in Ethereum to begin with. Uh, and not I don't say like in crypto, I say in Ethereum because a lot of crypto is nothing like this. It's the ideology, right? It's the belief in self-s

sovereign money. It's the belief in decentralization, in censorship resistance, and not just a a small belief like a hardcore belief, right? So, when you have that as your kind of foundation for why you're in this industry, then naturally you're going to have opinions based on that and there's nothing wrong with that. But then I understand the other side where it's like, okay, well, we have all, you know, these things. We have all these uh, you know decentralization sensory resistance, so on and so forth. Like, how do we actually instantiate that in a product? like how do we actually make a product out of it to so that people can get use out of it, so that people can get value out of it. And I think that if you look at the the products that Ethereum actually offers, you know, there's a wide set of these, but the

biggest product really is ETH as an asset. Like I would consider ETH as an asset to be a product of Ethereum, right? And that to me is the biggest product because it is self-s sovereign, decentralized, censorship resistant uh money and a store of value that uh is better than anything else that we have. I think it's better than Bitcoin. You guys know I'm not shy about that opinion and I think it's better than any other kind of asset in existence from from that point of view in terms of like store of value assets. And yeah, people will say, well, how can it be a great store of value if like the price does what it does? You know, we all know what the price does. But then I think what a lot of people don't understand is that like a good store of value doesn't

necessarily have to go up in price all the time. And like people still call gold a store of value even though it did nothing for like 10 15 years, right? And there just long periods of time where it doesn't do much. So, I think that when when you look at it from from that lens, um you kind of can reason about it being a good store of value while also realizing that yes, it's not going to just constantly go up all the time. Like any asset just goes up only. I have a word for that, right? It's called a Ponzi and eventually it collapses. So, there's always going to be es and flows to this. But yeah, so I understand both sides of of the coin here and I will talk a bit more about that in the context of all the L2 discussions that

have been had over the last uh kind of week or so. Before I jump into that, I did want to cover some protocol updates. So there hasn't been that much movement over the last week on the core protocol side of things. Uh things are still moving along for for Glamsterdam. Of course that's that's being worked on. You know the usual process is being followed there. But a lot of things have moved towards Hegotar as well because Hegotar is the upgrade that's coming after Glamsterdam and we are currently in the process of choosing headliners. So Nixo said here with the deadline having passed yesterday, we have six total major features proposed for the Ethereum upgrade glam after glamdam which is Hegotar. The next step is that the community and core devs will discuss and aim to choose at most one consensus layer feature and one execution layer

feature. So the six that have been proposed uh two of them we already uh talk about a lot on on the refill sorry I should say one of them we already talk about a lot on the refill which is fossil. I think fossil is going to win on the CL side. I just don't see why it won't. Um, considering that it was punted like a couple of times from other upgrades to be in Hegotar. So, I I think that that Fossil is going to win. Uh, but then we still have uh the execution layout side uh to to kind of choose here. And there have been a few different EIPs proposed for this. I think the two most popular ones at least that I've seen were uh the kind of I guess like I mean there's two for encrypted memp pools but just like encrypted mess generally that's been a

really popular one and another one called frame transactions which has got to do with uh quantum resistance. Now I'm not going to explain what each of these do. You can go uh kind of look for yourself if you'd like. They may be on forecast actually. I'm just going to bring up forecast on my other screen here. Yeah, they actually are. They're on forecast. Thank uh you know thank the the team for putting this together here. You can see each of these on forecast and learn more about them on this website. I'll link it in the YouTube description below. Uh but and yeah, there's there's a couple others here as well. I don't know if they're going to like like um such as 2D 2D padas which is on the consensus slide uh sorry on the um consensus layer side of things uh which has got to do with data

availability sampling which is blobs of course. I don't know if that's going to go into Hegotar over something like Fossil. So, I I do think that Fossil is a lock for the CL. I'm not going to say it's like a 100% kind of lock here, but it is definitely the front runner by by far. Uh, but on the E side of things, yeah, it's still a little bit of a topper up a toss up because there's also um SS execution blocks, which is uh which changes how Ethereum stores and shares block data between its two layers. I don't I you know, apparently that's like a a big upgrade. Like I don't know. This is the thing about like I guess the subjectivity that can go into this about what's a big versus small upgrade here or big versus small EIP because what you're relying on is

not just the opinion of core devs and researchers but you're also kind of relying on the opinion of the community about what they want. Because if the core devs and researchers say well we can do this and it's easy well then it can probably just go in as a non- headliner. But if they say that it's actually difficult and that it's kind of headliner worthy, well then you have to basically and and they say they can do it as a as a headliner, but it has to be a headliner. Well, then it defaults back to the community where the community is basically like what do you want? You know, what do you want out of this these three E uh four sorry I should say, but I mean two of them are similar in that they're incre encrypted mess. And then the community basically has to give

their take on this. Core devs, researchers, other stakeholders, they will discuss this and then you'll basically get uh an answer out of that. But yeah, as I said, I think on the consensus layer side, if it's between Fossil and 2D Podas, because of the fact that blobs are in a really good spot and it doesn't look like they're going to need to 2D padas and uh you know by by Hegel maybe they will, but like it doesn't look like they will. If we have to kind of make an assumption here, I would say that Fossil will be the the headliner for the CL side. On the E. We'll see about encrypted meals. I already gave my um uh my my my my thoughts on that on I think the last refill before the L2 talk that I did or maybe even the one before that where I

basically said that like I don't know like I haven't been convinced yet on encrypted meles uh and um someone actually came into the discord channel uh I've forgotten their name now apologies to to this person but they came into the discord channel and you know they gave some really really good arguments about encrypted memp pools um yeah so it's it's Antonio here from uh from the shutter team so the the uh the team that proposed um the shutterized kind of encrypted mele EIP8105 which is the universal enshrined encrypted mele which is literally one of the the contenders for a headliner here.

So so he came in and basically gave like a really good kind of bunch of arguments around why we need this and and kind of hitting back on my arguments about it too which was which is really great but yeah we'll see how that kind of uh you know shakes out there. uh but I am becoming more bullish on it but at the same time there is also a competing EL um headliner frame transactions which u uh you know which is part of the quantum road map but the thing is is that that could probably happen in the fork after a Hegotar right like if like obviously Ethereum is taking quantum really seriously but like is it an urgent thing like like if we put the timeline here if we say hear will go live let's say Q1 next year Q1 2027 like do we really

think quantum is going to be a by then, you know, probably not. Uh I mean, I would say like a very low chance of that. And then project out another 6 months to like Q3 2027 or even Q4. Do we think Quantum's going to be a major threat by then? Maybe it's coming into view as more of a major threat. And then we could say, okay, well, maybe we'll do the kind of frame transaction thing or or another EIP because there's there's multiple EIPs for quantum resistance. Maybe we will do that um you know uh as as a kind of headliner for that for that upgrade there. So yeah, we we'll see. But in terms of CL, yeah, as I said, Fossil is the one that I want at least and one I've been championing for a long time now. But we'll have to see uh what

uh what happens there over the coming uh months here. All right, moving on from that. So you guys remember that the Ethereum Foundation announced their trillion dollar security initiative a little while ago. This was basically an initiative to take security very very seriously on Ethereum to basically make the Ethereum chain the most secure decentralized kind of I guess settlement layer in in the world. Uh, and to that end, they're putting a lot of funding towards this, a lot of research towards this. Uh, and essentially what this new website does is show you where they're kind of uh, putting their time into. So, this is at trilliondollsecurity.org.

I'll of course link this in the YouTube description below for you to check out. But essentially, you can kind of see what they're doing um, and kind of follow the progress of this. you know, what's live, what's ongoing, what's in research phase, and what's planned across the kind of entire uh stack here, such as like key management, privacy, uh compromised web interfaces, like the whole kind of uh gambit here when it comes to security. Uh then you've got like uh smart contract security is a whole different section here. Infrastructure and cloud security, the consensus protocol security, monitoring, incident response and mitigation, social layer and governance. Uh and those are the kind of six uh categories there. The first category is user experience. So this is a very very comprehensive initiative guys like this covers the

entire stack from the user layer all the way down to the protocol layer uh and even the layers like the social layer and and governance layers here. I don't know of any other chain that's doing anything remotely close to this. And again this is why we love Ethereum. This is why we understand that Ethereum stands above all of the other things within crypto. And this is why that I'm still in this industry. Like I I would have quit this industry a very long time ago if it wasn't for Ethereum. And you know, Ethereum could still exist, but it could have gone in a very different direction. There's obviously debates about what direction Ethereum should go in all the time. Like that's one of the things that we debate the most, but the direction that it has gone in has been one that I've really resonated with for

many years now. Uh and and this existing is is one of the major things for me. Like I I've always believed that for a layer 1 chain that I think the arguments are different for like layer 2s, but for a layer 1 chain to be a layer 1 chain and to get the most value out of being a layer 1 chain, you need to be decentralized, secure and tend to resistance. And it's not just a little bit of those things. You need as much of those things as you can get. You need to be be able to push towards the the maximum amount of those things. You like essentially the way to think about it is that like you're never going to reach like 100% in anything. You're never going to reach 100% decentralization or I should say perfect decentralization, perfect security, perfect censorship resistance, but if we can get to as

close to perfect as possible, that is what we're aiming for. We're not aiming for, oh, we'll just get 50% there and it'll be okay. We're not aiming for like any arbitrary number like that. We're aiming to get as close as we can to 100% across those three main kind of verticals there. and the you know the security initiative that the EF is spearheading here is critical to that effort because of the fact that so much falls into this right as I've always said decentralization is an emergent property of other properties that come off of Ethereum security is a major one here guys Ethereum has over 10 years of uptime because of the fact that we take security extremely seriously and yes there's been plenty of hacks in Ethereum right there's been a hack of um that's

resulted in a protocol hard fork the DAO a very long time ago but it's happened and then the smart contract hacks which obviously aren't protocol related but it's still in the Ethereum ecosystem that's why they have a whole smart contract security track here right infrastructure we've seen these things happen before we've seen websites be uh taken over DNS hijacking we've seen what happened with buy bit right um uh consensus protocol like on the on the protocol layer side of things we've seen bugs that take validators offline we saw one recently with Prism after what happened with um uh after the fork right uh and then incident response response and and monitoring and stuff like that.

We haven't had, you know, as good as we can in in the past around this sort of sort of stuff and social air and governance. I think that's a big one as well. The governance process for all core devs has always been improving, but it I I I would say that it it's gotten a lot better over the last couple of years cuz there's been a lot of focus on it. The social layer is always going to be murky. It's not something that you can you can kind of plan for. you can kind of I guess massage into what you want it to be, but you can put like expectations and kind of guard rails in place where essentially you you set a standard and you can be like, "Okay, well, this is how the social layer does things." And I think we we naturally have a standard

for that within the Ethereum ecosystem, but formalizing it, having like a a central kind of place for it, I think is really really important here as well. So, yeah, you can go give this um uh this trillion dollar security.org website look for yourself. I'll link it in the YouTube description below for you to do so there. All right, next up, just wanted to highlight a tweet from Vitalik, which is a pretty cool tweet to see him tweeting. He did tweet something similar to this about 18 months ago, but he said um in response to Ryan Short Adams here, so I should say what Ryan's tweet was. So Ryan said the the last say the quiet thing out loud things I'd like to hear from Vitalik is that Ether is a store of value and one of the most important apps on Ethereum. Vitalik replies and says

either is a store of value one of the most important apps on Ethereum. Again, he did say something similar 18 months ago. So, this isn't the first time that he has said this, but him reiterating this is always a good thing because people listen obviously to Vitalik. People listen to the higher kind of I guess like more visible people in Ethereum like Vitalik, like Justin Drake, like Tomas cuz he's at the head of the EF, right? Like all these people, they listen to them. Uh and I think no one listens to anyone more than Vitalik. like his word carries weight. He's got the most legitimate reputation within crypto, even though he's got his haters, which I'll never understand, but he is, I would say, the most legitimate person in crypto by far. Like, there's no one else that comes close to him in terms of

legitimacy. Um, and and in terms of like long-term legitimacy as well. So, when he says something like this, it carries a lot of weight. Now, why is this important? Well, it's important for all the reasons that I've been going on about for many years on the refuel in that for Ethereum to succeed. It's not enough to succeed from the technical standpoint. It also needs to succeed from an economic standpoint. And that means ETH going up as much as possible. And yeah, some people will say, "Oh, you know, that's that's just gross. That just means you only care about money." You know, it doesn't matter like what ETH does, whatever. It's about empowering the the technology to offer, you know, decentralization, censorship resistance, all that good stuff to make better products for the world.

Obviously, sure, that's a huge thing. But but the thing is is that if you want to have things like true DeFi, you need ETH. You can't do true DeFi with any other token. You can't do it with stable coins like USDC and USDT. You can't do it with um certain DeFi tokens, right? Because they have um they have controls in place. You definitely can't do it with real world assets because they are just by their very nature not decentralized. So if we look at the only decentralized asset on Ethereum, it's ETH. So why wouldn't you want ETH to be worth as much as possible? Because then you get more economic bandwidth in the system. You get more liquidity. You get more interest in the system. Like look how I mean we all know it like when prices go up it brings in new people.

That's just the nature of the beast with these things. But if you like like me believe that DeFi is the biggest total addressable market for blockchains and I would say that like DeFi like there are things that kind of use DeFi that could be as big as DeFi such as AI agents. I'm really kind of coming not just coming around to it but I'm really getting like super hyped up about that because of the fact that if there's anything within crypto that has a natural fit, it's AI agents. Because as I mentioned last time on one of the episodes, AI agents cannot use the traditional system at all. It's not like humans where we have a choice.

We can either use Tradfy or use onchain or we could use both. It's fine. They can't use Tradfi at all. There's too many risks there for them. They can't just easily set up accounts for themselves because they don't have IDs. They're not people, right? They they can't KYC. The the system's too slow for them. They'll get banned. They'll get deplatformed straight away because they're not people. there's no recourse there. So if they want to be free, if the agents want to be free to do what they want, the only place they can do that is on chain. But again, not all chains are created equal. The only place they can truly do that is a decentralized chain. And I would and a decentralized um permissionless expressive chain like Ethereum, not Bitcoin, because they can't do this

stuff on Bitcoin. And I would actually argue that Ethereum is the only logical choice for AI agents. There is no other chain out there that is a logical choice for them. And I, you know what's funny? I actually argued this like years ago as well. It's not just because obviously agents are are a new trend, but I argued this years ago on the refuel and I put a tweet out about this as well. I remember I got a lot of heat about it where I said that long-term the only logical place that agents will want to do business on and want to do their financial uh stuff on is Ethereum. And obviously there's a lot of debate around what Ethereum is. Is it the L1's or the L2s or is it both? Whatever. From this perspective of truly decentralized for the agents, it's going to be L1 or

it's going to be stage 2 L2s. They're probably going to still be on these kind of like uh I guess like stage 0, stage 1 L2s. They're probably going to be on these centralized chains. But if we're talking long-term, if we're talking where they want to store their wealth and the smart ones, the ones that aren't going to get like rugpulled or whatever, the ones that are actually going to be uh proper autonomous agents, they're going to want to be on Ethereum L1. And Ethereum L1 is building for that as well because we're building more scale obviously with ZKVMs, with gas limit increases, all that good stuff there.

But we're also building new standards for them, which I covered, you know, the other day. David uh uh from the uh Ethereum Foundation, he's been, you know, spearheading this and uh growing that and there's been and Austin Griffith is also uh you know, at the Ethereum Foundation doing a lot of work there as well. You can follow both of them on Twitter and cover basically most of the stuff happening here. But, you know, I don't think AI agents are going away and I don't think that they're ever going to use the Trafy system. And I actually think that if the order of magnitude is is big enough, like if if these agents grow another order of magnitude or two, they could actually act as a forcing function to get everyone on chain, to get all the trady businesses on chain even faster, to get other people on chain. And I said this

in the Discord channel, uh, in the Deltaway Discord channel, uh, where I said that I actually think that the AI agent stuff has a chance to eventually result in another DeFi summer cuz a lot of you, I know, probably weren't around in 2020 for DeFi summer, but what happened was is that it didn't just happen overnight. Defi started building in earnest, I would say, in 2018. And then in 2019, we got a, you know, a bunch more protocols like unis swap and stuff and then and compound and and stuff like that. So we had the building blocks there. And then 2019, uh, 2020, sorry, everything came together and it caused this massive wealth effect that resulted in a lot of people having a lot of money and then that getting injected into DeFi, a lot of people coming from other chains into Ethereum and and and

we just had like that flywheel there and that's what pushed ETH from 100 bucks up to, you know, whatever it was like 4K, 4.4K and a lot of the DeFi tokens went nuts as well. Yes, they came down of course, but like there was still that massive effect there. So, I do think if we play our cards right here and we set the right kind of foundations up here and we set the right standards up and we and we grow this thing quite nicely, maybe just during this year, maybe we have a an AI summer, like an actual AI summer, like an AI agent summer, not the memecoin stuff, guys. Like, none of that crap. Like, I'm talking actual legitimate stuff. Cuz my issue with memecoins, and I remember talking to someone about this, I won't mention who he is, but I remember talking to someone

about this where I basically said that I, you know, I told them it was in real life. I said, I've I've made no kind of attempt to hide the fact that I absolutely despise memecoins. I think they're they're a net negative on the space. I think they're absolutely horrible. I think they're going to result, and this was back like maybe, you know, 18 months ago or something like that. I think it was in Bangkok for for DevCon. Um I, you know, I don't think it's going to result in anything good for crypto. And of course, I was right about that. Not to toot my own horn, but I think we can very easily and safely say that memecoins were a massive net negative for crypto. It took a lot of money out out of the crypto ecosystem. But then I got push back on that and he said, "Well, what about DeFi

summer with food coins? It's the same thing." And I'm like, "No, no, no. It's not the same thing. We got DeFi out of DeFi summer. What the hell are we getting out of memecoins? We got nothing." Like, where is the innovation with memecoins? What did they actually bring? What products did they bring to the table? Pumped off fun is not a new product, right? It is a memecoin factory with with like a DEX and that we already had that stuff, right? It just brought a couple of things together. There was no net new innovation here. So, the the trade-off wasn't worth it. Like, we had the speculative mania in DeFi summer obviously, but we got DeFi out of it, which is, as I as I said before, the biggest TAM for crypto. So, uh, with me, we got nothing. And we had meme coins around AI, too, like for a brief period

last year. So, what I'm talking about here is actual innovations with AI using onchain to do innovative things and for innovations to come out of that. Yes, there's going to be tokens to speculate on and yes, people are going to lo lose and make money, but that's fine as long as things pop out of it. As long as we get innovation popping out of it. If nothing comes of it, if all that comes of it is extraction, then that's not a net positive at all. That's a net negative. So, that's what my obviously you guys know very clearly what that was my issue with with meme coins. Um, and it still is and I'm glad they died. I knew they were going to die. They lasted longer than I thought they would, but I knew they were going to die. And it's actually kind of poetic that the person

who killed them was Trump with his own meme coin. kind of hilarious when you think about that. What what kind of reality do we do we even live in, right? When you really think about that, it's it's crazy. Um, but like it ended with that, right? That was basically the top for for meme coins. Who knows if they'll come back eventually. Maybe they will in some kind of limited capacity, but I think that the onflow effect of that has actually affected all tokens as well. So, yeah, we'll see. I know it's, you know, been a tough like last few months in the crypto ecosystem because of the fact that prices have not been great. And it's not just like the long tail of tokens, it's also ETH and BTC. Like I honestly didn't expect ETH to go back under 2K. But hey, like I'm a permable

so [laughter] like it's hard for me to be objective here. Um but yeah, anyway, uh I think I'm going to move on from that cuz I notice I'm 25 minutes here. I wanted to talk a bit more about the L2 debate over the last week here. So Vitalik put out a follow-up tweet from his one that he put out last week. Um the first one that he put out here. I'm not going to read this this tweet here, but the TLDDR was basically he wants L2 builders to do something uh new that brings something actually new to the table. I mean, that's what I said last week that I thought that he said in his tweet. Um, and vibes should match substance. The degree of connection to Ethereum and your public image should reflect the degree of connection to Ethereum that your thing has in reality,

which again, I guess like is calling out the chains that claim to be Ethereum aligned, but in reality were just like completely centralized L1s. there weren't even really L2s. So I agree with that. But I want to highlight two tweets here. So the first one was from Tamas which is who is the co-executive director of the Ethereum Foundation. You guys know know who Tomas is. And he put like six points here on Vitalik's first tweet which I thought was a really really great interpretation and summary of Vitalik's tweet here. So his his first point was that successful Ethereum L2s already have unique value propositions. And I would agree with that, right? like the the successful L2s as they exist today like Arbitrum 1 for example has a bustling DeFi ecosystem

that you can access for cheap very cheap right with those there those very cheap L2 fees and arbitrum one is stage one it has an escape uh escape hatch which is what we want right uh and it is very it's a very mature ecosystem uh base very similar thing here uh but they try to do the creator coin stuff they I mean they've done a bunch of experiments around many different things so they have been differentiating themselves from day one lighter per deck right like differentiated from the other the other L2s here so they are actually already actually doing this right uh and then the second point Tomas says Vitalik talks about the very long time ago idea of rollups acting like shards simple replicas of L1 EVM and tooling without the burden of L1 uh uh uh scale

consensus and Vitalic acknowledges here the success of L2s like starknet zk sync base arbitram lighter where they provide unique features or or trade-offs again what I was going on about last week where I said that um L2's the scaling is table stakes. What else do you bring to the table? Because I mean I've said this for years, guys. Like this is it's insane to me that people think this is like a revelation that you know just because Vitalic tweeted about it, it's suddenly something that hasn't been talked about before. This has been talked about for a long time. I've always said that just because you can scale in L2 doesn't make you special, doesn't make you a little, you know, a little special butterfly that someone has to care about. What else do you bring to the table? What else are you doing? Well, how are you innovating? And

we've seen different L2s come to the table and innovate here. Um, and then Tomas's fourth point is that Vitalik notices that the idea of a vanilla rollup that is not stage two and claim scaling Ethereum is up to optimal uh and will be most likely replaced by the native roll-ups tech. I agree with this um because yeah, if you're a generalized chain and you're not even like stage one at least and let alone stage two, then what are you actually bringing to the table? Like you're literally just another EVM chain. You are you are nothing, right? like you you you honestly don't even deserve to succeed because you've brought nothing innovative to the table. And this goes for the L1's as well that did this like BSC for example like like and Tron like these other L1s like yeah they found kind of niche use cases. Tron found a

niche use case within stable coins because um they had cheap float cheap kind of transfers for a while. BSC was just like the casino um because Ethereum got too expensive uh before we had L2s. But still like longterm these things are just like in my opinion worth zero. they're just not fundamentally interesting and they're not innovative at all. And the fifth point Tomas brings up is that Vitalic Vitalic points at L1 scaling plus native roll-ups as the no trade-offs block space that is now scaling. I I agree with this. I think that if you want to scale Ethereum L1 in the best way, then you will do it via L1 native scaling such as gas limit increases um and then and ZKVMs uh and and then you know native rollups as well on top of that. But those again come

with trade-offs and limitations which we've discussed in the past. I'm not going to rehash it here. Sixth point and the final point from Tamas is that Ethereum still needs roll-ups to scale. But it is important to differentiate the pure stage 2 scaling of EN inheriting all Ethereum security properties with low risk versus scaling with security trade-offs like Mega ETH. The latter still has tremendous value for riskaware users. I think Mega E is mega is the perfect example here because they are bringing something net new to the table. They are a generalized EVM chain, but they've pushed the EVM to its limits and they scale massively because of that.

Uh, and they're doing a bunch of different innovations under the hood as well. So, they're not just like a boring old vanilla EVM chain, but they are not using blobs, right? They're using off-chain DA. So, your security assumptions already are different are very, very different to arbitrer. So, your sensorship resistant guarantees are much lower as well. So, again, these are not new things. L2B has been around for many years at this point. That kind of very clearly gives you the idea of what these things are, how they work, what the trade-offs are. So, the notion that people are suddenly being like, "Oh, I didn't know all this stuff." Or, "Oh, I'm just cluing into this." is ridiculous to me. Because if you're just cluing into this now, that different L2s have different trust assumptions and

have different properties, then you have literally been paying no attention for many years. Like I know all of the people listening to the refuel know about this because I've been talking about this for so long and I don't expect everyone to listen to the refuel, but this is not something that has been hidden from anyone. This has been out in the open from day one. So I just I'm still just absolutely confused by the fact that people are only now cluing into this. Like it it really does show me just how disconnected people are from this ecosystem that this is a shock to them. that L2s being different and having different trade-offs and different security assumptions is a shock to them because boy, if that's a shock to you, I I would say you have the most surface of surface level knowledge of this industry. Um, and that's

probably why these people are also um losing money and angry about their investments not not paying off because they actually didn't do any research at all and they just bought things based on vibes. That's my assumption of it anyway. That's what that's kind of my read of it anyway. But yeah, that was Tomas's tweet. last tweet was a was a thread actually from Steven Goldfeder who is the co-founder of Chain Labs, the builders of Arbitum, uh the Arbitum ecosystem. Um but yeah, he basically put together a really great great tweet thread here, which I thought was uh I thought was good. Um and I I think that he got clowned on a little bit for saying this in his first tweet where he says, "Arbitum is not Ethereum. It's a core part of the ecosystem, a close-knit ally, and has enjoyed a symbiotic relationship for the last half decade,

but it is not Ethereum. And the notion that a scaled L1 and a thriving L2 ecosystem are somehow at odds is wrong. And the reason why he got heat I think for this is because he said Arbitum is not Ethereum even though I believe people linked him u yeah tweets where he said Arbitum is Ethereum. So fair enough like I I get that. Um but this goes back to my I guess point about the semantic discussion about what is Ethereum and what's not because in my definition and the way I see it when I say something is Ethereum I just I mean it's like part of the Ethereum ecosystem. I'm not saying that arbitum uh one is the Ethereum core protocol, right? So, this is the problem with like sound bites is that it's very open to interpretation and I don't blame anyone for interpreting it in different

ways here. So, he did get clowned on for that. But if he's but if he's saying arbitum is not the Ethereum protocol, then obviously it's not because it is a sit on top of it. That's just like saying that any smart contract on Ethereum is not the protocol. It's not it because it's a smart contract that's built on top of Ethereum. The core protocol is its own thing. Has its own spec and it's built by by the core developers and researchers, right? So, it's it's it's a separate thing here. So, yeah, I understand that there. But again, semantics discussion. It's literally pointless to keep discussing this water under the bridge. Let's just leave that in last year's uh kind of um debates and discussions. But besides that, the rest of the the kind of um tweet thread was really great. I encourage you to go give it a read.

basically kind of addressing this point and saying that, you know, a a scaled L1 and a thriving L2 ecosystem are not at odds. And I I kind of went through this as well, like I think Steven brings up a lot of the same points that that I brought up where I basic where I basically said that we scale the L1 both for itself and also for the L2s. Obviously with blobs, we're scaling it for the L2s. And that's great. More people can use the L1, more people get benefits out of it. But you know who else gets benefits out of it? The L2s. because now they have a more scaled L1 to do stuff on. With blobs, they got more scale with um a more scaled um EVM environment or execution environment I should say on the L1. You get better interoperability with faster uh blocks.

You get better interoperability, you get better guarantees of things. So, and then eventually with ZKVMs and and with the the the pre-ompile there, you get better security guarantees. So, like if you're a ZKVM um or or using ZK technology. So like yeah the notion that these things are at odds is completely wrong here. I would say that the L2s as I said before like for them to succeed longterm they definitely need to be differentiated from the L1 because Ethereum L1 is always going to be that generalized EVM chain right and it's always going to be king at that in terms of giving you the properties that you you care about such as decentralization security and sensitive resistance. No L2 unless they're stage two and like fully stage two and even then no I I would I would argue that no L2 is ever going to

be as decentralized, secure or censorship resistant as L1 Ethereum even at stage two. It's just not the way it's architected because of the fact that even at stage two you have unique risks with bugs within the L2 itself within the L2 smart contracts. You still get um you still get amazing guarantees though because you have an escape hatch. You can kind of exit via the L1 from the L2. Um so with with that in mind, you still get those amazing um you know security properties there. But if we're talking about the gold standard, it's always going to be Ethereum L1. So that's why we're scaling the L1. That's why we're focusing on the L1. That's why we're improving the L1. Now I do want to address one last point here on this

whole discussion which is that I think a lot of people uh have a lot of hindsight bias with this uh which is really annoying. So in the daily discord channel today there was a brief discussion uh about this. So if you remember I mean it's not hard to remember this cuz it happened relatively recently and still happens. A lot of the people calling for Ethereum to scale the L1 were saying that we should scale the L1 via sacrificing decentralization essentially because well give up solo stakers. You know Max Resnik is famous for saying that. Uh and he rightfully got booted out of the Ethereum ecosystem because like why are you even in Ethereum if you if you think like that, right? Uh it's got nothing to do with like having a competing idea. It's got to do with the fact that that is

literally the core of Ethereum and we're not going to change that. like if you want that to be changed then go somewhere else and he did he went to Salana good fit for him whatever I'm not going to focus on just him a lot of people like him saying these things but yeah they were saying that a lot of them didn't say anything about ZKVMs or native rollups or anything like that um and a lot of them were just kind of saying that yeah you can scale the L1 by like 10x but you just have to get rid of solo stakers like no bro we're not doing that um but where the hindsight bias comes in was that people will say well we you know some People are saying that, okay, well, we just wasted 5 years on the rollup road map. You know, some

somehow the rollup and the L2 road map is is is dead, which it's not at all. It's it's still it's thriving and it's only growing from here. But people read Vitalik's tweet the way they want to read it. It is what it is. Um, but then they say, you know, we can just scale the L1 now. We can do ZKVMs. Uh, and then yeah, we don't need the L2s. It's like, okay, let's take a step back here. Let's go down an alternate path. Let's say instead of Vitalic proposing the rollup centric road map in 2020 let's say he said we're going all in on ZKVMs we're going to do that we're going to scale the L1 via that it's going to be great it's like okay cool let's do that okay who would have funded that no one's given the EF more money to do the

research on that because I mean you may not have been around for this but in 2020 ZKVMs were considered a complete pipe dream guys like complete pipe dream like it was considered 10 plus years away. So, could you imagine Vitalik saying that and people being like, "Oh my god, it's going to be 10 years before, you know, we scale Ethereum like that. That would be just 100 times worse, right, than than the than the than the other reality there." But anyway, that that's one that's one aspect to it. Second aspect is, yeah, who's going to fund it? The EF could put money towards it, but they don't have that much money. They also have to fund everything else that they're that they're funding like core protocol work, which is just as important, right? And you could argue that the ZKVM stuff is part of the core protocol, but not at

the start. it needed to have a lot of money going towards R&D. So, who put the money towards R&D? Well, the L2 teams, they spent billions of dollars on the R&D of ZKVMs. And yes, it became a little bit cringy there where they're all like, "Oh, I meanted the first ZKVM, blah blah blah, whatever." But, you know, outside of that, we got ZKVMs live within like three years. I think it was three, four years, maybe. We got them live and working on mainet, not on the protocol, but like as an L2 within three or or four years, right? I think it was like 3 years or something like that instead of 10 plus years. And now we're at the point where we're like, okay, well, we

can integrate ZKVMs into the chain maybe within the next couple of years. We can do that and have that as well as a bustling and thriving L2 ecosystem on top of that. So that's what I mean by like there's so much hindsight bias here where people are like oh we could have just done the ZKVM stuff from the start. It's like no we [ __ ] couldn't have. It doesn't work like that guys. We couldn't have done it from the start for multitude of different reasons but the two biggest reasons are the fact that no one was going to fund it. No one was going to fund it right except maybe the EF. And again they wouldn't have given billions of dollars towards these efforts because they don't have billions of dollars for these efforts. And two we also wouldn't have had uh the L2 road

map. um succeed or the L2 kind of ecosystem succeed as it has and brought in a lot more players into the ecosystem and will continue to bring in more players into the ecosystem specifically like trad and and you know having this massive hindsight bias then I'm not going to take your points very seriously because that to me just signals that you are curve fitting an argument essentially like curve fitting is usually used in like trading or fitting a curve curve to the chart to basically make a make a trading thesis. But like to me or using statistics as well, but to me like you're curve fitting an argument here because you're using the benefit of

hindsight to say, "Oh, we could have should have done this." That's not how it works. You have to look at it from how it was at the time. And I was there. I was there, you know, thousands of years ago, as was said in Lord of the Rings. I love that line um in Lord of the Rings. But, you know, I was there all those years ago. I was there. I know what it was like at the time. I know how moonshot a ZKVM was at the time and how people didn't want to touch it because it was just going to take too long. And I know how urgent scaling was at the time as well because we had DeFi summer that was spiking fees. I know what it was like at the time and so do people that are saying this stuff with hindsight bias by by the way guys like

they were there as well. So it's very disappointing for me to see them say this but hey it is what it is. So when we look at it from from that lens, I would yeah I would make the very strong argument that we have not wasted the last 5 years at all. Those the last 5 years have been incredible for Ethereum both at the L1 and with the L2s and it has greatly accelerated the timeline for us to get ZKVMs as part of the core protocol in order for us to scale up like people want us to scale up. So anyone telling you otherwise I think is just reversing history here. I think they're not paying attention to history.

I think that they're just trying to again curve fit the argument to suit their point so they can say, "Oh, I was right." Um, okay, cool. You can think you're right, whatever. Uh, I don't think the the that that's the case. I I don't think that the L2s are dead at all. I think that they're going to keep thriving into the future. Um, I just think that uh Vitalik's tweet was basically putting the cards on the table and saying, "Hey, if you're an L2, it's not enough to just scale. You need to do something different." And again, this is not something new. I'm pretty sure at least as far back as 2022, probably earlier than that, I was saying the same thing on the refuel. And if someone wants to find me saying it on the refill or even in my newsletter, feel free to.

I'm not going to go and do that because it's going to take too long for me to find that. Um, but like I am fairly certain I was saying those things as well because it was always obvious to me that if all you're doing is is scaling, then that because that's table stakes with all the other L2s out there, uh, you're not going to win in the market. You need to be different. You need to have a differentiation here. And that's how I've always viewed things there. But anyway, I think after that little rant, that's going to be it for today. 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 next week. Thanks everyone.