Verkle tree update, EigenLayer LST contest and more - The Daily Gwei Refuel #682 - Ethereum Updates

Transcript

hello everyone welcome to another episode of delway refuel where up latest news in the ethereum ecosystem I'm your host Anthony Zer to the 2nd of November 2023 all right everyone let's get into it so apologies for missing yesterday's episode everyone another rug fuel uh especially at the start of the month 1 of November right uh but there's no paup for yesterday's rug fuel as the paup is not ready yet I did mention the other day that there will be pups for future rug fuels but uh not yesterday's unfortunately but anyway let's get into the news from the past couple of days here so the first big update comes from here who works in as um in the R&D department at the ethereum foundation where there's a bunch of updates around the statelessness effort in ethereum uh and these were updates fresh from yesterday's or I guess a couple days

ago's vertical implementers call now the tldr here is that as Josh says we have a new test net uh live with four clients and Counting work is underway on integrating vcal into gu which will happen over the next few months several other client teams are making significant progress as well still early but it looks promising that the performance of veral will be competitive with the current Merkel P tree this is a shadow Fork there is a shadow fork in the pipeline as well which will help verify our current assumptions so as you guys know a big portion of ethereum's road map is dedicated to something called The Verge which includes veral trees uh and other improvements surrounding that which basically stand to improve uh ethereum's kind of um uh potentially its scalability but also its

its um its security and being able to improve upon uh the Merle P tree which is been with ethereum since day one here and as I've been saying for I think like the last few months the efforts uh on building this have already started even though it's probably not going to happen until 2025 at this rate maybe maybe end of 2024 but we'll have to see you know it's more of a longer term road map item here but it's great to see that this test net is live with multiple clients actually on the test net here and as Josh said gu will be worked on over the next few months obviously gu is one of the most important clients or the most important still because of the fact that it is the majority client on the the network right now on the execution layer side of things um but yeah you can read

Josh Josh's full uh tweet here which I'll link in the YouTube description below but it's just great to see progress being made on these things because I remember when uh vitalic first published that road map people took it uh that that flowchart road map that I've shown on the refill before people uh took it to mean that there was a sequential road map as in like we would get the merge and then we would do the surge then we would do the Verge you know and we would do it one after the other but in practice what actually happens is that everything is worked on in parallel and then it goes live into the network when it is ready uh basically so um obviously the surge with things like Erp 4844 have been ready beforehand and also probably more important than than vericle trees and

and um oh I did I did forget to mention before that vericle trees are also important for statelessness within ethereum and to have true stateless clients and and True Light clients in ethereum which is very important for for decentralization and for scalability from a different perspective um and it's more this perspective of scalability of of nodes and people running nodes and people being able to verify things from their phones and stuff like that like full kind of cryptographic verification from your phone um stuff like that but yeah back to what I was saying about the road map um it is the being done in parallel there are efforts across pretty much everything on that road map except maybe the the more long longterm things like the moonshot ideas but even those things are being kind of researched here and there by people who are interested

in researching it I mean Justin Drake talks a lot about these things that he believes are like 5 to 10 years out of of potentially being implemented on the ethereum network um but that's exactly what should be at the Forefront of the research I mean if you're if you're a researcher and you're and you're you're dedicated to researching things that are 5 to 10 years out on the ethereum road map then of course you're going to be going uh and doing the bleed the bleeding edge right you're not going to be researching things that are going to go live on the network in a year they're going to go live on the network in 5 10 15 20 years or something like that now I know I've said before that I thought and I think this was maybe a year year and a half ago that ethereum had at least 10

years left as part of its road map and and it definitely does and obviously ethereum isn't just ethereum layer 1 anymore it's ethereum layer 2os as well which all have their own individual road maps and then you have everything surrounding that as well from you know all the infrastructure stuff that surrounds that all the the wallets um things like the me ecosystem like all of this has its own individual kind of road maps and things that they're working to improve and it really is a huge huge team effort it's not just like the ethereum core devs and then everything else Falls up of that I mean ethereum layer 1 is the Bedrock for for for most of this but at the end of the day there are independent road maps like a lot of a lot of the stuff that happens on these layer 2os doesn't require any changes to

layer one and that was the whole point of going with the the rollup Centric road map right at least one of the points of going with the rollup Centric row map to make it so that these teams have the freedom to do what they want while still getting the benefits of ethereum you know not having to rely on ethereum but yes there are some things they have to rely on ethereum for such as IP 4844 and eventually full Dan sharding with data availability sampling but in terms of actually improving their own layer 2 networks they can do that independent of ethereum layer 1 they don't need uh to wait for ethereum layer one to to do something for them to to work independently and we've seen that across the board with various different improvements on various different l2s whether they be full rollups or validium

uh and and everything in between right so I I that's why I've always loved ethereum's model of development and I've discussed this a lot on the refuel that kind of bizarre model of development where there is no top down here guys it's really just a flat or organization of people coming together from all over the world to build the most robust uh and and and most secure and most scalable decentralized Network to ever exist that is really the Crux of what ethereum is trying to be and I know I've gone off on a little bit of a tangent here from joshu's post but I this is the stuff that I was thinking about when I saw Josh's tweet today I was like wow okay we're making so much progress on on on the um the verle or The Verge kind of road map item here and there is other

things in the pipeline for other parts of the road map it just feels like ethereum's fundamentals are still so strong and just getting stronger all the time and it's kind of funny when I look at that and then I look at um you know I I go on crypto Twitter and I look at everyone just kind of like on ethereum because the price of eth has relatively underperformed over the past I guess I don't know a couple months or something like that then I think to myself this is just crazy like just because the market hasn't matched the fundamental reality doesn't mean the fundamental reality doesn't exist and this goes back to what I always talk about when I say that the narratives are more powerful than the reality a lot of the time but it's not a permanent thing it's like a short to medium-term thing

and over the long term that's where you see fundamental stuff play out uh and it's just funny how people confuse that a lot and I think that maybe a lot of it isn't people confusing it as much as them just Shilling their own bags which we all do to some extent right and I totally understand that but if you actually just look at at the the actual fundamentals of the ethereum ecosystem it's not bearish in the slightest it's actually incredibly bullish and just because e as an asset has underperformed Bitcoin for a little bit or under under performed some other uh coins um like salana for example that's obviously been the Talk of the Town the past couple of months doesn't really mean anything right because the reason it doesn't mean anything is because the reality of the situation is is that um the fundamentals

are stronger than ever and the markets are stupid and I'm not saying the markets are stupid just because things are um just because ether is underperforming I'm saying markets are stupid because if you actually look at the top 20 coins it's just a lot of trash right I mean xrp is still in there xrp is still a top five coins it's it's it's trash right you have cardano in there which I think is extremely overvalued even if some of their technology is is uh you know is valuable to someone it's extremely overvalued in in my opinion right then you can keep going down this list like ton coin for telegram um uh you know I know some someone's going to inevitably hate me for naming coins here but I'm just going down down the list right and there's there's a bunch of others I mean

even you go to the top 30 it just it looks terrible right to me uh at least in terms of kind of fundamentals and reality so I wouldn't really take take the market especially over the short to medium term as a as a good measure of what's fundamentally valuable versus what's not especially in Bull markets obviously we're not in a bull market yet but it's especially true in Bull markets here because yeah it just frustrates me going on on Twitter and seeing all of this rhetoric people saying you know ethereum's trash ethereum's dead screw ethereum and it's just like are you saying this just because you're trying to pump some other bags that you hold or do you actually believe this and I think nine times out of 10 it's the former uh because if you actually look at the reality ethereum obviously isn't trash

ethereum still has the biggest developer Community by far still has the most users you know e I'm talking not just ethereum layer one but obviously all of ethereum mean eth is still worth a crap ton and it's funny because if you look at eth market cap it's $220 billion if you want to look at um E's closest kind of layer one competitor I guess in market cap it's now salana that's $18 billion just the amount of staked eth is like three times that entire market cap there so when you're comparing these things you really have to keep in mind that they're in different leagues here as well uh and and it's just something that I I I kind of try to get through to people and try to say to people it's like hey like short to medium-term stuff it's going to be noisy especially on

crypto Twitter where it's really really toxic but if you just focus on the fundamental side of things and then the reality um that is what you should be focused on and that's what I focus on that's why I do this show I mean as I've said plenty of times before and as you guys know the show is not a trading show it's not a price show I don't talk about the price that often I try to focus on the fundamental stuff and also try to explain to to you why the fundamental stuff actually matters over the long term and why it may not necessarily matter over the the short to medium term here anyway enough of a rant there moving on from that one onto an update from node set today so they've announced today that they are working hard to enable their Community to provide

validation services for vaults on stake wise with the first partnership expected to go live in December uh and there's more details coming soon for that uh and they said you know this represents one of the many opportunities for no set operators to earn more from the partnership here now I remember highlighting that no set was looking for operators quite a while ago on on the refuel but I believe that they're still always looking for operators here um don't know if it's open right now because they're they're doing a phase launch I'm going to be a node operator for node set I'm going to try and do things like Stak wise vaults uh and also do things um in other communities like uh potentially you obviously in in the swell Community Diva Community other other staking communities there rocker pool obviously stuff like that um just

to support as a note operator and it's cool because I actually had a call with one of the team members from from noet the other day we were just running through it was kind of like an I mean it wasn't really an onboarding call for for nodet but was a touching Bas call and I had a call with him and notet is trying to be much more than just like ethereum staking what they want to do is basically be a a way for people to sign up as an operator and then uh basically sign uh on to different services so for example sign on to be an i layer node operator or sign on to be a node operator for a layer two or for multiple layers toos or for some Oracle Network here or something else right so basically um having a platform to enable

that I think is obviously very important especially for uh people who already run stuff uh on on Prem at home like for me for example as you guys know I have plenty of Hardware that I'm running ethereum staking stuff on that I want to use for other purposes as well uh and not just uh for uh you know St maybe running kind of like staking pools but also for doing things like IG layer services and um and and and running other things uh like that I I really do want to use my Hardware to do that so I think that's what notet is trying to enable here but yeah great to see that they've partnered up with statewise here uh cool to see where this partnership goes all right speaking of enan layer the voting period for the Igan layer LST contest is now open so from now until

November 8th which is only a week away or less than a week away uh whitelisted addresses can cast their allocated votes for their favorite proposal so you guys know that Igan is running a voting cont contest for which LST to support next as part of the IG layer protocol here you have a list to choose from there are eight submissions currently that have been made uh from Stak Wise from swell and from a bunch of others as well which you can which you can read about here but right now Stak wise is winning uh with swell second um is SW swell in second place third place is OS sorry O8 from origin protocol here uh but I don't know how many of these alist that they going to pick I can't remember exactly what they said I think they may only be

picking one or two of them like the top one or two um uh but yeah I mean they may have detailed this in the blog person and I've just forgotten here uh but yeah you can go vote for this if you haven't yet um you it'll say if you're eligible to vote or not apparently s. e is ineligible to vote I don't think I signed up with s. eth on this one here but yeah I'm looking forward to seeing which LST wins out here and which one gets on board it looks like right now it's going to be statewise but that can change right there there's no guarantee here and not that many of the votes out of the eligible votes have been deployed just yet so if you are eligible you can go to this link I'll link it in the YouTube description below it'll tell you

and then you can vote for which LST you want onboarded onto igen layer all right Tony has a new website for us today called mempool dop so the aim of this website is to add more transparency to ethereum's mempool the site shows you all kinds of stats around private order flows and the actors involved private order flow has grown more and more into a highly important topic eventually theer in the competitiveness of Builders the site can assist in getting a more comprehensive picture of the me/ PBS landscape so I'm on the site here at mol. picks and there's a bunch of different kind of uh metrics and and graphs and charts here that you can check out I mean this is uh this is really classic Tony here with the amount of detail he's put into these things but you can basically see things

like you know starting from the top here what the private order flow over time looks like um and you can see it's kind of been slowly growing over time uh I guess that that I guess you can say from July it was at like 8.2% and now in in I guess like November it's 12.8% so it has been growing uh I'll be at uh I'll beit slowly over time and then you can see the kind of split up here um in in in the kind of p in the pie chart yep yep and then percentage of the private order flow per block Builder breakdown private order flow per Builder again uh broken down here uh by users too you can see Jared from subway. E is just like absolutely smashing it here like leading the pack something fierce like he'd be responsible for most of of the activity

here right now and you can also see what type of um of order flow is going on here too so is it a back Run is it a front Run is it an AR is it a sandwich and so on and so forth uh and then yeah there's there's so many different metrics here and different ways of displaying this data that you can go check out for yourself uh and I'll link this in the YouTube description below uh for you to do so now another dashboard that will be good to pair with this is one that Hill Doby released today which is a dune analytics dashboard tracking sandwich trade so as you guys know know um sandwich attacks on the ethereum network or really on any kind of like Network are a really crappy attack right it is an attack that directly harms users and something that needs to be

weeded out of the ecosystem and you can see here if you look at the amount of Dex volume um of other uh other trades or sandwich or sandwiched you can see that the sandwich and sandwich are still a relatively small portion of of volume but it does make up a large portion of actual trade so as of yesterday the amount of Sandwich trades was roughly equal to the amount of non-sandwich Trades uh and that's in trade numbers not in volume numbers right U and that to me I think signals the fact that a lot of the smaller players are getting sandwiched unfortunately because the smaller players obviously aren't making it in volume but they're doing lots of swaps and they they're accounting for the swaps here and that's my kind of read of things now maybe I've got that wrong but but someone can correct me on

that if I have um but but yeah this dashboard will let you track all of the different kind of uh stats and metrics tricks around sandwiching as well as uh things like you know where it's actually happening like what exchanges you can see how dominant Unis swap is here like that's crazy right like Unis swop is pretty much like 100% dominant in a lot of these things here which is only natural because as I said I suspect a lot of the people getting sandwiched are the noobs and where are the noobs going they're going to Unis swap right the're the more sophisticated actors are probably protecting themsel from as many sandwich attacks as they can because they know about them they know that um getting sandwich attacked is really really bad for their bottom line where whereas the Newbie Traders out there have absolutely no idea about this

they're not aware of this they're just using vanilla Unis swap um which is obviously some somewhere where you're definitely going to get sandwich in a big way especially if you start adjusting slippage and stuff like that uh because for whatever reason you uh you need to do that you know whether you're trying to buy meme coin or something else I do think that that's why we're seeing the discrepancies here but anyway you can go check out that dashboard for yourself I'll link it in the YouTube description below and as I said it pairs very well with Tony's new mol. piix website because uh a lot of this kind of like sandwiches taxs versus private public order flow this all kind of I guess like um plays into it and this all kind of uh plays into it uh and and and kind of like correlates with

each other so yeah you can go check these out we'll link them in the you description below all right so bch has a couple of threads here that I wanted to highlight to get today first off it this thread is about account abstraction on ethereum uh and he says here if you're still confused about the AA despite tons of Articles and wonder what is the difference between say EIP 4337 account abstraction uh and what starware and ZK sync are doing with enshrined account abstraction and say nurus safe accounts then you can read on here now there is not a tldr there's just a really great thread from bch here with with images as well so it's not just text you got some pretty pictures here to follow along with um I highly suggest giving this a ra I'll link it in the YouTube

description below uh bartex threads are always gold honestly he deserves more followers I mean he's only got like 12 and a half or 12 12.8k followers here for those of you who don't know him he's one of the founders of L2 beat been around for a very long time super smart guy when it comes to U both the technical and non-technical stuff uh and he's also really great at not just kind of I guess uh reasoning about things from emotion he's pretty objective in in in a lot of his analysis about things which is what which is what I like but yeah you can go check out this account abstraction thread we'll link it in the YouTube description below uh but the other thread he did was one that really resonates with me because this this is something that I've been saying for a very very long time that still hasn't

gotten through to people but this thread is all about TPS or transactions per second he starts off the thread by saying TPS is a very faulty metric to be to measure blockchain throughput and it's only going to get worse in the future one of the potential Alternatives is to measure U Ops or user Ops per second or user operations per second but what are they how do they relate to account abstraction and is it really a feasible alternative and he goes on in this thread about what this all looks like here now I want to explain my kind of reasoning about TPS here and why I think it's one of the the worst kind of measures of blockchain through Port the first reason main reason is because if something like claims to have 10,000 TPS let's just say right but it's only doing like 50 TPS

okay well you have 9,950 TPS that's doing nothing right that that that's that's not real TPS that's theoretical TPS right so the real TPS that you can handle is 50 if you've only ever done 50 it's 50 okay so why is that important like okay they're only doing 50 now but what if they do 10,000 in the future I'm like sure that's the thesis right that it gets to 10,000 but the problem becomes is that if you're only doing 50 and you're claiming 10,000 then you're really just misleading people into thinking that you're able to do 10,000 Because unless you're actually doing 10,000 TPS 10,000 real true TPS right then um you can't claim to be able to do that because you're not doing it in a live environment you you can you

can say that you you're able to do it all you want but until you actually do it it's not reality again this is the narrative versus reality thing that I talk about a lot I can say that oh you know I can run the um the 100 meters in the fastest time possible I can beat the world record I can say that as much as I want does it make it reality no right maybe I can fool some people into believing that I could do it but then I'll go run the 100 meters and I won't even beat any of the records right I won't even beat the local record with my neighbors I I don't remember the last time I actually ran to be honest but you you know what I mean using that rough analogy there is like you can claim something all you want but until you

actually uh hit that in production hit that TPS number in production it's completely irrelevant right uh and that's the main reason why I've always hated TPS but at the same time looking at TPS between chains between different layer 2os layer 3es rolls validium whatever they are it's going to be very very different because as BK explains in these threads there's things like bundling transactions there's like offchain orders there's uh there's doing things um in offchain execution with uh things like Risk zero right and co-processing there's all these different ways to do things that you could bundle something and it only looks like one chain one transaction on chain but if you unbundle it there's thousands of transactions in there right so TPS is just such an inferior metric it doesn't

me measure anything and it it has been dominant in crypto for so long because people automatically think that oh wow this blockchain says they can do 10,000 TPS scalability solved woo it's like no we've had blockchains that can do that much TPS for a long time now you know pretty much all of them are centralized but we've had that for a very very long time and none of them none of them have ever been able to do that consistently in a production environment uh at all like even the most popular ones have not been able to do that so unless you're actually doing it in a live production environment you can't claim to be able to do it that's that's my kind of view on things because there's so much more that goes into it but then again it is not a good measure of throughput for all

the reasons bch list in his thread here and one of the reasons I just outlined before and again on top of that TPS is no measure of value as well for for a chain or the value of a block because because at the end of the day ethereum layer 1 has you know very bad TPS it's like a Max what what is it like 20 TPS or something like that not even 15 20 TPS on ethereum layer 1 but it makes so much more money on that TPS as a as a share of kind of like fee revenues than any other chain I mean if you go to Crypt fees. info which you guys know about I mean I've showed this this website to you guys plenty of times before just look at the the demand for ethereum layer 1's block space as opposed to to everything else and keep

in mind that no regular retail user needs to be on layer one anymore you can sit at a layer two and do pretty much everything that you can do on layer one from defi uh to even nft stuff to social F like as a regular user you really don't need to be on layer one uh especially if you're not tra I mean if you're not trading a ton of money if you're trading like even 10 there there's enough liquidity there for tens of thousands of dollars worth of Trades which covers most people right unless you're a whale there's really no reason to be on l one here and yet and yet there is so much activity on layer one over the last day ethereum has done $6.2 million in fees the next closest layer one to ethereum besides Bitcoin at $780,000 fees is BSC at

$336,000 right um that is significantly smaller than ethereum and BSC can obviously do more TPS than ethereum but they're not making it up in volume they're not making that fee Revenue up in volume and the next one after that is actually a layer two arbitrum 1 at6 5,000 then you have salana at 80,000 and and optimism at $65,000 right so when you're looking at the orders of magnitude between these things it's so totally different and that's why TPS again is not a great measure of value it's not a great measure of demand because in my mind something can have a lot of TPS but if ethereum with its limited TPS is still able to command a $6 million daily fee revenue or daily demand you could say for its block space as its product then obviously TPS is not

the thing that we should be looking at and should be measuring and now of course all this isn't to say that scalability doesn't matter of course it matters it matters more than more than probably anything for the long-term sustainability of these systems but the point I'm trying to make here is that scalability should not be measured in TPS right there's so many other ways to measure it there are so many other ways to look at look at it and reason about it and I think that at this point in time the fact that we're still talking about this in almost 2024 is kind of frustrating to me because it this to me was like a a well-known kind of solved thing a long time ago and maybe it's because I'm so deep in the ecosystem I I obviously top on top of these things but

the fact that people still fall for the TPS numbers is is incredible to me I mean I I don't really think that it matters that your chain can do a billion TPS if no one's using it it's like building a ghost City and then no one's there using it like who cares that you have a massive ghost city right so yeah anyway enough ranting about that uh you can go read bartex thread I'll link it in the YouTube description below for you to do so all right so a little bit of drama out of wallet connect of all places so wallet connect made a public statement a couple days ago where they said in light of the latest legal and ofac guidance wallet connect has restricted the availability of the wallet connect protocol in Russia certain regions of Ukraine were temporarily impacted but service has

since resumed we Inc we sincerely apologize for any inconvenience caused and thank you for your patience and understanding for more on this situation please read the following words from our CEO and there's just more I guess like legal speak here so obviously wallet connect is not decentralized I mean I don't think it ever really tried to be decentralized not yet at least um it is a way for is basically infrastructure but the fact that they can just like unilaterally block a whole country like this um based on the uh ofac guidance which is a us specific guidance it's it's shitty right and it goes against the the global nature of crypto it goes against the the the EOS of decentralization obviously but at the end of the day if wallet connect was decentralized they wouldn't be able to

do this so again it just speaks to the fact that we need to work really really hard to decentralize every layer of the stack like um the layer one like ethereum being decentralized is awesome you know that's like the first layer of the stack well technically the social layer is the first layer of the stack but you know what I mean then the infrastructure around it uh rpcs obviously we need to decentralize those out which which has been worked on and is being worked on front ends uh the me EOS system uh you know and then stuff like this like wallet connect wallets generally everything needs to be decentralized and distributed it cannot we cannot have any Central points of failure because a blockchain is not only decentralized just because of the the chain itself being decentralized it it it relies on and requires all of this extra

infrastructure to make it available for users and if that infrastructure is centralized then you get this what happens here right you get uh unfortunately wallet connect uh caving in uh or their lawyers at least kind of caving in here and F and and kind of like following this guidance here because obviously Russia is a sanctioned country right now uh from the US and ofac sanctioned them um so obviously well connect if you know if the team members in the US which I believe a lot of them are or some of them are um they would be breaking the law essentially so I don't blame them for doing this but at the same time I feel like we need to decentralize everything or else this is just going to keep happening and and and stuff's in the works don't get me wrong ethereum is by far the F furthest ahead

with decentralizing out its entire stack but it's not going to happen overnight it's going to take time uh and it's going to be an uphill battle I think um and even if we do decentralize things um there's still going to be uh weaknesses in that there are still going to be problems in that because how do you incentivize things to stay decentralized all that sorts of stuff you know it's a t as old as time when it comes to to blockchains but uh yeah just sad to see this from wallet connect but as I said don't blame them not unexpected uh and just another call to the community that we need to decentralize the entire stack but I think on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you haven't

yet give it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone