Why I'm Bullish Ethereum, Yearn exploited & much more - The Daily Gwei Refuel #51 - 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 cesano and today is the fifth of february 2021 all right everyone let's get into the news from the day so i did promise on twitter today that i would clarify what i meant by this tweet here and i'm going to spend a little bit of time talking about about this and i i think you'll get a lot of value out of it but basically what i tweeted was i have never been more bullish on ethereum than i am today now obviously i'm always bullish on ethereum right i'm always bullish on eth you know for those who have followed me for a long time i mean even with when eth was in the double digits i you know during the bear market

i was bullish right i never kind of stopped being bullish and obviously i'm still bullish today but i guess while i was sitting here today and i was like just reading through some things and and on twitter i just all of a sudden just felt like you know all these kind of puzzle pieces in my head kind of clicked together and just made me like more bullish than i've ever been like totally and it's probably hard to believe because i've been bullish for so long but yeah it was just a weird feeling so i'll run through why and uh before i do i just want to say nothing i say is investment advice uh obviously a lot of what i'm going to talk about it's got to do with 8th price as well um and like each fundamentals and things like that so i just wanted to clarify

that first so let's jump into why i am so bullish so i guess for me you know i started my ethereum journey in early 2017 and i've seen the space evolve so much since then right we're three years on since then uh i think four years actually wow okay it's been longer than that so four years on since then and yeah the space has changed dramatically we've gone from ethereum's only use case of being like an ico kind of token platform to being an entire platform for like so many different economic use cases right so obviously d5 is a big use case here now i think defy up until d5 summer and even like after that i think it

actually took longer than d5 summer for this to happen but at this point it's been validated as a use case right there isn't really many doubters of d5 anymore the only doubters that i see are kind of bitcoin maximalist who obviously they're gonna doubt anything that isn't bitcoin and still call it a scam or whatever but in terms of like the i guess the bitcoin is the moderates the quote-unquote general crypto people you know even competitor chains to ethereum right they've all kind of capitulated i guess in a way or at least realized the value of d5 now that is absolutely massive we've seen it play out on the markets we've seen all the default tokens go up we've seen the usage of d5 explode and you know for me it's become not a not a kind of when uh

sorry not an if but a when sort of thing right you know previously like it might be hard to believe now but before d5 summer especially for a lot of people for most people actually it was not like you know this is going to work this is going to change the world um it was like you know maybe this will work you know there's all these issues with them we have to solve them and if we don't it's going to fail and you know to be fair if we don't solve some of the fundamental issues it might still kind of maybe not play out like the way we want to the way we want it to but i think at this point you know there's way less of those people and it's more that everyone kind of believes this is what is going to take over the traditional finance

system right this is going to be the future of finance or the future of france as the as the meme goes right um and i don't think there's many doubters left for that so that was the first thing that i kind of like just sat there and really really took in i really kind of just took in how far we have come with d5 specifically from you know maker launching in december 2017 which i guess i would consider like the start of d5 even though there were some things before that i would consider that like the start of modern day d5 at least and then since then we have come so incredibly far it's actually insane how far we've come and it might seem like a long time like three or four years but it's actually a really short time considering what we're trying to do here right we're trying to

recreate the entire financial system on new infrastructure brand new infrastructure built from scratch this isn't like a fintech company building on traditional finance infrastructure that's already there we're building entirely new things here from scratch never been built before you know and and we've done you know if we've managed to create a booming ecosystem within three to four years i think that in particular is just a reason enough to be bullish right so other than d5 there's also we've got this kind of over the last few months the traditional finance system actually starting to pour into ethereum right um and you know i refer to traditional finance as tradfi so i'll just use that but tradfire is coming in in a really really big way and there's no way they would have

touched ethereum or d5 pretty much like pre-2020 they would not have even cared about it they were just getting their feet wet with bitcoin right they were understanding that they didn't really care about ethereum and d5 they didn't really care about uh to know about it you know maybe some of them thought it was a scam or something right so i think that's a huge kind of narrative going forward i mean you have people like uh the winklevia twins uh right the the winklevoss twins known as the winklevi they were just like big bitcoin proponents until recently until over the last i guess year or so they've become huge proponents for ethan defy and you can actually see this playing out in the markets where the d5 tokens that the traditional finance people are

talking about like are are going up really really fast right especially because they're on coinbase um and other deserves to as well others are an amazing platform don't get me wrong but you know when you have mark cuban and the winklevoss twins and roll paul right all these big traditional finance folk talking about this sort of stuff the the i mean mike novogratz used to say the what the herd is coming right and he's been saying that for a while i think he was too early i think now the herd is coming i think now it's gotten too big to ignore for the players in the traditional finance system i mean on monday we have uh the cme futures going live right i think people may have forgotten that that's happening on monday

right it's only a couple days away um so that's happening for eth which is uh uh just an insane for getting traditional finance people into eath and getting exposure to eath and getting their feet wet with it right and then we have like mark cuban tweeting to his millions of followers about using defy and about how defy like during the gme saga how dfi can fix it and and help with it as well right you have the winklevoss twins who have very very deep traditional finance kind of routes right they run a centralized exchange called gemini they grew up with uh in kind of like an old money family where their their family like is pretty you know has their roots set there they're obviously famous right for for i guess like uh from facebook fame so

you know they're not nobodies right they're literally like celebrities right and they're not celebrities in the sense of you know when we saw celebrities some celebrities tweeting about dogecoin they're like celebrities in the place where the money is right whether money's all the money's in traditional finance you know if you look at kind of charts and of like where the money is and where how the wealth is distributed in the world most of the money belongs to the older generations right um you know i think a lot of it belongs to the the boomer generation now obviously most of them aren't in crypto yet right pretty much all of that money is not in crypto yet so what do you think happens when that money makes it what makes its way into crypto what do you think happens when btc and eth get put into just like

these kind of like uh traditional investment vehicles right as kind of like just the thing you buy for retirement accounts for all this sort of stuff you know what what do you think happens i mean i i can tell you what happens right but i'm sure you can imagine what happens then but it's not just the prices it's also the use cases right these people validating d5 and ethereum for the traditional finance space is is just incredible right like that's what we need to happen yes we're trying to replace them right but we'd rather them kind of like replace themselves we'd rather than come into the ecosystem figure out how they can work within it right and how they can add value um and and then just kind of work with us rather than like just sitting idly by

and watching themselves get obliterated right i mean some of them i would like to obliterate right so some of them are parasites and you know even if they tried to work within the ecosystem they'd probably be parasites within d52 but the beautiful thing about d5 is that it punishes this right you cannot be parasitic in d5 um you know you can try but eventually you're going to lose because this is neutral infrastructure right this is this is something that can be you can be forked or someone can recreate and make a better and more neutral system right all these old tricks that you use in the traditional finance system to screw over people you can't do that in d5 right there are some things you can do in d5 don't get me wrong it's not a perfect system but it's much more open so it you know the the d5 battleground

is not somewhere where traditional finance people can win with their current tactics so yeah i'm looking forward to that uh layer two taking off way quicker than i expected actually like i'm a huge layer to ball but it's it's actually just amazing how quickly we've already seen the kind of i guess uh not only the volumes grow on layer 2 exchanges as i described the other day but project's adopting it synthetics is going full steam ahead with optimism right now you know uni swap is already confirmed to be working with optimism chain link as well you know uh kane put out a teaser tweet today which i've got here that i'll talk to a little bit more later about like there's gonna be more projects you know kind of adopting optimistic ethereum than people think so layer two is incredibly bullish and

it's coming at the right time as well it's coming when gas fees are high people are feeling the pain we feel like we're on dial-up internet we need to get to broadband so that's a that's another thing there and i talk about layer 2 a lot so i won't go into too much more detail there um so yeah on the gas fees no even though the gas fees are high right people are still using the chain like i don't people always say isn't this bearish for eth and i and i kind of i kind of say to them like so you're saying that people having to buy eth to pay for gas fees is bearish for eth right and then they're like oh oh i didn't think of it like that i'm like well you know i just i i don't see how people using

the chain having to buy either to use the chain right and using the chain with that eth too as like trustless collateral in d5 or using it as a productive acid in d5 i just don't understand how that can be bearish right how can it be bearish that something is being used like just because the gas fees are high and i get it you know not everyone can afford those gas fees i mean at times it really annoys me too having to pay them right but at the end of the day if you're willing to pay the gas fee then it means that transaction is worth more to you than the fee so you still i mean should net out profitably right um depending on what you're doing if you're speculating on tokens and you're taking a risk or whatever but you know at the end of

the day you know if you are doing those transactions they mean stuff too and if you're priced out of those transactions then i mean i i get that and we're going to fix that with layer 2 hopefully and some other different solutions you know coming online there but just in general as well the narrative around ethereum being you know the most used blockchain it's it's i went on crypto fees the other day and i think ethereum is being used like four or five times more than bitcoin in terms of fees right so that narrative is extremely powerful very very powerful right because it makes people kind of question things they're like well you know fee revenue is one metric you can't game because to game it you have to actually spend money right so i mean you can game it but it's

extremely hard and extremely expensive to game it so people kind of think you're like okay well if people are willing to kind of like spend this much money to use ethereum then how is this not bullish for ethereum right house is not bullish for the entire ecosystem you know the the rational people and the people paying attention know that we're fixing a lot of this stuff with layer two and um you know the end users won't have to deal with this forever so that's you know the high gas fees have always been incredibly bullish for me and another reason is because it encourages the adoption of layer 2 as well which i've spoken about in the past so yeah and then next up we have the eth2 launch right the eth2 beacon chain launch phase zero whatever you want to call it went so smooth it's insane right i think

even the researchers and developers were very very surprised by how smooth it went i think they were confident in it because we did so many test nets but it was literally a perfect launch i don't think anything could have gone better than how it went right we got up to over 95 participation from validators very quickly right the slashing mechanisms work correctly the chain hasn't halted the chain hasn't needed to be restarted right clients are working as they should they're talking to each other everything went so smoothly that it was a massive vote of confidence for the ethereum ecosystem especially because we hit the minimum eighth required to launch eth2 on the date that we were supposed to do and i remember that day was one of my one of the best days of my life like not not even kidding that was just such an

awesome day to be in the ethereum ecosystem um so that was a massive validation of ethereum and eth right and now the work on on eth2 while it's quiet it's continuing they're doing the first hard fork in the middle in july on for the beacon chain to add a bunch of new things to it and to and to kind of make some tweaks to the the penalties of slashing because it was actually set to be um weaker penalties at the start and they're gonna put in the original penalties now um and you know things like uh sharding is coming along and the other kind of like uh things coming into ethq with the merger and stuff as well was coming along so yeah that's all going really well as well so that's another reason why you know i'm really bullish and on that note in terms of like ethereum protocol

development eip1559 right that now just the narrative the eip155 is coming even though we don't know exactly when it's coming is also incredibly powerful because i think people understand how 1559 can add value to ethy asset how it can smoothen out the transactions on ethereum you know it's not going to fix the high gas feed problem i want to make that clear but it will act as a way to smoothen out transactions to give us better fee estimations and to give us an on-chain kind of um gas oracle or gas price oracle to uh to help with uh that that kind of fear estimation as well so and then that's closer than you think uh i think you know people are thinking that it's not it's like a year away i don't think it's a year away and i've

speculated before that i thought it would come in july and or or august pure speculation do not quote me on that i'm just speculating but i've said that before you know i i have relative confidence in that um but we'll see how we go there next up is nfts and crypto art do you know how many people new people are coming into ethereum right now because of nfts right that have zero interest in d5 endows in ethereum protocol stuff right they they don't really care too much about that stuff but what they do care about is collectibles they care about ah they care about digital art once they get it right artists are coming in tokenizing their eye getting value out of it this kind of whole space has just blown up and

it is amazing because it's bringing in a new set of people into ethereum that would have never come into ethereum through any other of the the many doors i think you know maybe they would have used defy one day but not as part of ethereum maybe they were using d5 through some kind of broker or centralized kind of exchange or something so to see them actually you know maybe download metamask or download a crypto wallet interact with nfts buy crypto art you know buy it with eth because the entire nft space is actually denominated in eth because ethers money so no one can say that isn't money anymore just going to make that statement so that's incredibly bullish right the eighth price being this high is also incredibly bullish because it validates all the work that we've been doing right if it's price was stagnant even after

everything that's happened the growth of d5 eth2 launching right um d5 being validated as a use case trad fi coming in layer two work right the gas fees being high um you know all this sort of stuff people understanding ether as a financial asset more if the eighth price was still low that would be you know incredibly bearish right that would mean that no one cares to buy eth even though all this stuff is kind of adding value to it but that didn't happen 80's over 1600 dollars yeah 1600. like if you told me that it was gonna be over 600 1600 in february like even a few months ago i would have called you insane because it was four hundred dollars in november 400 in november right remember was three months ago ah like seriously so the eighth price being as high as it is and continuing to grow

is massive validation and it's reflexive so the higher the eighth price goes the more bullish people get right and then it just kind of like snowballs from there and because of the eighth price being high and other d5 tokens kind of going up as well there is so much more money in this ecosystem now right there's so much more money to fund development of things to get people hired and people coming into the ecosystem wanting jobs we can hire them we can do awesome bitcoin grants around so millions of dollars are given to open source right people are quitting their jobs to work full-time on like whatever they want to work with in ethereum right so that's obviously a byproduct of the eth price going up and it's you know it's amazing right it's absolutely amazing and this is why i care so much about the east price going

up or at least one of the reasons obviously i care about it for other reasons but one of the main reasons is because of the fact that when we're in a bear market people have to grind you know people have to kind of be very conservative and try and make it through because you never know when the bull market's coming back and in saying that this bull market's not going to last forever so if anyone from any of like teams are listening any kind of founders just make sure you have enough runway you know for the next few years don't rely on the bull market sticking around forever and don't put your entire treasury into volatile crypto assets keep summoning stable coins not not not like investment advice or anything but i think that's just prudent kind of treasury management but anyway um that that's the kind of

note there and then lastly all of the on-chain metrics that i'm monitoring for ethereum are going absolutely bananas they're incredibly bullish they've never been more bullish and i'm not going to go into each of them now because i actually have a dedicated video coming out for that on the weekend i call them the daily grade data pumps i put out one so far which covered i think november or december i think it covered november i'm going to put out one this weekend that covers december and january and i'm going to show you what metrics you need to look at to to kind of track this bullishness and why it's bullish right so yeah look forward to that subscribe to the channel if you haven't yet because you'll be able to you'll miss that if you don't so yeah that is that tweet expanded for 18 minutes oh

boy okay i spent a long time on that but this is why i couldn't do it on twitter because i explain things a lot better when i'm talking to you know talking you know basically to an audience like you like all of you watching and i hope that you kind of are as bullish as i am i mean you know i just got myself even more bullish talking about all that so yeah anyway i'm going to move on to the rest of the stuff i wanted to talk about but that's that's that tweet in a not in a nutshell i guess like just just there summarize basically um yeah as i said while i was explaining about that tweet the cme futures are launching on monday you know i kind of lost track of the dates because of like covert and because of just like the bull

market i kind of lose track of time from being honest and then i realized before i'm like oh it's feb 5th oh wait see me 8th futures are launching february 8th oh wait that's monday and then i just put out this tweet i'm like y'all are aware that the cme futures are launching on monday right so yeah that's why i put out that tweet there uh and as i was talking about before on layer two i mean kane put out this tweet today saying optimistic ethereum so this oe that you see here on screen stands for optimistic ethereum um so he said optimistic ethereum native projects are coming and sooner than you might think i mean i just explained what he meant by that how you know there is more kind of projects coming to the optimism kind of ecosystem than you think you think maybe

it's just synthetics and uni swap but there are actually more coming i don't know exactly what which ones are coming or which ones aren't but their technology is ready and people need scaling now so there are definitely a lot of projects kind of talking to them looking into layer two solutions looking into which solutions kind of i guess work best for them so that i think that's what kind of kane meant by this tweet here so a really great tweet thread from daryl here from mechanism capital so he basically puts put together this thread and and says that market cap or fully diluted value slash tvl is a mean metric that really only considers things from surface level and should never be the only metric which you use to approach an investment in d5 now we all know what market cap is right

and we all know what the fully diluted value is at least i hope we do so let me explain the difference if you don't so market cap is basically the current price of the asset times the current circulating supply of the token all right fully diluted value you know as a kind of difference in market cap right it's still referred to as as kind of market cap but what the fully diluted value measures is the current price of the token times the total supply of uh the token right so you could have say one you know million tokens that you'll ever have but only 100 000 of them are issued so your market cap would actually be 10 of the value of your fully diluted market cap and people look at that and they get bearish right they're like okay

well this thing's already worth a billion dollars um even though the market caps are only 100 million that means there's 900 million dollars more kind of tokens coming to market that means i'm going to get dumped on but that's as daryl says here that's a very surface level understanding of how these things work you need to one understand how those tokens are coming into the market right the rate at which they're coming into the market who they belong to as an investor myself i can tell you right now a lot of investors don't just get their tokens and go to uni swap and market dump them that's just not how it works right they they work very differently to to kind of retail investors um but just by nature right some of them will some of them are mercenaries i'm not going to call any any out or

whatever but they don't you know they're smart enough not to do that right and also a lot of them are in it for like a hundred times a thousand times they're not in it for like a ten times like i know that sounds crazy but you know they want to return as much money as they can for their fund so they're not if they're bullish on a project and think that it's still you know got a lot of growth left in it there's this is this is the mistake that i think you know retail investors make and i've made a lot in the past is that you know you get it 10 times on something right like hopefully some of you have had that experience before and you'll sell because you'll be like oh it's already gone up 10 times right how much more can it go and then you see

it go up even more and then it goes up even more and then it goes up even more as an example imagine you bought ether the dollar then it went to 10 and you sold right then in 20 it you sold in 2016 and then in 2017 it went to 1400 right case in point not investment advice but if you are bullish on an asset right and you're selling because it's already gone up a lot it's just that's just not a great investment strategy in my eyes and that's not the investment strategy that funds use either so most funds at least some of them you know it's kind of like some of them are definitely mercenary but other than that you know daryl also goes through that um you know looking at the tvl in uh in different default apps like what is that tvl being used for so tbr stands

for total value locked which is the amount of capital in the system in that protocol and he basically says yeah what's it used for what percent is put to work is it sticky how can it grow right how can it 10x where is the value being captured and retained and things like that and then it goes through some examples here of each of them i'll link this thread you can read through the whole thing because i know i'm going to go over time if i talk too much about this but yeah basically you know it's funny because like it's it's kind of hard in a bull market to do fundamental analysis on this stuff you i'm gonna give you one example and then i'll move on the uni token last time i checked was worth 20 billion dollars fully diluted right the uni token cut currently doesn't

capture any value right it is only a governance token but if you saw that and you said okay well it's already worth 20 billion fully diluted right it doesn't do anything it's only governance it's overvalued that again is a surface level understanding what you are buying when you're buying union what you're betting on is that the fee fee what kind of capture will get turned on you're betting that uni swap volumes are going to keep exploding in growth right you're betting that unit software as a platform has extremely sticky tvl which i think it does we've seen that play out before and you're betting on uh on the unisop team being able to continue innovating and v3 to be like everything we want and and all that sort of stuff right and not just the uni swap core team but like

the whole ecosystem so if you just look at something and say oh it's only a governance token right that just is is so is a very surface level understanding of what these things can be and if you really think about it a governance token when done correctly within these protocols can be used to do anything it can be used to do absolutely anything right turn on fee capture burn tokens for whatever reason add new features add new fee revenue like all this sort of stuff add new kind of like value capture mechanisms for the token so i think that's just a good thing to to keep in mind there so uh the the jiho from uh axiomfinity put out this tweet today and i'll read it out so he goes think gas is expensive try sending out your pokemon cards to psa for grading

shipping plus grading fee nfts are 10 or 10 times improvement even on the ethereum main net now for those who don't know um the pokemon trading card game is is a pretty popular kind of card game in the world not so much for the game aspect of it but for the collectible aspect of it i'm personally a very big collector or was at least i don't collect the newer editions but the older sets from like the late 90s early 2000s are worth a lot now what people do is that they'll get their cards graded like the quality of them graded and psa is one of the grading kind of companies but to get it graded you have to ship it to them and then pay a grading fee now when you ship it to them you're not just shipping it to them in an envelope even though

it's a card you're shipping it to them with insurance on it right you're shipping it in a very like kind of um like maybe a box with like glad wrap all around it and like protect it as much as you can because if you're getting a card graded that means that you know that that card's worth a lot already right even ungraded cards are worth a lot so what ends up happening is you pay this enormous shipping fee you pay this enormous grading fee just to have the um the quality and the authenticity of your card verified by this third party right and then you know and then he goes on to say that nfts are a 10 times improvement on this even though the gas is high and they are i spoken about nfts you know i think a few days ago but basically you know you can kind of

verify that an nft is legit and and kind of like in cryptographically legit because it's on the ethereum blockchain and you can see that it is not a copy or anything like that it's not a fake right and the quality of it i mean the quality doesn't deteriorate because it's not a physical object so yeah this is this is kind of the same argument with i guess like comparing btc to gold and like all the different kind of um benefits to that i think comparing physical collectibles to nfts also has benefits right but in saying that and i mean you can see behind me i have tons of physical collectibles that i really wouldn't care to own as digital collectibles if i'm being honest um because there's like a difference there but i still think jiho's point stands here so yeah i

thought this was an interesting tweet all right so this was very interesting today from coinmetric so they put out this chart that shows that each daily transaction fees yesterday topped 22 million dollars which is an all-time record for crypto fees across any blockchains it beat btc's all-time high of 21.4 million dollars in december of 2017 and you guys will remember that december 2017 was the top of the bkc bull market so btc went to 20k then and topped out there right and and the fees were obviously on the chart you can see spiked up very high but basically yeah on ethereum yesterday 22 million dollars was an all-time record across not just ethereum but also bitcoin

which i thought was was huge right and i don't think we're done yet i think we're going to go past this 22 million as the bull market heats up i can see us going to like 50 million daily fees and yes that means the guy price is going to go higher than it is today you know it's around what 185 right now you know it's probably going to go to like what oh god 4 500 or something i'm sorry to say but i just don't see how it's gonna go down with all the new people coming in uh but we'll see right maybe we'll find an equilibrium and we'll find like a place that it wants to settle down at but yeah we'll see so yeah this was just incredibly bullish to say i think so speaking of gas will price put out this interesting tweet today

that basically says that coinbase currently uses 25 of all 8th block space now i wrote about this in the daily grain newsletter and you can go read that for a deeper breakdown here but we'll suggest here that with a different architecture they will be able to save 20 to 40 on gas like use 20 40 percent less gas um now coinbase obviously is the biggest us-based exchange they interact a lot with the ethereum blockchain right with you know people wanting to withdraw to it and they do a bunch of other stuff with it too i think they do some d5 stuff with with their addresses and things like that so you know they the fact that they're using so much block space is incredible that's a quarter of all ethereum block space right um you know that's a quarter of the ethereum network just being used by one

entity um and you know the other entities that are using it like uni swap the the contract and the erc20 contract for tether up to all the other big gas guzzlers so yeah i just thought this was a really interesting start and in the daily gray newsletter today i wrote about how different entities can be better stewards for the blockchain for block space that you know as will says here coinbase could improve their architecture and save up to forty percent on gas right there's that that's the same principle applies for anyone using the chain but i'll let you read the newsletter in the delight if you want to hear more about that um without kind of diving too much into it today so block native has uh announced today that they partnered with curve finance uh to basically monitor transactions in

the mempool and give trent and give kind of notifications on curves front end here now for those who don't know what block native is they're basically kind of they call themselves masters of the mempool and i guess for those who don't know what the mempool is the mempool is where all the transactions go before they're included in a block so whenever you put a transaction and you're waiting for it to be confirmed it's in the mempool and that's that's kind of like where all this i guess stuff happens around the dark forest and you know mev those may be words you've heard before and front running and stuff like that that all happens in the mempool before it's actually included in the official ethereum blockchain or in a block in other words so yeah block native is the kind of the masters of that they monitor it with all their

infrastructure and that allows them to give really fast and sometimes like real time and accurate notifications when you're interacting with things so say you kind of interact with curve it'll pop up a notification for you on curves front end that says you know you've done this and then as soon as it confirms it'll tell you it's confirmed and you know there's a bunch of other kind of pieces that fall into that so yeah if you haven't checked that out yet i definitely suggest checking it out and they also have what's called a mempool explorer so you can actually have like look into the mempo and see what's going on there now us regular folk probably don't need to do that but people like traders would like to do this because if they want to see what's going on in the mempo and kind of monitor people are buying and

selling and things like that all people building bots and stuff will want to do that so if that's you definitely go check that out all right the last thing to talk about today and i'd be remiss if i didn't talk about this i know i've gone over time but i have to talk about this so the latest defy exploit uh featuring uh yearn finance so an attacker profited 517 513 000 worth of die 1.7 million dollars worth of usdt and 506 thousand dollars worth of 3crv which is the three uh the pool lp token of the three crv curve pool basically so um i'll let you read this thread i'll link it in the youtube description because um i'm not gonna read out the whole thing but basically igor here describes how it

works and you could probably guess it was a flashlight related attack where someone flash loaned a bunch of eth right they um off the idx and rv then they borrowed um uh stable coins using that as collateral on compound then they kind of did some stuff in curve and kind of exploited some some weaknesses with i guess with with curve and how they do like um i guess pricing of the different stable coins uh and then kind of profited from that basically so i think i i'll let you read this thread i'll be put in the youtube description but i think i saw the one of the year and finance team members say that the response time to this was about 10 minutes which is actually quite good so they were able to freeze i think uh the the hacker out and kind of make

sure that no more money could be drained with this exploit which i thought was pretty cool within 10 minutes but this also kind of like falls back to i guess just the general d5 security right like people probably assume that yearn was one of the safer protocols and it turns out it wasn't unfortunately um i'm gonna say straight up you you know you're never 100 safe in d5 you're never 100 safe in c5 right there's varying kind of degrees of safety and security and you have to kind of be comfortable with how much risk you take on so you know i would say that some of the safest protocols in d5 are the ones that have been around for a while and never suffered an exploit like like this right and those would

there's only a handful of those i think there's uni-swap maker and compound right but maker and compound have also suffered kind of issues where um on compound they were they weren't using a robust enough oracle so what ended up happening was that and i spoke about this before you might remember was that there was an oracle exploit where the price of dye went up to like a dollar 20 or a dollar 30 and compound read that as a dollar 30 right even though it wasn't actually a dollar 30 and they liquidated millions of dollars of positions and with maker you might remember from march 2020 where someone was able to buy up a bunch of ether collateral at zero die basically because of um i guess the the keepers kind of bugged out basically the keeper bots are the liquidator bots essentially

and they just weren't there to to to kind of pay the fair price so yeah even the the quote-unquote safest protocols have still suffered from kind of these exploits and things like that right or kind of like something to do with with an economic exploit um which unfortunately isn't the aim of the game the name of the game right now because we're so early still we're still as i've said before we're still in the pioneer phase you know there's still a lot of risk so you need to be comfortable with that risk but yeah i'll link this in the description you can go check it out along with everything else but this has been a long refill today so thanks for for sticking with me uh for today's episode and and that's it so if you haven't subscribed to the channel yet be sure to do so give the

video a thumbs up join the discord channel subscribe to the daily great newsletter and i will catch you all next weekend and oh keep an eye out for that on chain metrics video that i'll be putting out on the weekend it's going to be a fun one thanks everyone