Withdrawals chat, Uniswap on Scroll testnet & more - The Daily Gwei Refuel #533 - Ethereum Updates

Transcript

hello everyone welcome to another episode of The Daily gray refuel where he kept the latest news in ethereum ecosystem I'm your host and this designer and since the first of February 2023. alright everyone let's get into it so there seems to be a bit of confusion still well maybe a lot of confusion still around how Beacon chain withdrawals are actually going to work now I explained this I think last week or the week before about how there are two different types of withdrawals there are going to be partial withdrawals and full withdrawals now without going into all the details again the trdr is that partial withdrawals happen automatically and cycle through all validators which basically all validators from index 0 to the current index um being cycled through every week on average right now and it obviously as more validators are added that time will

get uh will get longer and longer but what that does is it basically uh automatically withdraws automatically pays out all of your accrued consensus layer rewards to your withdrawal address so if you're a Staker today let's just say you're a solo sticker and you have a withdrawal address that you currently have access to the execution layer rewards because they go directly they get paid directly to every time you propose a block and obviously the Mev rewards are a part of that as well um now with the consensus layer rewards they have been locked since the beacon chain launched and that is what is uh that is part of what is unlocking when uh withdrawals are enabled and that as I said that partial withdrawals is going to happen automatically there's nothing that you need to do and if you're with

an LSD uh everything happens automatically anyway so there was nothing you need to do there either now when it comes to full withdrawals this is the withdrawals that I think people think apply to partial withdrawals as well it's when the user basically initiates the withdrawal themselves and it withdraws everything not just the consensus layer rewards but also the 32 E30 staked so basically let's say you have um 32 East stake and you have two eighth worth of consensus layer awards at time of issuing that withdrawal which I mean will rarely happen uh actually it won't actually happen like that uh post withdrawals because everything will just continue be partially withdrawn and you'll never get to the um so that two eighth again but just I'm going off on a tangent here just on the for the for the

sake of the argument let's say you have 34 8th and the end 32 8th is your principal and then the 2 8 is your consensus layer rewards and you initiate a withdrawal it will withdraw all of that once it's gone through obviously with the withdrawal Q right so those are the two different things they're partial withdrawals and full withdrawals now there are discussions obviously still around what uh how much either is going to be withdrawn post uh withdrawals well we can safely say and and I mean we can certainly say it's not even safely say that you don't have to assume here that one million around 1 million eighth worth of consensus layer rewards will be automatically swept and paid out within the first week because those are the rewards that have accrued since the beacon chain went live and as I said it

takes about a week to run through all validators so once that happens uh uh that one million eighth will be able to be either restaked or sold or you know maybe people just want to hold it whatever they want to do with it that is free to roam now the big question mark of something that we can't say with any real certainty and I've discussed this on the refill before with a bunch of different factors that go into this is the full withdrawals like how many people are actually going to withdraw that 32 eighth from uh the beacon chain and how much of that is going to get sold now we know that there is a a percentage of solo stakers obviously they will initiate their own withdrawals and we don't know how many of those are going to be selling their eighth I don't

think there's actually going to be many of those that sell but it means to be seen right and then with the lsds it really just depends on uh which kind of like users initiate withdrawals uh and how that's actually set up like for example Lido will have their own way to do it rocketball will have it has its own way to do it uh coinbase has its own way to do it and all that stuff there but really the times where withdrawals will actually Spike will be when the secondary Market is trading out of lockstep with the it's it's fair value so to speak so when you can basically Arbitrage between the beacon chain and the secondary amount market and vice versa there so it really is as I've discussed plenty of times on the record before extremely difficult to know what that's going to look like I personally

think that it's really going to be a nothing Burger there's not going to be that much stake or that much eat steak withdrawn from the beacon chain and the de-risking event that's coming with withdrawals being enabled will probably lead to a net inflow very very quickly I actually don't expect us to see a net outflow um you know maybe maybe past the first few weeks of withdrawals being live and even then I struggled to really see if there's going to be a net outflow there but that is just the eth at stake that is not the reward so I'm only talking about the 32e that's part of all the validators uh as as stake I'm not talking about the recruit rewards because as I said because of the way partial withdrawals works there are crude rewards are automatically paid out this isn't the users withdrawing them

they are automatically swept off every validator uh you know each every week right every kind of like seven days here rough rough estimate there so because of that it may look like people are quote unquote withdrawing from the beacon chain but that's not actually what is happening uh in terms of the classical I guess definition of withdrawals what's happening is that they're just getting their rewards right and that's that's totally fine I I guess like an analogy here it would be to use proof of work it would be like uh the proof of work miners they get their rewards right they get the fees and the block reward paid out to them but uh for them to fully withdraw from the from mining they would sell their assets for example right that's the analogy here whereas to fully withdraw from each staking you would withdraw your eighth I mean you don't

have to sell it but I mean a lot of the times people will probably sell it if they're withdrawing it because I don't know what else they're really going to be doing with it especially with lsds because what if you're not going to withdraw it and then restake it to get an LSD and then go use that LSD within D5 and then most likely you're just withdrawing it to sell it I don't really see many other reasons to not be staking uh your your eighth right if you're already kind of like staking it there so there's that as well now the reason why I'm talking talking about this again is because timbaiko put out a tweet where he said where he basically asked cinematics to make a video on big and Chang withdrawals and I think this was prompted by me messaging Tim and being

like hey man it would be really cool if we had a better explainer of how withdrawals worked maybe an official blog post from the ethereum foundation um because there's a lot of confusion out there and then he you know he tweeted this and he also put together a nice little set of criteria that he would like to see in the video which I'll link in the YouTube description below as well for you to to read this goes into the details of how both those types of withdrawals works there but uh but yeah this is something that I think is going to be confused and even used as part of some sort of fun campaigns post withdrawals especially because it isn't necessarily easy to understand because there are intricacies to these sorts of things it's not like you can immediately get what's happening and also if you

don't understand how ethereum proof of stake Works to begin with it's definitely going to be very hard to understand it and usually as we've seen over the years in ethereum if something is more difficult to understand and say I guess like a very basic thing that people are used to used to in the crypto space it gets twisted and turned and and people you know use it to to push their own narratives in their own I guess fight so to speak but regardless of that I'm pretty confident that everyone listens and watches the refuels uh should be aware by now that as I said there are two types of withdrawals one is automated one is user initiated uh and the automated one is only for the rewards the user initiated one is for that 32e that you need to stake plus any rewards that are there obviously when

the withdrawal is is uh processed there uh but yeah that's that's that's the way uh it is there so I'm gonna move on from that one I'll link this in the YouTube description for you to check out all right so speaking of withdrawals the jejang test net is now live and there is a block Explorer from a beacon chain that is live as well so you can go to jejang.bikin chain dot I end I guess like dot beacon.in uh and check it out for yourself and check out how everything's going here now this isn't uh I guess like hit Genesis yet so it's live in the fact that it's it's out there the software is out there everyone can uh I guess uh uh uh uh set up validates and participate or whatever but it's not currently live and that's happening in just under three hours from

now where Genesis happens and then the test net will be will be going ahead there so basically this is just an explorer to monitor that so if you are watching this uh when you know some of you are probably watching this or listening to this when it's already gone live you can go visit this this block Explorer website to check how everything's gone uh we're not really expecting to see any turbulence here as I said it's it's a test net right it's obviously not mainly or anything like that but we're not expecting to see any turbulence on this test net uh but still cool to see how things are going here and if there are areas that pop up they'll be able to be traced and we'll be able to fix them uh as time goes on all right so a load star version 1.4.0

is now live and with this release load star is set to become the fifth official consensus client on the ethereum foundation staking launch pad what this means is basically we now have five production ready official consensus layer clients for ethereum which brings us up from four that we've had um in in the past so now we have five and we have four in the execution layer side of things there are more than than that there are some other clients on the execution and consensus layer side but they aren't quote unquote officially supported and they aren't uh I guess like on the ethereum foundation stacking launch pad because they're not considered up to scratch with the other validator clients out there or with the other consensus layer clients I should say so uh I I guess they aren't put on

that website but now loadstar is on that website and if you were interested in basically uh trying out the most minority client you can on the consensus layer side of things lodestar is the go here now just just disclosure or discla I should say I haven't tried out lodestar before myself but I am definitely Keen to do so I have new a bunch of new validators I need to spin up and a bunch of new Mini pools that I'd like to spin up as well so I'll decide what I do there but I'm definitely going to give load star a go and I definitely um want to switch back to nevermind on one of my staking setups as well now that they've fixed a lot of their memory issues as I said as I've said before I did have to go back to Geth because of

those uh particular memory issues there but yeah I'm excited to play around with this stuff and excited to play around with clients especially when I get my Proteus device which is uh being made by Joe from The Rocker pool uh Community uh you may have seen a bunch of these devices on Twitter I know super Fizz already has his and a couple of other community members have theirs but I'll be hopefully getting mine relatively soon as well and it's basically a rock 5B board um you know 3D printed case a bit of customization to it uh built by by Joe so I'm hoping to set that up as potentially another rocker pool I guess a set of validators there or maybe just a set of solo validators because uh for I guess meat space reasons I can say I have to set up a secondary solo staking

PC which is actually really annoying but then I thought oh well I can actually do that with the Proteus uh which is very cool because I wasn't entirely sure how I would have my Proteus set up but now I know I'm going to be having it set up with solo validators and potentially some rocker pool mini pools are there as well but anyway enough on the tangent there if you want to try out load star version 1.4 for yourself it's now live I'll link this in the YouTube description for you to check out the blog post and learn more about this all right so speaking of super fears and staking generally he a Superfast put out a tweet today where he said how to decentralize LSD staking and he put bring up two points developed five plus trustless decentralized permission list Open Source fractional staking platforms

like rockapool and stakewise V3 and include the best Solutions in an index token that can be used in defy iterating on index co-ops DS eth so I obviously fully agree with this I don't know if we're going to get five or more of these decentralized staking pool platforms or fractional staging platforms because when you go past a certain number within with a lot of these things within crypto it becomes a lot harder to gain adoption I mean when you look at the way the decentralized lsds are today uh because of the fact that they're trying to be decentralized there a lot less I guess Capital efficient at least for the time being than their centralized counterparts

um and they have to they can't really take the shortcuts at their centralized counterparts can take uh so I I and it's actually much harder to build these things right um and there there are different kind of intricacies that you have to consider and all that sorts of stuff so I'm not sure if we're going to get five or more of these things I would be very surprised if we got five of them that were actively used maybe we get five that are built out but in terms of the uh which ones have the majority market share I would say you you would probably have two three maximum in terms of the most market share here just by virtue of the the fact that Network effect and liquidity be getting liquidity I I just don't think we're going to get that many now in saying

that you can actually build other platforms on top of these things which allow them to get even more adoption and allow them to grow even more than their centralized counterparts so and I believe this is definitely going to happen especially post withdrawals uh but yeah as much as we would love to live in the world where we have five or more of these things maybe we will over the long long term but just if you look at how long it took rocketpool to get to where it is if you look at how difficult it is for it's being traditional only for rockapool to scale and to compete even though they have like everything going for them and obviously they're improving all the time and they have a really great community can you replicate that four more times it's kind of what I'm saying right can

you have a rocker pool like uh solution and Community four more times I don't think you can do that just like I don't think you can have ethereums uh I guess like community and ethereum's network effect and values and everything around it more than maybe two or three times right we've seen what happens with a lot of the the l1s or pretty much all of them they all pretty much Fade to irrelevance because they don't have those missionaries over mercenaries as I've discussed before um but yeah I'm willing to and open to being I guess uh proven wrong here but just based on what I've seen and extrapolating out some things I just don't think we're going to have like five or more that are completely dominant I don't think that was what superfuse was saying here either he obviously just would love to see it

happen but it's not like he's giving a comment on whether he thinks it's going to happen or not happen uh but I I thought I'd add my comment there because I believe that we we should generally I guess like aim for this for the Stars so to speak but settle with them for the moon I think that's it's a good analogy I aim for the Stars if you can't get to the Stars okay and we got to the Moon that's enough right because the higher you aim right the hopefully the the the the closer you can get to that Target but if you're only aiming for the moon maybe you'd only get to like the stratosphere for example and but if you aim for this for the Stars you aim for the sun maybe you get to the moon and may it's a crude analogy but I think it

works now moving on to the second point about these other products like what index cop has done with DSE which I discussed the other day how they're basically incentivizing other design sorry have a have an index that has the liquid staking tokens in it and waiting it based on a bunch of different criteria I think that's great I think there's going to be other products that I build on top of this as well I hope that the institutional grade e-staking products don't just go the easy way or I guess like the comfortable way of going with coinbase alone or going with binance or Kraken alone or going with Lido alone I hope that they will spread out their steak I hope that they'll take advantage of Technologies like DVT I hope that they'll actually be be clued in enough to know that by going with the

minority Solutions helps I guess like the decentralization of ethereum helps the health of ethereum and in turn will also help the value of both their e-stake and also the rewards that they're going to get because ethereum remains incredibly neutral Active network and that should lead to increased yield from the fear of a new right from more stuff being built on ethereum so I I mean I don't have like that much faith in institutional players are going to be able to be clued into that we have to educate them but if they think more longer term I think that'll be better overall for everyone there but yeah just just something I want to talk about there from Super fears it prompted me and last thing about staking was that Hill Dobby has reworked his eth staking doing analytics dashboard from the

ground up so the tldr is that it's been migrated to Dune V2 it's open sourced tables on Spellbook added more entities that he'll Dobby uncovered and added some charts so you guys remember this dashboard the V1 of this dashboard that I've talked about a bunch of times on the refuel covered at a bunch here well with V2 it's even better so of course I'll link this in the YouTube description below for you to go check out but I think this is going to be a dashboard that I'm going to be very very glued to especially post withdrawals because I really want to see how things evolve and as I said before I think we're gonna have to give it probably at least 12 months to see how things shake out after withdrawals so I'm going to be monitoring it uh not not every day not

every week maybe month to month but then I'm going to be doing a full review at the 12 month period to see if things actually shaked out as I think they are my two biggest I guess or most confident thesis is that we're going to have much more eat steak post withdrawals and I've explained my reasoning behind that before and then I think that uh bigger players like Lido are going to lose dominance post withdrawals to uh to other players and we're going to uh and because um because of a bunch of different reasons but those are my two kind of like strongly held beliefs now we'll see if I'm wrong or not in just over a year so time right I hope I'm not open to being wrong of course but I don't think they're actually too outlandish of predictions there to say that more if he's going to be staked and

that we're going to have a more distributed Beacon chain I actually think those two things are very realistic I have more confidence in one than than I do too even though I'm fully confident in both of them um one is just an easier bet to make I think than two because like it it doesn't it wouldn't make any sense to me we would have to be in a really really deep like depression slash bear Market in I guess like the global environment not just crypto for there not to be more each staked especially at the yields that it currently has at five and a half pushing six percent sometimes yearly yield ether nominated yields and if the demand comes back in the and the bull market comes back that yield's just going to go even higher I find it extremely hard to believe that we're not

going to have more each staked um in a year's time or over a little bit over a year's time than we do today whereas number two I also find it very hard to believe that the beacon chain won't be more distributed post withdrawals but I don't have like as much confidence in that as I do in my number one uh kind of point that I brought up there but still obviously very confident in that prediction as well but anyway we'll revisit any ER going to move on from this now there's some news out of scroll so scroll has developed an instance of unisop V3 for users and developers to play around with on their pre-alpha test now I played around with this just before actually it didn't take very long to spin up uh it was about five minutes and this was my first time uh playing

around with the pre-alpha test that I hadn't done so I mean I've been meaning to do so I just kept putting it off but it was very seamless very smooth experience felt like I was on an L2 with obviously those low fees um uh and and those fast transactions this is a test Nets obviously fees are going to be low anyway um but just just relative to I guess um uh a mainnet in general relative to L1 because what I did was I essentially connected to the scroll L1 and then I I got a four sets to give me some funds then I Bridge those funds over to L2 then I swapped some of the ether I got the test net eight that I got for testnet usdc and it all worked really really smoothly so just great to see that this is a fully I guess like

working uh uni swap V3 on a skull ZK VM here in I guess like they're pre-alpha test net which is the earliest of test Nets I mean pre-alpha and then Alpha and then beta you know it's funny because they might just launch their mainnet as a beta like a lot of the l2s have been doing or pretty much all of them have been doing so I guess pre-alpha seems to be in a very good state for what it is then I'll move on to Alpha later on but anyway enough babbling about that you can go check this out for yourself it's linked here at scroll.io pre-alpha I'll link it in the YouTube description as well for you to check out all right so a pretty big announcement out of immutable today so they've introduced something called immutable passport which they're calling your passport to the future of gaming they

say yeah we are developing immutable passport the instant non-custodial wallet onboarding solution for web 3 games designed to onboard the next billion users into web 3. now the trdr of what passports uh is is and they say yeah passport is a non-custodial wallet and authentication tool designed for games that streamlines onboarding for gamers through passwordless sign-on and automated wallet creation it's the solution for making mainstream adoption possible now the main features of this immutable passport product here is seamless player onboarding secure non-custodial wallet Marketplace distribution frictionless purchases plug-and-play scalability and access to Gamers so I think the reason we're at least the major reason why they're

developing something like this is because a lot of the wallets leave a lot to be desired when it comes to just get General usability right I mean I was having this discussion with um with a team the other day about that's kind of wallets generally and they're asking me like why do I still use metamask or why do you know my friends still use metamask it's not for the user interface like not at all I've never looked at metamask and be like oh I like how they do that I like that interface no not once right and I don't really use mobile wallet so I don't really have an opinion on on those other than what people have told me because I'm definitely just a desktop user um but with metamask I don't use vanilla metamask I I obviously do it through Hardware wallets but even then it still

uses the same interface and like I'm getting a different interface I'm just using the hardware to sign the transactions right um but yeah I never looked at metamasking being like I love the UI and I love the ux but the reason I still use it and it's so sticky is because it's been around for so long it's very reliable it's very secure because it's been around for so long it has been through uh so much over the years and I'm just so used to using it uh I know my I guess like um wallets are there and I have some kind of like wallets there that uh that I created yongs ago that still have some funds on them because trying to preserve privacy and all that sort of stuff and then to migrate everything over it's a risky proposition because obviously you can use your seed

phrase and migrate everything across if you want to and restore your wallet somewhere else but I don't want to do that like I hate doing that honestly I hate doing anything with a seed phrase on a computer I always try to do everything offline right or even at like an air gap station or something like that um so yeah and then because of this conversation I basically said like it's right for the picking like the wallet ecosystem is so right for disruption on the UI ux front and I think immutable has seen this too especially when it comes to gaming and nfts stuff like that people don't want any friction there they want to just be able to seamlessly onboard and seamlessly use any of the stuff that they are getting entertainment out of whether that be the I guess crypto games or nfts or anything

like that so I think this is pretty cool what a mutable is building here now it definitely feels like we're getting to a point where there's just so many wallets and so many of these uh I guess the interfaces to interact with the chain that it becomes a diminishing return kind of thing but if there was one team or I guess like one of the teams I would bet on to execute this correctly it would be immutable because they are definitely trying to build for the mainstream with everything that they're doing because they're doing things like crypto games and nfts um trying to onboard all these web 2 companies all these traditional gaming companies into web 3 and I think they have a very good read on what those companies want what the users want and uh hopefully they can succeed in bringing that to Market with

a mutable passport here but you yeah you can learn more about the the immutable passport in this blog post which I'll link in the YouTube description below all right so connect has put out a thread slash blog post today talking about how to provide liquidity to help bootstrap the connects Network upgrade before the official launch on Thursday now this I believe is the amarok upgrade which I spoke about a little while ago but then was put on uh pause so now they're saying that connects is amarok upgrade is in its Final Phase before full launch this Thursday so very very close uh to launching so which is tomorrow actually so you can now help boost trap liquidity on ethereum polygon arbitrim optimism gnosis chain and BNB chain and this guide uh and this blog

post and three thread it tells you how to do that and how to get started with that so if you are interested in being an LP here this is definitely something that you should check out now two things here one Connexus already announced that they're doing a token called the next token I don't know what the distribution of that is going to look like I don't know if they're going to be airdropping it to people who provide liquidity and I don't know what kind of liquidity uh rewards that they're going to be paying out here but safe to say both of those things are probably going to to happen so maybe that's that's that picks your interest there about uh becoming an LP in connects Tia And for those of you who don't know connects is a cross-chain uh kind of protocol cross-train Bridge protocol and I've talked about them a

bunch before and the second thing is that I'm an investor in connects as well and I should have said that I'm an investor in both immutable and scroll as well um I'm actually putting the finishing touches on that website that I've been talking about where I disclose all of this sorts of stuff so I don't have to mention it on the refill every time but I just wanted to to disclose that for you guys as well in case you weren't aware of that but anyway we'll link this connects thread and blog post in the YouTube description below for you to check out all right finally here an update out of Lyra which again I am an investor in but just uh put it just putting that out there as a disclosure but what what I wanted to talk about was what they announced today and that is that they

are now live on arbitrim and have integrated with GMX which is a very popular Perpetual exchange that has been live on arbitrim for quite a while now so Lyra started life on optimism and they uh and they were they were only on optimism they actually were never deployed to ethereum mainnet and now they seem to be going I guess multi-chain but with multi l2s not on mainnet I don't actually think Lyra will deploy to the ethereum mainnet it doesn't seem like their product would actually even work there because of the higher fees and obviously the the longer transaction uh confirmation because of the longer block times so they're going across L2 here so very very cool to see them live on on arbitrim now for those

of you who don't know what Lyra is it is a options protocol and it is a part of the synthetics network uh and part of the synthetics ecosystem on on optimism but now on arbitrim I don't believe synthetics is live there but because of that that I mean that's why Lyra has partnered up with GMX because uh synthetics isn't live there so they needed to partner up with another a Perpetual exchange here or another synthetic Exchange in order to make their kind of product work and it's great that they've teamed up with GMX because as I said jmx is already extremely popular on Arbor stream it's probably the most popular thing on arbitrim um if not one of the most popular things there perhaps I should say App instead of thing um but yeah if you are a Lyra user on optimism if you want to try that on

arbitrim if you are an arbitrim user and not an optimism user well there you can try out Lyra for the first time now which should be very cool to do so you could go check that out I'll link it in the YouTube description below um but yeah I think that's 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