Uniswap L2 volume ath, Ethereum after blobs and more - The Daily Gwei Refuel #756 - Ethereum Updates
The Daily Gwei2024-03-30
1K views|3 months ago
💫 Short Summary
The video segments cover the anticipation of ETF approval for Ethereum, Bitwise's correlation analysis impacting ETF approval, EPBS implementation in the Ethereum network, the launch of dual Corum with Igan DA support, user demand and fee revenue for networks, Ethereum L2 ecosystem sustainability, increasing network capacity for transaction growth, shared sequencing and the AG layer for interoperability, liquidity importance in transactions, and the balance between decentralization and security in L2 implementation. Vitalik discusses Ethereum's transition post-blob era, focusing on the application layer's development. The segments emphasize market sentiment, ETF approval impact, network upgrades, and blockchain technology evolution.
✨ Highlights
📊 Transcript
✦
Anticipation of ETF approval or denial for Ethereum causing market uncertainty.
00:31Speculation on positive impact of ETF approval on Ethereum's price.
Market's cautious approach towards ETF approvals and potential for significant price movements.
Complex interplay between market sentiment, ETF decisions, and Ethereum's price dynamics.
✦
Analysis on correlation between ETH spot and futures markets.
03:39Results show a tight correlation similar to Bitcoin.
Impact on approval of ETH ETFs unlikely based on correlation.
Denial based on security classification could be worse.
ETF issuers continue to push for approval despite challenges.
✦
Bitwise filed S1 for their ETF and 19 B4 forms, awaiting SEC approval.
06:13Most ETF issuers have filed these forms except Hashdex.
ETH and BTC ETFs are nearly identical, both spot ETFs with the same custodians and correlation analysis.
Ethereum core dev updates discussed network stability issues with block relay.
Bloxroute blamed Lighthouse for relay issues, tied to their BDN delivery network.
✦
The need for EPBS (Enshrined Proposed Builder Separation) in the Ethereum network to address MEV (Miner Extractable Value) and improve communication between entities.
09:35Flash Bots is a for-profit entity working on MEV solutions, while Ethereum core developers focus on a neutral protocol.
Integrating EPBS into the network would assist developers in reasoning about changes and improving network efficiency.
Progress is being made on Verkle Trees, an upgrade to tackle scalability issues in Ethereum and enable features like history expiry and statelessness.
✦
Launch of Dual Corum with support for Igan DA on the Sky test net is a key step towards the main net.
11:54Dual Corum enhances robustness and decentralization by utilizing two Chums for securing a proof of stake Network.
Future plans include native tokens for ABS and rollups.
Ian DA is targeting a launch in April or May, potentially impacting the ABS landscape and staking placements.
Short to medium-term strategies involve token incentives for staking, while long-term considerations focus on natural yield from Protocols.
✦
Discussion on user demand, fee revenue, token inflation, real yield, and sustainability in networks.
14:29Growth of platforms like Arbitrum, Polygon POS, and Bas, focusing on their defi ecosystems and swap volumes.
Prediction of a layer two summer within 6 to 12 months based on Erp 4844 and Bas.
Emphasis on the significance of real users and narratives in platform adoption for success.
✦
Discussion on sustainability of meme coins in the Ethereum L2 ecosystem.
18:09Importance of strong ecosystem for long-term viability of meme coins like Arbirtum and Bas on platforms like Coinbase.
Emphasis on sustainable demand and revenue for meme coins, highlighting the significance of a robust ecosystem.
Mention of gas fees and scalability, with a graph showing how increasing capacity can lower costs while maintaining user experience.
Speaker stresses the need for continued growth and sustainability in L2 networks.
✦
The importance of increasing network capacity for accommodating growing transaction demand on Ethereum.
21:55Emphasizing aggregate fees over individual fees to improve accessibility to transactions at lower costs.
Envisioning a symbiotic relationship between human users and bots on the network, with bots serving users effectively.
Addressing challenges such as negative incentives for bots and potential disruptions like censorship to ensure smooth network operation.
✦
Key components for enhancing interoperability and reducing fragmentation in the Ethereum network.
24:27The AG layer by Polygon serves as a neutral layer for storing assets accessible to various chains.
Shared sequencing enables L2s to opt into sequences shared with L1 validators, facilitating seamless execution across different chains without bridging.
This approach streamlines trading processes and addresses liquidity challenges, leading to improved user experience and network efficiency.
✦
Importance of liquidity and fragmentation of execution in transactions on platforms like Arbitrum and Optimism.
26:33Shared sequences like Shar predicted to enable faster adoption within the next 12 months.
Potential benefits of layer 2 solutions highlighted by the speaker.
Anticipation of a shift in narrative towards centralization concerns once these technologies are live and functioning effectively.
✦
Balancing decentralization and security in Layer 2 solutions.
28:32Decentralization is important but must be balanced with security concerns and preventing concentration of power.
Multisig setups with identified participants are necessary for quick bug responses, despite risks of centralization.
Short to medium-term acceptance of multisigs recommended for security, particularly with untested ZK circuits.
Finding a balance between decentralization and security is crucial in the changing realm of blockchain technology.
✦
Vitalik discusses Ethereum's transition into the post-blob era, focusing on the application layer.
31:38He emphasizes the need for a focus on the application layer now that the infrastructure layer has been scaled with blobs.
Vitalik highlights the benefits of reduced fees, faster transactions, and improved user experience on Ethereum.
He encourages developers to build better apps and prioritize apps uniquely enabled by blockchain technology over infrastructure developments.
This shift aims to maximize the use of existing infrastructure and drive innovation in the blockchain application space.
00:00hello everyone welcome to another
00:01episode of the Del refuel where Rec C
00:02the latest news in etherum ecosystem I'm
00:04your host and and to the 30th of March
00:062024 all right everyone let's get into
00:08it so yes this is a Saturday episode to
00:11make up for missing uh yesterday's
00:12episode Friday's episode uh I was just
00:14too tired it's good Friday you know
00:16spending time with friends and family so
00:18I basically got home was like yeah no
00:20I'm I'm way too tired and today's like
00:22kind of a day off and then back into it
00:24tomorrow and Monday uh obviously all the
00:25Easter festivities there uh but yeah
00:28that's why there is an episode today but
00:30without further Ado let's jump into the
00:31news so we had some fresh ETF related
00:34news in the uh I guess like this was
00:36Friday um basically from bitwise here
00:38now of course I know you guys are I know
00:41pretty pretty pretty much like in the
00:43same position as I am right now where
00:44we're basically just playing a waiting
00:46game at this point till like May 23rd or
00:48at least until like mid April to see
00:50what the actual kind of thing is going
00:52to be with regards to the eth ETFs like
00:54the market right now I think is very
00:56like not confident in these things being
00:57approved by May 23rd and you've seen
00:59that basically priced in I think on both
01:02ethusd and eth BTC just from like a
01:04Market's perspective I really do think
01:06that the market is you know is fading e
01:08really hard right now because of that
01:09but it's kind of funny when you look at
01:11the way the market acts because I
01:13personally believe that even a denial
01:14like even if it does end up getting
01:15denied on May 23rd that would still be
01:17bullish because if you look at markets
01:20and how they kind of price things in
01:21like forward-looking essentially what
01:23happens is that if the market is already
01:24priced in the denial by the time it gets
01:26denied on May 23rd then maybe there's
01:29like a small sell the news event or
01:31something like that but then from then
01:32on I I don't really know who's left to
01:34sell right if everyone's already sold
01:35that wanted to sell before these things
01:37kind of got denied on May 23rd it kind
01:39of becomes a thing where it's like okay
01:40well the price ends up going up and then
01:42it's self-fulfilling where everyone's
01:43like oh wow the ETF denial wasn't
01:45bearish after all for eth you know let's
01:47let's go bu eth sort of thing so that's
01:49just some open speculation how I view
01:50these things um and I think that you
01:52know the fact that the market is very
01:54kind of I guess like weary of of uh of
01:57the ETF approvals at this point like
01:59thinking they're not going to happen
02:00if they do end up getting approved I
02:01think that is again still bullish for
02:03ethereum because essentially it means a
02:05lot of people didn't buy eth because
02:07they assumed that the ETFs weren't going
02:08to get approved and then the ETFs get
02:09did get approved and then of course
02:11we'll see inflows into that which will
02:14be positive for the price and then it
02:15just becomes a self-fulfilling thing
02:16again so I I don't think it's hopium to
02:18think that either a denial or an
02:20approval is is bullly sh just for for
02:22very different reasons I think
02:24especially because you know eth hasn't
02:26really outperformed like if eth let's
02:28say was at all-time high already and E
02:30BTC was a lot higher than what it is now
02:32then I would have a different view on
02:33things I'd be like okay well the market
02:34hasn't priced in a rejection of these
02:37ETFs yet the market is actually pricing
02:38in an approval here so that's why right
02:41now I'm thinking well you know the
02:42Market's being quite efficient about
02:43this they are they seemingly are do do
02:46tend to be pricing in and denial on May
02:4823rd here but that could change very
02:49quickly too like let's say in the next
02:51couple weeks we get like a lot of back
02:52and forth between the SEC and the issue
02:54is that begins to look like the EFS are
02:56going to get approved on May 23rd then
02:58you will very quickly see the Market
03:00correct for that I think because the
03:01market is very sensitive to the ETF
03:03stuff right now it is the main narrative
03:05still I believe um especially you know
03:07outside of the crypto native Market
03:08there but enough speculation on the
03:10price side of things the actual update
03:12that I wanted to get to is actually
03:13pretty important here so this was
03:14something from bitwise so bitwise did
03:16their own uh eth correlation analysis
03:19with regards to the correlation between
03:21the eth spot markets and the eth um
03:22Futures markets here so you can see here
03:25the actual correlation is linked by
03:27bitwise I'll um link it in the YouTube
03:28description for you to check it out but
03:30what's different about their analysis as
03:32opposed to coinbase's analysis is that
03:35they tried as closely as they could to
03:37replicate the specific meth methodology
03:39used by the SEC in their evaluation of
03:42Bitcoin um and the results here are very
03:44encouraging for E basically like very
03:46very similar to bitcoin and also these
03:49results are still heavily influenced by
03:51the first 3 months of of trading here so
03:53once that rolls over because it's done
03:55on a rolling basis once that rolls over
03:57it would it would seem like e and e and
03:59E Futures correlation would be basically
04:02the same if not better than Bitcoin here
04:04so as I said the reason why this is
04:06important is because it's trying to
04:08replicate the sec's uh methodology that
04:10they use for the BTC um spot correlation
04:13spot Futures correlation analysis here
04:15rather than what coinbase did where
04:16essentially they had come up with their
04:18own way of measuring that correlation
04:20they didn't try to specifically I guess
04:22recreate what the SEC did and coinbase
04:24has pretty much came to the same
04:25conclusion as what bitwise has come to
04:27where the correlation is very very tight
04:29and the reason why this is important is
04:31because people speculate that the SEC is
04:32going to deny the E ETS based on the
04:34fact that the correlation between spot
04:35and Futures is is not very tight which
04:38means that there's eth is open to
04:39manipulation on the on the spot markets
04:41or on the Futures markets there um but
04:43it's looking like they're not going to
04:44be able to deny based on that like it
04:46looks like that if they do that then
04:48essentially I mean they're opening
04:49themselves up to lawsuits because of
04:51that they're opening themselves up to
04:52potentially inter agency fights with the
04:54cftc because the cftc um regulates the
04:57Futures Market the CM Futures market for
04:59there and they'd have something to say
05:01about that they would like it just makes
05:02no sense to deny this based on this when
05:04essentially the correlation is pretty
05:06much like a mirror of of BTC here and
05:08the other I guess speculation people
05:10have for the SEC to deny these things uh
05:12is on the eth as a security thing which
05:15I think is even worse than denying based
05:17on correlation um for a number of
05:19different reasons but I'm not going to
05:20rehash all the reasons there but yeah
05:21you can go check out this analysis for
05:22yourself I'll link it in the YouTube
05:24description below um but another reason
05:26why this is important as well is that it
05:27just shows that the issuers are not
05:29giving up on their e ETFs like they're
05:31still fighting you know and I don't
05:33think they would be doing this if they
05:34were convinced that there was like no
05:35chance that these things were getting
05:36approved I feel like they're doing this
05:38because you know they they do think
05:39there's a chance that that it's it's
05:41going to get approved here and they also
05:42want to make sure that these aren't
05:43denied even if they are denied based on
05:45just like these frivolous things so they
05:47can have basically a trail of hey you
05:49know we provided this information we did
05:50this analysis ourselves and if the SEC
05:52does decide to deny based on a weaker
05:55correlation here they can then have a
05:57very strong I guess stance against that
06:00whether it materializes as a lawsuit or
06:01not and that works in the favor of all
06:04the issuers you know even the ones who
06:05don't end up suing themselves the other
06:07ones can use this material as I guess
06:09evidence in in a in a court of law right
06:11um but that wasn't the only update with
06:13regards to bitwise there was also the
06:14fact that bitwise filed their S1 for
06:16their e ETF um and they also filed their
06:1919 B4 here which you can kind of see um
06:22and I think James had a chart or at
06:24least a table of all the e ETF issuers
06:27and how pretty much all of them has F
06:29have filed 19 B4 forms and S1 forms so
06:32both of them need to be filed in order
06:33for this to get approved TR so all of
06:35them except I believe hash decks have
06:37have um have filed for all of this so
06:39yeah it's just like a waiting game now
06:41for the SEC to either you know ask these
06:43issuers to remove things like the
06:45staking portion of what they've filed
06:46here um or maybe change a little bit a
06:49little bit of things here and there but
06:50really as I've discussed at length
06:52before there doesn't seem to be much to
06:54change between eth and and and and and
06:57BTC right like if you look at the eth
06:58and BTC ETFs they're pretty much like
07:00identical because if they both just spot
07:02ETFs and remove the staking part of it
07:04then uh they're both using the same
07:06custodians they're both they both have
07:08the same kind of correlation analysis uh
07:10done on it because they're both trading
07:11on CME and Futures and and on the same
07:13spot markets so when you look at it like
07:15that yeah I mean it still is a copy
07:17paste no matter which way you look at it
07:19there but anyway as I said I'll link
07:21this correlation analysis that bidw did
07:22in the YouTube description for you to go
07:24check out
07:25below all right onto some eth core Dev
07:28updates so Tim boo put together his
07:30usual recap thread of the all core devs
07:33Co here this is quite a lengthy one they
07:35discussed a bunch of different things so
07:36I'm not going to kind of rehash all of
07:38this but I think one major aspect of the
07:41call was got to do with what I discussed
07:43on the last refu I believe or the one
07:45before that about the network stability
07:46issues we were seeing with regards to
07:48blocks route the their relayer uh
07:50basically not relaying blocks with blobs
07:53in them properly uh which led to
07:55essentially like a fall off on the
07:56effectiveness of the network there now
07:58there's been multiple different analysis
08:00on this from different parties I think
08:02there was a postm modem posted today
08:04about this uh from I guess like Blox
08:07route and I believe Lighthouse chimed in
08:09on this as well because I think bloxs
08:10rout blamed Lighthouse for the issue
08:12when in reality it was block rout Blox
08:14route's issue not just with their relay
08:15but with this thing called the bdn which
08:17is like this uh private I guess meol
08:20delivery Network that they use to
08:22propagate uh kind of blocks throughout
08:24the network here um and this has opened
08:26up discussions around epbs again so I
08:29think I I yeah I've got this tweet Thro
08:31here from Michael spra who basically
08:33discusses everything that I was just
08:34talking about as well as why we need
08:36epbs now for those of you who don't know
08:38epbs is stands for enshrined proposed
08:40Builder separation essentially what it's
08:42trying to do is get rid of the role of
08:44relays as part of the ethereum network
08:47and the reason why we're trying to do
08:48this is because the me boost pipeline as
08:51I've discussed at length is a side car
08:53right it's a side car to ethereum which
08:54means that the core devs do not have a
08:56good view over what's happening there
08:58and the me boost devel do not really
09:00have a good view of what's happening in
09:01cev land so there are these two separate
09:03things that are essentially uh very
09:05important obviously to the network both
09:07on on different sides here but they're
09:09not really talking to each other because
09:11one I mean flash Bots is the creators of
09:13meev boost and a bunch of other things
09:15like Suave they're as far as I can tell
09:17a for-profit entity right they're
09:19definitely uh you know trying to to
09:21monetize certain aspects of things and
09:23then you have ethereum development and
09:24ethereum core developers uh which is
09:26more of a I guess like public good style
09:28of development here where you're
09:29basically trying to build a neutral
09:31protocol so there is this kind of odds
09:33uh incentive uh kind of incentives that
09:35odds here with each other so that's a
09:37major reason why the cevs really want to
09:39integrate PBS uh into the network or do
09:42epbs because it essentially means that
09:44it's all enshrined in the protocol and
09:46it's easier for them to reason about
09:47here but don't let me bore you with my
09:49ranting there please go read this thread
09:51from Michael spra who is working on
09:53Lighthouse at Sigma Prime here he does a
09:55really great job of explaining what
09:57happened you know with with regards to
09:58the postmortem as well as how it wasn't
10:00a lighthouse issue and what this all
10:02means for epbs so I'll link that in the
10:04YouTube description below for you to
10:05check out as well as Tim Boo's recap
10:07thread on the cordev call uh for you for
10:10you to check out there as well all right
10:13so speaking of cev related stuff Josh
10:14Rudolph has another update for us on the
10:17latest veral implementers call so this
10:18is call number 15 they were talking
10:21about a bunch of different things there
10:23were updates about from different client
10:24teams there were testing updates uh and
10:27and updates uh as part of the
10:28cryptography performance improvements
10:30summary of discussions from eth taipai
10:32and a test net relaunch here so yeah I
10:35mean as usual you can check this out
10:36I'll link it in the YouTube description
10:37below uh for you to do so but just great
10:39to see continued work happening on
10:41vericle trees uh you know it seems like
10:43we could potentially get verle trees in
10:45Osaka which is the upgrade that's coming
10:47after Petra or sometime next year there
10:49it is a pretty big undertaking here but
10:51it's also something as I've discussed
10:53before that's really needed within the
10:54network in order to enable other things
10:56and as you can see here there's a little
10:58kind of graphic here of what this is
10:59kind of enables you know this is the
11:01well I mean it's showing you like where
11:03the ethereum scaling bottlenecks are and
11:05then with veral trees we can enable
11:07things like history expiry and and
11:09statelessness and state expiry which is
11:11one of the scaling bottlenecks you know
11:12the history growth and the state growth
11:14is is is definitely a huge bottleneck
11:16for the ethereum network here and I
11:17believe Paradigm had their blog post
11:19about this recently that you can go find
11:20that I I believe I covered with regards
11:22to you know where is the growth
11:24happening on the ethereum chain and what
11:25can we do to reduce growth in certain
11:27areas while still obviously keeping the
11:29trustless of the ethereum chain alive
11:31there but anyway you can go check this
11:32out for yourself I'll link it in the
11:34YouTube description below for you to do
11:36so all right I layers whole Sky test net
11:39with dual Corum support for du Corum
11:43support I should say for Igan DA has
11:45launch so rakers operators and rollup
11:47sequencers along with full nodes are are
11:49able to test this launch and this is one
11:51key step more key step towards main net
11:54here so dual Corum is basically uh
11:56something that introduces robustness and
11:58decentralization by by using two Chums
12:00to secure a proof of stake Network for
12:02now uh rra e is the second staking asset
12:04future plans include native tokens for
12:06abs and rollups and here's an
12:08explanation of how this works it's
12:10called dual staking I've talked about
12:11this on the refi before but essentially
12:13dual Corum addresses several challenges
12:15for new proof of stake networks
12:16including easier bootstrapping price
12:18volatility mitigation and as as well a
12:21variety in consensus design and yeah you
12:23can learn more about this in this blog
12:25post I'll link it in the yoube
12:26description below um but this is
12:28exciting because believe that Ian da is
12:30targeting launch for like May or
12:33something like that like April or May I
12:34believe so it's not too far I mean we're
12:36almost in April right but I believe yeah
12:38may they want to Target kind of main
12:39that launch here and there's going to be
12:40a lot of abss going live with this I
12:42believe don't know how many I da is
12:45obviously going to be the first a ABS
12:47live but there are others out there that
12:49um that that are in the pipeline uh I
12:51mean I've lost track of how many there
12:53are at this point and I think what's
12:54going to be interesting is to see like
12:56what the ABS landscape looks like not
12:58just from the cases but also from where
13:01the stake is actually going to be placed
13:03because you've probably seen a lot of
13:04tweets from some of these reaking
13:06protocols lately like ethery and swell
13:09basically saying oh we're going to put
13:10like the E Stak with us against this ABS
13:13you know when they launch and then we're
13:15going to be uh kind of lending out
13:16Economic Security to them so it's going
13:18to be as I said curious to see where all
13:20of that lands because I think it's going
13:22to be basically done on a maybe a
13:25two-pronged process like the short term
13:27you're going to see people doing it on
13:29uh avss that basically say Hey you know
13:31if you kind of put your stake with us
13:33we'll give you points or token
13:35incentives right so then essentially
13:37becomes like this huge thing of well you
13:40can Farm the LRT points then you can
13:42Farm IG layer points and then you can
13:44Farm uh I guess like these abs points on
13:46top of that which eventually all get
13:48turned into tokens which may you know
13:49may be air dropped or you know pretty
13:51much certainly be air dropped there but
13:52that's the short to medium term kind of
13:54stuff but then we we look at the long
13:55term and that's okay well what is the
13:57actual natural yield that these
14:00Protocols are you know supplying for the
14:02people that are reaking with them or for
14:04the protocols that are reaking with them
14:05and what I mean by natural yield is
14:07basically just like user demand like
14:09what's the fee revenue for these
14:10networks what you know what are they
14:11generating there yes they can pay out
14:13token inflation but that's not a you
14:14know a natural real yield that's a you
14:16know that's that that's a yield but like
14:18it's being paid out of tokens right so
14:20it's it's very different we all know
14:21that token uh inflation is not you know
14:23long-term sustainable you know they just
14:25basically bringing forward the future
14:27and you pay for it later so I I'm just
14:29very curious to see how that all plays
14:31out but it's probably going to take like
14:3312 to 18 months from when these avss
14:35launch to see what what what what kind
14:36of happens there and uh I think in terms
14:39of like what's going to generate the
14:40most Revenue it's going to be really
14:41hard to tell because as I've said before
14:43you know da is a race to the bottom so
14:46when you look at IG da you know it's
14:47going to be really really cheap when you
14:49get started and they're targeting 10
14:50mega megabits per second I believe or
14:52megabytes per second throughput which is
14:54a huge amount of throughput I mean it's
14:56more than Celestia can currently handle
14:57it's definitely more than ethereum
15:59even if you take out the polygon POS
16:00chain here you can still see that just
16:02base optimis and arbitrum alone still
16:04make it that it's an all-time high and
16:06you can see the growth of Bas here has
16:07just been absolutely massive like even
16:09compared to last month and obviously
16:11this is because we have a bit of a bass
16:12season going on right now where a lot of
16:14people are bridging to over to Bass to
16:16do a bunch of things uh and when it
16:18comes to defi I mean a lot of this
16:19volume has got to do with some of the
16:20bass meme coins that have been kind of
16:22popping off on there so uh I guess
16:24that's only natural there but arbitrum
16:26you can see has remained dominant you
16:28know pretty much all through out like
16:29arbitrum has had a healthy defi
16:31ecosystem for a very long time now and
16:32that's translated obviously into swap
16:34volumes on on Unis swap but so as
16:37polygon I mean obviously as I've said
16:38polygon POS isn't a layer two yet they
16:40are going to be a layer two when they
16:41convert it to a ZK validium um but you
16:44know that would basically be the same if
16:45there were a validium or or the POS
16:47chain here You' probably see more volume
16:49because as a validium they're probably
16:50going to be cheaper to use than they are
16:52as as a POS chain uh so the volumes
16:54would still be the same whether they're
16:55an L2 or not so I think that even if you
16:58include them or remove them it doesn't
17:00really make much of a difference here uh
17:02but this is great to see you know I
17:03remember putting out that tweet that I
17:04highlighted the other day that I put out
17:06in like August where I said that I
17:08thought we would be getting like a layer
17:09two summer within like 6 to 12 months
17:12from that date and we pretty much smack
17:14bang in the middle of that we're pretty
17:15much like at the 9mon Mark since I said
17:17that and that thesis was based on really
17:19mostly around Erp 4844 and bass and
17:23obviously with blobs going live the cost
17:25came down for all the l2s but the reason
17:27why I focused on bass in particular was
17:29because I think that there isn't just
17:31like an uh you know the real users on
17:33boarding from coinbase and obviously
17:35coinbase putting their weight behind it
17:36but there is a narrative as well like
17:38bass has kind of become a shelling point
17:40right now for people to come into the
17:42ethereum L2 ecosystem because everyone's
17:44like well you know coinbase is the one
17:46behind Bas and you know bass has a lot
17:48of stuff happening on it already with
17:49like farcaster and nfts so let's kind of
17:53do meme coins on Bas sort of thing now
17:54whether that's sustainable or not I mean
17:56I don't think it's going to be long-term
17:57sustainable but the the way that
17:59memecoins can kind of be sustainable for
18:01ecosystems is that if there is already a
18:03really strong ecosystem there or one can
18:05develop over time after the mcoin Mania
18:07subsides here and I think that right now
18:09you can point to basically uh arbitrum
18:12and bass uh as having both of those
18:14ecosystems I believe bass has a very
18:15strong ecosystem outside of just meme
18:17coins same with arbitrum uh and I mean
18:20opt bass falls into optimism for me so
18:22I'm kind of talking about it as if it's
18:23like the you know a similar thing here
18:25and I think the same is true for polygon
18:26as well even though the POS chain is in
18:27a layer 2 right now I think the same
18:29thing is is kind of true there and you
18:31guys know me I'm all about sustainable
18:32demand sustainable Revenue sustainable
18:34everything when it comes to these
18:35networks so I really do think that we
18:37have that you know right right now with
18:39a lot of these major l2s now obviously
18:41bit too early to tell like what this is
18:43going to look like but we'll see we know
18:45we'll revisit in a year or something
18:47like that you guys know I'll keep
18:48covering this stuff but we'll see how
18:49that all shakes out there but I guess
18:51like kudos to everyone who stuck through
18:53it you can see what the growth has been
18:54look has been like for these l2s there
18:56has been some quiet periods but then
18:58really since basically I guess like
19:01August last year it's been up only as
19:03you can see here of of these volumes and
19:05it's only getting stronger and stronger
19:06over time uh which has just been insane
19:08to to see
19:10here all right speaking of l2s Jesse
19:12Pollak from Bas tweeted out uh this nice
19:15little chart here that shows the gas
19:17limit uh used SL price on base so you
19:20can see here that the gas plus
19:22transaction capacity went up which is
19:24the Blue Line uh the gas plus
19:25transactions usage went up which is the
19:28purple line but the base fees went uh
19:30went way down which is the yellow line
19:31and they're going to be uh incrementally
19:33scaling base in a thoughtful methodical
19:36way as time goes on but this is awesome
19:38you know you can see here what the
19:39yellow line Looks like what the the fees
19:40were like before they actually uh kind
19:43of did it so you had those massive
19:44spikes there but then there was another
19:46Spike but then they raised their gas
19:48limit uh up to uh what is it whatever it
19:51is 37.5 million I believe and then after
19:53that like the transactions uh and the
19:56gas used was still going up you can see
19:58from the purple line but the cost
20:00dropped because obviously uh they
20:02increased the gas limit so there was
20:03more capacity now and that capacity
20:05hasn't been filled up yet so the fees
20:07drop now once that capacity fills up
20:08again you're going to see the fees go up
20:09but this is basically I think a really
20:11nice graph that illustrates what scaling
20:14is in a nutshell it's basically
20:16increasing the available capacity
20:18without you know I mean make making the
20:19user experience worse with lots of
20:21failed transactions and things like that
20:23making sure that that purple line keeps
20:25going up because that is obviously usage
20:27going up demand going up but that yellow
20:29line needs to be going down or needs to
20:31be kind of you know if it goes up we
20:32scale some more and it goes back down so
20:34that's the cat and mouse game that I've
20:35talked about a lot we're basically
20:36chasing that that yellow line every time
20:39it goes up we need to make sure that we
20:41are increasing the the capacity so that
20:43that can go down again and then we kind
20:45of monitor from there and then once it
20:46goes up we do the same thing again so
20:48that's the the I mean I'm not going to
20:49say it's a forever cat and mouse game
20:51but it is something that's going to be
20:52played for many years to come there's
20:53going to be so so much more demand
20:55coming in guys like it's actually insane
20:57I don't think people realize how much
20:59demand is going to come in there's so
21:00much Demand on the sidelines like the
21:02the very I guess like uh definition of
21:05induced demand is in this chart here
21:07because every time you increase uh the
21:09the capacity more and more people are
21:10going to be able to do more and more
21:11transactions and more and more
21:12transactions are going to be able to be
21:14done because it's cheaper and cheaper
21:15and then you just have to keep kind of
21:17increasing it here and this is why I've
21:18said before that it's all about like the
21:20aggregate fees not so much the
21:22individual fees because I described this
21:25last time when I was trying to do like
21:26on thefly math but essentially if you
21:28have like Millions tens of millions
21:30hundreds of millions billions of
21:31transactions a day happening but they
21:33all cost less than a cent that is worth
21:35much more I think than uh you know doing
21:38one transaction that is worth $100 on
21:40ethereum L1 main net for example because
21:42essentially that one transaction is
21:43being done by one entity one person or
21:45one bot uh you know and that one person
21:47or one bot has a bit of eth to do that
21:50with right has a bit of exposure to eth
21:52to do that with but if you extend that
21:53out to the l2s and there's you know
21:55millions of people doing this or tens of
21:56millions hundreds of millions of people
21:57doing this every day then eth is in a
21:59lot more people's hands and that really
22:01is the bull case for eth to increase his
22:02Network effect and to make sure that
22:04it's in as many people's hands as
22:06possible not just people but Bots as
22:07well of course you know I don't like
22:08thinking of bots as second class
22:10citizens on the network I believe that
22:11that Bots and human users are both equal
22:14on the network uh you know they're both
22:15first class citizens in my mind but I
22:17also believe that there needs to be a
22:19healthy balance between Bots and humans
22:21where the Bots shouldn't be pricing out
22:22the humans and the humans should be able
22:25to do their transactions in a you know
22:27fast and and and a nice way but at the
22:29same time humans are going to do
22:320.001% of all the transactions on these
22:35Network the vast majority of the
22:36transactions that happen will be from
22:38Bots and we want to make it so that the
22:39Bots are servicing the users rather than
22:41the users servicing the Bots and and and
22:44I think that that would be the nice
22:45symbiotic relationship to to kind of
22:47eventuate here but it's going to take us
22:48a while to get there because the bot's
22:50main incentive right now is meev so we
22:52need to basically Purge a lot of this
22:54negative me from the network so that the
22:56Bots just don't go haywire and do
22:57negative stuff that affect users such
22:59just censorship right we've seen this
23:00play out with M boost on layer 1
23:02ethereum um and also sandwich attacks
23:05right like front running all that sorts
23:06of stuff we want to make sure that users
23:08are protected from that and are aren't
23:10getting wrecked by that but at the same
23:11time we don't want to treat Bots as
23:14second class citizens because they do
23:16add a lot of value to the network they
23:17do things like Arbitrage right they keep
23:18prices in check they add a lot of um
23:20security to to the network as well by
23:22keeping transaction fees kind of high
23:24this is for for L1 and they also add to
23:26the deflationary nature of eth so
23:28there's all that playing into it as well
23:29there but anyway enough about that
23:31moving on to the next piece of news here
23:33so uh I put out a cast on far cter where
23:36I said Ager plus shared sequences if
23:39you're not paying attention to these
23:41things you should be this Tech Will
23:42further supercharge the already dominant
23:44ethereum L2 ecosystem now you guys know
23:47about the polygon AG layer I've talked
23:49about that plenty of times in the past
23:50before as well as shared sequences but I
23:53think that from what I've read and
23:55people I've talked to this is basically
23:57the Holy Grail here explain why uh and
23:59this is my understanding of it um I you
24:01know I might might be wrong on on things
24:03because these things are still quite
24:04early but let me just kind of spell it
24:06out here so for those of you who don't
24:08know what the AG layer is it's this
24:09technology that polygon is building
24:11which is essentially a neutral layer
24:13that sits on top of ethereum where all
24:15these assets can be stored and then any
24:17L1 L2 L3 side chain whatever you want to
24:20call it can tap into this and basically
24:22have a nice shared asset layer that
24:25becomes interoperable between all of
24:27these things so obviously that's a huge
24:29unlock right that solves fragmental
24:31liquidity basically um and it's an opin
24:33thing and as I said like it's not just a
24:35polygon thing it's like polygon's
24:37building it but the agare is meant to be
24:38for everyone it's meant to be like more
24:39of a public good than just like a locked
24:41in a kind of polygon thing there which
24:43is great like I love polygon for doing
24:45that um but that's just for the assets
24:47so people will then ask okay like then
24:49how do we kind of I guess fix the
24:51fragmentation of execution of actually
24:53doing the transactions with those assets
24:55and that's where shared sequencing comes
24:56in where essentially you basically have
24:59again this is an opt-in thing but you
25:00have the l2s or whoever opt into these
25:03shared sequences and they could use you
25:05know the L1 validators as shared
25:06sequences as well with uh with base
25:08sequencing but you know let's say they
25:09opt into them and then essentially what
25:11happens is that they can all
25:12interoperate with each other on the
25:14execution side so from my understanding
25:16you would be able to do a trade from uh
25:19arbitrum and optimism uh from arbitrum
25:21to optimism like so for example let's
25:23say you want to trade a coin that's only
25:25on optimism and has all the liquidity uh
25:27on optimism there essentially what you
25:29do is you initiate the trade on arbitrum
25:31and then you can do the trade on through
25:33the Shar sequencer uh using optimism's
25:36kind of liquidity and then the assets
25:37are all part of the AG layer of course
25:39then essentially you get the that
25:42transaction gets executed but
25:43everything's done on arbitrum still it's
25:45not it's not like you have to bridge to
25:46optimism or anything like that so we've
25:47basically eliminated the need for
25:49bridging here and we've solved the two
25:51biggest problems the fragmentation of
25:53liquidity and the fragmentation of um of
25:55execution uh because I think that the
25:56first thing is talked about all the time
25:59and I don't think that's you know as big
26:00of an issue as the fragmentation of
26:02execution of basically being isolated
26:04from being able to execute something on
26:06arbitrum uh sorry initiate a transaction
26:08on arbitrum that executes on optimism
26:10and then settles back to arbitrum there
26:12that's what these things like Shar
26:13sequences enable at least from my
26:15understanding but still early days for
26:16these things I believe but they're
26:18coming much faster than people think you
26:19know people used to say oh it's early
26:21days for zkm they're going to take
26:22forever to come to Market well they
26:24didn't I think the original timeline was
26:26like 5 Years From when people saying
26:28this and it ended up being like 2 years
26:30so if people are saying the same thing
26:31about the AG layer and the shared
26:33sequences I believe it's going to happen
26:34a lot faster than that I actually do
26:36believe within the inside of the next 12
26:37months this stuff's all going to go live
26:39and it's and you know as I said it's opt
26:41in so it's going to rely on these l2s to
26:43actually opt into this stuff but I think
26:45that the the the incentive is there to
26:46opt in because you're basically
26:48increasing the pie for Everyone by doing
26:50this and it makes the user experience
26:51much much better but we'll see how that
26:54shakes out but the tech itself I have no
26:56doubt Works uh you know we've had Shar
26:57sequence is live on testnet for a long
26:59time now uh you know espresso I think is
27:02the leader here but there's also Astria
27:04and a bunch of other projects and then
27:05the AG layer I don't think it's on
27:07testnet yet but it's very very well
27:09documented at at this point uh you can
27:11just search polygon AG layer and read
27:12all about it I think um Tim Robinson
27:15from the daily Way community uh had had
27:17a really great blog post about this you
27:18can just search his name and agay it
27:20should come up there but yeah I do think
27:22that uh this is like the holy gra here
27:24guys and I do think it's coming a lot
27:26lot sooner than people think and then
27:27once it's you see what happens when
27:29things are actually live and they're not
27:30just talked about anymore when things
27:31become reality people very quickly catch
27:33on to it the same is true for blobs
27:35where we were talking about blobs for
27:36years and saying hey Alto are going to
27:38come down with blobs and people would
27:39laugh at us and say no it's not you know
27:41uh you know show us what you got sort of
27:43thing and it's like okay well fair
27:44enough you know we're just talking about
27:45this stuff right now we'll show you what
27:47we've got and then immediately following
27:49blobs going live everyone suddenly like
27:51oh my God the l2s are actually cheap and
27:53they're fast and oh my God like ethereum
27:55is actually scaling so you can see how
27:57quickly the the narrative changes here
27:58based on the reality so as soon as these
28:01things are live and working like the AG
28:03and the shared sequences and people do
28:05start doing transactions where
28:06essentially they don't have to bridge
28:07anymore they don't have to you know
28:09worry about like fragmented liquidity
28:11you're going to see that narrative very
28:12quickly change and then I think that the
28:15fud maybe turns mostly to like the
28:16centralization of the l2s like the C
28:18centralized sequences and you know
28:20potentially like multi things like that
28:22which is the better stuff to like not
28:24fud but like talk about because all this
28:27other stuff is more of a technical
28:28implementation whereas when it comes to
28:30the centralization of l2s it's a lot
28:32more political and social where
28:34essentially the it is there is technical
28:36aspects to it but what I mean by
28:37political and social is that they want
28:39to decentralize but they have to do it
28:41in such a way where the Dow isn't given
28:43too much power so the Dow can't run you
28:45know a Muk and they also have to
28:47consider like security imple you know
28:49implications from a social perspective
28:51too because there are multis sigs on
28:52here but you know I argued this in the
28:54in the Dau Discord channel the other day
28:56these multisig a huge like the ones that
28:59can do instant upgrades so the the um
29:01security councils like for example the
29:03polygon one I believe or the arbitrum
29:05one uh or both of them they're like a 9
29:07of 12 multisig and all of the the multi-
29:09signers are doxed completely um so
29:12essentially when I look at that I'm like
29:13okay well yeah okay it's not
29:14decentralized I'm not going to call it
29:16that but when you look at the actual
29:18kind of incentives at play here the
29:20reason it exists is because if there's a
29:22major bug on the chain and we need to or
29:24a major exploit that could be exploited
29:26we need to be able to re react react to
29:28that quickly because you can't Fork an
29:29L2 like you can Fork an L1 to to kind of
29:32fix that um you can Fork an L2 but it's
29:34very different to an L1 you would have
29:36to basically you know move all the
29:37liquidity across and you have to worry
29:39about the asset I mean it's a very big
29:40mess here but what I mean and I'm not
29:42trying to defend multis here but what I
29:44mean is that like the let's say those
29:46nine people that uh that you know need
29:48to sign a transaction for it to happen
29:51the the the chances of them all
29:53colluding right and the chances of them
29:55doing that given that they're doxed and
29:57the chances of them doing that in order
29:59to do something malicious on on the
30:00network and not be caught before they
30:02even try to do it is so incredibly small
30:05because as I said they're all docked
30:06most of them are independent from each
30:08other um it's not in their best interest
30:10to do this at all because I you know
30:11we've already seen precedent of of
30:13people getting arrested for doing stuff
30:14like this like there's just no incentive
30:16at all here um so I guess for the short
30:18to medium term I'm I'm fine with with
30:20these things because there are security
30:22concerns here especially with ZK EVMS
30:24where the ZK circuits are are very new
30:27or untested there is a very strong
30:29argument to be made that that is the
30:31lesser of two evils having a multi is
30:33the lesser of two evils and the other
30:35evil is basically uh not having a multi-
30:37and then it being like fully
30:39decentralized from day one and they're
30:40being a bug uh and you can't fix the bug
30:42and that means that everyone's assets
30:44get drained and then there's no recourse
30:45from that so I think it's a lesser of
30:47two evils it's not decentralized don't
30:48get me wrong I'm not not saying it's
30:50decentralized at all it's still very
30:51centralized but it's not that big of a
30:54deal at least in the short to medium
30:55term in my eyes here and it's also not
30:57that big give a deal because I believe
30:59that that those things are going to get
31:00removed eventually but we have to keep
31:02pushing on that uh there but anyway
31:04enough on that uh last couple of things
31:06to talk about here uh just a dashboard
31:07that I wanted to highlight for you guys
31:09so if you're interested in keeping up
31:10with everything blob related Hill Dobby
31:12has an amazing dashboard here that I
31:13think I've shown on the refu before but
31:15just wanted to give it another shout out
31:16I'll link it in the YouTube description
31:17below he tracks a lot of things got to
31:19do with blobs on this and you can track
31:20along with you know who's posting the
31:22blobs uh you know what the blobs look
31:24like over the past 5 days all those kind
31:26of things so check that out link it in
31:28the YouTube description below and last
31:30up here I know I've gone over 30 minutes
31:32I just wanted to highlight a really
31:33important blog post from vitalic where
31:35he basically titled it ethereum has
31:38blobs where do we go from here so this
31:40is essentially vitalic laying out the I
31:42guess post blob era ethereum because I
31:44remember I I said this like a few weeks
31:46ago and blobs went live that we're now
31:47in the post blob era ethereum which
31:50essentially means ethereum is in a very
31:51different place to where it was before
31:53blobs essentially we have scaled
31:55ethereum out uh you know a lot at this
31:57point blobs and we're going to continue
31:59scaling with blobs so now Focus needs to
32:01kind of point or or shift to the
32:02application layer because the infro
32:04layer or the infra stuff is done or in
32:06the process of being done and we know
32:08what this kind of looks like with Das
32:10and and and and and data shotting and
32:12stuff like that but when it comes to uh
32:15the apps themselves we have he kind of
32:18argues this in his blog post he says we
32:19have no reason now not to build better
32:21apps because the fees are so cheap like
32:23before we could say okay well it's
32:24expensive to use the transactions are
32:26slow you know it's clunky ux but the ux
32:28is getting rapidly better on like the
32:29wallet front the fees have come down the
32:32transactions are fast so really we need
32:34to be experimenting at the app layer at
32:36this point like the infr layer there's a
32:37lot happening there don't get me wrong
32:39but we need to just shift over back to
32:41the app layer because there's no point
32:43having all of this infra if we don't
32:45have the apps to use it and I don't
32:46think that we don't have the apps to use
32:47it I think we do but vital is basically
32:50doing like a call to Arms where he's
32:51like let's make ethereum Cypher Punk
32:54again and let's make sure that we're
32:55focusing on the apps that are uniquely
32:56enabled by blockchain
32:58and let's uh you know not talk too much
33:00more I mean not focus so much on the
33:02infrastructure now but focus more so on
33:04the app layer stuff there but anyway you
33:06can go give Valex blog post a read for
33:08yourself uh but on that note that's
33:10going to be it for today so thank you
33:11everyone for listening and watching be
33:13sure to subscribe to the channel if you
33:14haven't yet give a thumbs up subscribe
33:15to newsletter join the Discord Channel
33:17and I'll catch you all next week thanks
33:19everyone
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