Future of ETH: What's On The Horizon?
Making Web3 Mainstream | Latest Market Trends | THORChain Proposals, Concentrated Liquidity?
GM, this is your Daily Bolt briefing.
In today’s edition, we bring the latest info on crypto’s greater adoption curve, and some data on how this cycle’s ROI potentially compares to cycles past. Also included: a quick report on the latest developments over at THORChain, including notes on the proposition around whether or not to implement concentrated liquidity.
Keep reading to learn some of the next technicals, upgrades, and ETH roadmap items you can look forward to following the Shapella staking upgrade.⬇️
Stay alert and informed.
1/ Animoca Brands - Making Web3 Mainstream w Yat Siu & Roham Gharegozlou
Preview: In this Twitter space, Rich Robinson is joined by Animoca Chairman Yat Siu and Roham Gharegozlou to talk about NFTs, Web3 adoption, the future of Web3 and more. Click here to listen to the full episode (72 mins).
Read our Note (2 mins) and save 70 mins.
Animoca has made more than 400 investments in the last 3-5 years.
Roham is the Founder and CEO of Dapper Labs, who made the first NFT game called CryptoKitties.
Dapper Labs did a new kind of campaign for NBA Top Shot where users can buy redemptions of play-offs of their favorite NBA players.
Web3 is equivalent to the internet in 2001 in terms of adoption level.
There’s an issue relating to financial awareness, knowledge and interest among people.
In America, 30% of young Americans are more in favor of socialism than capitalism because they don’t think capitalism is a fair system; crypto kind of represents capitalism.
2/ Coin Bureau - Weekly Crypto News ft. Benjamin Cowen - Apr. 17, 23
Preview: In this episode, Guy talks about the crypto market pump, Ethereum upgrade, DeFi and Benjamin Cowen’s market analysis. Click here to watch the full episode (20 mins).
Read our Note (4 mins) and save 16 mins.
Here are some key takeaways:
Last week, $BTC blew past the key price of $30,000 taking it to levels not seen since last summer.
The massive rally was accompanied by a sharp decline in $BTC dominance.
Coinbase and Lido Finance said that it would take weeks or even months to process all staked $ETH withdrawals.
Binance will begin $ETH unstaking this Wednesday.
Most of the $ETH that had been claimed so far is staking rewards.
Most of the crypto ecosystem lives on Ethereum including most stablecoins in circulation.
3/ THORChain Spaces #59 - Proposals, Concentrated Liquidity & more
Preview: In this Twitter space, FamiliarCow, Chad Barraford and Chad THOReau talk about new ADRs, concentrated liquidity, order books and more. Click here to listen to the full episode (88 mins).
Read our Note (2 min) and save 86 mins.
Here are some key takeaways:
ADR-007 is a proposal to change the fund migration and churn interval.
ADR-008 is a proposal to implement a dynamic fee outbound multiplier or DFOM, fixing a THORChain design flaw.
If you’re a passive LP and you don’t utilize concentrated liquidity, all the yield that you would get, gets pulled from you.
Concentrated liquidity is an attempt to add more capital efficiency and better pricing.
Adding concentrated liquidity to THORChain doesn’t make any sense at all to Chad Barraford; it turns LPs into day traders.
Instead of adjusting LP positions and getting concentrated income on the LP side, THORChain is doing it through their arbitrage bots and synthetics in order to trade efficiently and quickly in one block, adjust the depth of their pools, etc.
If you read these 3 Notes on Revelo Intel you would have saved: 2 hours and 52 minutes!
Unchained - Ethereum’s Multi-Year Plan Is Complete. What’s Next?
In this episode of the Unchained Podcast, host Laura Shin is joined by Tim Beiko head of the Ethereum protocol developer calls, to talk about Shapella's significance, and they also answer the questions about “Why EIP 4844 is the next big thing, and what else is on Ethereum's roadmap”?
Read our notes below for more information.
What is the upgrade?
Tim
The Shanghai (Shapella) upgrades on Ethereum Wednesday enabled validators to withdraw their stakes from the Beacon Chain.
The Shapella upgrade is the last step of the transition to proof of stake, allowing validators to either exit the Beacon chain or keep getting their validator.
There were already a ton of applications and value built on the proof of work chain, so their team in Shapella decided to launch the proof of stake chains separately.
The Ethereum network transitioned to a Proof of Work (PoW) chain in late 2020, which allowed people to become validators on the stake chain by depositing their ETH in a contract on the PoW chain and receiving rewards in ETH for their work.
Since then the Beacon chain has been up and validators have been earning rewards for their work, but the merge has removed proof of work from the network.
Shanghai’s Shapella upgrade allowed validators to take the state that they have on the Beacon Chain and exit the whole thing to stop being one of their validators.
Security Considerations
The development team for Shapella was concerned about allowing people to withdraw, so they added the ability for validators to create a validator and set an Ether address as their withdrawal address.
The idea of withdrawals allowed validators to transition to just specifying the Ether address where the funds should end up.
Validators can choose how they prioritize messages, and the network can process up to 16 messages per block.
There is no transaction for withdrawals, so it is important to ensure that money is not lost or credited on the execution layer.
The proof of stake chain and Ethereum proof of work chains were merged to create a new chain with a different cryptographic scheme than the Ethereum proof of work chain.
Validators initially used a Boneh–Lynn–Shacham(BLS) signature key to find messages and a withdrawal key set to the BLS key.
ETH Withdrawn
As of the time of recording, there have been 92,000 ETH withdrawn or in the process of being withdrawn.
The withdrawals are due to two factors: de-risking staking on Ethereum, which reduces the commitment needed to make it, and the network rewards, which are based on how many validators are validating.
The ability to withdraw will affect how decentralized Ethereum will be, as there is a lot of movement in both directions at the moment.
Staking on Ethereum is now de-risked due to the possibility of withdrawals, and it reduces the commitment needed to make withdrawals.
Staking reduces the commitment needed to make withdrawals, and even if people withdraw due to being forced to, they can still get their funds back quickly.
Decentralization of the network
People are moving from centralized exchanges to liquid staking projects due to the convenience of the user experience and the ability to accrue rewards on their validators.
The Ethereum network has a concept of coordinated penalties, which means that if a failure is uncoordinated from everyone else, the risk is much less harsh.
The transition to proof of stake is expected to lead to a reshuffling towards more decentralized alternatives.
The merge between networks has modified the software and interaction between nodes, making it simpler for solitary stakers to test it out and get incentives on their validators.
Before, validators and node operators had to run both execution and consensus clients. Now, people have a better understanding of the setup and there is a lot of support for it.
EIP-4844
Ethereum developers are focused on implementing EIP 4844, which is a Proto-Danksharding concept that allows for temporary data storage on the Ethereum network.
With EIP-4844, the idea is to reduce the cost of posting data back on Ethereum Layer 1, which is currently the only way to post data.
EIP 4844, also known as Proto-Danksharding was drafted in February of last year and several test Nets and Devnets have been running with it.
EIP-4844 will allow for more data storage capacity and lower fees for users.
In the next couple of weeks, their team in EIP-4844 will be focusing on rebasing all of this work on top of the new production software.
After working on the new production software, they will start sending Devnets and getting all the clients together to see what bugs they find and fix those in parallel.
Ethereum Roadmap
The proof of stake side of Ethereum, such as Proposer Builder Separation, Single-Slot Finality, and changing self-destruct are on the roadmap.
Proposer Builder separation involves an auction where builders can bid for their blocks, while Single slot finality involves moving to a different type of tree that looks a bit more like a bush.
Self-destruct is not the same as killing a contract, as it deletes the contract and sends any money that's in the contract back to the address that called it.
The goal is to not break any existing contracts, but if the owner of the contract uses self-destruct in a novel way that nobody's ever done, the goal is to remove self-destruct.
Proposer Builder separation is an auction technique in which builders may bid on their blocks and the validator can verify how much they would profit with their own block.
Single-slot finality is the idea that most transactions don't need billions or dozens of billions of economic security behind them.
Stateless Ethereum is a different type of tree that looks a bit more like a bush and the proofs would be much smaller to send over.