Core dev updates, ETFs and DATs buying ETH & more - The Daily Gwei Refuel #853 - Ethereum Updates

Activity in the crypto space is increasing as Core Dev calls prepare for the Glamsteadm upgrade, expected mid-year. Poojah from Ethereum Cat Herders summarized a recent call, noting Tim Baiko's new role within the Ethereum Foundation, which is seen as a positive change. The Glamsteadm development is advancing to its second DevNet, with discussions on selecting EIPs for inclusion. One Critical Feature Improvement (CFI) accepted is the Increased Maximum Contract Size, while seven EIPs were denied due to a lack of consensus, though they may be revisited later. Many pending EIPs focus on technical upgrades to improve efficiency.

Current discussions include ZKVM and Lean Ethereum, with a roadmap aimed at enhancing Ethereum L1 efficiency over the next five years. The upcoming Hegotar upgrade is anticipated early next year, with discussions on its EIPs already underway. Fossil, an EIP aimed at improving censorship resistance, is being considered for Hegotar despite initial plans for Glamsteadm. The complexity of EIPs like Fossil and EPBS raises concerns about compliance for institutional node operators, leading to a controversial suggestion that validators unable to meet legal regulations should reconsider their roles to enhance network decentralization.

Censorship resistance is emphasized as a core value of Ethereum, protecting users' assets from arbitrary actions by governments or banks. The network allows users to hold assets independently of their identities, enhancing privacy and security. ERC-20 tokens, enforced by the Ethereum network, can include controls like freeze functions, as seen with Tether (USDT) and Circle (USDC). The speaker expresses skepticism about many projects in the space, labeling several as scams.

Attention shifts to the ZKVM project, which is attracting top talent. Tomas from the Ethereum Foundation shared a detailed GitHub document outlining the ZKVM plan for Layer 1. The ETH PandaOps team reported that the recent second blob parameter fork increased the maximum blobs per block to 21, though initial data analysis raises concerns. Validators are engaging in timing games through MEV Boost, potentially delaying block proposals for higher profits, which may lead to the exclusion of blobs from blocks due to their resource intensity.

A tweet from Tony highlights a decrease in the median cost of Ethereum blocks, attributed to reduced MEV, linked to a lack of hype use cases like DeFi and meme coin trading. Improvements in user experience, such as private mempools, have reduced toxic MEV, including sandwich attacks. The reduction in MEV is leading to lower fees, as users are less inclined to pay when extraction opportunities diminish. This trend is consistent across Layer 1s and Layer 2s, with L2s having more flexibility in managing MEV.

The speaker critiques the practice of extrapolating short-term revenue data to annual figures, arguing it can be misleading. They highlight that most revenue in crypto is derived from MEV, often linked to speculative behavior, leading to skepticism about using fees as a reliable metric for valuing L1 assets like Ethereum. The conversation also touches on the increasing influence of traditional finance and institutional players in the crypto landscape.

Vitalik Buterin's vision for a simplified and efficient Ethereum protocol is discussed, advocating for a "lean Ethereum" approach to reduce complexity and enhance security. The speaker supports this perspective, noting the risks of complexity leading to security vulnerabilities. Ethereum's long-term vision aims for longevity, focusing on avoiding catastrophic failures from complexity.

The discussion reveals that Treasuries currently hold more ETH than ETFs, with Treasuries at approximately $22.7 billion compared to ETFs at $20.6 billion. Aggressive buying from individuals like Tom Lee of Bitmine has significantly contributed to the accumulation of ETH in Digital Asset Treasuries (DATs). Speculation arises regarding whether ETFs will surpass DATs in ETH holdings by year-end.

The conversation also touches on the recent Clarity Act aimed at regulating DeFi, which saw Coinbase withdraw support. The host expresses skepticism about centralized entities like Coinbase, suggesting their actions are driven by self-interest. Vitalik's tweet about 2026 being a pivotal year for reclaiming self-sovereignty and trustlessness is discussed, highlighting improvements in the Ethereum ecosystem, such as easier local node verification through ZKVM.

Running an Ethereum node remains accessible, but there is a call for improved decentralized application UIs that resist censorship. The speaker echoes Vitalik's views on reclaiming self-sovereignty, criticizing the growing trend of subscription-based models that lead to consumers not owning digital content. They express concern that this model creates a scenario where consumers own nothing and face rising costs.

Censorship on the internet is a pressing concern, with the speaker citing a recent Australian law restricting social media access for under-16s as poorly implemented. They warn about the risks of tying identity to online presence, which could lead to loss of privacy. While the speaker believes Ethereum could help preserve privacy and self-sovereignty, they recognize it may remain a niche solution. The conversation concludes with gratitude towards the audience and encouragement for engagement with the channel.