The EF Mandate, Staked ETH ETF live and more - The Daily Gwei Refuel #861 - Ethereum Updates

The Ethereum Foundation published a roughly 38-page document called the EF mandate, committing the protocol to censorship resistance, open source development, privacy, and security, summarized under the acronym CROPS, along with user self-sovereignty, resistance to extraction, and improved UX. The host and Tien argued that among generalized L1s only Ethereum meaningfully satisfies all four CROPS criteria, with Bitcoin falling short on privacy and Monero qualifying on values but functioning more like an app chain than a generalized platform. Tien predicted Bitcoin will become less secure and less private over time while Ethereum becomes more secure and more private, and that either the quantum threat or an inability to secure itself will eventually make Bitcoin irrelevant.

A Coinbase engineer named Yuga argued Ethereum is on a trajectory to become the Netscape of crypto, claiming the EF insists on cyberpunk values at a moment when institutions are moving on chain to other networks. The host rejected both the analogy and the underlying claim, pointing to Robinhood launching its own L2 on Ethereum, BlackRock CEO Larry Fink repeatedly expressing support for Ethereum, and BlackRock holding ETFs only for BTC and ETH as evidence that institutions are coming to Ethereum specifically. The host also noted that Base, currently the largest L2, benefits directly from blob infrastructure built by EF core developers, making Coinbase a direct beneficiary of the work Yuga was criticizing, and that user onboarding is the responsibility of companies like Coinbase and Robinhood rather than the EF.

BlackRock launched a staked ETH ETF described as the largest of its kind in the US, recording 15.5 million dollars in trading volume on its first day, with the speaker expecting significant inflows over time. ETH staking yield has declined from above 10 percent to approximately 2 to 3 percent as more ETH was staked. Total staked ETH peaked at roughly 39.2 million ETH in January and has since declined to approximately 37.8 million ETH, with net outflows over the past month across nearly all staking entities, though the past six months still show net inflows for the top 11 staking entities. The speaker said they are comfortable with the decline and do not believe more ETH needs to be staked, though it remains unclear whether unstaked ETH is being sold, held, or reflects dissatisfaction with current yield.

A user accidentally swapped an Aave receipt token for Aave on Cowswap, losing approximately 50 million dollars due to insufficient liquidity and extreme slippage. Of the 50 million dollars, 620,000 dollars went to Cowswap as a solver fee, 9.9 million dollars went to an MEV bot from back running, 2.6 million dollars went to the same MEV bot from a separate back running transaction, 34.3 million dollars went to Titan as block builder including 1.2 million dollars to Lido as block proposer, and 3.5 million dollars went to DEX swap fees. The Aave front end had warned the user of a 99 percent loss and the user explicitly confirmed acceptance. The speaker characterized it as user error but argued both Aave and Cowswap should have blocked the order entirely, and noted that the transaction leaking from Cowswap's private mempool into the public mempool was a failure of user protection. In response, Aave introduced Aave Shield, which automatically blocks swaps with a price impact above 25 percent at the front-end level.

An Ethereum Foundation researcher named Julian published a post arguing Ethereum urgently needs an encrypted mempool, stating a user gets sandwiched on Ethereum every 40 seconds and that private mempools are brittle because transactions leak into the public mempool anyway. The speaker said they have become increasingly convinced an encrypted mempool is necessary, arguing that if the public mempool were encrypted such leaks would not favor any party and the mempool could become a credibly neutral common good. An encrypted mempool EIP is expected to be included in the Pectra or Hegotar upgrade and may be the headline EIP for that fork.

MaxEB, the EIP that went live a couple of upgrades ago, allows validators to consolidate from a maximum of 32 ETH to up to 2048 ETH per validator. A new adoption dashboard was created on Dune Analytics to track consolidation progress, and the speaker predicted the consolidation chart will look significantly different toward the end of the year as larger staking providers and node operators plan to consolidate in a big way. On the L2 debate, a post argued that scaling Ethereum L1 is bullish for L2s rather than a threat, pushing back on interpretations of a Vitalik tweet that some read as signaling L2s are dead, with Robinhood's L2 described as built not purely for scale but to control chain configuration and apply centralized controls suited to its business needs.