EIP1559 Expert Panel | Tim Beiko, Hasu, Micah Zoltu, Barnabe Monnot, Matt (LightClients)

The time has come. With the London Fork just around the corner, the much anticipated EIP-1559 will be implemented. This fundamentally changes the relationship among miners, users, and gas. This panel, moderated by Ethereum core developer Tim Beiko, is set to discuss the macro and micro shifts to the ecosystem. We've talked about this a lot on Bankless, so it's time to hear from experts around the community about this massive turning point. ------ 📣 PoolTogether | DeFi's No-Loss Lottery Protocol https://bankless.cc/PoolTogether ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------ Topics Covered: 0:00 Intro 8:00 Understanding EIP 1559 ETH Research post: https://ethresear.ch/t/first-and-second-price-auctions-and-improved-transaction-fee-markets/2410 20:34 Changing Metrics 26:21 Improving User Experience Micah’s article: https://medium.com/coinmonks/a-tale-of-two-pricing-schemes-dc9c8717906 33:45 Advice for Smart Contract Devs JSON RPC Changes: https://hackmd.io/@timbeiko/1559-json-rpc 42:30 Miners, Burning Fees, and MEV 53:52 Clarifying MEV and Gas Prices 57:00 EIP 1559 on Geth 1:04:44 Hasu's Turning Point on ETH 1:11:11 David & Ryan ask Community Questions 1:15:51 Fifteen Fifty-Nine 1:19:40 Old Transactions in a New Paradigm 1:22:00 Stuck & Pending Transactions 1:24:16 Changing Monetary Policy 1:36:01 Manipulating Block Size 1:39:58 Discussing Timelines 1:47:25 Closing & Disclaimers ------ Resources: Tim Beiko on Twitter: https://twitter.com/TimBeiko?s=20 Barnabe Monnot on Twitter: https://twitter.com/barnabemonnot?s=20 Hasu on Twitter: https://twitter.com/hasufl?s=20 Lightclients on Twitter: https://twitter.com/lightclients?s=20 Micah Zoltu on Twitter: https://twitter.com/MicahZoltu?s=20 ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:14Ryan Sean Adams?

  Bankless Nation, welcome to another State of the Nation episode. This is a special episode we have lined up for you because it is EIP 1559 week. That's right, the week has finally come, the deployment of EIP 1559. David, we have so much packed into this week, but let's talk about the first event, which we are hosting right now, live streaming this on YouTube. You can catch it on the podcast as usual later. What is the panel that we have lined up today?

• 0:43David Hoffman?

  Yeah, we have Tim Baker, who is one of the guys that really stepped up to get EIP 1559 over the finish line and then stepped into the all-core devs coordinator position with all of Ethereum. And so Tim came to us and said, I really want to ask some experts, some expert-level EIP 1559 questions. And so that is what is going on today. Tim pulled in who he thinks has just the best understanding as to what EIP 1559 is from the expert perspective. So he is asking the questions that Ryan, I don't think you and I would have been able to even think up. And so this is-

• 1:19Ryan Sean Adams?

  We're not smart enough, man.

• 1:21David Hoffman?

  We're not smart enough, no.

• 1:22Ryan Sean Adams?

  We were barely smart enough to handle the EIP 1559 introduction with Hsu that we had a few months ago. And by the way, guys, if you're looking for a primer on 1559, we want to refer you to that episode. Take a look at the Bankless Archives, we'll include it in the show notes as well. But this is a deeper dive because this panelist has the EIP 1559 rock stars. You mentioned Tim Baker, who are the other panelists, David?

• 1:46David Hoffman?

  Yeah, we have a bunch of core client developers. We got Barnaby, a monaut, we have a light client, AKA Matt, we have Hasu, who is, I would like to say that Hasu came over to the Ethereum world because of EIP 1559. Maybe that'll be a question in the show. And then we of course also have Micah Zoltu, who is a major contributor to Ethereum.

• 2:09Ryan Sean Adams?

  Guys, you can ask questions on YouTube. Tim is going to be asking questions from his own roster of questions, but after the conversation, David and I are going to pop back on, hopefully, ask some of our own questions and address some of the questions in YouTube. So ask those questions. We will be documenting those as we go. Guys, this is just event one, though, because the actual deployment of EIP 1559 happens. I'm gonna say, what block number is that? Block number 12,965,000, I believe, if I got that correct, David. So what time is that going to be? We don't know. It's on the Ethereum clock schedule. So it depends on block speed, but it looks like it might be around 5:00 a.m. Pacific time on Thursday.

• 2:54Ryan Sean Adams?

  That would be 8:00 a.m. Eastern on Thursday, August 5. So you know David and I are gonna be up. And what are we gonna be doing?

• 3:01David Hoffman?

  Yeah, we're gonna be live streaming with the boys over from ETH Hub. And we're also pulling in some classic Ethereum community members. We got Hudson joining the call. I just got a message from Danny Ryan saying he'll be there. Trent Van Epps is gonna be there. Tim, I believe Tim is also going to be there. So it's going to just be a community call of people all watching the block of EIP 1559 getting mined. And so that stream will actually be starting, I think, roughly around 4:30 a.m. because we think that the hard fork is happening roughly around 5. So we want to be there a little bit early to make sure that everyone gets a chance to watch it happen live.

• 3:35Ryan Sean Adams?

  So David's gonna be up early, not as early as our E2 staking live stream, but still pretty early. I'm glad I'm on the East Coast for this one. Last event for you later that day on Thursday, we have an EIP 1559 Bulls panel. We're talking about all of bullish things that EIP 1559 could mean for ETH asset. We have Squish Chaos, DC Investor, James Wang. We are live streaming that at 2:00 p.m. the afternoon of August 5. So lots to catch up on. The best way to just catch up on everything is to subscribe to the YouTube channel, Bankless YouTube, and then click notifications on. David, one last thing, and then we are going to get to the sponsors and then the panelists, that is, pool together. They're doing some really cool things right now, David.

• 4:19Ryan Sean Adams?

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• 5:00Ryan Sean Adams?

  In every single one of these, these could be, you know, other coins as well. So super exciting. The thing I'm most excited about, David, is no gas fees because it is also layer two summer scalability summer. And gas fees are much reduced with some of these right now side chain type deployments and polygone and others. And I think roll roll ups will be coming soon. So a lot happening there. David, anything to add?

• 5:25David Hoffman?

  Yeah, that's pretty comprehensive, Ryan.

• 5:27Ryan Sean Adams?

  Guys, just get in the pool. The link is in the show notes, bankless.cc slash pool together. Relocate your savings account to pool together. All right, we are going to get to the sponsors right before this panel. These are the sponsors that made this episode possible.

• 5:43David Hoffman?

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• 8:31Speaker 02

  Okay, well, good morning or evening, everybody. Welcome to this 1559 paddle that I'll be running for the next hour or so.

• 8:43Speaker 02

  Yeah, so we have a lot of people here with pretty extensive experience with EIP 1559. As you all introduce yourselves, one kind of first question I'd like to ask you is, what was the moment that you kind of got 1559? And what I mean by this is that it's a pretty complicated change. It tends to take people like a lot of pass through it to feel like they fully understand it. So yeah, as you just give a quick description of yourself, just walk through kind of what what made you get 1559?

• 9:18Speaker 02

  Matt, you wanna go first?

• 9:20Speaker 03

  Sure. Hey, everybody. I'm Matt. I go buy light clients on the internet. I work for a small team called Quilt. We do a lot of core protocol R and D. And I was one of the main contributors to 15 for 1559 and go Ethereum. I don't think there was one specific point whenever 1559 like specifically clicked for me. I think there were kind of a couple of points. And I originally read Vitalik's paper a few months after he wrote it, the Pricing Resources paper. And I kind of at a high level understood, you know, 1559 is gonna act like this dampener to dampen the spikes in gas prices during periods of high demand. And that was something that sort of resonated fairly quickly through discussions.

• 10:03Speaker 03

  And I kind of tucked that away for basically two years till I really started getting involved again. And the end, the end of 2020. And so that was kind of one aspect. I would say the other aspect of that was the Tim Roughgarden paper. I really liked Tim Roughgarden's earlier papers on axiomatic approaches to block rewards. And so when he wrote about 1559, I was like, this is a really good, a really good paper describing all these things. But there was, there's another part of 1559 that didn't click for me until a lot later. And that was how it affects the security of the, the, the protocol. And I was lamenting to some people like I didn't like, I'm not really the biggest fan actually of this ultrasound money meme.

• 10:46Speaker 03

  I especially for core developers, I think that it's, it's not really my place to, you know, propagate these memes. And so I was lamenting to some people about this. And they made this good point that we're moving to a world of proof of stake. And proof of stake, we have this economic requirement of ether to kind of have value to provide security to the network. And we have that to a degree in proof of work, but it's becomes, there's a lot less transactional cost of mining and knowing miners and stuff. And so at that point, I kind of, you know, backed down a little bit from this ultrasound money meme. The, the community can, can have that meme if they want. I think it's, it's done. It's been a valuable resource and pushing 1559 forward. Not my place to perpetrate it, but I think that the value of ether being something that's stable is really good for security of the network.

• 11:34Speaker 02

  Thanks for sharing. That was, yeah, quite the history. Barnabe, you want to go next?

• 11:41Speaker 04

  Sure. Hi, everyone. I'm very happy to be here. So my name is Barnaby Munro. I'm a researcher at the Robust Incentives Group, which is a research group funded by the Ethereum Foundation. We mostly do things that look like game theory, a bit of economics, modelization, simulations. And actually, my experience with 1559 started like everyone else when I was just trying to understand it. And the way I understand things is I just try to simulate them and see kind of how they play out. And this is really kind of when it clicked for me. And I think the major insight that I got and that I feel, okay, this is when I actually understand.

• 12:23Speaker 04

  1559 is understanding why the dynamics of what we call the priority fee, or sometimes the tip, are completely different from the dynamics of the gas price as they are today, which is something that many people, I think, still have a bit of confusion around. Like, why aren't we just shifting to a model where, okay, there's a tax, the base fee, and kind of people still need to compete on that tip to the miners? And once you get this insight, I think you really unlock everything that makes 1559 like a step change in the way that the protocol is doing the gas market. And so, yeah, I hope we can talk a bit more about this, but I'll leave the other guests.

• 13:10Speaker 02

  Thanks for sharing. Micah, you want to go next?

• 13:16Speaker 05

  Yeah, sure. So I can actually show you guys my, where I learned how EAP 1559 worked. Let me share my screen here real quick.

• 13:28Speaker 05

  So back in July 2018, Vitalik wrote this article on E3 Search Forum. It talks about basically what ended up being EIP1559. And you can see here, this is 12:00 AM or whatever on July 3rd. And then like, I don't know, 6 hours later, Micah shows up, and I'll paraphrase. You guys don't have to all read this. It basically says, "Come on, Vitalik, why are you being an idiot? This won't work. There's no way this will work. This is not any different than what we have right now. We can do better." Then Vitalik shows up, and again, I'll paraphrase a little bit. And he basically says, "Oh my God, who is this guy? I've never heard of him before." He clearly doesn't know what he's talking about. And he tries to explain some stuff to me, but you can tell from his tone that he obviously doesn't think I'm going to get it.

• 14:12Speaker 05

  I'm beyond help. Then, you know, a few hours later, again, this is July 4th. So we're going back and forth pretty quick here. I basically just, again, tell him that he's wrong, obviously, and this cannot work. And then he again tells me, "No, you're wrong." And we just basically go back and forth, back and forth. And then Micah mysteriously disappears for like 3 months.

• 14:35Speaker 05

  And then I eventually come back to this thread. Actually, maybe it was like a year later or something, or another thread, years later. And I came back guns blazing, and I was like, "Oh my God, everybody needs to get on board with EIP1559. This is the best idea ever. Hopefully, no one remembers what I said in the first place." So yeah, so if you're curious about my learning experience, go ahead and look at this link on the E3 Search Forum, and you can see how Micah, the person who is now probably the biggest proponent of EIP1559, originally was the biggest naysayer and just spoke aggressively against everybody who thought this was a good idea.

• 15:13Speaker 02

  Wow. Do you remember what made you change your mind between kind of those 2 things?

• 15:20Speaker 05

  It was just, I mean, Vitalik ended up being right. I was wrong. And so he patiently explained things to me, and I just didn't get it. And a lot of the things I didn't get were the exact same things that people who I explain EIP1559 to don't get. And so I can appreciate where they're coming from. It's... Like I was there, I was that guy who was like, no, this, this won't work here. This, this is not, you know, the mechanics are wrong. But once you actually dig in, really let it sink into your brain, the mechanics actually do work. Like it does make sense, but it's not obvious at first. And the, the specifics are kind of nuanced and maybe we'll get into that later in this call. But, but yes, it's the same reasons everybody else thinks it won't work.

• 16:04Speaker 02

  Wow, that's really a turning of the tides. Um, cool, Hasu, I want to go next.

• 16:13Speaker 06

  Uh, sure. Yeah, I'm Hasu. Hi, hi, everyone. Um, I'm a research collaborator at Paradigm. I'm also a co-host of the Uncommon Core Podcast and still general editor at Terrible Insights, which I helped bootstrap. Um, my first touch point with the F1559, I would say, was in, in early 2020. Um, when I, I did a month-long deep dive with George, who also, who also collaborated with later on on many articles on the F1559 and we did what was basically a deep dive on all possible block space market designs that I employed in the crypto space, so across all projects, pretty much.

• 16:58Speaker 06

  We looked both at existing proposals and at, or basically existing implementations as well as stuff that has been proposed. And tried to understand why it has been like, what are the goals of the proposal? And for historic stuff, why has it been discarded? And a lot of stuff that has been discarded has been broken. So it was very, very interesting to see all of the different stuff that you can propose. And then like work through on your own, why is this a broken proposal? Why does this not work?

• 17:28Speaker 06

  And this is where we stumbled across the F1559, which was barely starting to get any traction in Ethereum, I would say. And yeah, we like, I was, I would say mostly thinking about Bitcoin at the time and not very much about Ethereum. And so my first instinct looking at this was, well, this is an over-engineered mess.

• 17:51Speaker 06

  So.

• 17:53Speaker 06

  It has so many goals, right, described in the original post and so many aspects of it. Like so there's the fee burn, there's like the elastic block size, then a quote, the protocol, quotes a fixed price, they still have this tip option on top. And it was so many things and it tried to be so many things at the same time, at least what it seemed like from reading the goals. But then I tried to point out why it's actually broken. And I had a lot of experience, a lot of training at this because for months we had been dissecting all kinds of block space protocols and I couldn't. And like within like a few days, I realized, yeah, this is actually like all of these moving parts are actually necessary.

• 18:35Speaker 06

  And it just affects so many things inside Ethereum. That's why you can say it has so many goals, but these are like really oftentimes like downstream effects, right? Like, like, like the fact, for example, that we burn ETH is, you could say like, so the people who use ETH as money, they like that it creates a disinflationary pressure on the price of ETH. But then like people who care a lot about security like that it's immense ETH as the fee paying asset in the block space market, even if the user pays in any other currency, like even if ETH gets extracted away on the user side, which I think like we are all for in the long term, but the miner still has to keep an inventory of ETH and still has to burn ETH.

• 19:18Speaker 06

  So it has like all of these very nice properties. Yeah. So, yeah, that, that was basically my, my experience with EIP1559. And so this culminated in our post, like analysis of EIP1559 for Deribit Insights, again with George. Yeah. And this, I think this for many people was the, well, the starting point, hearing about this proposal, because we, we used to get a lot of reads at the time. And I think this, this was really like for us when you, you had like this, this crowd of people were really interested in, in following it and asking for more and more and more content on, on it.

• 19:58Speaker 06

  And yeah, I've been in so many Twitter discussions and so on, because so many people had the same questions, right, that I, that I had before it clicked for me. And I think it was really good training, like just engaging with people on Twitter and on podcasts and explaining it to them like a hundred times, engaging with the different questions. So, yeah, here we are.

• 20:21Speaker 02

  Yeah, it's it's pretty impressive how almost everybody here, or I think basically everybody here started off as a skeptic and slowly got got converted to, yeah, to like in 1559. Bart, you you mentioned in your answer, you know, like the the new mechanism is is is obviously going to be better for for gas usage and whatnot. And you've also mentioned to me in the past that once it goes live, you want to actually track that and and try to quantify the impact. And so can you kind of give us a bit the detail of like, what are you expecting to see? What metrics are you expecting to change when we launch 1559?

• 21:00Speaker 02

  What like, what would you consider a success? What are, you know, what are some things that would kind of scare you if you saw them once once 1559 went live?

• 21:10Speaker 04

  Yeah, that's a great question. And I think my motivation here is really driven by the fact that I spent all this time doing simulations, trying to think through, okay, how do things work when they're actually launched? And you can't really get these answers from, let's say, so we have all these test networks, which are awesome to test that the code is working, clients understand each other. But they don't really tell you so much about like the economic properties of the mechanism or really what happens when like there's actual money on the table. And so we know cannot go maybe too wrong because it is live in some version on some other networks.

• 21:50Speaker 04

  But the things that I will be very much like looking at and that I think are are super interesting to to keep track of. The first one is kind of looking at if you're thinking of the chain, you have these metrics block by block and looking at the gas used. So you have in 1559 doubly sized blocks, which allow to have like kind of this damper when you have demand shocks and trying to understand, well, are the blogs getting too full? So one question we often get is how often does 1559 revert to to a kind of auction on the tip and Hasu and Giorgio's kind of made this meme of

• 22:30Speaker 04

  Ninety-five percent of the time, like things go right, five percent of the time, maybe there's too much people at the same time and we need to to have this auction. Um. And in in that case, it's it's the mechanism still works, but maybe there's more instability on the on the user side. And so one question is, well, is it really ninety-five, five percent? Can we quantify uh how often uh one five five nine is pushed in in this kind of uh regime? The second thing uh that I'll be looking at, and it's it's certainly kind of dual to the to the gas use, is actually the series of base fee themselves. So we wrote a paper with some of my co-authors. Um. We've seen that most of the time uh base fee,

• 23:15Speaker 04

  so the base fee update rule is kind of a multiplicative rule that depends on the gas that was used in the previous block. Uh. These update rules, they are really, it's actually a fairly simple one, and let's say even naive. But it's it's good that it's naive in some sense because it it makes it somewhat robust to whatever the protocol can throw at it. But we know that there are regions where that update rule can be maybe too slow to pick up the actual like if the demand is changing really fast, you want the base fee to catch up with this as fast as possible. And in in other regimes, it can be also too fast. And and when it's too fast, it just kind of flip flops around uh a value without necessarily getting to that equilibrium. And that can lead to

• 23:59Speaker 04

  instability in the sense that you can see blocks which are empty because base fee kind of jumped up and everybody's priced out. And then it goes down, everybody wants to go in and you you can have this. So we know that in theory, that's something that can happen. In practice, maybe, I mean, we it I'll be very curious to see if we if we actually see that happen. And one reason that we might see it happen, which is maybe the third thing that I'd be looking at. It's also kind of how so users send their transaction via their wallets and their wallets are using Oracles to kind of determine the parameters. For 1559, you have two parameters, the max fee and the priority fee. And depending on how these parameters are set, it's possible that you can find

• 24:44Speaker 04

  different patterns in the way that the transactions are first dealt with at the transaction pool level. So how they kind of get ordered by the clients. But even when they reach on chain, yeah, what do you observe? Do you observe these oscillations? Do you observe that maybe your Oracles can be tuned, given the data that we have on it. Like we often say, okay, you should take this kind of random constant as a Oracle default, but we'll change it when we know a bit more about the mechanism when we have the data. And so I think it would be very important to kind of backtest how the Oracles have done, especially at launch where we have this mixed regime.

• 25:26Speaker 04

  Some wallets will be still sending legacy transactions, so like the old format. And new wallets or same wallet, but new versions will be sending more 1559 native transactions. So kind of picking apart. Yeah, how wallets are doing? Can we backtest it? Can we understand how to make them more optimal perhaps? These are definitely the things I'll be looking at.

• 25:50Speaker 02

  Well, thanks. And so to summarize at a high level, three things. How often do we actually get this reversion to first price auction? So basically 100% full blocks. What, how does the base fee evolve? Do we oscillate smoothly or do we just kind of, you know, go from full increase to full decrease? And how well do Oracles adapt to set basically the priority fee for transactions, right?

• 26:19Speaker 04

  Yes, excellent scenario. Yes.

• 26:22Speaker 02

  Nice. And Micah, I think you wrote what was, at least for me, the best explanation of like, why 1559 actually improves UX for end users. And I know you spent a lot of time in several Discord servers, kind of dealing with users who say have their transactions pending and stuck today. So can you take a few minutes to actually walk it through from like a kind of a new user to Ethereum coming in, like, why is 1559 going to provide a better experience for them to get their transaction included than than the current system?

• 26:59Speaker 05

  Sure, let me go find the article I wrote so I can read it real quick and remember what I said. Apparently, it was a great argument. If I remember correctly, so basically, right now, what we see, so I, for those who don't know, I run a little side business where I offer support services, outsourced support services to Ethereum applications on Discord. And so I have a lot of insight into what problems users run into because my team is constantly helping these users deal with those problems. One of the most common problems we see with from users is stuck transactions or pending transactions, same thing, different different names. And so

• 27:38Speaker 05

  a user does a thing on Ethereum, like they go to Uniswap, or they go to whatever app they're using. They go to use it, they plug it into the app, it pops up MetaMask, and they say, okay, and they basically choose the defaults, and they think that their transaction, they just says a little pending spinner shows up, and they're like, okay, my transaction shouldn't be included soon. The problem is, is writing an oracle is very hard. So figuring out what the right gas price is, is a very hard problem today. And so that app, so MetaMask, is doing its best to try to choose a gas price that results in two things at the same time. One, the user isn't overcharged. So they don't want to set a gas price that's really high, and then the user ends up paying

• 28:22Speaker 05

  more than they needed to. And two, a gas price that is not too low, that the user's transaction doesn't get included. When gas prices are stable, so when the demand for block space in Ethereum is very stable over time, meaning like The exact same number of people want to be included as are submitting, you know, spread out over, let's say, 15 minutes. Then this problem is pretty easy. You just say, okay, what was the, you know, look at the last previous blocks. Okay, they're all around, you know, 20 or whatever. So 20 is what we'll set. This problem becomes much, much harder when the demand for Ethereum is increasing for any reason. So it increases because there's an ICO or a new NFT sale, or just because people in the US are waking up, or because it's a weekend or a weekday,

• 29:06Speaker 05

  or, you know, it's the second Thursday of the month and it's payday in, you know, Azerbaijan, or whatever, you know. Whatever it is that causes gas demand of Ethereum to increase is very complicated. Like, this is the whole world of people doing things, and for some reason, they have all decided to do things on Ethereum right now. And so what happens is the user shows up, fills in their, fills in everything, hits submit, and the gas price is set by MetaMask using Oracle that usually works pretty well. But this time it didn't because it estimated a gas price based on history, and demand is increasing, and so the gas price keeps going up and up and up and up. But the problem gets worse. So the user has a stuck transaction. You think, okay, well, they can just increase their gas price. The problem is the user doesn't know this. The user just knows their transaction is stuck. So they, what do they do?

• 29:51Speaker 05

  Like, okay, I'll refresh the page. So they refresh the page, but now the page doesn't remember that they're had a pending transaction. So then it just prompts them again, hey, what do you want to do on the internet? And they say, oh, I want to swap some coins. So they go and fill in the form again, they swap some coins and hit the button, and it still doesn't work. So they try it on their browser, and they repeat the process. And now, by the time the user comes to us for support, or comes to somebody for support, they've got like six transactions out there. If we're lucky, someone helps them that can walk them through the process now of canceling all those transactions, because the user only wanted to do one swap, but they've got six swaps pending. And so someone will walk them through the process of canceling those transactions, which is not super hard, but it's, you know, it's kind of technical, and the users don't really understand what's going on,

• 30:34Speaker 05

  so it's kind of blindly following people on the internet who are giving them advice, and we all know that's a terrible idea. And so, like, that's the happy path, where people are following the advice of random strangers on the internet to fix their problem. The unhappy path is they don't go seeking help soon enough. And what ends up happening is all six of those transactions go through, and instead of buying, you know... Five ETH worth of Dogecoin, they now have bought 400 ETH worth of Dogecoin. And they do not want 400 ETH worth of Dogecoin, because it turns out that drop tanks the Dogecoin price, or whatever it was they were doing. Like, the thing they're doing is not the thing they wanted to do. And so now you have a very unhappy user, who now is seeking help, and like, "How do I undo this?" Okay, so the first thing they try, of course, is, "Okay, let me, I'll swap back."

• 31:19Speaker 05

  And so they swap, go to swap back, but, you know, for whatever reason, there's huge demand, and they get in the same situation, so they, you know, swap back 20 times, and now they're, you know, shorting Doge or something, I don't know. Like, the point here is, the users get into these really weird situations, when things don't behave as they expect. And with 1559, the hope is that we can kind of solve, for the most part, solve this whole class of problems, by just making it so that one root problem, so that one root problem in this scenario was, writing an oracle for the gas price is hard. Predicting what the future price of gas is, is a really hard problem, because you both don't want to go too high, and you don't want to go too low. And so you can't just, like, overbid, because then it costs the user too much money. You can't just underbid, because then you end up stuck. And so that's a really hard problem.

• 32:03Speaker 05

  And so 1559 will hopefully make it so when the user goes to, goes to MetaMask, MetaMask can follow a very simple algorithm, that will 95% of the time, or hopefully even more, 99% of the time for Lucky, you know, will get it right, and will not result in users in that situation. And when it gets it wrong, we want it to fail gracefully. So in the ideal situation, that 95, 99% that we're hoping for, what's going to happen is the user will be included in the next block, and they'll pay exactly, like, the minimum they need to pay, and that was it. In the kind of worst case, hopefully, worst case scenario, the user will have to wait a little bit, but they'll still get a good price. Like, they still won't end up overpaying. And in the, you know, worst case scenario, they, you still, I will acknowledge, you

• 32:46Speaker 05

  can still end up in this kind of pathological pending transaction situation, but the hope is, is that becomes a much, much more rare thing, that it doesn't happen to, like, you know, 100 users a day, it's happening to, you know, one person every couple of months gets stuck in this situation. And that's a significantly better situation, just from usability, and making it so users' experience with Ethereum is simpler. And, and all this, just because we can solve that oracle problem easier, because we now have the data, and we now have this second price auction thing, so you don't need to try to do complicated auction stuff.

• 33:23Speaker 02

  Thanks. Yeah, that was a very colorful overview of the situation. And I think it's one of the things that gets missed a lot. Like when we talk about 1559, people say like it'll improve the UX. But yeah, that's often like a very abstract thing. So yeah, this helps kind of put it in perspective. I'm moving on to Matt. You've worked on like not only 1559, but on a ton of other kind of pretty important EIPs. Like your teamwork on account abstraction last year, which eventually morphed into 3074. You've implemented 1559 and you're one of the people who has background both kind of

• 34:05Speaker 02

  with the smart contract level and the core protocol level, which is, which is rare. Usually people are on one part of the stack or the other. And so how should smart contract devs building on Ethereum kind of think about 1559? And what, you know, should they change anything about it? How should they, how should they basically, yeah, change your practices or approach 1559 as it gets deployed?

• 34:29Speaker 03

  Yeah, I think that's one of the cool things about 1559 is like Michael was saying, there's all these UX improvements. But for the most part, smart contract developers get to just take advantage of all of these things for free. Like there's been a lot of work by core developers and researchers upfront to try and make sure the 1559 is a change that's safe, that it's actually works the way it's intended to. And a lot of other, the burden has been shouldered by these wallet teams like developing how they're going to choose these priority fees and interoperating with new RPC endpoints. And so now the smart contract developers kind of get this free ride. They just get to take advantage, they get to continue building their, their smart contract to take advantage of a lot of this work

• 35:12Speaker 03

  that people have been doing over the last few years. There are a few nuanced cases where 1559 really does come into play.

• 35:22Speaker 03

  One of the interesting ones is that the gas price op code will begin to behave slightly differently. It's not really something that most people are actually going to notice. But now for fifteen fifty nine transactions, the gas price op code will return the effective gas price to the transaction. So that takes into account the base fee. It's the actual amount that's being deducted from the account paying. And if, for the most part, people who use the gas price op code, this probably isn't going to be a problem. There is like a very specific class of people, though, that use the gas price op code in pathological ways or expect that they could potentially have a gas price of zero. And that's something that won't be possible with fifteen fifty nine anymore. So you've kind of removed

• 36:06Speaker 03

  a, you know, a few paths of execution that could have existed in the world. So now, if you ever had anything that was checking if gas price equals zero, then do this. That's not going to be possible anymore. And so if you were a smart contract developer who decided that was a great idea, then that's something you should consider. There is a class of people, I don't know if they actually have gas price equals zero, but Flashbots does generally require that these bundles are being included with a gas price of zero. This kind of helps them from if their transaction is uncle, they don't have to pay the gas cost to go into the transaction. And so if you are someone who's planning to use Flashbots for something, whether that's for MEV or for account abstraction or user onboarding,

• 36:49Speaker 03

  these are things that you should take into account. And I'm not certain what Flashbots has chosen to do about this. But now you have to understand that you you won't be able to have zero gas price transactions anymore. So that's kind of, you know, how fifty fifty nine changes what exists in the EVM today. But fifteen fifty nine does add this new base fee functionality. And an op code was added not in fifty fifty nine, but in a different EIP thirty one ninety eight. And this base fee op code is going to provide a really exciting new functionality to the protocol. A smart contract developer should consider looking into and maybe using. And there's a couple of like places where this base fee op code could be really valuable. The first one is if you want to pay for some bounty.

• 37:32Speaker 03

  To be executed on chain. I I know there's a couple of protocols that do things like this, where maybe someone will say, I want to have this limited order executed at this price. And a relayer will decide to submit it on chain whenever that bounty would pay out. But there's kind of this difficult problem with like, how do you decide what a fair price to pay for them executing that on chain is? Because if you, you know, if you want to have a bounty that pays out like years down the line, it's really impossible for you to know, like, is ten Gua going to be a good price for that bounty to pay out to the user? Or is like, are we going to be like, you know, two hundred Gua? And you can't really use the gas price op code because then the person who submits the bounty couldn't really just grief the user.

• 38:12Speaker 03

  They could submit a five hundred Gua transaction and and there's no way for the execution of the smart contracts right now to get a fair idea of what the gas market looks like. But base fee is basically a mechanism for having insights during execution of what is the current demand for gas in the protocol. And so this creates like this really nice mechanism where you can pay for bounties more fairly. And having this base fee op code is also going to allow like new financial primitives around the gas markets to emerge. I think we'll see people develop like future mechanisms based on

• 38:53Speaker 03

  the gas market. People want to speculate whether gas prices are going to go up and go down. And we kind of had this with gas tokens because you can mint a lot of gas tokens whenever gas was really cheap. And then there was demand for it. You could sell them whenever the gas price is really high or you could call them in. But there was a very significant transactional costs of using gas tokens. And it wasn't really something that was a net good for the protocol in general. And now this base fee op code is going to be something that we can use to much more efficiently develop gas market primitives. So I think that's something that interesting that smart contract developers should should look into and consider. And the last one is really for these like layer two scaling solutions.

• 39:35Speaker 03

  There are a lot of fraud proof based solutions, rollups, even state channels have some sort of.

• 39:42Speaker 03

  Like replay mechanisms to play out states. And right now, you kind of have this, this, uh, this world where we just choose a static amount of time to give for people to submit their fraud proofs on chain. And I know like optimism says, like one or two weeks is this is the challenge period that you have to submit a fraud proof. And that's to avoid, you know, minor censoring for a long period of time. What we might be able to do with base fees, we might also be able to look at the actual load of the chain and determine how, how, how many people are trying to execute things on chain and potentially expand those fraud proof periods during periods of high demand. And so that might allow these challenge periods to become more efficient.

• 40:25Speaker 03

  So they can kind of become elastic with how much demand is in, uh, the market for block space.

• 40:34Speaker 02

  Thanks. Yeah, that was pretty comprehensive. Um, and one thing I'll add is you mentioned, uh, you know, using the base YOT code to build gas derivatives. Um, it's also worth noting that London has another EIP thirty five twenty nine, which will make the current gas top tokens, uh, unworkable, uh, because of how it changes gas refunds. Um, so yeah, if you are kind of a heavy user of, of gas tokens, um, that's not going to be possible after London. And so, um, yeah, looking into ways to build these gas derivatives off the base YOT code, uh, is, is probably worthwhile.

• 41:09Speaker 03

  I should probably also mention that if you're more of a full stack developer for Ethereum, there's actually a fair number of changes that came to the RPC with London. And so this isn't something that if you're a pure smart contract developer, you may interact with. But if you are a, someone who maintains a backend system for a DeFi application, you should consider looking at, I think, Tim, you and Trent put together this, this comprehensive guide of the, the things that are changing with London. Uh, we could probably link that in the show notes, but there are a handful of changes and I'll, I'll mention like one. The, if you're calling this RP, these RPC endpoints that receive transaction objects, there is a gas price element of these transaction objects. And normally that's just the gas price of the transaction.

• 41:52Speaker 03

  But with 1559, we now have these two different elements that kind of relate to the fee mark and we don't have a gas price. But for backwards compatibility reasons, we're continuing to support gas price. And so that value will be equal to the max fee for per gas before the transaction is mined. And then after it's bind, it will be equal to the effective gas price of the transaction. And that's something that you should be aware of if you're a developer and active with these things. So yeah, take a look at this this document that Tim and Trent put together.

• 42:22Speaker 02

  Yeah, good point. Yeah, a lot of applications are not just smart contracts and they'll actually have to interact with the the node itself.

• 42:31Speaker 02

  And changing gears completely. There's been a lot of like talk about minor revolt around 1559 and the fact that the base fee burns of ETH, which which obviously lowers their income. And I think, Hasu, you put together alongside with George, I believe, kind of one of the best explainers of why it's in miners' best interest to support 1559. So could you kind of quickly summarize that that argument for us? And yeah, what you how you think kind of the the game theory plays out here?

• 43:04Speaker 06

  Yeah, I mean, so you already touched on it, right? So why would miners even be interested in blocking the IP 1559 or somehow like revolting against it? It's that the IP will burn some of the fees that are generated in the block space market, right? And at this point, I would ask you like how into how much detail you want me to go. Because it would cover like stuff like MEV and how that plays into how much is being burned, since I understand these might be like later questions.

• 43:35Speaker 02

  Oh, go for it. Yeah.

• 43:37Speaker 06

  Okay.

• 43:38Speaker 02

  Yeah.

• 43:38Speaker 06

  Okay, so basically, the first analysis that we did was first to find out how much is actually being burnt. Because we we thought that before that point, there was this very well, sort of naive understanding that like all the transaction fees that exist today in Ethereum would end up being burned. And so like all of the fee revenue that miners make would go down and they would be only left with the block subsidy. But fortunately, at the same time was when Flashbot started to get a lot of traction, sort of the the private relay for miners. And they

• 44:11Speaker 06

  They were very transparent with their data. And they started classifying a lot of sources of MEV, miner extractable value, and made public how many of the transactions in Ethereum today are sort of transactions that fight for for MEV, stuff like liquidations and front-running users and and so on, and arbitrage most of all. And so we we took that data set from flashboards and tried to map it over the total miner revenue in order to understand how much of what miners make today is actually from MEV and how much is from regular transfers.

• 44:51Speaker 06

  And the reason we did that is that to understand how much is being burnt, you can think of sort of the the block, the list of transactions, it's not actually one market, but actually several markets. So the the market to be included like in anywhere in the block is actually a very different market from the one about being included at a very specific point in the block. For example, like at index zero, like being the very first in the block. So you can be the first to do an arbitrage between Uniswap and Sushi Swap, for example. So there was a very important insight that these are two different markets. And in the priority market, basically, EAP one five five nine doesn't change anything.

• 45:35Speaker 06

  This is this is a market that will always happen

• 45:39Speaker 06

  so between those who want to submit their transactions, get their mind in a specific slot and the miners who control the ordering. And and this is money that couldn't possibly be burnt, like because if the protocol set some value for that, then the market would just move off off-chain for that. Yeah, and so we realized that all of the MEV that is extracted in Ethereum today will be like untouched by EAP one five five nine and wouldn't be burnt. And we tried to to simulate that. We found that like maybe thirty percent of the fees that are generated today are actually fees that are

• 46:19Speaker 06

  from regular transactors who don't care about where their position in the block is. And probably seventy percent or more is actually nowadays just from MEV extracting transactions. So.

• 46:33Speaker 06

  This was an important insight for us because it showed that it would be like much less impactful on miners. And I think this also helped sort of to diffuse the opposition from miners a bit. Because if you, I mean, you, you, you could argue that it's in the best interest for miners to like adopt any change that sort of the users want. And it is to a degree, but you can still create disruption in the mining market and create like perverse incentives there. If you end up reducing the revenue that you paid miners by too much over too short of a period of time.

• 47:11Speaker 06

  And so it was, it was quite good that, you know, the, the reduction of revenue turned out to be much smaller. And also that the, that like the uptick, the uptake from the market of this update was so positive that arguably contributed to like how we see an ETH as the asset was perceived in, in like the, the, the, the, the public, basically, right? So because for miners, it, it matters not just how much revenue they make that they nominated in ETH. So then don't just care about the ETH nominated fees, but of course they also care about, uh, so the other side of the equation. How much can they sell that ETH for in dollars? So, um, so both of those were, uh, I think very important.

• 47:56Speaker 06

  So I think you have this one side, which you just discussed, that the, the reduction of fees is actually not that large. And, and second, that miners are structurally long ETH, um, like they have a lot of future revenue at stake. And so generally they are incentivized to go along with what users want and what they think. The users and developers and, and, and all of the parties building on Ethereum, what they think is best for the ecosystem. Because that is what maximizes both the value of ETH and so the economic activity that ends up generating all of this MEV and all of this transaction activity.

• 48:38Speaker 02

  Thanks, yeah. I guess, yeah, this is one thing I'm curious to hear other people's thoughts on this because estimates vary wildly. You mentioned, you know, the current fee market is, you can think of the gas price as combining two things. The right to be included in a block at all, and then your positioning in the block. And revenue in a post 1559 world from just the right to be included in a block is what's associated with the base fee. That's what gets burnt. And then revenue from positioning or right of inclusion when there's too much demand is what goes into the priority fee. And you estimate there's basically like a 70% of this that would end up in the priority fee and therefore not be burnt.

• 49:23Speaker 02

  And then 30% would represent the base fee. I'm curious if anyone else here has thoughts on that breakdown. Do you all agree this is kind of what we should expect? Or, yeah, anyone have strong opinions on this?

• 49:37Speaker 06

  I would add maybe one thing, because this is, this does not at all like refute what, so what Barnabe said earlier, that you have different regimes, right? Where the demand is very high to get into a block. And that's why you end up with a tip auction. So this is something that happens in every block. Even if the block is just 10% full, you are still going to have competition to be in the top spot in that block. That has otherwise zero base fee.

• 50:02Speaker 02

  Yeah.

• 50:03Speaker 06

  And zero tip.

• 50:04Speaker 02

  Yeah, I guess a way to think about it, it's almost like if you had two blocks and one of them had just room for one transaction. And then, you know, the rest of the transactions is almost like a separate block.

• 50:13Speaker 06

  Yes, yes. This is exactly the right framework, thinking of it not as one block, but actually as several blocks stacked on top of each other.

• 50:22Speaker 02

  Yeah, yeah. And there's always going to be obviously kind of one transaction's worth of demand for that sort of premium block. And then the demand for the rest of the block space varies based on just general demand for Ethereum.

• 50:36Speaker 02

  Yeah, I'm curious, do people generally agree with that split? Do people have kind of differing opinions?

• 50:42Speaker 05

  So I don't know the exact number breakdown. The thing to keep in mind for everybody is that the MEV or miner miner extractable value is highly variable. And so we will see some blocks that have relatively little, like not very interesting. And you'll see a block that's got like 100 ETH in it. And so in that 100 ETH block, as Hsu kind of described, like the person who paid 100 ETH to get to the front of the line, they really, really, really, really want to be in the front of the line. Like they're willing to pay 100 ETH to be at the front of the line. They are going to pay 100 ETH to somebody to get to the front of the line. Like either that's a miner through gas price, or it's a miner directly,

• 51:27Speaker 05

  or it's some off-chain payment channel, or it's, you know, a cash dropped underneath a mailbox. Like they will figure out a way. When you've got 100 ETH you're throwing around, you'll figure out a way to get the money into the hands of the person who gets to decide who goes first. And so, so yeah, so from that standpoint, I totally agree with everything Hsu said. Like the, you can't avoid that. You can't make that go away. You can, you can drive into the dark, which just makes it harder to see and harder to record, but it will always be there. And so, but that means regarding 70% versus 30%,

• 52:03Speaker 05

  it's hard to say. Like there's many people who have done research on this and come up with different numbers. I think a lot of it comes down to like what timeframe you look at. If you look at some like back when things were going crazy, what was it like six months ago or whatever, nine months? I don't know how long ago it was. Like that's very different than, you know, a boring week in the middle of summer. You know? And so just keep that in mind with, with any sort of stats like this, that it really depends heavily on what timeframe you look at. Like if you look at like a one, a five-year timeframe is very different than a one-year timeframe, which is very different if you look at 2018 versus 2017. Like there's so many variables here. It's really hard to come down to, I think, a concrete number.

• 52:48Speaker 05

  But in general, I think Hsu is generally correct. That there, there is still a lot of value going to miners and will continue to go to miners as long as they are the ones choosing block order.

• 53:02Speaker 02

  Pardon me, Matt, any thoughts?

• 53:05Speaker 04

  I mean, I don't have much to add. I think it's quite clear, but I do have in mind this idea that, yeah, basically, it looks like today's gas price, or like average median gas price, let's say. Priority fee is mostly going to be nominal, like the minimum you need to send to be included by the miner, except maybe when you have kind of like these tip auctions, and then you have this MEV process, which I think so, maybe one thing is the 70-30 figure kind of hides the fact that, as Mika pointed out, MEV is extremely viable, so you have much more variance perhaps in revenue for miners, and this is perhaps something that's, yeah, worth just pointing out.

• 53:54Speaker 02

  Yeah, and I guess talking about MEV, I think, Hasu, your analysis was maybe one of the first ones related to 1559 that actually took MEV into account. But if you look at a lot of previous analyses, including, for example, Tim Rough-Garden's paper, or even some previous papers that were written on how kind of high transaction fee blockchains are less stable and more prone to short reorcs than high block reward relative to transaction fee chains. None of this kind of took MEV into account, and they were all kind of written in a pre-MEV world.

• 54:33Speaker 02

  So I'm curious, you know, are there other spots where, you know, aside from the actual just minor reward, you think MEV can have an impact with 1559?

• 54:49Speaker 06

  Oh, was that at me? I thought.

• 54:51Speaker 02

  Anyone, yeah, yeah.

• 54:52Speaker 06

  Oh, yeah, yeah. I don't really have anything to say at the moment, so if anyone else has any thoughts?

• 55:00Speaker 04

  Maybe just to, yeah, point out that by design 1559 really addresses more the problem of pricing inclusion in a block. And it's almost completely agnostic to the problem of position. So inherently, there's not so much interaction between the two, like the base fee is kind of, yeah, this minimum fee to enter the block. And so that really has nothing to do with what happens at the top heavy, like long tail of this high gas fees. So yeah, that's maybe one reason why MEV and 1559 don't interact that much. The one place where they do is now these MEV strategies, they need to pay the base fee. Whereas before they were able maybe to submit more like zero gas price transactions.

• 55:44Speaker 04

  So, but this is not a huge, I think, difference.

• 55:49Speaker 06

  Yeah, I would second that. I think it just makes sense, just even for the sake of it, just drive from like the notion that like EIP 1559 does not fix MEV, because for a long time, this was a popular talking point, I would say.

• 56:06Speaker 06

  And yeah, took, I think it's just important to say it again and again and again. Like, there's not really much overlap between the two, apart from what Barnaby said.

• 56:19Speaker 06

  Mika, you unmuted yourself. Do you want to say anything?

• 56:24Speaker 05

  I was gonna say basically the same thing. EIP 1559 does not fix censorship attacks. Like censorship attacks are still a thing and they are still a risk. This is why we're moving to proof of state, but that's for a separate call. 1559 will not make those go away magically.

• 56:46Speaker 02

  Yeah, I do think this is a, yeah, an important point to make. The other thing 1559 doesn't fix is high gas prices, in case anybody still believes that. So, yes.

• 56:55Speaker 06

  Oh, yeah, that's, that's the other good one.

• 56:58Speaker 02

  Yes.

• 57:01Speaker 02

  Cool, I guess, uh, bridge it back a bit more to the, the technical level.

• 57:07Speaker 02

  Matt, one thing that was interesting is you actually implemented 1559 in Geth and, and you're not part of the Geth team itself. So you kind of ended up writing the reference implementation, or the, the implementation and kind of the reference client. Can you talk us through like what that process was like, how, you know? Yeah, as like a non-maintainer, you got this, this pretty massive change included in the court, in the codebase.

• 57:33Speaker 03

  Yeah, so I think like the journey for working on 5059 for me started in early 2020 when we started working on account abstraction. And so the, my team Quill, we spent about six, seven months working on account abstraction. We wrote an implementation in, in Geth of this EIP and we were benchmarking all these things. And during this time, there, there was like more discussions this summer about how to have typed transactions in Ethereum. And this was something that Micah was, was proposing. And I was really interested in type transactions because that was a way to path forward to maybe having sponsored transactions in the protocol. And that's something that like is really exciting for me because I think that's a big UX problem with Ethereum.

• 58:19Speaker 03

  And so I was all on board with type transactions and it also helped account abstraction. And this is kind of whenever I started getting more interested again in 1559 because 1559 was another type of transaction. And so I sort of volunteered in the fall, I said, no, it sounds like type transactions is something that's useful. Let me just implement it in Geth. And so I pinged the go Ethereum team, I pinged Martin from the team and I said, hey, uh, is it okay if I just implement 2718 for you? And he said, sure, go ahead, knock yourself out. This was kind of like earlier in the cycle of Berlin and it wasn't a hundred percent certain it was going in. And so they didn't want to waste cycles on dealing with 2718.

• 58:57Speaker 03

  So I, and it was a pretty big change in the codebase because it basically added this discriminator to, like it basically broke this transaction type up in the go Ethereum codebase. And now you have like multiple transactions and kind of this new abstract type for transactions. And so I would kind of like ping them every once in a while and say, hey, does this, does this look okay? And, and they would, you know, respond and say, yes, this is good, this isn't good. And generally that would happen, I mean, a lot of this stuff happened in the open through. Through GitHub and through PRS. And so I think that if people are like watching this, this live stream and that they're interested in core development, like a lot of the times, it's just a matter of opening PRS and

• 59:37Speaker 03

  trying to become part of that process. So I did 2718 and that really was set me up for working on 1559. And I think 10, I don't know if it was started with you kind of like paying me and you saying, hey, are you interested in helping with 1559? And I think I was kind of like rebuffing you in the beginning because there we were working on some other things at the time and 1559 has never really never been something that like I personally was very, very excited about. Because it was something that made a lot of sense, but I was more interested in things like sponsor transactions. And so I kind of like rebuffed in the beginning saying, oh,

• 1:00:17Speaker 03

  there's other things we'll work on. And so after I think a little bit, I just realized that, you know, there's only a handful of people right now who can implement these kinds of changes in GoEthereum. GoEthereum team at that time was like doing a lot of other, other things. They were working on SnapSync. That was like a really big thing they were trying to launch. And so it was like, this is something that I should do. This is like, this isn't what I want to do necessarily, but this is like for the greater good of the ecosystem. So I need to become a part of it. And like it worked out really well. I really had a good time

• 1:00:51Speaker 03

  implementing. And so I implemented most of 1559 and like one or two weeks, the core consensus changes were like relatively straightforward. And I kind of like put a PR together and shared it with the GoEthereum team and was able to start syncing with the 1559 test nets at the time that Adele from the Beiko team had put together. And so the actual core changes were not super significant. They touched a lot of parts of the code, but it's like generally it wasn't a crazy change. And then basically for the next six months, it was a matter of all of the auxiliary pieces, all of the testing. And I don't think that it's, I don't think a lot of people understand, you know, just implementing E, that's like 10% of the work.

• 1:01:36Speaker 03

  And you know, I'm already standing on the shoulders of giants, all the people who have done the research vetting, vetting the idea in general, like, I think fifteen fifty nine is one of the most rigorously analyzed Eeps that we've ever had go into the protocol on all uh aspects from, you know, original design research to engineering, to testing, to fuzzing. And so I, for about six month period, was just helping implement all these other things, right, working on the MIM pool implementation, changing the way that the miner works and um, a, a lot of the, the work lately has been RPC and, and points and fifteen, and fifty fifty nine changed a lot of aspects of the RPC.

• 1:02:18Speaker 03

  And I think for me, like, the biggest takeaway from working with fifteen fifty nine is that we need better facilities for discussing changes in the Ethereum protocol. And if, if you look at the fifteen fifty nine E, but basically just implements a really stupid Ethereum client in Python, because that is kind of like the best way of describing these changes. And so I think the similar thing with this RPC endpoints, it's really difficult to just discuss in prose and through one-off EIPs, how these things are changing. It's a lot simpler to follow a more traditional software engineering process and say, here's a new release of the RPC, etc.

• 1:03:01Speaker 02

  Yeah, thanks. And I guess a quick credited shout out that you are working on an actual full spec of Ethereum executable spec. So that'll be really helpful to have.

• 1:03:14Speaker 03

  Yeah, shout out to my team, Sam and some of them have really been grinding out. We're going to replace the yellow paper with the Python implementation. So that's very exciting.

• 1:03:22Speaker 02

  Yeah, that'll be great. Uh, Micah, I see you have, you went off mute for a second.

• 1:03:28Speaker 05

  Yeah, I was gonna say that just to echo a little bit what like I said in the middle there. I think a lot of people assume that, you know, a platform that's managing 200 or 300 billion dollars or whatever probably is being built by a company the size of Microsoft and has, you know, 40,000 people working on it. And so surely one developer won't help. In reality, this platform that is managing, you know, hundreds of billions of dollars has far, far, far fewer people working on it than Microsoft has. And yes, one more developer definitely can't help. Like, there's lots of places you can contribute. Like Matt said, one of the greatest ways to get started is just

• 1:04:08Speaker 05

  find something that you can make better in just a small way and submit PR and just make it better. You know, if you're not a developer, there's other places you can help as well. You know, EIP editing is a lot of just kind of grammatical and clerical work, like just kind of making sure things flow through a process. You don't need to be an expert in, you know, some arcane language in order to do that. Lots of places people can contribute if you're interested.

• 1:04:36Speaker 02

  Yeah, definitely agreed there. The amount of people who make this possible is shockingly small. Yeah. I guess, yeah, before we move on to audience questions, I have kind of a final two-part question for you, Hasu. So, yeah, you were actually pretty new to the Ethereum community. And I could say, you know, 1559 was almost your entrance into this community. So I guess first I'd be curious, you know, to hear you just like talk through your experience of kind of advocating for this massive change as someone who wasn't like deeply embedded in the community.

• 1:05:17Speaker 02

  And then kind of the second part would be, is 1559 something you would want to like campaign to see elsewhere? Possibly even on Bitcoin in the future?

• 1:05:30Speaker 06

  Okay, so yes, I would say that YAP1559 was sort of my entry into the Eve community. I had been Neefolder before that and I was following it.

• 1:05:41Speaker 06

  But yeah, I really got my start with the YAP1559 and with DeFi. When I really started to appreciate what you can build on Ethereum. And yeah, I mean, what that affords you, basically, the trade-off that Ethereum makes. Because as a Bitcoiner, you're always focused on the trade-offs that Ethereum makes. But like, some people don't see all the good stuff that that buys you, right? The ability to have non-custodial, permissionless finance, have a sandbox for developers to play around. And I think we will see amazing things happening as a result of that in the next decade.

• 1:06:16Speaker 06

  And yeah, I would say that it's hard to trace back exactly like where that started, like that turning point for me. But it was around that time, definitely, like both YAP1559 and DeFi and seeing. You know, just writing research and just, it was like taking up so well by the community. And like the, just the feedback was so good, like so many people were open to collaborate. It was, it was just, I mean, it's, it's like a meme, but it was really like everything that like people praise about the Ethereum community. So I could really confirm that this was definitely true for me, right? That you have a collaborative spirit and everyone's really quite open to talking to you. Like, no matter who, right, can be like really high-profile people.

• 1:06:58Speaker 06

  I never had the impression that like any, that there were any closed doors in that sense. So yeah, I think that's why nowadays I would definitely say I'm more, or at least just as much home in the team community as I am in the Bitcoin community. And going back to sort of my intro, when George and I did this deep dive into BlockSpace market protocols. This, this was at least partially informed by sort of my, like a deep-seated fear that I have about what happens in Bitcoin when the block subsidy goes away.

• 1:07:35Speaker 06

  Because until this point, like the demand to transact hasn't really been enough in any like longer period of time to pay for security in Bitcoin. So. There's really like two possibilities here, like I either the demand picks up and we we still have this like systemic problem, but it's sort of it's sort of not not not relevant because people there's not enough demand to transact and people are going to to pay these fees.

• 1:08:09Speaker 06

  Or we make some change to the block space market mechanism or to the to the monetary.

• 1:08:16Speaker 06

  Yeah, to the monetary policy, basically. And yeah, this was sort of the the origin of what set us out on this quest to to find what's possible. And I don't like. So first of all, I would like every chain that has a block subsidy, I would like recommend to adopt the F one five five nine. And I think we're seeing it almost everywhere now, like almost every new Ethereum competitor starts out with the F one five five nine implemented. I think we know I've seen at least eight chains, seven eight chains that have it have had it before Ethereum, which is kind of funny, but I mean, that's just how the thing how things go, right? When you have these like smaller, more nimble

• 1:08:57Speaker 06

  chains where there isn't a lot of at stake and you can just, you know, just do it.

• 1:09:05Speaker 06

  So for for them, I would definitely recommend it, but this shows sort of why it may not be possible in Bitcoin, at least like as the designers right now, because the F one five five nine burns the non priority part of the transaction fees, which Bitcoin is 100% of it, basically, because there's no MEV or almost no MEV. And so you would burn all the transaction fees, simply speaking, and we already don't have enough transaction fees. So you you kind of rely on there being a perpetual block subsidy that can pay for security. And you don't have that in Bitcoin. So I think unless that changes, which I see is very unlikely.

• 1:09:46Speaker 06

  I think it's unlikely that we get to see any sort of proposal where transaction fees are burnt or the the.

• 1:09:54Speaker 06

  Or the protocol itself sets the price of transactions. I would support other proposals, for example, fee smoothing mechanisms where sort of part of the fee is paid forward into a security fund, for example, that can then, like when demand to transact is high, generate more fees than necessary. So you start paying some of those maybe into a fund and and later than when block subsidy as the client, you start consuming this. So at least by select, maybe a couple more years or so until this becomes serious problem. So yeah, that's, that's a proposal that I think would be more fitting for Bitcoin and one that I would campaign for.

• 1:10:34Speaker 02

  Yeah, that's super interesting. And you can even imagine like a naive implementation of that where if fees are on average high enough to secure the chain, but maybe not on a per block basis, then like a 1559 mechanism where the fees get sent over, say, the next 100 blocks or something can help you convert this kind of volatile income stream into something that's a bit more predictable as a security budget. Yep. Yeah. Um, yeah, so everyone will have done 1559 before Ethereum and Ethereum will have done it before Bitcoin. I think this is a good place to open up for community questions. And David, you want to take it back?

• 1:11:19David Hoffman?

  Absolutely. Guys, that was an absolutely fantastic panel. I'm going to have to re-watch that myself to make sure that I caught everything. So thank you guys all for being here. I need to get Ryan back into the show because we kicked him out before just video logistics. So we're going to take community questions. If you are watching on YouTube, we have been logging some of our favorite questions in a little document. But this is your last chance to get new questions in there. We're going to cut to sponsors for a quick two minute break. I'm going to get Ryan back in here and then we're going to start going through some of the community questions that we got through YouTube. So here we go.

• 1:11:51David Hoffman?

  As soon as I find it. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap.

• 1:12:37David Hoffman?

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• 1:13:06David Hoffman?

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• 1:13:52David Hoffman?

  if I wanted to lock in that interest rate in permanently. V2 also features the ability for users to swap collateral without having to withdraw their assets, trade them on Uniswap and then deposit them back into Aave. With Aave, users can do this in one seamless transaction, saving you time and gas costs. Check out the power of Aave at ave.com. That's A-A-V-E dot com.

• 1:14:15Ryan Sean Adams?

  Hey guys, we are back. The panelists are still on. We got some of your questions that came in via YouTube. We're gonna ask them. David, man, it was fun to watch as a guest on one of these bankless panelist episodes. What a fantastic group of individuals. You know, Tim and crew managed to pull together. And yeah, what were some of your impressions, I guess?

• 1:14:34David Hoffman?

  Yeah, my, my impressions are, there's just an entire massive playing field of just thought around EIP 1559. That like I've, I've thought I was paying attention to EIP 1559, but like there's, it's one of those things that it has rabbit holes in of itself. And so, like I said right before we cut to sponsors, I'm gonna have to actually re-listen to this for my own benefit.

• 1:14:54Ryan Sean Adams?

  Rabbit hole inception, rabbit holes within rabbit holes. Yeah. And I, you know, a few interesting things to me. I tweeted some of this out. It's like everyone on the panel seemed to start as skeptics and then they turned into supporters. That's kind of interesting. You know, a panelist made the question, like client made the question. EIP 1559 is one of the most rigorously tested EIPs to go to the protocol. We heard Ha Su's story about moving into the Ethereum community as part of protocol. So I think this, this represents a lot of what's great about the Ethereum community, the level of analysis, the permissionless nature of it. It also represents some of the challenges, like I don't know how many times that the panelists said, hey, there's, there's not that many of us actually doing this super important work.

• 1:15:38Ryan Sean Adams?

  Like come join us, come submit some PRs. Like we need your help in order to continue this, this whole research project and implementation project we call Ethereum. Anyway, lots of stuff to dig into. Let's get to the questions though, and I'm gonna start here because one of the panelists actually may have thought they showed up to the wrong meeting because I pronounced this EIP 1559. And I've just been told that might not be the most canonical way to represent it. So actually somebody in our Discord channel asked this question. This is oddba11.eth. Maybe these panelists can tell us if it's pronounced 1559 or 1559, or as I have taken, how to say 1559.

• 1:16:23Ryan Sean Adams?

  Guys, which is it? What is the correct pronunciation of EIP blank? I won't bias anyone by saying what I think it is. Like client, you have any thoughts on this?

• 1:16:35Speaker 03

  Yeah, at the beginning of the show, I, you know, was just settling in and I heard you say, "Welcome, we're going to begin speaking about 1559." I missed everything you said after that. Because I was like, "Oh, no, is this, this is the wrong call."

• 1:16:54Speaker 03

  I guess I've actually heard people say 1559 in a while at least. I feel like it's 1559. That's the, I don't know, Tim probably talks about, Tom, Tim probably has dreams of different ways of pronouncing the optimal way of pronouncing 1559, but to me, it's always been, yeah, 5059. If you want to be formal, full, if you want to go full formal, EIP 1559.

• 1:17:21Ryan Sean Adams?

  One at a time?

• 1:17:21Speaker 03

  But 1559, that's like formal casual.

• 1:17:26Ryan Sean Adams?

  Formal casual. That's what we do on Bankless.

• 1:17:28David Hoffman?

  Yeah, that's actually the right Bankless branding.

• 1:17:31Ryan Sean Adams?

  Maybe that's just me. I don't know. Any other thoughts, panelists?

• 1:17:36Speaker 05

  I mean, we're talking about naming. Obviously, I have thoughts. My, my personal favorite is the 1,559th EIP since the start of Ethereum. That's usually when I'm in casual conversation. That's how I'll express myself to users. Sometimes if I'm, you know, in a more business environment, I will say, "The fee market change for the Ethereum chain." You know, it really depends.

• 1:18:01David Hoffman?

  Do you guys think that we're going to need to call this differently in the future after it's implemented? Or is kind of EIP 1559 here to stay?

• 1:18:09Ryan Sean Adams?

  Is it stuck?

• 1:18:11David Hoffman?

  Is it just stuck?

• 1:18:11Speaker 03

  I think that the boats of calling Eeps by not their number sailed a few years ago.

• 1:18:17Ryan Sean Adams?

  Oh, my God.

• 1:18:18Speaker 02

  Yeah, I mean, even stronger than that, other blockchains call it EIP 5059, which always make me laugh, right? So, yeah, I think.

• 1:18:27Ryan Sean Adams?

  I don't know how many times I've had conversations with people like, you know, David and I like work on the, the layers here, the, the social layer, the, the meme layer of Ethereum, if you will. And like, can we come up with a better branding for this thing? And we threw around ideas, we had names, we tried some things, nothing stuck, like absolutely nothing. And so EIP 1559, it is, I think, for eternity.

• 1:18:53Speaker 03

  Where, where are we at on bips? Like, can we just put some like Noah bips in to get to bip 1559?

• 1:19:00Ryan Sean Adams?

  I don't know. Hasu, what bip are we on?

• 1:19:05Speaker 06

  What?

• 1:19:06Speaker 02

  Oh, 300, 400.

• 1:19:07Speaker 06

  So I don't know how it works in Ethereum, but Bips and Bitcoin aren't given chronologically. So they are like, the number goes up, but like the first part of the number is is reserved for like special things. Like it says, what kind of, what type of this is. So what, what kind of, what part of the system it touches, basically.

• 1:19:30Ryan Sean Adams?

  As long as number goes up, Bitcoiners are happy. We know that is true. Do you want to ask the next question?

• 1:19:36David Hoffman?

  Yeah, maybe turning to to more serious questions. A question from QB on YouTube is what happens when people send the old transaction types after EIP 1559 is switched on? Maybe I'll throw that one to Tim.

• 1:19:51Speaker 02

  Sure, um, basically what it does is behind the scenes, it'll treat your legacy transaction as. Yeah, behind this, Matt said in the chat, all, all funds are burnt.

• 1:20:07Speaker 02

  I know. So behind the scenes, it'll send your, your trends, it'll convert your transaction to a 15591. And what it does is it sets your gas price equal to both your max fee and your max priority fee. And what this means for the user is that when you send a 1559 transaction, you basically get a refund for the difference between your max fee and the base fee plus the priority fee. So if you put a very high max fee, you'll never pay more than the base fee and your max priority fee. And that makes it very easy to figure out, you know, to set a transaction because you can just set a high, a high max fee and know you'll get included and get a refund. For legacy transactions, your max fee is equal to your max priority fee.

• 1:20:48Speaker 02

  So that means that any difference between the base fee and your gas price basically will go straight to the miner or the validator. So it just means you kind of don't get that refund for extra fees paid. You can still, you know, if you're, if you're savvy, kind of estimate exactly what's like the right gas price and, and how to get that into a block. And that's basically your back to the problem we have today. But this is super important because we. You know, even though it might be slightly more expensive for users, we never want to be in a spot where like somebody is using your wallet that doesn't support 1559 and now they can't interact with Ethereum. Or even another edge case is like you signed a transaction a year ago before 1559 was even like

• 1:21:32Speaker 02

  considered for mainnet and you had like this, you know, note to yourself that you're going to send this transaction on the network in two years. And that transaction should still be valid, right? So yeah, legacy transactions will still, will still work.

• 1:21:47David Hoffman?

  Fantastic. Anyone want to add on to that before I move on to the next question?

• 1:21:52David Hoffman?

  Hearing none, I will move on to the next question. This comes from Mr. Green and I'm going to actually amend this question just a little bit. Mr. Green asks, what happens with your gas during a canceled or stuck transaction after the EIP 1559 goes live? And, and I'll add on to this, like, is what, how does the nature of a like pending transaction that gets like quote unquote stuck? How does that change once EIP 1559 goes live?

• 1:22:19David Hoffman?

  I'll just throw that one to the, to the open. Anyone want to take that?

• 1:22:23Speaker 05

  So, so if you submit a transaction after 1559 and you got very unlucky because you happen to submit it right when there is a massive increase in demand. So today you get stuck if there's any increase in demand when you submit it. With 1559, you, you still can get stuck, but only if there's a huge increase in demand. And we're talking like 2X increase in demand over a very short period of time and it's sustained. So that's another key is that's this, that demanding increase has to stay increased, like continue increasing for an extended period in order for you to get stuck. If you do get stuck, then you are back in the situation you're in today. So we have very similar mechanics where you have to submit a cancellation or you'll have to submit a replacement.

• 1:23:05Speaker 05

  And so, so that problem still does technically exist. I want to make sure, you know, all the listeners are aware that that problem doesn't 100% go away. The, the critical part is getting into that situation should now be very rare. And so again, just iterate, same problem, same solution, cancel.

• 1:23:24Speaker 05

  Or bump the bump the price that your your gas price effectively. But we really hope that if if we tune things correctly, and this is what Barnaby was talking about early on the call, that after this launches, we'll be watching so we can tune things. And we want to tune it so as few people get stuck in that situation as possible. And so what maybe, you know, right after launch in a few days, we won't have gotten the tuning quite right and there'll still be, you know, significant portion of people getting stuck. And that sucks and didn't achieve one of our goals. And so then in some future hard fork Ethereum, we'll just dial some parameters and do some research and tweak things and try to get better. And so eventually we can hopefully get to a point where no one gets in that situation.

• 1:24:04Ryan Sean Adams?

  Actually, Micah, when you're talking about tweaking things and changing things, that that leads me to another question that was asked on on YouTube. And this I was Baker, I believe is the username handle. I hear Bitcoiners using this argument against Ethereum that the Ethereum Foundation constantly changes Ethereum. Is there any merit to what they're saying? I think this is a reflection on the critique that, hey, core developers shouldn't change the anything economic, anything to the issuance policy at all. And that is one of the virtues or merits that Bitcoin has. And Ethereum shouldn't make this trade off. Any thoughts on that question? Is there any merit to this argument? Actually, I want to start with the Hasu is kind of our, you know, resident Bitcoiner on the panel.

• 1:24:49Speaker 06

  Sure. I mean, I would say there's some merit to it. I mean, I don't think. I don't think there's any merit to saying that the Ethereum Foundation chooses what upgrades get into Ethereum. I think that's not really how the EIP process works and I'm not even sure that the Ethereum Foundation pays most client developers. Maybe that's something that the actual client developers here can chat some later.

• 1:25:16Speaker 02

  Yeah, the short answer is they don't. There's one team on ETH one and zero teams on ETH two that are part of the EF.

• 1:25:25Speaker 06

  Yeah, thank you. Yeah, thank you. That's, that's what I thought. So I would definitely say, yeah, Ethereum is changing more and it's easier to get stuff implemented in Ethereum. But the EIP one five nine is actually a great example. It's, it is a very big change. Like I wrote once, wrote that it's the biggest change ever made to an already deployed blockchain. Like proof stake will also be a pretty big change, but I think EIP one five five nine is, is to date the biggest. And, and this is like a really cool thing to look at, to see how much, like how long the process took. And how many people were engaged in the process and how much scrutiny it received.

• 1:26:04Speaker 06

  And, and it took a couple of years to get EIP one five nine implemented and there were a lot of skeptics, I would say, for a long time.

• 1:26:15Speaker 06

  And it was just a process of, you know, eventual consensus in the community. Where I would say like those of us who wanted the EIP just produce more and more educational material and analyses and, and so on. Eventually like swaying some of the skeptics, you know, over to our side. And at this point, I would say it's definitely a consensus decision. So it's not like there's somebody, you know, making a top-down decision that we want to have this EIP, right? Right? It's, it's like, it has so many supporters now and I, I can't think of any skeptics anymore at this point, really.

• 1:26:56Speaker 06

  So I would say, yes, so it's, it's bad when things, I mean, there's value to things being hard to change. But if it changes in the right way, like if the right checks and balances exists, exist, then I think there's also a lot of good that can come from, you know, adding new features.

• 1:27:15Ryan Sean Adams?

  Mike, I think you've written posts on things like this. What, what's your take on the same question?

• 1:27:22Speaker 05

  Yeah, so I think that there is definitely merit to this. This question, is it better to change or is it better to not change? When you're building a large financial system, as people are familiar with the legacy financial system, it's well known that banks do not change fast. Like, from a programmer's point of view, it's always like a running joke that banks are running on code that was written in the 1980s. And it's now hard for them to hire people to change that because everybody's dead. Who knows how to write code in those languages? And there's a reason that banks are hesitant to change. And it's because when you're dealing with large amounts of money, especially other people's money, you ideally don't want to break things. Like, you don't want to, you know, make a mistake and then have people lose, you know, all their money, or all your money, or all of some investors' money.

• 1:28:07Speaker 05

  And so it's a very scary thing. And so, from the standpoint of the argument that, well, Bitcoin is stable, that's very reasonable. Like, having that stability is very valuable. People like stability. People want, especially in their financial systems, they want comfort in knowing that things will be stable. Whereas Ethereum is definitely moving fast. We're changing things every six months. We have a hard fork. Some of these hard forks are very big. 1559 is very big. And that's a very different paradigm. And I think the reason I like Ethereum personally is because I feel like the space is so new and so young that it's too soon to calcify and it's too soon to stop changing. Like, there's so much we can do and there's so many things that are right around the corner.

• 1:28:52Speaker 05

  Like, the technology is just so much in its infancy. It's like having a kid and then saying, "Okay, you're two years old, now's a good time to stop growing." It's like, there's so much opportunity, whereas, you know, once they get to, you know, 20 or 25, maybe that's a good time to stop growing. They've matured enough, they can be useful, they can be productive, and they have learned enough and they have advanced enough that it's a useful tool. And so I think Ethereum is not there yet. I think eventually, I will eventually lobby that Ethereum should calcify, like Bitcoin has. I just don't think that's now. I think that sometime after proof of stake, sometime after sharding, sometime after, you know, ZK rollups on mainnet, like, there's a number of things that I think Ethereum should do before we decide that, "Okay, now's the time, let's slow down, let's solidify,

• 1:29:36Speaker 05

  let's make this a platform that people can trust is not going to change."

• 1:29:41Ryan Sean Adams?

  I just have a quick follow up on that, but before we do, we want to thank Tim Baker, who's got to go to attend another call and maybe help get EIP 1559 out the door. Tim, you're a fantastic moderator, maybe future co-host of the Bankless Podcast. Who knows? Unlimited potential here, sir.

• 1:29:57Speaker 02

  Who's getting replaced?

• 1:29:58Ryan Sean Adams?

  For everything you've done. I don't know yet, David. It may just be seen. Thank you, sir. We appreciate your moderation.

• 1:30:04Speaker 02

  Yeah, thank you so much for having me and for setting this up. Yeah, and to obviously all the other panelists, I appreciate you all taking the time to come here.

• 1:30:12Ryan Sean Adams?

  Awesome. Guys, we still have a few more questions coming in if the panel can can hang on. I just have a quick follow up to Micah, though. You raise a really interesting point. Do you acknowledge, though, that that like the the time for Ethereum to calcify is somewhat subjective? Right? It's like, how how do we determine when the right time to calcify is? Like, it's obviously not now immediately, but isn't there always going to be new tech, new features on the horizon to implement?

• 1:30:44Speaker 05

  Hard question, especially since there are so many participants. I think that at the least, like when Ethereum's yellow paper was originally produced, it said, we're going to do switch to proof of state. So at the very least, we should wait to calcify until after proof of state, because that was like a thing that was promised and everybody kind of presumably agreed on that if you're going to use Ethereum, you acknowledge that this will eventually adopt proof of state. So at the very least, I don't think that it's super reasonable to argue for calcification prior to that. After that, things start to become a little more questionable because we have things like state expiry and sharding and, you know, ZK stuff like magic. And those are things that, you know, weren't necessarily agreed on when Ethereum was launched, you know, six years ago or whatever it was.

• 1:31:25Speaker 05

  And so that's where things start getting a lot more murky, where it's like, should we? Should we continue to build and iterate or should we calcify? And maybe one of the options is Ethereum just forks. And we say, okay, proof of state launched, everything we promised in the yellow paper is done. We're going to calcify that and that will be a supportive thing and it will get security fixes. Separately, we're going to continue building off of that in this other direction and build great things. I'm personally a big fan of forking as a form of governance. I think it allows people to have, you know, different belief systems and different values and kind of live and self segregate and operate in sandboxes that align more with their beliefs. And so, but I know a lot of people don't like that. A lot of people would rather Ethereum stay as one big thing,

• 1:32:07Speaker 05

  when there's one Ethereum. And so I do think that we will eventually see, you know, big debates on this exact topic. And I don't think there's a clean answer necessarily.

• 1:32:17David Hoffman?

  Any other panelists want to add on to that before I ask the next question?

• 1:32:22Speaker 04

  Maybe to add to this, I think the calcification is kind of the default position in the mind of many people who maybe come from the Bitcoin ecosystem, like this idea that at some point, the protocol just cannot keep changing. It's true that over time, the more things are built on it, the more difficult it is to make these changes. But rather than argue for finding the correct point at which the protocol should calcify, I would argue for finding the process that makes us decide whether we should do it or not. So finding what Mika was describing with the checks and balances, like in my position, I'm definitely not an immutableist. I joined

• 1:33:05Speaker 04

  the Ethereum ecosystem because I like this idea of it's ever-growing ecosystem. It's like this organism that just adapts to whatever is thrown at it. I cannot tell what will happen in 10 years. I mean, quantum computers, ZK magic. So I would definitely be more in favor of, rather than thinking, okay, is it the time to calcify? Just asking the question, how do we make the choice if we have it in the first place?

• 1:33:32Speaker 03

  Absolutely.

• 1:33:32David Hoffman?

  And oh, go ahead, Hoss.

• 1:33:35Speaker 06

  I would pose a different approach to the question. I don't think it's really necessary for us to choose when it's time to certify. I think this is also something that just happens automatically because every upgrade has a cost. But first you have to create social consensus, which is very difficult and a long process. And then you have to, like, all of the shareholders in the system have to upgrade their systems and so on. And there's so much involved. And this is like, this is very costly. Like, a lot of companies and the projects and a lot of people have to spend a lot of developer hours, you know, on making this up every upgrade in Ethereum reality, right? So it asks a lot basically from the users.

• 1:34:19Speaker 06

  And the more users there are, and the more businesses built on Ethereum as, you know, part of the infrastructure stack and so on, the more people will be affected by every upgrade. And the, basically, every upgrade needs to do more to, to pass their bar for still supporting it. And I think it will get, it will just get harder and harder over time to make enough people want to upgrade. And so it just qualifies basically on its own.

• 1:34:47David Hoffman?

  Matt, you want to, you wanted to add something?

• 1:34:50Speaker 03

  Yeah, I was just gonna add one other thing. In terms like the calcification, one thing to me that like really makes a blockchain a blockchain, something that's like goes beyond just a database is having ordered available data. And where we're going with these two, with sharding and having massive new, massive quantities of data availability, that is to me something that even if you don't, even if you want to do something that's not possible to do specifically on the Ethereum chain, if Ethereum provides that platform for making data ordered and available, you can begin to build different types of primitives using client-side verification, rather than having things go through the EVM.

• 1:35:34Speaker 03

  And so I think that that's going to open up an avenue for people to still use Ethereum, but really be able to experiment in like really crazy things that may not be possible on the base layer.

• 1:35:45David Hoffman?

  That's a great addition to that. We just have a couple more questions to get through and then we will have gotten through all of them. And Azu, I want to point this one to you because it's a little bit in the world of game theory and I think you might be best equipped. But for the other panelists, feel free to also hop in on this. This question comes from Yuan. Miners might artificially reduce the block size after 1559, the update, so that users are forced to be in a tip bidding war like we already are now. Is this something that we can be concerned about? Is there a topic of conversation to be had about miner block size manipulation to maximally extract value for themselves? Azu, have you thought about this?

• 1:36:24Speaker 06

  Yeah, I mean, this is probably the most obvious thing that you have to think about like with regards to the IP 1559 and how it can be broken by its participants, right?

• 1:36:36Speaker 06

  So if we argue that miners don't want any fees to be burnt, then they could make this a reality. They could just say, okay, we never mine blocks that are higher than the target. Because the blocks higher than the target are mined, then this is what makes the base fee go up. And if blocks lower than the target are mined, then the base fee goes down. So they mine blocks lower than the target, base fee goes to zero, and then they keep the block size below the target. And this way you can basically keep the base fee at zero forever. But if only some miners do this, then they will always have to, so they will basically have to leave transactions in the mempool of users that also pay fees.

• 1:37:22Speaker 06

  And I mean, then any other miner can come along and include all of these transactions in their block. And they can include a lot of transactions because there's all this slack, like all this extra room in the block size in the IP 1559. And they can scoop up all these fees and, you know, make more profit. So I mean, this shows that you can do this, but you need all the miners to cooperate on this. So either everyone follows along or so that the miners who want to do this have to pressure the non-compliant miners into compliance. Like, for example, by ignoring their blocks. When you have like 70% alliance of miners that wanted to do this, then they could ignore the other 30% blocks.

• 1:38:06Speaker 06

  But it also comes at a cost, right? So if the any user basically saw their transaction valid when like the thirty or confirmed when thirty percent minus block were was mined. And then later becomes reorganized, I think that's very bad user experience. I think we've talked about this a lot in the last couple of weeks because of, you know, all these discussions about short term re-ox and Ethereum. So basically that's the answer. So miners can do it, but they would need to be willing to make short term re-ox. And basically enforce a minor activated soft rock. And once we, once we are like in the realm of saying, hey, a minor activated software is possible. Then we also have to think, okay, so isn't this possible today?

• 1:38:51Speaker 06

  And the answer is yes, this is totally possible today. If miners were to collude and like enforce a certain high fee, like a mandatory fee that they charge users for transacting on Ethereum, then they could extract a lot more money from users than users would be willing to pay in a fair market, right? Because right now users pay the minimum that is necessary to get into a block. But when when miners were to set the prices, then users would pay the maximum they are willing to pay. Like this would be the correct sort of pricing strategy for miners. Miners could could multiply the revenue like if they were willing to do that, but they don't, they are not right. Because I mean, they are in competition with each other.

• 1:39:35Speaker 06

  And if if this property of a blockchain is broken, then I think users would lose a lot of trust in Ethereum. And far fewer people will transact than the value of E foot with would dwindle. And ultimately, I think it's not in my minus best interest.

• 1:39:54Ryan Sean Adams?

  Guys, we're going to close it out with this last question. I think this is for for each of the panelists. This is a question of timelines. Timelines in crypto in Ethereum are interesting things. I remember when EIP fifteen five nine was first proposed. You know, some people are like, oh, it'll be here in a few months, right? Others were like, this will never be deployed to main net, right? Like never, it's not happening, not five years, not 10 years, it's never going to happen. The truth, it seems like, turned out to be someone in the middle. I'm, I want to ask this question of on timelines. Did the timeline surprise you? Maybe first I'll turn I turn to Ha Su. Did the timeline surprise you, Ha Su?

• 1:40:33Speaker 06

  I would say yes, so everybody in the Bitcoin community, so like, what Ethereum has all these future plans for changing the protocol, but they never ship them. It's just, and they were right with regards to proof of stake and with regards to to sharding, both of which were part of the Ethereum white paper. So they had a lot of ammunition in that sense. But first Ethereum shipped the beacon chain and now they are shipping ERP 1559. And both of these have been important milestones and have contributed a lot to convincing me that the, you know, the development and governance process is actually much more functional than I thought.

• 1:41:18Speaker 06

  And Ethereum can deliver what it promised, at least like how things are today. So maybe in the past it was like more ineffective, but but now I think we like it's building a track record basically. And this upgrade has helped a lot with that.

• 1:41:36Ryan Sean Adams?

  Blake, Lion, how about you on timeline?

• 1:41:39Speaker 03

  I think whenever 1559 was originally proposed, it was, I was kind of a little bit newer to the ecosystem. And I was very naive. I thought that these things get proposed and then we upgrade the master node. And it's like very quick type of process, but it, you know, I like, I think I've become like quite jaded in the last few years, especially with some of our own proposals. I've been working on this 3074 proposal and I'm just like seeing that these timelines, they are really like multi-year timelines. And that's kind of, I've had to shift the way I think and work to try and treat things as, you know, small packets of work over periods of years.

• 1:42:21Speaker 03

  And you have to like, kind of have a few things that you're trying to maintain, some like general high level goals the community is on board with. And 1559 was one of those things. And I wasn't really involved until kind of the very end of the process. But I can kind of see how like different people have come in to play different roles whenever their roles were needed. And I came in to play my role whenever it became more of an engineering problem. And so I think that For a lot of changes in Ethereum, that's like a better mindset to think about it. Like it's a multi-year process and with the merge coming, I think we're not going to see very many new features in Ethereum until the merge happens. I think everybody has sort of decided that we're going to do the merge. This is the number one priority and nothing, you know, we're not going to focus on anything else until it happens.

• 1:43:06Speaker 03

  And so that's something that, you know, means that we're probably not going to see new, we're like, we're not going to see new things happen in Ethereum for the next 12 to 18 months, other than merge related things.

• 1:43:17Ryan Sean Adams?

  Micah, what's your take on timeline?

• 1:43:20Speaker 05

  So I'm similar to, uh, to Matt. I was, uh, not young and naive back in 2018 and I thought surely this thing is, is, well, after I realized that Vitalik was smarter than I gave him credit for, um, then, then I thought, okay, this is a great idea. Sure, this will go through quickly. Um, turns out, uh, that was not true, but I think there, there's a good reason for this. Um, when you're, you know, driving down the freeway with a bus full of children and you're trying to change the wheels on it, you, you want to take that process very carefully. Like you, you don't want to just, you know, just, you know, tip over on the two side wheels, swap the wheel out real quick and keep going, you know, just hope for the best. This is not a YOLO sort of situation. And so 41559, there, there was a lot of, you know, a lot of people, including myself,

• 1:44:05Speaker 05

  and it sounds like most people on this call, um, were skeptical of it. And so the process requires us to, you know, convince all those skeptics that this is actually a good idea. And then, once we convince the skeptics, then we need to, you know, actually implement it and then make sure there's no bugs. And, you know, there was, there was a bug on Robson as re, in, in the 1559 implementation as recently as, what was it, two weeks ago or something like that? And so this isn't like a simple thing, like this is, this is after massive amounts of testing and, you know, a month or so on test nets. And then we found, still found a bug. So this is, this is very hard to do. And so I think that taking it slow is the right approach at this phase of Ethereum's lifecycle. You know, when Ethereum was brand new and had 10 users, sure, we probably could

• 1:44:49Speaker 05

  have knocked out 1559 in a week. You know, it's not that hard. Just throw it out there, see what breaks. And if it breaks, you know, restart everything. It's even worse for things like proof of stake, because proof of stake had to, you know, build an entire, do a bunch of research to actually, you know, design a system that previously wasn't designed. Like, there are chains that have proof of stake, but they make trade-offs that Ethereum's unwilling to make. And so Ethereum had to actually go through the whole research process and figure out, how do we solve this problem that no one else in the world has ever solved before, without making trade-offs that we're unwilling to make. And so they finally did that. And then you have to build the whole thing. And then you have to test the whole thing. And then you have to convince everybody to, you know, actually upgrade and accept that whole thing. And so, yeah, so I think it was slow, but I think there are good reasons

• 1:45:34Speaker 05

  for that. And I don't think it means we've reached that point of stagnation we talked about earlier.

• 1:45:39David Hoffman?

  Micah, is that you use the metaphor, changing a school bus wheel with a bunch of children on it. Is that what it feels like to be an Ethereum maintainer? Like, just driving a school bus with a bunch of kids? Is that, is that how you think of this?

• 1:45:50Ryan Sean Adams?

  Are we, are we the kids?

• 1:45:54Speaker 05

  Yeah, I mean, if you see children as just dollar signs, then yes, it's basically the same thing.

• 1:46:00Ryan Sean Adams?

  Is that how you see kids? Deeper question. We'll save that for a different panel.

• 1:46:07David Hoffman?

  Barnaby, I want to make sure that 59 panel, not the 1559 panel.

• 1:46:11Ryan Sean Adams?

  That's what I signed up for. Barnaby, take us home. What do you think about Timeline?

• 1:46:19Speaker 04

  Yeah, I mean, I don't have so much to add, but EAP1559 was kind of my first project. I joined the EF in 2020. Before that, I was in a more academic background, let's say. Things in academia move quite slow. And so when I joined Ethereum ecosystem and kind of started contributing, I actually thought, wow, this is moving really fast. Like, it's a huge system, so many moving parts, and people are willing to go through these big changes. But it really... It gave me like such an appreciation of the work that goes on behind the scene, especially like a very thoughtful kind of staging process through the test nets, all the work that goes into making the clients work, coordinating an ecosystem which just spreads

• 1:47:03Speaker 04

  in so many like different directions, especially 1559. I mean, it touches the economic engine, it touches the client, it touches wallets, the way users interact with the network. So it's a huge amount of work and I would say, yeah, I can't really say if it was slow or fast because I don't have a good point of comparison, but to me it feels like it's actually quite fast.

• 1:47:25Ryan Sean Adams?

  Well, guys, it is here. We could say that for sure. This week it is happening, EIP 1559, currently scheduled for Thursday, maybe around 5:00 AM or so Pacific time, 8:00 AM Eastern time. Join us for that live stream where we will be broadcasting, hopefully a celebration when the hard fork goes live. Panelists, we want to thank you so much for availing your time to us. This has been fantastic. And I actually want to thank you on behalf of the Ethereum community for all of the work that you guys put into this. We have been excited about EIP 1559 for many reasons for a long time and you guys are part of the core team, along with many others who are not on this panel, but you guys have been part of the core team to make this happen. We just want to thank you for all of your work on it.

• 1:48:12Speaker 03

  Thanks a lot, guys.

• 1:48:14Speaker 05

  Thanks for spreading the word.

• 1:48:16Speaker 04

  Thank you.

• 1:48:17Ryan Sean Adams?

  All right. That's what we do. We spread the word. I gotta end with this, of course, risks and disclaimers. None of this was financial advice. ETH is risky. Crypto is risky. Hard forks are risky. Fingers crossed. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 1:48:36David Hoffman?

  And if you are watching the YouTube, one of the 426 people watching the YouTube, make sure to like and subscribe for the two EIP live streams that we are having on Thursday. Do not miss those. Thanks, everyone. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be.

• 1:49:21David Hoffman?

  Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.