Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: Ethereum's glow up

• 🔎 This seems important: Ooops! $100 billion gone…

• 🤝 Partner: This market with 63% price growth isn't just for billionaires anymore…​

• 🔪 Let's dissect this: How does the new-and-improved Ethereum ACTUALLY work?

Terms used in this edition (click for an explanation, or ask Web(GPT)3!):
Layer 2’s, Web2, Zk-Proofs.

💅 This is cool:

Ethereum’s ‘Dencun’ Glow Up (What It Is, and Where We’re Headed Because of It)

In one sentence: The Dencun upgrade will reduce fees on Ethereum layer 2’s by up to 75%, and is a major step in improving the Ethereum user experience (next step: account abstraction).

Ethereum is getting a big ol’ upgrade today!

The ‘Dencun’ upgrade aims to reduce the transaction fees on Ethereum layer 2’s (L2’s) by up to 75%.

(L2’s are kind of like third party/use-case specific apps that are built on top of Ethereum, the same way you have third party apps on your smart phone).

“Ok, cheaper fees — is that it?”

Kinda, but also not. This is one step in a broader plan.

Right now, L2 fees are in what we’d call the “I guess that’s ok” realm (the $0.10 - $0.50 range). What Dencun aims to do is bring these fees into the “I really don’t care” range (think: $0.02 - $0.12).

It’s a step in the right direction, but there’s still more on the Ethereum core developer’s ‘to-do’ list…

Specifically, ‘account abstraction’ — which is just a more succinct way of saying:

“The process of making the user experience not suck, and getting the broader functionality to feel more like a polished Web2 banking app.”

I.e. Allow users to set up automated transfers, buy subscriptions, and set up joint accounts on Ethereum — just like they would with a traditional bank acc.

And the Dencun upgrade brings us one step closer to that reality!

🥇 Want the news before anyone else?

🔎 This seems important:

Ooops! $100 Billion Gone…

In one sentence: ~$100B was wiped from the crypto market, before (mostly) being regained, after Feb’s CPI print came in at 3.2% instead of 3.1% (seriously, that’s all it took).

Welcome to Web3 Daily, where we stare at crypto charts all day, so you don’t have to!

That’s the excuse we make to ourselves at least.

(According to a certain therapist, it could actually be considered “obsessive behavior” which is “putting an immense weight on our relationships.”)

…but what does Dr. Stevens know — she doesn’t even own crypto.

Anyways…

While watching the charts yesterday, we witnessed a quick/violent dip, where ~$100B was wiped from the crypto market in ~1hr, after the release of Feb’s Consumer Price Index.

(Aka ‘CPI.’ Aka “how much more expensive has everything become in the past 12 months?”).

Here’s a rapid fire breakdown of how it all went down & why:

• Everyone expected CPI to have increased 3.1% since this time last year, but it came in at 3.2%

• This stoked fears that interest rates would be kept higher, for longer — putting pressure on the economy.

• The longer rates stay high, the less chance we’ll have of making a ‘soft’ landing (aka lowering inflation without going into a recession).

All of that played out over 1-2 hours, wiping ~$100B from the crypto market, before (mostly) regaining it all…

All from a .1% difference in expected CPI.

Economics, amiright?

🤝 Partner:

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🔪 Let's dissect this:

How Does the New-And-Improved Ethereum ACTUALLY Work?

In one sentence: Dencun does for data on the Ethereum network, what the pre-check program does for travelers going through TSA (speeds any required processing WAY up).

As we covered in our first article:

Layer 2’s are about to pop off following Ethereum's Dencun upgrade — and by ‘pop off’ we mean ‘get way cheaper.’

…but how?

We’re glad we asked!

A big contributing factor to this fee reduction is the optimization of data via zk-proofs, which…how do we explain this?

Let’s say you had 100 movies on a hard drive, and you asked two separate people to rank them from best to worst…

If Person #1 had already seen each movie, while Person #2 hadn’t seen any of them — who do you think is handing their list in first?

Def Person #1.

Zk-proofs work in a similar way…

They process the information once (aka ‘watch the movie’) then can answer basic yes/no questions based off of those learnings, indefinitely.

In a crypto context, the question would be more like:

“Is this group of 1000 transactions legit, verified, and good to be processed?”

Old answer: “idk, let’s go through them one at a time and find out.”
New answer: “yep.”

Ok, now you know!

What is the Ethereum Dencun upgrade?