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    Ethereum Could NFTs be money laundering?

    September 12, 2021

    Ethereum Could NFTs be money laundering?

    Could NFTs be money laundering?

    Posted: 12 Sep 2021 02:13 PM PDT

    Could it be that these art pieces are being bought for insane amounts of money in crypto for money laudering purposes?

    submitted by /u/rileyboiie
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    Addressing common rollup misconceptions

    Posted: 12 Sep 2021 08:58 AM PDT

    I'm delighted to see the enthusiasm around Arbitrum One. I concede I was too pessimistic - the growth it's seen over the weekend has been exponential and unlike anything I've seen in the smart contract space, going from $300M to $2B TVL in less than 48 hours. Within 12 short days, it's pretty much propelled itself to be the #2 smart contract platform in the industry after Ethereum. Awareness about rollups is increasing exponentially, but there are still too many bad takes. Here, I'll address some of these myths and misconceptions to the best of my knowledge. Feel free to ask more questions, I'll edit them in. Also, please correct me if I get something wrong.

    I believe a lot of misconceptions are because people are stuck with the old monolithic blockchain ways where it is assumed that there's only one way to do things, and that is that one blockchain will do everything. So, let's begin with that, and also, thanks to r/ethfinance users for contributing these misconceptions.

    Rollups are a temporary band aid fix - X, Y, Z blockchain can do it on L1 so they don't need rollups

    (by u/hehechibby, u/ec265)

    Rollups are the present and future of the blockchain industry.

    But first, a brief perspective shift is required to understand why rollups are essential. Until now, blockchains have had to do it all - execution, consensus security and data availability. This has led to significant bottlenecks and inefficiencies, reflected in the blockchain trilemma. Rollups are blockchains that are laser focused on one thing, and one thing exclusively: executing transactions as fast as possible, while "outsourcing" the hard work of security and data availability to a different L1 chain that is better at it. It's simple division of labour or specialization in action. Just like it led exponential growth in the industrial revolution, so will it lead exponention increase in scalability for the blockchain industry.

    Now, X, Y, Z blockchain may have compromised significant amounts of decentralization and security to get high scalability, and Ethereum and Bitcoin may have compromised scalability to get high security and decentralization. Rollups are simply constructions that can get the best of all worlds - with high scalability, security and decentralization.

    The important point is that it doesn't matter if it's an L1 or a rollup - to the user they are just interacting with an execution layer. Execution layers - L1s and rollups - should be directly compared with each other. Solana and Avalanche are not competing with Ethereum - they are competing with Arbitrum One and StarkNet.

    Tl;dr: Whatever any L1 can do, a rollup can do it better.

    X, Y, Z blockchain is still faster than rollups

    No. Once again, whatever any L1 can do, a rollup can do it better long term. I'll point out that there's a wide open design space with rollups, and some rollups will opt to have conservative rate limits - especially optimistic rollups. But especially with zkRs, they don't have to - they can push past the limits of L1s as described in the article linked above.

    Lack of composability is bad

    (by u/Whovillage)

    This is a common argument about rollups but it actually makes very little sense. As mentioned twice already, whatever any L1 can do, a rollup can do it better. I don't see anyone complaining about lack of composability between L1s?

    A rollup remains fully composable, even if it's settled across multiple data shards or external data availability sources.

    Like L1s are not composable with each other, so are rollups not composable with each other. But there are many interoperability solutions live like Hop, Connext, cBridge and Biconomy, and many more in the works. Indeed, there's amazing innovations like dAMM that lets multiple zkRollups share liquidity!

    Tl;dr: Rollup composability is superior to L1s.

    Fragmentation of liquidity is bad

    (by u/Beef_Lamborghinion)

    See above, all of the same applies. Rollups may not share liquidity, but neither do L1s. Except, unlike L1s, they actually can with innovations like dAMM!

    Tl;dr: Rollup liquidity fragmentation is less than L1 fragmentation.

    Rollups are centralized

    (by u/Whovillage)

    All transaction data (in compressed form) and proofs are published on L1, which enable exiting a rollup directly from L1 even if the rollup itself is compromised. So, security and decentralization of rollups = security and decentralization of L1. Now, it's certainly true that rollups may have centralized controls in the early days, but most if not all rollup projects are committed to progressive decentralization. The final form of rollups: zk rollups with decentralized sequencers, decentralized provers, decentralized L1 smart contracts and light unassisted exits - you have security and decentralization that's practically identical to the most secure and decentralized L1, except with the massive scalability.

    Casual users will never be able to execute the CEX - Ethereum mainnet - rollup journey / it's too expensive

    (by u/Whovillage, u/stevieraykatz)

    Top CEXs like OKEx, Huobi and Coinbase have committed to support withdrawals directly to (and deposits from) Arbitrum One and other rollups with very low fees. Bitfinex already supports withdrawals to Hermez.

    Meanwhile, going through Ethereum is not the only way into rollups. cBridge, for example, lets you enter Arbitrum One through Optimism, Polygon PoS, Binance Smart Chain, xFai, Avalanche or Fantom. So there are plenty of options already, and there'll be many more over time as CEXs and fiat ramps integrate, and liquidity builds up for these various solutions.

    Tl;dr: The UX is identical to any L1.

    It takes too long to withdraw from rollups

    This is true for optimistic rollups - take 7 days to withdraw from rollup to L1 using the default bridge. However, as mentioned above, there are multiple options available that let you make a fast withdrawal. Of course, zkRollups don't have this limitation.

    Rollups will be obsolete after "Eth 2.0"

    Firstly, "Eth 2.0" is deprecated nomenclature. The two major upgrades coming to Ethereum next are The Merge which merges the consensus layer (previously eth2) with the execution layer (previously eth1) - so we're all one Ethereum again! The next major upgrade is after that is data sharding on the consensus layer side. Data sharding is actually focused on accelerating rollups. So, Ethereum L1 scalability will be limited for the foreseeable future, while rollups will scale through the roof!

    Tl;dr: Ethereum's roadmap is rollup-centric and designed to accelerate and empower rollups.

    Rollups are still too expensive

    This is true, in the short term. Optimistic rollups like Arbitrum One and Optimistic Ethereum are reducing fees by 90%-95% currently, which while a huge improvement over Ethereum is still too expensive. With some optimizations like signature aggregation, better batching and calldata compression, this can be reduced to 99%. Indeed, zkRollups are already seeing 99% reductions getting fees down to the $0.10-$1 range even when L1 fees are high.

    But it doesn't stop here! When Ethereum releases data shards, rollup costs will absolutely plummet, with over a magnitude greater capacity unlocked overnight, scaling up to several orders of magnitude long term.

    You can get a preview of that with validiums like Immutable X, where it costs less than a cent to mint an NFT. Indeed, it's so cheap that Immutable X is subsidizing it, so it currently costs $0.00 to mint an NFT with your Ethereum wallet! Try it out for yourself on SwiftMint. I'll note that validiums are not as secure as rollups, but they are more secure than sidechains and other L1s. Volitions further extend this by giving users the choice between rollup and validium - best of all worlds!

    Tl;dr: In the long term, rollups + data shards will offer the greatest scale and lowest fees possible for given demand.

    Rollup finality is slow

    Rollup sequencers give you "soft confirmations" nearly instantly - for me this is ~0.3 seconds on average for a Uniswap trade on Arbitrum or Optimism. For most people, this soft confirmation is fine. But it's true that L1 finality is often delayed, especially in the case of zkRs. StarkNet has a great solution with checkpoints achieving effective finality on the rollup side very quickly, at which point the finality is as fast as the L1 can finalize. As zk tech improves, Ethereum implements single-slot finality and data shards are staggered, we will see finality drop to a few seconds. All that said, there may be some niche usecases where settling directly on L1 still makes sense.

    Rollups are an Ethereum thing and bound by EVM

    Rollups are definitely not just an Ethereum thing. Indeed, Tezos has committed to a rollup-centric roadmap. Arthur Breitman, founder of Tezos, actually makes one of the best arguments for why rollups are the ultimate scalability solution, in tandem with data shards.

    Further, rollups have a wide open design space. They can experiment with VMs, fee models, coordination mechanisms, governance etc. Indeed, the room for innovation is much wider than L1s - given they always have a fallback on the most secure L1. Want a quantum-resistant VM? Use StarkNet. Like your UTXOs? Use Fuel V2. Like LLVM and Rust? Use zkSync 2.0. Just want a chain optimized for one specific application? Sure, use Immutable X for NFTs. Want a fully private chain with 0 MEV: use Aztec.

    Tl;dr: Rollups have a wide-open design space, and anything any L1 can do, so can rollups, and then some.

    Why is Ethereum special, if you can deploy rollups elsewhere?

    Rollups will leverage whatever is the most secure and decentralized L1 with the highest data availability that can support it.

    It's clear Ethereum is orders of magnitude more secure and decentralized than any smart contract platform. Realistically, Bitcoin is the only other chain that's comparable, but of course, they lack the ability to host rollups.

    Ethereum doesn't currently have the highest data availability, but it will, with data sharding. Data sharding inverts the trilemma - the more decentralized your network is, the more data shards you can deploy, and the more scalable your rollups will be. This is how rollups that deploy on Ethereum will scale to millions of TPS over the years, speculatively up to 15 million TPS by 2030. The only area where Ethereum can be improved is the execution layer - to make it more friendly for verifying zk-SN(T)ARKs. I'm sure it will, once The Merge, data shards and statelessness are done.

    It's clear, then, that Ethereum is uniquely positioned to be the best host for rollups. But this is not to say that there can't be other contenders. If Ethereum's data shards are saturated, we'll see data availability chains like Celestia or Avail potentially taking up the slack. Other L1s who are transitioning to a rollup-centric model, like Tezos, may also benefit if there's an overflow of demand from Ethereum-based rollups. And of course, the elephant in the room is an unexpected new competitor, though realistically, the only real competitor is if Bitcoin somehow adds the functionality to verify zk-SNARKs and implements data sharding.

    For the rollups, it doesn't really matter. They'll just leverage whatever L1 offers them the best security, decentralization, network effect and data availability.

    Tl;dr: Ethereum is uniquely positioned to offer the highest security, decentralization, and data availability - making it the defacto standard host for rollups.

    Rollups are stealing traffic from Ethereum

    Ethereum execution is fully saturated, and has had full blocks for years now. All activity on rollups is net additive. Now, some may argue sharding would have expanded Ethereum's capacity - but rollups + data shards in tandem increase the overall capacity of the Ethereum ecosystem by several orders of magnitude more than the previous sharding solution.

    Rollups are too complicated, no one will understand it

    Might I just point out I'm writing this on the day that Arbitrum One has proven to be the fastest growing smart contract platform in history? In reality, the UX for using a rollup is identical to that of using an L1, as covered before. Users need not care about the underlying architecture - to them it's just another smart contract platform. Do YouTube users care about what programming language it was written in, what OS the servers run on, what hardware the servers implement, what internet connection they use etc.? Of course not. Indeed, I expect things will improve significantly with smart contract wallets and centralized frontends.

    When rollups get big enough they will just abandon the base chain and create their own blockchain

    (by u/Whovillage)

    Technically, this is possible. However, what makes a rollup special is that it's backed by the most secure and decentralized L1. This is the hardest bit, evidently so as only Bitcoin and Ethereum have managed to achieve it. Arbitrum One has already demonstrated that there's exponentially more demand for a chain backed by Ethereum's security than a more centralized consensus mechanism. On a related note, as alluded to earlier, if there's a competitor that offers better security and data availability than Ethereum, then rollups will be well incentivized to migrate. Which is fine, and will keep Ethereum core researchers and developers honest.

    There are no rollup tokens, so people won't be invested in the ecosystems

    This is not quite true. While there are many rollup projects in their early stage and do not yet have a token, I expect most rollups to eventually release a token. Many rollup projects do have tokens, and are using them in innovative ways - like Immutable X. Just another advantage for rollups over L1s - you can have unique and clever token and fee models.

    It's too expensive to compute a zero-knowledge proof

    True, but by amortizing this over many transactions, the costs become negligible relative to gas paid for transaction calldata. Of course, we're still in the early days of zero-knowledge tech, and we'll see costs and time for computing zk proofs plummet over time. Software optimizations, GPU/FPGAs/ASICs, Moore's Law, and growing adoption with more transactions means things will only get better for zkRollups, which have already proved to be sustainable.

    ​

    ​

    submitted by /u/Liberosist
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    Mastercard buys its first cryptocurrency company

    Posted: 12 Sep 2021 02:31 PM PDT

    In the past day, the #Ethereum Layer 2 solution #Arbitrum has grown by 17,107 unique addresses in a single day, and the daily transaction volume on the network is approximately 106,839, a growth rate of more than 300%.

    Posted: 12 Sep 2021 08:25 AM PDT

    Why are the gas fees low again?

    Posted: 12 Sep 2021 06:45 AM PDT

    Hey, I'm not really an ethereum expert and I'm curious why did the gas fees dropped to about 40 GWEI now? What was changed?

    Thanks in advance

    submitted by /u/Timcrypto1308
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    420,000 ETH Deposited to Arbitrum L2 For Nyan Cat Tokens

    Posted: 12 Sep 2021 08:00 AM PDT

    Arbitrum vs MATIC

    Posted: 12 Sep 2021 02:30 PM PDT

    I'm still a beginner in the Ethereum world and I'm wondering about Arbitrum vs MATIC. As I understand, the first is a real L2 and the second is a side-chain? Is that correct?

    People used to use MATIC for L2 with Ethereum, will now Arbitrum make MATIC obsolete?

    submitted by /u/Emotional-Fly5578
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    Will L2s matter after 2.0?

    Posted: 12 Sep 2021 06:01 PM PDT

    Instadapp adding Arbitrum. Allowing one-click movement of funds/vaults

    Posted: 12 Sep 2021 02:34 PM PDT

    Staking problems on Kraken

    Posted: 12 Sep 2021 06:51 AM PDT

    The Future Gamification of NFTs

    Posted: 12 Sep 2021 05:36 PM PDT

    Since long before NFT's humans have been collecting silly things. We collect stamps, baseball cards, vinyl records, video games, art, and recently of course, NFT's. I can easily enough imagine some caveman collecting rocks; heck I've seen it from penguins. It's wired into us. We instinctually want to gather things, feel they belong to us, and gaze upon our dragon hoards in pride. We even do this for otherwise valueless things. Baseball cards do nothing but Topps has been running a business on them for decades. Because we're weird we even do this for purely digital things.

    We weave our collections into our very identities. They become part of the story we tell about ourselves. You'll casually tell someone I'm an 'X' collector at a cocktail party in the same way you'll tell them your occupation. How you personalize your collection of 'X' says something about you. This behavior create communities of people, subcultures that share a bond forged by the difficulty of the habit. Being a part of a culture of collectors brings trust, community, and status.

    People will go to extreme lengths to finish a collection. They'll spend thousands of dollars on Magic cards that they'll never play with. They'll spend hundreds of hours filling some 100% number in a video game, collecting Korok seeds yahaha, getting every steam achievement, or gathering some aesthetic set. They'll login to zapper every day for months to sign a message and spend hard earned ETH on gas jumping through hoops just to get an image of a little Zappy dog. I don't have to be able to explain this. I can state to you with confidence that if you put a collectable in front of people it drives behavior. As soon as it becomes a defined collection, it becomes desirable. We take pride in showing our collection to others; it confers status. It invokes memetic desire. It is an achievement. The more difficult it is to attain, the stronger the memetic desire, the higher the status. Collector psychology is a deeply human, deeply emotional drive.

    This can be utilized by designers. For good or ill it can be gamified. Collections can create objectives that incentivize people try a spectrum of behaviors rather than specialize. They can encourage us to overcome our fear of the unknown and step out onto unproven ground. Steam achievements add replayability to games, serendipitous discovery of features, add style and humor, and extend playtimes. As a creator, the value of your creation and your ability to meaningfully iterate on it scales with engagement. Clearly, associating a collection with a desired behavior drives engagement and ultimately adds tremendous value per developer hour invested in it.

    Compared to monetary incentives such as liquidity mining, collectables are shockingly economically efficient at generating engagement. How much would Zapper have had to pay people to get the tens of thousands of users they got in their first quest round? How much would Alchemix have had to pay people in ALCX to get them to return the same amount of ETH from the red carpet exploit? How much ETH has been burnt by people chasing one NFT drop after another these past few months? The sums are staggering given how little is actually invested by their creators. Clearly, we're onto something important here. So let's have a look at where we are right now and where I see us going with NFTs.

    At present I see three main categories of collections taking off. The first are classic fine art collections. This is best represented by the collection of PleasrDAO. It's the type of thing you're going to see printed out in high quality and literally shown in art museums in a few years. The only thing the NFT layer has changed for these compared to their analog counterparts is transparency of their history. NFT's don't need someone at an auction to certify their authenticity. You simply get the artist themselves to claim it's legit and forever after the authenticity is assured. No counterfeits, no auction house shenanigans, just pure internet culture now itemized and monetizable in a way that wasn't possible with web2.

    The second are community membership NFT's. These confer membership and status to whomever holds them, and they serve as a proxy of a value system espoused by their creators. This encompasses everything from punks to mutant cats. The creators of these collections put out a community manifesto, provide some art to add some relative desirability, and offer these tokens on a first-come first-serve basis. Gas bidding wars erupt as people scramble to join to this new community. ETH goes up in flames, miners rejoice, and a new community is forged from the fire, standing atop the dying embers of the ETH sacrificed on the pyre. Little to none of the value used in the ritual is retained for the community itself. The long term value these of NFT's is based on the behavior of that community as a whole and how desirable membership remains. Some of these confer benefits, some do not. The only incentive of these NFT's is to hold and spread the memetic desire to others. As prices become… tempting… members reveal their commitment to that community by the money they forego by holding. As the price of punks rises, they become more of a statement of how much you want to belong to a group, rather than a personalized representation of what you have done.

    The third type of collection is not gated by scarcity of supply but rather by prerequisite action. I've already mentioned the Zapper and Alchemix NFT's as examples of this but POAP's are a more common one. These are designed by their creator to reward behavior. POAP's are used to reward event attendance or participation. More recently POAP Delivery is used to reward some historical behavior, from some csv file, sometimes even derived from on chain behavior. What we have as an ecosystem in this regard is a bunch of ad hoc attempts unified only by their NFT status.

    I predict we're going to see more NFT's that are not just retrospective but gamified to incentivize ongoing/future behavior like the Zapper NFT's. Gitcoin grants could launch a set of NFTs that can be claimed by anyone who donated to each previous grant round. Uniswap could create an NFT (instead of liquidity mining) for people who migrate liquidity to the Arbitrum-One pool. Some of these may have time cutoffs to create urgency, or only be available until a situation resolves itself such as the Alchemix red carpet NFT. Alchemix looks to be planning to create rpg item NFT's for DAO participants. Zapper is working on a crafting system for their next quest round. These systems are going to become more gamified and more prevalent because they are more economically efficient at incentivizing behavior. What we have right now as an ecosystem in this regard is a bunch of ad hoc attempts unified only by their NFT status. Eventually there will be a platform. RabbitHole is an example of an up-and-coming attempt of this; there will be others.

    Obligatory blog post: https://tokenomicsexplained.com/the-future-gamification-of-nfts/

    submitted by /u/LogrisTheBard
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    Ethereum – The Internet of Money

    Posted: 12 Sep 2021 09:57 AM PDT

    How to Get Started with L2?

    Posted: 12 Sep 2021 10:11 AM PDT

    Hello fellow Ethereans,

    I'm so excited that Layer 2 season is finally upon us! I'm an experienced DeFi user but haven't gotten around to any of the L2 options yet. My main focus is getting started with Optimism and Arbitrum. Anyone have any guides they can point me to?

    I'm really hoping to move my activities to L2 so I can save on ETH gas fees. Thanks.

    submitted by /u/tpmv69
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    A Quick Dive Into Optimistic Ethereum

    Posted: 12 Sep 2021 10:00 AM PDT

    Dusting attacked on erc20

    Posted: 12 Sep 2021 01:17 PM PDT

    I've noticed 7 or 8 random tokens/coins in my erc20 wallet - but surely if it were a dusting attack and the sender sent 1000s of them, it would cost them an absolute fortune in gas fees?

    I obviously won't be touching any of them.

    submitted by /u/Affectionate_Scar438
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    Comprehensive introduction to Eth?

    Posted: 12 Sep 2021 12:02 PM PDT

    I'll admit that I was brought here via another sub and want to really start reading up on Eth. Is there a "best" sort of comprehensive introduction on the topic that anyone would be able to recommend?

    submitted by /u/Adobethrowaway33
    [link] [comments]

    What would be cool things to build on Arbitrum or for the Ethereum ecosystem? Maybe a small thing for the community that makes things easier? Have you any cool ideas?

    Posted: 12 Sep 2021 09:30 AM PDT

    How to cancel transaction / set nonce on Coinbase Wallet?

    Posted: 12 Sep 2021 11:18 AM PDT

    I sent a transaction of 0.05 ETH a couple days ago, and me being stupid decided to set a super low gas fee and its stuck. I'm using Coinbase Wallet, and I can't figure out how to set a specific nonce so I can cancel it. Is there any way to link Coinbase Wallet to Metamask so I can set a custom nonce on the same address? Or is there any way to set a nonce on Coinbase Wallet? Clearing the pending transactions in advanced settings doesn't work either.

    Transaction:

    https://etherscan.io/tx/0x4cac5b0cd384fa500e287e59d55f4cee2d75c47b4718ce3b87a667efa988dcd4

    submitted by /u/Iittle_shit
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    Recovery

    Posted: 12 Sep 2021 05:58 PM PDT

    Is there any way to recover money sent via Ethereum? Pretty sure I know the answer….

    submitted by /u/Nefarious_69
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    Blockchain Trilemma: Does anyone have an example of compromising security to improve decentralization and scalability?

    Posted: 12 Sep 2021 08:55 AM PDT

    I understand how you can compromise on decentralization or scalability, but is there any real world examples where security was compromised to get the other 2?

    It seems to me that compromising on decentralization is implicitly a compromise on security, but maybe it's just that security is a must-have, so you either compromise on scalability or decentralization.

    If I had to classify rollups, they compromise on decentralization outside of L1 to perform more transactions and contract executions faster, but are required to prove to the decentralized L1 network they executed accurately in order to cement their previously relatively centralized actions onto L1.

    submitted by /u/nishinoran
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    Is Ethereum’s DeFi Boom Setting Itself Up For DeFi Bust?

    Posted: 12 Sep 2021 07:03 PM PDT

    Reducing Ethereum Inflation at the December Hard Fork

    Posted: 12 Sep 2021 06:59 PM PDT

    It is looking like the merge will likely not happen until 2022Q2. EIP-1559 has reduced the overall inflation rate by about 50% (though this may decrease if the NFT mania subsides). There is a mandatory hard fork in December, due to the coming ice age. Hash rate has remained high without any appreciable drop-off in hash rate and the chain remains secure despite the EIP-1559 upgrade burning the base fee (likely due to Eth price increase and the lack of more profitable mining options for miners).

    A reduction in Ethereum inflation rate is an option at the next hard fork. The current emission rate is 2 ETH/block. The goal should be to reduce inflation (essentially the security budget) to the minimum required to keep the blockchain secure. No point in overpaying the security budget in the form of a higher than required inflation rate to secure the chain. Thoughts?

    View Poll

    submitted by /u/StableRare
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    Can some one give me some dummy ether for test purpose. Rinkeby faucet seem not working to me. Thanks you!!!

    Posted: 12 Sep 2021 05:54 AM PDT

    Account: 0x7Fa32CE2d1Cdc1C46cE3704176eDf03099F6d3a1

    submitted by /u/octor_stranger
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