ETH Gas: This Will Change Ethereum FOREVER

Hey guys, welcome back to Box Mining. Today we're going to talk about a problem that irritates me a lot, which is Ethereum gas prices. Every time I tell a new person about Ethereum, yo, hey, let's trade an NFT. And then when we're trading, we're like, oh, that's $20 in gas fees. Nonsense. Nonsense. Today we have Kevin, the founder of ETH Gas, and they have a novel technology that just completely eliminates that, essentially. You can use other people to pay for your gas, and on top of that, make transactions faster. Welcome, Kevin. Thank you, and thanks for having me. Absolutely. That's basically what we're creating, is a marketplace for people to hedge and trade gas so that effectively it can just be relegated to the background. Like protocols can pay gas on behalf of users, and for the end user, you never need to think about it. You just, I want to trade. I want to swap. I want to buy. I don't care about gas. I don't want to see it going up and down. I just don't care. And I think this is one of the things that put me off Ethereum, right? Everyone's saying, oh, Ethereum's cool. Ethereum's cool, but when you're trading a transaction, you look at that gas fee, and it's just like, It's not cool. Like you think about, you think about the real world, right? You're buying, like you're buying your lunch. You're buying a piece of furniture. You shouldn't have to think about the electricity cost that went into that burger. It's there. It's in the background, but you just don't want to deal with it. Exactly. And it should be just that one swap button. You click it. Seamless, fast, efficient. So that's your dream, right? Yep. Yep. And it's coming soon. It's coming soon. And on top of that, for you guys that are watching now, I think there's two calls for action I discussed with Kevin a little bit earlier. So one is gas fees. So you're going to have a program for people to claim back gas fees. Absolutely. Yeah. So we're working with a couple dozen protocols. We'll be announcing that very shortly. Okay. But basically, it's as I mentioned earlier, the idea is that we know how the real world works, right? We know gas fees are annoying, but there's never been like a technical ability to do this. To claim it back. Exactly, right? We want a gas back. Absolutely. So we're working with the protocols to basically say, your user spent like $3,000 this month on gas. So they're basically going to rebate that to us. And through us, then a user can basically claim these gas rebates across one, two, four, six different protocols that are going to start to rebate this to them anyway. So guys, pay attention, because we're going to show you guys how that claim process works, and you guys should definitely follow them. But on top of that, there's one last tidbit that you need to stay until the end of the video to find out which is what's happening on the exchange, because they're bringing a lot of value into the space, and obviously capturing that value as a community as a whole, inviting you guys on to capture that value is going to be great. So stay until the end for that. Absolutely. Let's start from the beginning, right? So what is kind of your core objective here when you try to create EVE gas? Sure. So there's two kind of maybe North Stars that we think about. One is, as we talked about earlier, this idea of gas fees. It sucks. No one wants to have to think about and deal with it. But the other, which is more technical but also affects everyone, is just block times. So the block time, of course, on Ethereum is 12 seconds, which sucks. A lot can happen in 12 seconds. Which is frustrating. Ethereum and the community, they're looking to scale it. So you have L2s that provide more throughput, but no one's really addressed the latency of Ethereum. We've created this technology that inserts ourself into the block building process to enable you to get an instant confirmation on Ethereum. Would you almost say that's one of the reasons why Solana is taking traction right now? Oh, for sure. Solana has a lot faster block times. Yeah, you hit a button and it's done. It's not like you hit a button and it's, is it going to be done or is it not? I don't know. Is someone front running me? This matters a lot for trading too, right? For sure. Trading with that one millisecond difference makes a huge difference. Absolutely. And so for the wallets that integrate with us, effectively, you'll just go to your wallet or go to the website, click buy, sell, trade, whatever it is, and boom, an instant confirmation on Ethereum. Oh, really? So that you think about where that puts Ethereum. It's we have a very decentralized chain with the lowest latency and that's powerful. That's big. So you're bringing that war to Solana, making things even faster, solving that problem that Ethereum community hasn't really even properly addressed. Yep. So I guess, I guess let's go back to this idea. So how are you tackling this problem? Because it sounds like a huge problem that Ethereum needs to overcome. What's the technology that you guys are making that's solving this? Yeah. Currently, the way blocks are built on Ethereum is that you have these, you have people who are paying for transactions, you know, like the buyers, traders, HFT guys, or even retail, and you have the validators. The current block building process involves collecting a bunch of trades, submitting them through block builders, like flashbots and stuff, and then the validators just pick a block. So it's what we call like a spot auction. Basically, you deal with a block now every 12 seconds. What's happening is that all the validators that propose blocks, they're all about to upgrade their software. So currently the software they use is called MevBoost. They'll be upgrading to this new set of software called CommitBoost. And in that process, these validators can now choose how they sell blocks. And it just so happens that we have the majority of validators on board to sell block space through us. So we're almost like an agent of the validator. And in that sense, we can basically set up a mechanism to say, hey, this is going to be the validator for this block, but we will take orders on a millisecond basis. You get it? So we're acting on behalf of the validators, and this wasn't possible prior to, really, just like weeks ago when the software got updated. So it really depends. I guess going back to principles, it really depends on, and this kind of whole issue came about because of how blockchain works. Because it's decentralized, there's no one person deciding how things are ordered, et cetera. But there's a group of people that come to this conclusion, but what you're doing is you're providing a marketplace for these people, or for these validators there, for that auction to take place. Basically, efficiency. Exactly. It's improving the efficiency of how things are packed. Yeah, and so you have validators traditionally are not like low latency guys. It could be like a home staker on their Raspberry Pi, theoretically, right? But they don't know how to offer like a low latency experience. So they effectively outsource that process to us. And we effectively run that on their behalf. We take fees in the process, but ultimately, it provides a great user experience to the end users who want fast confirmations, but it also ends up paying the validators more. So it's interesting how much evolution there is in the space. So it does get very technical. I guess the easiest way to really understand what's going on is a lot of what you're building is behind the hood. A lot of people don't really see what's going on. They don't really know how it works on the Ethereum side because it's very decentralized. It's very abstract. Yes. But at the end of the day, it's really about making sure that the people who are willing to pay more are able to pay more. Can get included, yes. They can get included. And then at the same time, the people who are in charge of the decentralized network, they're getting paid more. Yeah, the validators, they're doing their job on the decentralization part or all around the world. But in terms of constructing the actual blocks and being able to sell it, that's where we insert ourselves into that process. Right. And because we're a low latency company, we can then provide that low latency experience to the traders, to retail, to the wallets and anyone else who just wants an instant confirmation. It's almost like bringing a professional service. It's like Wall Street. They have those super fast computers that can link up and link up a very fast network. You're basically providing a professional high quality network for everyone. Exactly. It's an off-the-shelf, high-fidelity exchange for the home staker on their Raspberry Pi. Exactly. So everyone taps into access of this and then because you bring more value, because you allow traders who are willing to pay more, they're fighting for the NFT, that one single NFT, they're willing to pay a thousand dollars of gas for it. They can set that in and their advantage is that they get a guarantee that they're going to get it. Exactly. There's just more certainty for everyone. Yeah, and it's a free marketplace, so as long as people are willing to pay, anything goes, right? And that's how good capitalism works. That's it. We're going to sit in the middle, provide the tools for people to get the best order execution, however they prefer, and that will end up having more money go through this pipeline. Awesome. Awesome. So at the end of the day, people don't really have to know how it's being done, but they just have to know that, hey, look, you're making Ethereum a lot more competitive because you're increasing how fast confirmations are being done, and at the end of the day, the other side result is that you're allowing people other, essentially, the protocol itself to pay for the transaction, so yet again, the end user will have an overall better experience. Absolutely. Exactly. Okay, so this sounds really exciting. So what's the timeline for your releases? What are you delivering? What's the first phase one, phase two, phase three for your project? Sure. So the exchange itself will be going live in early March. We're doing some limited testing right now with a bunch of validators on the testnet, but March is basically our go-live date. We have commitments from a number of the validators to sell the block space. We have a number of buyers who are interested to get involved and to pay up, hopefully, for that block space. So yeah, excited to get that going there. Right now, I do feel it's almost like it's a little bit institutional. You have the people in the background already, the people who really want to buy and sell. The exchange comes online, boom, you're matching them. They end up matching. It's almost like order matching, right? It is, yeah. Yeah, you're order matching. You're activating. It's like Binance opening for the first time. Boom, okay. Now we know people who are demanding these fast transactions. We know people who are providing blocks. Boom, so that's March. And then you have an exchange going on. So that's a full-scale DEX as well, right? Exactly, yeah. And so we'll have the, what we call like base fee trading as well, so you can actually trade the price of gas. Oh, so that's where, so the marketplace for gas. And that's a little bit more accessible to the everyday person. Whereas if you're buying kind of block space, it's a little bit like infrastructure-like. You need to have a certain access to this kind of like the gas markets. But if you're just trading the base fee, everyone knows the base fee. And so you can speculate on that or hedge. So that's actually already going, that's already going live then. So what's the next few steps for the project as well? So after March, what can people look forward to? Let's take a quick look at what's going on. So you guys already have this up. And I think this kind of describes visually what's happening. So as Ethereum is a blockchain, next transactions are packed in blocks. What is this showing us? Okay. Again, traditionally, when you think about blocks and transactions, you're only thinking about the next 12 seconds or that next block. What we have here is an array of blocks from validators who are going to sell the entire block up front. Technically, you could buy an entire block eight minutes ahead of time here if you'd like. And that would be the price of five, five, six, give or take. And of course, that's the entire block. What's an everyday person going to do with it? I don't know. But for the most part, this is where it gets interesting. Now, if I just want an instant confirmation, typically I would need to put like a priority fee on my transaction. But what is the priority fee? Is it like one gui, two gui? I don't know. In this case, it's very precise. In this case, it's 0.2 gui for an instant confirmation. So you will 100% be included in this block right away. Just hit that button. And that's what this section is here. These pre-confirmations are what they're called. So it looks very technical, but at the end of the day, it's really just saying, okay, how much does it cost for me to be next? Exactly. You want absolute guarantee. It's 0.18 gui, done. These are the people lining up. This is how much you want to pay to be the next one in line. And then you have a certainty that you will be the next one in line, which is what a lot of people, traders want. Traders don't want to be, oh, they don't want to be front run. They don't want to announce what they want to buy to the world and then get front run by someone else or get sandwich attacked. Here they want to be next. They know exactly how much it costs to be next. Boom. Exactly. The whole thing is, it's all about certainty. There's this uncertainty around, am I going to be included or not? Is my price right? Is it not stressful? But you say there's a guarantee there, but does that mean that all the validators have to use this for you to get a guarantee or how does that work? It starts off with the validators that have opted in to our service. So on day one, even though we have the majority of their support, they're not all going to come on day one. They're going to start with say 1% of the box, 2%, 5%, 10%, 20%, so on and so forth. But at scale, we think that'll take somewhere between three and six months. Then basically for every slot or almost every slot, this will be available. Because the slot order is decided ahead of time. Correct. Ahead of time, it's a little bit random, but as we ramp up, then more and more of these markets will open up and then naturally you would just have everyone wanting certainty for every transaction that they do. Got it, got it. So it's essentially, it's a big market. It's like a NASDAQ for the next block. It's like an energy market. So again, it's outside of the retail environment, but you think of the real world where people are trading energy and that's effectively what this is. You can buy block space, you can sell the block space. Again, as a retailer, you don't really interface with it, but protocols should be doing this because all of their end users are consuming gas and it frustrates users. So that comes back to the earlier discussion on how can protocols get involved and how can they subsidize and manage this in the background and just, the word is abstracting it away from end users and this is how they would do it. And I guess the kind of interesting part is that protocols are making a lot of money at the end of the day. At Uniswap, they have a transaction fee, they have a budget, right? So it's in their best interest to make sure that their experience for the user is the best possible. I think one of the worst experiences that we've ever had is let's say there's a very hot token that's going on right now. You're trying to buy it and a transaction keeps failing and it keeps failing. The gas gets wasted, you don't get your tokens or your tokens are like not the price that you want. For sure. So that's really the bad experience that you don't want, right? And centralized exchanges can do that very well. That's where centralized, that's where people, I think, are leaving the decentralized space and going to the centralized space because there's a lot more certainty and just virtually no transaction cost. So by here, by opening this market up, I think that's kind of the novelty of this and the discussion here is a lot of people, they can't imagine, if you're new to this space, you can't imagine how a market like this can be opened up. But once it's opened up, it's like, oh, it's so obvious. It's like that aha moment there. Exactly. Okay, we should open this up and then we should talk about that. Exactly. It's every protocol, we know how much gas people are spending with these protocols. We know what the fees are. It's all super transparent. Protocols can basically just say, my users are spending 50 million a month. I'm going to subsidize all the buy transactions and not the sell. Whatever, it's up to them. But the point is to have a gasless experience for retail users. It'll drive up transaction volumes. It'll build community. And how much are we looking at? Because you gave me some numbers a little bit earlier, right? So right now, how much is being transacted and how much value do you think you can bring to the space? Yeah, so this transaction pipeline, we call it, there's about $3 to $4 billion on Ethereum spent on gas every year. With our marketplace, we expect to boost that by another $1, $1.5 billion and that will basically flow all through our, at scale. Hopefully that flows all through our exchange. Oh, awesome. So that's actually bringing more value and I guess at the end of the day, more people will use it, so there's more fees. People are paying for certainty, right? So as you pay for that certainty, it's great because you get the instant confirmation, but the money will just flow through and validators will earn more. Exactly. Got it. All right, so then we're talking about what's coming next as well. So let's talk about things that you guys should pay attention to. What's in for the community for them to get? Yeah, well, if you don't want to pay for gas, then speak up. That's really it. And it's not that you're not paying for it, it's just that you don't want to pay directly for it. You want it to happen in the background. So I'd say, if that matters to you, speak up. We're already working with big protocols to kick this off with, but speak to your protocols, have them talk to us, and let's do this across the entire ecosystem because it's doable. With today's technology, we can make it happen. So that's one thing. And also, of course, there's trading, right? So you said, there's transaction trading right now for the marketplace. Should I check out the marketplace? Absolutely. Part of it may be a little bit more institutional, but get involved. Try it out. We value our users and our early adopters quite a bit. We want that feedback. We want to see how the user... Right, you want the community to grow with you. We think we have a lot of answers. We don't know all the answers. We need the community to help us give that feedback. So we've seen everything scaling and we're talking about gas-like experience, maybe the ultimate Ethereum experience. What do you envision that to be? Yeah, well, base. The base chain that Coinbase rolled out. You think about their tremendous success that they've had and a lot of it is due to just no gas fees, right? They've abstracted that gas fee component away from the entire user experience and it just makes it so seamless. And yet, that's just a small chain, relatively speaking. If we can bring that experience to Ethereum, that's 100x type of thing for Ethereum. Right, right, right. Exactly. Because yet again, I think that's the biggest thing that puts people off. Every time I tell people, hey, let's play around with Ethereum. I try to send them a bit of Ethereum. Nope. $20, nah. You want to buy $5 of Ethereum? The gas fee is $20. It's not going to work. Not fun. So really just reducing gas fees back down to, well, minuscule amounts and then kind of having a gas fee experience would be it. Just having to not think about it. Exactly. Exactly. I see it's really pleasant talking to you because I feel like it's a situation where I'm pretty much fed up with paying gas fees but at the same time, I feel like Layer 2s aren't exactly solving this problem. So I definitely want to see Ethereum grow. I definitely want to see Ethereum compete more aggressively with Solana. So I definitely see this is one of the ways to do it. I hope you all the luck. Thank you. And I hope to see you more on the channel. All right. Thanks for having me. Thank you.