Application-Level Data Deep Dive: Trends & Insights With ERC-7702AA

Yeah, welcome everyone. My name is Lorenz. I am the research lead at Grow2Pi, and today I'm hosting a workshop on application-level data deep dives, trends and insights, and talking also about ESC 7702 Improvement Protocol, which introduced account abstraction on Ethereum, native account abstraction. So there's a lot of cool stuff to go into this deep dive, and it's a workshop. So first of all, I want every one of you to always feel free to interrupt me if you have any questions, any thoughts, anything to contribute.

So let's make this a little bit interactive so it's not too boring. Okay, and yeah, I came up with a short agenda. First I want to talk a little bit about, so like the first three points are me explaining a little bit to the current progress and what is important to know about EIP 7702, but also like evolution of public goods funding and how on-chain data is always becoming more and more important. And then the number four will be a live demo on how you can basically, yeah, unlock on-chain analytics for your dApp through a simple attestation. And I will go through on how to do that in a live demo.

You can follow along and, yeah, just attest your own contracts. And by doing so, you will unlock a bunch of analytics for free for your applications. So I think, so you can basically kickstart your analytics journey for your dApps today. And yeah, I was notified that we are actually live. So just as a heads up, yeah, we are live streamed and everything will be recorded.

That means I guess I can't swear, which is kind of sad, but no, just kidding. Okay. So maybe, yeah, let's start with now is the era for dApps. What do I mean by dApps? And I think we all can remember, or like maybe a raise of hands, who remembers checking Etherscan and seeing these high numbers and basically, yeah, crying a little bit.

Okay. Yeah. A bunch of you guys. And crying a little bit when you hit the button and send and, yeah, paid $50 for an NFT sale. Honestly, thinking back that that was just three years ago, it's crazy, right?

So many use cases were just not possible if you have to pay $50 per NFT mint. And yeah, that was the problem. That was the status quo three years ago. And taking it a little bit, like taking a trip down memory lane, what changed in the last three years? And I think it's important to highlight that this problem has existed for more than three years.

So almost five years ago, the Ethereum Foundation made the strategic decision to abandon execution sharding for data sharding. Why did they do that? Exactly to solve the problem of the high gas fees. And that is exactly when they introduced the roll-up-centric roadmap. So because data sharding now allows Layer 2s to post data much cheaper to Ethereum and therefore scale the execution layer rather than natively scaling Ethereum itself.

And Vitalik and the Ethereum Foundation, they released a bunch of blog posts late 2020 already, early 2021, explaining the problem and also what they came up with the solution. And that's also where proto-dunk sharding was first thought up, which is exactly data sharding. And that went live with the Denkun upgrade early last year. And that allows the roll-up-centric roadmap to take up even more steam. But yeah, so this problem of high gas fees was really pressing and actually hindered a lot of growth.

And my expertise is data. So I really want to also showcase you what changed with data. So I prepared a few slides. One of them is different Layer 2 scaling solutions and their average transaction costs. And we can see that, yeah, we had Layer 2s, but without data sharding, they were also still too expensive, right?

So we can see here, for example, in January of 2022, sure, you can transact not on Ethereum Layer 1 for $50. But is OP Mainnet with $3 per transaction really an alternative? I mean, you're running into the same problem. But you can also see really well here that with the introduction of data sharding in the Denkun upgrade through Blobs, the fees basically went to zero. And you can really see that well in the lower right section.

Like all of these lines are basically flat. And all of the fees are minus 99.9%, which is insane. And now for the first time in the last three years, we basically have transaction fees that are less than a hundredth of a cent. So even our platform is rounding these numbers down because they are so small.

And I think in, yeah, in the Ethereum ecosystem, there's always a lot of talk about what the problem is right now. But I feel like a lot of people always forget where we came from. And I think solving this high transaction fee issue through the rollout-centric roadmap is really an accomplishment we can all be proud of. And it's also something that enables new use cases. And I prepared one more slide, which is throughput.

That is basically how much gas is being used across the Ethereum ecosystem. So that means layer one plus layer twos. And gas is just a measurement of how complex the transaction is. And we know Ethereum has a limit of 1.5 megagas per second.

And that hasn't changed since Ethereum came out. Okay, recently it changed a bit, but we say it's basically flat. And you can really see that down here on the timescale axis. The bottom line, which is this ultra-thin line in the dark blue color, that's Ethereum with this 1.5 megagas per second.

And now as new layer two launched, significant launches were, for example, in July 2023, BASE, but also a bunch of other layer twos. They really managed to scale the Ethereum ecosystem to levels we haven't seen. And I think that goes also hand-in-hand with the reduction of transaction costs, which enable new use cases, which enable 100x more transactions going through the Ethereum ecosystem today. So what do I want to tell you guys as dApp builders? I want to tell you that, yeah, we kind of entered a new era.

I guess my father walks in on me and asks me, hey, son, did you really scale Ethereum? I can say, yes, we scaled Ethereum. What is next, right? And I think next is dApps, right? We now have the infrastructure.

We have the cheap transactions. We have all of these high-throughput chains. We have them somewhat secure, but that's like a whole different story. Now is really the era of dApps. And while block space is being commoditized, I think the true value, the value capture will not happen in the infrastructure layer, but in the dApps layer.

So it's a message to you guys. I think now is the era of dApps. Okay, so that's what my opinion is on which era we are currently in. I now want to give a little side story to EIP-7702. It's an improvement protocol.

So EIP stands for Ethereum Improvement Protocol. And it's basically an upgrade, an upgrade to the Ethereum protocol. And it launched with Pectra. Pectra was a major Ethereum upgrade that launched a few months ago. And EIP-7702 introduced native account abstraction.

And I think knowing what native account abstraction is is important because it can be utilized in building dApps. Okay, I have a complicated slide here, but bear with me. It's, I think, kind of easy to understand. So this is like the flow of how a transaction is being built with EIP-7702, which is the account abstraction, plus the bundling transaction with 4337. You don't really have to know what 4337 is, but basically it starts down here.

Down here, you have a smart contract. A smart contract can be anything, right? It can be Uniswap, an exchange. It can be a Gnosisafe, a Multisig, whatever. But what ultimately EIP-7702 does, it allows EOAs, which is like a single address.

So let's say you are alice.eth, which is a normal address, your EOA with a private key behind it. You can now temporarily update your own address with code from a contract. And that code can be any code. Yeah, you can reference any code and upgrade your own EOA to become and adopt this smart contract logic.

Why is that important? Well, for the first time now, you can actually really utilize a bunch of benefits that do not come natively with an EOA. And these benefits are really good for dApp builders. And I think the list is pretty long, but I think these are the three most important advantages for dApps that enable EIP-7702 use cases. So first of all, yeah, your EOA can now become a smart contract.

And now you can simply batch transactions. So rather than approving first and then swapping, like we all know on any current DEX, you can now batch these transactions using a smart contract signed with your EOA. And by doing so, you only have to sign once rather than twice. The user only has to sign once and you can approve and swap together. That sounds simple, but ultimately for users of dApps, I feel like that's the biggest use case we have right now here.

Then also, I think the second most powerful advantage is that dApps can now use sponsored gas. So rather than having EOAs natively pay for their own transactions, they don't even have to know what gas is. You can simply say, okay, any smart contract call to my contracts are sponsored. So you can pay all the gas for all your users, and that's it. And the third thing is programmable account logic.

So you can add social recovery, you can add task keys, you can add multi-signatures to really make sure that users don't get locked out or in case they lose their mobile phones or whatever, you can actually recover their private keys and so on. And I feel like the combination of the Ethereum protocol releasing all of these account abstraction features together with the infrastructure being solved and having really cheap fees is like the perfect storm for amazing apps on dApps to come out. So now maybe a question for the audience. So who here has their own dApp and is currently working on a certain dApp? Please raise your hands.

Okay, yeah, one, two, nice. Who is interested in launching their own dApp? Okay, yeah, nice, some more hands. Who is here an infrastructure maxi? Yeah, okay, also a few.

Nice, okay, good to know, good to know. I think if you start with building a dApp, most of the times it's really hard to raise venture right from the beginning. And I know that a lot of dApps that are successful now started with public goods funding mechanisms. I mean, I can tell the story of Grow2Pi itself. We are an analytics company and we also apply for a grant for the Ethereum Foundation.

I actually got that and that's how we started. So with like a small grant from the Ethereum Foundation, we kick-started our analytics platform. And I think there's so many grant opportunities out there. If you want to get started with your dApp, look for these grants. They are not huge amounts of money, but they can get you going.

And I think these public goods funding mechanisms, understanding them a little bit better, really puts you in a better position to later raise more money and also optimize for the amount of funding you actually receive. And let me go over one example. So as I said, there's fundamentally a lot of public goods funding. So whether it be Octane's distributing yield to dApps, whether it be the Ethereum Foundation, other foundations, there's a lot of opportunity, but I want to highlight one of them, which is the RPGF program by Optimism. Optimism being the big layer two, they are distributing a lot of OP tokens to builders within the ecosystem.

And what you can notice, they have epochs. So every six months or every quarter, I'm not sure exactly, they have a new epoch and they distribute new money to users. And what I noticed and what they changed over the way how they distribute the funds is, at the beginning, they had community leaders, KOLs, backholders of OP tokens. They voted on who gets money. But what we really notice now with especially RPGF3, which happened last year, it's a shift of funding mechanisms.

In the past, it was people voting, which kind of turned out to be more like a who's the most popular user to how can we measure on-chain adoption through on-chain data to have a more neutral analytic way of measuring impact and then distributing money to these protocols that have the most impact. And I think keeping that in mind is important to optimize for funding. So it's much more important to have a big on-chain presence than, for example, convince a lot of KOLs your project is the best. This is the message I want to give you. RPGF, they basically have a function called, they measure impact basically by multiplying on-chain usage times their contribution.

And that's how they measure impact. So yeah, on-chain presence getting more and more important. But okay, I think I talked enough about different public goods fundings and why it's important to focus on analytics for your dApp. Maybe as a little final message here, yeah, public goods funding is now more than ever determined by your dApp's on-chain impact. Yeah, maybe let's jump into the live demo.

How can you now unlock analytics for your dApp and really track your users, your adoption, and also make sure that you have a solid on-chain presence that people can track and see and also utilize to measure your impact. And for that, I want to go into a live demo. So I will sit down here. Maybe so far, are there any questions regarding the first three topics? Yeah, back there.

Yeah, so the question was, how do you turn an existing EOA into a smart account? So first of all, the chain needs to support Pektra upgrades, which currently not all Layer 2s have, but most of them are adopting it. But yeah, if you're on a chain with the Pektra upgrade live, you can now send a so-called Type 4 transaction. And within that Type 4 transaction, you can upgrade your EOA to have code set behind it. And you simply do that by sending this transaction, defining how long it's valid for, also on which chain you want to upgrade, and then which is the address of the contract codes you want to give to your EOA.

And by simply defining that, you can upgrade your own EOA to any code out there, basically. And your EOA will have this code set, and then you can send transactions to your EOA, triggering these smart contract codes. And yeah, it's a new transaction that was introduced. Yeah. So the question was if MetaMask already did that for the EOA, or if you have to build that within your dApp.

So ultimately, you have to build it inside your dApp. The wallet providers, they just simply give you the interface of signing a transaction. The actual process of what you want to set behind your EOA, you have to still come up with yourself and program that into your front end for your dApp. So within the front end, you would basically set the contract codes you want to upgrade, and then whenever people hit here, upgrade my EOA or whatever, they would then set this code behind the EOAs. And the wallet would just show them the normal send interface of a transaction, and that's how it would work.

So yeah, you have to program the actual upgrading of the EOA yourself. Yeah, so because it's a new transaction type, that's correct. Oh yeah, sorry, I repeat the question for the live audience, or like the online audience. So the question was, do all the wallet providers support sending this new transaction type, right? So currently, a lot of major ones actually do not support it, which is kind of sad, but I think most of them have some sort of timeline behind it.

So I think it will come, yeah. I think it's just a matter of time. And there's actually one dashboard. Let me see if I can find it. You mean the Swiss Army Knife?

Oh my god, no. Ah, you mean this guy? Yeah, exactly, true. Yeah, that's it. Yeah, on this you can literally track which chains support it currently, and also which wallets.

Like, they're not allowing you to sign that type of transaction, but it's something under the hood. We use their own, much more than you have to change. Yeah, so I agree. It's still a lot of work in progress, but honestly, I think if your wallet provider does not support it eventually, it will just become irrelevant over time, so I think everyone will eventually upgrade. Ultimately, it's also a problem of the wallet providers actually making UI better for the user.

But yeah, this website is really good. Thanks for highlighting it. Here you can actually track who is actually already supporting EIP-7702, and exactly which chains are not supporting it. For example, Rabi, which is a big wallet provider, right? Okay, any other questions, thoughts?

Okay, yeah, so how can you now track data analytics for your dApp? I want to give a live demonstration here on how to do it. So whenever you're building a dApp, you can unlock free analytics for you and track your adoption. And what's the best way to do it? In my opinion, and I'm, of course, talking about also how, what we are building from Grow2Pi in some way here.

So we basically built the whole applications page. So in this applications page, we provide free analytics for dApps across the Ethereum ecosystem. And within that, you can search for applications and instantly see how many users you have, how many transactions, on which chains you're active, and a bunch of other metrics, how much fees you generated, and so on. And yeah, so for example, the most used contract in the last 30 days on transaction count is, of course, Uniswap. And you can instantly see, hey, Uniswap is active on multiple different layer twos, almost all of them, right?

And they have over 80% of activity on base alone, like if you go multi-chain. Oh, yeah, that's a bit larger. Sure. I can also remove the task bar. Yeah.

So this is, of course, an extreme example because Uniswap is so popular, right? They have millions of transactions and, yeah, almost 800,000 or 900,000-plus users. On a daily basis. But I think it gives you a nice overview of where your users are, how many fees they pay, who are your biggest competitors within this space, and, yeah, then also what contract addresses are behind each of the projects. So in this live demo, I want to show you how you can create this customized data analytics platform for your GAP, and it's actually pretty simple.

So we from ProtoPi, we implemented the Open Labels Initiative, and any dashboard is only as good as the labels are, right? So high-quality labels in an open format is really important for us data analytics companies to pick up on your projects and also implement them. So my recommendation to you guys is, if you ever launch your own GAP, go on to Open Labels Initiative to test the contracts, and then a bunch of data companies will instantly integrate you because it's on an open ledger. And we from ProtoPi will also listen to this and also pick up your contracts from here. So by listening on ProtoPi or, like, attesting to Open Labels, you will automatically also be listed on ProtoPi.

So, yeah, just as a side note, Open Labels Initiative is fully open source, I think also public good, so they don't make any money with providing labels for the community. And, yeah, it's a pretty awesome project, and you can see a bunch of people already integrated them. So attesting once will allow you to have your GAP analyzed across multiple data analytics platforms. Okay, that being said, yeah, why don't we just attest something? So, for example, CalSwap, you probably all know it, right, the Moo amazing decks, and we want to attest these contracts to Unlock Analytics.

And it's actually really simple. Simply go to Open Labels Initiative, and then there's the Attest button here, and now they have multiple options of how to attest your contracts, and let's do a single attesting. So what we do here is we basically openly announcing that this contract, or, like, we are attesting on-chain for everyone to view that a certain contract address is owned to certain projects. And anyone can do it, right, either the GAP developer or someone from your community. I guess I will be just someone from the community, and I can come in here and, for example, see, yeah, this is the Ethereum address, yeah, it's being used.

So we can see this is the entry point DEX contract. So I will simply copy the address, and then start filling out this simple form, which basically just says this address is, the name is GP version 2 settlement, I'm just going to copy that. Assign it the owner, which is very important because that's how things are being grouped. We can see there's already an owner assigned to it, the cow protocol. We can assign a category if we feel like it.

Decentralized exchange here, I think this is the best one. Common source, yeah, I don't know, I guess we can add the documentation as source. And yeah, and now we simply attest this contract, which is an on-chain transaction. And by doing so, we are basically marking this contract as crowdsourced protocol, and this contract being named GP v2 settlement. So I will sign this, and let's see what happens here.

Okay, perfect. You can see we attest it on-chain. So now this metadata is being posted on-chain using the Ethereum Attestation Service, and everyone can now view it directly from the Open Labels Initiative. And if we now update our group with PyFrontend, and now let's see if we can find our cow swap. I guess I have to scroll down a bit.

Yeah, there's a lot of different devs. Where are you, cowswap? Ah, there, okay, I found it. Yeah. And so what happens in the backends, the attestation is on-chain, everyone can view that this protocol is being marked, or this contract is being marked as cowswap.

We from Grow2Pi pick it up from on-chain, run our analytics on top of that, and then present finished made dashboards on Grow2Pi. So we can see that, yeah, the GP v2 settlement contract is in here now, and it's around, yeah, 2,000 transactions in lifetime. And now, yeah, now you have unlocked analytics for your dApp for free, and you can track everything that's happening from active addresses, amount of fees paid, the transaction count, and so on. And I think that is really important for dApp builders to not only track your own adoption, but also, yeah, make sure you are also leaving a presence on-chain, which could be beneficial for funding. Yeah, question?

Why is my project in the owner project? Yeah, good question. You mean, so down here in the owner project? Yeah, exactly. So that's a good question.

So the Open Labels Initiative works by assigning tag IDs a certain value. And owner project is basically a tag ID, and you would set a certain value to it. And this value is corresponding to the OSS directory. And the OSS directory is a GitHub repo with source code projects. So I think, yeah, there's even an app project up here where you can simply add your project information.

So let's say cowswap wouldn't have been there. We would simply add it to the open source directory. So cowswap, yeah, just name it cowswap again. edX. Okay, now it's already detecting that it exists, but let's just put some name here.

And what we are doing here is basically creating a new project in that repo, which we can then reference within the attestation. So if I create my YAML here, okay, it already exists. Okay, yeah. We generate a YAML file, which we then create a pull request for that onto the open source directory, which we then reference in the attestation. And that's how we map contracts to a project.

Yeah, and then you just have to hit commit changes. And then we will review it and merge it into the OSS directory. It's one extra step, but it allows for really concrete mapping of contracts to a project. Yeah, good question. Yeah, and...

Yeah, of course, so the thing is with labels and DAP analytics, they're only as good as your labels are. So if you want good analytics, normally you have to label them yourself. Like most of the time, people are not willing to spend a lot of time going through them, and labeling them for you. But putting in this five minutes of work, as we can see in this live demo here, really helps to give clarity on your project, how many users you have, but also allows community members to maybe easier find you, and track, and eventually hand out funding. Okay.

Yeah, so that is it with my live demo. Are there any other questions regarding the live demo, and how you can unlock analytics for your DAP? Yeah, one more from here. Yeah, there's... Where can I know more about the tag definitions, and what else Open Labels Initiative offers?

If I have other labels that I want to open source, basically. Yeah, so the Open Labels Initiative is a whole standard that is maintained by the community for labels. And they have, I think, 20 different tag definitions. Even if you enable here advanced mode, you can actually see what you can tag your address and things with, which is like everything from audit, to whether it's a paymaster, whether it's an ELC20, ELC721, the deployment date. So there's a bunch of stuff you can also tag your address with.

And I think the best overview, I think there's a documentation tab on the Open Labels Initiative website explaining each tag, and also the value sets behind it. So how the data model is defined. And by doing that, everyone can agree on posting labels in one unified format, really reducing the redundancy of contributing labels to multiple data analytics companies, because everyone can just reference this one, pull in all the data, and you have your data always in the right format. So that really helps in reducing redundancy of labeling. So I think Open Labels Initiative is really, yeah, helping a lot of data teams reduce redundant work and getting high-quality labels sourced from the community.

Because, come on, I think most companies that offer some sort of labeling submitting, that's always closed source. So whether it's like Uniswap, Dune, or something, if you commit your labels, whether that be names of your contracts or even source code, right, or APIs, you're basically handing it over to a centralized entity. So I can really recommend Open Labels Initiative because it's all open source. Yeah, exactly. And I see we still have some time.

So I think I made my point. Now is the best time to build dApps. Always make sure to combine the best roles, right, cheap transaction fees, and also account abstraction, being live on Ethereum and a bunch of chains now. Now is the time to build, guys. And always keep in mind your analytics because that's how you can measure your impact.

Yeah. So maybe a question to you guys. What analytics are you looking for when you search for dApps? I mean, we from Grow2Pi, I showed you this dashboard, right? It's pretty new.

So we only have four different metrics, which is transaction counts. We have active addresses, fees paid, and that's it. What type of analytics for dApps are you looking for? Wash trading? What exactly do you mean by wash trading in the sense of taxes?

Yeah, I mean, in general, maybe an app wants to pump the value. So you would find a way to label the fake volume, right, like a simple mint that doesn't actually generate any meaningful value, but it's there only to increase the stats, right? Stuff like that. That's true. Wash trading, yeah.

Yeah. But how would you determine if something is a wash trade compared to a normal user? Yeah, I don't think you can be certain that it's wash trading, but you can recognize some patterns and label it as potential wash trading or something along those lines, I guess. Yeah, no, that's a good thought. I know the Open Labels Initiative also has categories for scam, so I think it's called category.

Yeah, exactly. Yeah, so I think it's possible, yeah, we can extend this to include scams or wash trades and maybe filter out analytics for that. I think that sounds like a good idea. Any other ideas what you want to see in dApps and analytics? Yeah, back there.

Maybe connections between the active addresses to eventually figure out how many people are actually using the dApps or connections between dApps, which addresses tend to use the same set of dApps. Okay, nice. So in what sense do you think, like, do you mean, like, for example, who's using Uniswap compared to Cowswap or what would be the interesting insights you would want to know? How many users you can convert from one dApps to another? Yes, basically.

Or if there are a set of addresses that use a specific set of dApps. Okay, nice, yeah. Related to that, app user retention, so like how many people are using the app week after week versus once and leaving. Yeah, like 30-day retention times and so on. Yeah, I think that's actually really important because also that ties back to what you said with the wash trading.

A lot of times there's, like, certain periods where there's incentives and then you get all the airdrop farmers and people just spamming. I don't know if you saw the layer two, or not the layer zero activity chart. Maybe I can pull it up right now. Let me search for it. Layer zero.

So, yeah, layer zero was incentivizing activity quite significantly over the last few years. Okay, you can just see, like, a giant spike here. Active addresses. Yeah, but now recently the activities have not been incentivized anymore and you could really see a drop from, yeah, several hundred thousands to, yeah, okay, maybe just a 75% drop. Not that significant, but still, yeah.

Definitely a good analytic to add. Yeah. Maybe you can write the difference after the campaign ends. For retention, yeah, showing the difference, yeah. True.

Oh, wait, how do you mean that? Like a retention from certain points in time that users can set? Yeah. Yeah. Like, on the chart you can label the point where it ends, right, the campaign, and then maybe something that you set at a specific point in time and you see the difference and stuff like that.

I think the most important thing, I mean, you can just derive it just watching the chart, but you have the point on where the campaign ends, and then it's like, maybe it's not easy enough. Yeah. I was just thinking about maybe integration with proof of humanity protocols or something like that, where it's like you can filter by only people that have world coin attestation or other proof of humanity things to filter out travels and farming and stuff. And you would basically have, okay, just count actually verified humans as an active user. Yeah, exactly.

That would be cool. What protocols do you think of integrating there? Which proof of humanity protocols are the most interesting for you as a dev builder? World coin is one. There was one that I tried at East Denver that was like a handprint.

I think it was proof of humanity, something like that. I don't know if it's live yet, but I think that was a testnet. Anything that could come up, really. Makes sense. Okay, yeah, that's also a good thing to add there.

I know Zillow is also working on their own proof of humanity concept. So there are quite a few. And I know there was one more, Gitcoin Passport. I don't know if you have heard of that. I guess it wasn't a fully proof of humanity, but more like add a bunch of socials, and if you add so many socials, you wouldn't farm these accounts.

So in the end, you basically just rank up or rank higher. You would rank more unlikely to be a bot, basically. But I think they kind of sunsetted Gitcoin Passport a bit, which is kind of sad to see. Because I think it was a good concept. Okay, cool.

Then I would say I ended a little bit early. But yeah, thanks everyone for attending the workshop. If you have any data questions in any way for your dApps, come up and approach me. I hope I can help you out. Or just DM me on Telegram.

And yeah, we are building RotoPi. All our analytics are for free. So if you attest your contract in the Open Labels Initiative, we will pull it from there. And then you can track your dApp users, transaction counts across the Ethereum ecosystem for free. So I really can – yeah, I hope you make use of that.