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Why i’m bullish on Zilliqa (long read)

Edit: TL;DR added in the comments
 
Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analyzed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk-reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralized and scalable in my opinion.
 
Below I post my analysis of why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
 
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
 
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise, just skim through and once you are zoning out head to the next part.
 
Technology and some more:
 
Introduction
 
The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
 
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
 
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
 
Mainnet is live since the end of January 2019 with daily transaction rates growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralized and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. The maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
 
Zilliqa realized early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralized, secure, and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in the amount of nodes. More nodes = higher transaction throughput and increased decentralization. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
 
Before we continue dissecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
 
Down the rabbit hole
 
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
 
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
 
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour, no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here.
Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
 
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts, etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
 
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as: “A peer-to-peer, append-only datastore that uses consensus to synchronize cryptographically-secure data”.
 
Next, he states that: "blockchains are fundamentally systems for managing valid state transitions”. For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber, and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
 
With public blockchains like Zilliqa, this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network, etc.
 
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
 
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever-changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralized and scalable being low.
 
pBFT stands for practical Byzantine Fault Tolerance and is an optimization on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
 
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and the University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017.
Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
 
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (66%) double-spend attacks become possible.
 
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
 
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT, etc. Another thing we haven’t looked at yet is the amount of decentralization.
 
Decentralisation
 
Currently, there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so-called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralized nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics, you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching its transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand.
Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end-users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
 
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public. They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public-facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
 
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers. The 5% block rewards with an annual yield of 10.03% translate to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non-custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
 
With a high amount of DS; shard nodes and seed nodes becoming more decentralized too, Zilliqa qualifies for the label of decentralized in my opinion.
 
Smart contracts
 
Let me start by saying I’m not a developer and my programming skills are quite limited. So I‘m taking the ELI5 route (maybe 12) but if you are familiar with Javascript, Solidity or specifically OCaml please head straight to Scilla - read the docs to get a good initial grasp of how Zilliqa’s smart contract language Scilla works and if you ask yourself “why another programming language?” check this article. And if you want to play around with some sample contracts in an IDE click here. The faucet can be found here. And more information on architecture, dapp development and API can be found on the Developer Portal.
If you are more into listening and watching: check this recent webinar explaining Zilliqa and Scilla. Link is time-stamped so you’ll start right away with a platform introduction, roadmap 2020 and afterwards a proper Scilla introduction.
 
Generalized: programming languages can be divided into being ‘object-oriented’ or ‘functional’. Here is an ELI5 given by software development academy: * “all programs have two basic components, data – what the program knows – and behavior – what the program can do with that data. So object-oriented programming states that combining data and related behaviors in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behavior are different things and should be separated to ensure their clarity.” *
 
Scilla is on the functional side and shares similarities with OCaml: OCaml is a general-purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
 
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognized by academics and won a so-called Distinguished Artifact Award award at the end of last year.
 
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise, it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts, it inherently involves cryptocurrencies in some form thus value.
 
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa or Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
 
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”. Scilla design story part 1
 
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
 
Scilla also allows for formal verification. Wikipedia to the rescue: In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
 
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
 
Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
 
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
 
Smart contract on a sharded environment and state sharding
 
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
 
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
 
And this is where the downsides of state sharding comes in currently. All shards in Zilliqa have access to the complete state. Yes the state size (0.1 GB at the moment) grows and all of the nodes need to store it but it also means that they don’t need to shop around for information available on other shards. Requiring more communication and adding more complexity. Computer science knowledge and/or developer knowledge required links if you want to dig further: Scilla - language grammar Scilla - Foundations for Verifiable Decentralised Computations on a Blockchain Gas Accounting NUS x Zilliqa: Smart contract language workshop
 
Easier to follow links on programming Scilla https://learnscilla.com/home Ivan on Tech
 
Roadmap / Zilliqa 2.0
 
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
 
Business & Partnerships
 
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organizations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggests that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
 
Zilliqa seems to already take advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, Airbnb, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
 
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
 
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
 
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are built on top of these blocks.
 
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”
 
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human-readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
 
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They don't just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
 
Marketing & Community
 
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data, it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities also seem to be growing.
 
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community-run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non-custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiative (correct me if I’m wrong though). This suggests in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
 
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
 
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real-time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding of what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
 
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures, Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
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Why i’m bullish on Zilliqa (long read)

Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analysed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralised and scalable in my opinion.
 
Below I post my analysis why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
 
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
 
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise just skim through and once you are zoning out head to the next part.
 
Technology and some more:
 
Introduction The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
 
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
 
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
 
Mainnet is live since end of January 2019 with daily transaction rate growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralised and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. Maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
 
Zilliqa realised early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralised, secure and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in amount of nodes. More nodes = higher transaction throughput and increased decentralisation. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
 
Before we continue disecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
 
Down the rabbit hole
 
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
 
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
 
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here.
Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
 
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
 
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as:
“A peer-to-peer, append-only datastore that uses consensus to synchronise cryptographically-secure data”.
 
Next he states that: >“blockchains are fundamentally systems for managing valid state transitions”.* For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
 
With public blockchains like Zilliqa this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network etc.
 
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
 
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralised and scalable being low.
 
pBFT stands for practical Byzantine Fault Tolerance and is an optimisation on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
 
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017.
Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
 
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (>66%) double spend attacks become possible.
 
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
 
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT etc. Another thing we haven’t looked at yet is the amount of decentralisation.
 
Decentralisation
 
Currently there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralised nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching their transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand.
Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
 
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public.They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
 
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers.The 5% block rewards with an annual yield of 10.03% translates to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
 
With a high amount of DS & shard nodes and seed nodes becoming more decentralised too, Zilliqa qualifies for the label of decentralised in my opinion.
 
Smart contracts
 
Let me start by saying I’m not a developer and my programming skills are quite limited. So I‘m taking the ELI5 route (maybe 12) but if you are familiar with Javascript, Solidity or specifically OCaml please head straight to Scilla - read the docs to get a good initial grasp of how Zilliqa’s smart contract language Scilla works and if you ask yourself “why another programming language?” check this article. And if you want to play around with some sample contracts in an IDE click here. Faucet can be found here. And more information on architecture, dapp development and API can be found on the Developer Portal.
If you are more into listening and watching: check this recent webinar explaining Zilliqa and Scilla. Link is time stamped so you’ll start right away with a platform introduction, R&D roadmap 2020 and afterwards a proper Scilla introduction.
 
Generalised: programming languages can be divided into being ‘object oriented’ or ‘functional’. Here is an ELI5 given by software development academy: > “all programmes have two basic components, data – what the programme knows – and behaviour – what the programme can do with that data. So object-oriented programming states that combining data and related behaviours in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behaviour are different things and should be separated to ensure their clarity.”
 
Scilla is on the functional side and shares similarities with OCaml: > OCaml is a general purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
 
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognised by academics and won a so called Distinguished Artifact Award award at the end of last year.
 
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities safety is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts it inherently involves cryptocurrencies in some form thus value.
 
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa for Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
 
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”. Scilla design story part 1
 
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
 
Scilla also allows for formal verification. Wikipedia to the rescue:
In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
 
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
 
Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
 
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
 
Smart contract on a sharded environment and state sharding
 
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
 
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
 
And this is where the downsides of state sharding comes in currently. All shards in Zilliqa have access to the complete state. Yes the state size (0.1 GB at the moment) grows and all of the nodes need to store it but it also means that they don’t need to shop around for information available on other shards. Requiring more communication and adding more complexity. Computer science knowledge and/or developer knowledge required links if you want to dig further: Scilla - language grammar Scilla - Foundations for Verifiable Decentralised Computations on a Blockchain Gas Accounting NUS x Zilliqa: Smart contract language workshop
 
Easier to follow links on programming Scilla https://learnscilla.com/home Ivan on Tech
 
Roadmap / Zilliqa 2.0
 
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
 
Business & Partnerships  
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organisations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggest that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
 
Zilliqa seems to already taking advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, AirBnB, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
 
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
 
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
 
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are build on top of these blocks.
 
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”*
 
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
 
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They dont just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
 
Marketing & Community
 
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities) also seem to be growing.
 
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiatives (correct me if I’m wrong though). This suggest in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
 
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
 
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
 
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures & Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
submitted by haveyouheardaboutit to CryptoCurrency [link] [comments]

Recap of Binance English Kava AMA (May 2020)

This AMA was conducted within the Binance English Telegram channel prior to Kava's June 10th launch of its DeFi Lending Platform.

Q1:

Can you give us a little history of KAVA?

Q2:

Could you please tell me what KAVA cryptocurrency is? What problem does it solve?

  • Answer - KAVA is the staking, governance, and reserve asset of the Kava DeFi platform. KAVA is required by node operators to secure transactions on the blockchain. Additionally, when lending fees are paid, they are converted to Kava and burned reducing the overall supply of KAVA tokens. As more users use the Kava lending platform, KAVA should become more scarce overtime.

Q3:

What is the advantage of keeping the KAVA token for a long and short term?

  • Answer - In the short term, if you stake KAVA you can earn additional block rewards every day, block by block. This provides a nice steady return on the Kava usually in the range of 3-20% depending on the number of people staking.
  • We will be opening the gates of DeFi to many top tier assets such as BNB, XRP, ATOM, and BTC which have never been able to use lending, stablecoins, or other DeFi Services. If you are a KAVA hodler you can benefit from owning and having a stake in the network as we grow because as the network grows, Kava is burned and it becomes more scarce as a resource.

Q4:

Chainlink is KAVA’s partner, can you explain more about this partnership?

  • Answer - Yes, this is not the usual chainlink partnership where a blockchain consumes data from Chainlink’s oracle solution.
  • No oracle solution adequate for DeFi applications on Cosmos was available. For this reason, Kava has teamed up with Chainlink to bring its data and reliable oracle solution to the Cosmos ecosystem. Chainlink nodes now will be able to securely publish data directly on the Kava blockchain where it can be used or easily transported to other Cosmos-based blockchains and applications. Chainlink oracles on Kava utilize all the industry-leading technologies of Chainlink, while enabling more frequent price updates and improving the reach and distribution of where that data can be used.
  • Since Kava’s blockchain is built using Tendermint, Tendermint-based blockchains within the Cosmos ecosystem (Binance, Terra, OKChain, Cosmos Hub, Agoric, Aragon, and others) will now be able to retrieve market data such as cryptocurrency, FX, and commodity prices. For DEX’s like Binance this will enable them to create futures, options, and other derivative products they were not able to do so before.
  • TLDR: Kava + Chainlink Data creates the ideal hub for all blockchains and applications to get their DeFi services and Data, and as result makes Kava a natural hub for the growing Cosmos ecosystem.

Q5:

What is the KAVA CDP product? Do you have any exciting things down the pipeline that you can share?

  • Answer - First, let me clarify that CDP simply means “collateralized-debt-position” similar to CDOs that exist in the traditional finance world. What it means is a loan using collateral to back the loan.
  • Kava’s lending platform offers collateralized loans to users who have crypto. Getting a loan with Kava’s platform is great if you don’t want to sell your crypto position, but need short term cash for payments or if you want to use the loan to get a levered / margin position without going through KYC.
  • As for news! Kava’s lending platform is scheduled to officially launch on the mainnet June 10th.
  • At this time, DeFi will be made available to BNB for the first time ever. Also at this time, the Kava DeFi platform will be awarding the first users that have BNB extremely high rewards for being early adopters.
  • Each week, 74,000 KAVA will be given out to all the users who have taken out loans on Kava. Yes, you get free KAVA, for taking out a loan using BNB!
  • If you want to participate, you can learn more about how to do it here!
  • Medium

Q6:

Why should BNB users use KAVA’s lending platform and take out USDX? And how to mint USDX with BNB on KAVA CDP?

  • Answer - Free- maybe let's call it rewards for being good users 😉
  • The rewards are platform growth incentives so that we can grow the platform quickly.
  • Well at launch, definitely the KAVA rewards are a huge reason for BNB users to use it.
  • As for the product long-term, the major use case for our lending platform is to get a levered position without needing an exchange or to go through KYC.
  • How it works is that a BNB holder can deposit their BNB and take out USDX loans - this capital they will take and buy more BNB with it. Most people will use the loan this way to get 2-3x the original BNB amount. If the price goes up on BNB, they win 2-3x the gains!
  • Of course if the price goes down and they cannot repay their loan, the BNB collateral might get liquidated, so be careful, it works just like a margin trading account.

Q7:

Brian do you have any more information or links for our community about this?

Q8:

KAVA was initially planned to launch on Ripple network but later switched to Cosmos Tendermint Core. [email protected] is that something you see in Tendermint Core that is not available anywhere?

  • Answer - For clarification, Kava was never planned to be on Ripple. However, Ripple is a Kava investor, shareholder, and partner.
  • We selected the Cosmos-SDK featuring the Tendermint BFT consensus because during our past work with Ripple, MakerDao, ETH, and other layer 2 work we learned the value of “finality” of blockchains. For example, on ETH, the finality of blocks do not happen right away. You need to reach 15+ blocks to be confirmed on Ethereum to really know a transaction has passed. This results in really slow user experiences that aren’t acceptable in finance or any application really.
  • Tendermint solves this because it makes every transaction final and occur in seconds.
  • Additionally, we chose the Cosmos-SDK as the framework to build our stand alone blockchain, Kava because it allowed us to create our own security model and design which enables Kava as a DeFi platform responsible for millions of dollars of collateral to be very secure in a way we could net get if we built it on any other network.

Q9:

KAVA does cross-chain support. Compared to other DeFi platforms, KAVA offer collateralized loans and stable coins to users too. How will volatility be managed there with so many different collateral systems in CDP?

  • Answer - Volatility is an important consideration and accurate and timely price reference data is needed to make sure the system works.
  • All the collateral positions rely on price feeds from oracles to determine if they are safe or need to be liquidated. Kava has created a novel partnership with Chainlink, where Chainlink oracles that normally run on Ethereum, operate nodes directly on Kava where they can post prices. This Kava to avoid network congestion, high gas fees, and other less desirable issues found on Ethereum, while enabling the oracles with Kava’s fast blocktimes and finality so they can actually deliver price updates 10-20x more frequently than is possible elsewhere. This makes Kava’s price feed data very reliable.
  • In times of volatility, if liquidations occur, the Kava platform automatically auctions collateral off for USDX on the market and burns the USDX. This mechanism keeps the system balanced and USDX algorithmically stable and always fully collateralized by real assets.
  • And it does this transparently, unlike the real world CDOs which caused the world issues in 2008 due to the lack of transparency in their assets and risk.

Q10:

Recently, Binance has released a white paper on BSC, a Binance smart chain. So, what can I get by staking through Binance Coin BNB?

  • Answer - Yay for smart contracts!
  • What can we get by staking bnb?
  • Staking BNB on Kava, or depositing it in a CDP and creating USDX from it earns users KAVA in rewards everyweek. A lot of rewards. In addition, you get USDX to hold which also pays out a savings rate each block that is much better than say what USD in a checking account could do.

Q11:

Various platforms are in Ethereum. So why is Kava not at Ethereum?

  • Answer - I could speak about this for ages, but there is a reason for Ethereum being the home to many hacks and bugs.
  • Kava is not on ethereum because we couldn’t build our system there. The main reasons. as I have mentioned are:
  • (1) Ethereum has congestion, oracle issues, high fees, and slow block times.
  • (2) Ethereum’s open smart contracting system can do anything. This is great for building crypto kitties, but horrible for financial software as it makes all code have infinite attack vectors that hackers can use which are impossible to test for. We built our own chain so we could scope the code and limit what attack vectors are possible.
  • (3) Building in solidity, the language of Ethereum, is horrible. The development environment is bad, testnets don’t work, and many other things are painful. Kava is primarily built in GO which is far superior for financial applications in most respects.
  • (4) The future is Cosmos. Binance, Okchain, terra, Cosmos Hub(ATOM), and Kava all are created using the Cosmos-SDK framework. I believe this is the future and the blockchain developers are moving to this in mass. Over 110 projects now are building with the Cosmos-SDK.

Q12:

What are ways by which Kava project generates profit/revenue to maintain project. What is your revenue model?

  • Answer - Kava is a for-profit financial DAO with over 80 different businesses staking Kava and voting on its evolution. They want to see Kava succeed so they vote to fund operations and developments that drive user growth in Kava. Due to fees paid in Kava and the burning mechanism, as the system grows in users, the Kava supply decreases making those that hold Kava win due to scarcity.

Q13:

Lending/Borrowing has been introduced by Binance. How can this affect the Kava since people can directly borrow BUSD from Binance with BNB used as collateral than going to Kava?

  • Answer - Kava will be featured on Binance as well. The main benefit of Kava is that there is no counterparty. The capital is minted on demand not sourced from somewhere. Binance and other centralized parties on the otherhand need to find capital to provide loans, creating a cost of capital. Kava is much more efficient at providing capital and avoids a lot of regulator issues.
  • I'll add I think BUSD in the future might be usable for collateral to Kava's loans as well. It would be cool 🙂

Q14:

What's your opinions on Future of DeFi & DApps? Do you think that DeFi is the future of current Financial world? Also, How do you see the future of KAVA?

  • Answer - I believe Centralized Finance and the existing infrastructure has a place. It has a lot of issues that cause things like the 2008 crisis and the current insolvency issues that are happening across the world due to trust-based debt with no actual backers other than the people which end up bailing out banks and other financial institutions that have made poor decisions.
  • DeFi's future is bright because it solves this fundamental issue. It removes trust and adds transparency. Kava is right at the foundation for all of DeFi as things grow and mature.

Q15:

Recently, we have seen some big hacks in DeFi platforms. How will KAVA deal with these bad actors of crypto and what security measures have been taken by KAVA for the safety of users' funds?"

  • Answer - Unlike a lot of DeFi startups, we take things seriously. We don't ""move fast and break things"" as Mark Zuckerberg would say.
  • We do a thorough analysis before suggesting to deploy code. Our internal team works very hard to run tests and simulations, once it passes internally, we give it to 3rd party auditors who try and game it and break the code. If it passes there, we give the code to the community to review and vote into the mainnet. In this way, I’d estimate about 100+ people review our code and test it before it goes live and consumers can touch it. I don't know many other project teams that due things with such diligence.

Q16:

Binance for KAVA is a very valuable partner in terms of increasing the number of users, but what is KAVA ready to give equivalent to Binance users? What applications will be integrated into Binance to expand the ecosystem?

  • Answer - Kava gives the BNB users loans. It gives the DEX a stablecoin and the ability to offer margin products. Kava’s connection to binance chain and chainlink data also enables Binance DEX to offer trustless derivatives like options and futures products going forward.

Q17:

Cosmos has limitations on working with PoW coins. How do you technically solve the problem of implementing DeFi products for bitcoin?

  • Answer - Cosmos is great for hard-to-work-with blockchains like BTC. It's flexible in how you can construct bridges. For example, the validator set can have a multisig private key split up into pieces in order to create a trustless escrow and control of assets on other blockchains. In this way, we can create peg zones with Cosmos for the best assets in the world. Once a zone is established, it can be used on Kava and other Cosmos chains.

Q18:

USDX is currently a little-known stable coin. Do you plan to add it to the top exchanges with good liquidity, including Binance?

  • Answer - USDX will be growing quickly. We have a plan to have it listed and get liquidity across several known exchanges shortly after launch.

Q19:

There are several options for using USDX on the KAVA platform, one of which is Margin Trading / Leverage. Is this a selection function or a compulsory function? Wondering since there are some investors who don`t like margin. What is the level of leverage and how does a CDP auction work?

  • Answer - Using Kava for Margin trading is 100% optional. You can choose how you want to use the margin loan. You don’t have to spend the USDX unless you want to. It could be used for everyday payments as well in the case you simply don’t want to sell your underlying collateral. If you don’t want the risk, do small loans with lots of collateral.

Q20:

Will your team have a plan to implement the DAO module on your platform, as it provides autonomy, decentralization and transparency?

  • Answer - DAO - Kava is a for-profit DAO and it’s fully functional already. We have on-chain governance and have underwent several votes and evolutions you can look at. You actually can see some current voting processes taking place here: https://kava.mintscan.io/proposals
  • We recently implemented a cool feature called committees, which enables the DAO to elect a small group of experts to make decisions without needing a vote of the whole user base. This enables the experts to have control over a small portion of the protocol - such as monitoring the debt limit, fees, etc and enables Kava to operate faster and be more adaptable in volatile market conditions.

Q21:

How can we address the possible overloads and security threats caused by increased users in the DeFi scene?

  • Answer - Yes, this is a huge issue for Ethereum, MakerDAO and everyone in the space. I don’t see a bright future for DeFi on Etheruem unfortunately. You can’t have a blockchain do everything well. Tether alone congests most of Ethereum and makes oracle price feeds lag the market. This can cause liquidations that should not happen and real people will lose real funds. It’s a huge issue.
  • The hope is for a dedicated system like Kava to provide a better backbone for DeFi applications going forward.
  • I should point out that Kava is not just a MakerDao for Cosmos or a CDP for Bitcoin. Kava is designed to be a foundational layer for DeFi services that every new blockchain and application will need.
  • Every blockchain will need DeFi services like lending, stablecoins, and data and they need it to be very secure. Kava does all this with its cross-chain lending plarform, USDX stablecoin, and Chainlink data in an incredibly secure, but accessible manner.
  • In this way, Kava aims to connect and serve all the major cryptocurrency communities and build it’s place at the center, where every developer can get what they need to build financial applications of the future."

Q22:

What distinguishes Kava from your existing competitors like Syntetix?

  • Answer - Synthetix isn't really a competitor, but it is an interesting project in terms of mechanism design. We share a lot of common investors and have similar token economic ideas with them. The only blockchain project that could be is MakerDAO, but they can only work with ETH assets due to their design. We are focused on the major cap assets - BTC, BNB, XRP, ATOM and others have a much larger market than ETH to address. BTC is 10x the size alone. Currently no one serves them with DeFi. We’re going after this opportunity and believe it to be a huge one.

Q23:

Why is the KAVA coin not used for Mint, why am I asking that because I see it can also make the value of KAVA coins grow naturally?

  • Answer - Why is Kava not used as a collateral? Well, it could be I suppose. The community might vote for this in the near future if they want us to be like synthetix. It makes the Kava token more valuable and it will incentivize much more locked-up Kava reducing overall circulating supply which is fairly favorable. The main reason we have not done this yet is that we(Kava and its community) are still weighing the risks of doing this given that Kava also functions as a reserve asset. I think it's likely Kava gets added as collateral at some point, but it will likely have a high debt-collateral ratio to address the issues similar to Synthetix which is 750%.

Q24:

How do you prevent in a manipulated KAVA Mint just to take advantage of a token prize when minting?

  • Answer - Minting rewards and manipulation. We’ve thought of this. Each week, the blockchain counts all the blocks, counts how many people had a loan in that period, then takes the average loan amount over time to calculate the rewards. If you open and close a loan - you will get very little rewards. You only get a large reward if you keep the loan open the full period.

Q25:

Who are your oracle providers? Are you also an oracle provider?

  • Answer - Kava may run 1 oracle in the future, but we will always have many and be the minority. Most chainlink oracle node operators are large players in the space that run staking infrastructure companies like cosmostation, chainlayer, chorus one, figment networks, etc. Binance will also be one of our oracles.

Q26:

If we look at all the different types of DeFi products _(decentralized exchanges, stablecoins, atomic swaps, insurance products, loan platforms, trade financing platforms, custody platforms, and crowdfunding platforms) currently covering important areas of traditional finance...where does Kava fit in?

  • Answer - To make any interesting financial product work you need capital, a stable store of value, and price data. These are really hard to get on current blockchain environments. Kava provides all of these.

Q27:

Many people describe Kava as similar to Maker (MKR). How is Kava different? Why do you think Kava has more potential?

  • Answer - MakerDAO is a smart contract with a singular purpose, to serve ETH. It sadly inherited the problems of ethereum. Kava is designed from the ground up for security and interoperability. We are targeting bigger and better assets and have more capabilities to serve them with what their developers and ecosystem need.

Q28:

What is the uniqueness of KAVA project that cannot be found in other project that´s been released so far ?

  • Answer - Well in June 10th, we will be the first ever blockchain project to bring DeFi to another blockchain in a real way. BNB users will have loans, stablecoins, and much more.

Q29:

The gas fee is an issue for blockchain besides scalability. Does your Kava provide a solution for gas?

  • Answer - gas fees are very low on Kava, only high enough to prevent spam. We dont need high fees for TX because validators are paid in block rewards. Additionally, we dont have competing transactions from crypto-kitties or other non-financial applications. This leaves all of Kava's throughput 100% dedicated to scaling financial transactions.

Q30:

Kava project works on DeFi (Decentralized Finance) But what’s the benefits of Decentralized Financial system? What are the possibilities of DeFi over Centralized Finance system?

  • Answer - Open access, no need for trust, and no censorship by singular governments or parties. Kava is accessible anywhere in the world, by anyone.

Q31:

Data supplied by oracles are false at times, how do you prevent this? How reliable are data received by KAVA?

  • Answer - This is why using premium / credentialed APIs is important for oracles. These data sources tend to be more accurate and better managed. Wrong prices can happen - for liquidation systems like Kava, we factor this into our design by using an average of data overtime form all oracles as part of the calculation.

Q32:

Can anyone become a KAVA validator, or is it just an invitation from the project itself? What are the requirements for becoming a KAVA verifier?

  • Answer - Anyone can become a validator, but you will need to stake or have enough stake delegated to you from others to be in the top 100 validators to earn block rewards.

Q33:

DEFI PULSE said that a total of 902M is currently locked. According to you, how will this number change in the next few years, and how will KAVA position itself as the top player in this market segment?

  • Answer - DeFi will only grow through 2020. And likely grow massively.
  • All projects on DeFi pulse are ""ethereum"" based. Kava is going to shake the blockchain world in the next few weeks by being the first ""multi-chain"" project on DeFi pulse and by my estimations we should quickly surpass a lot of the projects on that list.

Q34:

I am an testnet minter and the process seem Simplified, now I want to know if minting of USDX will continue when you launch Mainnet and do you have plans to build your own KAVA WALLET for easy minting on your mainnet

  • Answer - Simple blockchain experience?! high praise! Yes the process will be the same. Kava will not provide interfaces or wallets. Kava Labs builds software for the blockchain, our community members like Cosmostation, Frontier, Trust Wallet build support for people to interact with it.

Q35:

What business plans does Kava have with Seoul (South Korea) after partnering with Cosmostation? Do you plan to expand your products beyond Asia? Have you thought about harnessing the potential of South America?

  • Answer - South Korea is a perfect market for Kava's DeFi. Regulations prohibit fiat-backed stablecoins and margin trading. Kava's platform uses crypto-backed stabvlecoins and can enable users to get loans to margin trade. I am looking forward to further developing the Korean market for Kava, working with close partners like Cosmostation and showing the world real use cases of DeFi.

Q36:

Thank you for taking the time to conduct this AMA. Do you have any parting words, and where can the people go to keep up with all of the new happenings regarding Kava Labs?

  • Answer - Thanks for all the awesome questions! Amazingly thoughtful!
  • I've been promising the world cross-chain DeFi since June of last year. The IEO and mainnet went live Nov 2019. It's been a year of hard work - but an industry first is coming on June 10th. I'm excited. I hope you guys are.
  • Thanks for having me, I hope you become a USDX minter and get KAVA rewards. And last but not least, I love Binance - it's Kava's first home and I'm really happy to open up DeFi to BNB first.
  • To keep up to date w/ all things Kava: Website - Telegram - Telegram for Kava Trading Chat - Twitter - Medium
submitted by Kava_Mod to KavaUSDX [link] [comments]

The History, The Current State And The Future Of NavCoin

The History, The Current State And The Future Of NavCoin

This is it. If you're interested to see what NAV is all about, this is the ultimate guide for you. You will learn about the history of NavCoin and how it evolved. You will learn about the current state and features of NavCoin and you will learn about the exciting new features that are planned and coming up in the (near) future.
So buckle up, this is going to be a long ride!

Table Of Content


Introduction - What is NavCoin?


The History

Introduction
The following chapter will summarize and break down the history of NavCoin in a few sentences. NAV started a long time ago, went through rebrandings and changes of the core team before it became what it is today.

SummerCoin
NavCoin was initially first introduced under the name SummerCoin on April 23 in 2014. SummerCoin was a fork of the Bitcoin blockchain. It used to have a PoW/PoS hybrid algorithm with a block time of 45 seconds.

SummerCoinV2 /NavajoCoin
Soon after the initial launch of SummerCoin, the original developer left and SoopY (soopy452000 on bitcointalk) took over as the main developer and rebranded the project to SummerCoinV2 respectively NavajoCoin and introduced new features.
The name NavajoCoin was chosen in honor of the Navajo Code Talker. The unbreakable Navajo code was used to encrypt highly classified military information and commands and decrypt the same in WW II.
SoopY introduced a technology which allowed sending transactions anonymously and private. This technology was called "Navajo Anonymous Technology". SoopY also released a new wallet and set the Proof of Stake rewards at 10% for the first year, 5% for the second year and 2% for every year after.

NavCoin
On August 12, 2014, Craig (current lead core developer, pakage on bitcointalk) started to get involved with NAV by helping to set up a website [10].
It was officially announced that Craig joined the core team as a "Wallet & Web Developer" on November 06, 2014.
The last tokenswap and restart of the blockchain of NAV happened on May 12, 2016.
Soon later, SoopY stopped showing up and Craig stepped into the role of the lead core developer. Since then, Craig has assembled a strong team with which he built NavCoin into what it is today.
Currently, Craig and the NavCoin Core team is located in New Zealand and they are actively developing many ground-braking features which differentiate NAV from other cryptocurrencies. You will read more about that later in this article.

The Current State

Introduction
The year 2018 has been a thriving year for the NavCoin ecosystem. Despite the USD price of NAV not reflecting it, in 2018 the core team has developed a whole bunch of new features. Also the core content creators published the first official guidelines that function as an orientation guide for community content creators. This chapter will give you an overview of the current team, the features, the prior mentioned guidelines and the community of NavCoin.

Core Team [1]
Last year, the core team has grown alot. It contains of developers, content creators and interns. The core team are employees of Encrypt S, the New Zealand's leading blockchain R&D lab. Encrypt S is developing blockchain solutions since 2014 and values building open-source software highly.

Craig MacGregor - Chief Executive Officer
Craig is the CEO of Encrypt S and the founder of NavCoin. He is one of the world's most experienced blockchain developers. Craig founded NavCoin in 2014 and is developing software for it since then. He has assembled a strong team of like-minded people. Craig also speaks at seminars and conferenced. Some of the companies and conferences he did blockchain education sessions at are Oracle, Xero, Air New Zealand, Blok Tex and trademe. Together with the team, he is also doing a education series on YouTube where he explains upcoming features in-depth for the community.

Alex Vazquez - Chief Technical Officer
Alex is the CTO of Encrypt S and the most active contributor to the NavCoin core Github. He has incredible knowledge of blockchains and proposes and implements solutions for challenges and features. He supports community developers frequently and answers any questions of the community thoroughly. Like Craig, Alex is developing software for the NavCoin ecosystem for a very long time. Alex speaks at universities at times and educates students about the blockchain technology.

Paul Sanderson - Lead Software Engineer
Paul is the Lead Software Engineer at Encrypt S. He has a flair for technology. His technical and management skills are perfectly suited for consultancy and investment advising. He also frequently contributes to the NavCoin core source code.

Rowan Savage - Senior Software Engineer
Rowan is a full stack software engineer with more than a decade experience in developing complex front-end web applications. He joined Encrypt S in February 2018 and has since been involved in the Valence Plattform, the Kauri Wallet and NavCoin Core. You will read more about these feature/projects later.

Carter Xiao - Lead UX/UI Designer
Carter specializes in user-centric design and is also very talented with 3D animation, motion graphics and programming. One of NavCoins core principle is "Simplifying Crypto" and UX/UI is a very important part of that.

Matt Paul - Software Engineer
Like Rowan, Matt is a full stack Software Engineer. He joined the core team in Mai 2017 and has since worked on NavPay, NavPi, the Kauri Wallet and NavCoin Core. Kieren Hyland - Chief Strategy Officer Kieren is one of the employees that are working for Encrypt S for a very long time. He is the CSO and is a digital strategist and growth hacker with a passion for new technology and has a lot of experience in online marketing. Laura Harris - Creative Director Laura has a combination of commercial and creative flair. She manages the social media accounts for NavCoin and ensures, that NavCoins' message is always powerful, relevant and distinctive. John Darby - Content Creator John is an internationally awarded Technology and Financial sector marketing communications specialist. He is one of the Core Content Creators for NavCoin.

Features of NavCoin [2]
The following features are currently available and have been developed in the last months and years. It is sorted from newest to oldest.

Static Block Reward
The soft-fork for the enabling of static block rewards have been accepted and became active recently at 5th January 2019. This means, that the block reward was changed from a percentage based reward to a static reward. This will incentivize the stakers to have their node online 24/7 which increased the security of the network. It also aligns NavCoin with the PoSv3 specification. With this implementation, the yearly inflation will be 3.6% currently and will exponentionally decrease because of the static value of the rewards. Every staked block will now give the staker 2 NAV. Depending on how many people are staking, the yearly percentage varies. With the network weight currently being around 20'000'000 NAV, stakers earn around 10% rewards from staking 24/7.

Cold staking
To provide extra security to participants in the staking process in the NavCoin network, the core team decided to implement cold staking. This allows to store NAV offline and still be able to sign staking inputs. Looking forward, a possible integration into the Ledger Nano S would mean, that one can stake NAV securely from a offline hardware wallet. How cool is that?

OpenAlias
One of the core principle of NAV is to simplify cryptocurrencies. Many non-technical people are deterred from the long, cryptic addresses used in wallets. When sending funds, you have to make sure that every single letter and digit is correct which is nerve-wracking for the average person. NavCoin has implemented OpenAlias, which allows to transform the wallet address into a email-like form. Everyone can register a name like "[[email protected]](mailto:[email protected])". Funds can then be sent to this name, which makes sending crypto much easier and less error-prone.

Community Fund
This is the one big feature I was most excited about. NavCoin core has implemented the first fully decentralized community fund. Acceptance of proposals and release of funds is all approved by the decentralized network. No central authority has access to the fund. The community fund enables everyone to propose their ideas to the NavCoin community and to get paid to implement these ideas. Everyone can propose whatever they like (of course there is a higher rate of success if the proposal contributes to the NavCoin ecosystem ;-)). In fact, this article was sponsored by the NAV-Community by voting "yes" for my proposal. The fund works like this:
For a fee of 50 NAV, everyone can create and present his idea/proposal to the entire NavCoin network. The fee is here to help prevent spam attacks. Proposals can literally be anything - be it development, marketing or anything else you can some up with.
After creating the proposal, everyone contributing to the NavCoin network can then decide if they like the proposal of not. They vote with "Yes" or "No" for the acceptance of the proposal. Voting happens via staking. Every transaction that gets validated by you gives you one vote. This means that the more NAV you are staking, the higher your voting weight is.
The proposal stays in the state "Pending" until it is accepted or rejected. To be accepted, a proposal has to have a participation of at least 50% of all staked blocks and at least 75% of these votes have to be "Yes"-votes. Like-wise to be rejected a proposal need 50% participation of the network and 75% of these votes have to be "No"-votes. Additionally, if a proposal didn't pass after 6 voting cycles (about 6 weeks) it is also rejected.
After a proposal has been accepted, the creator of the proposal can start his work. When the work is finished, or at in the proposal defined checkpoints, the proposal creator can create a payment request for the full or part of the requested funds.
The NavCoin network can then again decide, if the work is what the creator promised to do and vote for the funds or reject the payment request because it was not what he promised. This mechanism ensures, that the funds are only release if the creator of the proposal did what he promised. The NavCoin network decides everything, there is no central authority which makes the community fund 100% decentralized.
The community fund is quite new but there have already been some proposals that were accepted like paying for the development & hosting of NAV block explorer, the creation and distribution of NAV car stickers to the community for free (or paid by the community fund), the funding of interns for NavCoin Core, translation of the website into other languages and YouTube videos. What ideas could you come up with? By the way: this article was also sponsored by the community fund :-)

Proof of Stake
Like said before, NavCoin uses the Proof of Stake algorithm to create and validate blocks. Participants of the NavCoin network can earn rewards by putting their coins to stake and thus validating blocks and securing the network. The reward used to be 4% fixed but recently changed with the implementation of PoSv3. Currently, rewards for stakers that are staking 24/7 is about 10% but it is dependent on how many people are staking. If more nodes come online, this reward will go down. If 90% of all NAVs would be at stake, stakers would still earn 4%.

Tutorials And Guidelines [3]
The NavCoin Core team pushes the community to contribute to the NavCoin ecosystem constantly. They emphasize that NavCoin is an open source project and everyone can contribute. The team tries to make it as easy as possible for the average person to contribute and thus created different tutorials and guidelines.

Tutorials To Contribute To The Website
The whole website is open source. Everyone can contribute to the website. The team created different guides for people to follow [4].

The NavCoin Developer Manifesto
The content creator core team has build a developer manifesto. It defines the values that should be uphold like for example that they will always operate in the best interest of the network. If defines the principles, purposes, scope of involvement and operational requirements [5].

The NavCoin Content Creation Manifesto
Similar to the developer manifesto, there is also a content creation manifesto. Again it defines the principles for creating content, the purpose, the scope of involvement and the operational requirements [6].

NavCoin Brand Guidelines
In addition to the content creation manifesto, there is also a brand guideline booklet. This should help content creators to create images, videos, articles etc. in the same style as the core team. It defines the NAV brand. The brand guidelines contain definitions, the language to use (words to use, words not to use), the tone of voice, what the community aspires to be and what we discourage to be. It also contains the logo pack which can be used in graphics etc. It describes correct logo spacing, logo placement, the colors of NAV and different web assets. It gives tips about gradients and overlays, the typefaces (with a font pack) and many more. Check it out yourself [7].

NavCoin Educational Series
The core team has decided to actively involve the community in the creation of new features. For this reason and to allow users to ask questions, they created the NavCoin Educational Series. The core team schedules an online live meetup which can be joined by everyone. On YouTube they do live-streams and explain upcoming features. Examples of these series are explanations for cold staking, static rewards (PoSv3) and the community fund. The community can ask questions live and the core team will answer them immediately.

Community
During the last year there have been an influx of software developers from the community starting to create features for NAV.

navexplorer.com
An examples is navexplorer.com which is programmed by community developer prodpeak and is a block explorer for NavCoin. Additionally, it functions as a interface to see what is going on in the community fund. It shows pending proposals and payment requests.

NEXT Wallet
The NEXT Wallet is an alternative wallet for NAV and other cryptocurrencies. It has a beautiful user interface and is additionally the easiest interface to interact with the community fund (create proposals, create payment requests and vote for proposals and payment requests). It is programmed by community developer sakdeniz who put hundreds of hours into it during last year.

There were also some marketing activities starting to emerge with the release of the community fund. Some of these were for example free stickers for everyone in the NAV community to stick to their car / shop / window etc. or YouTube videos of CryptoCandor and Cryptomoonie that explained the details of NAV. I am sure, that with the 500'000 NAV available in the community fund per year there will be an influx of gread ideas - development as well as marketing activities - that will be funded.

The Future

Introduction
These features are planned for the future. Many of the following features are part of the 2019 roadmap. Some will not be described in great detail because not much is known about them yet. I've still listed them as they are part of what is yet to come.

Features
Rimu - Improved Privacy Solution
NavCoin used to be a optional privacy coin. That means, that you could choose to send a transaction in private. NavCoin was criticized for the way it handles private payments because it relied on a few servers which didn't make it that decentralized. The technology was called "NavTech" and was a secondary blockchain that obscured the transaction and the amount that was sent. NavCoin Core is currently developing a new improved privacy solution that will make the private payment system completely trustless and districuted and runs at a protocol level. Alex of the NavCoin Core team has published a paper that describes this new privacy solution. It's called Zero Confidential Transactions and can be found here: https://www.researchgate.net/publication/330366788_ZeroCT_Improving_Zerocoin_with_Confidential_Transactions_and_more. What I want to highlight is the collaboration between Alex as the proposer of the solution and the Veil team, a Bitcoin Core developer and Moneros main cryptographer as reviewers. When the best work together, it will be interesting to see what the outcome is!

Valence Plattform [8]
Valence is an applied Blockchain platform that can help businesses realise the tangible benefits of blockchain. You can think of Valence as a platform with which you can build Anonymous Distributed Applications (aDapps) with. But Valence is a different kind of platform that enables developers to create new types of blockchain applications. The problem with current (turing complete) dApp platforms are their complexity and rigid nature. Security holes in smart contracts and scaling issues happen frequently [9].
Valence provides transitional pathways that let businesses migrate only part of their activities to the blockchain without having to restructure their entire business model [9].
Valence will provide a spectrum of blockchain application solutions which sit along the decentralized spectrum, offering businesses simple ways to dip their toes into the blockchain at minimal risk or complexity [9].
Thanks to the proof of stake nature of the Valence blockchain, more of a node's resources can be used for processing and routing application data which makes the platform faster and scalable.
Valence aims to make building blockchain applications as accessible to the general public as WordPress or Squarespace has made building websites.
The developers NavCoin and Valence aim to make Valence extremely easy to work with:
A Valence application could be an open source mobile or web application that submits unencrypted or encrypted data directly to the blockchain. The only configuration necessary for the app developer would be setting up the data structure. Once they've done that they can start writing to the blockchain immediately.
The Valence blockchain interface is language agnostic, meaning developers are free to build applications in whichever language they're familiar with, which greatly reduces the barrier to entry.
As the platform progresses, Valence will introduce more and more smart contract templates in collaboration with the development community. These will be like plugins that users can simply select and configure for their application, without having to reinvent the wheel and risk contract errors or spend countless hours of research to program them.

NavShopper
The following information is taken from the latest weekly news: NavShopper is a new project which will allow people to spend NavCoin on a growing list of retailers and service providers. NavShopper sits between traditional retailers accepting fiat and NavCoin users and purchases products on behalf of the user by managing the crypt-fiat conversion, payment and shipping. This project will unlock many more ways for people to spend NAV on existing websites/marketplaces without requiring each site to individually accept cryptocurrencies. Some of the prototypes we are working on include crediting your Uber account, buying products on Amazon and donating to charities.

Kauri Wallet
The Kauri Wallet aims to be an open-source, multi-currency wallet which functions as a foundation for other features.

Kauri Enhanced
Enhancements to the Kauri Wallet will allow multiple accounts, pin numbers, recurring payments and more.

Kauri DAEx
The Kauri DAEx is a Decentralised Atomic Exchange that utilises the features of the Kauri Wallet and enables users to create safe peer to peer atomic exchanges for any currency supported by the Kauri Wallet. NavDelta NavDelta will be a payment gateway that allows users to spend NAV at any business which accepts currencies supported by the Kauri Wallet. NavMorph NavMorph is a fusion of Rimu and Kauri DAEx and will allow to privately send every cryptocurrency supported by the Kauri Wallet.

Outro

If you have made it this far: Congratulations! You have learned about how NAV evolved, what its current state is and what the future will bring. To sum all up: NavCoin has made incredible progress during last year and released many long awaited features despite the bear market. Many more exciting features are yet to come and it's going to be very interesting to see where we will stand on this day next year.

Giveaway

Unfortunately, the giveaway was not possible in the cryptocurrency-subreddit because of their rules, so I'm doing it here :-) As a surprise, in the next 2 hours I am going to send some NAV to everyone who wants to try out the awesome features and NavPay you read about above.
To get your NAVs, all you have to do is the following:
If you liked the experience, I'd be happy to hear back from you :)

References

[1] https://encrypt-s.com/company/
[2] https://navcoin.org/en/roadmap/
[3] https://navhub.org/get-involved/
[4] https://navhub.org/how-to-guide/
[5] https://navhub.org/assets/NavCoinDeveloperManifesto.pdf
[6] https://navhub.org/assets/NavCoinContentManifesto.pdf
[7] https://navhub.org/assets/NavCoinBrandGuidelines.pdf
[8] https://valenceplatform.org/
[9] https://valenceplatform.org/learn/business-on-the-blockchain-made-easy/
[10] https://bitcointalk.org/index.php?topic=679791.msg8320228#msg8320228
submitted by crypto_sIF to NavCoin [link] [comments]

[Part 2] KAVA Historical AMA Tracker! (Questions & Answers)

ATTN: These AMA questions are from Autumn 2019 - before the official launch of the Kava Mainnet, and it's fungible Kava Token.
These questions may no longer be relevant to the current Kava landscape, however, they do provide important historical background on the early origins of Kava Labs.
Please note, that there are several repeat questions/answers.

Q51:

How do you think about France in Kava market development plan?

What is your next plan to raise awareness among French about Kava?

Q52:

Why did you choose Cosmos instead of Aion, which comes with AVM built on JAVA, which can be accepted by many developers?

Will there be a possibility that one day we will be able to collateralize a privacy coin, such as Monero, on KAVA?

  • Answer: We like programming in GO, interfaces are OK for Java. Cosmos will also feature a WASM module and EVM later. The Cosmos-SDK is very flexible and it allowed us to choose our own security model. That was unique compared to other frameworks where we had to adopt the underlying blockchains. In Cosmos-SDK we can create our own blockchain.
  • Re: privacy - you can do some fun things in payment channels to make transactions more private. Such as onion routing clearing and settlement across different nodes. This can be possible in the future, but not our priority now.

Q53:

The biggest advantage of finance is the efficient allocation of resource allocation. If KAVA connects assets of multiple platforms through the interchain technology, the efficiency across the market will be improved.

But in terms of connectivity, Facebook's Libra, with its centralized giant platform, could be a big threat for the future. Of course, regulatory uncertainty still exists. KAVA wonders what big platform companies think about entering the blockchain field and how they can cope with their competition.

  • Answer: We think of Kava as a DeFi service that can integrate with wallets, exchanges, and other platforms when users want loans or stable coins for payments. We don't see competition with Libra, but we see lots of users potentially getting into crypto which will be good for the market, good for BTC, and good for Kava.

Q54:

What will you do with the money after IEO?

What is the most important markets that Kava is focusing?

What is your marketing strategy to approach those markets?

  • Answer: What will we do with the IEO money? Put it in a bank and keep building. We keep our funds safe in secure accounts that are insured. We always maintain at least 2 years runway in pure fiat to ensure we can survive in any bear market conditions and come out on top in the end.

Q55:

On mainnet, which function/feature can we expect to see on Kava since i only saw informations about its testnet?

  • Answer: mainnet will feature KAVA, staking, delegating, validator software, voting and governance / parameter changes. Following mainnet, the validators will vote to enable transactions and the CDP platform. We expect this to be towards the end of the yeaQ1 2020

Q56:

How does Kava maintain the stability of its stablecoin? Are there any opportunties for outsiders to arbitrage or any other mechanisms to maintain price stabilization?

  • Answer: Kava users deposit crypto assets as collateral and can withdraw a loan based on the amount they deposited. They must always provide more collateral than the loan is worth. When the value of the collateral drops due to market conditions, before it reaches the value of the loaned amount, the platform will auction off the crypto assets for USDX that is on the market at a discount. Holders of USDX can buy these assets at a profit. This removes USDX from the market and makes sure that the global USDX to collateral in the system remains balanced. Similar to MakerDao, 3rd parties can run "keepers" - very simple implementations which continuously monitors the Kava/USDX credit system for unsafe CDPs, and execute the liquidation function the moment they become unsafe. Keepers can also perform arbitrage on DEX/Exchanges executing trades across the Kava platform and the markets.

Q57:

Alright! So KAVA is doing DeFi right, could you explain DeFi in layman term to us.

  • Answer: Decentralized Finance. Finance is really ensuring everything about past, present, and future value of money. You need safe custody and a store of value to keep money you earned in the past safe to be used later when you need it. You need something liquid and easily tradable to be used in the present. And the trickier one is the future - people need to get loans on the assets they have or hedge against the assets they have in order to ensure they can build for a better future. That’s finance.
  • DeFi is taking all those things and making them open access and unregulated so that regardless if you were born with out an ID, if your credit score is bad, or if the government is trying to censor your actions and limit your spending - DeFi promises to give you a way to get access to the financial products you need.

Q58:

Could you please briefly explain your projects, and why you choose DeFi as a problem to solve?

  • Answer: Kava is a cross-chain DeFi platform for cryptocurrencies. Kava offers decentralized loans and stable coins for any other crypto asset such as BTC, XRP, BNB, and ATOM.
  • DeFi is the killer use case of crypto today. I think most people see this clearly now. We believe providing the basic DeFi services is the very first step that is required before blockchain technology can really become wide spread - so we started here.

Q59:

Why the name of the project KAVA?

  • Answer: We started in crypto thinking we would build banking products and we wanted a more relaxed cool name to stand out from other solutions. Turns out Kava means many things.
  • Kava = Hippopotamus in Japanese
  • Kava = crow in hindi
  • Cava = wine region in spain
  • Kava = a medicinal root you add to Tea
  • Kava = now a cross-chain DeFi platform
  • But TLDR - we liked the name and thought it sounded short and sweet.

Q60:

What do you think of the future of DeFi in this space? Will DeFi one day take over the traditional financial systems? -- any wild guess on when it might happen?

  • Answer: I think centralized solutions will always have certain advantages and DeFi will also have certain advantages.
  • But truthfully, KYC is a problem from a user experience point of view. One of the big things with DeFi is there is no need to make people go through a KYC process anymore.
  • If we imagine a world where USD Is king, or Renminbi is king, or BTC is king. DeFi has a place in all of them because open access to financial services is a basic human necessity.

Q61:

As we have known, Lending is not the only problem to solve in the whole financial areas, are you planning on going beyond lending? What other financial products are in your pipeline?

  • Answer: Thats a good #Q .
  • While we have a lot to solve to offer lending to other crypto assets - we can expand our support to non-crypto assets, to NFT tokens, and other assets.
  • We also have plans to offer derivatives and other synthetics other than USDX - such as synthetic bitcoin and Yuan. What is exciting about Kava and the oracle system run by validators is that we can leverage this infrastructure around the world to do all sort of things.
  • One of the more interesting products is creating under-collateralized loans using payment channel (layer-2 tech) of our USDX coin. Two parties can lock funds in payment channels and place bets on the price feeds from the oracles. When the funds reach a maximum threshold, the bet closes. Since a price feed is just a data set, we can have the settlement rules be multiples of the real data. In simple terms we can create 100x leverage products for the craziest of traders 😉

Q62:

Btw KAVA is a bit unique because it use Cosmos/Tendermint. While other DeFi use Ethereum , why you guys choose Cosmos?

  • Answer: Cosmos is the future. Even facebook’s Libra consensus design was just a copy of Tendermint. Kava, Binance, the Cosmos Hub and many other blockchains are built on the same Cosmos-SDK framework.
  • It’s very flexible and soon interoperable. This is a huge advantage over Ethereum. Where system’s like MakerDAO will be forced to develop in a slowly evolving chain like Ethereum and only touching Erc20 assets, Kava will be able to rapidly evolve, program in GO rather than solidity, and interoperate with chains like Binance directly.
  • We’re very excited to get BNB and BTCB onto Kava’s CDPs and to put KAVA and USDX onto the Binance DEX. This is fairly easy on Cosmos.

Q63:

I saw in KAVA deck that you guys will use USDX, is it a stable coin? How is it going to work and its relationship with KAVA token itself?

  • Answer: USDX is an algorithmically stable token pegged to the USD. USDX is the token users recieve when they get a loan from the Kava platform. USDX is collateralized or backed by crypto assets so the Kava platform should always hold more crypto value than the USDX it loans making USDX a very safe store of value even if the market crashes 10x overnight. That is what a stable coin should do.
  • USDX is special though. Natively, users can spend or trade USDX freely like other stable coins, but the important difference is that 1) USDX is free of censorship and does not require a bank or anything else. 2) USDX can be “bonded” or “staked” providing an interest bearing yield between 2-10% APR. This is substantially more than what I can even get from my bank account.

Q64:

From your point of view as KAVA team, what would be most anticipated feature in KAVA ?

  • Answer: Our CDP platform launch later this year. The first USDX will be minted then.
  • Support of BTC in the CDP smart contracts. No blockchain has supported a real decentralized custody and use of BTC with smart contracts before.

Q65:

Indonesia is one of the “developing” countries, how is DeFi can help in making a difference in those “developing” countries?

  • Answer: I can’t speak for developing countries as it’s not my expertise, but DeFi in general is trying to offer the exact same services to EVERYONE. Whether you are in San Francisco or Indonesia, the financial services you should have should be similar. The rates and fees you pay should be the same. DeFi is fair treatment and open access for everyone. That is what’s nice about having things run on a protocol.

Q66:

Last but no least, since we are doing AMA in Indonesian group, I believed our members wants to know if you are interested in going to Indonesia to expand your community and reach?

  • Answer: As I said, I have not been before! I am traveling throughout South East Asia for a lot of the year. It is one of my destinations. I hope to meet many of you while I am out there.

Q67:

Defi companies are growing at a rapid pace, but they're actually smaller than traditional financial institutions. In order for Defy to become a global trend, it must eventually acquire consumers within the traditional financial industry.

Traditional financial consumers, however, have poor technical understanding and want psychological stability through government guarantees such as deposit insurance. After all, what does KAVA think about long-term competitors as traditional financial institutions, and what long-term strategies do they have to embrace traditional financial consumers?

  • Answer: We think of financial institutions as big honey pots of potential DeFi users. For example, if Kava can offer margin lending at better rates than a bank because there is no middle men or compliance costs, users should want to use that service.
  • As crypto grows, I believe more FIs will integrate crypto assets and DeFi services. For example, in the US you cannot currently margin trade crypto as a retail user. But it could be possible for a regulated FI to integrate a lending service like KAVA without causing issues with regulators due to Kava having no counter party risk other than the user itself.

Q68:

MakerDAO is only for ethereum but Kava support multiple assets, is this only difference?

What are Kava main advantages compared to MakerDAO?

  • Answer: Kava supports multiple assets THAT are on different blockchains. Maker can only support ETH. This is a huge difference. In addtion, the role of Maker is quite likely a security token. It represents fees paid by others. Where in Kava, the token is used in security of the blockchain protocol itself. The holders of Kava have a lot at stake and need it to govern the system. Maker holders have nothing at stake.
  • I think a huge difference is that with our model being POS and based on validators with slashing if they don't participate our governance participation and management will be much more effective than MakerDao.

Q69:

Ticket claim for KAVA Launchpad is comming around the corner. This maybe last IEO ticket claim of this year. With this hype and expectation of investors/traders, do you think KAVA will be a big boom to end this year with happy tears?

If someone wants to manipulate Governance function of KAVA by changing voting result by possessing many Validators Node through buying over 51% KAVA of market, what will KAVA team do? Do you think Emergency Shutdown(Maker has this) can be considerd as a solution?

How will USDX be minted and backed on KAVA platform? If its based on uses crypto collateral, how will KAVA team make it stable since the inflation of crypto price?

  • Answer: I believe Kava to be underpriced currently, especially compared to maker which is 10x the value and serving ETH which is much smaller market than ours.
  • But I cannot tell you with certain if Kava will boom or bust - only the market can decide that. As with all speculative assets, do your homework and trade at your own risk. We here at kava are very LONG Kava, but we are biased 😉

Q70:

Stablecoin is the word that I heard everyday, so do you have any plans to release wallet for stablecoin?

  • Answer: There are already wallets created for Kava that can hold our tokens 😉

Q71:

My first question is: Why do traders choose to use KAVA instead of margin on exchanges?

My second #Q is: What happens whenKAVA doesn't have enough cash to loan out?

  • Answer: Traders who cannot get passed KYC can use Kava. Traders who want better rates than exchanges can use Kava. If regulators like in the US prevent margin trading, Kava is a great solution.
  • Kava creates USDX out of thin air when users withdraw loans. It will only create Kava is the user locks a great value of crypto in the system to back it. When the USDX loan is repaid, it is destroyed. In this way, Kava can scale however big it wants - it will never run out of cash.

Q72:

i heard as you said before in San Fransisco, Silicon Valley. what is the relationship about Silicon Valley and KAVA? and what will KAVA done in this Q1 ?

  • Answer: I am born and raised in Silicon Valley. I am blessed to have grown up in this area where lots of tech innovation is. However, I am the only one at Kava that lives here full time. The others on my team are in the Cayman Islands and Cambridge.
  • San Francisco is a hub for the largest crypto projects - Ripple, Coinbase, Stellar, etc. It's a great place to network with founders and feel inspired to do big things. It is not the best weather here, but the people are focused and extremely helpful if they can be if you aim to do big things.

Q73:

With regard to minting new USDX, is there any potential chance to against Global financial law? Likewise USDT, issuing money should guarantee deposit of real collateral as I have known.

  • Answer: USDX is debt. It is not a guarantee, but the protocol's rules state it must have more crypto assets behind it than the # of USDX issued. In this way, rules are better than guarantees. Tether guaranteed 1:1 USD, it turned out not to be true because their funds were seized by regulators. That is impossible in the case of Kava.

Q74:

What is the uniqueness of KAVA project that cannot be found in other project that´s been released before?

  • Answer: Cross-chain is unique for us. But most unique is our partners and validator group that is launching our blockchain. We have incredible partners that support our work including Ripple, Cosmos, Arrington, Hashkey, SNZ, Lemniscap, etc.

Q75:

KAVA was initially planned to launch on Ripple network but later switched to Cosmos Tindermint Core. What is that something you see in Tindermint Core that is not available anywhere.

  • Answer: We did not plan to launch on ripple and did not launch on "Tinder"-mint. I have a fiance - she would be quite mad.
  • We did however use the Cosmos SDK - a tool set, to build our blockchain that features tendermint consensus.
  • Tendermint is just the consensus so I assume you mean the SDK. The SDK is very much "choose your own adventure" you can build anything and design all the spec of your blockchain easily. In this way you choose the tradeoffs that make the most sense for your special application/network

Q76:

How much portion of USDX is backed from crypto/fiat money ...& please mention why any trader, hodler will prefer USDX over other stable coins?

What are the biggest challenges you expect to face and how do you plan to overcome these challenges?

  • Answer: 150% of USDX or more is backed by crypto. Traders will use USDX because it offers a savings rate. This rate allows traders heding bitcoin or other assets to not only store value, but earn a return.

Q77:

What do you think about creating liquidity for the Kava project?

  • Answer: It's the biggest challenge. My hope is the savings rate USDX offers will give it natural organic demand over existing stable coins. It will definitely be a large BD process to get USDX listed and used worldwide.
  • We work with some of the worlds best market makers to seed liquidity today. But we will need organic demand in the long-term

Q78:

So many IEO projects consistently drop in price after listing. Whats different with KAVA, what are some special highlights?

  • Answer: Why is Kava based on Cosmos? Based on what considerations?

Q79:

How do you see the chinese language community? How do you view the opportunities for growth in the chinese community?

  • Answer: You will be soon listing on Binance, what are your plans on the business side after listing? In one years time, what are your thoughts on where Kava's development will be?

Q80:

If we take a look at all the different types of DeFi products/apps out there, including decentralized exchanges, stablecoins, atomic swaps, insurance products, lending platforms, trade financing platforms, custodial platforms, crowd investment platforms, etc, nearly cover all the important areas of traditional finance.

In this age of all these different platforms taking hold, where does Kava see itself appealing to its app developers, users, investors?

  • Answer: What does Kava do? What can a normal user (of crypto) achieve by using KAVA?

Q81:

How does Kava maintain the stability of its stablecoin? Are there any opportunities for outsiders to arbitrage or any other mechanisms to maintain price stabilization

  • Answer: What is the reason for the IEO price reaching 6x the first round private sale price? How did you come about to reaching this valuation?

Q82:

What would you be able to do more for Russian-speaking communities and regions?

  • Answer: one thing to keep in mind is that yes, we do have limitations and regulations to follow when it comes to certain countries and we will adhere to those regulations in hopes of proving ourselves to be a thoughtful and long-term solution. while we may not directly work with some countries, we hope that communities there can understand that we're here focused on being sustainable rather than another project around shorter-term gains.
  • for myself, I'm actually belarusian myself so I absolutely see the value of working in the CIS/Russian-speaking regions. we'll continue to do AMAs, interviews, and always engage with Russian-speaking communities to better understand what the #Q s, concerns, and thoughts.
  • If there's anything else we can do in this region and with the @gagarin_ico communities, please let us know!

Q83:

What are your major goals to archive in the next 3-4 years? Where can we KAVA ecosystem in this period? What are your plans to expand and gain more adoption?

Do you guys feel satisfied by seeing your progresses and achievements till now, when you look back to the day when you have started this project?

  • Answer: We want to really build out great DeFi products for the masses. I really believe that DeFi will be a major force to allow much more mass adoption for crypto over the coming years. In the sorter term, we want to push out our blockchain and build on top of that our CDP platform, which allows users to trustlessly put collateral onto the Kava blockchain, and receive a loan in USDX that will be also trustlessly administered.
  • We will then build out more complex products and financial derivatives for crypto users and traders. We have barely scratched the surface in what we can do with DeFi so I can't predict the future, but we want to build products that are pegged to BTC values so that traders have more leverage purely in crypto.

Q84:

Which one of your milestone do you think was difficult and which was the encouragement that courages you to achieve it?

What were the Minimum and Maximum limit of KAVA tokens that one can be able to STAKE after the Mainnet launch ? And What will be the percentage of reward one gets and will it in future ?

  • Answer: Good #Q ! Well we've been working on open source cross-chain technologies for a number of years and honestly it can be a pain. I think the Cosmos SDK made it significantly easier to implement the features that we wanted into the software.
  • I think the largest challenges for Kava are not software based but in market adoption. Makerdao is a great project and they have spearheaded a lot of the work in the lending field. Hopefully Kava can be a very meaningful contributor as well

Q85:

What if someone fails to repay the debt? Is that KAVA is taking collateral system to enterprise level & if so, what's the plan? How secure KAVA is to safely handle the collateral tokens?

  • Answer: These CDPs or "collateral debt positions" are always over-collateralized, which means you have to have more asset locked up in the bucket than you can draw from the bucket. The system leaves a margin when the collateral is 'called' to be able to sell off. If the asset cannot be fully redeemed KAVA is minted to cover the balance. Hence KAVA is a 'lender of last resort". This is why its important that we select good initially assets to support 👍

Q86:

I am very impressed with your voting method, how does it work? Whether users can vote to change things in the platform, are you a programmer with filters to decide what can be voted on and what is not possible?

  • Answer: Thanks. A lot of this was pioneered with the Tendermint team. Basically voting is entirely open and asynchronous, meaning anyone can submit a proposal to be voted on. All the project in the Cosmos ecosystem are working diligently to expand the space of variable or features that can be modified via this governance method in protocol. For example, we were the first to enable transactions directly via governance in our Testnet-2000!

Q87:

Where does the interest rate come from for holding USDX specifically & technically?

  • Answer: Great #Q ! Just like in MakerDAO, lenders of collateral (e.g. BTC, BNB) pay an annual interest rate to borrow USDX. A portion of that interest rate accretes to holders of KAVA, the rest we can apply a 'carrot' for users to adopt USDX. In short, Savings rate is loan interest rate less 'rents' collected from KAVA holders

Q88:

As far as I understand it KaVa is used both as a staking token and as collateral for Kava stablecoins (UsDX) .Can you talk a bit about the stability mechanism? Can other forms of collateral be used to create Kava stablecoins (a la Multi-Collateral Dai)?

  • Answer: KAVA will not be used as a collateral type in the CDPs. Collateral types will be assets exogenous to the system, like BTC and BNB. Of course BTC and BNB's value fluctuates. To make USDX not fluctate we ensure there is always more BTC or BNB in the CDP bucket than 'stable' USDX. Therefore BTC could increase or decrease a lot, as long as its less than the 'stable' debt of USDX that you have drawn, the system is healthy and functional 👌

Q89:

As far as I know, KAVA had 150 Validators in the test. Why do you have so much. Which conditions are your team based on to choose / invite them to stay decentralized, important for a Defi platform like KAVA?

  • Answer: KAVA mainnet will launch with a cap of 100 validators. We want as many validators as possible. The reason? What if KAVA was run by just you and me. Well that works if people trust us, but its pretty for us to collude and act maliciously. Its harder for 100 people to collude -- its still possible, but harder. And so we put a lot of effort in to promoting a healthy and large validator community, and empowering them to grow their stake in the system

Q90:

As a developer, which program languages can i use in kava core smart contracts?

2How secure your fully on-chain liquidity protocol & What's is a core Smart Contract ?can you briefly explain.

  • Answer: Yay developers! 🤓 The Cosmos SDK is currently written in Golang. So thats a good start. What other language would you like to work in?

Q91:

What do you think of DEFI in the Blockchain space?

DeFi brings many benefits to users, but conflicts of interests with the Bank. What is the solution of kava?

  • Answer: Defi to me is offering financial primates, the supplies of which are spreadout amongst many participants, as opposed to few. People offer loans on BTC today. Kava's goal is to maximize the amount of counterparties to any loan, thereby 'socializing' the returns on any activiely used financial product

Q92:

What is the crucial thing, in your opinion,that would increase adoption of KAVA and possibly the rest of crypto. What’s the KAVA economic model and how will it is architecture ensure scarcity of the token and help to growth token price?

Can you tell me more about the new technology that combines the benefits and interactive functions of Cosmos with the DeFi applications you have built?

  • Answer: Principly what I believe is 'new' about the KAVA tech stack is that we are building a standalone piece of software that treats other network techologies as 'first class citizens'. This means from the ground up our design is mean to easily incorporate and work with other software. A lot of blockchain is a story of "everyone will use my software, because its the best". Kava Labs worked for years against this view while bringing open Interledger to market.

Q93:

As Per Kava website ! $KAVA was done many partnerships with Big project like Ripple, Cosmos, TenderMint, Hashkey, etc ! So, whats the major reason and benefits of these partnerships to kava project?

Kava Project have their own Mainnet Blockchain So, whats the main work of Cosmos Blockchain in Kava ? Is Kava projects is on Both mainnet and Cosmos OR Kava is just using the Cosmos Blockchain services?

  • Answer: Working together. Pooling resources and talent to make something bigger! Crypto is still a little fish in a huge ocean of financial services. Kava Labs has always had an eye for inclusivity. Grow the pie!

Q94:

I have been too involved in KAVA's AMA, I think I know all about your technology.I want to ask a successful person like you why come with cryptocurrencies and blockchain, with talent. There are many other areas for you to choose, so why are you targeting such a risky market?

  • Answer: Successful ay? hehe. Depends how you define success and what your goals are. I love delivering products to users. Crypto has some fantastic users, and there is still sooo much to be built. I think KAVA has a lot of promise, but there is still so much work to be done and I hope users like you all become producers some day as well

Q95:

What's the most critical and innovative point of KAVA to ensure users that it is the best under DeFi niche?

How can you compete MakerDAO which has done good number of business with recent market! If I hold KAVA tokens how KAVA leverage the tokens value and make it moon for me? 🙈

  • Answer: "IF" you hold KAVA tokens now? 😂 Again I think this a markets concern. To the extend that users on other chains begin to trust KAVA brand for loan issuance, and we get some solid adoption of USDX I think we're in a good spot. I would say a benefit of KAVA is that we are FOCUSED. We're not trying to be everything for everyone. This is lending, quite simply, for the large market cap coins -- and that's hard enough

Q96:

Why KAVA needs to create it's own stable coin, whereas there are are many other options available in the market? Is that crypto tokens can be stable!!?

  • Answer: Yeah there are a lot of USD backed stable coins that is true. Indeed we have looked around with working together with a number of them. The difference with USDX (and DAI) is that its crypto-collateral backed. Doesnt mean we won't work with others in the future 😉

Q97:

Processing fees on loans we need to pay in kava or usdx?

Which types of success you've been seen in testnet? Why on Nov 5th you've planned to launch mainnet? How many testnet was processed in the past?

  • Answer: Three major testnets with some minor iterations therein. Testnet-3000's software was pinned to KAVA mainnet software. That testnet is looking good which is a good indicator for smooth sailing on mainnet launch, we'll see 🤞

Q98:

DeFi is a hot niche when it comes to crypto/blockchain project! Most of the projects are developing aiming DeFi, How KAVA is looking to contribute in DeFi ecosystem? What will be the approach of KAVA to systemize & increase adoptability?

  • Answer: DeFi is big. Mostly on Ethereum, which is great! KAVA is for non-ethereum networks 😇

Q99:

What is the main reason that you think that Cosmos-based Kava zone will present a new validator opportunity :- a complex and multi-faceted governance system that allows differentiation?

  • Answer: Validator #Q , nice. I believe its important for validators to be able to distiguish there service in multiple ways, not just on security (otherwise they will be treated as a commodity). KAVA present an opportunity for validators to distiguish themselves on the basis of proper governance of system parameters on behalf of their delegating constituents. KAVA is a "lender of last resort", so delegating to a sophisticated validator could lead to better results beyond security.

Q100:

How is kavas tendermint better than other defi consensus especially with the introduction of etheruem 2.0 which many believe will be better than all others - considering kavas association with ripple, is it possible to foresee defi loans from crypto to fiat ?

Maybe kava partnership with centralised banks?

  • Answer: IDK about that. But we will be working closely with the great folks over at Ripple, thats for sure!

Q101:

Adoption is one of the important factor that all sustainable blockchain projects should focus to be more attractive in the invertors' eyes.

Can you tell me what KAVA has done and plan to do to achieve Adoption in the reality, real use cases, our real society?

  • Answer: Bitcoin is real!? I'm continuously impressed by the demand and size of that network. Help us capture that demand! Really, if we can I think the future looks bright for KAVA!
submitted by Kava_Mod to KavaUSDX [link] [comments]

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