BlockTalks x Equilibrium AMA Transcript!
Hello! BlockTalkers & Blockchain Enthusiastic!
We recently hosted an AMA with Equilibrium, on April 29th at 2.00 PM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Alex Melikhovy, Founder and CEO of Equilibrium. So here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Introduction Questions Asked By Team BlockTalks!
Q1. Could you please introduce Equilibrium to our community in layman’s term?
Ans — Equilibrium is a one-stop-shop for DeFi users — it consists of a comprehensive lending platform and a professional-grade, cross-chain DEX.
From the user perspective, Equilibrium is the first interoperable money market that combines all significant DeFi use cases in one easy-to-use interface, but in a cross-chain and risk-free manner.
These use cases include pooled lending (like Compound), synthetic asset and decentralized stablecoin generation (like Synthetix and MakerDAO respectively), and trading (like dy/dx).
Q2. What are the advantages of Equilibrium to other alternatives in the Blockchain field?
Ans — In spite of the fact that there are other lending platforms, there are several ways in whiih Equilibrium is unique and valuable:
We are a one stop shop, offering all key DeFi use cases in one place, as I mentioned before
We use three key elements that no one else offers:
1) Risk algorithm: monitors & corrects liquidity continually in real time. Incentivizes bailsmen & liquidity providers to add more liquidity if needed
2) Programmatic interest rate: users can choose their collateral ratio - & influence their interest rates (these are not fixed)
3) Bailouts instead of forced auctions to resolve bad debt:
We recall what happened on Black Thursday with Maker DAO in 2020. That was because auctions are a risky mechanism - especially in adverse markets. That’s why we have replaced them with bailouts instead - thereby minimizing your risk
Q3. What are the major milestones Equilibrium achieved so far & what are in the future pipeline?
Ans — We have already achieved quite important milestones. We have launched our core functions on the testnet. Also, the EQ token TGE took place in November 2020, so EQ tokens are available on the mainnet. We have successfully completed the first part of our PLO on Polkadot and reached the hardcap (250,000 DOT).
Recently, we announced our project on Kusama, which is called Genshiro. It’s an interoperable DeFi coglomerate on Kusama that can do all things that existing DeFi primitives do, but with less risk and in a cross-chain manner.
At the moment, we are mainly focusing on the PLO on Polkadot and the parachain auctions on Kusama. We are also in talks with multiple partners regarding our further business cooperation. These include liquidity providers, trading companies, wallets, and major exchanges regarding EQ token listings. At the same time, we are planning to launch a liquidity farming. Liquidity farming will reward users for active use of Equilibrium’s products in EQ tokens.
Questions Asked on Twitter For Equilibrium Team!
Q1. What are the three key things that set Equilibrium apart from other lending projects and why we should choose you “as our good option"?
Ans — As I mentioned earlier, Equilibrium uses three key elements that no one else offers:
Risk algorithm, programmatic interest rate and bailouts instead of forced auctions to resolve bad debt.
Equilibrium is a place where you can make use of all the functionality that DeFi primitives on Ethereum can offer, but in a cross-chain and risk-free manner.
Q2. What’s your vision ultimately? What is project trying to achieve in the longer term and how do you plan to get there? How will your ultimate vision and mission make a difference in the world?
Ans — Our vision is to solve the following three points:
1) Market fragmentation
2) Forced liquidations
3) Securing sufficient liquidity
Equilibrium’s decentralized cross-chain money market aims to solve these three main hurdles.
Market fragmentation means that to date, market users have been forced to use multiple apps on various blockchains to manage their DeFi needs. With its one-stop-shop offering all the main DeFi primitives in an easy-to-use UI, Equilibrium solves this problem - all in one place.
Regarding forced liquidations - as explained, Equilibrium makes them irrelevant by using the bailsmen mechanism. I have already mentioned that this is key to avoid events like Black Thursday, when the market crashed, exacerbated by the wave of auctions that happened at the time, when Maker lost millions and auctions went practically for free. This was made worse by the scalability issues on Ethereum, where transactions and price feeds could not be processed fast enough. Polkadot’s tech overcomes this.
Finally, Equilibrium cross-chain capability means that you can use all the main digital assets from different protocols in multi-asset collateral and for bailouts baskets - thereby maximizing available liquidity and solving one of DeFi’s biggest challenges.
We consider that this will contribute to the adoption of DeFi by a large number of people.
Q3. One obvious risk of yield farming is smart contracts bugs. How does coin ensure the smart contract security, especially to eliminate the risk of bugs?
Ans — Just for the record - we are on Polkadot and there are no smart contracts, so we are talking about run times here.
We have partnered with Quantstamp. Quantstamp audits Equilibrium’s core components, including the code which governs its underlying business-logic on balances, its risk and price modules, and its “bailout” mechanics. Quantstamp’s audit is of key importance to ensure the quality of Equilibrium’s performance.
When you are building on Substrate you are customizing a blockchain runtime as a whole - i.e. if a bug affects part of the logic on the Substrate, the blockchain as a whole can come to a standstill. So their audit means that our substrate as a whole will be secured.
Q4. How important is the community to Your project? and how can we collaborate or help share token for the development of the project?
Ans — Our community definitely plays an important role for us! That is why we’ve launched our ambassador program to give a chance for users to be involved in our project.
Feel free to read the full Ambassador Program description here: https://medium.com/equilibrium-eosdt/become-an-equilibrium-ambassador-v2-bde2ee9e4149
We invite everyone to participate in the program! By the way, we do various lotteries and giveaways for our ambassadors, so please join the dedicated chat to be up to date: https://t.me/eq_ambassadors
In addition, we invite our community to participate in the crowd loans on Kusama and Polkadot.
Our community definitely plays an important role for us! That is why we’ve launched our ambassador program to give a chance for users to be involved in our project.
Feel free to read the full Ambassador Program description here.
We invite everyone to participate in the program! By the way, we do various lotteries and giveaways for our ambassadors, so please join the dedicated chat to be up to date: https://t.me/eq_ambassadors
In addition, we invite our community to participate in the crowd loans on Kusama and Polkadot.
Q5. Can you explain more about the Equilibrium PLO? What is the advantage for early adopters of PLO? Can we still have a chance to get PLO?
Ans — We have two phase PLO mechanics. The mechanics behind the first phase of our PLO are pretty simple. Participants submit DOT and receive EQ tokens in exchange at an initial swap rate of 0.07 DOT per 1 EQ. They simultaneously get the right to swap their DOT back for EQ at the end of the parachain lease period for free, all while keeping any earned bonuses in EQ.
All the DOT collected during our token swap is kept absolutely safe. This DOT will live in a cold wallet by Copper, a reputable regulated custodian licensed in the UK. Copper is providing custody services during this portion of our PLO. When the token swap is over, Copper will submit the bid for our selected lease period by transferring DOT to the decentralized crowdloan module on the Polkadot relay chain.
Then, there will be the second part of our PLO, crowdloan. During the auction in Phase 2, users can stake additional DOT and earn EQ tokens as a staking reward. We will match the interest rate that Polkadot offers for staked DOT (currently around 7% APR), while providing an additional premium for users who support Equilibrium by contributing DOT tokens to the crowdloan module. The overall staking rewards on DOT can be up to 25% APY in Equilibrium’s PLO.
The phase 1 was successfully completed, but you still have a chance to participate in Phase 2.
At the same time, we are preparing for parachain auctions on Kusama. You can also take part in our PLO on Kusama. Participants will be able to stake KSM for our parachain slot and receive staking interest in GENS during the parachain lease period. Read the more details here.
Questions Asked by our BlockTalks Community Members during live Session to Equilibrium Team!!
Q1. We all know that there are many problems with the Ethereum network: scalability issues, high gas costs, slow speeds, etc. So, why did you choose to build a token on the ERC-20 blockchain ecosystem? Why not build it on some scalable blockchain?
Ans — We are not on Ethereum, we are on Polkadot. In fact that gives us decisive advantages, because
1) there are not gas fees on Polkadot
2) It gives us scalability & interoperability, which is badly needed but missing on Ethereum
3) Since Polkadot enables us to be cross-chain interoperable, we can use all the assets on Ethereum and beyond to enable our multi-asset collateralization and liquidity
Q2. Do you have a unique strategy to market your token to the world of cryptocurrency? So that users are interested in buying your token?
Ans — No other project offers what we do.
We have a unique risk algorithm which monitors liquidity in real time, and a bailsman mechanism that proactively supplies and ensures liquidity so that we are maximally invulnerable to market fluctuations and technical glitches of the kind that Ethereum has.
We are offering our users a lot of very attractive bonuses to participate in the parachain crowd loans:
You can get rewards that take account of your DOT staking opportunity costs and the amount of DOT that you stake, and at the end of the leasing period, you get back your DOT (it is a crowd LOAN, not a sale) and can still keep your EQ that you get as the bonuses.
Q3. Do you have mechanisms such as buyback and burning to regulate the demand and supply of Equilibrium so as to increase its intrinsic monetary values?
Ans — We do not burn tokens, nor do we buy-back, but in both the crowd loans (Kusama & Polkadot), at the end of the leasing periods, you get back the KSM, respectively DOT, that you have staked. So there is no risk, and in addition, you earn rewards.
Since the KSM & DOT are staked during the leasing period, this reduces their circulating amount, which usually results in growth of value.
Q4. Can I find out who the team on your project is? Do they have a great license?
Ans — We have a great team which has been working together for many years. Also, we uniquely unite expertise on digital assets, blockchain development, and classical finance. Feel free to read about our team here https://equilibrium.io/en/about
Here are some important links of Equilibrium 👇
🌎 Website: equilibrium.io
📱 Twitter: twitter.com/EquilibriumDeFi
📢 Telegram: t.me/equilibrium_eosdt_official
📚 Medium: medium.com/equilibrium-eosdt
