,What is Haven Protocol [$XHV] ?’: An in-depth interview, discussing opportunities, design and challenges.
Haven Protocol is impressing a lot of people within the cryptocurrency community due to their innovative idea, pace of development and their clear communication.
As part of my goal to increase transparency and general quality of cryptocurrency projects — I have reached out to the Haven Protocol team to hold an in-depth interview.
I hope you enjoy the content and the questions asked.
If you have any unanswered questions you’d like to have covered, or are interested in an in-depth interview with another cryptocurrency project, let me know!
This interview was done by @CryptoCountant
1. What has primarily been the reason for you to develop Haven Protocol?
The most popular ways to store your money digitally today are suboptimal to say the least & have tremendous downsides:
- Banks: Banks share our financial data with big corporations. We have to hand over control of our money to banks, which then lend out 90% of it. We don’t want any of that yet we can’t prevent it.
- Cryptocurrencies: Cryptocurrencies like Bitcoin solve this problem, but they have their limitations too as this bear market has shown. Losing 70% of our money for the sake of financial privacy & autonomy is not a viable solution.
- Haven combines the best of both solutions and eliminates the negative parts.
With Haven Protocol you get the price-stability of your bank account, combined with the privacy & independency of digital currencies.
- With Haven there is no data leakage, no trusted third parties, no banking bailouts, no accounts being frozen and no 70% price drops commonly experienced with digital currencies.
2. What distinguishes you from many other projects within the Cryptocurrency space?
There are three features that really matter to the users (not speculators!) of cryptocurrencies:
- Privacy: “I want my financial activity as well as my personal
data to remain private. Nobody besides myself should know how much money I have nor how I spend it.”
- Control (Decentralisation): “I want to be in control of my funds.
My funds should be accessible only by me.”
3. Stability: “I don’t want my money to lose 70% or more of it’s value just for the sake of financial privacy & control.”
There are multiple digital currencies that address one or two of these issues mentioned above.Yet there are none that can solve all three of these problems. Haven Protocol will be the first.
In addition, Haven Protocol is by far the most superior method for maintaining price-stable storage . We go in depth in this article: LINK
3. Where do you see Haven Protocol in the most ideal situation in 5 years? What opportunities do you see for Haven Protocol?
We see Haven Protocol as complementary and potentially even a replacement to bank accounts as the primary solution to store money. Haven is superior to a traditional saving accounts in almost every way, because it is:
- Completely private
- Giving you sole control & access to your funds
- Independent from centralised institutions
There are a couple of scenarios that could certainly catalyse adoption of Haven (and crypto in general) in the coming years, due to a financial crisis & banking bailouts as we have seen in many countries already.
4. What will be the biggest challenges and risks in the short and medium term - apart from the general cryptocurrency sentiment.
Liquidity is Haven Protocol’s biggest challenge. If there is little liquidity on exchanges you can still redeem your Haven Dollars for the equivalent amount XHV, however there would be slippage when selling your XHV due to thin order books. This means you cannot sell your redeemed XHV for the price you onshored them at & you receive less money back than you ini- tially put in. That would mean Haven Protocol’s value proposition as a stable value storage would not hold up to some degree.
Another risk that could happen is a vulnerability in the source code. This however applies to pretty much every cryptocurrency.
5. What are you planning to do to overcome these challenges and manage these risks?
Solving & engineering liquidity in the end all comes down to building a great product/solution, for which there is high demand and a large & growing user base. A solution that has demand translates into a lot of users wanting to offshore money with Haven. This results in higher liquidity, because in order to to store money “offshore” with Haven Protocol you need to buy XHV or XUSD in the first place, therefore creating liquidity for those who redeem onshore their XUSD.
Another way to increase liquidity is getting listed on additional reputable exchanges. This is not and never will be in our direct control. However we believe building a great product that people love using will increase the chances of getting listed on additional exchanges.
To decrease the risk of someone identifying & exploiting a vulnerability in the source code the contributors to Haven will reach out to developers to critically review the source code.
Later on this will be extended to the entire community by open sourcing the code.
6. Who is the target group of Haven Protocol and what kind of people will be your users?
We currently differentiate between three personas that are potential users of Haven Protocol:
- Trader: This user wants a stablecoin that has no third party involvement. They want to be able to privately & securely store their crypto-assets in a price-stable way, without needing to rely on centralised exchanges or banks. To solve this user’s problem we are planning to closely work together with decentralised exchanges, so he/she can reliably switch their volatile crypto assets into stable value seamlessly and independently from centralised institutions.
- Unhappy Bank User: This user has a dislike for banks and is looking for alternatives to store money. However cryptocurrencies at this stage aren’t offering a viable solution, because they are far too volatile to store money in them reliably. Haven offers a solution to this user with the Haven wallet which can be seen as a replacement to a traditional bank account.
- Crypto-User: This user is using (not speculating on!) cryptocurrencies today, they absolutely rely on them because of their unique features
(e.g. privacy, fast & cheap transactions, complete ownership of funds, etc..). This user is already using cryptocurrencies today as a medium of exchange or as value storage and is willing to give up financial stability for the unique features that cryptocurrencies offer to him/her. Haven Protocol can offer an incrementally better solution to this user, because he/she can now get the benefits of cryptocurrency without needing to compromise on financial stability.
7. How do you plan to acquire merchants as users of Haven Protocol?
Talking to potential users very few are specifically looking to use Haven for payments. As of today our focus therefore lies more on the storage of money/crypto/wealth rather than on payments.
Growing payment networks is more difficult to do anyway, because it requires adoption from two different user types simultaneously (customer & merchant), commonly referred to as the chicken & egg problem.
This is due to the fact that if customers want to pay with Haven, merchants will adopt Haven. The same however is not true the other way around: Customers will not adopt Haven because the merchant offers payments with Haven. Consequently there has to be an incentive for the customer first, which in Haven’s case is private, price-stable & decentralised money storage, before Haven Protocol can be used as a common viable payment network.
Coming back to your question. At this stage we aren’t planning to actively
acquire merchants as our users, because our focus lies on money storage not on payments. Focusing on storage means mostly focusing on the customer user type at this stage. Later on after growing the network, Haven has leverage and it’s a lot easier to get significant merchant adoption as well.
If there are lots of people that want to pay with their Haven, merchants will adopt. Obviously you can still use Haven as a payment method, however we believe mainstream adoption of every day peer to peer crypto payments, without relying on a cryptocurrency credit card is several years away.
8. Would you like to share the limitations and weaknesses of Haven Protocol with us at this time? — and how you are going to improve on this.
There are two issues that come to mind that the community is concerned about at this stage:
- Mining Decentralisation: Currently the mining pool Miners.rock controls more than 90% of the hash rate of the Haven Protocol network.
- Exchange (Price-Oracle) Decentralisation: Having XHV listed on as many reputable exchanges as possible is of high importance for the security of the network as well as the value proposition of a stable value storage. This is due to the fact that being listed on multiple exchanges creates more liquidity and therefore a better functioning product. It also decreases the risk of price manipulation with offshore storage for a profit, because being listed on more exchanges usually results in higher liquidity.
Neither one of these two issues are in our direct control, however building a great & useful product that is demanded by lots of people will certainly increase the chance of increasing decentralization from a mining & price oracle (exchange) perspective in the long run.
On top of that we are working on a solutions to help promote decentralising the network hash rate
9. Is there anything you want to share with the community — what hasn’t been covered yet? Do you need any help from the community?
There are currently 3 full-time contributors, around 15 part-time contributors & a couple of high ranking advisors helping out on Haven Protocol. If you are reading this and you want to be part of this community project and build a fair future that is private & decentralized without banks then treat yourself like you are already on the team. Haven Protocol wants “do-ers”. Everyone at Haven Protocol is a volunteer. If you want to get paid for your work don’t get involved. You either believe that Haven Protocol will change the world or you’re better off working for competing projects. ;-)
These questions have been answered by News Cutter who recently joined as a full-time contributor. He is helping with marketing, growth & product.
ON THAT NOTE:
I owe you a disclaimer. I love Haven Protocol, for some of the reasons above.
Am I biased? Ofcourse I am. As much as I professionally can suppress that bias, I am still a (small) investor in Haven Protocol — $XHV.
However. This interview is completely unpaid work, and completely voluntarily done.
I hope the interview was useful to you.
To stay up to date with what I am doing, follow me on Twitter: @CryptoCountant
or visit my website: www.thecryptocountant.com