Float Protocol
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Float Protocol

Float Community Call (Thurs 22nd April 2021) — transcript and video

Photo by Pavan Trikutam on Unsplash

Thanks to all those that joined us for the community call with the band on Thursday 22nd of April.

Video

Abridged Transcript

Update

Paul M: Okay. I wonder if I should start launching into it with a bit of an update and go from there?

John L: Yeah, I think that sounds good.

Paul M: Cool. So the summary, everyone, is that we are currently in the audit phase. We are waiting on other people, which is always a nerve-racking experience, but it’s going well so far and we’re hopeful that we’ll make it for launch. It’s just about going through the process and making sure we do it right because we don’t want to rush this step.

So that’s sort of the situation where we’re at. We’ve done a lot of other things behind the scenes. I’ve been working primarily with various code reviewers who have taken a look at the code already, as well as the sort of official auditors, and giving them some advice on how each step works through. That’s sort of the short-term stuff.

The litepaper is coming out as soon as we possibly can. We are just — we mentioned it earlier and it’s still true to this day — that we are a bit of perfectionists. We like releasing things when they’re perfect, and doing things quick versus doing them perfect is sometimes a bit of a mixed match. But that is looking good for the next steps, that’s all fab there.

In other sort of news, the big recent update we’ve had is the Multisig plan. So we’re moving from the four team members to being two team members plus five community members. The reason we’re doing that is because we want to mint the treasury and we want to make sure that everyone is equally invested, and making sure that we can’t do anything nefarious even with the two day lock that we’ve already talked about. So that’s sort of the plan there.

There’s other things going on. We’ve got the auction UI design ongoing, the design for that is now sort of finalized and we’re turning it into code. Again, we’re sharing more on that in the next week.

The other sort of long-term things…Oh, the audit panel. We’re going to do two official ones alongside the code review now, and then we’ll do one probably after launch around version 1.1 and then another one probably late summer with some of the big auditors who are massively overbooked from all things.

But that is just a whole load of information dump. I’d love for this to be a bit more for chat. I see people have gone for camera-on, which is lovely to see and some of them are well known community members as well, so thank you very much for doing that.

Yes, fire away any questions in the chat or feel free to mic-up.

Encode Club (Multisig signers)

Paul M: Okay, terrabellus has asked about who’s Encode Club, what do they- what’s their role there? So they are also multi-sig for a couple of other partnerships. Saddle is the big one which is already there. They’re also who’ve been supporting us from the very beginning, so we have a lot of respect for them. There’s a lot more other sort of well-known people who we’re talking to about becoming multi-sig signers and in addition to other more community stuff, and the strategic partnership stuff we’ve mentioned earlier. So hopefully that answers your question a little bit, but yeah.

Paul M: John, have you managed to get your details working at the moment? Because I know you’re having a bit of stuff.

John L: No, it’s not looking good, no.

Paul M: It’s okay.

John L: Voice is still here. I’m still speaking, I’m still going.

Paul M: Yeah, the private key. I hope they’re not being kept in office drawers, if it is it’ll be on a nice ledger with plenty of authentication behind it.

John L: Hopefully one in pink, to match my new avatar.

Paul M: John’s been telling us all about his plans for having a sort of pink ledger from the beginning, so…

BANK Rewards

Paul M: Ooh, loads of questions dropped in! Theo, pleasure. Any ideas about BANK beyond the current reward schedule? One of the things we want to do is we want to move away from the sort of big BANK FEI-style launch of rewarding people who mint, and also in the very sort of large way to incentivize that kind of huge launch and then big tail-off. We don’t think it’s the best way and we don’t think it’s the most efficient way of actually getting FLOAT into people’s hands. Instead, we want people who are interested in FLOAT for FLOAT, as opposed to interested in FLOAT for how much rewards they can get in the Genesis-style event. What we’re planning to do is use the funds that we were planning to use for that to instead heavily incentivize early FLOAT LPs post-launch. And we’ve got some other ideas to incentivize the right type of FLOAT users, I’ll admit. So there will be both FLOAT and other uses for BANK and FLOAT going forwards. Obviously, the focus for the next few weeks is to get everything done, getting the product launch ready, and we’ve got so many ideas that we want to get through. To give you some examples, I’m very keen on doing a sort of flash-loaning link with the basket because I think using that ETH is a really valuable thing. So that’s in version 1.1 and I’m hoping to get that out to some of the auditors before they finish their reviews so we can do that early on.

Dutch Auctions & UI

Paul M: Question from NP. Can you provide some details about how Dutch auctions work and who will be the initial participants, will there be a UI, an API?

So, starting from the beginning, the Dutch auctions work by — we do have a UI for it, there is a very clear UI about how you can sell BANK, or depends on which sort of case it is. So either you will be buying FLOAT or selling FLOAT, and if you’re buying FLOAT you’ll buy it in a sort of ETH/BANK split. It’s all very clear. It sounds slightly confusing here, but the UI is like — think about it like Uniswap, but instead you have two tokens at the top and then you have a dial in the center for progress through the auction and how that’s working. And in terms of who can be a participant, everyone can. It’s been a key thing from the very beginning, that these auctions are very open, and eventually we’ll get to the point where auctions will be very open and anyone can start one whenever they fancy. So that’s kind of the answer for you there NP.

Thoughts on OHM

Paul M: Coud, I don’t know if I’m saying that right, here’s the answer to your question. I think that the OHM/Ohm guys are running the project in a really interesting way. I think that the mechanics behind their distribution are fascinating, in terms of the highly compounding effect — I’m curious to see how they work in the long run. Whereas we’ve always decided our thing from the beginning is something that should last, and it shouldn’t just be a quick one hit wonder. Which is not saying Ohm is, it’s just part of the mechanics behind it and that the rate of increase in price has to support that, which is a quite tricky task when you have the compounding effect that’s going on — so for the runway onwards, this is quite interesting.

Cool. I feel like I’ve talked a lot. John, if you’d like to pick up a few questions?

Post Minting Ceremony

John L: Yeah, yeah. So okay, Gekonn. First of all, I don’t think I’m pronouncing that right. To answer your question: Charting the post-ceremony territory? So I guess yeah, post-minting ceremony, you’re going to have the first auction, right. And that will be everyone’s first experience of participating. Well actually, before that we’ll have a period of interesting time where people will be trying to figure out what they can sell FLOAT for and whether they should keep it or not. Then we’ll go into the first auction where depending on whether the FLOAT price is above the target price or not we’ll go into the expansionary or contractionary case. I mean depending on demand, it’s looking like it could be an expansion and in that case the protocol would be minting FLOAT, inviting arbitrageurs, which can buy FLOAT with ETH or a blend of ETH/BANK. That’s really the first mechanical thing in line.

Strategic Partnerships

John L: After that, I assume you’re also referring to strategic partnerships. This is a very good point. Realistically it’s, you know, using FLOAT as collateral for example on other platforms, we’re building on this now. For you to use FLOAT in other places though, FLOAT needs to exist first. How you can help is by being the wonderful community member that you already are and keep supporting us on our mission to create an Internet currency. But thanks for your question. Anything else you wanted to add on top Paul?

Paul M: Yeah, no I think you covered the basis there. It’s the whole point of these kinds of currencies, you want to be able to use them for something, and yes you get a level of protection by being in FLOAT as opposed to being in USDC, or in the other extreme case in ETH. We think it’s quite a clever mechanism but beyond that we also think that FLOAT’s useful in a number of other ways, which is where this partnership stuff we’ve been building, we’ve been having a lot of chats with a lot of various DeFi protocols and DeFi founders and things like that, and about how we can do that and how we can do those kind of integrations. Links to the sort of next couple of questions.

Auction UI

Paul M: So HookieNookie, which I think is a brilliant name by the way, has said: when will we see what those auctions look like? We’re gonna be releasing a couple of screen grabs of that shortly, because we think it’s gonna be fun for everyone to engage and take a look. It’s a really cool UI, I think the designer’s done a great job there.

John L: Yeah, I’m quite impressed, quite impressed yeah.

Minting Ceremony

Paul M: So that’s our plan there. Linked to NP’s question about, so anyone who wants to buy FLOAT has to buy BANK first however in ETH, or is there a pool of tokens that can be used? So for FLOAT during this minting ceremony kind of thing, which we’ve been nicknaming it, we’re planning to allow some stablecoins exchange into FLOAT. So if you’re interested, that’s the sort of route there. We’ve got other sort of couple fun mechanics to work with there, to try and make it a little bit more interesting, in terms of, how do we make sure to incentivize people who are here for the long haul. But the core principle of it is — the price will be fixed and that price will be at the golden ratio, and you can buy using other stablecoins because it’s kind of transferring you from the USD pegs world to this sort of more interesting, less pegged situation.

I think the expansion-contraction game is definitely an interesting one, I don’t think it will be for everyone and I also think that arbitrageurs will get very efficient in doing it. So it’s a fun thing at the start where it’s at human paces and then we’ll slowly become less humanized and more automated. And that’s good for the protocol because that means it becomes a lot smoother, but it’s also gonna become less of a sort of spectacle in the UI perspective.

And I agree, adoption is key. The PoolTogether is a great example of the kind of partnerships and stuff we’ve been approaching already. Because we think that’s really vital to get this kind of aspect of utility. What’s the point in having a stablecoin which you can’t use for things? Like a unit of account which has no use is crazy and that’s not the plan.

Paul M: Loads more questions, coming quicker than I can answer them.

Basket Factor

John L: Yeah, flying in now. So, from NP: What is the basket factor BANK vs ETH?

The basket factor is the value (of ETH) that’s held by the protocol divided by the value of FLOAT in circulation. Just to quickly deal with that one.

Paul M: You can think of it as a collateralization ratio but it’s not quite the same, it’s based upon what the target price is, so you can think of how much support there is to the current price. It’s kind of the one way you can think about it, phrasing it differently.

Partnerships & Use Cases

Paul M: From Kenny, this is about strong partnerships for use cases. We have a couple of people who we’re chatting to in detailed ways and we have some very, more concrete plans, some looser plans. We’ll be releasing those over the next week or so you’ve got something to look forward to. We don’t want to give away all the secrets before we sort of start ramping up for launch, because we’re still waiting on the auditors and we’ve got this very clear plan of making sure this thing is safe and secure. We don’t want to have a bug on release, which has been common in other places.

And linked to that, strategic partners we think are really important because we think long term supporters, which will help us with the go-to-market, have integrations and ensure protocol adoption, this in some way is the hardest part. This is harder than coming up with the design, it is making sure it has this long-term use case. And we’re not planning to disappear, we want to hang around and make sure this thing lasts and we also wanna make sure these use cases stick around. Which is why we think those partnerships are what we need to make sure that happens. Yeah, do you have anything to add on that John, or did I cover it?

John L: No, I think you’ve covered it, I think you’re spot on and yeah, it all comes in steps. Now, we’re not gonna take over the world tomorrow, as much as, well would I like to, per se… well I don’t know. Strategic partners are certainly an essential step to people paying for their Pokemon balls in FLOAT. So, you know.

Paul M: For sure. So linked to the next question from JSON, which I think is a very clever name, but I am a bit of a nerd in that respect.

John L: It’s a very good name.

Airdrop to Hackers and Audit

Paul M: Can you supply more details on the airdrop to hackers? Yes we can. We want to have more developers interested in playing with FLOAT and the ecosystem and we’re exploring organizing an airdrop to developers within the crypto ecosystem. We want it to be like a proof-of-hacker, if you want to think of it that way and there are a couple of approaches we can take. The sort of classical one would be doing something related to Gitcoin, but also we have this great relationship already with Encode that we talked about so they can act as an oracle for people who have participated in hackathons to make the sort of privacy preserving element, which obviously we believe strongly in, that you don’t have to put your face out there to have something which is valuable. This is because we do think that what you build is more important than who you are, which has always been a core concept for us.

Terrabellus has asked about will the audits be released — the answer is they likely will, we want to have a public released audit. We’ve got a lot of code reviews which probably won’t be released and probably will remain more in-house, depending on what they think and whether they want us to. Yeah, we will have a proper released public audit you can all have a look at, I might even sort of talk through any of the findings they do find because I do think it’s valuable for people to understand what’s going on there

John L: Oh yeah, definitely. I completely agree. I mean, a similar thing that you did with, you know, I mean, lest we mention it here, Flex and that folk. I think it’s so important that we found what the issue was and educated the wider public and community where they can look out for these things. It’s all about sharing, you know.

Paul M: Yeah, and I think it’s perhaps quite hard to do, like it’s — doing your due diligence is getting progressively harder as these things become more complicated and so I think there is a lot of value in making sure everyone understands how to do it and trying to make that as easy as possible to do.

Low Volatility of FLOAT

Paul M: C has asked a question about low volatility of FLOAT, making it a hedge against the downside, is this something you guys think about in the future? So this is using options to hedge against downwards pressure. There are a lot of things we can do with the basket and the value that the protocol has in sort of quite interesting ways. And we talked a lot about, we mentioned earlier about bonds being another sort of version, 1.5 kind of action, because we think there’s a lot of value there in providing multiple avenues to stabilization. We have these auctions which we think will be really efficient and effective, but there are other options that we can pursue which will take us on a different approach and having this kind of two-three-four pronged approach to getting this stable value we think is a smart move.

FLOAT vs ETH

John L: Yeah JSON asks, what do you think about FLOAT becoming a less volatile Ethereum? Yeah, once again I love the name. Yeah, so this is kind of part of this road to adoption, think about the characteristics there. It’s less volatile than Ethereum, so wherever Ethereum is used, as a collateral, FLOAT becomes actually almost a better version, a better collateral, because it’s less volatile. So I think that’s going to be a huge initial use case in other protocols. A lot of ETH-only maximalists may not like to hear that, but I mean hey, what can I say?

Paul M: I think that the important thing there is that Ethereum is a great protocol, it is really — we’re building on Ethereum, we think it’s great but the Ether as a currency is doing something very different, it’s about paying for computation, it’s about being a sort of world computer. And it’s kind of, that shift there is very different to being a unit of count and being like a stable asset. And I think that’s the kind of shift in distinction now. What do you think, John?

John L: No, I completely agree, right. Which is kind of why, you know, we also use ETH in the basket and we plan to diversify. You know, we’re here to use the basket to represent the crypto economy as a whole and so having ETH in there in the first version is excellent, and then to diversify to things like the cost of updating an oracle via LINK token, for example. That’s taking that a bit of a step further. Just to add on to that, as well.

Float Protocol vs Reflexer

John L: Freddie F — How do you compare yourself to Reflexer protocol, how do the vault factor / target price compare? I guess first off the bat, with the similarities — we’re both non-pegged per se, but a key difference straight away is on the target price comparison. So we like to follow the market with our target price changes, so if there’s more demand for FLOAT our target price will increase, if there’s less demand for FLOAT our target price will decrease gradually. Whereas Reflexer kind of goes the other way. It’s a different mechanic where the greater the demand actually, the lower their target price goes. Which, yes it works, it’s a PID controller, but we’re looking at something a bit different. Yeah, that’s one of the main key differences for us. Furthermore, how our vault actually supports our target price as well.

Paul M: Yeah, I was about to say, linked to that — Reflexer ultimately is based on the very same principles that DAI is. In a sense it is an over-collateralized system that works off loans. So you put a certain amount of collateral in, and in return you get something which you could use to buy out the bucket. That’s the sort of stabilization mechanic, which is a) very different from us but also very necessarily means that in order to have a thousand RAI in circulation, you need one thousand five hundred equivalent backing. And that mechanic is very sort of market-inefficient because you have to have all this locked up value just to support a very simple price.

Algorithmic stablecoins as a whole are trying to get rid of that and FLOAT in particular does it in a unique way with these sort of balancing auctions, which we think is much more effective and gives a lot more security. Because thinking about the mechanics again, you have to have this line of lock-up, you have to go like, oh — I’m gonna commit to having this bond or commit to having this thing which will last me a certain time, or I’m going to, in a sort of collateralized case, where I’m trying to liquidate something, I have to put in a bid and then after that bid I have a certain amount of time before I even know if that bid’s accepted. And those two things mean that there’s a lot of uncertainty that is built into the system because you don’t know whether or not the price you offered is gonna be taken up.

In Float, that’s not how it works. The price you ask for is the price you will get, full stop. Or you’ll get a better price, which is a neat trick in the sense that as long as you get to a point where you’re like, this is acceptable, you can then progressively get better and better deals.

John L: Yeah, sorry. Was just going to say that, yes, that’s the beauty of the Dutch auctions, right, in the stabilization events. They’re so efficient in terms of pricing you into your purchase.

Paul M: Yeah, we had an interesting chat with Gauntlet a while ago, about Dutch auctions because that’s actually what the sort of Liquidation 2.0, which MakerDAO’s just released, is planning to use. So literally just after we sort of started designing, we were discovering like, Oh yeah, other people are realizing these Dutch auctions are a neat trick. But they’re doing it in a slightly different way, in the sense: liquidization as a process is a gradual decrease to zero, which is, as we don’t want to decrease to zero, we wanna decrease to target price. So mechanically there are some differences there, but it was great chatting to them about it and seeing their perspective, and seeing how they were also thinking about it in a very similar way to us, which I think is always fun.

Post-launch Roadmap

Paul M: NP’s asked a question where he — We’re sort of getting close to our time so if you have any sort of last minute desperate questions, let us know. But for now, the sort of roadmap post-launch is all about the kind of integrations we’ve mentioned already, it’s all about making sure FLOAT can be used and FLOAT is used effectively. So we think that the most important thing is to have a stablecoin that has use, and then the BANK price naturally comes from that, and the BANK value comes from that. Because, unlike most protocols, the governance token is useful and will accrue value from that.

So we’re always very keen on making sure FLOAT is a useful thing that people want to hold, people want to use, and that’s the sort of key question about why we’re doing that.

Last little burst of questions there. If John wants to pick his favorite…

Target Price

John L: Yeah, I’ll do Freddie’s. So Freddie asked: the documentation doesn’t seem to go into much detail on the target price aspect? So yeah, the target price aspect. We’ve kind of been teasing you on that. The maths of the target price will be in the lightpaper which is gonna be released in the next week, on the precise way that it is managed and changed in various market prices or basket factors.

Paul M: Yeah, the key thing is based upon how the basket factor moves compared to the target price, so it’s basically saying how this ratio changes, which allows us to sort of predict the demand and predict these kinds of movements in a very simplistic way.

John L: Yeah, exactly. We want to capture market sentiment and to me that’s the key.

Paul M: Oh, the questions. They’re flying in now. I think we should cut it short cause I think, as much as people love those questions, what I will do is, I’ll link the Discord. You can ask more questions there, cause that I think is always great. Or in Telegram, as well. We’re always active and answering stuff there. In general, it’s great to hear from you guys, it’s great to see you or having a chat, and we’re looking forward to keeping in contact as things go on. Anything else John, or should I give my voice a break?

John L: No, John’s happy honestly. You’ve been very chatty this evening. I love hearing your voice, firstly Paul, so –

Paul M: Well hopefully everyone else does, otherwise…They’d be going like “Oh God, let John speak more!”

John L: Awesome, so yeah. Cheers everyone, thanks so much and we’ll keep you posted. Take care. Thanks again for help, from everyone at Encode as well. So cheers for hosting us.

Anthony: Thanks all, that was great. Cheers.

John L: Bye bye.

Socials

Website — https://www.floatprotocol.com/ (also available via: https://ipfs.io/ipns/floatprotocol.eth/#/pools)

Twitter — https://twitter.com/FloatProtocol

Telegram — https://t.me/officialfloatprotocol

Telegram (中文) — https://t.me/floatprotocolCHN

Medium — https://medium.com/@floatprotocol

Github — https://github.com/FloatProtocol/

Discord — https://discord.gg/nVCZacJJqM

Forum — https://forum.floatprotocol.com/

Governance — https://scattershot.page/#/snapshot.floatprotocol.eth

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