PARSIQ Community Q+A #46
Greetings PRQties! 🖖🚀
We have another transcript of an AMA for you today. This time, Tom Tirman (CEO) is joined by Rong Kai Wong (COO). As we all know, the market has taken a dramatic downturn in the last few weeks (and especially last week!). Tom and Rong Kai have a lot of insight and encouraging words about the current situation, but also offer a lot of information about all of our upcoming products — the Tsunami API, Data Lakes, Data Hubs, and more!
In preparing for the launch of the Tsunami API, we’ve already begun updating our website to reflect the evolution of our platform. So, if you haven’t already, be sure to take a peek at PARSIQ.net (note: this is not the complete website. Much more will be added in due time).
Now let’s get on with the questions! As usual, the bolded questions are links that will take you to the time-stamped section of the AMA on Youtube.
Tom: Hi, everyone!
Welcome back to PARSIQ’s AMA.
Today, we have Rong Kai, the COO of PARSIQ here.
Feel free to ask us anything about PARSIQ in general.
First we just wanted to start off by saying something about the market conditions, which have been quite, quite brutal over the past few days. I hope you are all staying safe. Obviously, this is not the first time we have seen harsh conditions — but it is pretty bad what is going on with the macro environment, with equities, crypto, and of course the whole situation with Luna and Terra UST this week. I have never seen anything like this before.
If any of you had any of your funds in UST: I really feel for you. Luckily, PARSIQ’s treasure wasn’t in UST. We had tested it for a little while, but withdrew it. I know a lot of startups and crypto projects had their whole treasuries there. This is definitely a tough time for everyone.
The important part is that we survive and get through this. Every down market, every crisis, every type of recession also involves new opportunities. The key part is to learn from any of your mistakes, and continue on.
Rong Kai: Hi everyone! It is good to be with you all today.
To continue what Tom was saying, it is not looking pretty for a lot of people right now.
I’m from Singapore, and the Chinese word for danger is a combination. The first word is ‘danger’ but the second word is ‘opportunity.’ Whenever there is a downtime when things are not going very well, if you look deep enough, there are always opportunities as well.
The good part is that there will be a time when builders will actually thrive — those who actually build and provide value to the blockchain space. All the marketers and the hype people will take a back seat in these conditions. The spotlight will be on the teams who are still building through this brutal downturn. I think this is an opportunity for many teams, including us — especially PARSIQ — to showcase what we can do.
With that, how about we get into the questions…
Tom: It will have a similar mechanism compared to the current one, in the sense that the IQ model will be applied: use of the platform will be tied to the token. But we are also playing with the model. We do not think it will be subscription based, but rather will be based on the number of API calls. For example, there may be a certain amount of free calls, and then the rest will be premium.
We are still playing with a couple of mechanisms to make it more interesting and more elaborate. We will share more details close to the release of Tsunami.
Rong Kai: Just to add to this, I am actually going to be talking about pricing in full details with Daniil (CTO) tomorrow.
I think we are looking at ‘free’ models, ‘paid’ models, and we are also looking at incentives. We definitely want to have something like a referral program, and something that would incentivize projects to test our API out.
Tom: We haven’t tested every single API. But we have played around with quite a few, especially the bigger ones. To our knowledge, the Tsunami should be the fastest. There may be faster ones we are not aware of, or that we haven’t tested. But, to our knowledge, this should be one of the best-performing ones.
Tom: Yes, it is being discussed. Like I said, we will introduce new mechanisms for the pricing and the tokenomics. This is one of the options on the table that we are discussing.
Tom: A lot. There are a lot. The ability to query data is a big value-add to existing PARSIQ technology. The API will build in a way to reduce as much friction as possible. A big number of customers will be new ones.
Rong Kai: Yes. Because we are doing the alpha testing, we actually have a pipeline of projects testing, and some of them have already committed verbally. We are seeing a long list — longer than I thought! So, we have to give credit to the BD team and the product team: they got way more than I had expected. This is something we will definitely share more details about as we move to further stages.
At this stage we don’t want to say anything that we cannot fully commit to now. We want to make sure that, yes, they are testing now and this is the result, etc.
Tom: Luckily we didn’t have any of our treasury in Luna. We did at one point. We tried it out a couple of months ago. But we withdrew those funds. I don’t exactly know why we withdrew — maybe intuition or gut, I guess.
I never, never expected this, though. I understood that UST could depeg for a time, or there could be some issues. But for a crash of this magnitude… 50 billion of market value wiped out in two days?! It’s crazy. I don’t think any single event in crypto has been of this size. It’s huge.
I feel sorry for the Terra team. They were building interesting stuff, and gaining a lot of traction. So, I can’t imagine what they are going through right now.
I don’t think I have seen anything like this in crypto, ever.
A lot of start-ups had their treasuries there. Perhaps Luna will not recover, but maybe UST has a chance.
Q: How was the FCA meeting in the UK? Could PARSIQ have any role in the plans of the FCA for this sector?
Rong Kai: I think it was a really good meeting! I was there during the past two days. It was a gathering of people from different industries. It was 6x over-subscribed. I think 600 people applied, and only 96 could attend. And not all 96 were from crypto. Even from my table, only a quarter were from crypto. The others were from law, traditional finance, etc.
It was actually interesting to hear viewpoints from across the board. Surprisingly, I think most of the feedback converged to a point where we all agreed that FCA needs to move faster. The UK is losing out in some ways, but they have a lot of unique opportunities for how they can position themselves, say, between the EU and USA.
I am definitely honored to have gone to represent PARSIQ and provide our input. I think, in terms of growth of the FCA and this sector, a lot of the talk was about policy and legislation. They recognized us for our input. But if you are talking about business: I definitely can’t comment for now.
Q: It was mentioned, at one point, that PARSIQ was in talks with government entities. Is there any progress that can be shared about that?
Rong Kai: In terms of progress, we have stayed in contact with them. There is one I am directly in contact with. We built something specific for them, so they could test it out. They have still been testing it. But that is probably the most I can share at this point. The ball is in their court right now. It is up to them to further test it, and find the real-life use cases to see how it works for them.
Tom: We shared some thoughts on this at the beginning of the AMA. But just to elaborate…
It is quite brutal. Is this the bottom? I don’t know. Maybe. But maybe we have even lower to go. Who knows.
I know values are down across the board (and not just in crypto, look at Facebook, Netflix, Spotify, Coinbase, etc.). I think we are entering a value area, where it is safe to start to dollar-cost-average into various things (this is not financial advice, by the way, but it is what I think). We could, of course, still go lower. This is a good area to start. Things are pretty oversold.
A lot of crypto projects will not recover. I don’t just mean to all-time-highs. I mean recover, period. They will just close shop.
During each bear market there is a purge. Many stop building or abandon their projects, because no funding is coming in, or the community isn’t growing, or there is no hype or interest.
But this is also an opportunity. Now will be the search for value, the search for fundamentals. People will be fleeing into safe crypto assets, like BTC or ETH and stable coins. But eventually everyone will be looking for opportunities, and they will be looking for teams that are still building, still delivering — and there won’t be that many of them, percentage-wise.
This is where PARSIQ sits. This is an opportunity, in my opinion.
Rong Kai: An old friend of mine, who used to be in the police force with me, who is now in private equity — he told me that he is interested in B2B gems. At that level, when you’re looking at private equity, it is always the ‘quiet’ or ‘behind the scenes’ B2B service providers that survive. The kind of volume that comes through B2B is absolutely different from what can come through B2C. I think PARSIQ is in a pretty interesting position. I wouldn’t say we were waiting for this moment (no one wants a bear market), but all the noise is pushed aside. I think in the next 3–6 months, more than half of crypto projects will be gone. What remains will be what was able to survive the bear market.
Tom: Yea. You know, the peak bull-market euphoria is mostly about hype. There, the more hype, the better, the more interest in a project. Now that is over. So now people will be looking to the teams that are actually contributing to the space. This is our time to shine. Not only us, but there are a lot of projects that are undervalued by a lot. I know legitimate projects that are trading at very low valuations, and I know how much they have planned, and how much value their technology will bring. So, there are always opportunities.
Tom: Well it is an ongoing process. The number of early adopters is in the dozens, and not in the lower dozens. And it is just getting started. We are getting more and more on board. I expect this number to double, very quickly.
Everyone needs blockchain data. If we are able to execute the roadmap and what we have shared, then PARSIQ would cover every blockchain data needed from one source. You wouldn’t need to use the Graph on one side, Etherscan API on the other, and then, e.g, Glassnode or something for a third use case. With PARSIQ you would have all the data and everything you’d need, from one place: PARSIQ.
Tom: Good! Good!
We have alpha testers. Everything is going well.
I am really happy with the progress.
The API is almost ready, in the alpha version. It is being tested by us and others. I think most time will be spent on the UI side of things.
Tom: There is no clear answer on this right now. Obviously, we are not going to launch a token into this type of market. We are still aiming for this year, regardless of whether or not it is a down year. But the conditions have to be a bit more stable than this.
Tom: Luckily, we have a financial runway that will last a couple of years. So we are good on that front. I mean, there is always an option to do an additional fundraise. But that would always be a plan-B. Regardless of the asset price, I feel that more and more companies and teams will come in to build. It is not like 2018, when there was still a question of whether blockchain will gain traction, whether it will stick around, whether the industry will survive. Now, there is no question about it. You just have to weather the storm, and that is it.
I think we will have teams coming in from Web2 to Web3 very often during this bear market, unlike 2018 and 2019. They will all need blockchain data. We can use this time to build and gain as many clients as possible, and then we can see the results after the market downturn has ended. This proved to be a great strategy last time around for us (in the previous bear market).
Q: Will I lose 100% of my $IQT airdrop if I unstake from IQ Protocol now? Or, were there snapshots taken in Q4 and Q1 for a part of the airdrop?
Tom: No, you won’t lose anything. You can withdraw at any time, and put it back at any time. But, doing so means you will spend less time in the staking pool, which means your airdrop will be less than it could be if you had stayed there for a longer period.
Tom: We will be implementing the same logic as the 1m $PRQ incentive campaign. This means that your share in the staking pool as well as the time you spent in the staking pool will determine the amount of tokens you receive from the entire amount of the airdrop.
Tom: Tsunami is the core API. It gives you access to all fundamental, raw data on the blockchain. I mean everything: whatever block sizes, transaction data, smart contracts — everything on the blockchain, every small, fine-grained thing. You can get all of this from the Tsunami.
In the future we will also do functionality to provide the data in an aggregated way, and not just raw data.
The Data Lakes that we spoke of, will be forks of the Tsunami API. But they will be custom-tailored to specific dApps and protocols. I know a lot of clients who need specific data, such as (e.g.) Uniswap custom data, or AAVE custom data, etc. We will be looking to work with all of these big DeFi projects. It will be useful for them, but also for their customers and other third parties.
Q: You often mentioned that bear markets are “an opportunity” for PARSIQ. Do you think $PRQ has a bigger opportunity in a bear market than in a bull market?
Tom: Well, yes. For a number of reasons. First of all, this comes from direct experience, because we built PARSIQ in ’18 and ’19 and the project took off in 2020 (earlier than most, really). It is exactly for this reason: we were building and we had products and clients; we had revenue; we offered something valuable to the industry. At the point where the market became more bullish, and more people came in — they took a look at PARSIQ and saw that we actually had a project and legitimate use case. We had clients, partners, and so on. That is a big reason for all of the traction PARSIQ got during 2020 and early 2021.
Things got too euphoric across the market, though. A lot more people came in with projects. There were way fewer projects in 2020, and so it was easier to get attention. Why? Because it was a bear market that we were coming from. So many projects quit during that bear market. It is an interesting thing, though. Since 2021, and afterwards, so many people came into the space, but not a lot of new people are coming in. Retail interest has actually been going down, since February or March 2021.
It became a game about ‘who could gain attention.’ It was a game of marketing, of hype, of unsustainable APYs, and so on and so forth. Those are things that are not our goal. Other things caught people’s attention. But now we go back, where we can keep building valuable things for the industry, get even bigger-name clients, etc.
I think more than half of the teams will quit during this bear market. A lot of them will have to close shop. That is why I think a bear market is an opportunity. At heart, PARSIQ is for builders — we are not hype-generating machines. We are builders, and it is simple in my experience that this is the way to go.
Tom: PARSIQ’s tagline has been “connecting Web2 to Web3'’ since 2020. It is interesting that it is only recently that “Web3” has become a popular term. But it just signifies the next iteration of the internet. It is blockchain-based, decentralized, permissionless, and trustless.
I absolutely think that that is the future. But we also have to understand that “Web3” doesn’t necessarily mean maximalism in terms of decentralization and all that. If you think about it: which projects are products truly, fully decentralized? The closest one I can think of is Bitcoin. The others can’t really be called completely decentralized. There is always someone having power, or something. Take a look at decentralized money: UST. Were they really decentralized? Maybe?
No project is 100% decentralized, in my opinion. Yes, they introduce aspects of permissionlessness and decentralization, to make things possible that weren’t possible before. And I think that this is the future. But we need to be careful not to define “Web3” as a kind of utopian decentralization. That doesn’t make sense.
Our approach is to think that there will be a kind of hybrid model, with centralized and decentralized parts. This is something we are supporting with the new products that we are building.
Tom: Yes, we are still hiring. There is a reason we have not been too aggressive with hiring. We are slowing hiring and expanding. Otherwise, if you have to cut people or they leave — it’s not good for team morale, or anything else, really. That is why we haven’t rushed. We’ve taken it slowly to find the right candidates.
Tom: It is still active. But, as I have mentioned in the past, we are working on a plan to close the program. We are working out the details about how to move forward with that. Be on the lookout for an announcement in the next month or two about that.
Q: Tsunami API is planned for launch around July. What comes after that? Can you please explain the next milestone a bit?
Tom: After the Tsunami API, we will have the Data Lakes. Our Data Lakes are specific APIs that provide custom-tailored data off of a specific dApp or protocol, or NFT platform. Think, for example, of Uniswap, AAVE, Compound…anyone really. There are thousands of them.
This is an important milestone, because I don’t think anyone is offering this custom-tailored dApp data, or the APIs to get this data. We have to dive deep into the custom logic of each dApp or protocol in order to implement this.
I think this will be valuable for the dApps and protocols themselves, as well as any third-party who wants the data from these dApps and protocols.
We will have Data Hubs for storage functionality. And after that we will have an SDK, so that developers can more easily keep track of the APIs and build things.
There is also a PARSIQ DAO coming. The DAO will have a lot of use cases. For example, at some point, we will eventually not be able to build all of the Data Lakes ourselves. It will take too much resources. If we want to expand and get more Data Lakes build, the DAO could outsource this to developers to build the Data Lakes on the PARSIQ Network. The developers could be incentivized with grants, which the DAO could decide upon.
Rong Kai: I think a lot of what Tom has just mentioned are already in the pipeline. They form the basis of what our flagship products will actually do.
But this is not to say we are not exploring more things as well. But when we say “the next milestones”, we mean the things that have been confirmed and that we are strategizing. We are also looking forward to things we want to do beyond these things, and looking at competitors, and seeing what other things our customers need.
When it comes to these APIs, this is what developers need. They need the resources to build what they need to build. And then there
Tom: The protocol itself? No. However, IQ Protocol powers the model that gives $PRQ its utility. If you mean will $IQT affect the token price? I don’t know. But I don’t see why it necessarily would. Of course, it could play out in different ways. But I personally don’t think there will be a correlation. At the same time, I have seen how one token performs well and then any other project in their ecosystem also starts performing well.
I have no idea, really. But I don’t see why it would affect it negatively.
Tom: Ok, I think that concludes today’s AMA.
To close this out, I’ll just repeat again that I realize a lot of people have lost a lot in the brutal market conditions this week. But there will always be better times. The important thing with crypto is to not quit, to give up and leave. If you survive the bear market, then you are good. You will have an enormous number of opportunities in this space — no other space can provide this. All you have to do is survive, and not leave the space! That’s it.
Stay safe out there, everyone. Thanks for joining. See you in about two weeks for the next AMA.
Rong Kai: Take care, everyone!
PARSIQ is a full-suite data network for building the backend of all Web3 dApps & protocols. The Tsunami API, which will ship in July 2022, will provide blockchain protocols and their clients (e.g. protocol-oriented dApps) with real-time data and historical data querying abilities.