PARSIQ Q&A #34
Every second Thursday, our CEO Tom Tirman take the live stage on YouTube to bring our community updates and answer all your questions.
Below is the transcription of the September 16th, 2021 live AMA with Tom Tirman, CEO and guest Anatoly Ressin, Chief Blockchain Architect at PARSIQ.
The bolded questions are links to the timestamped section of the video AMA. Or, you can watch the entire AMA here.
Be sure to visit PARSIQ on Twitter or in our Telegram, and Tom Tirman on Twitter here.
Introduction
TOM: Hey everyone, welcome to the third live PARSIQ AMA session. Today we have PARSIQ Co-founder and chief blockchain architect, Anatoly Ressin.
Hi Anatoly, thanks for taking this time.
Today will mostly be Anatoly’s show. I’m going to choose questions for him to answer. So, feel free to ask anything about the product, about the vision, about progress. I’ll take some of the questions that are directed to me, but I am here to moderate this discussion.
Before we get into the questions, I would like to share some progress on the IQ Protocol front. The team is working hard, and the HODL model is almost live. We are speaking, every day, to different projects who want to use IQ Protocol and deploy their own renting pools there. We have discovered a lot of use cases, including memberships, creator coins, and not just subscriptions. Many more use cases can be applied. So, I think we will see a lot more of these projects coming on board and building on top of our protocol in the next quarter, and the next year as a whole.
Anatoly, before we get started, maybe you can give a brief update to the community: (for example) What’s happening with IQ Protocol in the engineering department? What are the next steps? What have you been brainstorming or researching? What is the progress update?
ANATOLY: I would say that the surveys of the development are quite big. There are different directions in which we are evolving this protocol. One direction is spreading IQ Protocol to different platforms. We are investigating the possibilities and implications of implementing IQ Protocol on non-EVM platforms, namely Solana. We could implement more interesting logics — this is one question. Another direction is that we are investigating launching IQ Protocol on layer 2 solutions — not on the mainnet, because unfortunately for now, the gas prices are too high. But second layer solutions like Optimism and Arbitrum are looking promising. We are investigating the possibilities to port IQ Protocol to those. I would say that maybe Arbitrum has higher chances than Optimism. But we still are in the investigation phase.
About the IQ Protocol itself we have talked with different companies, who have provided feedback on our energy model. For some companies, our energy model fits quite tightly, and this is exactly what they wanted. Other companies tried to inverse some processes in IQ Protocol that can be easily done in IQ Protocol as an update. So, it is evolving. The most asked about feature is the ability to unlock tokens — to guarantee that borrowed tokens are really sitting on the same addresses without the proof holding, to make them non-transferable for the whole period of accessing the services of them, in enterprise, and so on. Another feature that is very hot in IQ Protocol and asked about by companies in the gaming industry is about lending and borrowing NFT tokens (both erc-71 and erc-1155). We are now working on the model of how to create mirroring smart contracts for NFT tokens and make them borrowable and expirable. Of course, any company that builds on top of IQ Protocol should be aware of how IQ Protocol allows a flow of direct on-chain lending and borrowing of assets in a game. This thing is also very hot. So, these are some of the directions for the IQ Protocol.
TOM: Thanks, Anatoly. Just now we have a question about NFT renting. We’ve talked about this in the past AMA sessions, and about how people can rent NFTs. The question is…
Q: When it comes to IQ being used for NFT renting, the NFT will be wrapped, correct?
ANATOLY: Yes. It will be wrapped, and this wrapper should be recognized by those who are willing to accept, or give you something in return, for having this entity on your account.
TOM: Exactly. So if we are talking about, for example, renting something like a CryptoPunk, it doesn’t have to be accepted by anyone — you can just rent it. But if it is an in-game asset, then it has to be accepted by the game, or the creators of the game. So we will be reaching out to talk to gaming companies, play-to-earn projects, and other NFT-related companies, so that they will accept the wrapped versions for utilty.
ANATOLY: I would say that those things are good, because those are battle scars. If the system has no such scars, then that is suspicious. Both Etherium and Bitcoin have had such things. It is better to encounter these situations earlier than later. It just means that both Solana and Arbitrum are being tested by external entities for strengths, capabilities, and the more things like this will be in the near future, the better battle-tested the systems will be. Because all such attacks, or all such instances of being overwhelmed with transactions, are all lessons that companies gain a lot of experience from — a lot of new input data that can be used to prevent such things in the future. I would say that these outages were anticipated.
ANATOLY: What can you express in that language that is tending towards becoming a generic programming language? That’s an interesting question. For now, we are moving from it being a small DSL (domain specific language) to a language that will be capable of processing different data sets and implementing different flows. I would say that the most interesting usage of ParsiQL will be achieved when PARSIQ begins to digest not only blockchain data, but also, for example, trading live streams from centralized exchanges; and you can build your own trading strategies, like you can do on the meta-trading platform Forex, where you can express your own trading strategies. Here, the most exciting thing will be when you can combine live data streams from CEXs, plus everything that is available through our monitoring of what is happening on the blockchain. So it is a CEX and DEX arbitrage case for ParsiQL, when you can express sophisticated strategies and earn money on that.
ANATOLY: Unfortunately, I would say that between two different blockchains, with completely different models, it will not be possible. Because, e.g., Solana itself has a completely different mindset about how to work with data and work with accounts. And when we express something meaningful in Solana, you may not have the same notion in EVM, for example. But I would say that some kind of unification (like Docker created for programming), then yes, there will be some generic services or interfaces that are re-createable on different blockchains. We are trying to abstract them and polish them, to make them almost identical. I cannot say that they will be absolutely identical, but we are trying to make ParsiQL for different blockchains, where we are representing different blockchains as streams of events. For such events, like transferring some tokens from one address to another address: yes, these types of triggers will be portable to different blockchains. But if we are talking about different DeFi products, if these DeFi products are congruent — if they do the same thing simultaneously with the same processes — then yes, we can provide streams that will allow users to consume this data in a unified matter. But if they are created ad hoc, if they are created specifically for a given blockchain and leveraging the strongest parts of that blockchain, then it will not be as easily portable.
Q: What is the status and what is the progress on Ncase?
TOM: Ncase has been in a beta stage of testing for a while now. Some of our partners are testing it out. But there is still so much to do, including the whole MPC part. Between IQ Protocol and the PARSIQ platform, the product rollout hasn’t been priority number one. But it is definitely on the roadmap. Maybe Anatoly can shed some light on what needs to be done this year and next year to get Ncase fully, commercially live, to be able to provide it to blockchain companies who have expressed interest in it.
ANATOLY: First of all, we marketed Ncase as the entire solution. But now we have sliced it into different abstraction layers. The tiniest layer, which probably will be published — and is a real part of the Ncase — is the nonce manager as a service. For those who program in Etherium, you know this pain point: how to assign current nonces when you have a big stream of outgoing transactions and need to assign correct nonces in advance. That is the first, small level. Second level is the new key management and signing. This layer is in active development, and I would say the consequence of creating a full-fledged key management solution will not be only for the wallet-as-a-service (like Ncase), but it will also be for the actions on the blockchain for PARSIQ itself. For example, if you want to attach some action that should be triggered by PARSIQ on your behalf, then you need some means of being involved in the flow of how we can sign your transaction with your key without disclosing it; and on top of this, there will be a different services: one will be a wallet as a service, and another will solution that will sit on top of the key management ability to track deposits and withdrawals will be an entire solution for exchanges. For exchanges, because not everybody who creates an exchange knows that an exchange itself has different parts. One part is connected to the trading itself, but it is not connected with the blockchain: all the trading is happening inside the memory of databases. Another part is a deposit and withdrawal system. That system will be another part of the Ncase. But now we are concentrating on the key management system. When it is finished you will see first deployment as actions enabled on PARSIQ.
TOM: This ties well with our reverse triggers and actions on the blockchain that we’ve discussed on the roadmap.
TOM: Definitely not. We are onboarding projects all the time. We expect more borrowing to happen within the next days, and continue to be happening. The pipeline is quite full. You’ll see increases all the time.
ANATOLY: When somebody borrows from the pool, the money that is used (or whatever the user pays to the pool) is not immediately added to the reserves of the pool. It is being continuously streamed from a special place where these funds are placed. It is streamed non-linearly. This non-linearity works in terms of gap-halving periods. For example, if somebody pays to borrow 100 tokens from IQ Protocol, and our gap-halving period is one week (I believe it is one week — I don’t remember the exact settings off hand), this means that the 100 tokens are immediately placed in a special locked box and only half of them are released during a week. Another half of the remaining half will be released during the next week, and half of the half of the half will be released the following week (and so on…). The gap between the not-paid and the paid amount halves every week — that is why we call it a gap-halving period. This model allows us to drastically save gas on EVM compatible networks. This model — or when something is streamed using this non-linear function — has a very interesting property: you can add, at any moment, new funds to this log box and it still will be streamed with the same halving scenario. So you will experience different APY earnings on different days if the borrowing model is sustained. But now it looks like stairs: borrowing, then no borrowing, borrowing, no borrowing, etc. So when there is a continuous stream of borrowing you will not feel it. You will feel different levels of borrowing, but you will not see such drastic differences.
ANATOLY: Here you need to understand that the game must be aware of the wrapped contract. For example, when some enterprise accepts powertokens (just our ERC-20 powertokens) it should know which enterprise deployed on IQ Protocol it will work with. The same goes for games. This means that a current game without modifications will not be able to accept wrapped coins. And the scenario, the flow, of how the wrapped NFT will be supported in the game involves our communication with that game — not our communication, because every game developer can read the documentation about the IQ Protocol and decide whether the users will be able to lend and borrow NFT tokens through the protocol. And, also, as in a situation with enterprises for ERC-20 tokens, they will be able to set up a service fee, or the royalties. For example, when one user lends their NFT to other users, and the other user pays for it, maybe some part of the payment will go to the creator of the game. Thus, games will be aware of the contract that will be created for by the IQ Protocol for the wrapped token.
Q: If blockchain is Kafka can ParsiQL be equated to Apache Flink or even Apache Storm?
ANATOLY: I would say yes, and that we can even see similarities here. But we are more concentrated on the specific blockchain. Patch products are very generic.
TOM: This is a tricky question, because PARSIQ has mostly been focused on delivering fundamentally good technology more than on marketing and hype. But we are slowly and steadily improving on this. It is not a sprint; it is a marathon. We are learning to work with messaging around our products and our technology, and how to reach out to more communities. In the last year, I have seen different periods — for example, last year’s August and September, we had explosive growth of token holders and social media followers. Then we had quiet stagnation, with slow growth. Then, again, we had surges in December and January, but then again, a few months of slower growth, and then April and May (more growth). Nothing is growing explosively forever, but in periods. We have been in a period of preparation, but I think very soon we will see some good numbers in terms of community growth. So, I wouldn’t worry about this: we have a lot planned for this year and for next year, which should turn a lot of people’s attention to both PARSIQ and to IQ Protocol.
ANATOLY: Firstly, we are already working with some kind of blockchain security, since we are integrated with Bitfury crystal, we are integrated with upsila security, and we are still in the process of defining and integrating other security tools. I would say that this is a slightly different direction of the PARSIQ evolution. We are now accumulating our own data that could be used for the forensics for different interesting security related questions, about the health of different wallets, and so on. We are slowly accumulating both knowledge and data, sufficient to say that we will be in the blockchain security as well.
ANATOLY: I would say that this is in our vision. We’re now working on the runtime environment that can be decoupled from the portal, that can be executed in Docker contains that can be executed even on personal computers. So if you just want to set up your own trigger on your own computer, you can just stop the session runtime environment, which will even have less restrictions than the portal because there you will only be restricted by your computer. But you will still need to be subscribed to our data-streams, since the most important thing is the unification of different blockchains. For example, all capabilities of processing could be off-loaded to you — it’s kind of decentralized — but you still will need to subscribe to the data that is provided by PARSIQ.
TOM: This is a tricky issue. Because the age of a project has no relevance here. Exchanges often do not give reasons why they do not list. Exchanges mostly chase things that are trending heavily. That means the meme coins, the play-to-earn industry… these have huge trading volume. That is why they go to the top of the priority list. I know a lot of great, successful projects, with working products, with adoption, with big communities, with top-tier vc backers who still haven’t managed to get listed on some of these tier-1 exchanges. So, it is nothing surprising. We are doing everything on our part, and a lot has been done. We are on certain waiting lists on some of them, but it is just that we are not priority number one — right now it is time for play-to-earn. That is where most the volume is. PRQ will be listed on tier-1 exchanges sooner or later. It can happen tomorrow; it can happen in 6 months. Most of the work has been done. And now it’s just showing a little more traction and waiting.
Q: Are you going to have any early incentives to lending?
TOM: Yes, we will have a number of incentives for participating in the IQ protocol as early-stage adopters, as liquidity providers. One of the first announcements of this will be made public within the next couple of weeks — and that is not the only one.
ANATOLY: In the future: yes. But not now. Not now because all the technologies, for now, exist at least as a prototype. As a prototype it could be done today, with all the zk-SNARKs, just to prove that we can really execute the logic that’s submitted, and you can verify exactly the algorithm that was executed on that data. But we need to combine it with blockchain data itself, and automation of the smart contracts in a purely trustless manner. We think that it is kind of a question for blockchains themselves, because sooner or later these things will be incorporated into blockchains. Now we are concentrating mostly on reacting in real-time and applying as fast as possible the algorithm to what is occurring just now on the blockchain. Trustless-ness comes with a big price: you need to verify it, you need to reverify it, and you need to reach a consensus, all of which somewhat contradicts the speed of the reaction. For the start, we are concentrating on creating a centralized way of reacting to events immediately, and only then will we identify those of them that are not as urgent as our main target use cases. For those, we will probably create a trustless mode.
TOM: We look at a number of things. First is the team, and the dedication of the team. Second, the project must solve an actual problem and capture value. These are the main attributes. Also, we look for some good fits that could be integrated with, or could make use of, the PARSIQ tech stack.
Q: Why haven’t you moved liquidity-providing incentives from Uniswap to Arbitrum?
ANATOLY: It is a question about investigation. We are on the path of at least sharing the liquidity between the mainnet and the layer 2 solutions. We see it will be the future, because users really search for transaction fees. When we see that these technologies are mature enough — have accumulated battle scars — then we will probably move without taking any regret there.
Q: How do you plan on displaying APY on IQ Protocol, since everyone’s APY is not identical?
ANATOLY: We are only now just accumulating the statistics, since it is really live process. What we can do is we can expect more borrowers for this, and create nicer visual representations of what we really have. Because, in contrast to inflationary coins, we don’t do minting of our own coins to create APY. Ours is a consequence of what is actually happening. We are trying to incentivize all the players of the protocol to create a sustainable system, one where the APY will be predicable. We cannot answer why APY is X at this moment and Y at another moment. We can just explain something about the number of borrowers and lenders. The ecosystem around IQ will stabilize all of these metrics.
TOM: Yes. We are in constant contact with the injective team. Since Injective is built on the Cosmos SDK we are creating a framework on how to integrate projects that are built on Cosmos.
ANATOLY: This growth was expected and highly anticipated. Without this growth, we were almost going crazy. Because a lot of different things were on our plate. Now we can divide the work more correctly — to assign correct people to it. We are even growing in the data analysis, in big data, in forensics, and so on. Now we are hiring a new person who will be owners of the process. Instead of having all these processes in my head, or Tom’s head, or Alan’s head, we can just offload these things, and think more thoroughly about our strategy, about our future. All the things that are already understood can be offloaded and can have better synergy.
Q: What is one exciting thing that we can look forward to at the end of 2021?
TOM: I have already covered some of the future milestones for this year. We want to update the portal’s UI/UX, we want to do the smart templates marketplace, the ParsiQL 2.0 version, and all the updates for IQ Protocol. But, for you Anatoly, what is one of the most exciting things you want to accomplish by the end of the year?
ANATOLY: I would say that the NFT borrowing and renting, in both ERC721 and 1155, will be very interesting. It will be doubly interesting if we could implement the NFT-related things on Arbitrum. I don’t know if we will do that this year. But the journey of offloading the NFT things to a second layer will be huge. It looks like recently, Vitalik Buterin published a note about the NFT interoperability, and he even mentioned Arbitrum as a possible target for where to offload NFTs. But immediately he wrote a disclaimer that he doesn’t like the idea of them being tied to just one lender. So, we need to create a standard about the interoperability of bridging NFT smart contracts, just to push it out from the mainnet. NFTs are now one of the main consumers of gas.
TOM: Yes, I am also excited about the NFT rental version of the IQ Protocol. In fact, we are pretty much shook hands with some NFT projects and marketplaces — some of them not small at all — who want to have the ability to give their users access to renting and borrowing NFTs. The IQ Protocol would be underneath, but there could be multiple front ends, including front ends on those projects’ websites and marketplaces. That would give us, immediately, thousands of users and millions in TVL. A lot to be excited about.
ANATOLY: For now, we are mostly centralized. Our subject domain, what we are working with, are decentralized things. But we are now a company that accumulates data in a mostly centralized manner. Yes, we have different nodes, and are even maintaining our own nodes to sustain different networks. But what we are doing is mostly centralized. The payment and business model we have decentralized with the IQ Protocol. So, there is an interesting symbiosis between centralized company — yes, the company works with decentralized technologies — and the decentralized economic model that is covered by the IQ Protocol. So, the business itself is, for now, not decentralized. If we decide to make the nodes for ParsiQL independent in execution, then probably from such nodes, we can build our own — not a blockchain — but something that resembles a decentralized project. But for now, we are trying to extract all the benefits of being centralized. Yes, we are trying keep all our data as transparent and auditable with all the hash chains, for our own internal audit. But when you are working with such huge data streams, as for example Solana transaction or Algorand transactions, you cannot offload this logic to decentralizing. It just will not work. You can only create very basic things on a decentralized level when you want to analyze such data. So, our data will be much richer, and with many more interesting analytics available than any decentralized project within reach.
ANATOLY: We are going to be an industry standard. It is not as easy. But it is a way that we see that we are needing to go.
ANATOLY: The uniqueness of PARSIQ is in the model of how it joins the world of blockchains with standard informational systems. We chose to build a generic tool. Building a generic tool is not an easy path. And we are always asked: why did you decide to create your own language? This is a good question. But when new employees at PARSIQ ask this question and get an in-depth answer about the processes we are covering with our language, they immediately abstain from any other questions about it. That is because we see a lot of patterns that can be easily expressed in language construction. So, to be able to build a full block chain language — which is a glue-language connecting blockchains and the world — they see the unique purpose of PARSIQ. Nobody has tried to do the same as us in this way. To build a language you need to have ambition, knowledge, and experience to answer such questions, and even simply to deliver your vision. We are doing this.
Q: Will PARSIQ work with governments to provide financial reporting or tracking solutions?
ANATOLY: That is an interesting question. We are just a tool, like a knife. It is a question of how the tool will be used. For example, someone could gather analytical data and enter commercial relations or into piracy. That could be so, why not? The question about being forced to provide data… I would say that it is nonsense. I do not know what, or how exactly, to react if, for example, a government would come to PARSIQ and ask, “Please give us all your data, for free. We just want your data.” That is, if they come to seize our data. I would say it would be a scandal.
Q: How does PARSIQ grow against a downtrend? What are you planned actions in a down trend?
TOM: I assume by “downtrend” you mean a downtrend of the crypto market. Crypto markets are volatile, of course. How do we grow against a down trend? The most important aspect is adoption. We are seeing blockchain adoption, and we are seeing adoption of PARSIQ. Blockchain isn’t going anywhere, it is only going to grow, and everyone will need middleware — it doesn’t matter if Bitcoin is going up or down. So that is the most important part. Of course, most digital assets (including the PRQ token) will be affected by a bear market. We saw this just recently when we had the ‘mini bear market’ in the summer. Unfortunately, some of PARSIQ’s main milestones — like a fundraising round with the Solana Foundation, and onboarding advisors and investors like Facebook’s Evan Cheng, and the release of IQ Protocol beta, and the burning of the tokens, which all fell in the downturn market range — obviously didn’t have any effect [on the price of PRQ]. But that was the state of the market. Everyone was in fear and panic. There is nothing that can be done against that. You just have to continue to build and show progress, because eventually all of the things that have been done in down markets will have an effect later one. If the adoption is growing, then the project will grow, and it will be a success.
ANATOLY: Yes. User-defined functions: we are going to create not only user-defined functions, but we are also introducing a sound type system where types will be expressible with all the generics, it will be optional, because of the type inference. If you already used ParsiQL, you will know that the type inference works well, even now. But it will be more sophisticated, of course, so there will be user-defined functions and user-defined streams. That means the user will be able to define their own trigger, or their own transformation of well-known streams, and they will be able to attach a new trigger to the streams you are already using. So, all these are planned. And because of one of the core features that we are working on now in the sound state, which allows triggers to retain and update information belonging to a state which could be used to alert machine-learning algorithms. We will probably include some packages — we are also working on namespaces for packaging functions, packaging streams, into packages that you will be able to import the appropriate package. There will be some functions that are familiar for machine-learning researchers. But it will not be immediately available. All things are gradual. Right now, we are working on the state machine, on the run time environment, on the semantics, on the new PARSIQ as well as the ability to decouple the run time environment from the portal. That is a huge job. But eventually, yes, we are going to do that.
TOM: Thank you, Anatoly. This concludes our AMA for today. I know we missed a few questions, but feel free to send any follow-up questions on telegram or twitter. We’ll try to collect them and then answer them later. Thank you everyone for tuning in. Thank you, Anatoly, for taking the time to answer the community questions. Until next time…!
ANATOLY: Thank you. Bye-bye.
