FinNexus X Elrond Telegram AMA Recap: 14/07/2020

Veer Singh

Published in

Phoenix Finance

9 min readJul 16, 2020

Michael Steven: Welcome FinNexus group to the Elrond Community!

Question 1:

Michael: Let’s start with a short introduction, tell us how did you guys discover blockchain and what motivated you to start working on FinNexus?

Ryan Tian: After graduation from university in Law and Finance, I was an investment banker for almost 10 years. After that, I stayed in Africa for two years as the CFO of a multinational construction materials company.

I think of all the many interesting topics in the blockchain industry, it is clear that Decentralized Finance, or DeFi, is the most intriguing part. It can make the biggest impact in the shortest amount of time using real-world solutions.

In 2019, after I left Africa, Boris and I co-founded FinNexus..

FinNexus is the combination of the words ‘Finance’ and ‘Nexus’ so the idea is that it is a hub for connecting different decentralized ledgers to each other and users, and also for connecting with traditional finance applications. The industry needs a solution that is not only interoperable between these new, fascinating blockchain worlds, but also between these blockchains and the legacy finance systems that still dominate 95% of the usage in the traditional finance industry.

FinNexus is a hub for connecting different decentralized ledgers to each other and users, and also for connecting with traditional finance applications. The first iteration of FinNexus will be a marketplace for hybrid decentralized/traditional financial products.

Question 2:

Michael: That is very interesting, can you detail how is the interoperability achieved?

Ryan Tian: Sure. FinNexus will be built as a crypto supermarket, where users may discover many different unique products to efficiently satisfy their needs. Technically, the varieties of products will be created and provided to users through different FinNexus protocols.

Technically, we try to build the combination of protocols connecting different participants and counter-parties into protocols clusters. We would like to call them ‘FAT PROTOCOLS’.

Professor K: FNX is a WRC20 token that rides on the Wanchain blockchain, and Wanchain connects to a variety of blockchains, currently EOS, ETH, and BTC. We will leverage that technology as well as develop new partnerships with great projects like Elrond and XRP, among others.

Michael: So in a word you build bridges that connect different chains with different assets ?

Ryan Tian: Exactly.

It’s in this middleware layer where FinNexus plans to develop its first sets of protocol clusters. In our first stage of development, we will concentrate on 3 different “protocol clusters” that will focus on 1) Blockchain Interaction Protocol (BIP), 2) a Protocol Cluster for Assets Payments (PCAP), and 3) an Assets Distribution Protocol (ADP). Since some of these protocol layers will exist above second-layer solutions like the Lightning Network, we sometimes call the kind of connectivity solutions we are working on “third-layer” protocols.

Professor K: So that is one way to achieve interoperability, but as you know, there are many ways to achieve interoperability. Sometimes we in the blockchain world get stuck on this idea that interoperability is connecting other decentralized ledgers to each other. But that’s only about 2% of the demand for interoperability.

Michael: That is a very through and both complex approach, how do you ensure that no malicious action is taken agains each layer, what security measures you have?

Ryan Tian: True. It is not easy. Building protocols is not easy. We are trying to do it by launching different decentralized and hybrid assets and models. Like what we are doing this year, we have launched our first real-world backed tokenized assets, and today, the decentralized options protocol is alive

So in short, we are building protocols from down-to-earth applications and keep perfecting the protocols with connecting to different counter-parties. Our operations in developing this blockchain middleware will simplify the oftentimes intensive token-interactive experience for DeFi users across many platforms. Our aim is to hasten the integration of traditional finance and decentralized assets, which is ultimately the most basic requirement for enabling the widespread adoption of cryptographic financial technology.

By integrating Elrond is an important step and we believe Elrond will provide an efficient and cost-effective way for making connections and launching assets.

Professor K: Wanchain builds bridges. REN builds bridges. FinNexus is not in the bridge business. We want to build decentralized financial protocols on chains that have activity and stores of value.

Bridges can help us to do what we want to do, but FNX protocols live higher up in the protocol stack.

Michael: Interesting take, I’ve actually used the REN bridge to mint some renBTC and use it in DeFi applications, but as you said a bridge is just the beginning of the journey into DeFi, what are you planning on releasing in terms of applications?

Professor K: Elrond will be bridging in assets as well eBTC, etc. (if I’m not mistaken) as well as having a deeply liquid well-known stablecoin supply in BUSD. That makes it very attractive to build a version of our FNX Options platform on Elrond.

Michael: I can’t wait to see the protocol in action, would you also build an application layer so that Elrond can access the wide variety of decentralized finance products that FinNexus is offering?

Ryan Tian: Yes. The protocol layers and application layers are all our focus. The goal cooperating with Elrond is to introduce real-world assets and decentralized financial application on the chain. As in our plan, the decentralized options will be the first thing to build on Elrond.

Our public beta options platform trial is live now! Read about it here: https://medium.com/finnexus/the-finnexus-protocol-for-options-fpo-debuts-this-week-52dc7cb3ead6

And would like to make it live on Elrond. The FinNexus options in FPO V0.1 are tokenized options that give the holders the right, but not the obligation, to buy or sell underlying crypto assets at a specified price (Strike Price) at expiration. The uniqueness of the FPO protocol lies in its 1) unique liquidity mechanism, 2) dynamic and multi-coin margin mechanism, and 3) liquidation mechanism

Professor K: We just launched the first public beta of this idea today on Wanchain. We plan to release a second version on Ethereum that will involve an interesting liquidity pool concept that Ryan has designed. Then we will run them both simultaneously on Wanchain and Ethereum on the same website!

Michael: That is great! would the concept after being refined, be launch on Elrond, can that be integrated or would it have to be launched as a separate entity ?

Professor K: Next step would be iterating upon and refactoring those smart contracts for ERD.

Question 3:

Michael: we also saw many times in traditional finance that at some point when there is extreme volatility a cascade of liquidations effect, where one liquidation leads to another because the engine can’t find liquidity to set the price, how would your option liquidation mechanism defend against that?

Ryan Tian: Yes, it is crucial to keep the protocol secure in volatile times. Options can be acting as an insurance and it is designed to face these uncertainties. As for the collateral, we have designed a mechanism called Dynamic and Multi-coin Margin Mechanism; it will be capital efficient and also provide extra security to the protocol itself.

Question 4:

Michael: Speaking of which are you planning to introduce a hybrid option, with both crypto and other assets?

Ryan Tian: Well, it is our plan to make the second version of the options protocol more flexible. We will build it into something like the hub of decentralized derivatives. Maybe a bit like synthetix, but full of possibilities in derivative products.

Michael: Would you also build synthetic indexes for multiple assets and offer options for it?

Professor K: Could be interesting. I actually just hopped into the UMA chat to see if we could pursue something like that.

Although using BAND or LINK on Wanchain or Elrond will not be nearly as expensive in gas fees compared to doing synths on ETH.

Ryan Tian: Well the indexes are not on the roadmap for now. We will dig more into the derivative products, like more options, future, swaps, and even some well-known combined strategies. like option strangle, straddle, etc..

Question 5:

Micabytes: What is the benefit of holding FNX? and what is UM1s?

Professor K: In the second phase of the FNX Options platform, it will be the main collateral asset for the liquidity pool that backs the minting of options tokens on the platform. UM1S is our first real-world tokenization effort. It basically provides a put on the price of FNX for those who participated in our public sale back in May.

Michael: UM1S will be tradable without restrictions and would the users be able to exchange back to FNX ?

Ryan Tian: No it is a one time thing and not reversible. once converted, the FNX tokens will be burnt and cease to exist, hence decreasing the circulation. UM1S cannot be traded, and it exists like a bond, with fixed returns upon maturity, backed by real world cash flows.

Michael: So users can’t transfer the UM1S bond to other users?

Professor K: They actually can, but they would forfeit the interest component of their return by doing so.

Question 6:

Michael: I wanted to ask, how did you discover Elrond and what did you like when you dig deeper?

Ryan Tian: Well before Daniel made a contact, we knew Elrond mostly from the positive words from the market. As the leader of the new force in the public chain layer, Elrond has great potential. Its ambition in DeFi coincides with the roadmap of FinNexus. Elrond’s got advantages of high efficiency, low cost, security and decentralization, and we would like to expand its hybrid decentralized/traditional financial application to more users.

Michael: I agree, from what I’ve read both here in the AMA and in your documentations a strong synergy between our projects exists. Can’t wait to see more novel products on Elrond build by FinNexus!

Question 7:

Professor k: We have already built 3 dapps on Wanchain in the space of a few

months. In addition to our headliner FNX Options, we made a little binary options game called Wandora Box that you can bet on the price of WAN, BTC, and ETH using WAN coins. Also, we have a little Pool Together type dapp called Jack’s Pot.

You could say our devs like to make dapps! …

Question 8:

Michael: What are your developments in term of UX, what are you doing so that the use of the platform is seamless?

Ryan Tian: We have some ideas, like the UI can be shared across chains. The users don’t need to know the backstage operations. By connecting different wallets, it will change automatically and the users will not feel it.

Ryan Tian: We have some ideas, like the UI can be shared across chains. The users don;t need to know the backstage operations. By connecting different wallets, it will change automatically and the users will not feel it.

Michael: I understand, that is fair imo.

🤝We thank @Ryan_Tian, @Prof_K933 and @BorisYoung for being with us tonight for an awesome AMA!

🛠We are excited for our partnership with FinNexus that will be abstracting the underlying complexity of DeFi to offer Elrond’s ecosystem exposure to both traditional and crypto assets: https://elrond.com/blog/elrond-connects-to-broader-defi-and-traditional-assets-landscape-via-finnexus

📰Stay up to date with FinNexus and it’s developments!

About FinNexus

FinNexus is building an open finance protocol to power hybrid marketplaces that trade both decentralized and traditional financial products. The FNX token will live on the Wanchain blockchain to take advantage of the most robust cross-chain capabilities currently available in the industry. The first products FinNexus plans on releasing will be innovative tokenized assets (available Q1 2020) with value based on real-world cash flows.