The Phonon Brief #4: Jan 14-Jan 20

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Phonon DAO

6 min readJan 20, 2022

Welcome to the 4th edition of The Phonon Brief. Our aim with this newsletter is to keep the Phonon and the wider crypto community informed of the latest news, including product launches, governance changes, and ecosystem updates. If you’re interested in learning more about Phonon, follow our official Twitter and Medium accounts.

Summary

Phonon Mining (Native Phonons)
FRAX-PHONON Liquidity Pools
PDBG Recap
Chain Analysis

Phonon Mining???

Things are heating up as the Phonon core devs deliver on another incredible use case for the Phonon Network. This time in the form of Native Phonons. I’ll do my best to summarize but I highly recommend you read the blog post that goes into more detail.

Native Phonons are tokens that are generated by Phonon Cards via mining (or any minting mechanics, staking). Unlike a phonon that is created to house on-chain assets from blockchains, (ethereum, bitcoin, etc.) these Native Phonons can be understood and verifiable on the cards themselves. They can be created in any unit of value and can be traded with zero gas costs.

Why is this important? Trading on-chain assets using the phonon network is simply exchanging private keys. The network has no knowledge of what bitcoin or any crypto asset is. This feature is what makes the network, blockchain agnostic and a true Layer 0, but it also comes with a weakness; The recipient, or their client software, must verify the on-chain asset associated with a phonon prior to accepting it. Native Phonons originate from the cards themself and can be objectively verified to be a genuine asset with a specific value. This allows for the free exchanges of assets which is always possible once on the network but intitially requires gas when minting and redeeming phonons from your blockchain of choice. This enables p2p cash and micro transactions natively on the network.

The basic form of an on-chain phonon is currently metadata and a key-pair. A form that a native phonon could take is a card certificate, a random number and a signature of the hash of the pubkey and random number.
The native phonon would have value if when the random number is hashed with the pubkey of the card certificate it creates a mathematically unlikely result, say a hash with a number of leading zeros. This hash could then be represented in the binary form and said to have the value of n-bits corresponding to the number of leading zeros found in the hash. For example if we work in binary this would be an example of a native phonon with 5-bits (0x07 -> 0000 0111).

To understand how this works head over to the blog post linked above. If this idea excites you come join the discord and you can play a role in the economic structuring of the native phonon mining.

PHONON Liquidity Launched

The PHONON-FRAX pool is finally live on SushiSwap, thanks to the help from the Ondo Finance team. The pool adds an additional $4m in liquidity for the PHONON token bringing us to about $6m total between Sushi and Uni. This gets us close to our Q1 goal of $8m in TVL.

Not only does this partnership bring us additional liquidity, the Phonon DAO will also be receiving 1000 FXS (roughly $30,000) per week. This is an all around big win for the DAO but we do view it as a temporary solution. If you have ideas on how to better provide liquidity for our growing ecosystem, once again, head on over to the discord and share your thoughts!

PDBG Weekly Meeting

The second Phonon DAO bootstrapping Group meetings was a productive one. We are still formalizing the process for theses meetings and in the future should have full and separate recaps for those who can’t attend. For those interested in sitting in and learning about the needs and roadmap of the Phonon DAO, join us on Wednesday’s at 12:30 EST.

The conversation started with a brief recap of the launch of the SushiSwap liquidity pools. The DAO has also submitted an application to participate in the Onsen program via SushiSwap. This program is how Sushi determines who to pay liquidity mining fees to. Hopefully, more info on this to share in future briefs.

GRID Conversion was next on the docket. Currently about half of the conversion contract has been redeemed. However, only ~30% of the GRID community tokens have been redeemed for PHONON. (Last weeks meeting mentioned the possibility of putting a deadline on the conversion in 2023 and sending the remaining PHONON in the contract back to the DAO)

Many low tier CEX’s have been reaching out with offer to list PHONON. Most of these require some form of payment for listing and for now the PDBG has decided to hold off on this. We do have contacts at some of the larger centralized exchanges and will likely pursue this as we move further along the roadmap. There have also been talks with liquidity providers who work with these large exchanges, these providers work with loaned tokens and the option to purchase at current prices at various intervals. While this is something we want to consider in the future, the low price we are currently sitting at makes this a dangerous options if/when our price is 50x from here. In a future meeting we will be looking at bringing a member of a large CEX to help us understand what steps should be taken to have a successful listing on their exchange.

Finally there was a long discussion about the roadmap, vision, and mission statement of the DAO. Many descriptors of what the Phonon Network does have been taken by other projects who do not meet the standards they claim to. This makes it hard for us to define a vision and mission statement without using crypto buzzwords that many projects misleadingly use.

Key traits that we are focusing in on when creating the mission statement and vision are scalability, interoperability, privacy, and providing transaction without censorship.

A second struggle that was discussed in the meeting is that the Phonon Network keeps evolving so defining a clear roadmap is tough. Similar to Ethereum when it launched, predicting exactly where we are today would have been impossible. This topic brought us to the discussion of the new concept of Native Tokens and the future they may play in the Phonon Ecosystem.

The meeting ended with a goal of creating some potential mission statements and testing them on twitter to see what gains traction. If you read something that catches your attention regarding the Phonon Network please share it with us in the discord!