Recap of PromoTeam AMA session with founder and CEO of Equilibrium & Genshiro, Alex Melikhov

Vlady Limes: Hello everyone, I’m really excited because we are having AMA session today with really interesting guest. He is cofounder and CEO of Equilibrium & Genshiro projects and his name is Alex Melikhov. We have received a lot of questions from the community. We’ll will choose the best questions later and know let’s start because we don’t want to take too much of your time! Alex, are you ready?

Alex Melikhov: Good evening thank you so much for having me, I hope today’s conversation will be interesting, ready to go!

Vlady Limes: The first and the last questions are traditionally from me. They are always the same. The first question, was announcement of the second batch of Kusama auctions unexpected for you and your team?

Alex Melikhov: Yeah, very good question, thanks. First of all, you guys know, that we have participated in the first round of auctions, we had quite substantial and quite active registration from the side of our community. Despite, we haven’t managed to get the slot. We think that the first campaign was pretty much successful for us, so technically speaking we definitely were prepared for the first one. Obviously, not much changed until now and we definitely were prepared from the technical perspective for this one. We’ve been preparing from the business development side, we were doing our homework in terms of engagement with the biggest Kusama stakeholders. Also, we were thinking through our strategy that we will be applying through current round of auctions. We’ve been expecting that auctions would be starting around this time, beginning of September. Obviously, the announcement itself was all of sudden. Answering the question, in the biggest part it was not the something unexpected but some elements were kind of suddenly. Devs team is fixing some stuff that we are going to deploy, codes to crowdloan campaign. But overall, it’s all good. It’s all fine.

Vlady Limes: Thank you, let’s go to the questions from our community. And the next question is kind of continuation of the previous one. Does the project ready to launch as a parachain?

Alex Melikhov: Yeah, good question. We’ve been building our product line for a quite a while, we are quite far with a development and we’ve been launching our testnet a while ago. Technically speaking, the first block was minted even at the end of the last year then we were updating the codes for the testnet moving out some of our developments. More or less, we have finalised the code for the initial deployment as the parachain at the end of May. It’s been quite a while and definitely there were more functionality developed and since that time we’ve been adding this functionality to the code of our parachain. From the perspective of business logics, we are very much prepared to become a parachain. Obviously, Polkadot and Substrate itself is not the finalised development. They are constantly rolling out some updates of their technology and we get in line to these updates. From this point, we amend the code and the code of parachain specifically, but the overall we are ready to go into the production as a parachain. It won’t require that much effort from our side. Moreover, we are aiming to launch our product line into production as standalone Substrate even before the parachain slot. By the way, it will happen next week. Some of our DeFi product line will be launched into production as a Standalone Substrate under the brand of Genshiro. If you are interested, we are hosting the events it’s the Kusama Demo Day, which will take part 2nd September. Please join us, there will be all the prominent teams of the ecosystem. We will present our developments in Genshiro and it will be launch party for us. Deploying our developments, presenting it to the community. We’d love to have you with us. Save the spot and welcome to the show!

Vlady Limes: Thank you for this detailed answer! We are trying to ask questions in the logical order. So the next question from our community. Do the technical features of the Polkadot / Kusama ecosystems help you in the implementation of the project? Are existing development tools (such as Substrate) ready for production use? Are there any non-obvious difficulties in their application?

Alex Melikhov: Yeah, this is a very good question. The obvious advantages of Polkadot we are leveraging in our developments, I can mention off-chain workers, I think this functionality plays the significant role for implementation of heavy computation and something that requires a lot of resources . You can upload some functionality off-chain and the results of these computations will be trustworthy you can use it in your on-chain application without any concerns and we use this functionality for implementation of our risk management system. Since you got know, we are building the conglomerate of DeFi products which includes the risk management modules because we are taking risk based approach to pricing which is differentiating us from other different lending systems in the space when they taking their approach of utilization where they considering the cost of borrowing for actual borrows. I mean, this functionality makes Polkadot really outstanding platform and very much simplifies the developments and makes it more comfortable and allows building more interesting features within your applications. Also, Substrate itself is highly customizable framework for building blockchain applications and this implies certain advantages and also drawbacks. Drawbacks are related to the qualification of developers with whom you are working with on your application or platform or product and if they are not that much qualified, you are under the risk that your application will have some certain security breaches but if you are working with qualified developers. We at Equilibrium and Genshiro have very advanced technical team, so you can be confident that everything will work smoothly and through this customization you can achieve certain advantages and build very tailored applications with very tailored functionality within you Substrate. Eventually, you are coding the runtime of your blockchain. You will never get the same capabilities in other blockchain platforms where you are coding smart-contracts executed in the isolated environments, so it’s total different developers experience. Regards the difficulties that we are facing during the developments on Substrate, I can mention, first of all, the Substrate itself is not the sustained framework, as I said Parity is constantly amending their code base and rolling out certain updates related to parachains. Maybe, not the whole Substrate but particular modules, like Cumulus for example. This brings in certain complications in terms of your development process because you need to be up to date if you expect to become a parachain, you need to update the latest version of Substrate to be compatible with what’s going on the Relay Chain. This requires a lot of efforts and consumes some time of your development and development team. There is another inherited problem out of that, so basically It requires quite a lot of effort, the barriers of entry for developers into this space is still high. Obviously, this barriers will be little bit lifted when some projects like Plasm or Moonbeam will be launching on full-capacity and you will be able to deploy Solidity code and smart-contracts on their parachains, but for now since everybody is building on Substrate their own applications and there is no platform that supports that supports smart-contracts it complicates things for newcomers and raises the barriers for new entries.

Vlady Limes: Excellent, thank you! Let’s move on to the next question. How can we get your White Paper or what do we need to do to read it?

Alex Melikhov: You can find it on our website Equilibrium.io or Genshiro.io. The one thing that we require for those who wants to obtain our White Paper from there to leave their e-mail addresses, we are doing this cautiously because we are sharing important documents regarding our project. We put some effort into creation of these documents and we think it’s fair to ask those who wants to get the White Paper to introduce themselves, so that we know who retrieve this White Paper from ourselves. Anyway, the White Paper is publicly available, it’s not the secret and you can definitely find it on our website.

Vlady Limes: Very good, thank you! The question from our community member, Is it correct that users will be able to mint their own stablecoins? How does this work in a cross-chain solution and how will these stablecoins be backed up?

Alex Melikhov: Yeah, thanks for the question. That’s correct! We will launch our embedded native use deduct decentralised stablecoin called EQD which will be backed by crypto collateral. We can see that stablecoin more than lending instrument, everyone who provide the collateral can borrow the stablecoins from the system at the collateratizon ration through their preference. These stablecoins will be primarily solving the needs of the system, to give you background what we are building, it’s one of the most comprehensive DeFi platform in the space which will include the wide set of lending instruments and the order-book based of professionally grades decentralized exchange which will be highly leveraging these instruments. All combine, you can think of that DeFi prime broker which will deliver a lot of sophisticated functionality which is much relevant to professional market participants or to retail market participants as well. Regarding the backing of the stablecoins it will be backed by crypto collateral and all the loans in the system will be backed by collateral basket. Thanks to off-chain workers, we are able to implement functionality of portfolio management and risk management within the system. And this functionality of portfolio management is quite unique for the DeFi space because all the standalone chains like Ethereum and others they can not support this kind of functionality due to obvious congestions and the cost of all resources on these blockchains. Thanks to Polkadot advantages and the advantages of the Substrate framework, we can implement this functionality and to build really sophisticated system which inherits the best practices from the world traditional finances. With regards to the stablecoins we consider it as a lending instrument, the loans and the stablecoins will be maybe the cheapest ones in the system because there are no liquidity providers behind these loans and simultaneously all the stablecoins will be backed by portfolio of crypto assets. From this perspective they will have the constant backing and you may think of that like in the same way how DAI or Maker DAO work. In our case, it’s little bit different setup. First of all, because of this portfolio management functionality. On the other hand, we have different debt management system in our platform which differentiates us from regular DeFi applications on Ethereum where the liquidations and stuff are managed through auctioning. As you know, Maker DAO failed to maintain this auction at the Black Thursday a year ago. The thing is that opposed to this auctioning process we are introducing the mechanics of bails out and this means we have include settled systems in advance which secures the system against worst defaults. I think that is pretty much of it. I can cover bail out functionality if the audience wants.

Vlady Limes: Thank you so much! We’ve got the question from the voice chat. Equilibrium collected DOTs before the announcement of crowdloans and it was done by using Equilibrium crypto wallet, so could you comment why it was done in this way?

Alex Melikhov: Yeah, sure. It was the part of our parachain lease offering strategy on Polkadot. We announced the two phase strategy in advance and overall process was split in two parts, so the first one is DOT — EQ token swap which we have successfully accomplished. There was quite impressive oversubscription and eventually we managed to secure 250,000 DOT as the first part of our beat for the parachain slot on Polkadot. The second phase of this campaign will be crowdloan which will be launched simultaneously with the launch of parachain auctions on Polkadot. We decided to do this way because we think that this strategy makes a lot of sense. It helps us to get DOTs that we eventually can re-use for the further auctions. When the first leasing period will be over we need to participate in the next auction. We are assuming that and confident that project will perform well on Polkadot in two years after the parachain lease and eligible to continue our functioning on the Polkadot network. One remark here that we have not been collecting DOTs on our own wallet, this is not accurate. We have been collecting this DOTs on the wallets which belong to our custodian, so we have the contract with Copper this is the London based regulated custodian which is managing these funds and simultaneously we have multi-signature permissions for these wallets. One of multi-signature participants is our investor, this is very reputable and known in the ecosystem fund called Sygnum based in Singapore. We have no access to these funds, we can not use that on our decision whether we want transfer that or not, we can not do that. All the operations with this DOT need to be verified by all the multi-signature participants, so there are three of them — Ourselves, Copper custodian and Sygnum. These funds are supposed to be used only for the parachain beat during the auctions and obviously will be the robust assistance for us to start auctioning process and start our participation in the crowdloan campaign on Polkadot.

Vlady Limes: Excellent, thank you so much! Let’s go next! I think this is very interesting question! If liquidity pools on different blockchains are interconnected through Equilibrium, then by breaking one protocol, it will be possible to pump out liquidity from the associated pool on another blockchain. How will the protection be carried out in this case?

Alex Melikhov: I’m curious whether this related to bridges because It’s not clear from the question from which particular liquidity pool this statement is related.

Vlady Limes: Got it, can we go the next question?

Alex Melikhov: Can you clarify the previous one whether it’s related to liquidity pools in our system or liquidity pools on bridges?

Vlady Limes: I think liquidity pools related to bridges.

Alex Melikhov: If it’s related to bridges than like for the very beginning we have the protection mechanism which will be implemented as delay for withdraws of bridges, so we can constantly be monitoring the transactions or bridges and understand what’s actually going on and whether the particular operation implies certain risk for the system. After the system will sustain we definitely will leave this limitation. Simultaneously, I should mention that we are paying close attention to the cyber security. First of all, we are covering with extensive framework of tests of all the code we are creating, and also we are in touch with several cyber security auditors. We have the first kind of audit done by Quantstamp, it’s already accomplished and it covers the basic functionality of the system. Currently, the rest of the code is under review and will be announced about little bit later once it will be done by another independent counter-party. Also, we are currently in the process of the audit of our bridges, it should be done by the start of the system.

Vlady Limes: Thank you so much for the answer, the question was a little bit confusing but it’s good that we figured it out. The question from our audience. How will Genshiro and Equilibrium get the next slot after the first leasing period? Will you use your own funds or will you use it from crowdloan?

Alex Melikhov: We have this strategy which presumes that we will be participating in two crowdloans campaigns. The first one to win the first slot and second to win the second one. This strategy helps us to secure two parachain slot leasing periods. For the first year and for the second. The funds that will be raising during this crowdloan will be raised against the tokens that we have allocated for this process. At the end of the second year, we expect that project will become more established on Kusama and we will be able to secure the slots ourselves. For that we have the mechanism within our products when some fraction of fees that we are collecting from operations with our product line will be converted through our native Genshiro tokens and this liquidity will be used from this treasury for the beat for the parachain slots once it will be needed.

Vlady Limes: Great, thank you. Let me ask another question. What tokens will support at the start of the stand-alone and parachain version of Genshiro? Will there be a bridge with Kusama / Polkadot in stand-alone version?

Alex Melikhov: In terms of networks that we are bridging from the start. As you know, we have implemented two bridges, so the first one is bridging our Substrate with Ethereum and the second one is bridging us with Binance Smart Chain network. We think that this opportunity to work with the two biggest DeFi ecosystems will have certain positive influence on the overall system and will help us to bootstrap liqudity and will get the user acquisition from both of this ecosystems. In terms of assets that will be available from the start, on Ethereum there will be all major stablecoins including USDT, USDC and also in collaboration with Maker DAO we have recently integrated DAI, maybe I should mention that we have arrangement with the company called Stable Node which is run by Gustav Arentoft who is the leading business developer at Maker DAO. Stable Node will provide the initial liquidity in DAI once we launch into the production and we sure that this integration also will help us to get more users from the number of those who are actively using Maker DAO in their operations. Besides these stablecoins there would be Ethereum itself available on the bridge and in the system. Users will be able to bridge the native Ethereum from the Ethereum network and use it in our product line. Also, we are working in the close collaboration with the Curve team, maybe you know we are also building the Substrate version of the Curve stable-swap automated market-maker protocol. We have finalised these developments recently. We are adding CRV tokens also on the Ethereum side. On the side of BSC there will be major BSC-based assets including BNB and BUSD. We think that this integration with BSC will have certain impact on the project because we will definitely add certain value to the BSC ecosystem, we are in very close connection with the BSC team itself and considering different scenarios of our collaboration with them. Beside of these BSC assets, there will be native Substrate-based assets available, obviously Genshiro because bridge between BSC and Substrate will allow for bridging BSC-based tokens. Maybe some of you know, we currently have the Genshiro tokens launched they are tradable at Kucoin and BKEX. We also have the liquidity pool on DODO exchange. Basically, GENS are currently available on the BSC network and the stakeholders of GENS on BSC will be able to bridge their tokens back to our Substrate and use it in our product line.

Vlady Limes: Great, thank you! Thank you for answering all these questions, it was quite much of it. Thanks for you time and it was a big pleasure for us!

Alex Melikhov: Thank you so much guys for having me on! Don’t forget to subscribe for our beta-testing. It will be opportunity to get the exclusive access to our beta project on Genshiro. You’ll able to be on of the first to access liquidity farming on our product line and get the hands on experience what we have so far. Good luck to you guys and see you soon!

Vlady Limes: Thank you, Goodbye!

https://equilibrium.io/en
https://twitter.com/EquilibriumDeFi

PromoTeam is a diverse team of specialists and blockchain activists with various skills that actively promotes the Polkadot ecosystem in the English-speaking and Russian communities.

Our main activity is content production, offline and online event organization, community management and creation, product marketing, development of ambassador programs.

We also run validator nodes for Polkadot and Cosmos blockchains and participate in the Polkadot ecosystem projects as investors, advisors and contributors.

YouTube channel | Twitter | Medium | PromoTeam Official Channel

Contact us: polkadotpromoteam@gmail.com

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We are the international team of Polkadot fans with experience in different activities– community growing, business communications and strategy, promotion, advertising, mathematics, programming, entrepreneurship and others. Our main task — increase the value of Polkadot and Subst

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