Neon EVM X Spaces AMA with PowerPool — September 07, 2023

PowerPool recently joined the special Spaces AMA session hosted by Neon EVM where we talked about Neon EVM, their Early Builders Program, and PowerPool’s/PowerAgent’s capabilities to enrich the Neon EVM ecosystem.

If you missed the call, we prepared this transcript for you!

Spaces Recording: https://twitter.com/i/spaces/1rmGPkvwvyVKN

Speakers:

PowerPool:

Gordon Gekko — Chief Strategist @GordonGekko_CVP

Vasily Sumanov — Head of Research @Vasily_Sumanov

Neon EVM:

Jay

Pascal

Recap:

Jay-Neon: So as you are all aware, this Spaces call is hosted by the Neon Foundation and the company Neon Protocol, who will be signing grant agreements on behalf of the Foundation with said participants. And so today is your opportunity if you want to learn more about what they’re getting, what they’re building, and if you have any questions regarding what they are building and what’s going to be happening with them. So with that little intro out of the way; hello, I’m Jay, head of Social Media here at Neon EVM and we have the PowerPool Team here. So Pascal, would you like to come in, introduce, tell us a bit about the Early Builders Program (EBP), and tell us all about the PowerPool team?

Neon EVM’s Early Builders Program

Pascal-Neon: Thank you, Jay, for the introduction. Hello everyone. I will also start, as usual, by explaining about the Early Builders Program. I see we have a lot of new people here, so let me just sum it up quickly. I’m actually in charge of grants and BD at Neon, so I’m pretty much doing the whole selection side for the Early Builders Program, interviewing the projects and leading them through the pipeline so that at the end of the day, they’re getting their grant. The Early Builders Program was designed around three to four months ago with the one goal: to bring, on the one hand, DeFi protocols like DEXes, stable swaps, borrowing, lending to Neon, and on the other hand, also auxiliary infrastructure ‘helper’ networks such as PowerPool’s PowerAgent Automation Network. With the Early Builders Program, we very much guarantee that building teams will get Neon marketing support, and closer tech support as well. And of course, there is also a grant component tied to this. Typically, most of our grants are now paid out in USDC. Some grantees also receive some additional funds in $Neon. And yeah, the Early Builders Program will still operate or run for another month or so until we actually move over to the grants program.

The grants program will later also focus beyond DeFi to some gaming use cases, NFT use cases, payments, etc. But yeah, without further ado, I would also like to give the word to PowerPool’s Chief Strategist Gordon, if you could just introduce the PowerPool Network itself, what you guys are building? And thank you so much also for joining our Space.

PowerPool aims to enrich Neon EVM’s ecosystem

Gordon-PowerPool: Thank you, Pascal. And thanks to the Neon Foundation for inviting us. PowerPool is an old-guard protocol. We’ve been around since 2020 and we originally thought about how to automate DeFi. We have over the past years launched several vaults and baskets with earlier versions of automation and we launched the first version of PowerAgent Automation Network (v.1) quite some time ago. About 2 years ago, we pretty much decided that we would focus on generalized, multi-chain decentralized network automation as an unsolved problem. The Ethereum Virtual Machine, which we all know and love, is core to Neon EVM and core to their community. But the Ethereum Virtual Machine has some problems and one of them is that you can’t initiate execution by yourself. EVM needs an outside Agent or Keeper to initiate things. Given that Agents or Keepers are increasingly required, we wanted to build the best, most decentralized, and most trustworthy (and that’s a keyword because there’s a lot of automation out there that technically wouldn’t be considered trustworthy). So that’s what PowerPool is focusing on these days launching the Power Agent v2 network and recruiting an increasing number of Keepers (I think we’re up to about 60+ keepers now), as we add new cohorts of Keepers and test our various EVM network deployments.

We’re going to deploy earlier on Gnosis Chain simply because a lot of really detailed adversarial testing is best done in a cheap transaction environment. We’re going to probably go Gnosis Chain initially mostly for cheap transactional testing, and then deploy to Ethereum Mainnet. But our Roadmap of course includes rolling out to many EVM chains because all the EVM chains have the same need for decentralized, autonomous, and trustworthy automation. We are very happy to make this partnership with the Neon EVM community because obviously, it’s the only way that we’re going to get exposure to Solana and the Solana ecosystem. We’re very enthusiastic about Solana and its capabilities as well. So it’s an excellent fit. PowerPool DAO is basically a collection of people who want to be PowerAgent Keepers. Most of them are Ethereum Validators who are already running DAppNode, and to become PowerAgent Keepers they simply add our client to their DAppNode bundle. PowerAgent software is already bundled in DAppNode and it’s actually really simple to spin up a PowerAgent Keeper node from DAppNode. And we’re hoping that Neon Operators get interested in that as well and that we can cultivate a shared Community where we have Operators, Validators and Keepers all talking to each other and benefiting from each other’s advice and experience.

I’m going to just give you a quick overview of the value proposition of PowerAgent Automation Network. If you’re a developer, what is it that it offers you? And then I’m going to hand it over to Vasili who can answer more technical questions and outline the academic research that underpins the design and the algorithms and also the practicalities of integrating our own Grant Program to help protocols that may still be relying on their own ‘home-rolled,’ centralized keeper bots to decentralize by incorporating the PowerAgent Keeper Network into their protocols.

So why use the PowerAgent Automation Network? I’m going to run through the high points of the PowerAgent value proposition. Why use PowerAgent autonomous, decentralized, trustworthy automation? Well, firstly because it is all open source and that means you can see everything. It also means that all the other protocols that are using PowerAgent will have looked at it, and their auditors will have looked at it. It is going to be a very hardened code base because a lot of people are sharing. This is much better than ‘home-rolling’ and maintaining your own private keeper bot. So everything is open source, this shouldn’t require discussion, but yeah, you must always use open-source automation.

The second point is that PowerAgent is generalized. This is a fully generalized toolkit, if you like, for automation. All the event-driven functionalities, et cetera, they’re all there, everything’s all packaged up. We’re giving grants to people to develop other key functionalities and build out the tooling and options. Incorporating PowerAgent greatly reduces your time to market as a protocol by just wiring in all of this pre-existing automation. PowerAgent is also very flexible in the sense that it can do very low-value simple tasks and it can do very high-value, mission-critical tasks. It has very generalized task automation and off-chain computing capabilities.

Thirdly, it’s permissionless. Anybody who wants to can spin up a Keeper node and join the network. Obviously you have to have something at stake. You need ‘skin in the game’, which is staking our own $CVP token, but other than that, anyone can join and that makes it a lot easier to grow big Keeper sets across lots and lots of EVM chains. The Job Owner, the person who commissions the job automation, can set specific requirements for eligible Keepers to be selected, the so-called ‘signer set’ for a given task or job. This is quite important because going back to being open source, decentralized, so forth, and so on, there are a lot of regulatory implications about running your own automation, your own keeper bots. Running your own keeper bot is a red flag for regulation. Sometimes it’s a red flag for decentralization maxi activists. Decentralization maxis like Chris Blec will start coming after you for relying on a centralized keeper bot. So it’s very important to be able to specify the eligible signer set and know that your selected Keeper set has sufficient ‘skin in the game’ for high-value risk of no execution, mission-critical tasks, or also that we don’t need eligible Keepers to have very much stake at risk at all because it’s not a big deal. If a particular low-value task doesn’t get done right away, maybe it can get done anytime this week. You have a full set of flexibility to specify the task or, we call them jobs. It’s a lot like using Uber. You don’t know who’s going to do it, but you know somebody’s going to do it and you know they’re going to do it within a clear service framework and can be punished if they do it badly and so forth and so on.

PowerAgent is autonomous. So the execution of the job is totally independent of the client protocol. So if you’re launching a brand new protocol, nobody’s ever heard of you, you get a lot of trust points right away by having the jobs executed by something like PowerAgent, and your clients can see what’s going on. In fact, what you will find is that some of our client protocols will also want to run their own Keeper nodes. They’ll want to run a Keeper node on PowerAgent just to get maximum transparency on their own tasks. And that’s fine, that’s great, that’s what we want. Totally decentralized, with no single point of failure. A centralized keeper bot is a single point of failure and someone, somehow will eventually call you out on it. There were problems just this week with liquidations on Synthetix just because of it.

PowerAgent is very configurable. Event triggers, the specification of the job, and the minimum signing requirements are all defined job by job. You can have very simple routine low-value jobs together with mission-critical high-value jobs on the same automation network with the same Keepers or more likely two different Keeper sets. It’s all configurable through an online interface that allows you to configure your tasks and it’s also very cost effective. In the past, independent keepers used to only respond to arbitrage opportunities and liquidation opportunities. So some of those jobs were very costly to the protocols and to the clients. But if you use a decentralized automation network like PowerAgent, you can specify the fees job-by-job. The cost to you and your clients/users does not depend on market movements, does not depend on price movements for incentives, and it can manage gas spikes. PowerAgent fees are usually just a function of the gas required for the task/job. So in general, you will find PowerAgent much more reliable and economical than any other way of automating things.

Next, the trustworthiness and security. With the PowerAgent network, nobody knows which Keeper is going to be selected to execute the task. It’s random, and it’s random within a signer set. And that’s part of what we mean when we say trustworthy. Trustworthy. Why? Because the Keepers have ‘skin in the game’, they have big $CVP stakes, and if selected and they fail to execute, they can be slashed. Or if not selected, they can check if other selected Keepers have performed, and if not, they can slash the failed Keeper. Keepers can be slashed by other Keepers who are constantly keeping them honest. The other Keepers are keeping the lead, randomly-selected Keeper honest and they’re slashing him if he doesn’t deliver appropriate execution on time fully the way they should. This means it’s a lot easier to trust the PowerAgent Automation Network. Many of these are very innovative things that depend on a lot of original research and algorithm development, which we have done. And so with that, I’d like to introduce our Director of Research, Vasily Sumanov, and he’s going to talk a bit more about the innovations that underlie PowerAgent. Can you hear me, Vasily?

Vasily-PowerPool: Thank you for the introduction, Gordon. So, yeah, I will wrap up a bit for our listeners to get more understanding of what is going on. So, PowerPool is a protocol and PowerAgent is an automation network developed on top of the protocol. So the PowerAgent Automation Network is a network of Keepers that execute some transactions or some Jobs, as we call them, on-chain strategies, algorithms, or anything you want on-chain. So, for example, if you want to have a limit order, you can create a task to buy ETH if it is below $2k, and it will automatically execute your needs to buy ETH. For example, you buy one ETH per day if ETH is below $2,000, that’s a basic example. Or for example, you have a MakerDAO position and you supplied substantial ETH collateral. You minted some DAI, supplied this DAI in some yield protocol like Yearn Finance. And if ETH price rises, it’s logical to issue more and more DAI and get more and more yield on top of it, on top of your ETH collateral.

So it’s like capital efficiency, basically. But if ETH goes down, you have a liquidation risk. So in case ETH declines in price, part of the DAI can be unstaked from Yearn protocol, burned, and your collateral ratio will grow back and you wouldn’t be ever liquidated, if it’s all done properly. So these are examples of automation. Or if you have a UniSwap V3 position, it’s logical to manage it, to move it across the different price ranges according to the market situation. So you cannot use UniSwap V3 positions and provide liquidity without a proper automation tool if you want to get efficient capturing of fees. Now DeFi is moving toward fully-automated solutions or something automated for a user to decrease the amount of time, attention, and manual work that is required from a user for some complex DeFi protocol. And this is a big trend. We expect that in around three years, about 40% of all mainnet transactions, on Ethereum mainnet, on Neon mainnet, on some roll ups, on Solana, will be automated by some automation Keeper networks because it’s a very natural way to simplify the user experience.

It’s also a good way for all EVM POS validators to get some additional fees on top of block rewards, MEV, and transaction fees because they can easily launch PowerAgent on top of any validator. For example, Neon Operators/Validators can launch PowerAgent once deployed on Neon mainnet, participate in signing tasks, and receive not only the gas compensation for the gas spent but also an additional $NEON-based fee on top of it, thereby increasing the overall Operator/Validator earnings for the hardware/bandwidth setup. So it’s quite a good approach for Operators/Validators to increase their earnings, making running a Validator more profitable and efficient. So this is our vision. We think that in the future the majority of manual actions will be automated and users will use DeFi in a much simpler way, spending much less time by efficiently using it. That’s why we are going to the EVM-compatible chains including Neon EVM. PowerPool is a symbiotic project for any chain because it powers additional value for both validators and users. So if somebody builds a protocol on top of Neon EVM, the team can use PowerAgent to automate anything under the hood in this protocol.

They can build harvesting strategies, or complicated on-chain strategies, including algorithm-based strategies. When you don’t know when you particularly need to execute a task, you can use algorithms. If for example the oracle price is this and something else is this, you can do this or do that. So you can make a fully automated program of what to do for the protocol or even for a particular retail user if the user wants to do something automated for his own yield strategy or lending markets or something else. If you’re an NFT trader, you can use PowerAgent to put your NFT to the market with some particular floor price if it rises up to some level or pull your NFT from the market if the floor price decreases. So you can design any strategy you want, and you can automate all the transactions and off-chain computations with PowerAgent. This is our ultimate goal — to automate the world. And for Neon EVM, our primary focus is to support projects, to help some projects that are building on top of existing and building new solutions to help them automate anything they need. To just launch right away and forget about this automation.

If somebody builds a startup, they rent service in Digital Ocean, or they rent service in Amazon. They get these cloud servers and stuff for doing their application. PowerPool is the same but for on-chain automation. If you need to automate something you just can set up the task in PowerPool, do it in quite a small amount of time and it simply works out of the box. So this is the ultimate vision, what we are offering to all projects building on Neon EVM. We will be happy to collaborate and support technical staff to launch all these tasks. And also for ordinary users, there’s also an opportunity to get some additional value from PowerPool because for example there is an AMM-based DEX and you’re just a user that wants to buy some amount of tokens on some limit order price, you can set up a limit order through PowerPool and get it all done without any manual actions. So this is what we are doing and the Neon EVM is the unique option for PowerPool to join the rising Solana ecosystem because PowerPool’s codebase is all written in Solidity.

So for us, Neon offers a unique opportunity to run on Solana via an EVM and offer all our automation services, help all Neon DApps to become automated, provide all services to users without any deployment of PowerAgent on Solana itself, without any experience in re-building a Rust code base. So this is, I think, a big partnership benefit for PowerPool today, that we can enter the Rust-based Solana ecosystem effortlessly. This is our purpose, to get there to automate protocols on Solana, to help Solana users automate their needs and at the same time stay in our convenient multi-EVM chain Solidity-based environment.

Jay-Neon: This sounds absolutely amazing.

Pascal-Neon: Awesome. Yeah, I mean, thank you so much for this thorough explanation. I actually had a couple of questions written down previously to the space, but you answered pretty much all of them already. I think it was pretty cool. I would also suggest, like, if there’s anyone out there who has any questions for PowerPool, then it’s a good time also to raise their question. We can unmute you. And if there are no further questions, I would just like to jump to pretty much the last topic of the space already because we are almost out of time actually. But I would just like to ask Vasily, maybe you can just mention to the community about the grant that you will be receiving? That would be nice. And if there are any follow-up questions from the community, please just raise your hand and we can unmute you and make you a speaker.

Neon EVM and PowerPool Grant Programs

Vasily-PowerPool: Yes. So we applied for a quite small $10k grant. So for us, it’s mainly for some integration and development costs. We will of course ask for marketing support from the Neon team as well. Our aim is not really just to get some money from Neon. Our aim is to get access to the community, to projects, and just to work together. The $10k grant is for some testing, deployment, making some design materials, content stuff, and some marketing campaigns as well, probably together with Neon. We decided not to apply for the huge grants, like $50k or something like that, because we think that $10k will cover our technical costs. Because our value from the collaboration with Neon is mainly to get access to the community and to all the possible partnerships, collaborations, and automated projects rather than get some money from Neon Foundation.

Gordon-PowerPool: Just to add to that, we’re actually hoping that people building on Neon will come to PowerPool and ask for grants to integrate PowerAgent.

Vasily-PowerPool: Yes. I want to mention that we provide up to $20k small grants to projects that will use PowerAgent automation for their operations. These grants are also mainly focused on the integration costs and maybe some initial deposits for tasks. In the case of projects running on Neon EVM, all the gas costs and fees for executions will be paid in $NEON, obviously. And we expect that part of the grants that PowerAgent will provide will go straight converted to the $NEON token and will be used for funding Jobs, to have some budget for paying for automation for the first month.

Jay-Neon: This is wonderful stuff. Pascal, do you have any more questions?

Pascal-Neon: No more questions from my side. I do note, we are pretty much out of time, so I would rather want to give the community time to ask any further questions about the PowerPool protocol. Maybe someone wants to know more about PowerAgent?

Questions from the community

Jay-Neon: We do have some questions that have been asked in the chat. So there’s one here that’s asking “Why did you change funding the projects with $NEON to USDC”? That’s more aimed at you, Pascal. From my understanding we give both, don’t we? USDC and $NEON token.

Pascal-Neon: Yeah, that’s correct. So the main reason why we changed it from $NEON to USDC was on the one hand that of course we had some price decreases of the $NEON tokens. So we still wanted to support the project with the amount that we promised. So for instance, if we said we support $10,000 but the NEON token dropped by a good amount actually already, then we want to still support with the $10,000 because it’s all about building right now to set up the infrastructure so that we are pretty much ready as soon as the bull market comes in again. So that’s why we changed. There were also some legal reasons why we changed it to USDC, but having said that, again, Jay already mentioned parts of the grants are actually still paid out in $NEON tokens and we’re talking especially about liquidity incentives there, but it’s pretty much separate and rather targeted at DeFi protocols or DEXes. So that’s pretty much the reason for the change.

Jay-Neon: Thank you very much for that answer, Pascal. Next one, “My question is for Neon. If I’m a dev and I have an idea of building a DApp on your EVM, what would be the best way to contact the team and submit my application? Also, what is the max amount of grant I could apply to? And if there are some DApps you would like to see, what are these DApps?”

Pascal-Neon: Just breaking down the question. So the grant size, maybe the first one, when it comes to grant size, I mean, it depends very much. The average is around $50k as mentioned again, USDC, but there are some smaller grants too, depending on how difficult it is to implement. Also the angle for collaboration. We have also paid out some larger grants. I think the largest one we have now is around 130,000 USDC or US dollar equivalent. But this is a protocol that directly commits to TVL targets as well. So they committed, if I remember correctly, to milestones of the part of the grant being unlocked once $30 million TVL is reached. Another part of the grant unlocks once $100 million TVL is reached. So it’s something that unlocks probably over a timeframe of one year or longer. So I think what we always like to see is if a project applies for a grant that they can kind of commit directly to some goals. They suggest the KPIs that they have in mind. This is usually a good way to apply. And Jay, did I miss any part of the question?

Jay-Neon: The last bit was basically and if there are some DApps you would like to see, what are these DApps?

Pascal-Neon: Yeah, so when it comes to DApps, I mean, we are still looking to onboard more borrowing lending protocols, decentralized exchanges, lending, of course. We also recently started looking more into alternative use cases for our chain that bring transactions rather than TVL, which are games. We’ve been looking at some e-commerce use cases too, and payments. So I would say we are pretty broadly positioned. If the team is great, and the idea is good, then happy to take something innovative forward too, if it has a good match with our value proposition.

Jay-Neon: That’s amazing. Thank you so much, Pascal. Sorry, I’m flicking between because you have to do live Spaces on a mobile device and it’s a bit of a pain. So we have two more questions. The first one I can answer, basically it’s super cool. Can I also apply for a grant as COO? Yes, you can indeed. I have replied to you in the comments with the link, but for everyone listening, you just go to Early Builders. Again. I’ve replied to the X Space comment. Regarding it, you can see there’s a comment saying you can apply for EBP here. Also, after this, I will tweet it out again. And the second question is what is the timeline for approvals?

Pascal-Neon: I guess that’s directed towards me. So when it comes to approvals, it takes us around, I would say two to three weeks to decide on a protocol, whether we want to bring it forward or not. And afterward, we usually start crafting the agreements. In the past, it has taken a bit of time because we had some more legal tasks to do based on our set up too. But I would say the processes are pretty efficient now as we signed five grantees or Early Builders. So I’d say for the future, the process should take around four to five weeks until someone is signed from application coming into signed.

Jay-Neon: Amazing. Well, I think that’s all the questions there. No one has raised their hands. We’ll give it a quick second, but while we’re waiting, I just want to say a big thank you to everyone at Neon EVM and PowerPool’s Team for popping by and having this discussion and informing the community about what you’re building, what your grant is, what your milestones are. And I’m sure we’re all very eager and very excited to see your PowerAgent Automation Network become live on Neon EVM. And, yeah, once again, thank you so much for you all coming here today. And, of course, thank you to the community for coming by and listening and taking part in this Twitter space. We do massively appreciate it. So, yeah, thank you, guys.