PowerPool Community Call #2 RECAP- June 7, 2023
PowerPool completed its 2nd Community Call AMA and discussed PowerAgent v2 Testnet and features to inform the community.
If you missed the call, We prepared this Recap article for you!
Spaces Recording: https://twitter.com/powerpoolcvp/status/1666437278137217024
Speakers:
Gordon Gekko — Chief Strategist @GordonGekko_CVP
Vasily Sumanov — Head of Research @Vasily_Sumanov
Recap:
Gordon: Welcome, everyone. I thought we would take the beginning of today’s session just to ask Vasily to give an operational rundown of the current status of the PowerAgent Sepolia testnet launch and the onboarding of the next cohorts of noderunners/Keepers.
Status of the PowerAgent v2 testnet
Vasily: Yep. So at the moment, we have a Sepolia PowerAgent testnet running. We have more than 20 Keepers online there. The people launching these nodes joined the test net mainly through DAppNode, our infrastructure partners. Everything in the test net from the DAppNode bundle works well. The node is easily launched, and connected. Also, we have a brand new web user interface where we can create the Keeper or the Tasks or as we call them, the Jobs. It’s much easier now. It’s a beautiful interface. We tested it yesterday, and it works really well. Regarding the test net itself, we found a couple of bugs related to the job execution. Sometimes the node cannot properly execute the Job. So we are now updating the node mainly as the primary focus for the test net. So to update the node and to, you know, get it to work well, we have three types of jobs in the system. So when we started to test the first one we found a bug, but it’s not a critical one.
So, the bug should be fixed soon. This is why we run the testnet, to fix the bugs prior to launch. This is also the reason why we didn’t yet admit any new Keeper nodes to the test net because if we will admit them now, they will need to relaunch the node with the new software after the update. So we will fix the bug, update the node package, and update the DAppNode package as well. After that, existing Keepers can update their nodes. We will see that everything works properly, and that the bug is finally fixed. Then we will be able to test the first type of Task, and then the second and the third one including the additional types of Tasks/Jobs with conditional logic. After these three types of jobs are tested and existing test Keepers are running without any problems, we will move to the Gnosis chain test net. So I think it is a matter of maybe 2 or 3 weeks to get to the next stage of the testnet on Gnosis chain. And I think it will be much more interesting because on Gnosis, there are a lot of Defi apps that can be used for creating example Jobs for automation.
The node bug is the primary bottleneck at this moment and I hope that we will solve it really soon, maybe in a matter of days. If it will be resolved and if everything then works well, we will admit the next cohort of Keepers/noderunners to the test. But yeah, I want to say that the test net in general is going very well. We have a lot of Keeper applications. We have I think almost 400 applications at this moment. And you know, we have a lot of node runners that ping me in DMs, asking me how they can launch a node and when they can participate. So we have a lot of demand for network nodes. Even some Influencers ask us to get into the test net. I think that after the bug is solved, we will move much faster. So that is the update on the testnet progress. Gordon, maybe you can add something here.
The future for PowerPool/PowerAgent
Gordon: Well, I think the main thing to keep in mind is that PowerPool is not only trying to be the leader in automation, but to do that cross chain as well. And these things just take time. But there really isn’t anybody else out there on the horizon with a cross-chain scope and generalized solution. In that sense, PowerPool should be considered in the same sort of conversations as off chain data oracle networks, where ChainLink is the leader. All of the Defi apps that we all know, they all run essentially on a combination of L1/L2s plus an oracle network and increasingly an automation network. So you can think of L1/L2s, and oracle networks and automation networks as three legs on a stool that holds up all of Defi. As Defi becomes more and more automated, the automation leg is going to become just as important as the oracle leg. The difference is, first of all, in terms of Defi protocols that sit on top of the stool, there’s lots and lots and lots of them. There are hundreds of new DEXs and yield vaults and lending protocols every day. There’s lots of them and there will be even more in the future.
In terms of structuring a long term crypto investment portfolio, you have to be aware of which are the categories one needs to be invested in. Obviously, everybody needs to be invested in L1/L2s in some mix. But even there, there’s just so many out there. It seems like every day there’s a new L1 or L2. So I think PowerPool deserves a lot more attention because there just aren’t any other big players in the generalized, decentralized permissionless automation network game. There is some overlap with ChainLink, but ChainLink is fundamentally architected differently as primarily an oracle network. ChainLink will always be expensive for simple automation tasks because ChainLink is dominant in oracles, and has announced huge deals with Tradfi banks and payment systems like SWIFT. This is going to drive demand for the $LINK token which powers ALL ChainLink services. That will make DeFi developers turn more to us in the future to ask us to build out more capabilities in PowerAgent to take on Tasks more cheaply than ChainLink.This battle for automation Tasks/Jobs against a backdrop of a mooning $LINK oracle services token (when ChainLink finally turns on fees and uncaps staking) will take place over the next few years. This opportunity certainly deserves a lot more attention than the average crypto investor is giving it.
Vasily: Yep, I completely support this point. I think in the near future, every Defi user will find out that they are users of an automation network, even if they don’t know it. So if you’re interacting with Defi, you’re probably also interacting with an automation network. Do you know about it or not? All the protocols or liquidity layers or all structured products will require some sort of automation. The value proposition for PowerPool, it’s a crypto service for everyday usage. It’s not something exotic, it’s not something that you use once per year or once per month. It’s something that you use every day. It’s like Metamask, you know, every day you open your wallet, your Metamask or any other Wallet Connect or any other type of wallet that is easily connected to the applications, to the interfaces of the DApps. And you trade, you use some tokens, you invest, and you are doing all the everyday Defi stuff that you need to do according to your own strategy. And one day you will find out that you’re using an automation network multiple times a day. And the automation market is like a big blue ocean at this moment.
There is ChainLink, and there is also the Gelato Keeper network as competitors in the market. But there are many different use cases, properties, and conditions why developers will choose one or another automation network, and the gas efficiency and the other properties are all quite important. For example, the guarantee of transaction execution, etc. PowerPool deserves, and I have no doubt that we will have, a very good share of the Jobs automation market in the near future. We need to run two stages of testnet first to be sure that everything works well. We need to ensure that slashing works because as I said before, the previous time we tried to launch PowerAgent v2 it was the slashing features that caused problems.
We need PowerAgent to mean fully decentralized and trustworthy, with slashing of Keepers stakes to guarantee user protection from malicious behavior, from front-running, and from all types of attacks. So far, there have not been many examples where users get robbed by some type of automation code. People are not yet thinking about it. But people never used to think about the front running Uniswap basic trades until it became a widespread problem via flashbots. But now, private mempools come into play and everybody knows what flashbots are, right? Because people know that if they want to be protected from front running, they need to use flashbots to be protected.
So the same market education process will play out with automation. Once we see users robbed by some types of bots or malicious actors on the network that will liquidate them instead of protecting the liquidation, or front run them instead of executing the limit orders on chain properly. Then suddenly everyone will begin to think about trustworthy automation. But we have already been thinking about these things in advance because we understand that in a truly permissionless, decentralized system, there are a lot of attack vectors and a lot of possibilities to do some bad things. So we need to ensure that PowerAgent will protect our users. This is why we implemented the Keeper slashing features. The cornerstone of PowerAgent is to anticipate and try to fix problems using the code, the mechanism design, properly implemented crypto economic incentives rather than whitelisting, and the permissioned manual mode for Keepers selection. So the distinguishing features of the PowerAgent network are not only automation that works but also trustworthy automation that works properly and works without a lot of crashes and a lot of manual operations.
PowerPool asset management solutions
Gordon: Yes, I agree. Another of the things that separates PowerPool from other decentralized network operators like Gelato or ChainLink is that PowerPool actually intends to add our asset management expertise on top of the PowerAgent automation network. PowerPool has in the past launched many, many automated Defi solutions. The strategy going forward is to leverage the PowerAgent automation to try to dominate the most important Defi application that will be running on every POS chain, the diversified LST basket product. Because diversified LST basket tokens are lower risk, and they’re higher return and they are the most liquid. So PowerAgent plus $LSTxxx basket tokens make an ideal combination. We will continue to evolve PowerAgent automation capabilities together with the requirements to automate the management of diversified baskets of LSTs. When we roll out PowerAgent onto another chain, we will not only launch the automation network, but at the same time the $LSTxxx basket token to suck in TVL and generate more fees from our own basic asset management product, which should become the biggest one on each POS chain: diversified LST baskets. LST TVL is already the biggest DeFi category on Ethereum and that has only taken a couple of months. LSTs/LSTFi TVL on Ethereum will double or triple again in the coming year. And every other EVM POS chain will likely move towards increasing use of LSTs, while avoiding validator centralisation, so there is a big, repeatable opportunity to develop a series of $LSTxxx basket tokens as a Defi primitive and prime collateral token.
Even BNB Chain has lots of regulatory issues they will face if they don’t further decentralize. They don’t have their own R&D. They’re just going to copy Ethereum and become more LST-centric. They already have five LSTs on BnBChain. You could already launch a diversified basket, and I think this same pattern will be played out across all EVM POS chains.
Similar with Gnosis. If you look at GnosisChain, all the discussion in Gnosis DAO is ‘how do we invest our Treasury?’ We don’t yet have anything suitable on GnosisChain and for the Treasury, which is a LOT of ETH. So the idea is not just to launch the PowerAgent automation chain on every EVM POS network, the idea is to at the same time launch a likely dominant $LSTxxx Defi application to provide a token that can be used as a pristine collateral layer, the layer that everybody else builds on, which is the automated basket. But we can also launch LST PowerBaskets across chains. There is over $1 billion of ETH held on BNBChain, with no way to stake it. Gnosis has a huge ETH Treasury. We plan to launch $LSTETH on BNBChain and GnosisChain, along with the native $LSTBNB and maybe even $LSTGNO Baskets once the LST market on GnosisChain matures.
So the combination of PowerAgent and a collection of $LSTxxx PowerBaskets and stablecoin PowerVaults, makes PowerPool DAO look like a combination of, say, ChainLink, that drives value to its $LINK token through staking to earn service fees, and an asset manager like Index Co-op, which charges management fees on a variety of structured investment tokens. Except that Index Co-op doesn’t have an automation network. They are relatively ‘passive’ managers of baskets and vaults, whereas PowerPool will be an ‘active’ manager of PowerBaskets/Vaults, meaning we’re going to go out and harvest extrinsic yield on underlying, we’re going to do peg arbitrage inside the basket amongst all the LSTs. We’re going to use flexible weights, we’re going to do all the active asset management things that can only be done if you have an automation network.
We will also allow others to build automated Defi solutions that leverage PowerAgent automation. But in the case of LSTs, the simplest way for them to do that will be to build on top of our $LSTxxx baskets as the core collateral. The entire Ethereum POS economy is moving to the point where almost everyone always wants to HODL their ETH in liquid staked form as some kind of LST. Obviously the best way to do that is to put most of the available LSTs in a big diversified basket, to spread the contract risk, and to have a better chance of getting the rewards. Because remember, POS network rewards are awarded by lottery (together with the MEV). The yield is awarded randomly. So you want to make an investment in an LST vehicle that covers the largest percentage of the validators. You’ll have better yield than if you pick just one LST. This is a simple fact about lotteries. If you want to win the lottery, buy more tickets. So we know that this is the way it’s going to be. And I think that makes PowerPool even more exciting. The fact that we’re pretty much alone in automation networks, which are critical for DeFi on all EVM networks, AND we have a clear plan to take over the whole LSTFi base layer of Defi on every single EVM POS chain with an automated basket token others can build on.
Vasily: Yep. Thanks for the detailed explanation. I think that maybe we can move to the questions because we have a lot of them collected from the Community. Sixteen questions is, you know, a big number. So let’s start with the first one.
Q: How has PowerPool engagement with its community changed in the past year, and what initiatives has the platform taken to improve communication and collaboration with its users?
During the past years, we made a lot of internal-development that was mostly hidden and not reflected in the communication with the Community. We had some early test nets in late 2022. Some new Keepers participated in this early test net and we provided these with the first preference slots in the current test net to get all of our supporters satisfied with participation, some even launching 2 or 3 individual Keeper nodes.
Based on those previous tests, we decided to integrate PowerAgent into DAppNode so that our nodes are communicating directly with Ethereum validator nodes already participating in the consensus of Ethereum, or operators hosting the full nodes for their own transactions. These are all relatively knowledgeable node runners and we are now recruiting and communicating directly with them via DAppNode because our partnership DAppNode provides prospective node runners with an option to easily launch an Ethereum validator or any other node and then just add a PowerAgent node on the top. It can be done in a couple of clicks and it’s really very easy to launch a PowerAgent node from DAppNode. So now we are targeting a big audience of DAppNode Ethereum validator NOs, more than 4000 of them. That is a huge percentage of the total number of validator NOs on the Ethereum network, which is around 11,000 at this moment. So now around 35–40% of validator NOs are theoretically now reachable via direct communication with PowerPool.
Also, we are now starting with the bridges to bring you back to the BnB Chain and also to bridge easily to other EVM compatible networks like Gnosis Chain, Polygon, maybe Avalanche, and to other chains that we will eventually supply with PowerAgent automation.
So as part of the Keeper/DAO recruitment process, we are now launching these AMA community calls to enable anyone to have direct access to all the knowledge from the community. The DAO Forum has been updated a lot and new product proposals are posted. So I think that now we are making much better communication with the Community. We are going to continue upgrading the DAO governance platform to help grow the number of Keeper nodes to at least 100, maybe to 200 in the near future. And we are aiming to get at least 100 nodes on the mainnet after we complete all the tests and checks. Gordon, do you have anything to add?
Gordon: Well, I think that our history is relevant. Just for people who don’t know, PowerPool was one of the original creators of automated Defi going all the way back to an early partnership with Yearn and projects like that. We were developing innovative automated stablecoin vault yield optimization products like Yearn Lazy Ape, which was an automated yield-optimisation vault. And we also launched several thematic multi-token baskets, on both Ethereum and BNBChain. We’ve launched more Defi asset management products than most other Defi protocols. But it soon became clear that on-chain automation had to take a bigger, generalized, decentralized and trustworthy step. So we architected PowerAgent V2 as a generalized automation network to enable the next generation of Defi, not just for ourselves, but also for lots of other projects and users. It made sense to do it in a general way rather than what most projects have been doing, which is ‘rolling their own’, i.e. building specific automations inside of their protocols. Those soon become single points of failure and pose trust issues as well. So we took the very complex, generalized, decentralized and trustworthy automation network route, but it meant going into stealth development for more than a year, during which time we had no idea how many other people were trying to develop the same thing, which is a fully decentralized, open source automation network. There’s no good way to announce “Oh, I’m going into stealth now”. It just happened. We went into stealth and really not much communication took place until we were certain that we had a PowerAgent V2 working and ready to go and that we were ready to start recruiting more Keepers/node operators, which we are now doing.
So now we’ve actually hired a Community Manager, The Original Degen. What a great name! Now we’re going to get serious about building our DAO community, not so much around, you know, ‘moonboys’, but around Ethereum validators, especially home stakers, who are also Keepers, people who know about staking and proof of stake networks and LSTs, DVT and Defi automation and someday also EigenLayer. And we want obviously every one of our node runner Keepers to be an active member of our DAO. A lot of the money going into our asset management products will be from our own Keepers and fellow DAO members. It will be money that PowerAgent Keepers are earning and they’re going to want to farm that and max yield it and we’re going to provide the low-risk investment vehicles that do that. Obviously as asset managers we will also accept outside investors who could at some point become quite large in terms of multi-chain TVL.That growing TVL will generate even more fees for the Keepers because PowerBaskets/Vaults are highly automated.
So now that PowerAgent V2 is ready for mainnet, we want to re-energise the DAO, initially with Ethereum validators/Keepers, and later with investors managing LSTs and stablecoin yield portfolios cross chain.
Vasily: Yep. Thanks for providing the history related to the stealth decision. Our new Community Manager, The Original Degen is a very experienced community lead with a good background in managing big communities, active communities with a lot of AMAs, and a lot of community engagement using community interaction platforms like Galxe. I think The Original Degen was the best fit for PowerPool in the whole market at this time. It is quite a big achievement for PowerPool that we hire the type of person that can handle a big international community, build it up and keep it running. I hope we will build a really strong community with the same original vision and a lot of team players. So thanks a lot The Original Degen for organizing these regular AMA calls, you did it from scratch and you do it every time really, really well. Also, you have helped me with the testnet a lot. So, if you didn’t know The Original Degen before, you need to get to know him. You need to speak with this person. If you have some ideas for improvement for the protocol, if you want to contribute to the DAO, you just need to reach out to him and he will handle all the requests and he will do the best he can to provide Community value to PowerPool DAO, its Keepers and investors.
So, now we are ready to boost the Community a lot and make the PowerPool Community platform more automated and better promoted using all the best practices of community engagement.
Q: At what stage are the new DEFI products? Like PowerBasket $LSTETH and $LUCY?
The $LSTxxx PowerBasket, with a diversified mix of Ethereum staking tokens, is still at the proposal stage, not yet approved by the DAO. We need the PowerAgent v2 automation network up and running to efficiently deliver this product. This is probably the key investment management product for the future of PowerPool, and for LSTFi and Defi in general. It will attract a lot of attention and TVL, showing leadership, and will be the flagship product of PowerPool showing the all capabilities of the automation network to the whole world. So $LSTxxx is a very important product to us, starting with $LSTETH which we can launch on BNBChain and GnosisChain as well, alongside native basket tokens like $LSTBNB and maybe $LSTGNO.
The already approved product is $LUCY, a $LUSD stablecoin yield-optimizing PowerVault which runs on top of Balancer. This product is entirely designed, and has been simulated and coded into Solidity. Once we achieve mainnet PowerAgent launch, I think we will really shortly launch a $LUCY together with Liquity, who have already made a Medium article and a strong Twitter thread about it. So people are already aware of it. We will make marketing campaigns to educate people on how it works and what’s the value behind $LUCY. $LUCY is an example of a quite good crypto economic concept of the self-funded stable pool that is funded by liquidation income. Also, there are now several forks of Liquity that also could be interested in collaboration. So after launching $LUCY, I expect that we can use this code base and all these developments to launch several more stablecoin PowerVault products on different chains like Arbitrum, I don’t know. So we will use the same PowerVault model to replicate the $LUCY product with other stables (mostly LST-backed Liquity forks) and attract more TVL and collaborators. Gordon, do you have something to add?
Gordon: Well, yeah, I would say, first of all, regarding $LUCY, $LUCY provides optimized yields, ‘defensive’ yields on $LUSD and recently this overcollateralized ETH-backed stablecoin has grown very dramatically. The growth is attributable to problems that were encountered with the Fiat-backed coins like $BUSD, $USDC and who knows, someday, maybe Tether? $LUSD was one of the main beneficiaries of people moving to overcollateralized (in ETH), decentralized, immutable stablecoins. So there’s much more $LUSD out there looking for vaults than there was before. So I think $LUCY is going to work well for us. And Liquity is the primary source of many forks for people who are creating LSTFi over-collateralised stablecoin minting using LST backing rather than unstaked ETH. Liquity works on ETH, unstaked ETH, and that can’t be changed because Liquity is an immutable contract. So now many projects are forking the Liquity contract and they want the collateral to be LST staked ETH. But of course we all know that the best form of staked ETH, is an automated, diversified basket token like $LSTETH. So we will be working with both Liquity AND LST-based forks of Liquity. We are well-positioned to not only provide PowerVaults that optimize yield on overcollateralized stablecoins, but also provide LST PowerBasket $LSTETH tokens that will be the best collateral to mint the new LSTFi stablecoins.
Vasily: Yep, the stablecoin market share of Liquity is growing and it could become really big because at least some people don’t want to use centralized and fiat-backed stablecoins with the blacklist option and the risks based on external factors like, you know, fiat bank bankruptcy or any other factors not related to on chain events. So people want to get some immutable payment solution. I think that the Liquity $LUSD code base could make this concept work. Of course, $LUSD is not such a large market cap at this moment, but it has been growing in a bear market. Other over-collateralized stablecoins, for example, $DAI is also a centralized stablecoin with a lot of centralized elements like collaterals, etc, that could also lose some share of the market, in favor of Liquity and LSTFi-based over-collateralized alternatives.
Q: How is the PowerAgent v2 testnet going? Have any bugs or bugs been found?
I think we already answered this, so I will just repeat that we found some bugs, and we are solving them. Hopefully, we will solve them in a couple of days. Then we will update the node package and DAppNode package and then current users and current Testnet participants can update the PowerAgent node using the DAppNode. It will be quite easy thanks to the DAppNode integration, it will be just a one-click operation for them. After that, if everything works fine, we will add new groups of Keeper nodes to the testnet and grow the number of testnet Keepers to at least 100. This is our primary goal for the testnet: to have at least 100 participants up and running the nodes.
Q: The PowerAgent v2 testnet caused quite a stir. I think the mainnet will be just as successful. Are there any protocols ready to cooperate with us?
Yeah, there are some protocols. Moreover, I already have some grant applications. So as you might know, we have a DAO Proposal for grant funding for builders who use our full automation for the Defi products. Currently, we have already received a couple of grant applications for funding small existing protocols that want to switch off their centralized bots and deploy more trustworthy decentralized automation from PowerPool, but no grant applications yet from any bigger projects. But the smaller ones can also generate good publicity for us. In the early stage of discussions, there are some bigger protocols, one could even say major Defi protocols. I will not list the names here because, you know, I think it’s better to do than to speak, and once we will get a partnership and, you know, some integrations, then we will notify the Community via the announcements and emails and all this stuff in Twitter.
The bigger projects are waiting for the mainnet. And the main question is, okay, we need to see the number of Keeper nodes. We need to see that it works. We need to see the traction and THEN we will also integrate you for our automation. So it’s just a matter of time, the testing leading to mainnet launch and some traction on the mainnet because anyway, we need to show the world that the PowerAgent network is working, and working in a trustworthy and reliable way.
Q: How is the testnet going in general? Are there enough participants? Is the team satisfied with the result? What are the future plans?
Yes, there are enough participants. We even have potentially too many participants. Node runners are asking in DMs how to join the testnet. So hopefully we will let everybody in soon. As I said before, after fixing the node bugs.
Q: How is the DappNode community responding to the testnet? Do they take part in the PowerAgent v2 testnet? Are validators ready to pair PowerAgent v2 with an ETH node?
Yep. We already have some test Keepers from DAppNode who have Ethereum validators. The majority of DAppNode applicants for testnet list either an Ethereum validator or that they have nodes running in DAppNode. So yes, we have a lot of attention from the DAppNode community.
Pol Lanski from DAppNode helped us a lot with sharing everything with their Community in the proper way. So he is responsible for this success in DAppNode so thank you Paul for the good introduction and explanation of PowerPool and for setting up everything.
Q: What are the results of partnership with deBridge? What are the plans? Is the CVP bridge between BSC-ETH networks ready?
Well, deBridge will serve as a key infrastructure layer for PowerPool by providing a lightning-fast and secure mechanism for transferring $CVP tokens across EVM-compatible (and non-EVM in the future) networks. The first new bridge will be between BnB Chain and the Ethereum network. The whole integration is done and it will be working soon.
The bridge to BNBChain is a priority because we have some users stuck with $CVP tokens there. They transferred the tokens using our previous centralized Binance exchange. And since those are different tokens, with a different contract address, we need to make sure that they are a legit deposit option for staking into the PowerAgent contract and can be transferred back to Ethereum. So, the deBridge integration is also aimed to solve that in a proper way. We will fix it and it will work properly. In the meantime, wait for updates, they will come really soon.
And what are the longer term consequences of multi-chain bridging? In the future, the $CVP token will be easily transferred between different chains, even without bridging via Ethereum. So, for example, $CVP tokenholders will be able to transfer directly from one chain to the closest chain or to an L2 like Polygon. It’s a big, big step forward because it will be quite easy for tokenholders to bridge to different chains to stake in Keeper nodes, or to trade, or unstake and re-stake to another chain etc. All transactions will be much simplified when $CVP can be transferred in a ‘one window’ mode. So you go to the deBridge website and make a few clicks and choose the chain that you want. This is the main reason for the deBridge partnership and this is what we expect to get in maybe the following months.
Of course, our main aim now is completing the testnets and launching PowerAgent on the mainnet. After that, I think we will integrate a lot of other EVM chains. Our first integration will probably be with Gnosis Сhain since that is the network where the next stage of PowerAgent’s testnet will be. We plan to do it with the real $CVP tokens, not with the test tokens, so $CVP will need to be bridged from Ethereum. So, I think that the first bridge that you will be able to use really soon is the GnosisChain bridge.
Q: I saw that the Validatrium community supports us on the PowerAgent v2 testnet, what are the results of cooperation? Who else is ready to cooperate with us?
So, I don’t know particularly what is going on there. I know that some people from the Validatrium community approached us about the testnet and we provided them with some test slots and hopefully, we’ll provide more of them when the bug with the node is fixed. There are also some other Ethereum staking providers that have Ethereum nodes that want to cooperate with PowerPool and launch PowerAgent Keeper nodes on top of their validators to earn more ETH as automation fees. We have had some chats with them, but they too are waiting for the testnet results. So yeah, we have some other noderunner staker projects that we want to cooperate with, but you know, it’s all a matter of successful testnet completion.
Q: Have you had contacts with other major projects for PowerAgent network use cases? Why do you think the adoption rate of the PowerAgent network will be high? What types of products will you have and what big problems in crypto are your goals to solve? What other products will you have to increase the use cases of the CVP token?
Gordon, you are the best man to answer these questions.
Gordon: Ever since PowerPool started, we have been automating Defi. And so we were the ones that showed the rest of the world how to automate things. And as we took this sort of stealth period to re-architect PowerAgent v2, the number of applications of automation have grown dramatically. In the very beginning of Defi, everything was manual. Degens had to do everything themselves. But all of the data that’s required to make a decision about something is on the chain or available through oracles. So if the data is all there and the oracles are all there, all you need is triggering automation to apply basically any kind of logic, event-driven or chronological logic. L1/L2s, especially EVM ones, don’t have any cron job capabilities in general. And so you need the ‘third leg’ of automation to do all kinds of basic authentications, yield harvesting, concentrated LP management, rebalancing etc. as well as very elaborate things like peg arbitrage in LST baskets. If you have a basket of ten LSTs, all of which are on multiple AMMs, on multiple layers, you know, there’s going to be massive arbitrage going on, but that requires automation. Just checking, validating things on the chain requires automation. Some protocols have only gotten as far as they’ve gotten by writing their own internal custom automation and that slowed them down, created more bugs, required more audits and added single points of failure and trust issues. ‘Rolling your own’ automation slows time to market. So as the next round of Defi goes live, it will be based on LSTs = LSTFi, and there will be a huge incentive to use our more trustworthy autonomous generalized automation.
There will be protocols that continue to build out their own internally-developed specialized automation, but they’re really only hurting themselves. And to answer the second question, that’s why we think the adoption rate of PowerAgent will be high. It’s because new protocols are launching and all the protocols have to be re-architected because people aren’t going to be working with just unstaked ETH anymore. They’re going to be working with staked ETH. And this already requires some additional automation and people are going to realize it’s no point us doing this ourselves. So we think the adoption rate will be high because all the incentives for Defi protocols are to get out there quickly with the minimum development, minimum bugs, minimum audits, and no single points of failure and that’s what PowerAgent provides them.
The types of internal products we will have, we call them PowerBaskets and PowerVaults, will demonstrate all this working. They will focus on LSTs and yield optimisation of over-collateralised stables like $LUSD and LST-backed Liquity stables minting forks. We’re not really interested in getting into any other asset types. The biggest TVL on every POS chain will always be the liquid staking tokens and the need to manage LST yield and optimize LST baskets as collateral for stablecoin minting. That will be the biggest Defi application on every single chain. So that’s the one we’re going to do. And people who want to use our automation may actually decide to build on our tokens because that’s the fastest and simplest way. But we expect to have a lot of third party Job Owners who are running other kinds of baskets with other assets including, who knows, someday real world assets and all kinds of things are possible.
But we first need to show everybody, okay, this is how you run an automated, diversified basket of LSTs with intrinsic yield, with extrinsic yield, with peg arbitrage, and with the kind of guarantees required to be pristine collateral for minting stablecoins. So once everybody sees it running, they’ll either use that as a base layer, or they’ll use the same tasks and the same automation that we use for their own purposes. But they’ll be able to clearly see it and they’ll be able to clearly see why it’s better. Tasks are all open source. It’s totally auditable. There’s a lot of Defi protocols out there that still have closed source elements that are single points of failure. This is a nonstarter going forward. Everybody’s wise to it. So you have to use our generalized automation because it’s open source and decentralized. So we won’t need to do any other asset/investment management products other than diversified baskets of LSTs and yield optimization vaults related to stablecoins minting from ETH and LSTs like $LUCY. So, our DMs are open. Call us up, tell us what you think is a good idea to build in Defi given that almost everything has to be rearchitected to work with POS staked tokens.
Q: What are the most likely Tasks to be executed on the network, and how are they priced? How are gas fees handled?
Vasily: The gas fees will be compensated for all node providers. So if one node is executing the task, the gas fee is fully compensated. There are no gas expenses for the nodes because they receive gas compensation. But there are also Keeper automation fees paid in ETH (or BNB, or GNO) on top of that. So the automation fees provide income for the Keeper node and a return on their CVP staked.
So, about the Tasks/Jobs. There are different types of Jobs for various applications: vaults, automated strategies, liquidation protection for limit orders, some technical tasks for protocol maintenance, etc. There are a lot of them, and different jobs should be priced differently. However, I think at the initial stage of the network, the price will be manually added by the Job Owner and then Keepers will decide whether to execute the task at this price or not.
But in the future, there will be algorithmic pricing based on the cost of no execution, on the risks that are inside the task if it is not executed. But this is a matter of future implementation. I don’t think we need to discuss algorithmic job pricing at this moment, but we are writing a formal academic article on this point to share with the community.
Q: Is all staking across all EVM chains in $CVP? Does this mean that $CVP will be a cross chain asset?
As I said before, we have partnered with deBridge to bring $CVP to all EVM compatible chains in one click and this will be done after the mainnet launch. In the future, PowerAgent will expand to different EVM chains and Keepers will be able to stake $CVP on many different chains. The profitability of staking will be different because it depends on the number of jobs and the automation fees Job Owners are offering on each chain. On Ethereum, there is a lot of demand because it’s the biggest chain in terms of products and TVL, but also I think the BNBChain and some other chains can be also considered good markets for automation services. So yeah, you can expect that $CVP will be a cross chain asset and will be widely used on different chains, and the automation network will be operating on different chains and solving the daily needs of the users on different chains.
Q: How does PowerPool/PowerAgent compare to ChainLink?
So Gordon, could you elaborate on this point? I think you can do it way better than me.
Gordon: Yeah. ChainLink is architected primarily to be the leading off chain data oracle network. Oracles are designed to provide off chain data and increasingly these days to do bridging and off chain computations as well. We are architected primarily as a trustworthy permissionless automation network, but we will also be doing bridging and off chain computations as well. The tokenomics of ChainLink are ONLY the tokenomics of nodes staking $LINK on their network to earn fees. You stake $LINK to be a node operator in Chainlink, your rate of return leads to increasing your staked $LINK with usage so the price of $LINK goes up. I think the whole world knows that $LINK is going to go up when they turn on fees and uncap staking. So one interesting point about PowerPool is we’re a good second choice to ChainLink for some kinds of overlapping tasks that will be more price sensitive when $LINK moons due to total usage.
But the other interesting difference is that PowerPool is ALSO an asset manager launching and managing PowerBaskets/Vaults. ChainLink doesn’t do any baskets and vaults, they are primarily an oracle network with some automation, bridging and off-chain computation capabilities. We are primarily an automation network, but we ALSO have big asset management possibilities sitting on top of our own automation network. ChainLink will never do DeFi or asset management because they don’t want to compete with their oracle customers. But we are in a position where we can say yes, on top of the automation network we will also do the diversified base layer LST basket token. We could say to other projects that we are permissionless, so they can choose to build on top of our base LST tokens. They do not have to start from nothing, they can use our tokens as well as our network.
So I think this is a big difference because suddenly our $CVP token value is driven by two different things. Although their $LINK token has lots of use cases, this will also make $LINK increasingly expensive, just like Ethereum is the most expensive L1 because of congestion and everyone paying gas in ETH. I’m a big investor in $LINK and I think most people should be. But ChainLink will shed a lot of automation and off-chain computation tasks in our direction as $LINK moons. And PowerPool will generate a lot of extra automation AND asset management fees operating LST PowerBaskets and stables Vaults.
Vasily: Yep. ChainLink and PowerPool are different projects in general. PowerPool is focused on decentralized on-chain automation and providing PowerBaskets and PowerVaults. ChainLink is focused on oracle solutions and off chain computation. By the way, off chain computation will also be added to PowerPool Keeper nodes soon based on zk-snarks and zk-proofing technology. It’s, I think, on the roadmap for the end of the year. So it’s going to be a big technological update and we are working on it at this moment.
Q: Will noderunners/Keepers be able to farm their native token fee earnings across all chains via PowerPool LST automated baskets?
I think yes because all the automation transaction execution fees will be paid in the native token of the blockchain. And there will be an LSTxxx basket on every chain. Assuming the TVL is high enough, the gas and automation fees will be spread across all the investors in the basket token, so it should be a lower risk, higher return, and more liquid investment option for Keepers (and others) on every chain.
Q: Will competing DeFi LST baskets be allowed to use PowerAgent for their own tasks? Will 3rd parties be able to integrate $LSTETH as a base collateral layer for their own strategies?
I think we can answer yes to both questions because PowerAgent is a permissionless network and $LSTETH is a permissionless token. So anyone can automate anything they want, including competitive projects. I think it’s not a bad policy. It’s a market. So if someone can build a better product and get more TVL and get more users and they need reliable automation, they can come to PowerPool and get this automation using PowerAgent. PowerPool will serve everybody who wants to do some automation. There are no borders or restrictions or whitelisting or any of this kind of stuff. So regarding the LST basket, for example, using $LSTETH as a base collateral layer, yes, of course, it’s a permissionless asset so everybody can use it for any purpose. It’s the same answer. So Gordon, could you elaborate, please, on this question?
Gordon: As regards third parties doing their own LSTxxx baskets, we would hope that they would want to work with us. But if they don’t, you know, that’s fine too. I think it’s more likely that rather than reinvent the wheel, what they’ll do is the second option. They will just take $LSTETH or $LSTxxx as the base collateral layer and build more elaborate strategies on top of our permissionless LST basket tokens. That just means more automation earnings on top of the fees already being generated by our own $LSTxxx basket TVL. This model is replicable. It applies to all the EVM POS chains. So wherever there’s an EVM POS chain, I think protocols will have to decide, do we want to do everything ourselves or do we want to use the PowerPool $LSTxxx basket as a base layer and start from there? And I think quite a few of them will choose the second option. Why reinvent the wheel? Because PowerPool controls PowerAgent, PowerPool will operate all the baskets. We can optimize the automation network to do everything just right for our own PowerBaskets and this gives us a big advantage. We’ll be first in every LST basket market. We’ll have the tweaks and the knowledge and the best way to do it. New DeFi protocols will likely just build on top of the existing $LSTxxx PowerBasket tokens.
Closing statements
Vasily: I think that the main comment that I also want to make here and to finish is that PowerAgent v2 is permissionless. So if you want to build something on top, you can use it. If you want to collaborate, you can collaborate. It all depends on your strategy and what you are doing. So basically come and collaborate if you want to use our baskets for, you know, for collateral stablecoin yield protocols or something like that, you can also do it. Our focus is on the permissionless service rather than whitelisting partners, that is, making decisions about who we will collaborate with or not. So you can collaborate if you want to. You can decide not to. So it’s easy. So yeah, I think that this is all for me. So thank you all for attending this AMA. Gordon, maybe you can want to add some closing notes to this end. I think we can finish.
Gordon: No, no, I think these questions were good, and I can’t really think of anything we’d like to add other than we’re going to be doing this more frequently. We have a Community Manager now driving the process. If you haven’t looked at it, you can read the Project Wiki and get the full specification details of products like $LSTxxx and $LUCY. They’re up on the Forum as well with links. I hope that based on what you’ve heard, you realize that PowerPool is a much bigger deal than you thought, and that it deserves a bit more time and attention.
Vasily: Yep. Yep. Thank you, Gordon. You know, referring to the Project Wiki, I think it is a very important resource. Also, we have a GitBook with a lot of information. We will also make some updates to GitBook according to the testnet results, and share them with the community. So thank you a lot guys. See you. And yeah, let’s build together.
Gordon: Yes. Thank you, everybody.
