METER.IO AMA with Xiaohan Zhu and Mike Chan
Meter employs a unique economic and consensus design that separates currency creation from record keeping. It leverages PoW to create a fully-decentralized, low-volatility cryptocurrency that eliminates counterparty, regulatory, and oracle risks typically found with fiat- and crypto-collateralized stablecoins. PoS is used to manage the ledger. Validators who hold Meter’s governance token, MTRG, approve transactions.
Eric: Welcome Xiaohan Zhu and Mike Chan
Mike: Hi everyone! Happy to be here and thanks for having us.
Eric: @xiaohanzhu will catch up so let’s have Mike warm the AMA up in the meantime. Mike, Please introduce yourself and what do you do at Meter?
Mike: Hi everyone, I’m Mike and I help with marketing at Meter. This spans the entire gamut of marketing — content, email, analytics, website design, participating in AMAs 😉 and more.
Eric: Nice. So what has been your journey into crypto?
Mike: My crypto journey started in 2013. I took an online programming course taught by Balaji Srinivasan, and we built a simple crypto wallet. We had to buy a little bit of Bitcoin (I wish I bought more!) and that got me hooked!
Eric: damn. BTC was extremely cheap back then
Mike : Yup, $90. I kick myself everyday for not buying more
Eric : Ouch! So what is Meter.io?
Mike : Meter is a DeFi infrastructure with a Built-in PoW-based low volatility coin, MTR. MTR is a fully-decentralized, permissionless, low-volatility cryptocurrency that eliminates counterparty, regulatory, and oracle risks typically found with crypto- and fiat-backed coins.
Meter employs a unique hybrid consensus protocol that separates currency creation from record keeping.
The system uses Proof of Work to create the MTR low volatility coin, making it as decentralized and secure as Bitcoin. HotStuff consensus based Proof of Stake is used to manage the ledger; validators who hold Meter’s governance token, MTRG, approve transactions.
This hybrid consensus mechanism makes Meter fast — the system can process thousands of transactions per second, reaching finality in seconds — and super secure.
Eric : As I understand, it is its own blockchain thats both POW and POS, right?
Mike : Yes, it is. We believe that money should be a Layer 1 chain. Meter also functions as a Layer 2 sidechain for other public blockchains to allow value interaction among different crypto assets, though.
Eric : What was the reason why you guys started Meter?
Mike: I am not a co-founder of Meter, but I can speak to why I joined the company, which is probably similar to why Xiaohan and his co-founders started the company
There are many problems with stablecoins today. Centralization of fiat-based stablecoins is an issue, as proven by the Centre/USDC and Tether/USDT blacklists.
Crypto-collateral SCs depend on oracles and are unstable, proven by Black Thursday. And overall, crypto needs a decentralized, stable asset that can be the unit of account and medium of exchange for DeFi apps and users.
@xiaohanzhu can jump in to build on why he started the company
Xiaohan Zhu: Sorry for running late. I will let Mike talk and I will supplement😀 We have believed in DeFi since 2018. Our US company is called Decentralized Finance Labs. I felt it was crazy not to have a solid native currency as the base layer for DeFi. If everything is based on dollar. What is the advantage compare to the existing financial system. It is a war that crypto will never win. That is one of the reasons we started Meter
Eric: Very sharp insight. it uses a dual token model. tell us how that works?
Mike: Sure. The reason to have two tokens is related to having two consensuses, PoW and PoS. When you separate the two, the system becomes much more efficient.
Think about the physical world. The miners for gold are usually a different group of people from bankers and accountants. There is a reason for that.
$MTR is the currency in Meter system. It is mined via PoW, stable in value, and you use it to pay for the fees, gas and storage in the system.
$MTRG is the governance token, and it is used to approve transactions via PoS and earn block rewards.
Finally you could use $MTR to compete for the newly created $MTRG in the system via on-chain auctions.
Eric: Can you explain how you could use MTR to compete for MTRG?
Mike : Of course. So you can bid $MTR to acquire $MRTG to take part in staking, governance, etc.
This is done via on-chain auctions that are automatically generated by the Meter system every 24 epochs (roughly 24 hours).
here is a diagram of how it works:
Participants bid MTR to acquire MTRG with no specific bidding price. At the end of the 24th epoch, all participants acquire MTRG at the same price and the next auction begins. The majority of the MTR tokens from the proceeds of the auction will be put into the Meter reserve pool. The rest of the MTR tokens will be distributed to the validators as block rewards.
Eric: nice. so how does MTR achieve stability? aren’t energy prices volatile itself? does it use an energy price oracle?
Mike: The system uses the profit-seeking behavior of miners to achieve stability. To create each $MTR, miners have to consume 10kwh of electricity with mainstream BTC miners. Their profit-chasing behavior will cause them to only create MTR when it is needed (meaning, when they can sell MTR at a profit), creating a disciplined monetary policy. When there is more demand, more miners will come in and more $MTR will be created. When there is less demand, miners will leave and the MTRG on-chain distribution will remove $MTR from circulation continuously and bring the system back to balance.
Actually, quite the opposite. From historical data, electricity prices are surprisingly stable in terms of purchasing power. We have data that shows that from 1960 till now the electricity price measured by USD has gone up by 6.3 times, but if you adjust for inflation, it stayed the same. That is why we believe it is a good measurement of values in the physical world.
And no oracles needed! That’s exactly what we are avoiding
Eric: It seems to rely on people acting rationally. can it withstand an event where miners act differently?
Mike: Yes, we have a reserve mechanism to deal with larger price fluctuations.
Eric: Ok 2 more questions before the communty drops theirs. Tell us about the team. How big are they and any notable badass on it? besides you two.
Xiaohan Zhu: This is the missing intro for me: I am an engineer with finance background. First 10+ years of my career is in R&D. After I get my finance MBA from Wharton. I started working on investment related things. 2016 I raised a VC fund. One of the investment focus was fintech and blockchain. That is how i got into the space. We started Meter in 2018 as we believe Decentralized financial system in a megatrend in the society and worth to bet the rest of my career on😀
Mike: Ha, plenty of badasses. @xiaohanzhu can you elaborate?
Xiaohan Zhu: We have 5 full time engineers and several part time
Eric: Really perfect skillset to build a disruptive startup
Xiaohan Zhu: My technical cofounders are mainly my ex-colleagues in Huawei. They are very seasoned architects from Google Huawei Cisco, with expertise in distributed system and networking
Eric: The project has some big name backers. how did you guys go about getting them onboard with the vision? @xiaohanzhu
One of my cofounders worked on a bitcoin fork, another on was student of Dan Boenh, the famous Stanford professor in cryptography.
Yes, Pantera and DHVC were the early supporters of the project. They like the vision of linking physical science with social science. The way we think about the economic game and consensus. Finally they believe there needs to be a crypto native unit of account as well
Q: Why did Meter decide to use the state of art HotStuff consensus for record keeping on the chain level instead of tendermint and the likes? Does it offer you any competitive advantages than the rest?
A: Yes. Compared to tendermint. HotStuff consensus perform a few time fast. Doesn’t rely on a strongly synchronised network and can quickly switch the node if the proposing node is broken. All these are extremely important for a decentralized money type of application
Q: What steps did you guys take to make sure Hotstuff is ready for production? i understand it hasnot been ever used in a big meaningful way yet?
A: We worked very closely with the author Ted Yin and implemented everything from scratch. Before the mainnet launched we tested in an open staking enviorment for 7 months
Q: How does DApps work in Meters? Is not a popular category for DApps is exchange and gambling.
A: We support EVM and allow $MTR $MTRG to flow through other chains
Q: What is the Proof of Value (PoV) consensus mechanism? What is the difference between Proof of Value (PoV) consensus and other consensus mechanisms?
A: If we look at all existing cryptocurrencies, people are mixing currency creation with record keeping. However they are fundamentally two separate consensuses. Record-keeping’s goal is to prevent double spending. New currency creation is a process to reach agreement on the value of newly created coins. It is typically implicit and expensive. In a PoW system, it is performed by the miners, while PoS system there is no such consensus, only arbitrary inflation numbers from the developers.
Proof of Value (PoV) clearly separates the two consensensus. It uses PoW for the value consensus to create the low volatility coin MTR, and PoS with the governance coin MTRG for record keeping. This approach combines the benefits of both worlds. PoW will be less energy-consuming due to the economic game design; transactions can be processed really fast with instant finality. Also some of the PoS problems like long-range attack and rich-gets-richer problems can be avoided as well. Details could be found in our blog post. https://www.meter.io/what-is-proof-of-value-consensus/
Q: The cost of solar electricity is different from atomic, how is the price of 10 kWh of electricity in Meter considered in this case?
A: It is global race to the bottom. At the end of the day only the most efficient guys at scale matters. In addition because we use SHA256, miners have opportunity cost as well
Q: How does the delegation work in Meters? And how do I run the node?
A: We support delegation. You could try running a node following the instructions on our website https://meter.io/warringstakes
Q: Do you have plans to extend the MTR to others Networks? Like USDT with its ERC-20, TRC-20 and OMNI versions? Considering that you are trying to implement a new “Fiat model” you must have permissions from Governments, or this is not necessary considering your Decentralized nature?
A: Yes. In the making 2. because the currency is fully decentralized from day 1. The regulators in democratic countries will have to treated as a digital commodity
Q: Defi projects promise financial inclusion, better interest rates, and reduced costs. However many are still lacking on the security front, with critical vulnerabilities for users’ funds. Does Meter prioritize security?
To what extent are you focusing on live security monitoring, increased transparency, and insurance so that Defi’s potential can be increased?
A: We absolutely prioritize security. Our first step is the creation of a base layer low volatility crypto native currency that is fully decentralized and free of oracles. It addresses the typical DeFi attack vectors from oracle and smart contracts. We are also building low level integrations with Chainlink and Certik to increase the reliability of oracle and early vulnerability detection.
The advantage of Meter is that we could optimize the entire stack for DeFi, rather than just patching the smart contract layer.
And the PoV consensus model is more secure than its separate counterparts.
Q: Does Meter have any plans to buyback and burn tokens to increase the value of $MTR tokens and $MTRG Token?
A: $MTR is low volatitlity $MTRG is the limited supply token. The $MTR in the meter reserve is essentially removed from circulation
Q: Crypto Believers are saying that Defi has the same hype as ICO’s had in 2017, Do you think that same way? What has Defi Brought to the crypto Space & How do you look to the future of Defi?
A: Yes, there is a lot of hype in DeFi right now. But we are more educated (hopefully!) than we were back in 2017.
We believe DeFi in its current format is far from enough. It is more designed for whales and speculators. Although they are important, the long term growth of the crypto space requires more everyday users. Meter’s dream is to achieve satoshi’s original vision, create an open financial network for the entire world.
Q: The meter Whitepaper says that is an autonomous chain like ETH or BTC, so Considering that, How Meter manage the Chain congestion? I don’t understand How you can keep a stable reference value WITHOUT collaterization, can you explain It in Easy words?
A: Because miners are profit chasing. $MTR has a fixed production cost. They will only create $MTR when it is economically meaningful for them. Such behavior and competition will naturally drive $MTR price to marginal production cost
Q: Can Meter monitor all transactions on the DeFi infrastructure and outside the chain?Can the transactions of the users be monitored on the network? How do you ensure privacy and anonymity?
A: Right now it is similar level of privacy to ETH. the privacy layer can be an addon module
Q: When we hear stablecoin in DeFi, DAI always comes to mind. How can METER serve as a better stablecoin in the DeFi space?
A: We saw the weakness of DAI on Black Thursday, when the price of ETH fell significantly, oracles were delayed, and many Vaults got liquidated. Meter avoids all of these problems — collateral volatility and the oracle issue.
Q: What if the community or meter investor wants to contribute to the Stake Program? Is it only stored in a particular wallet or are there other conditions?
A: Please visit our website https://meter.io/warringstakes to try out on test net. mainnet staking opening in 2 to 3 month
Q: Earlier Forbes reported that Tencent and Ali United Bank issued the central bank digital currency. How do you view the development of MTR stable currency? Does this affect you?
A: It really doesn’t at all. CBDCs will essentially be digital fiat, and will be still susceptible to all the problems fiat faces — centralization, poor monetary policy, cross-border swaps, and more. Meter avoids all of these issues, so we don’t see any issues. If anything, the creation of CBDCs will help people learn about the benefits of Meter.
Q: One interesting thing is that you DON’T USE Oracle like chainlink or similar, but why? This not attract the attention of Legal terms? Just for curiosity Which kind of electricity source use you? Aeolic , thermal or hydroelectric? Or don’t care at all?
A: We like oracle and think it is needed for DeFi. However we don’t think the base layer building block for the financial system should be built on top of oracles. That is too much systematic risk. Chainlink is one of our partners, we will work together for DeFi application on Meter. It is global competition for eletricity price. just like bitcoin. The source doesn’t matter
Q: For most after the IEO comes listing on various exchanges to enable traders and investors make some profit but for me this should be a period used by the team to prepare the product for its pilot launch, can you list the current products that have been developed by the meter team ?
A: We have worked for two years to build an EVM compatible chain from bottom up with the new economic game and consensus design. Our mainnet went live on July 4, we have launched our desktop wallets, and compatibility with the EVM is on testnet.
The next step is to gradually open up the mainnet for the MTR to MTRG conversion and open staking, and launch mobile wallets. After that, the layer-2 cross-chain capabilities will be released, and then we and others can build DeFi applications like synthetic assets and etc.
Q: Can I really get electricity in the future with Meter? Or is it just symbolic?
A: The electricity is an economic sybil resilience to prevent cheating like the free printing in fiat. It creates a unit of account. Recoverability is only for paper currency. You have to recover to make sure the issuer is not cheating
Q: You will agree with me that ADOPTION and UTILITY is very key to project survival and success, so what’s being done to drive global adoption?
A: There are many things we are doing to drive adoption.
1) Partnerships — we just announced a partnership with chainlink, more to come. Meter is built for decentralized financial applications and will focus on this market. We will also have partnerships on consumer lending and credit.
2) Trading community — With our exchange sale and listing, we will attract the trader’s communities as well.
3) Launch of mobile wallets, and integration into other wallets — our mobile wallet will focus more on non-crypto users.
4) Community — we have an Ambassador program to build communities all over the world from the ground up.
Q: What is the advantage of SIDE CHAINS and how does it solve the problem of interoperability prevalent in crypto and blockchain today
A: Right now, all chains are working in their own silos, with cross-chain only really happening with tokenized Bitcoin. This is super important for the future to achieve mass adoption.
We will soon start working on cross-chain interactions with other chains like ETH, BTC, Cosmos and Polkadot. From those chains’ perspective, Meter is just a layer 2 side chain on their network. Our goal is to break the boundary of different crypto silos.
We have already had very deep technical collaborations with many teams working on this field.
Q: What is the business model that Meter is applying now? How will Meter get profit to continue project development?
A: Once the network starts fully running, there will be daily on-chain bidding for MTRG tokens. 40% of the proceeds goes to the validators as block rewards, and 60% will be retained in the system so MTRG token holders can borrow against them in the future. We will be one of the participants on the network as well and the income from staking will be able to support the team.
We will also build more applications on the platform, such as synthetic assets, DEXs, and lending products, which will bring in revenue as well.
Q:What are your plans for community learning and awareness raising so that more people understand the Meter platform, its technology and vision?
A: We have an ambassador program that will help educate people all over the world about the benefits of Meter. This will also happen via partnerships, where we will help educate other networks’ audiences.
Q: How does the meter maintain its value? So that investors can save it, if the Meter can really maintain its value.
A: Electricity is the only link between the physical world and the crypto world and it is surprisingly stable in purchasing power, as civilization and all important goods require electricity to be created or function. This stability helps Meter maintain long-term value, while currencies like the USD keep getting printed and loses value.
Q: can anyone be a validator when you open it up?
A: in Phase 2, which should happen around September, we will allow those who validated on the testnet onto the mainnet. In Phase 3, which will happen toward the end of the year, validation will be open
Q: Do you like your job?
A: Yes, very much so! 👍 We are building a world-changing technology that will impact so many people around the world. it’s amazing.
Q: @mikewchan is there a mechanism where you use MTRG to counter balance any black sheep/big dip event like the one that happened in DAI?
A: Meter will be mostly immune to any of these black swan events because there is no collateral involved. but if there are bigger fluctuations in the price of MTR, we have a reserve mechanism to deal with this.
At launch, 40% of the proceeds collected from the on-chain auctions (in MTRs) gradually goes to validators as block rewards in the next 24 epochs; the remaining 60% goes into the reserve. The MTRs that are put into the reserve are temporarily removed from circulation. This reserve allocation ratio is a parameter that can be adjusted via the Meter governance process.
The reserve is collectively owned by MTRG token holders. In the future, MTRG token holders will be able to borrow their pro rata shares of MTR in the reserve or use them as collateral for DeFi applications.
Q: “DeFi is the future,” do you think? Currently, there are many DeFi projects that are operating very popular such as MakerDAO, KavaLabs, Compound, … What is the difference between #METER and these DeFi projects?
A: DeFi is absolutely the future but it is insufficient at the moment. Meter will be the underlying infrastructure upon which DeFi apps will be built.
A lot of the current DeFi applications are skyscrapers built on sand. The fundamental building blocks of the system are not reliable. DAI has to use oracles and has capacity limitations. Now the trend is to use USDC and USDT. All these are centralized solutions. Once the system gets bigger, regulators will for sure come in.
Meter is creating an infrastructure for the decentralized economy that relieve the application developers from these concerns.
Q: @mikewchan @xiaohanzhu is the system operational should energy cost go down a lot? say somebody cracked nuclear fusion 5–7 years from now
A: Great question! I can’t speak to nuclear fusion, so I would have to get back to you on this one 🤓
Q: So the validators in the network will act as a miner, validate and produce blocks, as well as vote on network proposals. Is that correct?
A: Not quite. Miners create the MTR via PoW. Validators approve transactions, create blocks, and vote on network proposals. Of course, miners, or anyone, can acquire MTRG to participate in governance as well.
Eric : Okay. Learning about meter.io on this AMA has been a pleasure.
@mikewchan Please invite everyone to your official TG group and invite all to participate in the sale tomorrow.
thanks to @xiaohanzhu and @mikewchan for taking the time.
Mike : Thanks for having us! This was lots of fun. Our TG group is https://t.me/Meter_IO.
Our community token sale ends in just about 4 hours! IEO on Gate.io and public sale on Cobak (Korean market only) take place tomorrow. All info here: https://www.meter.io/meter-token-sales-info/?utm_source=telegram&utm_medium=social&utm_campaign=metertokensales
Let us know if you have any questions in our TG group!
Thanks @ERCSU for hosting us, and thanks for all the great questions!
Eric: Really awesome project. Thanks to everyone. We will post the transcript at medium.com/exnetwork
Xiaohan Zhu: Thank you @ERCSU for organizing. Thank you everyone for your time