Mike Toutonghi
Jul 27 · 7 min read
Photo by istolethetv under the CC by 2.0 license

Just as Elon Musk said it would probably be easier to land a craft on Mars than convince NASA that he could, we believe focusing resources on completing the best possible implementation of Public Blockchains as a Service (PBaaS) rather than telling people all about how great it will be is how to get this technology to the people of the world sooner rather than later, so they can benefit from and experience it themselves.

That said, my heads down focus and that of other Verus developers in the past few weeks may have left some community members otherwise used to seeing me around Discord on a daily basis wondering what exactly is going on behind their screens. I’ve put together this update on Verus PBaaS reserves, and the state of community development at the present to help briefly explain some things.

At any time and for virtually any volume, Verus will be convertible in a fully automatic way between Verus and native fractional reserve currencies through simple transactions and PBaaS reserve protocols.

Verus fractional reserve currencies will be the native currencies of Verus PBaaS chains that choose to share liquidity across the Verus ecosystem. All PBaaS blockchains that are launched as Verus fractional reserves will control a certain amount of Verus Coin on the Verus blockchain that will serve as the reserves for those chains. The reserves may represent 100%, 50%, or even 10% of the total market cap of a PBaaS blockchain.

Explaining the details of how these fractional reserve currencies work is not the purpose of this update. Although PBaaS reserve currency conversion is built into the blockchain protocol, charges no centralized fees, addresses the infamous front-running problem, and can be mined and staked while emitting new coins in the process, the model is very similar to Bancor reserves. The Bancor whitepaper is a good place to start if you want an introduction into cryptographic fractional reserve currencies and how conversions work. At any time and for virtually any volume, Verus will be convertible in a fully automatic way between Verus and native fractional reserve currencies through simple transactions and PBaaS reserve protocols.

Importantly, conversion is not a buy or a sell from or to another individual, it is a protocol conversion. To convert any amount, you need no buyer on the other side of a “sell” and no seller in order to buy. Converting to a currency will cause the currency conversion rate (price) to rise, according to proven, market-based mathematical formulas, and converting from will have the opposite effect.

With PBaaS reserve currencies, there cannot be a shortage of liquidity across the ecosystem, since the order books are always the entire supply and reserve of the currency. In addition, currency can be sent automatically from the Verus blockchain to a PBaaS reserve blockchain, arriving to the specified address as either Verus Reserve Tokens, or auto-converted at the current market price (causing the price to rise slightly according to the reserve currency formulas) to the native currency of the destination chain. Unlike complex APIs that make cross-chain operations difficult for the average user, the latest big advance in this area is a protocol that makes it as easy to send from one chain to another as it is today to send a simple transaction.

Verus fractional reserve currencies will have decentralized capabilities and benefits that are fundamentally new both to crypto and also to historical human money.

Verus reserve tokens that have already arrived on a PBaaS chain will be convertible at any time to the native coin without waiting for notarization and cross-chain transactions, and also may be used similarly to a native coin in a wallet. Any fractional reserve currency can also be sent back to the Verus chain and auto-converted to Verus along the way. Even when sending Verus reserve tokens on a fractional reserve blockchain with its own native currency, symbol, and project, no explicit conversion or Gas is needed to prevent DoS attacks from flooding a chain with transactions. In fact, when Verus reserve token is sent from one transaction to another on a PBaaS reserve chain, network fees are automatically paid in Verus, which is converted on the fly to the native currency of the chain.

Verus fractional reserve currencies will have decentralized capabilities and benefits that are fundamentally new both to crypto and also to historical human money. Some are described above and the power of those capabilities will be evident if given some thought, but there are also some very deep concepts that I’d like to at least touch on before getting back to the code.

The Verus PBaaS protocol will allow fully community funded fairly-launched reserve currency projects, corporate currencies, and more, that all share liquidity with the rest of the entire Verus ecosystem.

One major benefit of the protocol is that across the entire multi-blockchain network of reserve currencies, all liquidity is fully shared and grows as the network grows and is used. The value of a currency going up and down will depend much less on how thin an order book is and much more on its fundamentally recognized value. For example, if a business that accepts Verus, such as La Pasta here in Seattle, decides to make their own reserve currency for food, and offers discounts for purchases with their crypto, the more people who use it, the more people who will convert to it, and the higher their coin’s conversion price will naturally be.

In addition, the Verus PBaaS protocol will allow fully community funded fairly-launched reserve currency projects, corporate currencies, and more, that all share liquidity with the rest of the entire Verus ecosystem. As a fully decentralized protocol with no company to take a cut along the way, any blockchain costs to launch a PBaaS project on Verus are paid directly to miners and stakers for verification, notarization, and initial conversion of Verus to the PBaaS reserve currency. Any range of the contributions to a reserve blockchain launch, from 0–100% of proceeds, can be transparently routed to the reserves of the fractional reserve currency, with the remainder being distributed, also transparently, as determined by those who launch the chain.

It’s important to understand that we are not building these technologies to just talk about them or claim that we did something. We strongly believe that the world needs Verus PBaaS and fractional reserve currencies. Some of us are helping exciting new projects work on use cases in addition to those described in the Verus vision paper, and we fully expect these projects to leverage PBaaS reserve technologies.

In one very powerful sense, the Verus reserve ecosystem will have no need for and no overhead imposed by money changers, a virtue that is going to be more and more important as it grows.

Finally, to introduce some specifics about what exactly has been going on in my deep, dark development hole for the past few weeks:

We realized that if the process of moving currency from one chain to another or converting currencies was too complex, fewer people would use it. That led to the idea that you should be able to send from Verus to XYZ chain and wait for your currency to arrive on XYZ chain as either Verus reserve or XYZ, which should happen based on a decentralized protocol, without any further action by you.

We also realized that if we make it that easy, many people are likely to do it, which would make cross-chain transactions a very common occurrence and therefore, something that needs to scale more than a simple one send/one cross-transaction relationship. To solve this, I’m nearly finished developing a new, decentralized cross chain protocol, designed for high volume, provable cross-chain transaction flow with minimal per-transaction overhead. Doing that meant committing to some additional development time, but we believe in the power of this system to help society, and it is more important to get it right than have it deployed a few weeks earlier.

Personally, I predict that ease of use won’t be the only reason cross-chain conversions will be popular.

All buys and sells in any given block will get the exact same conversion price with no spread and all conversion fees will be a flat 0.05%, 100% of which goes to miners and stakers on the Verus and PBaaS blockchains, which of course can all be merge-mined together. This 0.05% both incentivizes miners and stakers to follow the new protocol as intended, and allows fill-or-kill order types that eliminate the risk of front-running. Even at that incredibly small rate, it also provides huge opportunity for decentralized mining and staking profit to anyone who helps validate the Verus PBaaS ecosystem. In one very powerful sense, the Verus reserve ecosystem will have no need for and no overhead imposed by money changers, a virtue that is going to be more and more important as it grows.

To conclude, I wanted to provide a general update on development progress that I know about and a more in-depth update on some of the exciting technologies we’re planning to deploy soon on testnet, followed shortly after by mainnet. As many community members know by now, I do not generally make predictions on timing of releases, and in the latest Crypto-Rich interview, I said that I hoped to get PBaaS reserves out by the end of July. I suspect we will hit early August for full testnet deployment, but I feel very good about where things are now and cannot fully convey how excited I am about PBaaS’s revolutionary technologies that you will soon be able to experience yourself.

Verus Coin

Verus Community Blockchain Project — Truth and Privacy for All

Mike Toutonghi

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Verus Coin

Verus Community Blockchain Project — Truth and Privacy for All

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