Wolfonaire Chatbox : AMA With Sifchain (November 16, 2020)
Hello! Wolfonaire Family & Crypto Enthusiasts!
We recently hosted an AMA with Sifchain, on 16th November, 2020 at 04:00 PM UTC. This Session was phenomenal. If you have missed then here is the precious AMA transcript, for those who missed the live session this will enlighten you for sure…
(Note: This is the transcription of the event. Please note that the transcript was edited for comprehensibility and coherency, while the content was not changed.)
Odin : (part 1) We try to keep it focused on the team as opposed to individual members, but it’s no secret that a lot of our credibility lies with the fact that we have so many members from the Thorchain team, including its early architect. This gives us a lot of credibility and experience with cross-chain software and AMM token design.
Jazear was not just involved in early architecture on Thorchain but helped with development on Cosmos’s official Ethereum <> Cosmos bridge for the Interchain Foundation and the Polkadot <> Ethereum bridge for Web 3 so we are experts in cross-chain transactions.
Beyond that, our team has a lot of experience with other crypto projects including a YC-backed crypto startup and multiple crypto exchanges.
Purely on the development side, we have over a dozen engineers, most of whom have prior blockchain experience on other major chains. They’re supported by strong business development and marketing experience over many major famous cryptocurrency projects by our operations team team.
(part 2, last part of the response for this question)
Sifchain is the omni-chain decentralized exchange (DEX), unlocking liquidity from otherwise siloed chains to free people from egregious fees and inefficient trades. Sifchain will target 20–25 blockchains (such as Ethereum and Stellar) for cross-chain integration. It will also simplify the process of blockchain integration, lowering the development process for the open source community so that additional cross-chain integrations will be cost minimized in terms of money and developer resources.
Sifchain’s goal is for new blockchains to consider cross-chain integration as essential as a wallet or block explorer. Liquidity from all cryptocurrencies can then be accessed on-chain, allowing the coordinated deployment of capital from all cryptocurrencies by DAOs.
The future of Sifchain is a Decentralized Autonomous Organization (DAO) and for SifDAO and other DAOs to self-sustain, they need access to massive capital. We believe that building cross-chain liquidity will be fundamental to the future of the blockchain industry: an expectation, not a feature.
Sifchain is built on the Cosmos SDK and is compatible with other Cosmos Network blockchains like Kava, Akash, and Terra via the Inter-Blockchain Communication (IBC) protocol. As such, it is 100 times more efficient than Ethereum-based DEXes like Uniswap in terms of both trading fees and transaction speed.
As a decentralized exchange, Sifchain combines the best elements of liquidity pools and order books for optimal order execution. While decentralized exchanges are currently dominated by liquidity pool algorithms optimized for token swaps, Sifchain will rethink the formulas used for liquidity pool algorithms from first principles of complexity theory to implement adaptive AMMs suitable to limit orders and token swaps alike.
Traders will be able to place limit orders that are executed against the liquidity pool as the market price fluctuates. Sifchain prevents validator front-running through a commitment-reveal scheme for order placement.
Sifchain allows traders to use margin on their trades by borrowing from the liquidity pool. Interest is set based on market demand and liquidity supply. This increases returns for liquidity providers in two ways — it provides interest as a second revenue stream in addition to swap fees and increases the size of swaps, and thus the size of swap fees.
Wolf : Great To Hear 👏👏👏. For our members who are not already familiar with the project, can you give us a very high-level overview of what Sifchain Finance is and what competitive edge it brings to the DeFi landscape?
Odin : Yea sure, Sifchain is the DEX described above. The competitive edge for us is that there are no other projects even targeting omni-chain. There are a couple of independent projects targetting cross-chain with Ethereum but none trying to make omni-chain a standard to capture the entire $450B+ of market cap across all cryptocurrencies.
There are no other major projects supporting both margin trading and limit orders on a decentralized exchange.
We’ll be the first to launch Ethereum compatibility in the Cosmos Network, bringing Ethereum liquidity not just to Sifchain but also other Cosmos projects like Kava, Akash, and more.
We are the most thoughtful about decentralizing control slowly over time. There are a few projects that have exited to community like Synthetix and Compound. We respect those communities and hope to have strong governance similar to them. However, we also want to give SifDao some control in the begining. This is why we will create an on-chain pool of capital for SifDao to control through on-chain voting separately from the Sifchain core team. We explain this more in our tweet thread here https://twitter.com/sifchain/status/1323162320382517248?s=20
Wolf : Awesome! How do holders of the Sifchain Finance token benefit in the ecosystem? What power within your model do individuals hold? Why is it so attractive and what are the basic requirements to participate?
Odin : great question, (part 1) Sifchain’s token, Rowan, serves three purposes:
1. It’s used as a staking token. Holders can use Rowan to validate the network in exchange for block rewards if they run a validator. Holders can also delegate to validators to earn as share of block rewards without running a validator.
2. It’s used for liquidity providing. The token economic model for Sifchain is simple. Sifchain consists of two-sided liquidity pools in which one of the tokens is Rowan and the other is an external token such as BTC, ETH, or XLM (or at least a pegged version thereof running on Sifchain). The value of either side of each liquidity pool is equal to the other. For example, if the RWN:YFI pool has $100,000 USD worth of YFI, it must also have $100,000 USD worth of RWN. If the value of external assets on Sifchain is a modest $10M in total, the other side of the liquidity pools must have $10M total of RWN so that the pools stay evenly weighted. This means Sifchain has a combined $20M in liquidity.
The validators then must be securing at least $20M in RWN so that the network is secure and the cost of malicious activity (slashing) is not worth anything a validator can gain from fraudulence as per Tendermint consensus. This means that for every $10M in external capital, we can expect $30M in Rowan’s total liquid market cap.
Here is a breakdown of how $10M in external capital would affect Rowan’s other metrics based on the above assumptions:
External Capital in Liquidity Pool — $10M
Value of all Rowan on Sifchain (liquidity pools + validators) — $30M
Liquid Market Cap — $30M
Fully Diluted Market Cap (Current token distribution has 14.5% of all Rowan liquid and available during Sifchain’s launch) — $206M
This, of course, does not include tokens stored outside of Sifchain such as in an investor wallet, on another exchange, or in cold storage. Further analysis on our core model can be found here from Gauntlet Network’s analysis of Thorchain and we’ve posted modifications thereon. https://gauntlet.network/reports/thorchain
Wolf : Good
Odin : (part 2 last part of the response): Rowan is a governance token. Holders can use Rowan to vote for proposals ranging from small changes to key cryptoeconomic metrics to complex new projects and features funded by the on-chain treasury. As mentioned before, we see on-chain governance as a critical role for participation in Sifchain’s Dao, Sifdao. Users can use Rowan to change any part of the fee structure, making its value proposition similar to Comp’s.
Wolf : Phenomenal 👏👏👏.Have you met all your goals in the roadmap till now? And were there any difficulties that you didn’t expect and were not prepared for?
Odin : So far we’re on track on our roadmap but we’ve had all sorts of issues. We originally intended to fork Thorchain for Sifchain but after a deeper review of Thorchain’s code and Cosmos’s code we decided to create a fresh deployment of Sifchain from a new Cosmos SDK chain using Thorchain as a reference implemnetation.
Another issue is that we wanted to build IBC compatibility directly but it’s actually not really ready for production use right now so we reallocated those resources. We’re going to wait for the Cosmos core team to do additional work on it before taking another look. We expect to have IBC implemented in 1–2 months but this is primarily based on Cosmos’s dev speed, not ours
We’ve been pretty good about using our time effectively whenever encountering any difficulties though.
Wolf : Good To Hear. Final Question:- Did you find any threats till yet like smartcontract failures.When we think about mass adoption,security should be our first priority?
Odin : We have been very good about catching any threats like smart contract failures or bugs.
We are extremely concerned with safety. We’ve allocated a separate team just for writing tests and building testing infrastructure. We’ve got an auditor and will intiate a bug bounty program. We encourage anyone interested in this space to help us test our testnet now. You can find instructions for that here https://github.com/Sifchain/sifnode
Wolf : Getting Postive Vibes. Awesome 👏👏👏.
Let’s move For Community Questions
Now Group Question & Answer Session 1 Began
Q1. Sifchain will rethink the formulas used for liquidity pool algorithms from first principles of complexity theory to implement adaptive AMMs suitable to limit orders and token swaps alike. This sounds beautiful and complex, but what exactly is the complexity theory? Was it applied in practice by other projects or it is just a theory for now?
Odin : Complexity theory is the literally the theory of complex systems. It has been applied in many cases. Here is one of the most famous institutes on it
It has been pretty important for market design
Early research on auctions focused on two special cases: common value auctions in which buyers have private signals of…
It’s already being used in crypto
Check out www.block.science for more
Q2. You recently launched Sifchain’s first testnet (Monkey Bars) can you explain to us how successful the Testnet has been and at what point should we be expecting your mainnet launch will there be other Sifchain testnets before then?
Odin : We’ve iterated multiple times on Monkey Bars so far but don’t intend to release a testnet with a new name until after mainnet. We’ve had really great success, the testnet was 8x oversubscribed by validators.
Q3. Which consensus mechanism is Sifchain currently using and why would you consider it to be the best one for your project? What kind of problems does it solve?
Odin : We use the Tendermint consensus mechanism for Sifchain, just as all Cosmos SDK blockchains do.
“Tendermint consists of two chief technical components: a blockchain consensus engine and a generic application interface. The consensus engine, called Tendermint Core, ensures that the same transactions are recorded on every machine in the same order.”
What is Tendermint | Tendermint Core
Tendermint is software for securely and consistently replicating an application on many machines. By securely, we mean…
Q4. Recently the countries restrictions has stopped the growing of New projects, so considering that you have a live Presale right now, so you have countries excluded to participate?
Odin : Yes, we will have more to announce about our token sale on Nov 30 but we can announce now that we intend to offer Sifchain in appropriate jurisdictions, some will certainly be disqualified.
Q5. Why did you decide to launch sifchain with the ethereum erc20 network as support and not with other Blockchain networks with less gas congestion? What benefits can a network with high gas congestion give them?
Odin : We launched with Ethereum because it currently has widespread adoption of ERC20 tokens.
Token swaps on Sifchain are executed with 100x efficiency as those natively on Ethereum platforms like Uniswap.
Q6. Big problem for a lot of Defi projects seems to be that when farming starts, the price goes down because people unload to put liquidity into the farm. Will there be an incentive to hold and not just farm and dump?
Odin : Our liquidiy mining program (which we’re calling a subsidy program) will have dynamic rewards that take hold duration into account so that users cannot quickly farm and dump.
Q7. Why has Sifchain decided to focus on so many blockchains instead of just a few? not a lot of work?
Odin : We believe it’s critical that as many blockchains as possible share liquidity. We’re starting out modestly with just Ethereum and will add new chains over time at an aggressive but reasonable pace. We also plan to galvanize the open source dev community to help us with cross-chain development.
Wolf : Awesome 👏👏👏… Let’s move for Round 2
Now Group Question & Answer Session 2 Began
Q8. Do you have a Global ambassadorial Program or Referral Reward System? Does I get any benefit from holding $ ROWAN token for long — terrm ?
Odin : We will certainly announce a referral system for Sifchain.
Q9. Sifchain prioritizes orders with higher gas fees. Would this not create a Uniswap-like situation where everyone just sets high fees to push their transaction through causing a spike in fee price?
Odin : 1. You have to consider that gas fees are revenue for validators so there are multiple parties to consider when instituting gas fee policy
2. Historically, traders reach a rational equilibrium price for gas auctions as opposed to letting gas payments spike beyond profitable rates https://www.youtube.com/watch?v=vR1v7AQ8i3k
Q10. You organized a very useful AMA session and received lots of questions related to utilities and technology, visions of the future. So now I want to ask you what would you like to receive from the community?
Odin : The Sifchain core team and community need to work hand in hand to ensure that Sifchain’s mainnet is well-tested and well-supported, and that the full vision of the protocol is carried out beyond mainnet. If Sifchain’s mission appeals to you, we urge you to stay in contact by joining our Telegram, following us on Twitter, joining our Discord, and subscribing to our Newsletter.
If you feel called to contribute more, we encourage you to start by reviewing the code we’ve open sourced at https://github.com/Sifchain. You can always address outstanding Github Issues https://github.com/Sifchain/sifnode/issues and speed up time to completion. We’ll be attributing rewards for some development help over Gitcoin. Until we can get our Gitcoin account set up, you should just feel free to review the issues filed in https://github.com/Sifchain/sifnode/issues and if you fix one and we accept your pull request, you will receive $250 or more via USDC.
If you’re looking for a way to contribute to Sifchain while earning income, we will provide opportunities to do that. If you want to invest in Sifchain’s success fund a bug or feature reward for a new issue or small feature. In special cases, the Sifchain core team may even invest alongside you!
Another way to contribute is with code reviews. Look at our developer documentation https://github.com/Sifchain/sifnode/tree/develop/docs and our pull requests https://github.com/Sifchain/sifnode/pulls. This is a great place to review what’s coming to the protocol. You can identify ways to improve the protocol and submit PRs of your own. The Sifchain core team doesn’t guarantee it will accept your PRs without substantial revision, or that it won’t leave your PR without being able to review it in depth, but it intends to put as much effort into cultivating community contribution as it can.
Yet another thing you can do is maintain a Sifchain testnet node. We have a strong community of testnet operators who serve as the first user of all of Sifchain’s code. By running and maintaining a Sifnode, you help the community test and operate at scale.
Beyond that, you can write community articles for Sifchain. Here’s one a community member just released for the Russian community!
🚀Sifchain — инфраструктура децентрализованного кросс-чейн обмена ценностью.
🔗Sifchain строит свою инфраструктуру на Thorchain и Cosmos и будет поддерживать 20–25 блокчейнов (таких как Ethereum и…
Of course, there are still more way to help we haven’t thought of. One developer told us he’s been working on Promethus + Grafana integration for benchmarking. Other developers have already helped with building faucets and other critical infrastructure we need, or just answering questions on Discord and Telegram https://twitter.com/sifchain/status/1327419675672682496?s=20
We’ve been deeply grateful for all of the support we’ve seen from the community but know there’s still a lot more to go. An unfinished article we want to write describes how we ultimately see Sifdao and Sifcore working to make Sifchain a premier cryptocurrency protocol. It heavily cites research on Teal Organizations which prioritize self-management.
“The Teal paradigm refers to the next stage in the evolution of human consciousness. When applied to organizations, this paradigm views the organization as an independent force with its own purpose, and not merely as a vehicle for achieving management’s objectives. Teal organizations are characterized by self-organization and self-management. The hierarchical “predict and control” pyramid of Orange is replaced with a decentralized structure consisting of small teams that take responsibility for their own governance and for how they interact with other parts of the organization. Assigned positions and job descriptions are replaced with a multiplicity of roles, often self-selected and fluid. People’s actions are guided not by orders from someone up the chain of command but by ‘listening’ to the organization’s purpose. Unlike the highly static nature of Amber, Orange and Green organizations, the organizational structure in Teal is characterized by rapid change and adaptation, as adjustments are continuously made to better serve the organization’s purpose.”
If you see any way you can help Sifchain, please reach out so we can work together!
Wolf : Thanks @Omni_Skyfather For This Great Time. Learned Alot From This Session. I believe we will host more AMA In Future.
Now the session ends with lots of thanks to our Guest Speaker…
Here is some important links of Sifchain ⛓⛓