Equilibrium AMA Recap
Equilibrium: The First Interoperable Protocol in DOT DeFi Ecosystem
Judy_EncryptClub Host: Generally speaking, people only work for 3 quarters in 2020 due to the Covid-19. It is very rare that the recent US stocks is profitable in Q4, therefore, the overall situation of the crypto market is positive and makes cryptoers who buy long are full of expectations for the magnificent market next year. Today, Equilibrium, a cross-chain DeFi project from EOS, will conduct an AMA with EncryptClub. As the exclusive LEND 2.0 project on EOS which has attracted much attention from fans in the EOS and the DOT community, what Equilibrium is ?
Welcome to EncryptClub, Alex. Would you please briefly introduce yourself and Equilibrium to our group?
I’m Alex, the CEO at Equilibrium, the leading cross-chain DeFi project. I’m an engineer in applied mathematics by training. Before I arrived at the blockchain space I was focusing on fintech — mostly payment systems and gateways. I was always on the tech and architectural side of things.
I came to crypto in 2016 when we co-founded Changelly. Currently, it’s one of the largest instant crypto exchanges on the market.
In 2017 I decided to put together a team of senior developers and financial engineers to start development of DApps. We were building a lending platform on Ethereum those days and it was even before all DeFi buzz.
But you can think of us as of a blockchain agnostic engineering team. In 2018 we kicked off the development of the EOS blockchain. We have launched the first decentralized stablecoin on EOS called EOSDT in April 2019. Today it is the most liquid stablecoin on EOS and one of the biggest DeFi projects there, with over $13 million of total value locked in our smart contracts, and over 1000 open user positions
For now we are working on turning Equilibrium into a one-stop-shop for DeFi users. Imagine that you can do all things Ethereum promitives can do, but in a single place and cross-chain. It’s all coming true thanks to our recent developments on Polkadot.
Our main goal is to unite all sustained DeFi use cases in a single easy-to-use interface on the basis of cross-chain liquidity pools and a robust innovative technology that underpins all the product line.
The use cases for the lending platform include pooled lending (like Compound), synthetic asset and decentralized stablecoin generation (like Synthetix and MakerDAO respectively). For the cross-chain DEX we anticipare trading on margin and perpetuals to be the main products
Equilibrium allows users to stake and earn, lend, borrow, raise liquidity in synthetic assets and decentralized stablecoins — all in one place. Our tech is super scalable and secure thanks to the underlying technology — Polkadot. Also, it accesses all protocols bridged to Polkadot to unlock full DeFi potential.
That’s almost it about myself and our team.
Q1：What does Equilibrium do for EOS DeFi ecosystem? Why Equilibrium is said to be the founder of EOS DeFi ecosystem?
As I mentioned before, we’ve launched the first decentralized stablecoin on EOS called EOSDT in April 2019. It was literally the first DeFi primitive that enabled more effective management of EOS-based assets back at that time.
EOSDT is currently backed by EOS, BTC and ETH cryptocurrencies to ensure its 1:1 parity to dollar. EOSDT has been listed on several prominent exchanges such as HitBTC, Newdex, Bancor, Changelly, eosfinex. The stablecoin and the DApp for its generation are also added to all known wallets that support EOS including Tokenpocket, Huobi wallet, and imToken.
Having said, until now its smart contracts hold over $13 M of crypto liquidity with over 1,000 open user positions.
EOSIO itself is designed to handle an industry-grade volume of transactions, to provide a wide array of dev tools to make blockchain development an easy task, and to lower the barriers for entry for the new devs. At the same time, we think that the future belongs to cross-chain technologies. So we expect to bridge our EOS-based projects with our Polkadot-based technology and unite these products in one at some point.
Q2：Which problems can you determine in the DeFi industry now? How Equilibrium can help to solve them?
We see several obvious industry hurdles that we are also addressing at Equilibrium.
1. Market fragmentation. Before us, users needed to use several apps on different protocols.
2. Lack of interoperability. We design Equilibrium to enable asset transfers across chains & and use of different assets in lending combining them in collateral baskets.
3. Inefficient bad debt liquidations. We are introducing the bailout mechanism that will prevent situations like with MakerDAO in March this year by ensuring bailout liquidity in advance
4. Liquidity issues. Equilibrium maximizes cross-chain, non-custodial liquidity by using multiple assets from different protocols
On top of that existing DeFi protocols from our perspective don’t take into account risk parameters seriously. We will sustain the system with our on-chain risk management algorithm, which:
- Monitors the liquidity of all the individual users across all of their assets and protocols in real-time.
- Assesses system solvency on the basis of the aggregated stats and the volatility of the underlying assets
- Adjusts programmatic interest rate to incentivize “Bailsmen” who work for Equilibrium to inject more liquidity into the system (if needed)
Q3: From EOS to Polkadot, Equilibrium has become a key cross-chain DeFi project and obtained the investment from Web3 Foundation. May we know what technical support does Equilibrium provide for Web 3.0?
We are currently participating in the Substrate Builders Program and are very committed to our development on Polkadot. We have received a Web3 Foundation Grant to further develop our DeFi pallet. You can find more details here: https://cointelegraphcn.com/news/equilibrium-receives-web3-grant-to-develop-its-universal-defi-module
Equilibrium’s financial pallet is an open-source Substrate module that utilizes oracles for external price feeds on featured assets and uses this data for further financial calculations which help users to optimize their asset management. The pallet will benefit anyone building complex DeFi and Fintech solutions using Substrate technology because it offers a lot of functionality out of the box to reduce development efforts.
Generally speaking, we expect development simplification to facilitate the migration of DApps from other blockchain platforms to Polkadot.
Q4： How can the community participate in Equilibrium DeFi application? How to gain profit by using Equilibrium reasonably?
Besides common for DeFi protocols user roles — lenders, borrowers, and traders, Equilibrium is also introducing a completely new role called the bailsman. This is a very important user role that allows to earn a significant portion of interest (up to 80%) paid by borrowers on taking risk of debt liquidations in advance. From our standpoint it should be the most relevant for institutional liquidity providers who used to take over risks and manage a diversified portfolio of assets.
Another opportunity to benefit from Equilibrium is staking crypto assets and getting passive income via pooled lending.
As a borrower, borrow crypto, and generate synthetic assets or decentralized stablecoins — all with automatically (and fairly) defined APR. Borrowers can reduce the interest by setting higher collateralization of their positions as the programmatic interest reflects the level of risk.
Liquidity Farming is another way to earn in the context of cross-chain asset use. Users will be rewarded in EQ tokens for actively using Equilibrium’s products.
Q5： We are optimistic about the prospect of DeFi ecosystem. If 2020 is the first year of DeFi, the following 10 years will be DeFi’s fastest growing period. What is Equilibrium’s future plan? What usage experience will Equilibrium bring to users?
Our vision is to empower the DeFi community to access the full capacity of the entire DeFi market and not just Ethereum, on which the majority of the market is now located.
First of all, we are enabling transfers of our EQ tokens soon at the same time with upcoming listings on exchanges and the launch of the ETH bridge
Since our substrate will be bridged with Ethereum we are expecting some amount of EQ tokens to be ported there and we are planning to launch the Uniswap liquidity pool then
We will be launching our main products on mainnet in the begining of 2021 and also will be launching liquidity farming. Liquidity farming will reward users for active use of Equilibrium’s products in EQ tokens.
We are planning to participate in a parachain leasing auction via an Initial Parachain Offering. DOT token holders will be able to stake their DOTs in our name for a parachain slot and receive EQ tokens in exchange. This will be a risk-free trade-off — they will be able to submit EQ and get their DOT back at the end of the parachain leasing period (if they wish).
After launching the ETH-bridge on Mainnet, we will be planning for the integration of other bridges to support BTC, TRX, XPR.
Token Economy: https://equilibrium.io/docs/zh/EQ_token_economy.pdf
WeChat group: Equilibrium 架构讨论群 (add me on WeChat — hello_melikhov — and I will pull you in)
Judy_EncryptClub Host：Thanks for your sharing, Alex. Here comes the free QA session, and you can choose 2 lucky questions to give a brief answer.
There is NUT tokens, why did you issue the new EQ tokens? When and how we can participate in the EQ tokens?
Alex: the new EQ token will serve the needs in the new product line on Polkadot and become a cross-chain compatible token with multiple utilities. NUT token will remain on EOS with limited utility for just our EOS-based products. We have successfully distributed 25% of the total EQ token supply via NUT/EQ token swap and for now the best ways to acquire EQ are:
1. Wait until exchange listings
2. Participate in our liquidity farming program via bringing liquidity on the platform
3. Participate in our Initial Parachain Offering (we will reveal details soon)
User2: May we have the TOKENOMICS?
Judy_EncryptClub Host: Thanks Alex for joining our AMA and sharing so much valuable information with us. Thank you all for watching this AMA. EncryptClub will work hard and bring more wonderful content for you in future.