#PegNet AMA Summary with #Decentralized_Club✔️
Welcome to our community on t.me/decentralized_club Telegram group’s AMA. We really appreciate all your support. There were really good and thoughtful questions that were asked. For those who missed our AMA, this blog post is for you :)
✔️Introduction with #PegNet :👉
@paulsnx2 Will you kindly introduce yourself and tell us what is PegNet about?
Hello Everyone! I am the original architect of the PegNet. What I wanted to do is utilize the distributed immutable ledger provided by the Factom protocol to build something more powerful than simply the trading of tokens. We wanted to pull in the key utilities required for management of store of value, and conversions between assets to facilitate payments.
The PegNet is built from the “hard asset” economic theories of Bitcoin and the monetary structures made possible by protocols that can issue tokens to create a system that allows users to represent the value they hold in the assets they want for value store, or need for payments.
My background is basically of a developer and engineer. I’ve built compilers and rules based systems for handling very complex problems. I love the blockchain, because it allows the construction of very complex distributed systems that are more fair, and more efficent than centralized solutions.
🐧Community ask Questions by Twitter ✔️
🐧Twitter Question No :1
Username : @fantom_rb
Q. What are the challenges faced by PegNet to bring DeFi access to Dollar, euro and other highly traded assets?
The highly traded assets with high volumes are the easiest assets for us to handle in the PegNet. The PegNet uses the simple fact that users can convert between pegged assets in the PegNet, value to value, by destroying the source asset and creating the destination asset. This creates an arbitrage opportunity anytime an asset (say pUSD) varies from its reference value (say USD).
Assets with easy measures of value from the economy and market, and assets that do not vary much in value, are ideal for the PegNet. More challenging are the more volatile assets like BTC or even Gold.
As developers, we are going to keep a close eye on the PegNet in these early days to make sure the protocol is working well for all listed assets.
🐧Twitter Question No : 2
Username : @TomJerryAD
Q. Since LXR builds hash in memory. Will just increasing my ram increase my mining speed?
Thanks @TomJerryAD! No, the LXRHash uses 1GB + a bit of working space, and that is all. If you run multiple threads, you would still want to use the same 1GB table. So more ram will not increase mining speed.
🐧Twitter Question No: 3
Username : @ManDivineflame
Q. How will PEGNet solve the reserve and collateral problem in a better way than say Tether?
The PegNet doesn’t use reserves, so all the data needed to audit the PegNet is all on the blockchain.
All assets are issued from value. So pFCT was created from FCT, and FCT had a market price at creation.
The price of FCT in the beginning was defined by the Price Records from Miners. And all the data used is on the blockchain and it is all auditable.
From there, conversions are strictly value for value as defined by the market.
Arbitrage between the assets keep their value stable in the market.
So no risk of banks interfering, or an issuer breaking trust. It is 100% user driven.
🐧Twitter Question No : 4
Username : @Crypto_Hunter
Q. To make #PegNet have enough liquidity and volume what are you guys going to do so that users don’t face liquidation challenges?
Within the PegNet, the liquidty is never an issue. The value of the asset you are holding is destroyed to create the asset you want on conversion. So 100% of all the value in the PegNet could migrate to pUSD, if that is what everyone wanted to do. (Hint: People never move in mass like that, but it could be done.)
So I’ll address the issue of gaining liquidity to leave the PegNet.
Quite a number of interested parties are setting up businesses to run mining pools, arbitrage, and provide liquidity. Because liquidity is important to the value of the PegNet, and it is also important to these business models, we have the incentives in place for a distributed set of interested parties to work on and ensure liquidity.
To help with this, PegNet users can leverage time. Because they can move from various assets to pUSD or pEUR or pYEN etc., they can select a cost basis and use the liquidity in the PegNet over time to liquidate out of the PegNet. This also opens the door to OTCs who can take assets and know that their fee can profit over time.
The liquidity within the PegNet allows opportunities to provide liquidty that don’t exist in other cryptocurriences.
✍️ Telegram live Questions answered by #PegNet ✔️
Q. What is the relationship between Factom and Pegnet?
Many of the developers in Factom have contributed to the development of the PegNet. However, the PegNet is a completely separate and unrelated project. Factom Authority Nodes provide immutable organized data to the PegNet code, but play no other role in the operation of the PegNet.
One might think of the PegNet as something like any of the applications running on Ethereum. CryptoKitties is not a part of Ethereum, but leverages Ethereum. Ethereum developers have been involved in many projects that run on Ethereum.
Q. Why you choose Factom protocol ? What are basic step for a new comer use and transfer PegNet ? I’m only familiar with Ethereum network . It is quite strange for me.
Well, I was the main architect for Factom, so there is that.
The problem with Ethereum as it is based on smart contracts, it doesn’t easily allow business logic to exist outside the Ethereum Blockchain. Factom provides organized data on the blockchain, so the only place to put business logic is outside the blockchain, where we want to put it anyway.
So 200 or so Oracle Price Records are written to the PegNet in the Oracle Price Record chain in Factom every block. That is about 200 x 600 bytes, or 120,000. On factom, that costs about 20 cents total. On ethereum, the cost would be higher for just one of those records.
So Factom is a better protocol for 2nd layer distributed applicaitons and data. But where we can support Ethereum smart contracts with digital identities, auditing of data, etc. Factom works well with Ethereum.
Q. How will the PegNet ERC20 token correlate in price and usability? Will the ERC20 token be deemed unusable after the “fork”
ERC20 tokens will match a PegNet asset token in the gateway. This will be auditable by anyone on the blockchains. The gateway will be run by centralized parties, and the ERC20 tokens will continue to operate fine after the fork.
Q. Liquidity problems are mentioned many times for old and new exchanges in recent time, so how will Pegnet solve this problem and build up belief for users to have a good liquidity?
There are many projects focus in DeFi, Pegnet also works on DeFi, so why do you think that community should choose Pegnet instead of others in same field?
Mostly PegNet is designed to address:
Liquidity: Value to value conversions means PegNet always has liquidity inside the protocol
Diversity: Exposure in PegNet can be shifted without counterparty to real world currencies, a range of crypto, or gold/silver
Management: Adjusting and resetting exposure in the PegNet can be done right in your wallet
Payments: Regardless of the exposure you prefer, payments can be made in the asset perferred by a merchent, i.e. pUSD, pBTC, pGold
Security: You can do all of this inside your wallet without counterparties
MicroPayments: Low fees
Q 1 — As we all know that, there are many scalability issues on Ethereum Blockchain ! Then, Why you choose Ethereum Blockchain for PegNet project? I know it’s a backup but Factom is scalable?
2 — Why choose to go with Factom? Instead of Factom, PegNet can make it’s own Blockchain! Does it have tech setback the PegNet team?
Factom provides what we need for the PegNet. It provides a basis for bootstrapping the protocol without centralization, provides the data management we need, provides an existing community, and more.
The protocol began development at some reasonable level in June of 2019. The protocol went live with all major features by September. Factom enabled that rapid development with only a handful of developers. Maybe 2 to 3 developers full time at most on average.
Q. #AMA #PegNet #pegnet
It’s heard that next phase of adoption of blockchain technology will came from the Defi space. What is your views on this?
This is where adoption has been strongest. I also think audits, security, digital identity, distribution of content are all strong use cases for blockchain technology.