Post

AMA Highlights – KIRA Network

By 13-Sep-2020 No Comments

AMA Highlights – KIRA Network

By Daniel Dal Bello, Director.

September 13, 2020 – 6 min read.

On Tuesday 8 September, we welcomed Milana Valmont and Mateusz Grzelak from KIRA Network into the Hillrise Capital Telegram chat for an AMA. Milana is the current CEO and cofounder, and Mateusz is CTO.

KIRA Network is another emerging DeFi innovator introducing a unique ‘Multi-Bonded Proof of Stake’ consensus mechanism to enable multiple-asset staking. The KIRA Interchain Exchange is a scalable, trustless, and permissionless asset exchange enabling users to earn income by staking any assets available (e.g. fiat, commodities, BTC) while maintaining liquidity through staking derivatives – something that we are seeing more and more of from the DeFi space.

KIRA Protocol Token (‘KEX’) is a native staking asset of the network. Staking KEX is incentivized through distribution of network fee revenues and block rewards. A small public raise for the KEX token has been planned.

In this post, we have compiled key questions and answers from our AMA event.

Daniel Dal Bello
Welcome to you both, thank you for being here today. I’m looking forward to getting into the detail for another DeFi-focused startup and particularly some of the interesting innovations that you are bringing to the table with Kira. Kira is aiming to become the first ‘true’ peer-to-peer cross-chain asset exchange protocol that is fully owned, governed, managed, protected and operated by the community. We know you have been doing a lot of similar AMAs so we hope to ask you some different questions today.

Before we get into that, could you please introduce yourselves and give us some insight into your individual journeys into the world of blockchain? Could you also give a basic introduction to the company, motivation, and solution?

Milana Valmont
Hi everyone, my name is Milana Valmont, I have a corporate finance background from NY. I got into the crypto-space first as an investor in early 2017 and later the same year I joined Binance exchange as a community volunteer. After that I have worked as Project Manager for Adcoin.com and was an Adviser to Sentinel dVPN. In 2018, I went to Tel Aviv to join Knoks platform as Head of Strategy, and by mid-2019 I dedicated my full attention to Kira as CEO.

Mateusz Grzelak
My name is Mateusz, Kira’s CTO, I am an Electronic Engineer, and have been in crypto since late 2011, involved in Interchain/Web3 ecosystem for the last 3 years. I’ve worked as an R&D developer for Barclays Bank, then as Lead Infrastructure Engineer for US-based Settle Finance, then as Product Manager for the crypto exchange in Switzerland called ‘Bity’. Shortly after that I started with Kira.

My journey to the industry came with an obsession of algorithmic trading which I was exploring by wrapping my head around MT4, I learned about crypto from Reddit somewhere around 2011 and gave GPU mining a go, it all started from there.

Daniel Dal Bello
There are a couple DeFi startups that have proposed concepts similar to your ‘Staking Derivatives’. I’m curious to know more about those derivative tokens.

You propose enabling users to receive these derivative tokens in an even swap to their assets at stake and note that these derivative tokens cannot be slashed. What happens if your assets at stake are slashed? Is there any way that a bad actor could convert their derivative token back into another asset ‘xyz’ and not feel the burden of losing their stake?

Milana Valmont
When you are staking your token you are getting a 1:1 derivative representing that token being staked. Although the derivative cannot be slashed and [can] be freely traded, the original token is still at stake, if the validator would misbehave then the original tokens at stake would be slashed, as a result, who ever owns the derivative would no longer be able to claim the original tokens back 1:1 because a portion of them would be slashed.

The tokens that are slashed land in the ‘Community Pool’, Kira does not destroy them, so that they can be used to reimburse people if there is some affected party. Yes, it’s possible to trade your derivative for another staked or not staked token, but of course someone has to put a bid for that and be willing to take the risk, this gives the opportunity for speculators to put up bids below the value of the token and once people sell their staked tokens they can simply wait for [the] ‘unbonding’ period to claim the difference. From the network’s perspective it doesn’t matter who is getting slashed, as long as someone is getting slashed because they were willing to take that risk. And also you don’t have infinite liquidity on the market.

Daniel Dal Bello
The Initial Validator Offering (‘IVO’) is quite an interesting idea and I have read your blog post introducing the concept. We saw just the other day that Binance have effectively created an equivalent product with their ‘Launchpool’ where users can stake BNB, BUSD, and ARPA and receive ‘rewards’ in a new protocol token.

Can you introduce us to the IVO concept and explain how your ‘calculation’ of token rewards will work? Binance are going to be using a system based on ‘x’ user’s ratio of tokens staked relative to the total staked. Your design seems to be quite different where you want to issue tokens based on validator rewards.

For example, if a validator earns $1, the investor is expecting to receive their portion of $1 of value in the newly ‘interchain-mined’ token. My question is, how do you establish what $1 of value in a newly created pre-market token is?

Milana Valmont
With IVOs you simply define an exchange rate in terms of any asset you choose, you can peg [the] value of the token that people are mining to [the] value of any asset, whether that is a stable coin or cryptocurrency. You can also change it on the go to encourage early delegation, for example.

Daniel Dal Bello
Where I’m not clear is how you establish what $1 of value is in a brand new pre-market token is. How are you able to say, here is $1 of value in this new token?

Mateusz Grzelak
You define that your new token 1 ‘AAA’ is worth let’s say 0.00001 BTC/ETH/USDT etc. So, if you get commissions in the asset ‘BBB’, you go and lookup the BBB/BTC exchange rate. From there it’s a mega simple formula that allows you to credit 1 AAA per each 0.00001 BTC you make.

Daniel Dal Bello
The follow-up question building on this is regarding how the new ‘project’ startups raise funds through this means. Back to Binance Launchpool, their first startup has already raised funds and we might conclude that their distribution through the Launchpool initiative is part of their ‘listing’ on Binance (adding utility to BNB). How do startups running an IVO raise funds?

Mateusz Grzelak
They charge a 100% commission. As mentioned per each $1 or other increment of value earned an equivalent of 1$ (or some other increment of token value) of a new token is credited to the delegators.

Daniel Dal Bello
Thanks Mateusz, so the company running the IVO will receive a 100% commission which would be in KEX?

Mateusz Grzelak
Depends on the network where you deploy your IVO validator. If you deploy on Kira, then yes you earn KEX and a basket of other coins from fee rewards. But, you can do it on multiple chains at the same time, so you could earn DOT, ATOM or any other stakeble asset.

Daniel Dal Bello
Ok I understand, I can’t imagine the basket choice as you put it being too desirable. With that being said, you will be able to utilize MBPoS and stake an ‘outside’ asset like Bitcoin for an IVO?

Mateusz Grzelak
It’s not a choice – you earn fee rewards as validator, those fees can be paid in any token that is whitelisted. With MBPoS, yes any token can be utilized. So you can stake BTC to mine ‘XYZ’.

Daniel Dal Bello
How do assets get whitelisted?

Mateusz Grzelak
First you need to transfer it to the network over IBC, XCMP or another protocol or gateway, then you request from governance to define interest rates for staking that new token. Once they approve your token and whitelist you can stake it and claim a portion of rewards.

Raymond Reijnders
What are the main incentives for token holders?

Milana Valmont
Staking KEX is the most efficient way of claiming the block and fee rewards in [the] case of Kira. You also need KEX to become a validator or a governance member.

Raymond Reijnders
Also very curious about why I, as a company, would pick an IVO over an ICO/STO. A good addition might be: why have you yourselves decided to have an ICO and not an IVO? What does your roadmap look like?

Mateusz Grzelak
It’s more about your investors and if they would be comfortable spending their money or using IVO, where they do not spend their money at all – they put it all at stake. You can always use other mechanisms for crowdfunding in parallel.

Because we want our IVO to be on-chain – on the Kira Network and not off-chain. Our latest deliverable is a public testnet that is coming in around 2 months, so far we completed most of our governance permissioning system so that community can easily join the validator set and collaborate on first proposals. Roadmap-wise we will be launching in a similar fashion to Polkadot.

Daniel Dal Bello
NGC are a notable investor in your recently closed private round. NGC have been around for a long time now as a prominent VC in the blockchain world and they have also invested in a handful of other DeFi startups. What can you share about their interest in Kira and what value they can bring beside capital?

Milana Valmont
Yes, NGC has invested into various DeFi projects, so of course once KIRA started to get some momentum they didn’t want to miss the opportunity. As an investor and strategic partner, NGC has been pretty hands on, especially when it comes to Chinese markets, connecting us to the right people.

Daniel Dal Bello
I would like to understand in a bit more detail some aspects of the token – which is ‘Kira Protocol Token’. Can you outline the key utilities of the token and the relationship with staking governance as you mentioned?

Milana Valmont
Governance controls every aspects of the network economy, KEX is the core of that economy. Whether it’s inflation or interest rates for staking other tokens defined in terms of staking KEX token, it’s governance that has full control over that. Because the more efficient they are at using those financial mechanisms provided, the easier it is to attract users to come to the network. Note that this space is extremely competitive and there is no simple algorithm that you can come up with to fascinate every single edge case.

Daniel Dal Bello
What is your total dollar amount you are targeting to raise and how will you be allocating the funds?

Milana Valmont
Our hardcap is $4M, in the public round we will be raising $400k, we sold out our private round already. We will create a whitelist for the public round so stay tuned for our announcement. All the funds will go into development, marketing, legal and market-making, like any other project pretty much. Our goal and budget is to ensure that we can create a self sustaining network that is controlled by the community and does not have to depend on development effort coming just from a single centralized party.

Raymond Reijnders
How are you planning to create developer awareness and interaction for the Kira platform? In the past we’ve seen many projects who wanted to have outside ‘independent’ developers involved. But outside of Ethereum and a few other projects this never really took off.

Milana Valmont
We will have our own on-chain contracting system, very similar to contracting in the real world that protects both employer and employee. Governance will be able to hire and incentivize developers on-chain, using community pool funds.

Raymond Reijnders
When could we expect to see the first IVO? Thank you!

Mateusz Grzelak
On-chain IVO requires MBPoS so it will be on of the first modules after that release, I would say around Q2-Q3 [2021].

Raymond Reijnders
How will this community fund be realized?

Milana Valmont
A portion of the block and fee rewards will be landing in the address controlled by the governance module. But, of course on-chain contracting will be possible to be used with any address so that individuals will be able to hire other individuals.

Daniel Dal Bello
Thanks for your time, we know you have a few other AMAs to get to today.

Milana Valmont
Sounds good Daniel, thank you for hosting us and for the original questions.

Mateusz Grzelak
Was great to have some new, well-thought through questions.

The text in this summary has been adapted to correct grammatical errors and for presentation purposes. We thank our guests Milana and Mateusz for joining us for this AMA. For more information on KIRA Network, visit https://interchain.exchange/.