It may have been our first Spaces event, but it certainly won't be our last; with over 1000 attendees and 200 questions, we can't wait to host the next one!
For those who missed it, you can listen below:
Or check out a breakdown of the top 10 questions:
We provide a full developer toolkit, which includes well-documented APIs so you can create and sign transactions as well as integration libraries in Python, Node, JS, and Java. This toolkit is something developers can pick up and start building on today. One thing we are missing is these repositories and "how-tos," so a big part of what we're going to be developing is a comprehensive developer ecosystem where people have the tools, guides, and resources available to allow them to build autonomously. It does take a bit of time, but building quickly is something we aim to do. Equally, it has to be high quality because we can't get something wrong when people are developing.
We have also been testing out how easy it is to build on the Qredo Network with several partners and the community. At the end of last year, we participated in the #BitcoinBankathon. We had many people coming together virtually and in-person building using Qredo, so the Bankathon was a bit of a test case. And we learned a lot, but most importantly, we discovered that we want to make the whole developer experience better, and we are working hard on improving that.
If you are interested in building on Qredo, you can contact us, and we can help as much as we can.
We have a token model with a circulating supply that is entirely predictable because we're a Proof of Stake protocol; we're not Proof of Work. So you know what has been minted, and you know in advance what is entering into supply. We have heard the concerns from the community, and at the moment, we are working on smoothing the distribution curve over the first two years. We've built the total to be mapped across 50 years, and the majority of the actual circulating supply enters the market in the first five years out of that one billion that's minted.
Understandably people see this as a large chunk of tokens entering the markets, we're conscious of that, but there is also a bit more context here: Investors are using us, accompanying us on this journey to decentralize the infrastructure, and a lot of these investors are institutions and power users in crypto. More than 80% of the tokens from the private sale are still with us, and we expect this to be the metric that will continue as tokens vest.
Additionally, we want to smooth that curve out, so we are looking at a few options that will dampen inflation and actively work on restructuring other elements. There will be more on this to come, but we are working on it. We believe, compared to other successful projects in crypto today, that our supply is increasing less aggressively. The supply has also increased less aggressively than the overall appreciation of our token price so far.
So we are building on some excellent fundamentals with long-term sustainability in mind. In addition, some products and services we're building will yield some serious value, for example, the protocol fees. Protocol fees will generate validator income. That validator income will be used to buy back Qredo on the market. The launch of that will have a material impact on critical demand in the market.
Excellent question because one of the benefits of having your assets custodied and settled within the Network is that you can do much more with those assets. Instead of sitting in different places, you have them all in one ecosystem, which means you can do more with them.
We've been exploring how to use the Network to settle loans. So can you borrow funds using the Layer 2 protocol? Can you lend funds using it?
The answer is yes. We're able to use our Layer 2 network to settle the movement of assets associated with borrowing and lending. In addition to this, we are doing very complex things across various counterparties. You'll be able to read your exchange balance, figure out the kind of assets that you're using to collateralize that position, and take out additional credit based on the collateral that's available to you. And we aren't building this all ourselves, we are building it with the community.
Two months ago, we announced our partnership with X-Margin, and these guys are the gold standard in building borrowing and lending technology that is on-chain first and blockchain first. We're working with X-Margin on some borrowing and lending functionalities for institutional investors, but we're going to apply this to retail investors as well. There are a few things you can expect. You'll be able to take out credit from existing DeFi protocols and settle those directly from your Qredo account. You'll also be able to use Qredo Network to settle the borrowing and lending relationships you have.
We did a CoinList sale last year, and one thing they do very well is getting your token into as many hands as possible. We enjoyed that process of building our initial community and picking up people from different communities and walks of life. You name it — from Turkey to Russia, to the Philippines and Indonesia — we've got a local language community there.
So for us, retail investors are one of our most important stakeholders. Initially, we built the product for institutions, so it isn't as intuitive as some other retail-first solutions when you use the Qredo web-based app and mobile signing app. One of the things we're working on is building a much more user-friendly product for retail. We want to reward retail investors in the long term with a better product experience.
We're not only going to try to reward people with better products, but we're also going to try to do it with our underlying tokenomics: If you hold assets on Qredo Network when the custody mining and validator program goes live, custody mining rewards kick in. So if you hold assets in your Qredo Wallet, there will be some reward on a weekly or monthly basis (a bit like an airdrop) that will reward you for holding assets in your self-custodial crypto wallet.
In addition, we have the launch of the Liquidity Hub, which will allow people to compete with the big boys. You'll be able to provide liquidity on the same terms with no one snooping on your transactions, no frontrunners lurking in the mempool — in a way that is privacy first.
You'll be able to do that just as some of the most prominent players on Qredo Network can, without them having any advantage over you.
This will attract liquidity mining, which applies to everyone that uses the Network as a liquidity provider. For example, if you are providing liquidity to a cross-chain swap pair, you're going to get a rebate, and you're going to get a reward as well. Various reward mechanisms will be available to everyone, even if you're a retail investor or retail token holder. It is just the beginning, and we can't emphasize enough how important the original retail investors are to us.
We are fortunate enough to be invested in by some exchanges, so one of our long-term plans is to change the way you trade on centralized exchanges.
Today, if you want to trade on a centralized exchange, you must move your assets to that exchange. One of the things people love about DeFi is that you can hold your assets, you can connect your crypto wallet, and trade in DeFi, but you don’t always get the best price. What we’re trying to do, and have demonstrated can be done successfully, is enabling the ability to have a self custodial crypto wallet on Qredo Network that you link to an exchange. This will essentially allow you to open trades using the collateral you’ve got in that self-custodial wallet, but you won’t have to move the funds out of the crypto wallet to the exchange. So you save all the fees that come with moving assets from your wallet to an exchange wallet.
The exchange has to be able to get funds from you when something is due or your position gets liquidated, and they want to be able to sweep the assets out like a direct debit. So using the Layer 2 settlement network, the exchange will sweep assets out of that crypto wallet if, for example, a liquidation event occurs. Still, at all times, until this happens, you’re holding your assets in your self-custodial wallet. We’re trying to completely strip out the time and the costs associated with moving assets around different Layer 1s and make everything settled between the user and the exchange all done on Layer 2.
And that Layer 2 can settle anything. We can settle NFTs, and we can move all the integrated crypto assets that we have across the Layer 2 network. So to answer your question, yes, we’ve built it, it’s ready to go. One thing that takes time is getting an exchange comfortable with this because it’s never been done before. People have different solutions to this, but we’re trying to essentially let the blockchain speak for itself and let people settle transactions when they need to settle. Until then, the assets don’t need to move, they can stay in your self-custodial wallet.
In theory, huge. If we had this conversation a year ago, I think we would all question whether government-backed stable coins, nation-backed stablecoins, central bank-backed, or issued stable coins would even happen. And I think now we're all at a stage where we know it's going to happen; it's not if it's when.
It will happen very soon because people see the rollout of the electronic yuan in China and how this digital cash will be beneficial across commerce and peer-to-peer payments. But what people don't want is something that is as controlled as that, and I think many governments are figuring out what the right approach is.
And when they make a central-backed digital currency, it will need to be custodied, it will need to be settled, and it will need to be transferred across the ecosystem. And how they will do that efficiently depends on which blockchain they launch on. For example, if they launch on Ethereum, gas still becomes a problem. They will want a solution that will allow them to hold and move that asset within a Layer 2 settlement network that is also compatible with scalability solutions. We think what Arbitrum, Optimism, and StarkWare are doing is fantastic, and we want to provide value by producing this meta-layer that can settle transactions.
The CBDCs coming out will still need all the tooling that other crypto assets need. How these look and feel and their issues are still unknown, but it is happening soon. And we are well-placed to provide infrastructure for that. Whether it's a bank, asset manager, or retail app, there's a solution we'll be able to offer, and that core solution all comes down to custody and settlement.
Q7. The adoption of Qredo this year will be undoubtedly a fact. Is there anything to be announced? (@ChannelSpray)
It takes time to send a message like ours. When you say to people, we are decentralizing custody and settlement, they often think, why would you decentralize custody?
But instead of putting yourself in the hands of one single entity holding everyone's funds, you remove the risk by decentralizing custody. That's the mission we're on, and it's taken some time to sell that message.
Everyone is now seeing that decentralized distributed systems are the way forward. This year, we've already seen adoption from the sheer amount of deposits we've had on the network so overall adoption will be quite something. We've been working with MetaMask Institutional for a long time, and the amount of momentum that we see in our integration is phenomenal: The number of assets flowing through our crypto wallets, generating fees for the network, and the number of inbound customers that we have looking to access DeFi through our tools is really something.
Is there anything to be announced? I'm not going to answer this question, but there's a hell of a lot of things to be announced very soon. So if you could have a little bit of patience, we will have multiple announcements coming on several significant things happening from a product perspective and a broader ecosystem perspective.
The way the buyback scheme works is like this: The network is underpinned by validators, and when the validators generate income on the network, initiates a buyback of tokens.
And the way that the network monetizes itself, is that every time there is a transaction on the network (i.e. an asset leaves the network or a wallet), that asset is charged half a basis point of the notional amount: Half a basis point gets taken out of the asset that moves.
For example, if bitcoin is settled across Qredo Network, half a basis point is taken out of that bitcoin. So the protocol ends up generating all these Layer 1 fees, and it then instructs the validators (on a random basis to prevent gamification) to buy back Qredo on the open market.
So, that buy pressure of validator buybacks is directly connected to the network's income. And the Qredo tokens that are bought on the secondary markets then get automatically staked for a period of time — there's a lock-up associated with them. This is something that we will be covering in greater detail soon, so people know how it works and can understand the demand incentives that this creates.
We're building on several fronts as a network and as a company. We're well over 100 people, and within the next couple of months, we will most likely be at about 150 people across various teams.
Sometimes, it takes longer for us to build than we expected, and we need more hands on deck. So building the team, making it bigger, getting some great talent in is a big priority. In addition to that, we're building the fundamentals for Qredo. We're building a coalition, and speaking with a number of the largest businesses in the space looking to support efforts like this. I can't say who's in the coalition yet, but It will be announced, and it will be a fairly pleasant surprise to many of you.
This coalition marks the beginning of this relentless building phase that we're doing with our partners on our own product. And there are all these different products and services that are coming out. We're constantly getting asked about Liquidity Hub and where it is. Well, we've built it, It's ready to go, and we can launch at any time. But we realized that we wanted to make it as useful as possible, and that it needs to have some kind of liquidity mechanism underpinning it. We want to be able to tap into existing liquidity sources, so it looks and feels a bit like a liquidity aggregator. That's what we're working on, which explains the delay, but it's going to be game-changing.
Liquidity Hub is only one of many different products we're bringing out this year. We've got a DeFi market access tool that we'll be integrating with a well-known market provider.
Meaning you'll be able to go from your secure self-custodial Qredo crypto wallet into DeFi using your mobile signing apps, like 2FA for DeFi.
That's coming in the next couple of months. And we've got some other exciting functionality coming on top of that. We are focusing on product, execution, and distribution as quickly as possible, and our product roadmap is the key focus for the next six months.
Today we have over 55,000 individual crypto wallets. These are used across Bitcoin, Ethereum, Qredo Token, and Algorand; we have a number of different wallet types. Based on the last month, we have 46,000 monthly active users. We have a significantly growing AUM in the billions.
We are also looking to release a Block Explorer in the coming months, giving people the ability to see what's happening in the network on-demand. If you're familiar with other protocol's block explorers, you will have seen all the friendly dashboards that show all the activity, such as the blocks being produced, how many people are using it, etc. We're going to make that data available so you can pull these figures autonomously.
We had such a good time hosting this AMA, and we look forward to seeing you all at the next one.
Big thank you to all those who submitted your questions, and a special shoutout to @QredoPerry for hopping on stage and chatting with the Qredo team.
Hopefully, this will be the first of many live AMAs to come, so be sure to stay in touch with us and keep your eyes open for the next one.
Thanks from everyone at Qredo!