Welcome to Recap AMA IgniteCrypto & Chemix Ecology #AMASeries
On 17 September, 2021, Ignite Crypto and Chemix Ecology got together to host an Ask me Anything (AMA) chat with the community. The following is a summary of the content of the entire AMA
Admin: Now, Mr. David Lei, please simply make a self-introduction first!
Daivd Lei: Hello, I am David. I have been working in crypto world for over 3 years. The first crypto project I joined is named ForTube, and I acted as co-founder. I developed the architecture of the QIAN protocol after I became independent from the ForTube team in 2020. With the support of the community developers, the QIAN protocol has completed the upgrating from V1 to V2, and the V2 version is named Chemix ecology.
Let’s Move Part 1: Online interview,a total of 10 questions let everyone know more about Chemix.
Admin: Question 1. Could you tell us about the origin of the name Chemix ecology, which sounds like the name of a chemical laboratory?
Daivd Lei: Sure. The name of Chemix Ecology is derived from the Chemical reaction, which corresponds to the core business of the synthetic assets.
Chemix Ecology has different parts, take Chemix Labs for example, the goal of Chemix Labs is to establish a scalable, distributed, algorithm-adjusted synthetic asset management system. Its advantage is the improvement of user’s capital utilization and a stable arbitrage mechanism through real-time operations as minting, redemption, buyback and recollateralization
Admin: Question 2. We found that QSD, an algorithmic stablecoin minted on chemix, has a long-term price of 1:1 anchored to the US dollar, but the mechanism is different from that of MakerDAO. How did it to that ?
Daivd Lei: QSD (QIAN Second Dollar) is the first fractional-algorithm-based dollar stable cryptocurrency issued by Chemix ecology. You can also find another type of synthetic asset to be recently launched — cKAVA, which will be introduced later.
The core mechanism of QSD adopts the idea of “partial mortgage” and “algorithm adjustment”, that is, the value of QSD is supported by the pledge of certain assets and the burning of algorithm token (Chemix governance token named KUN), which is different from the idea of excess mortgage rate. This mechanism can effectively improve the utilization rate and absorption capacity of funds. Based on incentives of Chemix ecology Mint and Redemption, QSD can closely anchor the dollar price in the market.
Chemix Labs is inspired by Frax protocol, and we also learned a lot from the incidents of Iron Finance and Pegs. For example, we designed a token called KBT (KUN Buffring token) on the anti-dump-to-zero mechanism. Our project token is called KUN, and KBT is KUN’s buffering token.
With tokens like KBT, users get KBT first when redeeming. However, KBT can only be converted into KUN under certain circumstances. And of course, KBT has always been one-to-one correspondence with KUN.
When the project is fully collateralized and the price of the synthetic asset QSD is above the anchor price, we believe that the system is in a healthy state, then our system allows users to convert KBT into KUN under such conditions.
In addition, when the system is in a healthy state, some people will buy KUN for the operation of assets synthetizing, which creates a dynamic balance between selling and purchasing. Therefore, we have a mechanism that truly originates from the market, which provides a guarantee to eliminate the risk of dump-to-zero.
On the other hand, in Chemix’s minting system, QSD and US Dollar are anchored at 1:1 by default. If there are price fluctuations on Pancake or other dex, DeFi players can make arbitrage between Chemix and the Dex. Furthermore, we provide long-term liquidity farming incentives to attract more funds to be deposited in the staking/farming pool, which in turn will make the expansion and stability of the upper-level synthetic assets better.
Admin: Question 3: We found the new version official website and some changes of Chemix Ecology. What will be the key dev roadmap ?
Daivd Lei: Chemix Labs (synthesis market), Chemix Launchpad (a link between primary market and open market) and Chemix NFT (treasure and further rights) are now available.
We plan to establish a listing based spot trading decentralized market within weeks for all the synths from Chemix Labs in the future
Admin: Question 4. Following the contents mentioned by David just now, where can DeFi players carry out Chemix-related liquidity farming now?
Daivd Lei: There are two platforms, namely Chemix.io and DODOex.
There is a staking page on Chemix Labs official website. Users can first go to Pancakeswap or DODO to get LP tokens (Binance Smart Chain and Arbitrum), and then get KUN by staking and locking LP on Chemix staking page.
Liquidity farming for QSD/USDC and KUN/USDC are to be launched on DODO (Arbitrum) in days. KUN/BUSD trading pairs are now farmable on DODO BSC version. In the future, we will establish more liquidity cooperation on BSC and Arbitrum.
Admin: Question 5. This year, we witnessed the outbreak and growth of defi, and meanwhile experienced many hacking incidents. It is a good thing that users can control their own assets, but it should be very serious when encountering contract vulnerability. I heard that Chemix was also attached and stolen in 2021Q2?
Daivd Lei: I have to say yes. Chemix Labs has passed code audits, but there was still an incident of hackers stealing pledged assets on May 14, 2021, with a loss of approximately $900,000. The related vulnerabilities have been fixed after that and passed CertiK’s emergency audit. We still don’t know why CertiK’s audit didn’t find out that vulnerability.
In response to the risks of such incidents, we will introduce more preventive measures in the follow-up, including but not limited to introduce more audit institutions, regular code self-inspection, and bug bounty programs.
Admin: Question 6. Let’s talk about the Chemix Launchpad that everyone is very interested in. What are the differences and advantages compared to other launchpads?
Daivd Lei: Chemix Launchpad is a new product developed by Chemix Labs community. It provides on-chain-minted synthetic assets to release the liquidity of locked assets. The most outstanding difference between Chemix Launchpad and other launchpads is the combination of Labs, Launchpad and Exchange in Chemix Ecology.
Yes, but in Chemix Launchpad, there are not only incubate of potential projects but more valuable functions. For example, users can “shadow” locked assets on chain (such as locked private-sale tokens, etc.) through the Chemix Labs system, the most valuable assets will be choosen by Launchpad team to go public, remaining assets can be exchanged in Chemix Ex in the near future.
To get more value flow from assets liquidity, the asset issuer could mint synthetic assets as their willing for sale, only by pledging assets such as QSD and KUN at a certain ratio.
On the other hand, participants could obtain those assets which may be hard to get in traditional OTC markets at a good price during auction, all process is backed by smart contract that reduced risk from people.
In the long run, some real-world’s assets can also be minted, issued, and synthesized on Chemix Launchpad through certain procedures.
Admin: Question 7. So how can we participate in Chemix Launchpad?
Daivd Lei: You can follow us on Twitter, medium, telegram, official website and other channels. In these media, you can see the detailed rules of participation, such as holding some QSD/BUSD LP tokens or KUN, applying KYC/AML verification, etc.
Admin: Question 8. How do participants make profits?
Haha, if you don’t miss the upcoming auctions on Chemix Launchpad, you will be rich. For example, the last 2 auctions of synthetic assets on Launchpad were KAVA and MASK projects, which under Dutch Auctions mode. The price drops over time, and the participants had obtained synthetic assets at low cost than market, and then earned price difference by selling them in any secondary market.
Of course, every investment has potential risk, you need to do some research before you took part in the auctions. You can find project details on auction introduction page.
Admin: Question 9. Okay, let’s continue to discuss about the synthetic assets protocol. I know that there are some successful synthetic asset protocol on Ethereum and other ecosystems, such as Synthetix, Mirror, etc. Do you think Chemix will surpass them?
Daivd Lei: At present, the synthetic asset such as QSD is operating very well, and there is no significant price fluctuation or unilateral drop. It is proved by market performance that we create a reliable protocol.
In the future, we will launch more different synthetic assets such as the ones related to real world objects, compound index, etc.
In the end, we hope to have business cooperation with the decentralized derivatives protocols on BSC, Ethereum and other public blockchains such as Arbitrum.
There are needs of improvement for current synthetic assets projects.
For example, Synthetix, one of the most famous synthetic asset project, operates at very high collateral rates using the token SNX. Synthetix has also built an exchange itself, which means that you can trade the synthetic assets in its own system. Synthetix has already made a mature business framework on synthetic assets. And most of the synthetic asset protocols coming out later are improved based on this framework.
Some people think SNX plays like a Ponzi scheme at its early stage. Why? SNX is not a hard crypto-currency like Bitcoin but another air token that nobody knows from the beginning. Later, its mechanism was proved very powerful and could be self-driven, so the price of SNX continuously raised and became a mainstream crypto token. This is the story of SNX.
As we looked back to it’s development today, the flaws of SNX are obvious, because you don’t know when SNX token will crash. If it does, it will crash faster than Ethereum. First of all, SNX has implemented a high collateral ratio from 550% to 800% in order to prevent trust defects, to assure everyone that the system is safe due to such a high ratio.
However, this raises a problem, that is, in terms of economics, with such a high collateral ratio, its capital utilization efficiency is extremely low, so this is a need worthy of improvement.
Secondly, why can’t users use stablecoins USDC, BUSD or USDT as collaterals for synthetic assets, and do they have to use only SNX? This means that we need better mainstream assets as the underlying collateral for synthetic assets, but the Synthetix mechanism is not suitable for this, so some evoluated projects appeared later.
Another example is Mirror, which is relatively popular recently, which allows you to use USD anchored stable currency UST as collateral, with a collateral ratio from 150% to 200%. The utilization rate is higher than that of Synthetix.
But there is another problem in Mirror protocol: Mirror still has not led a strong mainstream currency into the system, the MIR token is a governance token, and the value of the protocol that can be absorbed is relatively small.
It is a major contradiction to allow the tokens of the project itself to have a strong value capture ability, while at the same time being able to absorb mainstream assets as the underlying collateral.
To sum up what I just meant:
First, users can use mainstream assets, especially stable currency and low-volatility assets, to participate in synthetic assets minting. The legal currency is relatively easy to obtain, so you can take out the US dollar and use the stable currency representing the legal currency as the collateral asset, which has a strong endorsement ability for the protocol.
Second, this mechanism allows the project’s native/governance token to participate in the process of asset synthesis. Why our project is called Chemix Labs? As I just mentioned, the name comes from the chemical reaction. For example, if you combine BUSD and KUN with a certain ratio, a new USD stablecoin named QSD will be generated after the chemical reaction. This is a simple example of how our protocol works.
Admin: Question 10. We heard that Chemix ecology is to be integrated to Arbitrum(Layer2 network of Ethereum) soon, isn’t it ?
Daivd Lei: Yes, Arbitrum. Chemix Labs is already deployed on Arbitrum main network, and KUN is listed on Arbitrum official bridge service.
Everyone can move their KUN token from Ethereum L1 to Arbitrum network now. We care about security very much, so KUN is now not listed on other 3rd party bridge service than Arbitrum bridge.
As an Ethereum Layer 2 solution, Arbitrum provides a more friendly environment for non-whale players. We have established cooperation with some top projects such as Chainlink, DODO and MCDEX. Liquidity farming is now open for public on Chemix Labs Arbitrum version, which I mentioned above.
Part 3: Quiz Time
1. Q1: What is the abbreviation of the governance token of Chemix ecology?
2. Q2: Please introduce and summarize in one sentence what is Chemix ecology?
Synthetic Asset Protocol
3. Q3: which networks are currently Chemix ecology available on?
BSC/Binance Smart Chain and Arbitrum (Layer 2 on Ethereum)
4. Q4: What assets can be used when synthesizing QSD on chemix.io?
ETH, USDC, WBTC and KUN on Ethereum and Arbitrum; BUSD, USDT, BNB, CAKE, FIL and KUN on BSC.
5. Q5: what is the role of KBT in system of Chemix ecology?
The buffer(slow-release) protection mechanism effectively prevents the price of synthetic assets from falling out of anchor.
6. Q6: what is the latest synthetic asset on Chemix launchpad?
7. Q7: What is the synthesis mechanism of cKAVA?
QSD and KUN pledged by issuer and KAVA delivered on/ahead of a distribution date
8. Q8: is there a way to transfer KUN on BSC to Arbitrum?
Official bridge on chemix.io then through Arbitrum bridge
9. Q9: where can we get KUN at present?
Farming/Staking on Chemix.io, DODO, or swap on DEX such as Pancakeswap and DODO; KUN also listed on CEX, CoinEX and Hotbit.
10. what is the next auction on Chemix Launchpad?
Don’t forget to follow Chemix Ecology on their official channels for the latest news and promotions you don’t want to miss out!
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