Oct 31st,2018, Chaince CEO -Peter Wu conducted a two-hour live Q&A session in the Chinese Telegram group(https://t.me/chainceChinesegroup). The users were very enthusiastic and put forward a lot of constructive issues closely related to the benefits of the users, the development plan of Chaince, and the future of EOS ecology.
The AMA(Ask Me Anything) content is as follows:
First Part: Share from Peter
Good evening, dear Chaince users, thank you for coming to this sharing session.
The Chaince platform has witnessed ups and downs of the market since official launch in June. Over the past four months and more, dozens of team members have remained committed to improving the user experience of our platform according to the established strategies on the one hand, and watched closely the latest developments of the market and released the platform functions that could meet the newest demand of the market on the other hand. We really appreciate your support because it is the source power of our growth. Our team has made a series of plans for the future development of the platform. Today, I would like to share with you and interpret some of the plans under deployment. In the meanwhile, I am going to tell you my personal opinions on the whole market. Thank you.
My sharing today is divided into three parts. The first part is my personal analysis of current cryptocurrency market; the second part deals with my interpretations of future development plans of the Chaince platform, and I will talk about how to allocate personal assets at the current stage for your reference.
First of all, my analysis of the whole cryptocurrency market at the current stage.
In the cryptocurrency market, “stage” is a very important concept. Many friends believe that the cryptocurrency market is an emerging market with vast potential. I strongly agree with this judgment and firmly believe that the development of the cryptocurrency market will be lifted to a new high that we can’t imagine in the next three to five years. However, we need to recognize that this emerging market features a staged development. In regard to staged development, it not only refers to the alternation of the bullish and bearish markets, but more importantly, the development direction that looks promising varies at different stages of development. Some project types may be popular at the previous stage, but will be abandoned by the market at the new stage due to the proven lack of value. When we face thousands of projects in the market, we need to think about which projects can create value, which will be favored by the market in the future, and which are destined to be abandoned by the market for sticking to the old development ideas.
Personally, I think the cryptocurrency market goes through three development stages roughly.
The first stage is 2016 and earlier. At this stage, the concepts of bitcoin and blockchain were gradually spread, and the wealth storage and value transfer functions of cryptocurrency were increasingly recognized by the market. On a whole, cryptocurrency wrapped up the initial accumulation and growth of overall market cap, user base and transaction volume at this stage, while a solid foundation was laid for the subsequent boost of influence. Mining, as well as cryptocurrency transactions and payments combined with real-life scenarios were eye-catching at this stage. Although Ethereum was not noticed by the market at this stage, it has gradually grown to a nascent community of enthusiasts and developers in two to three years.
The second stage is 2017. At this stage, the market discovered a crucial function of Ethereum which could meet the financing demand of projects. This was followed by the great popularity of smart contracts, which triggered a boom of token public sale. According to the statistics of CoinDesk, the public sale of tokens raised more than $6 billion in 2017, while the total market cap of cryptocurrencies hit an all-time high. Also in the year, there were a large number of projects with huge valuations. This kind of explosive growth completely conformed to the market law. However, if the investors couldn’t remain equally enthusiastic with the continued development and popularity update of the projects, the projects would be usually trapped in a cyclical downward of price. Unfortunately, the inefficiency of the Ethereum is the major bottleneck for these projects to gain popularity through sustainable development. Ethereum has successfully caused a sensation of the market in 2017, but it couldn’t empower it further.
The third stage is the year 2018 we are in now. At this stage, the token public sale model overdrafts the active funds accumulated in the early period when the market enthusiasm was at its peak. Although this model is still going on, and public sales unprecedentedly raised more money in the first three months of 2018 than the whole of 2017, the overall liquidity is obviously trending down. In the early days when we created the Chaince platform, we have anticipated that the public sale model would become unsustainable from the second half of 2018, and any team in the hope of raising funds via public sale would embrace severe challenges. Along with this trend, Ethereum saw an evaporation of $51 billion in total market cap in 2018 (up to $113 billion if compared to the highest market cap). What’s even worse, the investors are gradually losing confidence in the Ethereum products due to the limitations of Ethereum’s public blockchain performance and its iterative solutions.
Opportunities always coexist with challenges in a market. While abandoning a concept, the market is also searing for another new concept. When the token
public sale model and Ethereum with the second largest market cap among the cryptocurrencies go into a decline, we should stay sensitive toward the market changes and think over the following two questions:
“Will the market remain as inactive as now?”
“If not, what will most likely liven up the market again?”
Different people may answer differently. You will get access to my answer at the home page of the Chaince platform.
In 2008, a developer published an essay titled Bitcoin: A Peer-to-Peer Electronic Cash System, in which bitcoin was mentioned for the first time. Since then, the industry development has experienced high tides and lows with the impact of the cycle. However, the blockchain industry with bitcoin as the initial form has a larger market development potential. Urgently, the industry needs to improve the efficiency of the public blockchain system. With the most scalable and application-oriented public blockchain system in place, EOS is playing the historic role of carrying the blockchain industry into the next stage for commercial-grade applications.
We can discuss EOS on many development dimensions. In my opinion, airdrop has the closest relationship with the holders. Just now, I have mentioned that the token public sale model is on a decline, but this doesn’t imply the stagnation of the blockchain project development. I made a judgment in a lecture five months ago — the mainstream token offering method will change from public sale to airdrop. This conclusion is drawn on the basis that there is a changing balance between supply and demand in the market, and such balance is shown by market prices. Compared with the active funds in the market in 2017, the blockchain projects were actually in relative scarcity, a key factor to the success of the public sale model. Following the flourishing trend of the blockchain industry ecology, more and more projects have kicked off and offered tokens. The increasing supply of tokens will lead to a new balance in the overall prices. Nowadays, the competition between projects is becoming increasingly fierce. To get more attention from the communities, the project parties have to pay higher cost and even conduct free airdrops to attract the users. In response to this new situation, the Chaince platform has set the objective of fully supporting the EOS holders to get airdrops. So far, we have already offered 21 airdrops for the EOS holders, which was even bigger than the number of airdrops that the wallet users get access to.
Although there are a lot of airdrops to get at this stage, many friends may feel uneasy about the long-flat market. What I want to say is that no matter whether the market is surging or flat, we must at least understand the reasons for the market performance. EOS has actually become popular at two time points. The first is at the beginning of the EOS initial token distribution, and the second is near the mainnet launch of EOS. We say that the token price performance of all blockchain projects is closely related to the popularity of the projects. It is not difficult to understand the reasons for EOS to become popular at the above-mentioned two points. What really matters is still the following two problems:
“Will the EOS market remain as inactive as now?”
“If not, what will most likely liven up the EOS market again?”
Different people may have different answers to these two questions. I think that it is the projects built on EOS that can ultimately reflect the business value of EOS. EOS is the best choice for public chain systems in the current blockchain world and has the ability to provide the most efficient infrastructure support for large-scale projects. In the future, once there emerges a large-scale commercial-grade blockchain project, we have good reason to believe that this commercial-grade blockchain project will choose EOS. And such project will very likely arouse a new round of enthusiasm with EOS. But I must remind you that the long-term confidence in EOS is often totally different from the anticipation of the short- and medium-term market trends. It takes a good chunk of time to research the business model of a project and develop a product, and we must wait patiently for the next opportunity. The so-called “wait” has nothing to do with the position, whether it is full position or short position. It is important that we understand the current market stage and maintain sufficient market sensitivity before the next market opportunity comes.
The second part： The Strategic Development Planning of Chaince
Two weeks ago，Chaince released the strategic development roadmap，which announced our plan in the next six months. The planned Chaince Labs was officially launched on Oct 29, 2018, and announced the first batch of 37 well-known institutions from China, Korea, and Japan as long-term partners, including EOS Cannon, EOSYS, HelloEOS, IMEOS, imToken, KOREOS, MEET.ONE, NEOPLY, TokenPost, Bitpie, Huoxing Caijing, Antpool, SlowMist Technology, Gravity, etc. Here I want to explain to you first: what’s the significance of Chaince Labs?
An important competency of Chaince team is its sensitivity to project information. Since we announced the establishment of a superior trading platform, we have placed great emphasis on the source and sorting of EOS project information. From the founding of Chaince to present, we have sourced all the EOS ecological projects available on the market, and analyzed most of them. For projects that decided to list on Chaince, we will further disclose detailed project information to users through official announcements, WeChat official account, community, and other channels. Chaince is also the first to initiate “Choice of Chaince“ module，which only select high-quality EOS projects that can be listed on Chaince and provide detailed report for these projects. When the project report is published, it will also be released on the platform of Bitpie, imToken and KOREOS, ect. since we have built a cooperation with these parties. We have established two principles：the first principle is not to miss any valuable project； the second is to cooperate with outstanding project parties in the first place. Under the guidance of these two principles, we have listed world premiere project — — Everipedia, a well-known project invested by EOS.IO Ecosystem Fund and its trading volume on Chaince exceeded 20 times of that on Bitfinex for a long time. Chaince has also reached an exclusive cooperation with South Korea’s media content protocol platform Publyto and entered into product launch partnership with BancorX and will conduct more business cooperation with it. While reaching cooperation with projects that can be sourced through public information, we are also fully engaged in a series of very promising undisclosed projects. What we know better than other teams is that the real value of the EOS ecosystem comes from projects developed on this platform in the future. To dig out these projects at the first time is the mission of Chaince.
Chaince Labs is not a project incubator. Instead, we are devoted to connecting project teams at the forefront of the EOS ecosystem with top institutions in all sectors of the industry to achieve long-term cooperation in industry resources. The significance of Chaince Labs is divided into two aspects: the first is to provide comprehensive and long-term industry support for excellent EOS project teams to promote early outbreak of EOS ecology, and let EOS form network effect as soon as possible during the time when Ethereum did not perform well and EOS is lack of competitors to become the most valuable public chain; the second is to let the Chaince team expand more promising projects based on the existing project advantages, and help Chaince users continuously access to excellent EOS ecology projects in the first place in the future.
In our roadmap, there is a more important plan, which is to introduce the high-performance on-chain processing system that combines the advantage of pending order depth of centralized trading platform and the convenience of decentralized platform, and supports Scatter and mainstream EOS wallet login and transaction. I mentioned in many previous speeches that I believe that both the centralized trading platform and the decentralized trading platform have their own advantages in user experience. Many users asked us how we view the competitive situation of more and more decentralized trading platforms in the EOS ecosystem. I can announce our answer today: we will not develop or acquire any independent decentralized trading platform. Instead, we will integrate the advantages of the decentralized trading platform into the product experience of the Chaince platform. More importantly, sharing transaction depth between the two systems will completely improve the overall product experience. We are very confident that we will be able to overcome a series of technical obstacles in the next one to two quarters and launch flagship products that will lead the industry.
The development positioning of Chaince is to maintain the industry leading position in both project capture and product experience. On this basis, we will continue to accumulate industry resources and transform our previous accumulation into strong profitability when the market timing is right. This development model is closely related to the industry characteristics of the cryptocurrency trading platform itself. If a trading platform wants to succeed when market opportunities come, it will be necessary to patiently maintain its influence ，pre-judge the market demand and improve and perfect product functions in advance in a long-term bear phase. This principle is easy to understand but hard to act. However, the core members of Chaince have the experience of operating the cryptocurrency trading platform with the world’s largest transaction volume a year ago; and the team is even more clear how to make a platform significantly spend the long-term bear market. The previous experience of getting rid of the difficulties in bear market is our exclusive advantage over other teams.
In addition, I am sure that everyone is very concerned about the new equity statement of CET. I will explain it to you today. First, every month，we will use 51% of our one-way EOS transaction fees (i.e. the EOS transaction fees deducted from the platform when users sell other blockchain assets and buy EOS) and 51% of the one-way EOS transaction fees in the subsequent decentralized transaction module to repurchase and destroy CET. The function of staking CET tokens and receiving the corresponding EOS will be cancelled accordingly. The EOS in the existing pool of funds will all be used for buying back and destroying CET. The implementation of this mechanism is based on the following two considerations：
First, the CET was mainly distributed to EOS token holders through airdrop, so there is a large amount of CET tokens outside of Chaince platform, which will decrease the value support of active CET in Chaince platform. From an economic point of view, adjusting the CET mechanism to token repurchase model will directly assign platform revenue to active CET token holders.
Second, since the Chaince platform will launch a decentralized trading function, this module will also generate corresponding fees income. Combining this part of fees with fees generated by existing centralized trading function to buy back CET in the market will assign value to CET. It is a more concise mechanism and is more clear and understandable for Chaince users.
The account achievement system is a very interesting mechanism that we will launch later. In the account achievement system, CET holders can gain plenty of account experience and improve their account levels permanently. The higher the account level, the richer the permanent rights, including the transaction fee reduction ratio and the airdrop ratio. The Chaince platform will continue to distribute airdrop tokens to CET holders in the platform in various forms. Every airdrop for CET holders is actually a big proportion. For example, in the last cooperative airdrop project, the ratio of airdrops issued to CET holders is more than ten times that of EOS holders. In the long run, CET holders will gain more benefits.
The third part: Personal Asset Allocation in Current Stag
Regarding the allocation of personal assets, this topic goes actually beyond the blockchain industry. As investors, we need to look at the economic situation we are in now with a more macro perspective and spend more time thinking about how to make responsible investment decisions responsibly.
There are many unstable factors in the overall economic situation in 2018. The trade war between China and the US, the largest trade war in economic history to date, is the most important event affecting our current and future economic situation. In March of this year, the US President instructed the US trade representative to impose tariffs on Chinese imports involving 60 billion U.S. dollars, which was the beginning of this trade war. Since then, the situation has been escalated and intensified step by step. The speech of US Vice President Mike Pence at the Hudson Institute in October revealed that this trade war not only stems from the trade friction between the two sides in the economic field, but also indicates that the two sides may engage in confrontation in a series of fields in the future.
This economic situation is closely related to the lives of each of us, especially the performance of our future assets. I personally will be cautious about participating in the stock market and real estate investment in the affected areas during this time. I also suggest that you pay close attention to the foreign exchange risk of the relevant currencies.
As for the cryptocurrencies, what I want to say is that, historically, as a cryptocurrency with wealth storage and value transfer functions in the new era， Bitcoin，rather than losing its popularity among the market participants，is becoming more important for its continuously increasing influence and its function of fund transferring. Today, Bitcoin has been closely related to the overall political and economic situation in the world, and will undoubtedly continue to expand its influence to traditional industries and funds. When the political and economic situation changes dramatically, Bitcoin may be sold in the initial stage by some investors or miners who have suffered from the crisis, but no one knows when there will be a sudden large amount of capital inflows, making Bitcoin performs well.
Besides, the Chaince platform will also open the USDT Markets, allowing our users not only to enjoy EOS airdrop benefits, but also to obtain more safe-haven options when the market fluctuates.
That’s all for my sharing today. Thank you everyone！Next, you can ask me some questions.
Second Part: Q&A
Q1: Will decentralized exchanges replace centralized exchanges in the future? As a centralized exchange, does Chaince have any countermeasures to stand out in the fierce competition?
Peter: Decentralized exchanges and centralized exchanges each have their own advantages in user experience. For example, decentralized exchanges need no registration and users can log in and trade directly with their wallets. This kind of experience was not prominent on the Ethereum public chain previously, but it showed convenience on the EOS system now. While centralized exchanges have the advantages of API trading, transaction depth, project and market operations, which cannot be replaced by decentralized exchanges. In the first quarter of next year, Chaince will launch a decentralized module that supports Scatter and mainstream EOS wallet login and transactions. Most importantly, this module will share transaction depth with existing centralized system, which will greatly improve users’ trading experience.
Q2: The PUBLYTO project from South Korea has attracted a lot of attention recently. How does Mr. Wu think about the development prospects of this project?
Peter: Personally, I am very optimistic about the development prospects of PUBLYTO. It can be said that PUBLYTO is one of the most competitive projects in the current EOS ecosystem. The PUBLYTO project team is very professional, and we can feel their determination to do a good job in the communication process. I suggest that you pay more attention to this Korean project. I believe that you will see a series of exciting progress in this project in the future.
Q3: What are the differences between the token repurchase and destroy mechanism you proposed today and the previous token mechanism? What’s the advantage of the new mechanism over the previous one？
Peter: The previous model was；stake CET and receive EOS. Initially, we distributed CET to EOS holders through airdrop, the problem is that quite a lot of CET tokens are distributed to some inactive accounts forever, without being converted into Chaince platform users. although all EOS holders have contributed to the entire ecosystem, we must focus on existing platform supporters when designing and modifying platform mechanisms. By repurchasing CET directly from the CET/EOS trading pair in the platform, the platform revenue can be directly shared to Chaine active users. In addition, we will launch a new decentralized trading module in the next quarter. 51% of EOS transaction fees in this module will also be used for repurchasing CET.
Q4: How do you think about the gaming projects which is very hot recently？What about the tokens these projects issued?
Peter: The economic incentive model of tokens issued by gaming projects and trading platform tokens which is very hot previously are the same in essence: mining with low-cost in the early stage → profit increased with more users participated →the early users quit game through big dump after making a lot profit → market cap collapse finally.
Q5: Mr. Wu，can you introduce the account achievement system?
Peter: The point of this system is to encourage users to continuously use the platform’s services to upgrade their account level and obtain various benefits permanently, such as fee reduction, additional airdrop rights, etc., This system will be exquisitely designed to enhance retention rate of new users.
Q6: Hello Mr. Wu, which field of EOS are you more optimistic about?
Peter: The positioning of the public chain system itself is a decentralization project serving various market sectors. The development of DAPP is the sole mission of EOS. As for DAPP, for example, Everipedia is positioned as an encyclopedia incentivized with tokens that everyone can participate; PUBLYTO is positioned as a tokenized media protocol platform. Personally, I am optimistic about projects with reliable team, reasonable business model and large market potential. It’s not limited to a specific field.
Q7: Will Chaince cooperate with third-party rating agencies (such as Dprating, etc.) to select high-quality airdrop projects in the future？ Or is it possible for Chaince to rate airdrop projects by yourself?
Peter: We will sort out all relevant project evaluation information before we list a project. The current situation is that the influence of EOS is still expanding, and the projects in the ecology have not attracted enough attention from rating agencies. As a third-party trading platform, it is not convenient for Chaince to directly participate in the project rating, but will provide you with a very comprehensive and detailed project information summary and report, and the relevant pages will be online.
Q8: I feel that we should find a balance between stable and radical.
Peter: This is my answer to project listing standard. We will balance the market situation and the quality of the project to determine whether to list the project or not. First, we will actively cooperate with the project teams；second, we will not irresponsibly list all the projects since many projects have nothing but a token name；finally, after the decentralized trading module launched, the listing standard will be more relaxed.
Q9: Will you let CET holders “vote for listing” on Chaince platformin the future?
Peter: Our team have discussed internally about this scheme. Since it involves the development of the back-end system, the “Vote for Listing” function has a lower than the decentralized trading module, so it has not been included in the development plan.
Q10: If Huobi，Binance and OKEX also open the EOS markets in the future, how will you deal with that?
Peter: Honestly speaking, many exchanges have not paid enough attention to the EOS ecosystem. Chaince will formulate and implement project operation principles and establish a solid project cooperation channel. These are also the key value that Chaince Labs can play.
Q11: Hello Mr. Wu, do you think which is more important for an exchange — — list more projects or select hi-quality projects？” Choice of Chaince” select high quality projects, but is it possible to miss other potential quality projects？ The main function of the exchange should be to focus on the “transaction”, whether an “inferior” project with market demand cannot be listed on Chaince? Such as gaming DAPPs which is very popular recently.
Peter: In terms of listing of projects, in fact, we are not adhering to an idealized principle, but actually analyzing the direct and indirect impact of the project on the trading platform and users. For example: For Chaince, is it good or bad to list all tokens issued on EOS？ “The function of the trading platform is to list projects, the risk should be left to the user to control, and you should trust the user’s rational judgment “ “The trading platform must be responsible, and the project lacking landing ability should not be listed.” The idealized principles above have great blindness and limitations when making specific business decisions. My point is that: List all tokens in EOS ecology is not good for both trading platforms and users. The reason is that when a trading platform list a project, there are two effects on the platform: one is the drainage effect; the other is the blood-loss effect.
The drainage effect means that people who are concerned about the project may become users of the trading platform and use services provided by this platform; the blood-loss effect means that some irresponsible project parties may maliciously sell their tokens and exit the market forever. Therefore, the responsible policy of the trading platform should be； evaluate both positive and negative factors for each project and make decisions that are beneficial to every investor.
Above all is the content of this live Q&A, if you want to know more, contact us:
Chaince Labs Cooperation: [email protected]
Token-List cooperation: [email protected]
Telegram Group(EN): https://t.me/chaince_foreign_group
Telegram Group(CN): https://t.me/chainceChinesegroup
Telegram Group(KR): https://t.me/chaincegroup
Official Website: https://chaince.com