AMA Live Session #3: Recap

  • 17
  • 1
  • 2019-06-19 16:57:25

Dear X-Network community,

Thanks a lot for participating to our latest AMA session! We have had a lot of participation, it was truly exciting to talk with you.

For those who weren’t able to be there, we have prepared a transcript of the questions from the community.

→ Are there strategic partnerships with companies outside crypto but not yet public knowledge?

We are part of a program from the INPI (National Institute of Industrial Property) to assist startups in protecting their intellectual property. We have initiated contacts with some companies but as the products are still in the development phase we have not signed nor are looking for additional partnerships.

→ What is the future marketing strategy for X-Network?

It is important to differentiate two different marketing actions here: the cryptocurrency (XCASH) and the company (X-Network).

From a cryptocurrency point of view, we have provided new services in the past few months (X-Bank and newly implemented X-Payment), enabling better managing of XCASH holdings, and a broader adoption with the integration on Discord. We are planning on onboarding X-Payment on other Discord communities to enable value interaction within ecosystems outside X-Network. This will bring visibility to X-Cash and a clear use case, enabling more people to join the airdrop and be included in our community.

On the company side, we are going to as many relevant events as we can. We have been to a Blockchain Summit in Malta and in Austria, we have organized a conference with DragonChain in Paris, and we are planning to do much more. We have other events planned, and we will be able to share our progress at another blockchain event hopefully!

→ What is the status of the integration between X-Network services?
In the last two months, we have gone through a significant reorganization of our pipeline of products to have a better coherence and make them more distinct. This also led to an internal reorganization with product owners and clear pipelines of development.

The initial strategy has been to develop the products separately to speed up the development and deliver MVP (Minimum Viable Products). This is now the case as X-Cash, X-Bank and X-Payment are all in production mode. While X-Bank and X-Payment already rely on X-Cash, we are now initiating a phase of convergence and harmonization with the inclusion of X-Payment into X-Bank.

→ Do you already have clients who will use X-Payment for Discord?

X-Payment is still mostly in the development phase with limited features released to the public. We have started to review the potential communities that could use it in order to be ready to accelerate once the communities onboarding feature is released. At this point, we will start contacting them progressively while also offering it to our user base.

However, we can say that at the time of writing we are in the process of onboarding X-Payment into another server.

→ How X-CASH will be used as a form of the payment system? Will it be used for global remittances?
With the use of sidechains, Remittance would be a perfect use case for X-Cash technology. Based on how X-Payment will be used and evolve, we will consider adding such a feature.

→Why should I become a delegate? What are the benefits?
We can distinguish three major benefits from being elected delegate:
- Staking: the emission structure will remain the same under dPoS and therefore the delegates will receive the proceed from the “mining” process;
- Voting: we are currently designing a voting system where delegates and users will be able to vote for proposals. This means that as a delegate you will be asked to take part in some of the decision making processes;
- Sidechains: the longterm goal of having a dPoS Network is to allow delegates to operate sidechains. These sidechains will be either directly linked to the mainnet of X-Cash to allow further scalability or be dedicated for a specific client/need.

→ How can I continue to earn XCASH with dPoS?
By continue, you probably imply that you already earning X-Cash under PoW through mining. Since all the generated supply from the PoW mechanism will be translated into the dPoS, this means that to keep on mining you will need to use your stake to vote for a delegate which in turn will reward you in a similar process as it’s currently done in the mining pools.

→ When will the switch to dPoS occur?
We are targetting to launch the testnet in July and if the tests are successful mainnet should follow shortly after.

→ How much of the network will be allocated to dPoS?
100% of the network will be “allocated” to dPoS. The key difference is that while all nodes are equal today, there will be tomorrow regular and delegates nodes. The first one will only serve as a relay for the blockchain and the transactions while the delegate will be in charge of writing the transactions in the chain.

→ Is it necessary to keep my wallet online to participate in dPOS?
It will be not needed to keep the wallet online to participate in dPoS. The only requirement will be to keep the funds locked in the wallet by not performing transactions. If the funds are totally or partially transferred, the reserve proof use in the vote count will become invalid and the vote, as well as its staking component, will be cancelled.

→ Will there be skill and/or technical requirements to fulfil in order to run a node for the dPoS system?
The technical skills required to run a delegate node will be similar to the one running a node. The technical requirements are detailed in our latest article regarding dPoS.

→ What is the minimum of XCASH to feel comfortable in “dPoS station”? So I could get a profit and won’t feel that other users have much more and they get almost ALL from nodes.
From the other dPoS coins, we get that the typical ratio of funds segregated towards voting is in the 40–60% area. With X-Cash and a circulating supply of 40bn, that would translate into 20bn used in voting. Assuming an equal repartition of stakes between all delegates (for which there is an economics rationale), this would translate into an average stake per node of 200M XCASH.

→ Is it planned to enable voting/staking for delegates from within X-Bank accounts?
At the moment, the funds stored in the X-Bank will not be used for staking. We are reviewing this option and based on the demand from the community this is a feature we could consider adding.

→ How will X-Cash avoid cartels being formed in dPoS?
The cartel prevention will be achieved through 3 mechanisms: the emission structure of the pre dPoS supply, the resilience of the algorithm and the pre-mined reserve. Because we have not gone through a public sale and thanks to the current decentralization of the network, we know that the concentration of coins will be much lower than other dPoS coins. The fact that we are under a Byzantine Fault Tolerant algorithm also makes collusion in the network more complicated as it would require 67% instead of 51%. Finally, should such an event occurs, we could consider in accordance with the community to use the reserve supply to restore balance in the consensus network.

→ dPoS is a relatively new system of consensus. The legal frame for dPoS is not very clear, the same is for taxation of revenues like dPoS rewards. Pool-staking adds even more complication:

Q1: did you check the dPoS consensus also from a tax-law prospective. If yes, can you tell us about the result / your expectations?
There is currently no jurisdiction that treat proceed from staking differently than mining. This means that coins generated from dPoS should be treated from a tax perpective as mined coins under PoW.

Q2: will the programs that you are building for dPoS also provide reporting tools that will help delegates / stakers to fulfill possible legal documentation duties?
This is not planned for the moment but could be developped if there is 1. a clear taxation framework in the countries the tool will cover, 2. a high demand from the community to develop such tool.

→ Do you have an MVP for DPoS rewards?
The reward under dPoS will be the same as PoW; therefore a good estimate of the average reward per block can be calculated by dividing the block reward by 100, i.e. 560 XCASH per block on average per delegate.

→ Are you planning to reward VPS based nodes just for running the daemon to support the network?
Given the interest from the community and the added value of such a feature, we are seriously thinking about how we could implement and reward it.

→ You are planning dPOS with 100 delegates. When a bad acting delegate finds out the IP addresses of the corresponding nodes he could attack them (DDoS). How is this prevented?

The IP of the delegates will not be displayed on the voting website, but security via obscurity is not best practice so we are treating this as if they were publicly available.

We will provide on GitHub a firewall script specifically built to stop these potential DDOS attacks.

In a DPoS system, every delegate is communicating with each other through signed messages. We have implemented numerous checks before a node is able to receive a message, notably:

Is the message signed by a top 100 delegate;
Has this top 100 delegate already sent a valid message;
Is this type of message valid at this point of the round.
To stop replay attacks, the message header also comprises additional information, notably the previous block hash, the current step in the block creation process, and the current iteration of the selection of backup nodes.

→ Are the 2 million X-CASH locked away while participating in the dPOS? Can I use the 2 million X-CASH immediately after leaving dPOS?
While you are using your stake to participate in dPoS you are free to remove/use it at any time. However, the delegates will automatically notice it and your vote count/reward will be excluded.

→ How many delegates will be operated by the x-cash team members?
We are currently planning to run between 1–5 delegates. Each team member or contributor will still have the possibility to stake at their own discretion.

→ Do you have already a “partner” that will use the DPOS during launch day?
We are not looking for partnership in this regards but we can already announce that the first commercial product we are developing will rely on the dPoS technology.

→ Could you explain the rate at which the circulating supply increases with dPoS?
The inflation under dPoS will remain the same, which is ~3%.

→ What services does X-bank offer?
The X-Bank aims at simplifying users’ life in managing their cryptocurrency and more particularly X-Cash by offering a more classic interface. At the moment this is used as a way to distribute the airdrop and allow users to manage their wallet easily. In the future, the range of features will increase, starting with the integration of X-Payment. We are eagerly looking for feedback and we plan on asking the community to vote about what should be implemented next.

→ How soon after the switch to DPOS will I be able to use XBANK (how long will it be down)?
The X-Bank will remain accessible during the dPoS switch. there will be a small downtime of ~1h around the block where the fork will happen to ensure everything works as expected.

→ Can you review the features that will be available with the x-exchange?

The exchange will work similarly to a traditional exchange with buy & sell features, limit/stop orders … etc

→ When is the eta on the in-house exchange?

The development of the exchange has not started. We are focusing on the X-Payment integration while adding other mandatory features and reviewing the coins to be onboard in the X-Bank next.

→ Will the exchange have fiat on-ramp?
It is not planned for the first version due to legal and capital constraints.

→ Will the exchange be decentralised?
We are currently studying a technical solution to offer the best tradeoff between full centralization or decentralization. This solution would also apply for internal transfers where an additional decentralized ledger would be used to store and track all transactions while the infrastructure itself remains centralized.

→ Will the exchange require KYC?
Yes, similarly to the one existing in the market above certain limits.

→ Will XCASH still be a minable coin?
From an economics perspective, there will still be an emission process which we call forging under dPoS.

→ What is x-cash’s strategy for tackling India?
As for any other jurisdiction, we comply with the legal framework of the countries we operate in; which can potentially imply some restrictions to specific locations.

→ Will X-Cash create a deflationary environment using strategic coin reduction, either in the protocol or in a periodic consensual burn of total supply?
A burn is currently not planned and would be hard to execute given that there is no structure generating fees or profits on top of the existing products/cryptocurrencies. This could be still implemented in accordance with the community’s choice if we can find a suitable model for this.

→ Are there any future plans for an X-Cash debit card?
It is not planned for the moment as this is well tackled by many other companies.

→ The airdrop is adding X-Cash every month to the circulating coin amount. This is roughly 3% of the actual circulating coins. Assuming that ca. X-Cash will be further added every month by means of dPoS rewards, this means that an additional 3% per month will be added to the circulating coins.
This leads to a fast dilution (6% per month) of already circulating coins causing potentially high inflation/big loss of value.

Q1: How do you expect Inflation to affect X-Cash?

The global inflation will remain the same under dPoS as the reward from forging/mining blocks will not change and the amount released from the airdrop will also remain.

Q2: Do you expect that the fast increasing number of circulation coins will be absorbed by the markets?

As the number of coins released to circulation will remain the same (or lower), there is no rational reason to see why they would not be absorbed tomorrow if they are absorbed today under PoW. On the contrary, one could argue that given dPoS is a much more efficient and cost-saving process, miners will not have to liquidate most of their mined coins to cover their electricity costs.

Q3: If not, do you plan other measures to keep the value of the coins stable (examples: burnig coins, place unused coins in escrow until the market will be capable of absorbing them etc.)

As this question has been brought by many members of the community, and more particularly in the context of the Airdrop, we will carry an in-depth review of how the Airdrop funds can be better used as well making the community vote on what should be done with it.

→ Will the 5 billion XCASH investment funds set aside to be sold to ordinary investors or institutional investors?
While we will soon publish further information on this topic we can already state that:
- The sale will happen once all products are working in MVP stage (X-Bank, X-Payment & dPoS)
- The full segregated supply will be sold during the sale (5bn XCASH) through OTC trades against BTC an ETH
- The proceeds of the sale will be fully used to fund the development of the project and more particularly to cover the costs for additional exchange listings
- To make sure there is no high concentration of coins, there will be a cap and the floor on the amounts that can be purchased
- Given the coins will be immediately released after the closing of the sale, there will be no significant discount on spot market prices

→ Is there an exchange of X-CASH paired with other cryptocurrencies and fiats?
X-Cash is currently traded on STEX, Graviex, Tradesatoshi as well as other exchanges. A non-exhaustive list of the available pairs can be found on CoinMarketCap.
With regards to the listing strategy, we believe the current list of exchanges is satisfactory at this stage of the project. The next listing phase will happen after the launch of the dPoS where we are targetting a tier-1 exchange.

→ Is X-Cash another pump & dump project? Why nearly 40% supply already distributed to limited people, why an investor put his money in X-Cash when people with millions of free coins can dump X-Cash anytime.
While we understand this concern could have been raised during the first months of the project, we believe that our one-year track record supports the opposite.

The 40% premine number is far lower than most of the ICOs (considering we are also not raising funds from the ICO itself), with a significant portion given back to the community directly.
At X-network, we believe transparency is the key to better adoption and approval from the community. For this reason, the uses of the remaining part have been clearly defined with significant energy put towards transparency and traceability:

→ In the whitepaper, for X-CASH 2.0, you speak of partnering with financial institutions, providing derivative products for increasing liquidity/hedging merchant positions. Could you speak to when (or if?) this is still planned, when the expected work for that is to begin, how you will begin and/or implement this, do you have specific targets identified to approach with this plan, etc? Your thoughts on this plan now that you’re this far into X-Network development.
We are still considering this path for the future of the project once the planets are aligned to trigger it. Lasts months taught us that the focus should be done on the technology while building a healthy community. Our goal is to reach this market once it will make sense from both perspectives as well as having gained the credibility from our own products. We believe this will be a long journey but the momentum around the project has been only increasing in the pasts month and we are getting each day closer to this target.