Great Visibility for BitShares – the World’s First “DeFi” blockchain

On the 17th December BitShares.org participated in an AMA (‘Ask Me Anything’) online chat session with the Binance community on Telegram.

With 149,490 members, Telegram group of the Binance Exchange is one of the largest and most visible crypto/blockchain communities out there. Consequently a Binance AMA gave BitShares great exposure – especially given they’re ranked as the #1 crypto-exchange in the world (source: CoinMarketCap). A total prize fund giveaway of $3000 USD in $BTS tokens was allocated for the event. Click here for the full list of the AMA winners.

Below are transcripts of the Binance AMA session. Only small grammatical errors were edited. These provide a fantastic overview of the current state of BitShares from Christopher Sanborn. For anyone still wondering why BitShares has suddenly become *the* project to watch come 2021, the rest of this article makes for essential reading.

Announcement Tweet from Binance

A big thanks to Dr. Christopher Sanborn for representing the BitShares blockchain. Please note the ‘CTO’ tag applied by Binance in the Tweet – actually refers to Christopher representing BitShares as CTO of Move Institute (trademark and bitshares.org domain owner, legal representative of the BitShares blockchain by Consensus).

Binance BitShares AMA – Session Transcript

The AMA was broken into 3 segments, repeated for reference here:

— Segment 1: Gajender from Binance asked BitShares Team a few questions.

— Segment 2: BitShares Team asked the chat a total of 5 quiz questions. A link to a google form was sent into the chat for each question, so a total of 5 Google forms. Each Google form accepted submissions for 2 minutes. Participants filled in: (a) the answer – (b) Telegram Username – (c) Wallet Address. There will be $2,500 worth of $BTS distributed for all those who answered 5/5 questions correctly. 

— Segment 3: Chat asks BitShares Team questions. Participants take the time to think of some good questions, which will underline quality and uniqueness. BitShares Team will select 10 of the best questions after the AMA, as the lucky winners who will receive $50 worth of $BTS each, making that a total of $500 of $BTS.

Segment 1 – Binance Questions to BitShares:

Q1:  What’s with the new voting system, introduced in version 4.0 and further modified shortly thereafter in version 5.0?

Christopher Sanborn: Yes great question! And if you’ve looked at all the details, it’s confusing, isn’t it? But really, it’s quite sensible. What it does is it prevents double-dipping. The BTS token (the core token on the BitShares network) is a very versatile utility token. With the new voting system, to enable participation in BitShares governance, a user must make the deliberate decision to lock-up, or “stake,” a quantity of BTS for a period of time. The lock-up period encourages long-term rather than short-term decision making (in fact there’s a multiplier for longer staking periods).

Because the BTS is staked for voting, it cannot simultaneously be used for other purposes, e.g. in limit orders on the DEX, or as collateral to borrow a SmartCoin token, so it forces a deliberate and conscientious choice. It aligns incentives too. Example: BTS can be used as collateral to borrow SmartCoin tokens, which is a unique and powerful feature of the BitShares platform.  However, if the collateral counts towards voting weight, what it means is that users who are underwater holding a large debt position — possibly in danger of being margin called — can also be in a position of holding significant voting weight, which is a conflict of interest.

The new rules simply require that a user must deliberately choose the utility of their BTS tokens which they wish to use. Trade on the DEX, borrow SmartCoin tokens, stack and “HODL”, or stake for participation in governance. All are great options, the only difference is it’s an OR now instead of an AND.

Q2. In what way are BitShares Liquidity Pools/AMM different than traditional solutions?

Christopher Sanborn: Well BitShares is rather unique in that the smart contract for the Liquidity Pools is baked directly into the core code of the blockchain. BitShares is not a Turing-complete scripting platform like other blockchains that offer AMM-like features, but rather a carefully selected set of well-designed contracts and primitives that allow for complex business logic to be implemented in a simple way. The logic of the BitShares AMM/LP pools is simple, direct, and totally decentralized. You know you are dealing with the blockchain code, and not a third-party contract that requires another layer of trust, nor does it depend on any off-chain transactions or “bots” controlling accounts. It’s a simple and straightforward implementation of the Market-Maker formula, in which anyone can participate, but all pools follow the same pool logic. So on BitShares, whatever pool you’re trading in or providing liquidity to, no matter who is the issuer of the pool, you know you can trust the code. It’s performant. It runs on a blockchain that can handle millions of transactions per second, has a three second block time, and finality in under minute.

Q3. What is the progress and plan for roadmap 2021?

Christopher Sanborn: Yes! It’s very exciting. 2021 will have a lot of focus on proper corporate structure for the BitShares brand. The BitShares blockchain is about being a financial-services and business logic platform that can simplify operations for many business use cases. BitShares offers a lot in terms of capability, flexibility, and performance. Yet many businesses today still remain hesitant to get involved in “blockchain” for a whole host of legal and regulatory reasons. Blockchains in general are still a Wild West, and BitShares is no different.

The BitShares blockchain itself is an MIT licensed, open source, unstoppable and censorship-resistant internet protocol. While that description is exciting to many of us, it remains a point of concern for many main-line non-crypto native businesses. For those businesses, having a registered corporate presence centered on and protecting the BitShares BRAND and offering services to on-ramp these businesses, gives a corporate entry point that businesses can trust.

Among these brand-building efforts will be the deployment of a new BitShares-branded DEX front end, the incorporation of development services and software engineering with expertise in DeFi, legal entry for traditional investors, a program to repurchase BTS and build-back the reserve pool, a focus on further developing the technology, and registering the BitShares corporate structure as a traditional stock.

Q4. What are new BitAssets 1.0?

Christopher Sanborn: Simply, these are a reboot of the original BitAssets — market-pegged collateral backed tokens designed and intended to represent a stable value relative to other currencies. There was bitUSD, bitCNY, etc*. Due to governance issues which were ultimately the reason for the voting changes introduced in the 4.0 and 5.0 releases, these original assets suffered a year-long de-pegging, or failure to track the correct external price, which was very harmful to the BitShares platform and reputation. The BitAssets1.0 start fresh with a new issuance and a set of price feeds more adequately protected from issues of chain governance and “politics”, to help ensure correct price feeds free from interference. 

Q5. Is there any trustless exchange in crypto space and if there is, which one is it?

Christopher Sanborn: This depends on what you mean by trustless, but I’d say the BitShares DEX gets pretty close to the ideal. Token exchanges on the DEX are executed strictly according to the code and in that sense are fully trustless — no third parties control the order matching process, and the code is time tested and reliable on our platform. Where trust issues start to arise is when you ask what is, really, the token you are trading? Is there an assumption that the on-chain token that you are trading is convertible to an off-chain real-life asset? If so, what is that conversion method? Is there a company behind that token that “backs” the token and offers that exchange service? Do you trust that company? A paradigm that can be a little hard to grasp is that BitShares is primarily a platform for businesses to deploy business logic, and yes, you still have to ask yourself if you trust the business whose services you are using.

Segment 2: “Quiz”

Answers highlighted.

Quiz question 1: Who is the CEO of BitShares?

a) Daniel Larimer
b) Digital Lucifer
c) Stan Larimer
d) Nobody. The blockchain is permission-less.

Quiz question 2: What is the difference between EOSIO and BitShares from a technology perspective ?

a) EOSIO has the advantage of BFT.
b) EOSIO utilizes bandwidth (no fees) over BitShares traditional fees for tx
c) None.

Quiz question 3: By whom and when was Bitshares built?

a) Daniel Larimer and Christopher Sanborn in 2014
b) Christopher Sanborn and Daniel Larimer in 2016
c) Daniel Larimer and Charles Hoskinson in 2014
d) Built by anonymous team in 2016

Quiz question 4: Who is the current legal representative of BitShares blockchain ?

a) BBF (non-profit BitShares Blockchain Foundation, Holland)
b) CNX (Cryptonomex, USA)
c) OL (OpenLedger, Finland)
d) MOVE (non-profit Move Institute, Slovenia)

Quiz question 5:  Complete the sentence:

The BitShares platform can be used to launch Decentralized Autonomous Companies (DACs), which issue shares, produce profits and distribute profits to investors.

Segment 3 – Binance Community Questions

3×3 rounds of questions and answers took place in the remaining allocated time. This segment was composed of questions submitted by the participants, and broken into 3 rounds. With each round of questions, Dr. Sanborn choose 3 to answer.

Round 1 – Group Questions

Gajender (Binance Angel) 🇮🇳, [17.12.20 15:54] As we move on to Segment 3, here’s a quick reminder. ⚠️ In order to be eligible for any prizes for Segment 3, you need to have joined BitShares’ Telegram Group! t.me/BitSharesDAC Round 2 – Community Questions Segment 3- Round 1 starting

henry pok, [17.12.20 15:56]

Does Bitshares have an anti-cheating/manipulating system to prevent bad persons or groups from trying to harm health of voting results?

Christopher Sanborn, [17.12.20 16:02]

Such things are VERY difficult to build into code and the game theory of voting is a notoriously hard problem. That said, when approaching the problem, one needs to consider incentive alignment. Does the platform and the voting logic align incentives in the correct way? No system is perfect and ours isn’t either, but we do think the changes in 4.0 and 5.0 went a long way towards correctly aligning incentives.

Dinnoo Tinnoo, [17.12.20 15:56]

What does this program promise for the ecosystem to make DeFi more common? What are the benefits of holding and staking BitShares tokens? And What plans do you have to help drive demand and scarcity for BitShares tokens?

Christopher Sanborn, [17.12.20 16:09]

I think one of the biggest things is that our platform is remarkably easy to use and performant. Using the DeFi features, such as (but not only) the liquidity pools, “just works”.  There’s no long delays for transaction confirmation. It feels very modern and professional. In that sense I think we have a platform that is “inviting”. Staking options can be in the form of staking for voting, which enables participation in governance, or staking into Liquidity Pools, which can allow you to participate in the revenue that the pool collects via exchange fees.

Maxim, [17.12.20 15:56]

As we know some Ethereum platforms lost its utility or got problem with “adoption” due to high ETH gas prices. While DEX use ETH for gas fees, how did Bitshares solve this problem for doing adoption?

Christopher Sanborn, [17.12.20 16:14]

BitShares is DPOS and does not rely on mining, and we have a comparatively quite high block size and fast block time (just 3 seconds!).  We also have a flat fee structure for transaction fees — you don’t see prohibitive premiums on the fees for periods of high activity!  Simply speaking we have the throughput that other chains lack.

Round 2 – Community Questions

Ruthe Shanahan, [17.12.20 16:15]

Do you have any plans to attract non-crypto investors to BitShares? Because it is the success of a project to get more investors who are still not in the crypto world specially as a new project entering to crypto. What are the plans to increase awareness about BitShares around in non-crypto space? And which region is in your mind?

Christopher Sanborn, [17.12.20 16:27]

In the 2021 Roadmap there is a specific entity that will open the door for world-wide investors to select their way of investment and to go into the deal with an SEC registered stock-based company. This will open the door to many who do not currently have a way to invest in a way that is familiar and comfortable to them.  Once that process is final – not even the Sky will be the limit.

KIM ♥️♥️, [17.12.20 16:15]

Q. Do the token holders have right to participate in the governance of the project? On what kind of decisions can they vote on about the project?

Christopher Sanborn, [17.12.20 16:37]

Yes! But it’s not automatic. Users must now make a deliberate and conscientious choice to participate by locking stake for significant periods of time.  That takes commitment, and helps to filter out actors who are not long-term thinkers.

Larka💃💃, [17.12.20 16:15]

Currently DeFi project is on fire.  But you know very well that, contract security is a big issue in DeFi. Has your smart contract been audited? How do you guarantee the protection of users’ funds?

Christopher Sanborn, [17.12.20 16:41]

One of the biggest differences in our platform is we focus un simple, reducible elements, that implement a clear business logic objective.  So the “contract code” for us is not like it is on other platforms like ETH where any contract logic can be deployed and you don’t know who (if anyone) has validated it. Our “contract code” is in the C++ code of of the core protocol, and yes it’s well-tested.

zafer metin, [17.12.20 16:15]

Why was ‘PoolTool’ written in Python programming language? What are the advantages of Python over other programming languages?

What is the significance of the PoolTool infrastructure being the first software made for AMM and what are the advantages of using the Python BitShares library and uptick ‘CLI’?

Christopher Sanborn, [17.12.20 16:50]

PoolTool was written by a community member and is a great example that highlights our community involvement.  It could have been written in any language.  Languages like Python are often more well suited to user-facing client code, whereas the back end (the blockchain) is in C++.   We have many such tools that are simply there to make the blockchain “easier to use”.

Segment 3- Round 3

Eliz Kat, [17.12.20 16:51]

Can you tell me what the benefits of the BitShares CORE-UI release, how does it help BTS differ from other projects, and its importance when you put it to use?

Christopher Sanborn, [17.12.20 17:07]

Yeah, the BitShares blockchain has a lot of complexity and moving parts.   Unlike other blockchains with very narrow purposes, there is simply a lot you can DO on the BitShares blockchain. Thus we have one of the most comprehensive UI interfaces out there. When you use it, it’s easy to forget that there even is a blockchain underneath. We have plans for a significant refresh and improvements to the UI.

Pavlusha, [17.12.20 16:51]

Bitshares has been existing for a long time now, how has it dealt with regulations, in terms of KYC, аsset creation аnd trading аnd defunct bridge exchanges? Take case study of openledger..

Organizational structures of companies are almost entirely dependent on people management and business rules. What concept does BitShares use in relation to DAC to improve organizational structures on the blockchain?

Christopher Sanborn, [17.12.20 17:17]

Right, this one can use an emphasis on the fact that BitShares is a platform, and a blockchain. And that not everything that happens on the blockchain is a product of BitShares itself.  As one of our points of emphasis in 2021 will be protecting the BRAND of BitShares, we hope to make it far more clear WHO on the blockchain is legitimate and has some serious organizational structure and due diligence behind them.  In the past, many companies — not BitShares itself! — have operated without this proper structure, and by claiming the name of BitShares have done damage to the brand. The blockchain is permission-less and will not reject any transactions that follow the protocol rules, whether it be an honest, serious party, or not. Thus it’s important to protect the BRAND so that it’s substantially more clear who is operating with what levels of structure and diligence and who is not.

Samanta Mitchell, [17.12.20 16:51]

In your opinion, which is more important for the BitShares and why ? Community, Investors, Market or Exchange.

Christopher Sanborn, [17.12.20 17:29]

BitShares has been around for many years — since 2014! — and we’ve seen our share of strife and turmoil, especially in the last two years. For that we’ve lost some good community members. Although we’ve also retained a good many. To answer your question, these are all important and indispensable pieces — community, investment, market, and exchange. 

I think we have a positive trajectory on all of them. But personally, the one thing I most want to see is for the community to come back. Things are about to start getting fun around here again.