Wed. Apr 14th, 2021
DeFi #15, Free TON

The meetup is dedicated to the quality of submissions for DEX contest, flash loans, jurors rewards, DEX Architecture & Design contest results and Polkadot bridge implementation proposal.

Weekly DeFi Governance Call #11

PolkaDot bridge implementation proposal

Wintex.pro presented a draft proposal for PolkaВot bridge implementation. Vladislav Ponomarev explains that the Wintex.pro team transformed the roadmap presentation they had into a comprehensive and detailed document. This document will be published as a proposal in the governance interface. Governance members will vote for it and it will serve as a kind of bridge between the Wintex.pro team and DeFi subgovernance.

Wintex.pro is obliged to deliver everything that is written in the document, and DeFi sub governance, in turn, is obliged to accept it. After the Wintex.pro team publishes separate proposals for compensation for each delivered milestone, governance members will need to review the list in the document to ensure that everything that is listed in it has been completed. Governance members will need to vote/not vote to approve the compensation.

  • The question is why only one team can do this?

We invite all teams that participated. Any team can provide a proposal for an implementation with architecture. If we understand that the team can really implement this, the team is free to prepare a proposal and we will pay for deliverables.

DEX Architecture & Design contest results

The results of the contest are unsatisfactory. Eleven submissions were applied for the contest. They can all be divided into two groups:

  1. Submissions focused on the economy and on the operation of the whole system, but without due attention to how Free TON works;
  2. Technical submissions that are not focused on the economic side of the issue.

Mitya notes that duplication of Ethereum’s design in the Free TON contest, as it was in most submissions, is unacceptable. The idea of ​​the contest was to collect as many original ideas as possible. 

Vladimir Maslyakov agrees that the submissions were more a copy of the Uniswap and Ethereum models, and not something new. He thanks everyone for their participation and suggests to assemble a team of participants who will draw up an implementation proposal with feedback from the community and participants. All participants who have scored more than 5 points are asked to join the team and help them build proposals for implementation. The document will be published on the forum, everyone will be able to leave comments.

Dmitry mentions the features of Free TON and the fact that developers need to have experience working with Free TON smart contracts

DarkwingDark — one of the contestants, he believes that the main idea is to form a team. He read all the works of the participants, and each of them has its own part that can be used. You can create a collaboration, a team and connect all the items.

Ignat Shapkin says they faced a problem when there were not enough financial experts to build financial products with knowledge of Free TON specifics. He supports the idea of ​​delegating this task to an internal group or assembling a team. Challenges require solutions.

Flash loans — evil or not? Should they be in Free TON?

Mitya explains that flash loans are a bug, inefficiency of the Ethereum system. The synchronous design of the entire Ethereum blockchain is impossible in Free TON. It will also most likely not be possible in Ethereum 2.0. The order of transactions is set, it cannot be changed. No validator has the right to check the execution of a transaction. 

Ignat Shapkin explains that flash loans provide an opportunity to take any kind of capital available for the whole system, with the cost of effective zero.

Mitya says that all that needs to be done is to create a DEX smart contract or a pool that will allow that. In an asynchronous system, you pass a message, so when you want to execute something in a smart contract, you need to pass a message, and then if you want to execute it between smart contracts, they need to pass a message between themselves. The cost of arbitrage will exist, however, it exists everywhere in the financial market, except for the Ethereum flash loans bug.

Flash loans have potentially good implications for arbitrage opportunities, however costless arbitrage is not such a good idea in financial terms.

Ivan Kotelnikov believes that it is necessary to distinguish the terms. Flash loans are unsatisfactory because they are caused by bugs. However, arbitrages do their job and are safe for the financial system. It may be necessary to hold a contest to develop short-term loans, but there is no need to duplicate the entire flash-loan mechanic.

Free TON StableCoin Architecture & Design

Vladimir Maslyakov says that their proposal for stablecoins is not yet completely ready. They will post it on forum, comments are welcome. They hope to launch this contest publicly next week

The architecture and design of the stablecoin contest have been slightly changed. The length of the text has been reduced. They also added one hard criteria for the participants who will implement the first type of stablecoin. The participant must be licensed to engage in this type of financial activity or have legally validated agreements with those institutions.

Vladislav Ponomarev suggests leaving this document on the forum for another week so that everyone has the opportunity to comment on it from both technical and economic point of view. He invites people to contribute to improving the specification via the main Free TON news channels. Stablecoin is more about economics, however technical features must also be taken into account in this contest.

The quality of submissions

Alexandr Vat again brings up the topic of the DEX contest results.

  1. The quality of submissions is not entirely satisfactory.
  2. He also drew attention to the variety of marks the participants received from the jury (from “reject” to 8 points).

This means that the jurors do not have enough time to review the submissions in detail.

Alexandr invites jurors to study submissions in more detail and, in this regard, increase the percentage of rewards.

During Alexander’s communication with the participants, two main points emerged: they do not fully understand DeFi and they have the potential to make higher-level proposals.

In this regard, he suggests dividing proposals into two stages:

  1. Participants write an essay. 
  2. Those participants who pass further will make adjustments to their applications. 

In this way, Alexandr hopes to improve the quality of the submissions.

Vladislav Ponomarev recalls that Mitya has already proposed to separate the jury from sub governances and group them by skill. It may also be necessary to extend the submission deadline, as participants may simply not have enough time to read all the details.

Jurors reward

Rewards will be determined globally at Free TON level. They will most likely be based on qualifications (technical skills tend to score higher). In some cases, the number of participants reaches hundreds. Such amount of work should be highly appreciated.

For now, until the whole system is reformed, the 5% standard is fair. It is very important to keep a good image of the entire sub governance, increasing the reward may cause unnecessary accusations.

Starting with the stableloin contest, it is necessary to set a certain threshold score for all submissions, otherwise there will be a huge number of submissions that do not meet the requirements.

The proposal to increase the jurors reward must be formally approved. All processes should be as transparent as possible, Vladislav emphasizes that the main task is to achieve good results.

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