David Johnston, Pegged Network Visionary, introduces us to the PegNet project. It’s a Stablecoin Network for Decentralized Finance built on Factom. PegNet functions as a state channel on Ethereum dedicated to Stablecoin prices, conversions, and transfers. Let’s dive in the AMA to get an even better understanding.
AMA
Host: Hi David! Welcome to the AMA room! Tell us about this fascinating Stablecoin project.
David: It’s a community project to make a whole network of Stablecoins. There is no ICO, no foundation, no company. It started mining last August. It already has 30 pegged assets on its network. 12 of the top cryptos, 12 of the top fiats, + Gold and Silver.
Host: When we say Stablecoins. we think of Tether, USDC and PAX. what is different with Pegnet?
David: Well PegNet has a pegged USD. But also lots of other fiats. Euro, Pounds, Swiss Francs and so forth. The big difference with PegNet is it’s all oracle based. You are not trusting a third party or central reserve https://pegnetmarketcap.com/
Host: As opposed to collateral based, what are the pros and cons between each approach?
Dave: Correct as compared to both Reserve and Collatoral based. I wrote an article about it here: https://medium.com/@DJohnstonEC/pegnet-decentralized-minable-4th-gen-stablecoins-e7b890a7edf6
Host: What is the relationship of Factom and Pegnet?
David: PegNet is a decentralized application built on Factom + Ethereum. So the miners report the prices for all the assets every 10 minutes and that data is published on Factom. PegNet works with Ethereum too. So you can use the stablecoins in any ERC 20 wallet. https://medium.com/pegnet/adding-pegnets-passets-to-ethereum-6b20d63ae635
Open Floor Questions:
Q: What is PegNet economic business model? And What about community governance?
David: PegNet’s native token ($PEG) is used as a gateway into buying / converting into pAssets. So if you want $1,000 of pUSD, you can buy PEG and convert it into pUSD. It’s pretty much that simple. The stablecoins are all individual, you don’t get a basket of them, so you can have exposure to any asset you want inside PegNet.
Q: Which countries is PegNet focusing on for growth? Are the present markets with huge data sources like India and China your target of PegNet markets?
David: TL, PegNet is pretty global. There are a lot of miners in Asia. Many of the devs are in Europe and there is usage everywhere.
Q: 5,000 PEG tokens are shared among the top 25 miners per 10-minute block. My question: does it have to use a special CPU to become a top 25 miner? And what about energy consumption when starting to mine?
David: You don’t need any special hardware to mine PEG. The more CPUs you use the more hash power you have, so that’s a pretty good way to get to the top.
Q: How does PegNet assess the importance of the user community? What user communities do PegNet currently have?
David: Great question. Well since there are almost no fees on PegNet ($0.001 USD per conversion) it’s attracting a good trading community. There is also no limit on conversions or liquidity so for someone wanting to re balance their portfolio PegNet is very powerful. This is also a mining community of course. They secure the system and so they are very important to the health of the ecosystem. You can see the mining stats here. https://www.factoshi.io/pegnet
Q: PegNet is designed to solve problems in DeFi, why should the community choose PegNet instead of other projects in the same field?
David: Well PegNet has the advantage of being permissionless. So you don’t need an account with a central party, you don’t have to pay fees to someone. PegNet in short is the least expensive system to use and scales to huge levels thanks to Factom’s architecture.
Q: Explain the utility of PEGNET , what’s the real-life use case and application of PEGNET ? Are you focusing on only business and IT solutions or you will spread to other sectors?
David: The PegNet community is interested to serve the normal stablecoin use cases. So hedging, payments, sending and storing value. I just think if you are going to use a stabelcoin, use one that you can have confidence isn’t controlled by a third party.
Q: How do we ensure miner’s report are accurate? Do we take the mean/median? What are the precautions made to remove bad actors?
David: Great question. Yes, the PegNet mining software grades the miners first on the hash power and then on how close the prices they report are to the median. So miners are rewarded for both hash power and oracle accuracy.
Q: Which other/new Cryptocurrencies, Commodities & Fiat Currencies have you planned to Add in your PegNet trading Platform in future and when?
David: The community has proposed to add 6 more fiats and 6 more cryptos in the next upgrade to PegNet. So the Turkish, Russian, Swedish, Norwegian, New Zealand, and Australian currencies.
Q: Among different blockchains and cryptocurrency projects, what are some key features that set PEGNET aside? What does PEGNET have that other projects don’t?
David: One thing that is unique is the community support for developers on PegNet. The community just had a vote on all the new features it wants Devs to work on, then pledged PEG or pAssets as a reward for each.
More than 22 Million PEG has been rewarded to Developers already. The process is repeated with votes and dev work every month.
So things develop really quickly. As devs get paid the donations when the DELIVER.
Top Pledges By Proposed PegNet Feature / Upgrade:
1. pAsset Listing on Exchanges (especially pUSD) — 11 Votes — 2,750,000 PEG Pledged + $30,000 pUSD Pledged.
2. PegNet Mobile App Wallet — 5 votes 750,000 PEG Donated — 1,000,000 PEG Pledged
3. One Minute Conversions on PegNet settled in the next block — 20 Votes — 300,000 PEG Pledged
4. PegNet Trader Tools — 12 Votes — 500,000 PEG Donated — 300,000 PEG Pledged
Q: Why did you avoid other algorithms and chose LXR hash? What makes this algorithm unique, useful and important towards PegNet blockchain?
David: LXR hash is great because its RAM / Memory bound. So the amount of compute isn’t a big factor. As a result it takes 90% less power to mine. And with an algo that works on anyone’s computer we have seen tons of miners join PegNet. Hashrate has grown more than 200X since the launch.
Q: With the price fluctuation of crypto market and for a healthy long-term of project, what will PEG inflation/deflation model be?
David: There is an article here on how the Supply of PEG works. In short 10,000 PEG enter the system each block. 5,000 as the miner reward and the other 5,000 for conversions into PEG. So it’s a predictable increase. Though as people buy PEG and convert into pAssets it decreases the amount of PEG in the supply. https://medium.com/pegnet/predictable-supply-of-peg-3fd39124f36 So for example today 7% of all PEG were converted into pAssets by users converting from PEG or pegged assets in the system.
https://pegnetmarketcap.com/asset/PEG/supply
Q: PegNet offers a low transaction fees of $0.001 (1/10th of a cent) whether we send five cents or million dollars. Will PegNet able to maintain such low in future?
David: Yes, the cost of using PegNet will stay at $0.001 USD as that is the cost to use an entry credit on Factom.
Q: What is PegNet’s user interaction strategy? Do you have any way to make it easier for beginners?
David: I think there is a lot that can be done to improve the UI. There is a web wallet and now also a Mobile wallet for PEG so its getting there. The GUI wallet is two parts:
1. A MetaMask-like Chrome browser extension (that also works in Brave). Get it here: https://chrome.google.com/webstore/detail/kambani/oiceedellfbhhplkfkpkkocbdkifpili
2. The extension then interacts with https://factomatic.io/wallet/
https://t.me/PegnetOfficial
Host: I see some similarity to SNX. Is that a fair statement?
David: some people draw the comparison to SNX. The difference with PegNet being there is no operator, there is no pausing the network, there aren’t fees like you have in SNX. But we need lots of great DeFi projects. There are going to be many successful approaches.
Closing Remarks
Host: Very interesting how decentralized this is. Thanks for taking the time David!
David: Thanks Eric. They can join the PegNet community on
Telegram: https://t.me/PegnetOfficial
And there is a ton of activity on Discord especially for developers.
Discord: https://discordapp.com/invite/Xz2ZN6p
