Recap of AMA with OKExChain
OKExChain Community|Host
Hello everyone! 😁
The AMA is about to start!
We are about to commence the AMA with the invited guest, Chris.
Chris is the Co-Founder and also the CMO of Zero One Foundation.
Hello Chris, we are excited to have you with us today.
Can you please make your presence know by waving to our audience.
Chris | Co-Founder: Zero One Foundation
Hi there, this is Chris!
OKExChain Community|Host
Okay, the AMA itself is in two part consisting of questions and answers between I, the host and Chris, the guest.
The second part will be the revealing of questions that have been picked.
Chris will answer these questions and members who asked them will be rewarded.
OKExChain Community|Host
So, first and foremost, we know that the Flux Protocol, which is currently the most popular lending protocol on the OKExchain mainnet, was developed by the Zero One team.
Could you please share with us the background of this team, and more information about Flux?
Chris | Co-Founder: Zero One Foundation
Yes certainly. Flux is a decentralized lending protocol developed by ZeroOne Foundation. The code is completely self-developed, and has passed the smart contract audit by the world’s most advanced blockchain security agency, Certik. You can find the official audit report here: https://www.certik.org/projects/flux
Zero One is a team with innovative spirit and pioneering experience. Most of its core members come from respectable universities and companies like Tsinghua University, Peking University, Tencent, and Alibaba. With both rich experience in blockchain technology and experience from top-level financial institutions, we can ensure the safe and stable operation of the Flux protocol.
The Flux Protocol has its own protocol governance token, $FLUX, with a total number of 21 million tokens, all of which will be produced through mining.
In Flux, there is no pre-sale, no pre-mine, and no public offering event. You can enjoy the lowest liquidation threshold and collateral ratio, with the most transparent liquidation process, and the lowest liquidation penalty.
Since Flux Protocol’s initial launch Conflux Network, it has been further deployed on OKexChain (OEC), BSC, and Heco. It will also be launched on Arbitrum next, as well as other chains soon.
RockB | OKExChain Community Co-Host
Wow, quite interesting. Flux has been really busy!
Okay, to the next question.
RockB | OKExChain Community Co-Host
We know that borrowing and lending can be said to be the cornerstone of all finances.
So are there any unresolved pain points and needs of this market that could be improved by the Flux ecosystem?
What’s the original intention of the Flux project?
Chris | Co-Founder: Zero One Foundation
Looking back at the Black Swan incident on 2020.03.12 as an example, almost all cryptocurrencies experienced plunges in a short period of time, which led to a significant number of liquidated assets on DeFi lending platforms, such a MakerDao or Compound. One triggered the other, the Ethereum network was congested with pending transactions. Borrowers could not repay the outstanding borrowing in time, resulting in collateral loss; liquidators could not obtain assets in time for auctions through transfers. As a result, huge numbers of unwanted assets were taken away by liquidators and liquidation robots at extremely low prices, as low as 0 DAI (~ $0). Instead of repaying the borrower’s collateral value and rebalancing the protocol, borrowers and lending platforms had to endure the massive loss.
After witnessing the losses of the borrowers and the platform, we are determined to develop a new lending platform with more generalized asset templates and better collateralization models that could withstand future market meltdowns.
The initial proposal has gained further support from the technical community of Conflux Network in the beginning and has now spread to new high-throughput networks like OKexChain, that drastically improve the efficiency of the interest rate model, liquidation logic, and more features of current DeFi lending products. With the improvements just mentioned, we revealed the Flux Protocol.
We are aware that DeFi’s lending and borrowing track is still in it’s infant stages with many opportunities to explore and room to innovate! ZeroOne has put in extensive research and development to learn more about this particular billion-dollar industry, and with our background and development expertise we wish to contribute our know-how to shape the future.
RockB | OKExChain Community Co-Host
Apparently, Black Swan is such a cautionary tale.
It’s good to know Flux is building a new lending platform that could withstand future market meltdowns! 👌
And yes, In fact, several well-known lending protocols, such as MakerDAO, Compound, and Aave, all have different advantages and disadvantages in their liquidation methods and rules.
We would like to know how competitive Flux Protocol is compared to the current lending protocols on the market?
What advantages do you have that make you stand out?
Chris | Co-Founder: Zero One Foundation
We are confident that the Zero One team’s capabilities on low-level code development is stronger than most projects. This has been proven by the courage and patience itself of developing a lending protocol from scratch. Compared to many other protocols who do not have their original codes, our advantage is that we are very clear on how to upgrade the contract. Every detail in the protocol has been carefully considered and reviewed, and the theories of our V2 and V3 paths have been formed even before V1 is finished. Our technical team is still expanding, and more developers are joining our ecosystem. For example, we are already developing V2 right now, while our V1 is still launching on many public chains (Arbitrum is next).
Moreover, in response to many deficiencies in the market, such as opaque liquidation process, high liquidation penalty, and high collateralization ratio, we have improved and optimized the underlying technology to make Flux more user-friendly. The biggest difference is our separation of liquidation and collateral ratio. Thus, under each extreme case, Flux users always have the least liquidation among similar lending protocols.
In addition, Flux has a clear roadmap. V2 leveraged lending will be launched in June, and our V3 cross-chain deposit and withdrawal is also under development.
RockB | OKExChain Community Co-Host
Oh wow, that’s great.
For more information on that, the audience can follow this link to get more acquainted!
There are new ways to play in the DeFi field every day.
Please tell us what is currently happening with Collateralized loans in Defi?
And which direction are you most optimistic about?
Chris | Co-Founder: Zero One Foundation
Most of the current lending products are over-collateralized, and we are exploring ways to work around it. Under Flux V2, the users’ deposit in V1 will be used as margin in V2, and from here you can do many things, such as futures and other derivatives. One idea we have is that users can make a margin for leveraged borrowing, for example, you deposit $1 in V1 and borrow $20 in V2 for mining and trading, but if the loss exceeds $1, the $20 will be collected.
RockB | OKExChain Community Co-Host
We know that the Flux protocol can be deployed on multiple public chains such as Conflux, BSC, Heco, Okchain, ETH, etc.
This seems to be the first time I have seen a protocol that can be deployed in various chains in such a short period of time, while maintaining fairly good liquidity.
How do you deploy on multiple chains and ensure liquidity among these chains? 🤔
Chris | Co-Founder: Zero One Foundation
We used Conflux’s Shuttleflow technology in the early stage as the bridge, and now we use Poly Network for conversion among Ethereum, BSC, and Heco.
After Flux’s deployment on multiple chains such as OEC, BSC, HECO, and Conflux, they will conduct internal contract operations similar to interbank lending. For example, if the USDT borrowing rate of Flux on OEC is too high, we will use Shuttleflow 2.0 or Poly to lend the USDT of Flux on BSC to the USDT pool of OEC. Although the Flux on each chain is independent of each other, it can be regarded as bank branches.
Later, Flux V2 will be launched on Ethereum, and V1 deposits will be used as V2’s margin. Once the loss exceeds V1 deposits, liquidation occurs. What can really revolutionize this industry is the credit model of Flux V3, and we will announce more information about Flux V3 as soon as possible.
RockB | OKExChain Community Co-Host
Well, I must say, these prospective achievements are quite intriguing!
I heard that Flux has been conducting bootstrap mining for a while, and the amount of funds involved is already very large, reaching the level of hundreds of millions of dollars.
Can you introduce us more on the $FLUX token distribution, and more information on mining?
Chris | Co-Founder: Zero One Foundation
We have just launched the single-sided staking today, so please check our website for the latest updates!
https://fluxdoc.01.finance/announcements/launch-of-single-sided-staking-for-usdflux
RockB | OKExChain Community Co-Host
Alright, on the 18th of April, the crypto markets such as Bitcoin plummeted. Compared with other platforms, the Flux platform has maintained zero liquidation, and user assets have not suffered any loss.
Is there anything special about Flux’s liquidation mechanism?
Chris | Co-Founder: Zero One Foundation
Liquidation is a very important part of every lending product. The mainstream liquidation models include British auctions, Dutch auctions, Sealed auctions, etc., but they are all not very adaptable to the unstable market conditions.
To this end, we have explored our own collateralization ratio and liquidation model. We separated the collateralization ratio and liquidation threshold. For example, the collateral factor for stable coins USDT and DAI is 130, and for ETH and BTC is 140, while the maximum credit for borrowing assets is more than 70%. But the liquidation will only occur at the factor of 110, which is 90.91% of the collateralization ratio. There is 20% space between the 70% maximum credit for borrowing assets and the 90% liquidation, which is enough to buffer the user’s risk, and once the liquidation threshold is reached, the user’s assets can be quickly auctioned off as soon as possible, avoiding the risks due to price fluctuations.
RockB | OKExChain Community Co-Host
So you mentioned earlier that Flux is 0 premined and 0 fundraised. I think it is largely because Flux wants to develop into DAO and be driven by the community.
Is there any plan on the DAO development?
Can anyone holding $FLUX participate in governance?
How can the community contribute to the ecology?
Chris | Co-Founder: Zero One Foundation
Flux is a governance token. Flux will be upgraded almost every quarter to form a complete DAO governance system. To sum up, Flux holders will have: 1) governance rights; 2) coupling value with other products of Zero One. For the community, we have a certain ratio of the total amount of $FLUX tokens for distribution, and we will also provide incentives based on the community system
Also, after the launch of single-sided staking today, we are also planning to reveal for details for the DAO governance soon. Stay tuned for this!
RockB | OKExChain Community Co-Host
Alright, great! 🙂
I know you probably get asked this a lot but what are the core advantages of Flux’s security performance compared to other lending projects?
Chris | Co-Founder: Zero One Foundation
We are now developing an active security bot mainly for chain defense. Because Flux is a multi-chain deployment project, it will be hard to monitor chain activities respectively. The main task of the security bot is to monitor if there is any trace of public chain attacks, calculate the cost of the attack, and take measures regarding the overall assets on our chain.
RockB | OKExChain Community Co-Host
Finally, this should be what the majority of users want to know.
Can you share with us the milestones you have reached so far and your roadmap plan for 2021? 🤔
Chris | Co-Founder: Zero One Foundation
In short, we have planned 3 major versions of Flux:
- Flux V1 Lending & borrowing
- Flux V2 leveraged lending
- Flux V3 cross-chain banking: withdrawals in different places (chains), and mutual lending between different chain protocols.
In addition, we are researching flash loans, and are working with a number of cutting-edge public chains to explore the next generation of lending agreements.
Eventually we may be deployed on a total of about 7 chains. In the future, we will also develop cross-chain technology and cooperate more with shuttleflow.io
RockB | OKExChain Community Co-Host
Wow, this is all great but how can Flux help out to build the OKExChain DeFi ecosystem?
Chris | Co-Founder: Zero One Foundation
We’d like to acknowledge and thank the OKexChain community for reaching the highest TVL on OEC at $1.2 Billion. In the near future we will roll-out our DAO, so that token holders can actively participate in the development of FLUX on OEC and other chains.
We are always looking for more collaborations opportunities with other ecosystem projects and all of Flux Protocol’s version upgrades will take place on OEC :D
Since Flux Protocol’s TVL is the largest on OEC, the $FLUX release is also the most significant on OEC. This means that the $FLUX release is at 52.5% on OEC, while 7.5% on Conflux, Heco and BSC.
RockB | OKExChain Community Co-Host
Wow, thanks a lot for educating us Chris! I’m quite sure we’ve all been illuminated by this.
Now, to the second part.
Members who have been notified about their question being picked can ask now.
OKExChain Community|Host
Any question about Flux?
Free question now!
RockB | OKExChain Community Co-Host
Chris, please pick those you would answer and illuminate us.
Chris | Co-Founder: Zero One Foundation
Thanks Mich, my pleasure.
Also a great thanks for everyone joining today! We are truly overwhelmed by your passion for this project.
Feel free to ask us some questions regarding to FLUX, we will pick 7 questions to answer later.
Please also fill in this form to join $FLUX lucky draw if you haven’t!
Q&A
Q1:As an investor, I want to know how strong is your project security system? and what benefits will I have in the years to come when I decide to join the project you are working on right now?
Chris| Co-Founder: Zero One Foundation
Our code is 100% originated by our dev team, which is NOT a fork of any existing lending protocol. Also, our code has been audited and battle-tested among multiple chains with significant TVL.
So, we know our system very well as we build everything from scratch, knowing every block of this building makes us feel safe and comfortable.
The benefit of joining FLUX would be betting on one of the most innovative teams in DeFi space, and there’s a lot to grow.
Q2: How did FLUX manage to survive as many projects disappeared in hard market conditions? What is your survival strategy?
Chris| Co-Founder: Zero One Foundation
Great question. So our strategy here is to build a strong B2B business, partnering with various lending protocols/ futures trading platform to form an alliance to share our liquidity in the lending dark pools. This feature will help everyone to survive in the hard market conditions when everything is undervalued.
Another hard situation would be sudden price drop of major assets, and our liquidation model will safeguard our users’ assets and platform stability in this situation, which has also been tested in 418 and 519 recently
Q3: There are many cryptocurrency startups were established by talent teams, but they got problem in raising capital via token sales due to many factors as bear market, bankrupt… This leaded their potential startups fail. So how will flux break these barriers and attract more funds from outside crypto space?
Chris| Co-Founder: Zero One Foundation
Fortunately, our team has been quite popular among the crypto funds and established VC firms, so fund raising is what we are always confident about.
Q4: With the recent Flashloan attacks happening across the BSC network, many investors have been afraid to invest in various projects and flux is not outside that framework, what could you say to reassure investors, how safe we are against this type of attack inside flux?
Chris| Co-Founder: Zero One Foundation
Great question. Looking back to several events happened on BSC these days, we could spot the inherent vulnerability of the forked projects: you just don’t fully understand your code and risk within.
Of course, flashloan is a great testing tool to check how good a project is, which is not necessarily a bad thing for the market health in general.
For Flux, we are constantly reviewing our codebase and checking on our price-feed mechanism, also working closely with a few security advisors to prevent such attack over our platform.
Q5: CORONAVIRUSES (COVID-19) is currently a worldwide epidemic. All parties are concerned. Many blockchain industry figures contributed to this disaster. How do u react to it? Does this case also affect the performance and future steps of your project?
Chris| Co-Founder: Zero One Foundation
We truly hope this pandemic could end soon. Luckily, we have all of our team tested and get vaccinated. Also, the places that dev team resides in are relatively safe from COVID-19. So not much worry for this one.
But again, we appreciate for all the efforts made from various ppl to fight against this virus!!
Q6: Can you list some great features of Flux that makes it ahead of its competitors? What is the competitive advantage your platform has that you feel most confident about?
Chris| Co-Founder: Zero One Foundation
We have a very productive dev/design team
- Multi-chain deployment, including OEC
- Originality of codebase -> fast and secure DevOps
- Strong investing background
- Complete ecosystem for DeFi and NFT (Stay tuned!)
Thanks for your questions, truly appreciated!
