Kyber and Uniswap Benefits to platform supporters

[doc]

I am excited to see pKyber and pUniswap being integrated with Incognito, and I definitely see its value and benefits to anyone who is trading between coins. I also understand how it brings exposure to Incognito and with that, a whole new set of people that will be entering the ecosystem.

So to be clear, I am very excited about this and absolutely think it will be great for everyone using pKyber and pUniswap.

What I am not quite sure on, is how do these integration help the following three groups specifically: Validators, Liquidity Providers, PRV Staking. I am also interested in understanding how these integrations are expected to effect the PRV value.

The benefits may not be direct, maybe they are just about exposure and conversion of new users into platform supporters where they now take part in nodes, liquidity pool or staking.

My initial thought is that validators will see increase in network traffic, so should earn network transaction fees, but these will most likely just be dust at this point (from my understanding), so will essentialy be a wash and not really show any increase for a validator nodes.

When it comes to PRV value, liquidity pools and staking, I have no idea how it could/should/expected to effect these positions…

Can anyone provide some clarity or provide references/examples on how this integrations will effect the native platform and coin?

[andrey]

Hey @doc the idea of Incognito project is to bring privacy to the token economy. Integration with Kyber open a an opportunity to bring privacy to the whole Defi industry.

From the economic perspective integration with Defi brings one more utility for the PRV. To execute any confidential trades in the network use must pay network fee in PRV. Utility is essential, and as we shared on the past two calls with the community - the utility is the main focus.

A very simple example to compare utility:

type of utility	PRV	XMR
transact value	yes	yes
to pay transaction fee for transfering itself	yes	yes
to pat network fee for other coins (BTC, ETH, etc)	yes	no
to pay trading fee	soon	no
cross pool route	soon	no
execute privacy for DeFi	yes	no
confidential lendign/borowing fee	soon	no
cross-chain transaction Portal V2	soon	no
shielding or unshielding fee	soon	no

The math of the value is quite simple, as more ways user has to utilize token as higher utility this token has.

Hopefully, this kind of answer gives you a hint how to evaluate the effect of the integrations with DeFi and understanding of where we go further.

[doc]

Thanks @andrey, I am definitely understand the need to increase utility and with the more utility a coin has, the better. I also really appreciate you laying out the different utility comparisons with XMR, and I truly believe incognito is the right solution for the privacy needs of crypto.

I also understand how once DApp come online that itself can cause an increase in utility, and I am looking at ways on how to incorporate PRV into my own DApp that I am currently designing as well.

I would like to get some clarification on some of the specific utilities you presented, so i can make sure that I am interpreting the terms correctly.

@andrey

|to pay transaction fee for transfering itself|yes|yes

Is this the current fee we see when transferring PRV or any other privacy token from one wallet to another, the fee that is on the order of 0.00000005 PRV?

@andrey

|to pay transaction fee for transfering itself|yes|yes|
|to pat network fee for other coins (BTC, ETH, etc)|yes|no|

What is the difference between a “network fee” and “transaction fee”? Are both of these fees on the same order of magnitude as 0.00000005 PRV?

@andrey

|execute privacy for DeFi|yes|no

Is this referring the ability to have anonymous DeFi in general, or is it specifically relating to some specific transaction on the network?

@andrey

|cross pool route|soon|no

Is this referring to the types of trade discussed in June PRV Call, where if someone wanted to trade BTC to ETH, there would be an automatic pBTC --> PRV --> pETH? I could see this being a substantial increase volume for PRV, but in this case it would have a net neutral effect on PRV value, correct? Since the PRV being purchased is immediately sold for the final desired coin.

@andrey

|cross-chain transaction Portal V2|soon|no

This is the trading fee to go from pBTC --> PRV --> pETH, right? Which is on the order of magnitude of 0.00000005 PRV?

@andrey

|confidential lendign/borowing fee|soon|no

@andrey

|shielding or unshielding fee|soon|no

These both sound very exciting, and I am interested in knowing more about them… Is there any post on these topics you can point me too? These are not directly connected to pKyber or pUniswap though, right? Or is having those integrations, going to be what enables these features to come online?

[andrey]

@doc

Is this the current fee we see when transferring PRV or any other privacy token from one wallet to another, the fee that is on the order of 0.00000005 PRV?

Hey @doc, yep this is the current fee, but it is not set forever. As you know, once we update a new consensus and finish all development on the protocol layer, all fixed slots will be released to the community.

Until this moment we have time to discuss what kind of fee should be set on default mode in the network.

@doc

What is the difference between a “network fee” and “transaction fee”? Are both of these fees on the same order of magnitude as 0.00000005 PRV?

“network fee” and “transaction fee” it’s the same in my understanding

@doc

Is this referring the ability to have anonymous DeFi in general, or is it specifically relating to some specific transaction on the network?

The goal is to bring privacy for all DeFi protocols when the only way to get it is to utilize PRV (as a transaction fee, trading fee or other ways)

@doc

Is this referring to the types of trade discussed in June PRV Call, where if someone wanted to trade BTC to ETH, there would be an automatic pBTC --> PRV --> pETH? I could see this being a substantial increase volume for PRV, but in this case it would have a net neutral effect on PRV value, correct? Since the PRV being purchased is immediately sold for the final desired coin.

Yep, you are right here. It will increase usage in several times but will not change the total balance of PRV. The same time, if you see from a different angle when someone wants to list a new token it will require to set an appropriate amount of PRV.

@doc

This is the trading fee to go from pBTC --> PRV --> pETH, right? Which is on the order of magnitude of 0.00000005 PRV?

In this case, means transactions BTC -> pBTC -> BTC, ETH -> pETH -> ETH. As I mentioned in the previous comment - level of fee is not important right now. The priority number one - to build working product. Once the product is live we will initiate a discussion regarding fee structure. Make sense to cover different aspects, including network fees, trading fees, shielding fees, Defi fees, etc.

But let’s discuss this when all products work perfectly.

@doc

These both sound very exciting, and I am interested in knowing more about them… Is there any post on these topics you can point me too? These are not directly connected to pKyber or pUniswap though, right? Or is having those integrations, going to be what enables these features to come online?

Confidential lending/borrowing functionality is on the plan, but we haven’t started development in this direction.

Shielding or unshielded fee - we plan to release the first version of Trustless Custodians: A Decentralized Approach to Cryptocurrency Custodianship soon, and of course, we share all details once it’s live.

[Clint]

When using Kyber, does the trade still use incognito nodes? Since its intro the number of transactions has not really increased. Curious if this change will help node operators or hurt them?

[Ducky]

Hey @Clint, please refer to this topic. @andrey also mentioned the thing that you’re curious about here.

[Clint]

Hmm. Network Transactions are down.

Reading above, I just want to verify, kyber transactions use the incognito network and nodes to process the transactions, right?

Sorry, just want to hear a straight answer.