ICYMI - Last night, over 40 people attended the monthly PRV Holders call. In the call, @Andrey and I were joined by various other core team members to give an update on April and on our upcoming plans for May. We also had a Q&A session in which many of you asked some fantastic questions!
The full recording can be watched here, and a summary of the main points, as well as extended answers to the questions asked, is below.
The call was accompanied by a slideshow. The relevant slides are attached as images in each section.
We had two main categories of improvement goals for April, project growth and building a stronger platform. Much was done to both ends.
Incognito operates on trial-and-error, experiments of every kind. Some work instantly, some are more controversial But that process of iterating continuously and the community participating so wholeheartedly, made April a month of many successes, thanks in large part to you. Here are a few of the biggest advances in growth from the last month:
Shield volume is up 372% MoM. That exceeds our goals by 315%! In total, 85 different cryptocurrencies were shielded, the majority in stablecoins USDT and USDT, as well as the most popular coins in the world, bitcoin and ether.
316 new validators joined the Incognito Network, +144% growth compared to March. This exceeded our goal of adding 300 in April. In fact, as of today, there are more than 1500 Nodes in total.
In April we set up a target around increasing liquidity pools on the DEX. We designed and launched the incentives program for liquidity providers which subsidizes providers to keep liquidity on the DEX. We planned to grow 30% month over month. Fortunately the program got a lot of attention from the Incognito community and new users.
The actual growth of liquidity pools in April was +840% and liquidity pools hit $2M+!
As for building a stronger platform, here’s what Incognito devs and users accomplished in April:
Portal version 2 is live on the testnet. It is a new trustless way to shield cryptocurrency by using decentralized custodians implemented in a similar way to MakerDAO.
This solution will allow us to launch trustless connections with different blockchain protocols. Especially ones which do not support smart contracts.
The first protocols which will be integrated with Portal are Bitcoin and Binance.
Privacy version 2 was also created and is in testing. At the chain level, we implemented one-time addresses and confidential assets to increase the level of privacy you get with Incognito.
You may have noticed that until now, you’ve been able to see what types of assets are transferred by using the network explorer. With the one-time addresses and confidential assets functions, privacy is extended to coin type, so people can no longer see what coins are being sent/received.
Incognito Highlight Website
@raz has been highly involved in developing the Incognito ecosystem from the moment he joined the community. His latest project, a website that explains Incognito in a simple, attractive way to newcomers, is nearing completion. You can find his latest update here.
@mesquka has gone far out of his way to repeatedly advance Incognito. One of the things he’s done is create a tool anyone can use that gathers node activity in one place. It also includes price charts and other chain-related data. Explore it at https://incognito.mesquka.com/
Yet another Incognito enhancer is @inccry. He’s the mind behind https://incscan.io , the site which tracks pDEX pairs and coin prices, recent trades and transactions, and more. He’s continuing to build features, a list of which you can find here.
If you feel like donating to any of those hard-working creators, I’m sure it would be much appreciated. You can also contribute by sharing your feedback, or by creating your own proposal and making something amazing!
Alright, so that’s the gist of what got done in April, though there was much more. If you want more on April results, see the PRV Holders Letter.
Now, let’s talk about what’s coming up in May.
During the call, we talked about funded proposals. Voting on new proposals happens weekly, so if you have a goal for May and want to get funded to build something, create your own proposal!
For May, the core team’s primary goals are divided into power and use.
What we’re dubbing “power” means to grow the network. This month, the goal is to add 400 more validators to the network. These validators can be Node Physicals, Node Virtuals, and Nodes powered by the Node Pool.
Network use has many facets. The primary one we are focusing on is the DEX. The Incognito DEX is the first decentralized, confidential, permissionless exchange. To be first requires a lot of experimentation on the path to find a product-market fit. Among the experiments we’re trying this month are:
- New Dashboard/UI
- Zero trading fees (optional)
- Removing the need for separate DEX and send wallets
- pKyber integration
- Increasing liquidity
We plan to increase the usage of Incognito to add more utility to PRV. The main focus is on listing more crypto Projects on the DEX. So if you guys know any projects that are looking for listing, feel free to recommend incognito to them. It’s free, permissionless, private, and decentralized.
Note: Trading fees are not transaction fees, so validator earnings are unaffected. Liquidity providers will still earn trading fees, as they can setup liquidity pools with fees. Zero trading fees as a default setting has already led to an increase in trades. In addition, this change is not necessarily final. It is one of many experiments taking place.
Note #2: With regard to pKyber, to clarify, we are not taking a competitive stance with them. It’s a symbiotic relationship in which they give us liquidity, and we give them privacy.
As we focus on building out a strong platform, we’re constantly changing. We’ll have some rather big updates to the app UI, we’re doubling down on the DEX, and there are more changes that you’ll continue to see. So be ready for the experiments, and let us know your thoughts.
Last month we received a lot of feedback on how to improve the pNode experience. In May, our team is going to work on:
- Improving purchase experience (allowing the purchase of nodes with different cryptos)
- Improving shipping time
- improving pNode setup flow
- reducing the number of bugs
The developments for layer one will be tested or released this month. The following are links to various proposals you may want to review.
One more thing
Below this is the Q&A (It’s long, so you’ll need to click to expand it). But before we get to that, there’s one more recent change that took place and we’ll be experimenting with this month.
You’ve probably noticed we changed our logo! No, it’s not a joke We’ve nicknamed it the black hole. It references the fact that Incognito helps you disappear, without a trace. It accomplishes a few things, but aside from being badass, it also helps to continue shifting Incongito from being a brand to being a community. I know it’s unorthodox, even counterintuitive from a traditional branding perspective. But remember: Incognito is not a traditional brand.
We’re not a profit-driven machine, and it’s not about a company. The privacy tool, and you, are the most important parts. If it ever became clear that a move like this would damage growth, it would be changed. But the rules aren’t one-size-fits-all. If the past is any example, you need look no further than February, when we changed from a beautifully-designed website to the clunkier discourse format, and saw 1,000% growth as a result.
Change is always hard, especially when it’s so unusual, but let’s see where it takes us. As always, be sure to share your thoughts! There’s a great discussion here.
For the Incognito merch discussion, that’s still all good. The old logo can be worn as “OG/legacy incognito”, or you guys can take the challenge to find cool ways to use the black hole to design merch. Up to you! There’s a proposal on getting Incognito merch out by @Joe_Moffett, you can check it out here
Finally, for the question and answer session! Due to how long this part of the post is, please click to expand if you want to read the Q&A:
1. Why isn’t there a PRV price chart in the app?
Answer: It’s coming! The work is still in progress for now, so use https://incscan.io in the meantime.
2. What is the intended stable price of PRV, long-term?
Answer: There is no set goal price for PRV. As we focus on building a strong project with a strong community and minimal speculation, the price is expected to rise and fall until it finds its correct market-fit.
3. The price of PRV has been rising considerably. Should I be excited or worried?
Answer: Both I wouldn’t suggest taking unnecessary risks based on price speculation. Instead, join us for the long run, and as the project succeeds, so will you.
4. How/when will nodes start earning more?
Answer: Block rewards for Nodes will decrease over time, and transaction fee rates will change. Consider the two parts of this: how much PRV they earn, and how much it’s worth in USD. The number of PRV your node earns from block rewards will go down, but how much PRV it earns can increase or decrease depending on how many nodes there are compared to validator slots, how much transaction fees are, and how many transactions are happening on the network.
That’s different from how much that is worth in USD depending on the price of PRV, which has a 100% chance of increasing and decreasing over time.
5. You guys are adding tons of nodes, there’s a goal to have 1800 by the end of the month. Won’t that decrease node earnings?
Answer: More nodes means the network is more decentralized and secure. Because the chance of selection as a validator is random, your chance decreases with more nodes, and increases with more validator committee slots (as shards increase). And, the more transactions that occur in the network (until maximum throughput), the faster the cycle occurs and more nodes will earn as well. It’s a complex system that is designed for the various changes to balance out, and ideally, increase the value of what you earn.
6. How else will I be able to use PRV in the future? Anything besides the node pool planned?
Answer: Utility for PRV is vast, much of it yet to be created. Currently, PRV is used in block rewards, private transactions, as a vehicle to privately purchase other crypto, for network fees, and more. In the future, we’re looking at increasing transaction fees, integrating PRV with payment gateways to use for eCommerce, and more. With pApps and Incognito Mode for smart contracts, endless uses for PRV can be considered, if we dare.
7. How will zero trading fees affect liquidity providers and node operators?
Answer: It doesn’t affect transaction fees, so Node operators won’t be affected. Zero trading fees has already encouraged an increase in trades. Liquidity providers still earn the rewards for providing liquidity, and can create liquidity pools which have fees, so they can still earn as well. They are largely unaffected.
8. How will smart contracts be implemented for shielded crypto? How can we know our crypto won’t be stolen?
Answer: When you shield your crypto with smart contracts, the custodianship is fully trustless. Your crypto is locked forever on-chain in the smart contract, and you are issued a privacy coin. It is automatically released when you unshield it.
9. Are there any security upgrades planned as the size of the network grows?
Answer: Consensus v2 and highway are two big upgrades that will increase security. Also, as the size of the network grows to its full capacity and decentralization is complete, committee size will increase and security will grow. There is also a plan to conduct Portal audits, which can also be done by any third party.
10. what effect, positive or negative are you expecting from the upcoming halving?
Answer: Everyone has their own opinion on this. I can guarantee one thing: The price of bitcoin will increase, and it will decrease.
11. Will we able to get full earning percentage of pNode?
Answer: You can already stake your own PRV to get full earnings. Plug in and set up your Node, and it will automatically borrow staking funds. You’ll receive 35% of its earnings by borrowing. To stake your own PRV, check here.
12. What’s the difference between portal v2 and portal v3?
Answer: There are a few differences, but in short, Portal v2 uses custodians to protect funds, while Portal v3 will use Ethereum smart contracts as collateral custodians.
13. Can you explain how exactly the NAT traversal solution will support highway? or is it intended to replace it?
Answer: NAT traversal solution is planned to replace highway. Highways are complex, and you can’t have very many. NAT Traversal will allow every node to connect to each other without issue. It will also help to decentralize the network further and increase security.
14. Any plans to speak on popular podcasts?
Answer: We are always up for it! It takes time to reach out to hosts and work out these appearances, and most of the core team is very busy this month prioritizing the pDEX and improving the products and UX. There will come a time where we actively pursue appearing on podcasts, but for now we take what comes to us. In the past months we’ve appeared on a couple. If you have any connections to influencers/podcast hosts, we’d love for you to introduce us!
15. If rewards for Nodes and Node Virtuals is set by design to decrease, what is the incentive to invest in one, other than taking the risk to help privacy? Seems a lot of risks, for a system designed to reward us less overtime for supporting the network?
Answer: You’re right, that doesn’t sound fair. Thankfully, it works a little differently. The network is designed to reduce block rewards, but not necessarily reduce how much validators earn. Every year, block rewards decrease by 9%, but earnings can increase based on an increase in network transactions, validator committee spaces, and more. Additionally, the price of PRV will likely increase as more people go Incognito. Transaction fees will also increase, meaning node owners can earn more. Decreasing block rewards is not done to lessen validator earnings, but to moderate the supply of PRV according to its economic model. So ultimately, the system is designed to balance the decreasing block rewards as the scale of the network increases. So, as privacy wins, so do you.
16. You guys are talking about pDEX v2 - apart from zero trading fees, will there be any new app features or changes?
Answer: Quite a few! Like described earlier, the UI is changing. There will be a dashboard update, removing the deposit/withdraw step by allowing trading and sending from one wallet, and more. And again, the trading fees aren’t entirely removed. They’re just zero by default to allow anyone to trade, but liquidity pools can be setup to charge trading fees, to give liquidity providers ownership of the pools they create.
17. Does setting a fee higher than zero put your trade in front of the other trades?
Answer: The trading fee does not, but a higher transaction fee does.
18. How will somebody be able to buy PRV privately in pDEX? Can you elaborate more on that?
Answer: Any on-chain transaction is private. So, to buy PRV privately, you must buy it from within the network. First, shield your public coins to get privacy versions of them. Then, trade them for PRV in the pDEX. That’s all there is to it!
19. Is there a timeline/metric goal for when liquidity and staking rewards will be reduced?
Answer: There is no exact timeline. It depends on the availability of DAO funds for rewarding liquidity providers, and how much liquidity is being provided. It is nowhere near capacity yet, so it will remain consistent for some time.
20. When will XRP be supported?
Answer: After Portal v2 launches, the first trustless integrations will be bitcoin and binance. After that, we can use the bridges built to expand to other chains. We’re considering bitcoin cash, Ripple, and more. It takes time to build a way for these integrations to take place, so we want to be sure there’s a real demand for them before reaching out to the developers from those projects so we aren’t wasting anyone’s time.
21. Will you be creating incentives to increase liquidity for pairs that don’t include PRV? For example, a BTC and USDT pair.
Answer: We’re focusing only on PRV-related pairs in order to bring more use to PRV. Plus, if there is liquidity for PRV pairs, there’s no need for non PRV pair liquidity, because you can use PRV as a medium of exchange. For example, if you want to trade BTC for USDT, you can trade your BTC for PRV, and then that PRV for USDT. By focusing on PRV pairs, we’re concentrating liquidity where it’s needed so that you’ll end up with the equivalent amount of USDT for the BTC you traded. Otherwise, without overwhelming network-wide liquidity, rates may not be equivalent across trades.
22. Will there be a referral system for Nodes?
23. Will you keep the pDEX separate from pUniswap and pKyber?
Answer: They will be integrated into the pDEX.
24. How often Node can get into that not earning period and what is being done to resolve that?
Answer: Node selection is entirely random, to allow for equal selection chance. This means that over the long run, statistically, node earnings are equal. However, it is possible for your node to remain unselected for several cycles, and the longest non-earning streak is 23 days. If your node does not earn for a couple weeks, it might have an error, so be sure to double check. As more slots in validator committees become available (increasing shards), with transactions to match, more nodes will be earning at one time
25. Why is the XMR<>BTC liquidity so small? The trades quote a weird price.
Answer: The pDEX uses automated market-making algorithms, which balance the price of an asset based on supply (size of liquidity pools) and demand (how much you’re trading). As a result, pools with large liquidity compared to your trading amount will reflect market rates like what you might get at Binance or Coinbase at that moment, but if the pool is too small, the prices will be different. This is why we focus on attracting liquidity to PRV pools, so you can always have a work-around. Just trade your XMR for PRV, and then your PRV for BTC, and you’ll get a more normal rate.
Phew, that was a lot of reading
Thanks! If you have any more questions, comments, concerns, thoughts, or anything I haven’t listed that you want to share, please do! Reply below, and let me know your thoughts.