E-Crypto News Talks to Telos Blockchain Chief Architect on Cross-Chain Interactions
Cross-chain transactions have been something of an enigma for many people within the crypto space. The ability to execute transactions across several blockchains has eluded most cryptocurrency enthusiasts.
Recently, Telos partnered with the pNetwork ; a cross-chain interactivity platform. This partnership allows users to do many new things within and outside Telos and other blockchains as well.
E–Crypto News reached out to Douglas Horn, the Chief Architect of the Telos blockchain about this and the many possibilities that the new partnership brings to the table. Here is what he had to say.
Douglas Horn, Chief Architect, the Telos Blockhain
- Do you think that cross-chain transactions will enable the Altcoins to compete directly with Bitcoin? Please tell us the reasons for your answer.
I don’t see this as competing with Bitcoin but as complimenting and extending the powers of Bitcoin.
Think about the speed and cost of payments, for example: using pBTC on Telos means anyone can make transactions as low as 1 satoshi twice a second with no fees and complete transparency.
That’s a big improvement over similar transactions on Bitcoin or even Lightning Network. But that’s an integration, an extension of the power of Bitcoin, not competition with its ability to be a strong store of value.
2. What benefits can be gained from the integration of the pNetwork with the Telos blockchain?
Telos gains access to more widely distributed stores of value like BTC and any other tokens that pTokens brings to Telos in the future.
Bitcoin and these other tokens gain the advantages of integration into the Telos dapp ecosystem.
The first use of that is going to be faster, feeless transactions, but more importantly will be the ability to use pBTC in various Telos dapps and economies.
For example, Telos has a highly advanced, easy to use governance engine called Telos Decide™ which is the only such toolset that exists at the Layer 1 level of any chain.
Groups from city councils to homeowners associations to unions to sports leagues can use to easily build, robust and resilient governance structures that control any token on the Telos chain.
So adding pBTC or others, perhaps pUSDC, or other stablecoins would mean that these organizations can work with more widely used forms of payment.
Together, these systems create a structure that organizations will actually be able to use, where neither system alone can.
3. What kinds of transactions can Telos users perform using pNetwork tokens?
At the moment, most are swaps and DeFi, but only because the deployment just occurred.
Already, dapps are beginning to integrate pBTC into their payment systems–either directly or through automated Swaps from the Telos Swaps liquidity pools.
Soon you will see any Telos Decide-based DAO able to control funding treasuries in pTokens. Within a few weeks, Telos will launch T-Bonds, which are NFTs of locked tokens which can be bought and sold on secondary markets.
These are essentially like a derivative or T-Bill but the tokens always go with the NFT to prevent it being a security.
The first of these will be issued by Telos itself, allowing the chain to sell tokens for pBTC to fund expansion without the TLOS tokens immediately depressing the price on primary markets.
Several projects have shared their plans to use the T-Bonds system for their own fundraising purposes. It may become a new form of ICO (though it also works well for secondary offerings, which are hard for ICOs).
We think that pBTC and TLOS will be the major currencies that people use for T-Bond investing.
4. What are Telos capabilities as regards decentralized finance (DeFi)?
DeFi is just beginning to grow on Telos but there are some unique advantages that will be seen soon.
Currently, Telos has its own AMM called Telos Swaps which also includes a USD-pegged token called TLOSD that’s backed by various assets.
Telos has DEXs like Newdex.io, Evolution and Alcor.exchange. In addition to pTokens we have IBC routes to other EOSIO chains, the most important of which is EOS.
My hope is that our relationship with pTokens will grow and we will soon also have pETH and other pTokens on Telos as well as pTLOS and other Telos-based pTokens on Ethereum and other chains.
One way or another you will see wrapped TLOS on Ethereum AMMs like Uniswap.
Two other DeFi offerings of note are our 15-16% APR staking rewards through Telos REX and T-Bonds which are a very exciting new way for projects to get funding as a replacement for ICOs and even as a funding option for additional rounds of development.
T-Bonds are an NFT that locks up tokens until a maturity date. The tokens always flow with the NFT, so it’s not a promise to pay, just an unlocking event.
But this lets us create a secondary market for the T-Bond NFTs. Just like T-Bills don’t pay until their maturity date, but are always liquid on secondary markets,
T-Bonds will allow projects to sell tokens without dumping their price on liquid exchanges–so that they can accomplish new milestones to increase the value of their projects before that impact hits.
Investors get a good discount on buying the tokens but retain liquidity in the position if not the tokens themselves.
And speculators get a new type of derivative to use to bet on staking rewards just as T-Bill traders make money on interest rate changes.
TLOS-backed T-Bonds will be the first offering, but almost every project we share the T-Bonds concept with wants to use it in their next funding round and we will make all those tools available to Telos projects, so there will be many more following.
I expect the all other types of DeFi primitives we see elsewhere like flash loans and insurance will all come to Telos now that Swaps and pBTC are live.
Besides the speed and feeless transactions, Telos offers three things that the leading platforms do not have. First, there’s a high protection against front-running transactions due to lack of a mempool or paying fees to jump in line.
Second, it’s exceedingly easy to make governance tokens that have real governance functions powered by the protocol and maintained by the Telos Core Developers.
Most Ethereum and EOS-based DeFi “governance tokens” are really just user polls and multisigs compared to Telos Decide™.
Meaningful, smart contract enforced governance is going to be increasingly important to people as poor versions lead to losses on these other chains.
Finally, only Telos offers degens the ability to ensure their transactions never lose money. A DeFi user can compose a transaction of all the primitives they like and at the end of those actions, add an action to check the new balance of the account.
If their transactions result in a lower balance than they started with, they can just have the transaction fail. We’ve tested it out and will be releasing a suite of DeFi tools and models soon for anyone to use.
I expect we will include a no-code type toolkit in 2021 that lets anyone compose Telos DeFi transactions from primitives like Legos.
Most people will want to include this “fail if balance decreases” money Lego at the end of their transactions so they can ensure they never lose money.
As a side note, this is probably the world’s worst case of burying the lead: “Telos offers DeFi transactions that will fail if they lose money!” I think people will like this a lot.
5. What are your thoughts on competition among altcoin chains?
We are due to reach a point where the adoption of blockchain tech overtakes the ability of well build systems to accommodate adoption.
That’s opposite the problems we’re all trying to solve right now, but it’s inevitable. This is why I’m not concerned about well founded competitor altcoin chains: the need is going to be enormous.
So I don’t see these chains as competition except at the fringes. I see them as partners.
There are two movements in crypto that sadden me: the tribalism and the scammers. A number of projects are scammers or, more gently, are unlikely to add value to the ecosystem.
There is a good number of projects that have real utility and some projects that were fairly launched and eschew centralization.
Telos is one of the rare projects that does both. But in the end, it’s real utility and development that will count.
Those that don’t bring something real and meaningful to the table are just drawing attention and resources away from those that do.
As sad as that it, I think tribalism is sadder because it means that people who have roughly the same aims and ethics, working towards the same goals, are balkanized by their fixation on one specific incarnation.
I don’t really believe that EOSIO or anything else is an “Ethereum-killer” any more than Television was a “radio-killer” or the Internet was a “television-killer”.
The reality is that new developments have made each of these modes more powerful by filling in their previous shortcomings. The blockchain landscape will be the same.
6. Do you think any of the altcoins will rival Bitcoin? How do you think this will occur?
I think BTC will always enjoy a central place in finance as a store of value, similar to gold, but probably more functional than gold today.
The limited number of BTC in the world and the strength of the protocol are unparalleled. This is why it’s vital to extend this value to other systems where the functionality is far greater and can better evolve towards usefulness.
Bitcoin is like big gold bars–not many people actually own gold bars–they are very valuable but not user friendly.
What people actually own in gold are small amounts in jewelry or ETFs or perhaps futures. These are modifications of gold bars that make them easier to buy and sell, and put to use.
Expanding BTC to high speed, high capacity chains like Telos via pTokens is like converting gold bars into forms people can more easily deal with, with the knowledge that they can always go back to gold bars or be priced at parity.
7. Ten years from now, what do you think will be normal scenarios in the blockchain space?
Ten years from now, blockchain will be over twenty years old and will be in common usage among most computer users, which is to say almost everyone in modern society, but few will think much about it day to day.
It’s similar to how right now people access databases, cloud storage, and payment systems without giving much thought to the inner workings of any of them.
Bitcoin will be part of a basket of world reserve currencies, CBDCs will be in use in every country, much of it will be integrated into the core business operations and the machinery of finance.
The majority of supply chains will be on blockchain or integrated into one. Digital currencies will be built into browsers and other platforms like Venmo will become services that use digital currencies with perhaps a layer of additional user convenience and dispute resolution.
Everyone will use blockchain and almost nobody will think about it.