We had a great AMA in Matic Network’s Telegram group on Friday! Many of the group's 32,000+ members were on hand to ask CEO Xiaohan Zhu and CMO Mike Chan many questions about:
- Xiaohan’s and Mike’s backgrounds.
- An overview of the Meter network.
- How our partnership with Matic will work.
- MTR’s peg to electricity.
- Much more!
Check out the transcript below.
Welcome guys! Can you please share a little bit about yourselves, so we can get to know you better?
Hi everyone. It is my great pleasure to come to the Matic community today.
I have a mixed engineering and finance background. The first 15 years of my career were in R&D and engineering. Afterwards I got my MBA from Wharton and started doing strategy and investments. Back in 2016 I formed a VC fund called ZMT Capital. In 2017 many of our portfolio started launching tokens include Brave (BAT) and Aion. We started investing in cryptos as well. In 2018 I finished the first fund and decided that I enjoyed BUIDL more. That is when I started working on Meter.
We have been working on meter.io since then and just launched mainnet on July 4th 2020 and had and IEO on gate.io on July 15th, which was 45x oversubscribed.
I'm Mike and I'm the CMO and Head Cheerleader for Meter. I have a background in engineering, marketing, and product, and I've started a few tech companies of my own. I discovered Meter just doing research online, and was enamored with the PoW-mined stablecoin, hybrid consensus mechanism, scalability, and much more. So I blindly reached out to Xiaohan, we had a great chat, I suggested some marketing ideas to him, laid on the sales pitch to work together, and here I am as Head Cheerleader!
Can you share a little bit about what Meter.io is?
Meter is a DeFi infrastructure with a Built-in PoW based low volatility coin. It employs a unique hybrid consensus protocol that separates currency creation from record keeping.
The system uses Proof of Work to create the $MTR low volatility coin, making it as decentralized as Bitcoin and uses HotStuff (similar to Libra) based PoS consensus with $MTRG governance coin to manage the ledger.
We are trying to achieve 3 things with Meter’s DeFi infrastructure: 1. complete Bitcoin’s original vision and create a metastable sound money independent of the fiat system. 2. Address scaling issue with a Hybrid PoW/PoS + HotStuff consensus that is backward compatible with Ethereum. 3. Interconnect with other public chains like ETH and as a side chain.
To clarify, can you tell us how the MTR low volatility coin is different from other stablecoins and low volatility coins?
All the stablecoins so far are pegged coins actually, especially to the USD. Based on finance theory only real USD backed stablecoins could maintain pegging to USD at scale. Unfortunately they will have to be centralized solutions and subject to all the regulatory restrictions. At the end of the day, it is the central banks’ job to create such coins.
Crypto-backed stablecoins like DAI first have capacity issues as it could only use a very small portion of the backing assets as collaterals to avoid causing liquidity problems in liquidation scenarios. It also has to rely on oracles, which is typically centralized (there are just a handful of good data sources in the world). If oracles provide wrong data, the entire financial system is subject to fail. This may be too much of a systematic risk.
Meter is designed to avoid such systematic risks. It gives up strong pegging to USD, but could maintain an economically stable value. Each MTR is created with 10kwh of SHA256 Proof of Work, the same method used by BTC. Miners’ profit chasing behavior will drive the coin to the cost of global competitive electricity price, which is more stable in purchasing power than any fiat in the world. Permissionless mining also eliminates counterparty, regulatory, and oracle risks typically found with crypto- and fiat-backed stablecoins.
Can you tell us a little bit about your Matic integration, and how it ties into this whole vision?
We have been friends with the Matic team for a long time. We share the same vision that the current EVM is important for developers and ETH 1.0 is in great need of scaling.
In addition, Matic team is actively working on DeFi related applications as well.
We recently created an ETH bridge to map the Meter main net $MTR and $MTRG tokens to ethereum. Their wrapped erc20 version is called $eMTR (0x29E9fDF5933824ad21Bc6dbb8BF156EFA3735e32) and $eMTRG (0xBd2949F67DcdC549c6Ebe98696449Fa79D988A9F). They are created for Meter to be part of the Ethereum composability.
We are also working on a oracle driven smart AMM for DEXes and launching the liquidity mining program with our partner later next week.
We would like to bring $MTR and $MTRG to the Matic network as well for DeFi application. There are a lot of integration we could work with Matic on scaling and layer 2 level interconnecting.
Speaking about Dapps, can you tell us a little about the use-cases of MTR and MTRG? Are there any live apps already using MTR?
We are still building out the infrastructure on the Meter side to bring in stability to $MTR. One of the most important early functions for $MTR is to compete for newly emitted $MTRG. We will enable that capability later this year and open staking on the Meter network. This will provide the initial use case and liquidity to $MTR. This will provide the base for building more apps on top of it. $MTR is also the fuel and gas to pay transaction fees in Meter network.
What would be the best way for the community to stay in touch with Meter and it's progress?
Our telegram channel is https://t.me/Meter_IO Please join if you are interested in knowing more about Meter and our future progress.
What is the amount of electricity pegged to one meter coin?
10kwh with mainstream BTC miners for the metastable coin $MTR.
For me the most important question is how is the peg maintained. Is that something you can touch on briefly?
To answer the earlier question on how we achieve the pegging. It was actually done at the consensus layer when miners solve crypto puzzles. On average, a certain number of hash operations could always mine 1 $MTR. We have a built-in curve to represent the improvement of energy efficiency for miners and it could be adjusted through governance if it deviates too much from reality.
How come electricity price is more stable than fiat?
We have data from the last 70 years. Competitive electricity price went up by 6.3x if measured by USD, but it essentially stayed the same after adjusting for inflation. purchasing power wise it is surprisingly more stable than any fiat currencies in the world regarding to the Matic integration.
For the success of a project, investors, communities and developers play a major role. What is the MTR strategy for engaging them?
We were fortunately to have Pantera, DHVC and GBIC during the early days. Our IEO on gate also brought in 2700 new token holders. Moving into the future, we will work with developers to build more applications that are useful for the crypto space to attract investors, community, and developers. For example our upcoming launch for the smart AMM DEX is through collaboration with another development team.
How will advances in energy generation affect Meter? For eg if solar power is available for really cheap, will the price of MTR go down?
It is a global race to the bottom. At the end of the day, only the lowest price producers matter. They are actually quite spread out across the world. That global competitive price of electricity is really stable. Even if there is a major leap in energy technology, there is a governance mechanism that could be used to adjust the curve.
Can $MTR be used to pay for real world electricity if and when there is real world adoption?
No yet. We certainly hope it will one day. Currently the main function is proof of burn to create a unit of account of value that could not be cheated like paper currency.
Are there plans to work with power companies to store the value of excess power in MTR coins? If power companies accepted MTR in exchange for 10kwh then this would be a true backing of the coin.
Because the economic game is redesigned, the amount of energy needed for mining is actually much much less compared to traditional PoW coins. For example in BTC, the hashing power in the network correlates to the price of BTC or the market cap of BTC. In Meter, the hashing power only correlates to the additional $MTR needed in the system as each $MTR represents the same value. We did a calculation, to support the US economy with $MTR, the annual mining cost is similar to the annual budget of US Mint and US engrave and Print. It can be as efficient as fiat.
Interesting, so it is more sustainable than Bitcoin.
yup. we do not use PoW to protect the ledger. We use PoS with $MTRG and HotStuff consensus to protect the ledger. $MTRG is distributed so on chain competing with $MTR in the near future.
The entry in the system is permissionless, and you could upgrade to a stakeholder through on-chain activities.
You mentioned that kWh essentially remained the same due to inflations. What if In the future, suppose let's say due to widespread adoption of nuclear fusion, electrical costs are reduced drastically to pennies, wouldn't $MTR take a hit?
Actually the amount of energy we could harvest and use represents our level of civilization. Our human race uses different things to measure value based on the level of civilization. It is already a great achievement for a currency to sustain the current civilization period:). In addition, we could use a governance mechanism to adjust for any changes if needed. That is one of the core functions of $MTRG.
When you stake $MTRG, your income stream will be in $MTR and the DAO has assets in $MTR in the system. The two tokens’ interest are very well aligned.
True. So, can $MTR in the future be backed by other sources of energy other than electricity?
So far PoW mining is the more direct and uncheatable link from physical world to cryptoworld. That is why we chose it. As technology improves, I am sure there would be some new ways.
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