ProtonChain is the love baby of Lynxchain (had its own wallet and blockchain) and Metal. You might remember this name from an AMA we had with Marshall Hayner, the CEO of MetalPay. 7 months have passed since then when suddenly Proton came on my path again hunting small cap gems on Kucoin, only this time I decided to go for a deep-dive.
What are they trying to achieve?
''Programmable Money that works.'' Is the slogan clearly visible on their website, which fits their mission: ''Crypto currency, and in particular, stable coins are going to be the basis for the next generation of digital payments. Our mission is to enable users to buy, trade, and use them anywhere and everywhere in the simplest possible way.'' So they're a payments provider building an ecosystem on the blockchain with the goal of being simpler and cheaper, how are they achieving that?
simplification of ProtonChain.
Simple Usernames: Every business and individual account on Proton has a unique human readable name. Need to send $20 to fred? It’s as easy as you would expect''. As simple as posting a tweet, Proton allows to send money to usernames instead of long and complex wallet addresses. This was one of the features I enjoyed most, I lost quite some crypto over the years with not checking the address well enough.
Verified Identity: Proton chain stores identity attestations by multiple identity providers, both for individuals (KYC) and businesses (KYB). These identity providers can be queried with the user’s permission.'' To build a bridge between the legacy finance system and crypto this seems a necessary evil. KYC itself is pretty basic, doesn't require actual proof of residence or any form of identification.
4,000 Transactions per second: We’ve stress-tested Proton at over 40 million transactions per day. It can handle far more traffic than blockchain apps are currently collectively capable of''. Very nice for a L1 blockchain, TPS can often be extended even more with sidechains/rollups.
Users never pay gas: All user transactions are completely free. Send $20 to someone, the person gets $20. You pay nothing. All resources are handled by the app at extremely low-tiered costs.'' Who doesn't love that?
''Proton supports multiple wrapped stablecoins including USDC, PAX and TUSD. Developers can add their own coins in a permission-free way.'' and ''Apps interact with the Blockchain by in-wallet Payment requests. This revolutionary tech eliminates the need for chrome plugins, “dapp-stores,” or other devices.'' are self-explanatory, useful features most other projects lack.
How do they make all this work?
ProtonChain is essentially a DPoS chain (Delegated Proof of Stake) combined with an identity layer. ''This identity layer is a distributed system of KYC validators and Money Service Businesses (MSBs) that can validate, for free, any user’s identity — thereby giving them the “blue checkmark” of a trusted user.'' Lynx was a key player within the EOS ecosystem, having built the leading EOS wallet for US users. Eventually Lynx decided it could improve upon the design and capabilities of EOS and developed its own Lynxchain as a fork of EOS.
When hearing the name EOS many people still have a bad taste in their mouth due to their failure to address design flaws. The voting process for selecting validator nodes was being aggressively gamed by cartels looking to capture block rewards, which scared away developers, crashed the price and the rest is history.
ProtonChain introduced the ''Governing Council'' to prevent this from happening. ''The Proton Governing Council is an independent, term limited governance entity that regulates and oversees block producers on the Proton blockchain. It consists of up to 59 diversified organizations representing a wide variety of stakeholders**.''**
Governing Council tasks:
– The council monitors all block producers, verifies that performance meets minimum thresholds, and in the case of non-compliance can terminate BPs.
– A majority vote of council members is needed to pre-approve new block producers. Each BP must meet minimum technical standards, and must have a verified identity.
– The council advises Metallicus and other Proton contributors on the direction of the codebase, and sets the block producer rewards and resource pricing for apps.
– All members of the council have an equal vote, and serve for a term of 2 years. The council nominates and votes on its own replacements.
Would I call this decentralized? ''59 diversified organizations representing a wide variety of stakeholders'' have a lot of influence over the whole chain, and they can choose their own replacements. I'd say this is their weak point if not executed and monitored properly, it's the most decentralized way of running a centralized project, nowhere near the level of decentralization Bitcoin/Ethereum have but better than Solana for instance.
Tokenomics:
Marketcap: 65.5M USD.
Proton Issued: 12,231,927,183
Proton Short Staked: 2,204,328,306
Proton Long Staked: -1,654,882,434
Max supply: theoretically unlimited.
Protonchain currently offers ''Short Stake'', offering Variable APR sitting at 6.35% today. This allows you to vote for 4 block producers, rewards can be claimed every 24 hours. There is no hard cap, but due to deflationary measures there could eventually be a tipping point it becomes deflationary.
Staking also gives you reduced fees at Protonswap, fees start at 0.3% for each swap and is reduced the more XPR staked, 10 million XPR and you will pay 0 fees for each swap.
Proton currently has two deflationary measures:
- Fees from Proton Swap (0.1% from every transaction) are converted to XPR and burned
- System resources (including NFT resources) are purchased with XPR and burned
On July 19 the first ever Proton burn happened. The XPR burned in this transaction came from 0.1% of the trading fees on Proton Swap; these funds were used to purchase XPR, which was subsequently sent to the /token.burn Proton wallet to be destroyed.
Current pricing for Resource plans.
Roadmap & Products:
ERC-20 Wrapping: NOVEMBER 2020
We released an ERC-20 Wrapping and Unwrapping tool. This tool allows users to move between ERC-20 coins to Proton coins and back. Wrapping gives you the opportunity to send Ethereum for 0 gas fees once it enters the Proton blockchain.
ProtonSwap: Q1 + Q2 (Liquidity mining) 2021
A cryptocurrency swapping tool with instant conversion and no gas fees, ProtonSwap was launched as the best way to swap cryptocurrencies. With the ability to swap for single satoshis and small units of crypto, this tool enables first-of-its-kind micro-transactions between blockchains. A DEX that doesn't rip you off, I like it. Proton Swap allows liquidity providers to earn rewards on the tokens that they provide to the pools on select trading pairs. Liquidity mining on Proton is designed to be simple, attractive, and seamless.
Simple interface, does everything it needs to do.
Proton Market: Q2 2021
Create, sell, and buy NFTs with no gas fees, near-zero minting costs, and superb end-user experience. With the Proton Chain's fast speed (3,000+ TPS) and the Proton Wallet's ultra-secure PSR, Proton is the perfect new home for NFTs.
Looks good, NFT's are cheap. Site needs more selection criteria e.g. ''sort by cheapest'' etc.
Still coming up:
Fiat Transaction Integration: Q3 2021 (minor delay)
Proton Chain was developed with the intent of recording payment pending transactions of fiat as well as crypto transactions. As fiat bank accounts are moved into Proton wallet we will demonstrate the first examples of that. Direct fiat integration in the app, makes life easier.
Proton Lend: Q3 2021
Using the LOAN token that will be airdropped to Proton holders in Q2 2021, Proton Lend allows individuals to borrow or lend cryptocurrency using multiple blockchains simultaneously. This multi-blockchain approach will open up lending options that are not commonly available on other crypto lending platforms.
Updated Roadmap expected soon.
My holdings:
250K XPR at an average of 0.008122
Target: Hard to predict with relatively new projects, if adoption takes place I could see 1$ in the next 3-5 years.
This is not financial advice, just some DD on a project I found and wanted to share. If there's any mistakes let me know and I'll correct them.
