Community Call #5 Recap

Dear Minimalists,

Thanks to everyone for joining our last community call. We covered all the things happening in the market and more.

Our CTO also joined us on stage speaking about algorithmic stablecoins and his long-term vision of the blockchain space. You can find a recording of the session here.

Read on for a recap of the most important points we covered.

Jazmin (Technical communication) and Luke (Head of the community) took the stage, moderated by Naomi (Social Media Manager).

Minima Updates

What have you been working on this last month?

Luke: “We’ve continued to grow the community, and the node count, particularly in Asia, which is great to see. It’s now well over 70,000 and continues to grow day by day. In terms of countries, we are now in over 180 countries.”

Jazmin: “I’ve been working on content for our docs, and it’s been great to see that so many of you started to read those, and we’ve received really good feedback so far. I’ve also done internal testing on the new version of Minima. We’re also working on a new Incentive website, and I worked on that together with the tech team.”

What updates can you share with us?

Luke: “The first one is already in the announcement channel, and it’s about the node count tracking. So we look at two different numbers: one of them is the number of nodes installed, and the other is active nodes. The chart you are seeing is the number of installed nodes, roughly 80,000, but at any given time, the number of active nodes fluctuates around 30% lower. There’s a reason for that.

In any given network, you will see ups and downs on any given nodes depending on external factors such as connectivity or phones being shut off. So going forward, we will publish both of these numbers for maximum transparency. And you can actually see the number of installed nodes in your Minima app when using the “status” command.

The other update is brand new and related to the Incentive program post-TGE. We will be allowing you to make a choice to either take out all your coins or leave them in the program, and you will continue receiving rewards until 2024. There will be a halving of the rewards every three months. Either you take them out, or you leave them in and continue earning.”

Another update is that we now have a name for our Layer-2

Jazmin: ”Yes indeed. We have a name, and it’s Omnia. Omnia means all or everything in Latin. Just to give you some background on L1 and L2, as you know, Layer-1 is the base layer, and all transactions have to go through every node in the network. That’s why it does not scale.

So when you see other Layer-1s advertise their high throughput, it’s usually achieved at the cost of decentralization. At Minima, we don’t sacrifice it. So our approach to scaling is Layer-2. We also have to differentiate between true Layer-2s and other scaling solutions such as sidechains. The difference is that an actual Layer-2 inherits the security of the Layer-1, the blockchain. So you get all of the guarantees of the underlying chain on your Layer-2. Sidechains have their own security and can even use their own consensus algorithms. So you could run a PoS sidechain on a PoW blockchain.

With Minima, we are internally working on our Layer-2 solution, Omnia. Omnia is similar to Bitcoin’s Lightning Network but more advanced. In essence, Lightning is a protocol that allows you to update and exchange smart contracts between a subset of participants in the network. And since it’s just a subset, it’s a lot more scalable, faster, and cheaper.

And one thing to know is that if you want to run Lightning on Bitcoin, you need to run a full node, and it’s not that easy. Most people will just use a wallet that talks to a cloud server. Obviously, that comes with its own security issues. But on Minima, everyone is already running a full node, so there is nothing additional they’d need to do.

Paddy: “We see a lot of Layer-2 solutions these days, and the ETH fad is to have roll-ups, sidechains, etc. And what’s interesting to see is that as they get used, their fees go up. And that’s because I’d not call them true scalability solutions. They are throughput solutions. And what you find is that they have the exact same flaws as the underlying blockchain. As traffic increases, fees increase. Whereas if you look at lightning, as that has grown, the fees go down. As liquidity increases, the fees go down. The bigger it becomes, the better it becomes. And that’s why we chose it as a template because it’s the only one that can offer scalability in a decentralized manner and without limits. And the speed of interactions purely depends on the hardware people have. With Minima, we get to benefit from hindsight and technological progress, so we use something called ELTOO, which is a protocol that was invented after the original lightning network, and it allows for simpler, more powerful ways of operating off-chain. With Omnia, you can do any sequence of transactions, with any smart contracts between a subset of users and tokens.”

Community Member of the Month

Congratulations to our Community member of the month, who comes from Kazhakstan this time. Unfortunately, since he’s in the countryside, his connection isn’t good enough to talk to us, but we’ve gotten some answers in advance from him.

He has been very helpful to new Minimalists joining our community, and we even had community members reach out independently to tell us about him.

You can read about him and his journey to get to Minima here.

After the incentive program ends, how do you ensure that the number of nodes remains at a high level? Will there be a new node count growth plan?

Luke: “There are two parts to this. The first is, of course, utility. You will want to continue running your node to access all the utility that will exist on Minima. There will be MiniDapps for testing available this month. And we’re also encouraging developers.

There are also plans post-TGE for the reward program, so you can hold or cash out. When you cash out, you won’t be able to earn any further rewards. It’s up to you.

And then there will be nodes as part of partnerships that are coming up.”

Risks associated with stablecoins

Jazmin: “There are absolutely risks with these. With the centralized, the question is always what are they backed by. And for the algorithmic one it’s all about confidence in the end. If the price of one asset in the system drops, it can impact the stablecoin negatively. “

Luke: “Another question is also the underlying liquidity. There have been questions about not being able to cash out your stablecoin, so it is at the back of my mind.”

Paddy: “Stablecoins are a temporary fix. We just need them while we transition from the old to the new world. The endgame is that you will transfer in the base currencies of the coin that wins. Currently, you can’t do that because the marketcap is too low. Eventually, as these cryptocurrencies grow, they will become a lot less volatile so that things in shops will just be priced in them. There won’t be a conversion. Then the value of the currency will go up in proportion to the economic growth of the world. Personally, I am not a big fan of stablecoins because they feel like a band-aid as we move over.

The collateralized stablecoins are going to work a lot better than the algorithmic ones. And the reason is that algorithmic stablecoins work on artificial scarcity. And that’s always about rent-seeking, a zero-sum game. In a true crypto economy, the rent-seekers will be kicked out, and only good products remain. I’d give the algorithmic stablecoins a 40 -60% chance of survival.”

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Interestingly enough, 10 days after this call took place, the algorithmic stablecoin in question has dramatically lost its peg, wiping out billions of dollars in a matter of days.

Thanks again to everyone joining our call, and we’re looking forward to seeing you during our next one. You can listen to the recording here.

And for any further questions, reach out to us anytime on Discord.

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