We're back with another episode of Everything EOS! This week, Rob and I discuss the EOS Scaling Blockchain Conference, Cypherglass' EOS Pumpkin Carving Contest, braided sidechains, and much more. Watch a video of the episode below, or read the transcript if that's your thing.
EOS Scaling Blockchain Conference: bit.ly/ScalingBlockchain
Cypherglass EOS Pumpkin Carving Contest: www.youtube.com/watch?v=Fa17y3wJjq0
BitShares EOS: steemit.com/bitshares/@stan/sov…-the-brown-eos-beos
Pegged Stablecoins: github.com/EOSIO/eosio.exchange
EOS Blocksmith Dashboard: dashboard.eosblocksmith.io/
Meme Contest: medium.com/@eosBlockSmith/eos-…ontest-b30ce30477f5
Zack: Welcome to the 28th edition of Everything EOS. I'm Zack Gall, our in-house EOS shill here at ICO Alert, the trusted ICO discovery platform. Visit ICO Alert dot com, the most complete calendar of all active and upcoming ICOs, and I'm here today with the top 21 block producer, Cypherglass CEO and founder, Rob Finch.
Rob: Thank you all so much for joining us for yet another episode of everything EOS. Now, if you're listening to our beautiful voices and you haven't seen our beautiful faces on YouTube, I highly recommend you hop on over to our Everything EOS YouTube channel, and check out that video. It's so much more than just a version of us talking. My friend @BlockchainZack over here does a ton, a ton of work to make these episodes good.
Rob: He goes in, spends several hours on every episode putting up overlays, and videos, and quotes, and tweets, and all kinds of good content. So, go ahead and check that out. We appreciate the feedback and comments we keep getting about the show. There's so much good, positive feedback so please, continue to let us know that you're enjoying the show by liking, subscribing, or following the podcast on YouTube, iTunes, SoundCloud, or wherever you may be listening.
Zack: Yeah, if you're looking for it on YouTube, just search Everything EOS and just a second reminder and shill, smash the like button, subscribe. We want to keep you guys informed. If you guys like the content, other people will too, and the way YouTube's algorithm works is you've got to engage. So, please engage.
Rob: And a final disclaimer before we get started. This podcast is not sponsored. Zack and I are just two really excited members of the EOS community, talking about our opinions about this open source software. So please, during this podcast, do not take any of our opinions that we express as legal, financial, tax, professional or any other kind of advice, and both of us do, as a matter of disclosure, hold EOS tokens.
Zack: Guess who has more?
Rob: I think Zack.
Zack: Alright, on today's podcast we're gonna be talking about the San Francisco Hackathon coming up next month, along with the Scaling Blockchain Conference following the hackathon.
Rob: Oh yeah.
Zack: We're gonna talk a little bit more about BitShares and some things Dan's father, Stan [Larimer 00:01:54], mentioned about BitShares porting to EOS. We will have some contests coming out that we're gonna explain to you guys.
Zack: And some new tools, so let's get to it.
Rob: Jumping right into it, as Zack mentioned there is the Scaling Blockchain Conference happening the day following the hackathon, so the San Francisco EOS Hackathon is November 10th and 11th, but on the 12th if you stay an extra day, Scaling Blockchain Conference should be awesome. I'm gonna be one of the speakers there, and there are some other great speakers there as well. So, people you're excited about and ready to see as well I think, right?
Zack: I'm excited to see you, Rob. I haven't seen a Rob Finch speech since, was that February or March?
Rob: Yeah, I think so.
Zack: In San Francisco last time, at Token Fest.
Rob: History repeats itself.
Zack: Yeah, so I'm excited to finally meet all the people I interact with on telegram, all the other block producers, I'm excited to meet the guys from Multicoin and now Aurora EOS, so [crosstalk 00:02:51] if you're listening, come say hello.
Rob: I'm excited. There's faces on here that I've seen on YouTube before, but that I haven't met in person or even talked to on telegram. His name is [Cosi Maraffo 00:02:59], I hope I'm saying that correctly, from EOS Africa. So, as we know, this hackathon grand finale that's happening in December is happening in South Africa, so I'm sure he'll be there, and I'm really looking forward to seeing what Cosi has to say about how EOS is sort of integrating in with African culture.
Rob: So, if you are in San Francisco for the EOS hack-
Zack: You're skipping. I got a show myself.
Rob: Okay, go ahead.
Zack: Additionally, so Rob's gonna be giving one of the keynote speeches, but on a side note, I will be partnering, me as in ICO Alert, will be partnering with a company called dApp Cast, and Jake, the founder of that company, we're gonna have a podcasting setup in a separate room than the main conference area, and we're gonna be scheduling a whole day of podcast recordings. The way we initially planned it is we'll probably have a four mic setup, so we wanna have sort of like round table discussions.
Rob: Oh, that's great.
Zack: Either I'll be the facilitator, or Jake will be the facilitator, and we're gonna have three people in the EOS community, whether they're block producers, dApp developers, or whatever they are, they're gonna be on the show and we're gonna cover topics like governance, referendum, upcoming dApps-
Rob: That should be super entertaining.
Zack: Yeah. I mean, basically the way I envision it, it's the same conversations that are probably happening in the hallways at the conference, and at the happy hours after the conference, but we're gonna record it for everyone at home, and it's probably gonna get distributed through a lot of different channels, through Investing With A Difference, through ICO Alert, maybe some Cypherglass, through dApp Cast, so you'll be able to see all the content hopefully not too long after the show, because we'll have to do some editing. So, it'll probably come out the same week of the conference. It'll be pretty cool.
Rob: Yeah, and speaking of that EOS Hackathon in San Francisco, as has been the case at every hackathon that's happened previously, we should hopefully get an announcement or two. We'll see what they have to come out with. In the past it's been a development tool, the London Hackathon, of course, we had some dApps that followed the hackathon that came out, but who knows? Maybe they'll come out with something special this November.
Zack: Let's go. What is our speculation on it again? Is it gonna be the same as the London speculation?
Rob: I don't think so. I mean, I think they made it pretty clear that when they announce their dAppp, or even I think this biometric wallet that they're gonna come out with, that they've said, and even Dan showed to a lot of people in London. I think they're gonna have their own event for that. So, maybe this'll be another development tool, maybe they'll show off the buddy software package that they came out with recently that helps people build dAppps faster. Who knows? But it should be good.
Rob: One interesting note, that hackathon does not yet have a venue.
Zack: Yeah. I was asking about that. I couldn't find it. And I'm trying book my airfare, and my Airbnb hotel, and I'm like all right, I know where the Scaling Blockchain Conference is, but I wanna pick somewhere that's near Scaling Blockchain in the hackathon, because that's where my weekend's gonna be spent, and I reached out, I was like do you know something that I don't know?
Rob: Yes, that's still TBD.
Zack: It's crazy.
Rob: I expect them to come out with that announcement soon though on where it's gonna be. The one in London was in that science museum, and was really amazing venue, and they had the presentation on the IMAX theater, so I think wherever it's gonna be in San Francisco, it's gonna be a cool event, and there are some really awesome auditoriums, museums, the planetarium maybe. There's so many cool places that it could be, so I'm excited to see where that will actually end up happening.
Zack: And your participating right now as a mentor, right?
Rob: Exactly. So, I'm talking with the guys at SVK Crypto, shout out to them, to hopefully be an entrepreneurial mentor at the hackathon. So, in addition to all the people that are actually competing to win a price in the hackathon, there are these people that provide an instrumental role in the hackathon as mentors. These mentors go around to all the different teams and help them out, they answer questions, they give them advice on where they might wanna take their dAppp. Because when you're running on no sleep, you might be missing something obvious, and a mentor like myself can come in and say, "Hey, why don't you try this? Or why don't you cut out that piece and focus on this in stead?" So, I'm excited about that, and that opportunity to engage with the people participating.
Zack: And I'm signed up as en entrepreneur, and I still need a team if anyone's looking for a partner here. As far as my skillset, I can code, but I'm not an engineer.
Zack: I'm very good at UXUI, help with ideas, token economics, help with the presentation and pitch, I need a team. Reach out. Comment.
Rob: Yeah, and Zack and I talk all the time about cool dApp ideas and interesting stuff on EOS, so he could be the idea guy that comes up with the idea for your dApp. So, if you're a group of coders, maybe one of you's a designer, you wanna get together with him, I think he'd make a great member for your hackathon team.
Zack: Reach out, comments for it. Zack period Gall, G-A-L-L, at ICO Alert dot com.
Rob: There you go. And moving on from that, we talked about a couple contest announcements happening before this. We have one at Cypherglass, pretty excited about it. If you're watching this video, you maybe have just seen the announcement come out. Should be coming out around the same time. But HallowEOS is almost here. So, this is an awesome idea that Zack gave us to run with at Cypherglass and the EOS community. We're doing an EOS pumpkin carving contest called HallowEOS, so if you wanna participate, we'll put up an image of a pumpkin I carved here, along with my cat next to it. I think it's pretty good.
Zack: I don't have my pumpkin carved yet, Rob, but by the time this video comes out, I'm gonna travel back in time and I'm gonna embed the picture of a pumpkin that I haven't even carved yet, but it'll be carved before we put this out tomorrow.
Rob: That's awesome. I'm looking forward to it. So, whether it's the EOS logo, or you wanna come up with something creative, or you wanna carve Dan's face into a pumpkin. We're giving out big EOS prizes so the number one biggest prize is gonna take home 200 EOS for carving an EOS pumpkin.
Rob: Second place, 100 EOS. Third place, still good, 50 EOS for submitting that.
Zack: Man. So, even with the token drop here, let's just round down to five bucks, that's a lot of money.
Rob: Yeah, first place $1000 for carving that EOS pumpkin. So, in order to participate-
Zack: Gotta buy more pumpkins.
Rob: Yeah, exactly. You can head over to the Cypherglass YouTube channel, there's an announcement video there, but all you have to do is tweet a photo of your pumpkin to at Cypherglass BP, as in Block Producer, with the hashtag HalloweEOS. H-A-L-L-O-W EOS.
Zack: And how's the contest being judged? I haven't seen the rules yet.
Rob: Yeah, so we're working on getting a couple different community judges. We wanna be totally impartial to who's gonna be the winner, and who's not gonna be the winner, so we're reaching out to some different community members right now, and should have some news on who that community panel will be very soon, so the judges will be picking who's gonna win.
Zack: All right. So, let's backtrack now to the hackathon. So, we were talking about what we think the feature will be that people will build around there. The topic.
Zack: So, do you think there's any chance of there being a version of the [Rex 00:09:16] ready for this?
Rob: I think it's possible. I don't know what you would build beyond a leasing platform on top of Rex, but-
Zack: So, I think it's more or less could possibly be automated, so if there's a surge in resources, have automated swap in the background going on where you use the tokens you hold in reserve to kind of buy lease, a lease additional bandwidth on the fly.
Rob: Mm-hmm (affirmative).
Zack: But beyond that, I'm not sure. But we could always speculate, can't we?
Rob: Yeah, definitely.
Zack: Do you wanna talk about the EOS Dublin tweet the other day?
Rob: Yeah, so EOS Dublin came out, I looked at this tweet and I immediately sent it to Zack. It said, "Hey, interesting event happening tomorrow", and they ended up getting the data incorrect. It's actually happening later in November, but it's for something that we talked about here on the podcast, we weren't sure what it is. I think maybe Zack knows now what it is, but it's about BitShares EOS, and Stan Larimer. Not Dan Larimer, his father, Stan Larimer.
Zack: The rocket man. Former, I don't know where he was an engineer, but he was a rocket engineer, like an aeronautics engineer.
Rob: Oh wow.
Zack: Yeah, that's kinda where he got his start, and then he helped build Graphy and BitShares with Dan, and then he's like nicknamed, I don't know if he gave himself the nickname, but the Godfather of BitShares. But basically what's happening is we talked a few weeks ago about BitShares EOS, how it's basically been confirmed. It's now been given the title BEOS, which is actually Brown EOS, not BitShares EOS. But before I talk about it, because I did fall into the BEOS rabbit hole over the past couple of days-
Rob: I'm curious to hear what you found.
Zack: ... I'm gonna share some video clips with you guys of Stan explaining it, and then I'll try to build on top of that after.
Stan Larimer: Our vision is to make BitShares one of the best and most interesting of the EOS sidechains. Okay? We're starting out by using EOS itself to build the interface so that we can use ... However, the EOS interface is evolved for sidechains still working. We can let that evolve as Block One does its thing, and so on, are interfaced to what Block One is doing, is using Block One code to make it, and then we can modify things facing the BitShares as necessary in order to keep BitShares on there.
Imagine some people come along and say I'm gonna make a clone of the EOS chain for this special purpose, or that special purpose. Our special purpose is tying BitShares and EOS together so that going forward, BitShares can be viewed as just an extremely powerful EOS chain, that has all the base features of EOS, and all the legacy features of BitShare in one braided chain, if you will.
And that allows us to be backward compatible without interfering with anybody else who may be building on the original legacy system. Don't wanna go in there and recommend big changes to that. Might break somebody's business model. But we wanna give them the ability to have confidence to know that going forward, they will remain compatible with the juggernaut of the EOS mega ecosystem that is clearly going to become one of the all time great platforms out there. And we want BitShares to be able to ride along as a member of that family, and so this is our way of achieving that.
And when we're done, hopefully people will be able to move back and forth with tokens produced on either chain, and use them on other chains.
Zack: Let's leave it at that.
Zack: The juggernaut.
Zack: So, you gotta understand the situation. Whether you know who Stan Larimer is or not, we don't know the relationship, but think about any father, son relationship. So, we all speculate on what Block One's doing, what's on Dan's mind, what's Dan's priorities. We have no clue. And Stan might not have a clue either. We don't know. But the fact of the matter is this. Stan Larimer also works and lives in Blacksburg, Virginia. So does Dan.
Zack: That's where Block.One is.
Zack: So, that's the first thing, and they have ties. I mean, so it's in their best interest to kind of work together and not be stepping on each other's toes building the same thing.
Rob: Right. I mean, Dan has talked so much about building his own decentralized exchange, like a BitShares 2.0, but I think the thing that was interesting, the thing that was most interesting that stood out to me is that there will be some kind of a braided chain, so they can work together. So, it's almost like, and correct me if I'm wrong, is this gonna be a sidechain of EOS essentially?
Zack: So, just like Warbly is doing a sidechain for a specific use case of the finance industry and all the regulation involved with that, BitShares is already a dow in itself, it's just not a widely used one, and it's being held back by the technology that was developed in 2014.
Zack: So, what they wanna do is they wanna take all the features of BitShares, move them to EOS, have all that functionality, but then be able to use all of these new features that Block One is going to continue to build out.
Zack: So, we're gonna travel back in time here. I'm gonna take you guys on a journey. So, the date was March 12th. On March 12th, I'll pull up the Telegram conversation, but Dan was talking about trustless margin lending, ample liquidity, fuzzy asked if it's open sourced, Dan said everything I do is open source. And then Dan finished it off, I encourage BitShares to adopt what I'm working on.
So, for anyone who hasn't used BitShares, one of the most unique properties of it is something called a pegged stable coin. It's called Bit USD on BitShares. And what that allows you to do is let's say you own a quantity of BitShares, you could stake your BitShares as collateral to borrow Bit USD against it, but at like a ... I don't know what the ratio is. Maybe like a three to one.
So, if you have $3.00 of BitShares, you could borrow $1.00 of Bit USD, and then ... there's more to it than that, but there's a way that it stays stable. I'm not gonna get into that. But that's a functionality of BitShares. It's like a native lending algorithm that they have, that matches people wanting to loan out Bit USD, and people that wanna lend out their BitShares.
Rob: Is that kinda like Chintai in their leasing platform on EOS?
Zack: I don't think there's a comparison because the Chintai model provides an actual resource of computation, and bandwidth. They're actually getting a function out of it. Whereas on BitShares it's just the actual loan that you're getting.
Rob: Oh, okay. Makes sense.
Zack: There are fees for the loan. You can't borrow money for ... in a [felis 00:16:22] way. So, that was brought up back in March. And then two weeks later, let's pull up this code commit from Dan Larimer. I'll put up on the screen. It's in the main EOS repo, Dan posted it on March 14th, and it's a pegged derivative currency design. And he gives the background on it, and that setup process, and the collateral, and now the loans work. And all this and that. And I was actually looking for this repo I have up on the screen, to prepare for the show, but it was kinda gone.
I had to go into some version control stuff to find it. And what I found was that Dan's original commitment of that was gone, but a new person, user name Larry K 85, committed the exact same code on June 22nd. And I think that was maybe to separate Dan from the pegged assets and lending stuff.
Zack: It's a lot of ... Dan's very good at being crystal clear about all of the regulational risk. That's why during the token sale, we consistently saw the legal verbiage of this token's meaningless, worthless, this is all revenue to Block One. Nothing. Unless the community launches the chain.
Zack: So, Dan's always been very careful with that. This is the same instance. But I'll put the link to the pegged derivative currency design, and like I said, Dan posted this originally, two days after he mentioned the lending. And basically, it allows you to collateralize your initial token to borrow against a pegged currency, whether it's EOSUSD, or Bit USD, or EOS gold or silver, it's already in the code. It's probably not finished, and even if it was finished, it would still need to get implemented on the main net, which would require referendum to come through first, and then all of the token holders to reach a consensus that they want this feature to be built in.
Zack: So, like I said, BitShare has always had this collateral borrowing and lending system in place on their native platform, but they didn't have the Bancor algorithm.
Zack: Which we could only assume is an improvement over whatever the original BitShares lending swaps, whatever library they were using. So, BitShares could start this BEOS chain, on EOS, and utilize the same functionality as far as the lenders and buyers, but using this new algorithm that Dan created and already committed to the repo. So, basically BEOS could implement this peer to peer trustless lending system on BitShares, as a proof of concept because it's already featured on regular BitShares, it's just an improved version that Dan made, that could be implemented on the main net, if the token holders want it on the main net.
Zack: And it'll be great because BitShares already has businesses trying to build on it, so those business can come over to EOS.
Rob: So, are you basically saying that BEOS or whatever's happening with this code coming from Dan is going to enable some kind of pegged stable coin on EOS.
Zack: Yes. So, 100%. So, Stan mentioned that any token on BitShares through this braided chain, will be able to be transferred to BEOS.
Zack: So, that's from BitShares to BEOS, but not necessarily from BEOS to EOS. That's still to be determined, because I think the IBC stuff still is being worked out.
Rob: Yeah. It sounded like maybe in that video clip he was talking, he said, "Oh, wherever the EOS IBC stuff works out, we'll follow that." So, as soon as that's done, which I think should still be by the end of the year, hopefully then they can link up the chains in the same way that Warbly is gonna link up their sidechain to the EOS main net and basically make it one giant chain that everybody can use.
Zack: So, I think what we're gonna see first is BEOS is gonna launch, and they have their own distribution model. It involves staking BitShares and getting, it's called Raindropped, BEOS tokens over a long period of time. So, I'll just leave it at that. That's how you get these tokens. They're free if you own BitShares and you stake them.
Rob: Wow, interesting.
Zack: So, if it's cross chain between BitShares and BEOS, that'll allow the transfers, whether the BEOS integrates the Bancor protocol version of banked assets or not, you'll be able to transfer the Bit USD's from BitShare, which is a stable coin, over to BEOS, and then eventually those will be able to be used on the EOS main net with IDC.
Rob: Wow. That's cool. It's interesting he said it's backwards compatible. So, this could be the roadmap that other chains make. If they wanna keep their existing user base, keep their existing projects that are built on top of it, but they can connect it to EOS, it's backwards compatible, and then eventually everybody just migrates over to the U.S. main chain.
Zack: You're onto something. So, I went down the rabbit hole, as I typically do. So, the other thing that's super interesting is, let me pull up more of the Dan Larimer conversation. So, we time traveled back to March, and then we kind of fast forwarded to June or July because that other coder just recommitted Dan's work. So, let's go back to I think it was July 7th when this conversation happened. This is whenever the Steam 2.0 and BitShare ... it's really 3.0, it was misspoken here in the quote.
But Dan specifically said Steam 2.0, which we've all been waiting for and get news on. He said, "It needs BTS 2.0 for tokens", because BitShares does do certain things right. They also have smart tokens, which is a whole nother thing to get into, that I'm not able to talk about today, but we all want Steam 2.0, and we all want the dex to end all dexes.
Zack: So, for Steam 2.0 to happen, and then eventually the URI, if that's gonna be proposed, BitShares needs to happen first. And it could happen on BEOS first, and BEOS can be great. That's BitShares on EOS, but anything, any technology that BitShares builds on their own, it's all gonna be open source, and could all be voted in on referendum to be implemented on the main net.
So, back to his continued conversation, he said, "There's going to be an ability to lend with interest to shorters", and that's basically how you create these pegged stable coins. So, if it was on EOS, I would have to stake $3.00 on EOS, and the ratio might be different. $3.00 of EOS to get $1.00 of this stable coin, and then that stable coin would be swapped in commerce, or there's also if you're long against the EOS USD, you would just hold EOS.
So, if you're short EOS, you're holding the EOS USD-
Rob: So, what is this just a way to ... I'm a little confused. Is this just with a way for the pegged asset of EOS USD to retain its dollar price and be a stable coin?
Zack: Yeah. Let's just stop with this how it's a stable coin, just accept that it's stable.
Zack: So, I think that's the best way because I'm not Dan, I can't explain this. But we've talked about margin trading on here, and peer to peer lending, and the way it works is, okay, pretend Rob loans me the $3.00 of BitShares, we'll go with the BitShares version. Rob loans me $3.00 of BitShares to hold for him while I give him a $1.00, and I have three times what I lended him, so we're good. I know he can pay me back because I have three times the loan.
But if the value of the three BitShares that I'm holding depreciates, at a certain point maybe when it's one and a half to one, then I take my $1.00 back off of Rob and say we gotta end this loan, we gotta liquidate the loan, and then I will take your $1.00 back, I will use that $1.00 to repurchase $1.00 worth of BitShares and then I'll give you back whatever's left over.
Rob: Oh, okay.
Zack: That's like a liquidation call, or a margin call on the exchange.
Zack: So, let's continue through the conversation here. He said, "The ability to lend interest with interest to shorters ..." But then he says, "Without risk of default." And then he also said, "I have a working proof of concept code for the pegged token." That's, I think what I was referring to on the repo, but then he said, "No forced settlement, high liquidity, self collateralizing, short term income from trading fees."
Zack: So, I told you about how it worked on BitShares.
Zack: When you stake BitShares, you're not earning revenue.
Rob: Mm-hmm (affirmative).
Zack: Okay? So, if you're-
Rob: So, what's the purpose of staking-
Zack: If your collateral ... I'm not as familiar-
Rob: Oh, okay.
Zack: Let me talk to the EOS version because it's gonna be a lot better. So, if this were to be implemented on the main net, other things would need to happen. So, we've talked about different things via the Rex, the Ram trading, different ways for earned income on the EOS main net to be redistributed to stake tokens. So, we could assume that that's gonna be implemented at some point. Probably in the next six months to a year, I don't know.
But there will be an incentive for voting and staking your tokens on EOS, and you can do that through the Rex when it's ready.
Rob: Mm-hmm (affirmative).
Zack: That's basically gonna have the same functionality as Chintai where I hold tokens, but I'm not using all the resources so I will lend those resources out to other people who might be able to use them, and I could earn an income of, let's say 5% a year annually.
Zack: Okay? All right, so on the BitShares model, if you borrow USD against my BitShares, once my BitShares value goes down to a certain point, I get liquidated, I gotta buy the $1.00 back. But with EOS, these tokens that are staked over a long period of time, they're gonna continue to earn income. So, it's all about property rates. So, let's pretend it's a house, and I use my house as collateral-
Rob: Bad idea, by the way.
Zack: ... to buy some other tokens, and then the value of my house goes down, and rather than foreclosing on my house, selling it to buy, to pay off this loan, they start renting out my house to pay back the loan. Let it sink in.
Rob: I'm not sure I get it.
Rob: To be honest.
Zack: I'll explain it again, so that it might be more clear. All right. I'll start with the example again.
Zack: So, EOS has been compared to having property rates, and ownership rates, okay? So, if I own a house, I own the property of my house, I live in my house. If I live in the house, that's the same as using my computational resources, because I'm using the resources, my house provides shelter, I'm living in it.
Rob: Oh, okay, okay.
Zack: So, that'd be like I'm a dAppp, and not just a token holder because I'm using my computation and bandwidth. So, if I owned a house and lived in my house, I'd be a dAppp.
Zack: But if I wanted to buy something else, and use my house as a loan, I could lend my home through a smart contract to the EOS platform, and while I'm loaning it to the platform as collateral, it's still earning an income from the resources. It's like the EOS platform and the Rex is renting out my house while I'm not using it, and I'm using the money I borrowed against the house to buy whatever the hell I want.
Zack: And as long as the prices aren't moving enough to get to a point of liquidation, everything's fine. But let's say the house value drops to a certain point where it isn't anymore twice the loan amount, or whatever that threshold is, rather than them foreclosing on my house, and selling that house, to buy EOS tokens back to pay off the loan, it would basically the loan would just be stuck-
Rob: Okay, so you're basically saying that, because there's a lot going on here. Are you saying that the new pegged token will basically, rather than them liquidating your loan, they'll instead lease out the EOS that's the collateral for your loan?
Zack: Throughout the entirety of the loan, the EOS that's being borrowed against this collateral is earning revenue, because someone somewhere is probably renting or leasing the computation from that stated EOS. So, there's already a revenue stream on the collateral. It's not just staying flat, it's growing in it's EOS size.
So, that's going on the entire time. So basically instead of defaulting on a loan, it'll probably freeze you from trading or borrowing anything more against it, but I'll kind of pay itself back in perpetuity.
Rob: Oh, interesting. So, instead of-
Zack: Because of the fees.
Rob: So, you're saying the fees that the EOS earns, will then ...
Zack: So, let's say it's 5%, and I think on BitShares ... I keep using this three to one model, so you're able to borrow 33% of whatever your account holds.
Zack: So, 33%'s the maximum I could have borrowed against my EOS. So, let's say you can earn 5% EOS annually by staking your tokens, so if I lose all of that 33% that I took on a loan, and I didn't have that money anymore, maybe I bought something that depreciated in value or went to zero, rather than having to sell my house to purchase the tokens to pay back the loan, my house would just kind of be held in perpetuity until, what, six or seven years of transaction fees, or however long it took for it to gain enough value back.
Rob: And then you would get your house back.
Rob: Oh, okay. Interesting. So, it's a way of ... is that how you think when he says without risk of default? You think that's what they're gonna do?
Zack: 100%. So, I don't know what the ratios are gonna be, and it might be a modest loan, which is fine. I think modesty is great. So, if you could borrow 10% against your total token value, then that would be reasonable. So, let's say you have 10 EOS, you'd be able to borrow one additional EOS and maybe buy some other tokens on the platform, some platform coins. Maybe buy some Karma, or whatever else you wanna use, some IQ, and you could buy it with that.
And the other thing is let's say you, the other reason that I think this is a fantastic idea, is let's say that you wanna use a dAppp, and it requires one token to use it. The utility of that token is literally just to be on the site, or the ... whatever this application is. So, if you wanna use the application, you have to stake one token, and when you're done using that application, you can unstake that token and get it back, and then sell it.
So, it's like a quick swap. You'd be able to do that transaction on a short term loan, by using this lending system. I would never have to buy that native token for that platform because it could be borrowed and then paid back, and you would just pay it like a transaction fee.
Rob: Oh, okay. Interesting. Some of this is a little over my head just because I don't know a ton about collateral with margin lending, and all that stuff, but I think it makes sense.
Zack: So, it's just, it's peer to peer, it's trustless, and the no force settlement is gonna stop people from getting completely wrecked. And I hope that the thresholds stop people from getting company wrecked also. Like 10% is pretty safe.
Rob: We talked about this last time on where I don't like leasing out my EOS tokens, for example, because I have to do it on a platform like [BIFNX 00:32:08], and then there's all that counterparty risk. I wouldn't do that on any centralized exchange, but if this comes out and I can do that trustlessly, with no risk of default, where they can't pay back that loan, I would do that in a heartbeat, and I think a lot of people would as well. Which then more supply of people giving out that token, that the actual cost of taking out a loan should go down. So, should be interesting.
Zack: Now the final piece of what I'm excited about with the BitShares EOS is, Stan explained it as being jurisdictionally agile, which means instead of their block producers all being independent and all over the world, global, jurisdictionally diversified, he wants to set up multiple clusters of block producers, and this is against the traditional terms of decentralization, but their goal isn't to be completely decentralized, their goal is to conduct real life business transactions on a block chain.
Zack: So, basically the 21 block producing nodes would all be in a specific area, and he gave the example of Utah, so maybe Utah is favorable laws for some sort of business model. So, all of the nodes would be located, all of the hardware would be located in Utah, and if you wanted to be a block producer, you would actually, you would pay to lease that hardware and be a block producer using that hardware. I don't understand how that all works, but I do understand the jurisdiction part.
So, basically if I built a dow or a business model on top of a blockchain, I want my customers and myself to be legally compliant, and be able to take them to court if need be.
Zack: I mean, we talk about arbitration, and we're getting there, but there's also if you wanna conduct actual business, sometimes you do need part of the law.
Rob: So, this is basically a way, if I wanted my business to be ruled under the laws of Malta, for example, the island, they call it Blockchain Island, it's super favorable, I could choose that cluster of block producers in Malta and distribute my dab there, and then that's ... or my smart contract, and it would be governed under that?
Rob: Oh, okay. That's interesting.
Zack: A really good example of this, is a cruise, okay? So, let's say I get on a cruise ship from Florida, and I don't know the gambling laws in Florida, but let's just pretend gambling's completely illegal in Florida. So, I get on the cruise ship, and there's no gambling, there's no casino, but as soon as that cruise ship travels to international waters, all the sudden all the poker tables come out, the Roulette tables come out, and we start gambling.
Zack: But as soon as we come back to port, gambling's illegal again. So, it's kind of like if you're a gambling business and you wanna be 100% legally compliant on a blockchain, you would run your blockchain on the cluster or block producers in a jurisdiction where everything you're doing is completely legal.
Rob: Right, like Pennsylvania, for example. The state that we're in right now, online gambling is illegal, believe it or not.
Zack: Yeah. So I mean, it goes deeper than that, but the ideas make sense to me, and-
Rob: I'll have to look into more of those videos too, and maybe I can wrap my head around it more. But it does make sense. I mean, if you can prevent people from getting liquidated on a loan, and if I on the flip side, the people who are loaning that EOS or whatever token to other people, have no risk of that person defaulting and not being able to pay them back, it seems like everybody wins.
Zack: So, the other piece to it is, to create one Bit USD, means that two or three BitShares need to be staked and taken out of circulation.
Zack: So, the same would be the case on EOS, you would be taking EOS out of circulation to create these pegged stable coins, and the pegged stable coins are such an integral piece to mass adoption because if you build an application for the layperson, they wanna transact in dollars.
Zack: They don't wanna transact in EOS. They don't even need to know what EOS is.
Zack: They just need to know that I have this many dollars in my account, and if you wanna dive down deeper you can swap for EOS and go down to layer one and stuff, but this is all gonna be abstracted from the end user, and I see it, and I have a really hard time explaining it sometimes but it's all in my damn head.
Rob: No, it makes sense. That's interesting.
Zack: I'm glad you ask questions so I can think about it deeper, but this is huge.
Zack: It's bringing together all of the stuff that Dan's been teasing, and Stan's been teasing, and it's all making sense to me, and some of the ideas on BitShares might sound ridiculous and like they'll never happen, but let them prove that it's ridiculous. Let them test it on their sidechain, prove the model works or doesn't work, and I think that's the value of all of these sidechains. Whether it's [Telos 00:36:38], Warbly, whatever. Anything that could be done on a sidechain could be done on the main net, so if it works on the sidechain, all it takes to get it on the main net is a referendum vote and the block producer approval and we're still waiting for referendum.
Zack: What's up with that, Rob?
Rob: I think it's almost done. I gotta reach out to the other block producers that are working on it. We're not actually the ones that are building out that system, but I think it's close. It's close to being ready, and I think EOS Alliance is working up ... oh sorry, finishing up their working group, so we should get some news outta there. But I think moving on from BEOS and all that's happening there, I wanna tell a quick little torture story about high fidelity.
Rob: So, if you're out there, you're listening, what's high fidelity? It was actually the second EOS VC announcement. So, that billion dollar dApp fund that Block One has, they're giving out all this money to VCs, to fund projects on EOS, and high fidelity was the second project funded by Mike [Novograt's 00:37:27] Galaxy Digital, and the second EOS VC project in general. But what I didn't know, and this is what I learned from the guys at SVK Crypto, is that if you go to high fidelity dot com, you can actually play the game right now, and they're saying that it's real time social VR.
So, it's in beta, they say be anywhere with anyone right now. So, when I checked this out it was kind of a good coincidence but I saw them tweet out hey, come join us, we're doing a stress test of our system. We have 400 people online in this virtual world. So, I logged on. I just did it on my computer. You don't need a VR setup, you can just hop on your laptop, or even I think your phone, and I went into this game and they had a whole ... they were doing this contest. So, apparently over the last few weeks, before that contest happened, people were like designing 3D models, and animating them, and basically making their own avatar, so I was walking around as this little wooden guy that had no cool costume, and there were hundreds of all these different things dressed up and all.
There was like a Santa Claus, there was one guy who was Ganesh, one of the, I think Indian gods. There was like this crazy Final Fantasy character, but they were doing this contest from all over the world, even the announcers were in their own VR headsets all distributed across the world, but it felt like everybody was in that same room.
Zack: So, you said you don't need a VR headset, but did you have a VR headset on?
Rob: I didn't set it up, so I have my HTC Vibe, but I didn't set it up for this, because it was already happening and it was in the last 30 minutes or whatever. So, I hopped on, on my computer and it was cool, but there's some cool stuff that's happening. So, we all met up in this room, and the announcers were up on stage, and everybody could hear the announcers because of the area they were in. It was like oh, they projected out, but you could also hear the people around you and have local conversations.
Rob: But then they went out, they did this costume contest, be people walked are runway, and you can just imagine all these people at home with their VR headsets on moving around in this virtual world.
Zack: So, how many people would you say were-
Rob: It was more than 400 at the pique. So, more than 400 people logging into this virtual world. If felt like they were in the same place, and at the end they were voting, and it was funny, the Ganesh guy was up, and they asked everybody to cheer, and everybody was like Ganesh, Ganesh, Ganesh.
Zack: So, none of this technology is something that wasn't possible before. Where does the blockchain fit in?
Rob: So, I'm glad you asked that. So, I was walking around, you get into the game for the first time and there was this menu that pops up, and one of the options on the menu was a little icon that says wallet, and in that wallet it's basically, it's an EOS wallet, it's a blockchain wallet. I don't know if it's connected to the main net or not, but when you go in, you click on this, you can teleport to I think it was Bank of High Fidelity, or something like that.
So, I jump in, I'm suddenly in this giant high rise building, I'm looking out across this virtual world-
Zack: That sounds like your kind of game, Rob.
Rob: Oh, it's awesome. I gotta go back in and play it and set up my VR. But I'm walking around, I'm in the Bank of High Fidelity, they gave you some of their Bank of High Fidelity coins, which I guess will be maybe the currency that High Fidelity comes out with, but ultimately the whole thing was insane. I thought High Fidelity was like in this incubation stage, and hadn't really released what they were doing, but here it is, real time social VR, 400 plus people in the same virtual room, feeling like they're all in the room, interacting and talking, and yelling at each other, and it was crazy. It was a really cool time.
So, I thought I'd share that story with everybody.
Zack: That's really cool, man. So, as far as we know, it's not ported over to the chain yet. Kinda like how IQ, every [crosstalk 00:40:42] you were able to use it for months before it was actually a blockchain platform, but now it is.
Rob: Yeah. And then they had a blockchain platform on a separate domain, but now they've actually merged it back and [inaudible 00:40:51] is there, but so we'll see what happens with High Fidelity. But it gave me ... I can see where this future is going. You can imagine there will be people that live in the high fidelity world and have a job there. Maybe they're a custodian at the bank, or they open up a shop and sell some of these skins that they've designed so that you can customize your own character. So, there's so much that can happen with this, and the virtual wallet that they give you, they can sell land in this, like the central land, so much can happen.
Zack: I don't know if you remember saying it, but whenever you first brought this up, you used the interesting term, voting.
Zack: So, you could have an auditable election in a virtual world, and everyone trusts the results because it's verifiable.
Rob: Can you imagine? We're gonna elect the president of the High Fidelity world-
Zack: I've thought this for a long time, but we could talk about these real life implementations where instead of owning all of a piece of property, you own a portion of it because that property's tokenized. We could vote on a blockchain, with a real government. I think all of these ideas are fantastic, but to have that type of change in the real world with governments especially, it's gonna be a long, long time. But I think this stuff ... you're explaining right here. It's ready in the gaming world. I think we're gonna see, in the virtual world, I think we're gonna see all of this tokenization and blockchain swaps and smart contracts take from in the virtual world, to prove it's use case, trust, security, and all that. And then over a longer period of time, we're gonna see some really, really, really cool stuff [crosstalk 00:42:21].
Rob: Oh, absolutely.
Zack: Because anything that can happen in a world like High Fidelity, it is a proven use case. Why can't we bring it here?
Rob: Oh yeah, and imagine when this gets to the point where eventually virtual reality is indistinguishable from real reality-
Zack: Yeah, if we can't bring it to the real world, we're just gonna live our whole lives in virtual world.
Rob: We'll live in little pods, and be in High Fidelity world-
Zack: We'll be in the matrix.
Rob: Yeah. We really will be.
Zack: That's funny. I think I read in Telegram at one point, Dan said something like I don't know if I'm creating the next Skynet, or the cure for cancer.
Rob: I think it could be both. I don't know, we'll see.
Zack: Yeah, I mean, the immutable blockchain, man. Everything lives on forever-
Zack: That's the scariest part about it.
Zack: But we won't get into that.
Rob: Yeah, but so, that's High Fidelity, that's sort of the current status. But I think we got some other stuff to talk about.
Zack: Yeah, let's get into something fun. So, there's a new meme contest that I think started this week, by EOS Blocksmith, one of a great standby block producers. I think they're one of the partners or sponsors of the Scalable Blockchain Conference too. But they created this new tool, and I actually made it my new homepage because it has all of the information I could possibly need on it.
So, on this homepage that EOS Blocksmith made, they call it their dashboard or workshop, basically it has everything you'd wanna know about the EOS blockchain in a quick glance. So, you could see your block producer rankings, they use a crypto panic widget to see all the latest news and announcements around EOS. You can see the price charts of EOS, are Ram prices, the Airdrop token prices, you could see EOS videos, links to all of the great tools, and at the very bottom, they have the meme of the week, and that's how this contest got started.
Zack: They want people to submit their memes using hashtag EOS meme contest. So, I encourage you all to participate in that. I am still working on my meme right now, and I am going to win the contest. I'm just going to state right now, EOS Blocksmith, if you're listening, I'm gonna tweet out a meme either tonight or tomorrow, and it's gonna be the winner.
Rob: That's awesome. I look forward to seeing what that meme is. Maybe it'll win the contest.
Zack: It might even be up before this video comes out. We'll see.
Rob: That's great.
Zack: But yeah, I love memes.
Rob: Yeah. We got some other really exciting news. If you were one of the 19,000, I think it was 19,587 people who forgot to register your EOS tokens, maybe you were on vacation, maybe something happened, for whatever reason, you didn't register your wallet ahead of time, there's now a fix. So, Cypherglass along with a bunch of other block producers voted in this proposal to the chain recently that basically allows those people to use their Ethereum wallet and use the private key associated with that private wallet, to claim your EOS token.
So, these 20 000 people are now for the first time getting access to their EOS that otherwise would have been lost. So, when we saw this proposal come up we approved it right away, we thought this is an awesome proposal to really give this stuff back to the people that lost it, and it's a great example of what makes I think the EOS community so much, I would say better, than any other crypto community right now. It's that everybody's just working together to help everybody else in the network. If it's somebody's account gets hacked, you refer them to E-caf and help them freeze their accounts so that they can recover it later.
Or all of these people that forget to register ahead of time, instead of us just saying oh sorry, you're out of luck, you didn't follow the rules, there's this active proposal for EOS authority, and I think it was EOS Argentina who actually coded this up, so huge shout out to them. Went out, and made this happen. So, congrats to the 20 000 people that now have their EOS again. That's pretty awesome.
Zack: So, I think we're coming up on our time limit here for the week. Why don't we remind everyone of your contest, and anything else you have-
Rob: If you're out there, you're carving a pumpkin, maybe you pick up an extra pumpkin, or you just carve this on your own pumpkin, hashtag HalloweEOS, tweet us at Cypherglass BP, tweet us your photo. Top prize, 200 EOS, picked by our community judges. Second place, 100 EOS, third place, 50 EOS. So, give us a cool EOS themed pumpkin carving, and you could be the winner.
Zack: So, I have one request for this pumpkin contest.
Zack: One, I don't know if you're considering it, but I do not wanna be a judge. And it's gotta be completely independent because as I'm gonna win the meme contest with EOS Blocksmith-
Rob: You're gonna submit?
Zack: I'm gonna win this pumpkin-
Zack: I'm gonna at least be a top three. And if I am, I'll volunteer the funds to the next person, but I wanna be on the record as being a winner, and I don't know if you're gonna have a crowd vote, but I will have the best pumpkin.
Rob: I like that. Very confident. Very, very confident. Yeah, we're gonna do a-
Zack: I've got a stencil already, I've just gotta put it into action.
Rob: I'll tell the panel of community judges that you're entering. We'll see. We'll see how they do it.
Zack: Any hints on who they are?
Rob: Not yet, but they're people that you know within the EOS community.
Zack: So, I'm guessing Shane or Charles be one?
Rob: We'll see, we'll see.
Zack: Do they have Halloween in London?
Rob: I don't know. I would think so.
Zack: Yeah, well they know what a pumpkin is.
Rob: Charles, do you have Halloween? I'm sure he's watching. But anyway, I think that's our show for today. Its been a good one. If you could, remember leave us feedback, smash the like button, contribute to the HallowEOS, and again you can find me on Twitter at @finchify.
Zack: And blah, blah.
Rob: You can find him at blah, blah.
Zack: You can find me at @BlockchainZack, with a K.
Rob: There it is.
Zack: So that's this week's episode for you. Once again, I'm Zack Gall.
Rob: I'm Rob Finch.
Zack: And this is Everything EOS.
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