2023 AMA Answers with Horizon Protocol Team
Dear HZNation,
Thank you for your participation in our recent AMA. We received 33 thoughtful and engaging questions. Many of the answers to the AMA questions align perfectly with our strategy in 2023, and we’re excited to share our answers with you.
To make our answers clear and well-organized, we’ve condensed duplicate questions into a shorter, more concise version. We’ve sorted these questions into categories to provide a clear and easy-to-follow response.
HZN Ecosystem & Product
Product Features
Q: What future applications will Horizon Protocol have?
2023 will be a pivotal year for Horizon Protocol with new use applications and use cases being introduced, along with many improvements to existing ones. As mentioned in our updated roadmap, we broke down our protocol strategy into two main categories:
- B2C (Business-to-Consumer): for the end user, and
- B2B (Business-to-Business): integration opportunities with other projects.
On the B2C front, Horizon Protocol will be launching a Synthetic Perpetual Futures exchange, where users can trade long/short with leverage as well as several other DeFi products, including borrowing, margin shorting and token wrapping. Furthermore, Horizon Protocol aims to continue to chip away at any barrier for new or existing users within the ecosystem by taking on a hybrid UX design approach of creating a centralized (Web 2.0) experience for the decentralized world (Web 3.0). Expect a continuous effort to streamline the product UI/UX, education materials, guides, and overall onboarding experience.
On the B2B front, Horizon Protocol seeks to introduce new use cases that allow it to be integrated within the broader DeFi community, such as borrow/lending protocols, DEX aggregators, cross-chain protocols, yield optimizers, NFT platforms and more. An example, coming this year, will be to remove the oracle waiting period and create a simple and well-documented interface for DEX aggregators to leverage the zero-slippage benefits of Horizon Exchange when routing trades for their users. This will create more usage of the Exchange and generate trade fees, incentivizing more stakers, thus creating more liquidity for even bigger trades.
Q: Will there be a revamp on the zUSD model to increase its utility?
zUSD fulfills its role as the stablecoin base zAsset when minting from HZN and it is the asset that all debt in the protocol is denominated in. This is a critical piece of Horizon Protocol and is an incredibly important piece of utility.
In terms of additional options to mint zUSD, we are interested in exploring alternative ways for zUSD to be minted, such as wrapping your stablecoin to become zUSD, or using other crypto as collateral to mint/borrow it.
Q: Can C-Ratio be reduced to around 400–500% to increase zUSD in the system?
Absolutely. Per community wishes, we have previously reduced it to 700% from 800% in the past. There are many good reasons to reduce it further to increase the supply of zAssets in the market especially as our project grows, but will require stakers to maintain their c-ratio more diligently. Some other considerations are if we lower the issuance ratio too low, it could create an overabundance of supply, which could lead to a temporary open-market depegging, but arbitrageurs could certainly profit from this scenario as Horizon Protocol always values 1 zUSD at $1. We encourage the community to let us know what they think about this and what issuance ratio they think is ideal given the supply/demand of zAssets and their ability to manage their C-Ratio.
Q: When will futures be Integrated into the platform and will you be able to trade stock futures?
We plan to release a perpetual futures exchange this year (2023). Equity futures is definitely a possibility if there is demand from the community for it and there is a sufficiently good oracle for it. Please let us know what futures markets you wish to be listed.
Q: What other utilities do we expect from HZN tokens in the near future?
Currently HZN is used as the primary collateral for liquidity for Horizon Protocol and plays a key role for maintaining collateralization of the protocol. While we certainly are exploring new utilities for the HZN token, such as new governance utility and burning mechanisms, we also share the mindset of keeping the purpose of HZN simple and focused on its original intention, to drive the protocol’s collateralization mechanism for liquidity, staking, and rewards. We also believe a lot of new utilities can be introduced on the zAssets themselves rather than on the base HZN token.
Q: Could you add a possibility to transfer staking to another account?
Right now, you can’t do this because rewards are locked for one year, it is a big problem when consolidating wallets.
Yes! This functionality has been considered and we plan to introduce a mechanism to migrate the escrow entries/rewards from one wallet to another in a future update. Do note that this could take some time, as security is one of our top priorities and any new feature has to go through extensive testing before being implemented to prevent any form of exploitation.
Q: Will you make more pool pairs between zAsset with real assets?
From our current perspective there is no need to further incentivize new LP pools as the current pools (zUSD, zBNB, HZN) are sufficient for onboarding and arbitraging, but we are open to ideas if you feel another pool is necessary. It is also important to remember not to unnecessarily incentivize pools that don’t add tangible value to the protocol and waste rewards that could benefit HZN stakers instead.
Q: Have you considered adding Liquid Staking to the DEX?
We have certainly considered the idea of liquid staking, but the feature will require a change to the architecture of the protocol to support it. When you stake HZN in Horizon Genesis, the HZN doesn’t actually leave your wallet and the amount of HZN that is either ‘staked’ or ‘transferrable’ is ever changing based on the price of HZN and your active debt. Therefore, it will only be possible to introduce this capability in a fundamental restructure of the protocol.
Q: Does your project support a staking program? if yes. How is your stake system working, what is the requirement for users if they want to stake in your platform?
Horizon Protocol offers strong incentives for staking in the protocol. This comes through the incentivization of staking HZN to collateralize and mint synthetic assets (zUSD) as well as incentives to provide liquidity for important token pairs on DEXs.
For staking HZN, you can stake any amount of HZN tokens on Horizon Genesis for weekly HZN rewards. This is an active form of staking, which means the staker can’t “stake-and-forget”. On our knowledge base, Horizon Academy, we have a video guide walking you through every step of the process. And because this form of staking is not risk free, we have a separate section dedicated to explaining the risks, as well as offering strategies on how you can minimize your risk.
For staking in liquidity pools, you will first need to get at least one of the assets in the liquidity pool (i.e. HZN or BNB for the HZN/BNB pool) and deposit them into the correct DEX (i.e. PancakeSwap or Ellipsis Finance). Once you deposit, you will receive an LP token which can then be staked into the corresponding staking pool on Horizon Genesis to start earning passive income.
Please learn more by checking out our Horizon Genesis guides in Horizon Academy.
Here is a snapshot of our staking comparison:
Q: Will it be possible for one to collateralize LP’s as well?
If what you mean is to use LP tokens as collateral for zAssets in the protocol, this is an interesting idea and is certainly possible on a technical front, but risk assessments against the debt pool would have to be conducted to protect HZN stakers (i.e. malicious attacks on the LP pool price due to large liquidity withdrawals / low liquidity price manipulations etc.).
Q: Are there any plans to go multi-chain?
Yes, there are plans to bridge our ecosystem to other chains in the future. The precursor to introducing bridges will be to first create enough success on one chain so that we can leverage that recognition into other chains. It’s also important to note that bridges introduce risk points for the protocol, so they need to be carefully considered and the implementation will take a significant amount of time, which means that it can only be prioritized once we have more core functionalities built out. We are bullish that the space will continue to develop and bridging options will only get better.
Q: Will the collateralized loans be just on the BNB chain or will they be transversal to all chains in order to attract more liquidity?
As our protocol is currently only available on the BNB Chain, the collateralized loans will also just be available on the BNB Chain. That being said, we can integrate cross-chain bridge aggregators directly into our front-end so users can easily bridge their assets from other chains into the BNB Chain so they can take advantage of the benefits of our protocol.
Growth & Marketing
Q: How many active users are on the platform as of January 2023?
Here are a few stats for January and February related to the landing page:
- In January, we had a total of 2,225 visitors to the landing page. Out of these, 820 were active users (33%) and 1,698 were new users (67%). Compared to December, there was a 56% increase in total traffic, an 82% increase in new visitors, and an 18% increase in active users.
- Moving on to February, from the 1st to the 19th, we had a total of 1,737 visitors to the landing page. Out of these, 520 were active users (30%) and 1,217 were new users (70%). When compared to the period of January 13th to the 31st, there was a 22% increase in total traffic, a 33% increase in new visitors, and a 2% increase in active users.
- Finally, we have 1,264 stackers who are active on a weekly basis.
Q: Volumes on Horizon Exchange are very low. Critical for the success of the project is to get actual users on the exchange and not only passive investors. How do you plan to increase the number of active users?
Increasing volume on Horizon Exchange is certainly critical for the long term success of the protocol, but that doesn’t necessarily have to come from new individual users. Successful integrations/partnerships with DEX aggregators can potentially direct significant trading volume through Horizon Exchange as well as our exchange can potentially offer cheaper routes when trading certain pairs.
For example, removing the price oracle waiting period after each trade on Horizon Exchange will dramatically improve the use case of the exchange. This is done by introducing a dynamically adjusted exchange fee (based on market volatility) to eliminate oracle front running opportunities. This will be released this year (2023) and will allow for DEX aggregators to more easily leverage the Horizon Exchange for its no slippage benefits.
Q: How do you plan on bringing more people to the platform and exchange and what’s the plan for increased awareness with other communities or influencers?
Bringing more people to the platform will basically require continuing to build awareness around the project. Awareness will bring more potential users to explore the project.
There are a lot of ideas to build awareness. From the community and marketing side, this could include
- Working with influencers who have an audience in trading and investing
- Release a trading competition once we have Futures Exchange up and running
- Building strong and lasting partnerships with other projects
Some of our current efforts in raising awareness with other communities include connecting with region-level community groups. The regional community typically has higher engagement than the English one. We will start testing regional-level influencers. If you have any good recommendations for regional influencers, please let our CM know.
Aside from marketing / community endeavors, which are certainly critical and important to bringing in new people, there are also ways from the tech and product side that can help as well. As mentioned in our 2023 tech roadmap, a high priority moving forward will be to introduce more technical integrations with other protocols/projects which will invariably create great opportunities to connect with their communities and increase awarness. This will require building partnerships with DEX aggregators, yield optimizers, borrow lending platforms, cross-chain bridges, etc.. Each partnership will open the doors to a new community, in which there will be opportunities to engage with potential new users.
Q: When will we get a new partner in the real-life sector or other new DeFi use-cases?
As outlined in our 2023 roadmap update, new DeFi use-cases leveraging Horizon Protocol will be a high priority item for this year. The most important one will likely be DEX aggregators.
Q: When do you want to start with marketing and talking with exchanges for maybe a listing?
Marketing is constantly happening, but it doesn’t make sense to spend on marketing because the ROI in the current market is extremely low.
Therefore, our focus is on community and partnership building. Our community building efforts are centered on two key focuses for maximum impact. Firstly, education plays a crucial role in building a strong and long-lasting community. That’s why we’ve invested in initiatives like the Horizon DeFi Podcast, BSCDaily@L2E event, and Horizon Academy to increase awareness in the space.
Secondly, we aim to start a grassroots movement and foster a network effect within the community at a regional level. The Horizon Ranger Program, recently launched, is the first step in driving this effort. We are grateful to have the support of our regional leaders who are sharing their inspiring ideas and acting as advocates and educators for our community.
By working closely with regional leaders, we can better understand the audience with localized insights, which will allow us to continue to build a strong, inclusive community. If you’re interested in joining this movement, please let us know.
Communicating with exchanges for listing is also constantly happening behind the scenes.
Q: Any plans for CEX listings in the near future?
This year we are more actively engaged in getting HZN listed on CEXs. We are excited to share that we have already locked in one exchange and will try to roll that into more listings that make financial and strategic sense. This is a slight pivot in our approach due to the fact that the market conditions are improving and because we have an exciting release schedule planned for the year making the investments into CEX listings a more attractive ROI. Our fundamental approach to CEX listings remains the same, that any listings need to be sound for the long-term growth and success of Horizon Protocol. Our commitment to utilizing the Community & Ecosystem Fund to support the project’s growth is unwavering, and we are dedicated to pursuing a listing strategy that aligns with this ethos.
Q: Any aggressive marketing campaigns planned?
To ensure success in any aggressive campaign, a comprehensive strategy with a proven return on investment must be established. To ensure the strategy is effective, consistent testing and optimization must be conducted. In the current bear market, it is difficult to draw attention in the space by using any big marketing activities that are cost effective.
Our testing of various marketing activities over the past few months have shown that marketing spend ROI (return on investment) is bad. With ROI and conversion rates lower in a bear market, it’s vital to be selective in both our marketing investment areas and resource allocation.
For example, during the bull market, the CAC (customer acquisition cost) for NFTs was estimated to be between $2–3, with a 50% conversion rate. However, during the bear market, the CAC increased to approximately $10, with a conversion rate of 8.75%. User acquisition in Web3 can reach up to $30–100, depending on the strategy and timing.
The current bear market does not lend itself to aggressive campaigns, therefore, we use this time to gain insights into effective marketing strategies by testing and carefully analyzing and refining our approach. The goal is to establish a robust and efficient funnel that will deliver optimal results when the time comes.
As we look towards the 2023 release of new features, we are exploring and preparing for a comprehensive marketing campaign with increased spending that will effectively showcase these developments and partnerships. However, the Web3 market is constantly evolving, and we must remain flexible and adaptable to changing conditions. Launching a major campaign during a bear market or a period of heightened uncertainty is not a prudent decision. Instead, we will leverage our data-driven strategy to make informed and strategic decisions, ensuring the most successful outcome for our project.
Q: Will you try to localize the docs/even the academy to different languages apart from English to reach more engagement in the future?
Absolutely! We have already translated our documentation into Spanish and are already actively working on other languages. Regional localization is very important to community building, but it is not being prioritized over other efforts at this time. Therefore, we have approached it by introducing it as a community volunteer effort, where we work with the regional community on translating documentation and other project information. If you have a specific language in mind or if you have spare time to help with the translation, please let our CMs know.
Q: Do you allow suggestions and feedback from the community? Are we allowed in decision-making, do you put the community into consideration?
The community has always been the most important part of every decision. Horizon Protocol aims to become a full DAO where the protocol itself is 100% controlled by the community. Our goal is to foster and encourage as much community participation as possible to make this goal a reality.
Therefore, community suggestions and feedback are always welcome. We welcome not only suggestions and feedback, but also in-depth discussions on the process of decision-making. We released HIP (Horizon Improvement Proposal) a while ago, where the purpose of HIP is to start creating an environment for us to get the discussion going and find the best way to push the project forward. The HIP format will be imperative to setting up a strong foundation toward DAO. If you have any suggestions or feedback, please do not hesitate to let us know.
Q: Would the team be doxxed and attend crypto/DeFi/blockchain IRL events?
The decision to reveal one’s identity, or “doxxing,” is a personal one and the majority of our team has chosen to remain anonymous. Our educational director, Stanton Wong, has decided to be publicly known and you can learn more about him in his introduction post.
We were the sponsor of the latest BNB CHAIN innovation meetup in Buenos Aires, and our CM JR attended the event to represent our presence in real life. It’s possible that in the future, more members may choose to reveal their identities or attend in-person events. However, we respect each team member’s personal choice and privacy.
Funds
Q: What are the wallet addresses used by the Team and their purpose (minting, rewards, compensation, etc.)?
There are two Horizon Protocol wallets:
- Protocol Wallet: 0x3a10A18Ca6d9378010D446068d2Fd4dE5D272915
- Community Treasury Wallet: 0x5a7e0E29A6cCFaFfc34739005002B316cD42debC
The Protocol Wallet controls the smart contracts and implements all community decisions via HIPs The Community Treasury Wallet holds the community funds used to support the growth of the project. Note that the community fund currently does not stake, mint or claim any rewards, but a community discussion is welcomed.
Q: How many team funds are left? How many people are in the team working?
Due to the bear market, we have had to lower our burn rate to a more manageable rate relative to the market conditions, but there are sufficient funds for the team to operate for the foreseeable future. Currently our team consists of 5 full time, 3–8+ part time (varies depending on the certain needs).
Q: Do you have a Token Burning plan to increase Token value and attract Investors to invest?
There has been no formal proposal on this, but token burning is an idea we believe the community would be interested in to help offset the inflationary rewards. An idea we have is to take a small % of all zUSD fees generated in the protocol to buy back HZN and burn it. If implemented, as the protocol adoption and volume grows, there will be more HZN bought back and burnt, potentially making the protocol deflationary (i.e. Ethereum during peak loads).
Obstacles
Q: Core features like futures have been announced but not delivered to timeline. While Updates happen regularly, it is still very unclear for investors when to expect new features. How do you plan to improve planning and comms?
For futures and other updates this time around, setting definitive dates is difficult as there are many unexpected challenges that can arise. We are perpetually operating in uncharted territory.
We believe rushing to meet a deadline can lead to increased risks. That’s why we have decided not to provide a definitive timeline because our focus is on security and quality. We strive to keep our communications as transparent as possible and welcome feedback on how we can improve.
By prioritizing security and quality, we aim to provide the best possible outcomes for the project and community, and we believe that this approach is worth the trade-off of not being able to guarantee a timeline.
Q: While the dev team delivers consistently, the output is very low. It seems that the team is too small to compete with other projects in the mid to long term. How do you plan to increase team size and output?
Our project has a complexity that far surpasses the majority of projects in this space. This is why there aren’t as many players doing synthetic assets compared to NFTs for example. Complexity comes at the cost of taking more time. It is also absolutely critical that security is prioritized as there are no ways to get funds back in DeFi if something goes wrong. In 2022 alone, the total amount of financial damage to DeFi investors was estimated at almost $3 billion. Exploits originating from carelessness can play a factor in this, which is why we take the security of our protocol very seriously and take the time that’s needed.
Furthermore, in a prolonged bear market where a large quantity of projects, large and small, have either collapsed or ran out of funds, Horizon Protocol has been consistently BUIDLing the entire time without hiccup or serious incident and we believe the market will accurately reflect that over the long term.
Q: How do you plan to finally be noticed by the crypto community?
This will always be a work in progress. Although not always information that can be publicly shared, we are in constant contact with key players in the industry in exploring partnerships that will help grow the project, but a lot of the decision making depends on timing as well. We are constantly exploring opportunities for further growth. With a clear and ambitious 2023 roadmap in place, we are confident that we will drive significant improvements and establish ourselves as a leading player in the crypto space.
Q: Translation: How much should we trust the project, and why?
We understand that finding the right project to invest in can be tough. That’s why we’re committed to transparency, and all of our information is publicly available on the blockchain for you to review. We believe in the power of DeFi and crypto to empower individuals, but it’s important to remember that with great power comes great responsibility. So, take your time to do your own research (DYOR) and make sure you feel confident in your investment decisions. And if there’s any information that you would like to know about the project of the team that it’s not included in this AMA, don’t hesitate to ask by reaching out to our CMs using our Telegram or Discord groups.
Thank you again for everyone’s submission. The AMA is over, but the conversation continues. Please let us know your thoughts in the chat! We value your feedback and look forward to engaging with you further.
