Last week our Education Director Stanton had the opportunity to conduct an AMA with the Arabic BNB Chain community. For those of you who missed it and are curious about what was discussed, this article will provide you with the full Q&A!
If you wish to read the AMA in its entirety instead, you can do so by going to the BNB Chain Arabic Telegram channel; the AMA starts around here.
We would like to thank BNB Chain for giving us this AMA opportunity, and also a special thanks to Project Galaxy for providing an awesome opportunity for our AMA participants to earn an OAT/NFT! These AMAs are part of a wider strategy to keep creating brand awareness, expanding our community and creating synergy within the BNB Chain ecosystem.
Q: Hi Stanton, we are glad to have you here today. Can you introduce yourself to the chat and share a quick overview of Horizon Protocol?
A: Thank you very much for having me! My name is Stanton and I am the Education Director for Horizon Protocol. My role is to develop content to help people better understand synthetic assets, their potential use cases, and generally, how to more easily navigate Horizon Protocol’s services. My background is in software development and product management, but I have been involved in crypto related stuff since 2016. Our project, Horizon Protocol, is a defi project that facilitates the creation and trading of synthetic assets.
Q: What are synthetic assets and what do I do with them?
A: Synthetic assets are tokenized derivatives. In traditional finance, derivatives include options, futures, swaps, etc., which has a huge market cap in traditional finance, estimated at $1 quadrillion USD. So synthetic assets are basically financial derivatives in crypto. The simplest kind of synthetic asset is a mirrored asset, which uses oracles (from Chainlink) to track the price movement of stocks (APPL, TSLA), commodities (gold, oil), currencies (USD, Euro), crypto (BTC, ETH). Since there are no limitations on what a derivative can be, there are a lot of other possibilities as well, including unique market indexes, such as the S&P500 for crypto or NFT baskets. Horizon Protocol essentially allows users easy access to buying financial exposure to these assets without going through traditional red tape.
Q: How does Horizon Protocol work? Can you explain to us what’s the difference between Genesis and the Exchange?
A: There are two parts to Horizon Protocol, like you’ve stated: Horizon Genesis and Exchange.
This is going to get technical: Horizon Genesis is the backbone for all the synthetic assets in the Horizon Protocol ecosystem. Horizon Genesis is used to create Horizon Protocol’s first synthetic asset, the zUSD, which is minted be using HZN as collateral. All zAssets are backed by this collateral pool. This pool is maintained by stakers on Horizon Genesis, which receive incentives for doing it.
Horizon Exchange hosts a decentralized exchange for zAssets by utilizing industry-leading oracles to track their price movement. The exchange allows for simple market trades of typical underlying assets including commodities, stocks, bonds, forex currencies and crypto. And it will also allow access to advanced derivatives trading tools like, shorting, futures and options. And the best part is that anyone can access all these investment and trading options by simply acquiring zUSD or zBNB on the open market and connecting a supported wallet.
Q: Who would your users be? Why would someone be interested in your project?
A: I love this question because synthetic assets are still hard to pin down as to how to use them. There are probably two main types of users:
- Stakers who want a good return via dividends on Horizon Genesis in the form or HZN and zUSD tokens.
- Retail Investors, who want easier access to a diverse variety of investment options, including equities, commodities and indexes from around the world, that are available in the form of synthetic assets on Horizon Exchange. And they can do this simply by connecting their wallet and performing simple transactions like selling and buying.
Q: There are other synthetic asset projects. What makes Horizon Protocol unique?
A: I think as of right now, one of the unique parts of our project is that we are currently the only fully functional synthetic assets exchange on the BNB Chain. The low costs for each transaction match with our mission around easy access, so everyone can try trading without much cost. I also want to mention that to fulfill our mission, Horizon Protocol needs to make synthetic assets and DeFi derivatives more accessible. To do that, we take a user-centric approach and have a strong focus on UI/UX design.
Q: What is the next step for the Horizon protocol? Can you tell us something about the roadmap?
A: So much is coming! We have recently updated two of our core products, Horizon Genesis and Horizon Dashboard, and we have also implemented our first two Horizon Improvement Proposals. We will be releasing an updated version of our Roadmap really soon, where you will see some of the important developments we have ahead: On Horizon Exchange, we will be adding the ability to short assets through inverse synthetics. and also to invest in futures. Loans and wrapped assets are also in the pipeline and we will be integrating Chainlink Keepers for automated smart contract execution. We will also add a bunch more synthetic assets into the market to be made available for trading! We invite everyone to join our discussions on which assets to add next round.
Q: Is synthetic asset same as ETF token on CEX? how safe is it compared to native asset’s derivatives?
A: There are a lot of different types of synthetic assets. The most common would be mirrored assets, where we have a derivative that is mimicking the price of another asset. This can be mirroring crypto native assets like BNB (we have zBNB) or assets in the real world like equities and stocks (TSLA as an exammple). These are not the same as ETF tokens. The value will come from price oracles, so good price oracles will be critical.
Q: Do you have a white paper available? If so, please send it to us, and do you have any plans for pre-sale? Now, where can we share?
A: Yes, whitepaper/litepaper can be found on our website. Here is the direct link: https://static.horizonprotocol.com/Horizon-Litepaper-v1.7.pdf — We are past presale and HZN, our token is traded on a few CEXs and on PancakeSwap.
Q: Could we as Horizon Protocol users see a summary of our portfolios in our accounts?
A: Horizon Protocol users can always see a summary of their own portfolio via the Exchange. They can also see a summary of the global portfolio via the Dashboard (https://dashboard.horizonprotocol.com/)
Q: Can we trade using leverage within the Horizon Protocol platform?
A: Right now, there is no leverage yet, but it is something we plan to add in the future.
Q: What kind of oracle does Horizon Protocol use to set prices in the market?
A: Horizon Protocol currently uses Chainlink’s oracles, which we believe are the best in the market right now.
Q: For HZN token holders, are there trading pairs within the platform against it?
A: Horizon Exchange will likely not have a way to trade a synthetic HZN (i.e. zHZN).
Q: How do you plan to attract new users (especially non-crypto) to the Horizon protocol? How do you plan to accelerate the adoption of Horizon Protocol?
A: Right now, with the bear market, our marketing efforts will mainly be education based. AMAs like this, cross promotional activities with other projects, and we will be starting our own podcast soon to help provide more insight into the possibilities of DeFi and synthetic assets.
Q: What are the project’s perspectives in relation to the market moment, is there a Marketing plan and/or idea of disseminating Synthetic Assets, how to attract new investments to survive this delicate moment?
A: The most important thing is to make sure that we survive past this moment. The market is currently not a good place for small project spending marketing dollars, so we will be focusing on building content on the marketing front and continue to build out the features that will make us a full fledged DeFi derivatives platform.
Q: How can users ensure their safety and privacy when investing in Horizon Protocol, is it safe for users?
A: We forked from SNX because we believe that they have one of the safest and most robust protocol for DeFi Derivatives, so Horizon Protocol is in good hands. Our development takes time to guarantee that we test and re-test everything before every release and we are focusing on building better interfaces so it’s harder to make mistakes with your actions. We are always looking for more input though!
Q: So many projects just like to speak about the “long term vision and mission” but what are your short terms objectives; what are you focusing on right now?
A: Short term, we are focusing on educational content to help make synthetic assets more easily understandable and also continue building out the other functionalities like shorting and perpetual futures. Gradual adding of more zAssets will also be important. What we are really hoping to do though is to introduce interesting and unique zAssets that are not found anywhere else in the world, but we need to find the right oracle for it first. Security is more important than novelty at this time.
Q: Are there any incentives planned to increase the current volume on Horizon Exchange?
A: We recently added another on-ramp of zBNB/BNB on ellipsis.finance, which will help. We will continue exploring opportunities to be listed on CEX and DEXs, potential investments, and partnerships to strengthen Horizon Protocol and build recognition around it.
Q: Will the community be able to vote which new zAssets they wish to see added on HZN exchange?
A: Yes! The plan is to build out the governance model for voting for new zAssets. There is obviously the requirement for an available high quality oracle first thouugh.
Q: How are my rewards calculated for staking HZN in Horizon Genesis?
A: There is an inflation model for Horizon Protocol that distributes HZN to stakers. The distributed HZN will gradually decrease over time. Check out the tokenomics here: https://academy.horizonprotocol.com/horizon-protocol/introduction/tokenomics
Q: Why are there fee differences between zAssets? For example: zDOGE shows 0.25%, zAPPL shows 0.50%.
A: This is due to the chainlink’s price deviation value of a particular price feed. For Equity feeds on BNB Chain, they have a 0.5% deviation before updating, so to offset potential oracle front-running, the fee is also 0.5% to close that gap. So basically, it is something that is inevitable to protect the protocol from potential hacks (via front-running).
Q: Is there a plan to list HZN on the Binance exchange?
A: In the long term, yes. In the short term, it is too expensive and there is also a requirement from exchanges to maintain a certain trade volume, which we are unlikely to be able to maintain at this time. Therefore, we are looking at other ways to grow until it makes financial sense to be on Binance.
Q: How do you ensure the liquidity of synthetics?
A: This is where Horizon Genesis comes in. All synthetics on Horizon Protocol is covered by a 700% collateral worth of HZN. With weekly claims that require maintenance of the staker’s collateral, all zAssets on Horizon Protocol is always heavily backed.
Q: Nowadays NFTs are hot trending, do you have any plans with that? If so, could you tell us something about it?
A: We see an opportunity to provide a zAsset index for certain NFTs, so instead of holding 1 NFT, you could hold an index that matches a lot of NFTs priced together, which makes more sense for price movement. This will be dependent on oracles though.
Q: Will Horizon Protocol ever have its own mainnet, could this happen?
A: Horizon will likely never have its own mainnet because its not necessary. Our focus is on DeFi derivatives and synthetic assets. The mainnet security layer is already handled by so many wonderful projects and teams, we don’t need to rebuild that.
Q: According to the roadmap, what is your most important next priority? Do you have enough funds and strong community to achieve your goals?
A: Development/building and educational content will be the short term focus. Building a strong community is also very important, thus our focus on transparency as much as possible.
Q: What motivated you and your team to start this project?
A: We have a couple finance nerds in the core team that really enjoys looking at how money is handled in the world. We see a lot of issues due to lack of transparency and access, so this project was initially dreamed up as a way to provide universal access to assets all over the world and make it as transparent as possible, which is what Traditional Finance should look like in the first place.
Q: What are your plans on how to spread awareness about your project in countries where English is less proficient? Do you have local communities, like Indonesia, Thailand, so that they can better understand your project?
A: We are slightly limited right now in terms of manpower, but we definitely want to gradually spread as much as possible. There is no easy way to do this without investing into it, so it is a catch-22 problem where we need to grow to project first to have more money to spend on all the local community development.
Q: What is the usecase and utility of your token? Can I do staking for passive income benefits? What else can long term holders benefit from?
A: Horizon Genesis provides ‘active’ staking (check in once a week), which is necessary to protect the protocol and keep it properly collateralized. Stakers get a share of the distributed HZN and trading fees.
Q: Why did you choose for BSC chain as the blockchain for your project? Will you support cross integration with other blockchains in the future?
A: When we first started, BSC chain (or BNB chain now) was the only chain with reasonable transaction fees. Due to our mission of universal access, low transaction fees is a must, and thus, we started on the BNB Chain. We also see a lot of potential on the BNB Chain as it is still very much blue ocean for high technology projects. We do have plans to bridge to other blockchains in the future, however this is not a top priority for us at this moment.
Q: Will there be a burn mechanism for HZN tokens?
A: There is a burn mechanism for stakers to unstake their tokens, but there is not a burn mechanism for HZN to remove it from circulation at this point in time.
Q: Is this platform suitable for Crypto beginners, or does it only appeal to professional users?
A: We are definitely targeting retail investors, but it does take a little bit of time to understand how it works. And that’s what the Horizon Protocol Telegram group is for. https://t.me/HorizonProtocol. We have amazing community managers who are super helpful. And its a great project to get hands on and learn about how DeFi works.
Q: Almost 80% investors have just focused on price of token in short term instead of understanding the real value of the project. Can you tell us on motivatiions and benefits for investors to holld your token in long term?
A: It is still very early for DeFi, so it’s even earlier for DeFi derivatives and synthetic assets. We strongly believe that crypto and web3 will play a huge part in the world economy in the future and derivatives will be a part of it. Building out the features and the platform for that day will be important. Gradually building momentum around it by educating everybody about the possibilities will be a big part of making that a reality.
Q: What is your strongest advantage that you think will make your team leading the market?
A: Our strongest advantage would be that we have multiple people who have started real world companies before in the core team. Good crypto projects are essentially start ups where during your friends and family round, you offer it to everybody in the world, but at the end of the day, it is still a start up. We are not a project that only does marketing to drum up the value of the token. We need to build out the platform for the token to be successful, so we need to treat it like a real company.
We also feel very strongly for our mission for universal access to potential investments globally, so that drives our team to make this a long term reality.