Here’s What You Missed At The Alex Melikhov AMA
We recently welcomed our very own Alex Melikhov, CEO of Equilibrium, to an AMA on our Telegram channel. More than 3,000 Equilibrians and DeFi enthusiasts congregate there, so Alex was happy to field community questions on home turf.
This post is going to collect the most interesting questions and answers from that session in case you missed it live. You can find the beginning of the AMA session in our community chat right here, or you can read on for our selections.
Q: What are Equilibrium’s plans to educate and raise awareness among the community for sake of increasing adoption?
A: First of all, we are creating a series of articles about Equilibrium. The first one you can find on our Medium blog.
This post sets the stage for explanatory posts to come. Subscribe to our announcement channel to keep up with further releases: https://t.me/equilibrium_news_feed
Q: Overcollateralization in lending services is a big problem for borrowers, but $EQ’s collateral requirement is pretty low compared to other DeFi projects. How does Equilibrium do this? How do you neutralize the risks of price fluctuations?
A: We have a 3-level system protection mechanism with bailout functionality in place. In fact, every loan is backed by overcollateralization, plus a cushion that comes from the bailsmen.
Furthermore our system uses programmatic interest rates, which means users have a say in determining their interest rates based on their collateralization ratio.
Equilibrium starts with a low c-ratio (at a minimum of 105%) which gives users flexibility, as opposed to most other projects. But if they want better interest rates, they should opt for solid collateralization. These inverse relationships are determined by our risk algorithm, which monitors aggregated system liquidity based on individual users’ portfolios.
Q: DeFi is one of the hottest topics in the blockchain space right now. Can you share your opinions on DeFi with us? Do you think that DeFi will disrupt the existing financial system? What is Your approach towards the sector?
A: It’s definitely hard to forecast a precise scenario. One month in crypto feels like ages. But what definitely makes sense is that the future belongs to cross-chain interoperable projects like Equilibrium.
I also think that everybody has been building primitives so far. We will see how the DeFi
ecosystem will face more sophisticated projects built on top of primitives by combining them together.
Q: What can you tell us about the launch of your decentralized exchange?
A: We are starting its development in January and our expectation is to launch its alpha version into the tesnet later in Q1. It will introduce margin trading with a simple order book first by leveraging functionality of our lending platform.
Q: Are you planning to use PES (protocol embedded staking) in the future?
A: We are sticking to NPoS (native for Substrate-based blockchains) and that doesn’t presume usage of staked tokens anywhere else.
Q: What are the types of users on your project? How do you keep them together for the long term?
A: Like most of DeFi projects we have lenders, borrowers, and traders. But also we have a special role of “bailsman,” who secures loans in the system.
We believe that liquidity is a cornerstone of a goodDeFi project. So we put a lot of effort into bringing prominent liquidity providers onto the platform.