On October 26 Satoshi Club held an AMA session with our friends from Momentum. Our guest was @alex448844.
The total reward pool was 1500$ and was divided into three parts. In this AMA Recap we will try to summarize some of the most interesting points for you.
PART 1, INTRODUCTION AND COMMUNITY QUESTIONS
Mary | Satoshi Club: Hello, Satoshi Club! We are happy to announce our AMA session with Momentum! @alex448844 welcome to Satoshi Club.
Alex: Hey everyone. 👋
Mary | Satoshi Club: Happy to welcome you here. And could you please introduce yourself and tell us how did you start with Momentum?
Alex: Great, I’m excited to be here and answer your questions today. My name is Alex, I’m a software developer with a background in full stack web development and a strong interest in cryptocurrency / decentralized technology for the past 2 years. I got started with Momentum back in early July while watching and analyzing deflationary tokens. The idea of a dynamic deflationary token peaked my interest and over the following weeks I spend hours each day crafting ideas and ultimately building the core concepts for Momentum. All that has lead us to where we are now, an active community interested in a fully realized project.
D. | Satoshi Club: Great! tell a bit about your project, what is it purpose?
Alex: So originally the project aim was to build on deflationary index funds. The idea being to use a deflationary token’s DEX liquidity token inside a Balancer pool to force constant trading pressure and constant burn. I was motivated to create a deflationary token that would produce a more effective overall burn rate. Two index funds have been set up and since then we have partnered with DeFiat to utilize their PartnerStake technology. Part of our ongoing plan is to explore yield farming options and working with DeFiat has been a huge step in the right direction. We also have an engaged community who are regularly contributing ideas toward best next steps for the project.
Q1 from Telegram user @dashinberlin
I have tried to find information about your team everywhere but couldn’t. Maybe I didn’t search properly? Please share with me information about the team. It is important to gain the trust.
Alex: The team originally consisted of a software developer (myself) and a creative manager. Since launch there are now many more individuals assisting in community support and design/development contracts. We are remaining pseudonymous for the time being. The ethos of the project and further development is technical trustlessness and decentralization.
Mary | Satoshi Club: So, you plan to stay anonymous?
Alex: For the time being yes.
Mary | Satoshi Club: And your community has to trust your smart contracts first.
Alex: Of course, and getting a successful security audit was a big step toward building on that trust.
Q2 from Telegram user @balabas4bounty
Long momentum and short momentum are 2 main features of your app. Please explain exactly how do they apply and what do they mean.
Alex: The long momentum and short momentum essentially act as running averages of recent transfer sizes. They are used to calculate the transfer fee based on the size of a transfer. If an incoming transfer moves the long and short momentum further apart, a higher ‘destabilization fee’ will be calculated and applied to the transfer. If the transfer brings the two momentum values closer together, the minimum transfer fee will be applied as the transfer is considered to have stabilized the momentum.
D. | Satoshi Club: So momentum is some new technology for DeFi? some tool? I´m not quite sure that I’m understand how it works…do you have a simple explanation for dummies? 😁
Alex: I think the momentum values and mechanism can be a bit tricky to understand. They will fluctuate with the history of token transfers to provide a rough understanding of average tokens transferred across a recent period of time. The intention here was to have a non-oracle based, contract held understanding of token value perceived through how many are being bought, sold, transferred.
But ultimately they are best understood as averages of recent token transfer activity.
D. | Satoshi Club: Well it’s an interesting concept, not easy to understand (for me) but interesting. 😊
Alex: One of the positive outcomes of this has to do with how weights are used to update the momentum values. The weights will tend to move the short momentum below the long momentum. This has the effect of making smaller transfer sizes trigger a higher transfer fee and larger transfers generally pay the minimum transfer fee, ultimately producing a balance of absolute tokens burned across the range of transfer sizes.
Q3 from Telegram user @anacruzz
As I noticed, the transfer fee is around 0.7% or so. Isn’t it quite big? For 1000$ I have to pay 7$ to make the transfer.
Alex: Yes that is the case. Momentum deflates with every transfer and the minimum fee is ~0.75%.
Mary | Satoshi Club: Isn’t it more profitable to transfer smaller amounts?
Alex: Not exactly, smaller amounts will tend to pay a higher fee. I think right now, based on the momentum values, $1000 would trigger the minimum fee and $100000 could be a little bit higher as that is a very large outlier compared to average transfer sizes.
Q4 from Telegram user @anditgoestome
The audit from quill have found that there are a number of issues to be tackled in the medium level severity and low level severity, code is readable but can be improved according to the Solidity’s style guide which is recommended to be fixed before implementing a live version. Have you implemented the changes which were advised to be made? also, which were the vulnerabilities they have found?
Alex: The Momentum smart contract was deployed as a non-upgradable contract. The hopeful outcome and purpose of the audit from QuillHash was to show that no critical errors exist. Fortunately the audit report determined that this was the case. There are no critical errors in the contract. Some medium and low level issues were found in their report. These issues mostly have to do with code style, software development standard practice and deployment optimization. An audit company usually expects their client to be able to respond to all issues presented, however since Momentum was already deployed and non-upgradable, I am unable to address these minor issues. The most important takeaway from the audit process was that no critical issues were found.
Mary | Satoshi Club: Also, in final disclaimer they gave you advise to run bug bounty program, do you plan any?
Alex: We don’t currently have a bug bounty program but open to that for sure. With the exception of the momentum values and all the math in there, the token contract simply performs basic erc20 operations. (edited for clarity).
Q5 from Telegram user @bitalik_vuterin
91% of initial total supply provided as liquidity and locked until December 21, 2021. I am curious what happens after that? You will get out all the liquidity?
Alex: To inspire confidence in the team and project, we locked the initial liquidity for 16 months during the early days of the project launch. This time frame could have been arbitrarily smaller or larger but this is what we landed on. My main concern presently and going forward is the health of the project so when December 21, 2021 rolls around, it is highly likely that those liquidity tokens will be sent to another time lock contract unless there is some consensus around using these liquidity tokens in a more beneficial way.
Mary | Satoshi Club: Did you had or plan to have any kind of token sale?
Alex: There was no plan for a token presale. We chose to go with a Uniswap ICO and lock that liquidity.
Q6 from Telegram user @mr_putin_v
I’ve read your roadmap carefully but it ands on December 2020… What happens after that? What are the next steps for 2021?
Alex: So currently our roadmap has scoped out the rest of this year. The next steps involve more active research and development, which I’m very eager and excited to get in to. We haven’t exactly mapped out what 2021 looks like but I will for sure be continuing to work full time studying and building. Roadmap updates can be expected in the coming months.
Mary | Satoshi Club: Btw, will XMM have any governance functions?
Alex: We do actually have governance setup through Snapshot, so we’re ready to pass any proposals to the community. This was actually another contribution from an engineer in the community.
PART 2, TELEGRAM COMMUNITY LIVE QUESTIONS
The chat was open for 80 seconds; a lot of questions were posted by Satoshi Club community. Our guest chose some of them.
Q1 from Telegram User @Nickkiii
Do you have any tutorials on how to use the XMM/ETH liquidity token XMMx in your Balancer Pools?
Alex: We have created a Medium article for this! https://medium.com/@xmm.momentum/balancer-pooling-tutorial-935478d0f424
Q2 from Telegram User @rockmorti
The golden ratio is part of my best memories studying basic math. Why did you choose the number φ as the central rule of tokenomics?
Alex: Coming up with the ratio between the weights took some trial and consideration. Originally I was focusing on more flat values like 10/20/40 but after spending time thinking of the ‘best’ ratio it hit me to use φ and upon simulating the momentum updates, it felt like the perfect choice.
Q3 from Telegram User @AugusS7
On its website it says that the Momentum contracts “were audited by QuillHash and no CRITICAL PROBLEMS were found”, but common or NON-Critical problems were you found? And really what problems are “CRITICAL” in contracts?
Alex: Critical issues in a contract have to due with major code errors that affect the safety of funds or a contracts functionality. The absence of these critical errors is the key ‘checkmark’ a project is looking for when getting a security audit. The Momentum smart contract is an erc20 token contract and what was key to pass the audit was verifying that all the standard token functions work. The less critical issues were to do with code style and deploy optimization, ends up I could have saved some money on the deploy. 😐
Q4 from Telegram User @Alika061
DeFiat Staking on #Momentum and Collection of prize bets have been created for #Momentum, is there a minimum or maximum to stake $XMM tokens?
Alex: There is no minimum or maximum to stake in the DeFiat pool. However, the amount you stake will determine how many rewards you receive over time. This also depends on how many other tokens are staked in the reward pool by other parties over this period of time.
Q5 from Telegram User @KevSalom
All this behavior of the price range between SM and LM, and its influence on the cost of the rates is quite interesting, but where did you get this method? Did you invent it? Did you perfect it from a previous idea? Or is it a concept that is already in the books of mathematics and economics?
Alex: I came up with this mechanism between early July and August this year. The final product is the result of iterating over multiple other solutions and testing how they would perform based on transfer sizes interacting with the momentum values.
Similar concepts may exist elsewhere, but I did not model it off any known products or theories.
Q6 from Telegram User @jpsarmah
Why does the graphical representation of the mathematical formula of Destabilization fees = ~ 0.75(1+ln(P/2)) involve logarithmic function and not any Polynomial function or Exponential function?
Alex: A logarithmic function is more appropriate for modeling a diminishing effect, in this case a gradually decreasing fee applied to destabilizing transfers. Exponential functions would be far too harsh for outlier and larger transfer and are more appropriate for different applications like a bonding curve.
Q7 from Telegram User @Angieleal
What relationship does Momentum have with DeFiatCrypto? Is it possible to get rewards in $DFT through $XMM? How does this staking system work in Uniswap?
Alex: We are using DeFiat’s PartnerStake technology to issue XMM rewards for staking XMM/ETH Uniswap v2 liquidity tokens. Staking in this pool will not yield any DFT, however this pool uses DFT boost where staking DFT in their core pool will boost your rewards by up to 100%. I would highly recommend DeFiat for any project owners looking for yield farming options.
Q8 from Telegram User @Winterkom
Will there be a limit to token burning or will it be done indefinitely? Do you have any established range? How does this favor token holders?
Alex: XMM will burn with every transfer and deflate indefinitely. This will favor holders by ensuring that their portion of the total supply will gradually increase over time.
Q9 from Telegram User @AmirJosh
There are 3 separate weights that will be used to compute new Momentum values. Please explain the difference between these 3 weights and when will each be use for computation.
Alex: There are 3 separate weights. One is used to update the short momentum and two are used to update the long momentum. When a transfer size is less than the short momentum, a heavier weight is applied to the long momentum and when a transfer size is greater than the short momentum, a lighter weight is applied to the long momentum. This has the effect of producing a wider range between the momentum values where the short momentum is typically below the long momentum. Ultimately this makes small transfer sizes incur a higher transfer fee and larger transfers incur the minimum fee more often. This produces a balance of absolute tokens burned across the spectrum of transfer sizes.
Q10 from Telegram User @tungvodoi206
As you mentioned on the site, 91% of initial total supply provided as liquidity and locked until December 21, 2021. Why did you decide this? So how is the remaining 9% used?
Alex: The goal was to provide as many tokens as possible for circulation while still maintaining enough funds for project development. The remaining 9-10% is being used for design/development contracts, marketing and reward giveaways.
Q11 from Telegram User @warny
Most deflationary token models burn a constant amount, but Momentum takes a different approach, can you explain how this model to us?
Alex: Well I think one of the core motivations was to build something more novel and having a different effect than a constant transfer fee token. Many projects are already employing this solution so finding a way to stand out was important.
I may be biased, but I do believe this approach is better. Take for example two constant fee deflationary tokens, with 1% and 3% transfer fees.
The 1% token will have a small fee incurred across all transfers, not necessarily bad but predictably small, especially when the average token transfer sizes are small relative to the total supply.
Now take the 3% token. The overall rate of deflation of this token would presumably be higher, but relatively large transfer sizes would be feeling the pain big time with this transfer fee and may want to avoid it completely.
XMMs dynamic approach provides the best of both worlds, allowing relatively large transfers to incur a more reasonable fee and small transfers to incur a higher fee closer to 3%. This ensures better usability while still providing an attractive rate of overall token deflation.
Q12 from Telegram User @chelyabinsk_crypto
What kind of APYs are there currently on your Pools? Why percentages are not shown on the website?
Alex: On average we’ve seen the APY for our current reward pool around 100% – 200%. This data is calculated by DeFiat’s contracts and displayed on their UI for the time being. I think some updates to display that on our site will be underway soon.
Q13 from Telegram User @nyo_cant
Some Balancer pools with deflationary tokens were drained due to flaws not so long ago. How will Momentum protect their assets to avoid such incidents?
Alex: This exploit occurs when a deflationary token is directly used in a Balancer pool. We will never create a Balancer pool that uses XMM in it. Instead the XMM/ETH Uniswap liquidity token will be used to produce a similar effect. This token is safe to use in Balancer as it is a very standard, non-deflating erc20 token.
Q14 from Telegram User @Gutike95
You say that “We believe that transparency is the key”, right? If so, in case of presenting any problem with contracts or with exchanges or liquidity and its blockage, who can I contact to solve it? I was looking for and on your website there is no “Technical Support”, don’t you have it?
Alex: Transparency here is referring to the smart contract code being verified and proof of the liquidity being locked. I am always available on Telegram/Discord for technical support if an issue were to arise.
Q15 from Telegram User @CElllIFE
I am confused about Momentum pools. I would like to get an explanation about farming and getting XMMx and XMM tokens.
Alex: So there are 5 pools currently. The first two are uniswap pairs for XMM and XMMx (XMM/ETH Uniswap liquidity token). Staking XMMx in DeFiat’s reward pool with yield XMM as rewards. The other 2 pools are balancer pools that use XMMx along with other common crypto assets.
PART 3, QUIZ AND INFO
As usual, for the third part, Satoshi Club Team asked the chat 4 questions about Momentum. A link to a Quiz form were sent into the chat. Participants had 10 minutes to answer. 800$ were distributed between the winners. Please check the winners list here: https://t.me/Satoshi_club/365245
For more information and future AMAs, join our Social Media channels:
English Telegram group: https://t.me/Satoshi_club
Russian Telegram group: https://t.me/satoshi_club_ru
Spanish Telegram group: https://t.me/satoshi_club_spanish
Telegram Channel: https://t.me/satoshi_club_channel
Website: https://esatoshi.club/
Twitter: https://twitter.com/esatoshiclub
Our Partners:
XMM – Momentum: https://t.me/xmmtoken