BtcProxy x Satoshi Club AMA Recap from 11th of August
Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from BtcProxy and our guests was @donnkim — representatives of BtcProxy. The AMA took place on 11th of August.
The total reward pool was 500$ and has been split into 3 parts.
In this AMA Recap, we will try to summarise the most interesting points for you.
Part 1 — introduction and questions from the Website
Mary | Satoshi Club:
Hello Satoshi Club! We are happy to announce our AMA session with BtcProxy! Welcome to Satoshi Club
D. | Satoshi Club:
Today our guest — @donnkim !
Good to have you with us today
Donn K:
Mary | Satoshi Club:
Welcome to Satoshi Club
Donn K:
Hello everyone and thank you for having me here at Satoshi club.
D. | Satoshi Club:
Hello! nice photo!
Donn K:
Thank you.
Mary | Satoshi Club:
So, let’s start our AMA! We are really excited to hear more about BtcProxy
And we will start with intro!
Could you please introduce yourself and tell us more about BtcProxy
Donn K:
Yes thank you.
My name is Donn Kim and im the founder of BTC Proxy.
I’m also the CTO of Krypto in Investment Advisors which is the sponsor to a Bitcoin ETF in the USA.
BTC Proxy is an institutional BTC Bridge to Defi built on Matic L2
Mary | Satoshi Club:
Do we have chances for ETF in the nearest future?
Donn K:
And the governance token is $PRXY
We will see it is currently undergoing review
at the SEC
Mary | Satoshi Club:
Hope one day we will get it
Donn K:
I think we will get one soon and hope that ours is one of the approved ones.
Mary | Satoshi Club:
It will be a great day for crypto community
Donn K:
Yes USA is the last frontier and it would be a great day for retail investors.
D. | Satoshi Club:
By the way, what was the motivation to create BTC Proxy? and how long project under development?
Mary | Satoshi Club:
For sure
Donn K:
Well the project is the combination of blockchain tech and the Exchange Traded Funds.
learning how ET products were structured and how they are used by institutions enabled us to develop a similar structure using blockchain
in a way that they would use it
to tell you the truth we begain in 2017 experimenting with different models but we failed to launch in the ICO era because the product just wasnt good enough
so we literally retooled and created system to fit the needs of the potential users
Mary | Satoshi Club:
So long
Donn K:
I think we have found product-market fit here from the feedback we’ve received.
Mary | Satoshi Club:
I am sure you did it perfectly
D. | Satoshi Club:
I suppose now is the right time for such a project as yours in DeFi era
Donn K:
We had the help of many people, just a shout out to my partner on the asset management side if he is watching Jason Toussaint
we think we have something special here
just wanted to also mention that because of the emergence of governance tokens in the past 1.5 years we were able to create this PRXY ecosystem
and was able to bring another very special function which is the ability to FARM BITCOIN
D. | Satoshi Club:
Haha great!
Mary | Satoshi Club:
Yes, governance is important and, to be honest, i almost don’t know any project which launched without governance lately
Donn K:
Thats right, it is important to separate of the value capture from the protocol
Mary | Satoshi Club:
Donn, thank you for your intro! It was informative and detailed
We also collected 6 questions from our community for the first part
Are you ready for them?
Donn K:
I just wanted to make an announcement to our community before we start.
Mary | Satoshi Club:
Of course
Shoot it
Donn K:
BITCOIN FARMING goes live at 200pm UTC so go-to app.prxy.fi and stake your PRXY to earn BTC
today is the launch of our Bitcoin Farm and the bitcoin was generously donated by Alphabit Digital Currency Fund.
Mary | Satoshi Club:
Wow
Donn K:
https://twitter.com/BTC_proxy/status/1425281031297409025?s=20
Pls go ahead with questions.
Mary | Satoshi Club:
Perfect
Let’s go
D. | Satoshi Club:
Insane possibility to get bitcoin from farming
Donn K:
We believe it is a great product because BTC is not a shitcoin and the value is stable
So people will be interested in this type of return
D. | Satoshi Club:
Totally agree!
Q1 from Telegram user @josegamboac
BTCpx adds value to the crypto ecosystem. By combining the ubiquity and maturity of BTC, the functionality of ETH and the scalability of the Matic (now Polygon) network. BTCpx opens up a world of possibilities that allow your Bitcoin to perform like never before in the world of DeFi. So what are the uses that can be given to BTCpx?
Donn K:
BTCpx is considered a bridge to DeFi for certain users that do not or cannot sell their Bitcoin. The way it is different than other wrapped BTC products is that the user directly deposits their BTC into a 3rd party custodian where you know it is safe, there is no threat of a rug pull, it is insured against loss.
The user can mint an erc20 or polygon version of their BTCpx where they will be able to utilize it to farm yield. Hopefully with some time we can have various pools set up where they can stake it. One such one that we are planning is a BTCpx/USDT pool on Polygon
So essentially BTCpx is the Bridge
Mary | Satoshi Club:
So, currently you have both erc20 and polygon tokens? Do you have plans to add more networks?
Donn K:
We initially began with these two networks and will likely expand next to BSC since that is where a lot of the defi is happening.
D. | Satoshi Club:
But could you explain a little bit more, how BTC Proxy is different from other ‘wrapped and pegged’ BTC versions in DeFi like WBTC or renBTC? like explanation for dummies
Mary | Satoshi Club:
This would be great!
Donn K:
Sure we have a small table that shows the differences.
Donn K:
The main difference with WBTC is that WBTC has no interface and it is a centralized product. The holder of WBTC has no rights to redeem it for BTC.
There is no governance associated with WBTC either.
but what WBTC has is it uses Bitgo as their custodian
this is why it is 15x larger than renBTC
a lot of institutions are using this product
and that is the main drawback for renbtc. with ren they themselves hold the BTC somehow
so the custody part of renbtc excludes it from a lot of usage
Mary | Satoshi Club:
True
btw, as i understand you mainly or 100% concentrated on institutionals
Donn K:
Here is an image for the roadmap for those interested.
it is focused on them but it is open for permissionless usage
so anyone can use it. and its cheaper than Ren to mint your BTCpx
there is no ETH Gas fees required
D. | Satoshi Club:
As i know Ren also works with other assets and allows to use those in DeFi like Zec and Doge — renZec/renDoge. do you also have plans to do something similar or you focusing only on BTC?
Donn K:
At this moment in time we are going to be focused on bridging bitcoin only
D. | Satoshi Club:
Gotcha
Donn K:
Bitcoin is 50% of the market so we think that is large enough.
Mary | Satoshi Club:
Thank you for your answers! Ready to proceed?
Donn K:
Yes
Q2 from Telegram user @orlemys
You’ve said that confirmation of Bitcoin blocks onto an Ethereum smart contract using a Matic side-chain makes Proxy the cost-effective choice. This is quite a complicated statement for crypto newbies, like myself. So would you please explain this process in simple detail? As I know Ethereum fees are extremely high, so I’m really curious to know how making use of it would have as a result, gasless transactions. What is the exact function of the Matic side chain in this context? Why don’t all projects make use of similar strategies? How safe is it?
Donn K:
This is an Layer 2 project where we are putting all the information from the Bitcoin Blocks onto Matic instead of ETH because it would be incredibly expensive to do so.
each time your push data to ETH it has a cost so putting that on matic made sense
Since Matic and ETH contracts are synced, only when we need to push data to the ETH chain do we do so and that is the only part of the transaction that requires gas.
Not all projects will use the same strategy because you have to weigh the cost benefits of the implementation of that L2. Does it save costs is the real question and each use case has to be weighed.
Mary | Satoshi Club:
What is the minimum/max amount of BTCpx a user can mint?
Donn K:
About $100 worth.
Mary | Satoshi Club:
Oh, it’s ok and acceptable for anyone
Donn K:
It’s permissionless so anyone can use it.
D. | Satoshi Club:
So you think Matic is the best L2 solution? are you looking into Optimism or any other L2 solution which will be launched in the future?
Donn K:
The system is already built and we started over 10 months ago.
and Matic was the best option
at that time
D. | Satoshi Club:
Yes they are know what they doing
Mary | Satoshi Club:
Thank you for your answers, Donn! Do you want to add something or we can go to the next question?
Donn K:
They knew that ETH needed an L2 back in 2018
incredible job and very good support from that team
pls go ahead
D. | Satoshi Club:
Mary | Satoshi Club:
They saw future
Q3 from Telegram user @JesusFre1tes
I read that BTC Proxy has Commercial Crime Insurance to further protect its clients’ assets, with insurance coverage arranged by Aon through a selection of international insurers. What have been the strategic advantages of using Aon for such an important purpose as securing a decentralized platform? Which international insurers are part of the comprehensive crime insurance that BTC Proxy has implemented to prevent the theft of digital assets?
Donn K:
So just to be clear BTC Proxy is not the one that is insured.
It is the funds that are held through the custodian that are insured.
Assets placed into custody with Hex Trust are covered by AON insurance for Crime and Inclusions. You can read more about it on the Hextrust.com website.
The strategic advantage is that for certain institutions and users they do not or cannot sell their Bitcoin. So instead they are staking it into custody instead of selling it or swapping it.
Selling it or swapping it with a CEX has some counterparty risk and then swapping it for another token can result in slippage. So minting an equivalent is an option that has insured counterparty risk and no slippage reduces the risk
Mary | Satoshi Club:
Does it add additional expenses for those who are using this?
Donn K:
There are small fees to mint and redeem.
.1% to mint and .3% to redeem — this is due to costs associated with insurance and custody.
But it is these fees that we earn that are shared with the stakers of PRXY.
Mary | Satoshi Club:
Really small
Donn K:
So PRXY stakers will earn a portion of these fees.
D. | Satoshi Club:
Nice profit for them
Mary | Satoshi Club:
Excellent!
Donn, thank you for your answers! Ready to go to the next question?
Donn K:
And that fee is in Bitcoin
Sure let’s go
Q4 from Telegram User @Jmagsss
In order to earn $PRXY one must mint first $BTCpx token by swapping it by Bitcoin. Let’s say that all the Bitcoin in the world were minted and swapped for $BTCpx, how would the supply of $PRXY token comprehend that scenario. Can its supply coordinate with the supply of Bitcoin itself? Can you tell us more about your token economy?
Donn K:
The max supply of PRXY is limited to 21M exactly the same as BTC. The two tokens are related but the existence of BTCpx will not have a bearing on PRXY.
Some of the supply of PRXY is controlled by the foundation and given as a reward for using BTCpx. We would have do some calculations and determine how much PRXY would have be issued for a reward on an case by case basis.
Mary | Satoshi Club:
Could you tell us more about PRXY tokenomics?
Donn K:
The only thing that would happen is that so much in fees would be earned.
That it would drive up the price of PRXY.
D. | Satoshi Club:
The supply of PRXY will be always limited to 21mil? or is it possible to change it through governance voting?
Donn K:
So the max supply of 21M of PRXY will be mined over 2 years.
There is only about 10% of that currently mined and only about 470K in circulation.
So we aim to keep the circulation low in the beginning until we see real usage and adoption.
Mary | Satoshi Club:
Ohhh, that’s what we love
small circulation supply
Wise decision!
Donn K:
That is why we just rolled out staking so that it would further limit circulating supply.
1/2 of the prxy that is mined is going to be offered as rewards to BTCpx users.
And incentivize them to use our protocol instead of the competitors.
We will open a swap shortly.
For Renbtc and wbtc holders to swap it for BTCpx and reward that swap with some PRXY.
D. | Satoshi Club:
Smart move
Donn K:
Yeah there is over 11B in tokenized BTC in the market so the liquidity is out there.
D. | Satoshi Club:
@donnkim big thank you for the great answers! ready to move onto the next question?
Donn K:
Yes.
Q5 from Telegram user @Arisabela
Can you tell us the characteristics of the cold and frozen wallets implemented on your ecosystem? I saw there will be needed to request a withdrawal that must be authorized in order to transfer funds from these wallets, can you tell us if this is an automated process? What chances will the users have to get a negative response?
Donn K:
Well the two wallets are separated.
Both wallets require multisig and at least 2 users to approve withdrawals.
We allocate a certain portion to the hotwallet for redemptions for that day.
And under a certain threshold there are no approvals necessary as it is rule based.
So if a user gets a negative response it is because the hotwallet has to be replenished.
Or it is over the threshold.
But all transactions are stored so we can deal with any negative responses
Mary | Satoshi Club:
How long it usually takes to replenish hotwallet? 24 hours? And how often you give negative response?
I mean — is it common or unusual situation?
D. | Satoshi Club:
In this case how much user have to wait to get a positive response and be able to withdraw funds?
Donn K:
We have a system where we replenish the hotwallet once a day.
Positive response is immediate.
And confirmed on Eth/matic.
As well as BTC.
It is a coordination of all three chains.
Mary | Satoshi Club:
Thank you for your answers! Are you ready for the 6th and last question from this part?
Donn K:
Yes.
Q6 from Telegram user @h1drX
It is true that the centralized exchanges and systems exponentially increase counterparty risk of theft or loss and an inefficient transfer of value resulting in price slippage. But this decentralized bridge called Proxy Relay Protocol is not also vulnerable to attacks or even operational deficiencies? Can Proxy BTC guarantee total security of the system?
Donn K:
Well let me start by saying no system is 100% risk free.
But there some systems are safer than others — especially those that use multisig.
Centralized exchanges are not regulated so of course they are exposed to more counterparty risk. Think of IDAX think of MT Gox and all the rug pulls from these small exchanges.
Decentralization helps to solve this but currently the biggest vulnerability at the moment are these CROSS CHAIN bridges.
D. | Satoshi Club:
Right.
Donn K:
We just saw the 600M hack on Poly Network that was a cross chain bridge.
BTC Proxy does not use pure decentralization for the matter because storing BTC on one of these bridges is extremely risky.
Mary | Satoshi Club:
Yes, one of the biggest hacks ever.
Donn K:
It is much safer to place it into a regulated and insured custodian.
No system is 100% safe but we believe BTC Proxy to be an extremely safe protocol because the BTC is completely out of reach.
Mary | Satoshi Club:
And of course you passed audit, right?
Donn K:
Of course.
I will post link to it later.
Quillhash was the auditor.
Mary | Satoshi Club:
Great choice!
Donn, i like our conversation very much, but i feel that something exciting is coming
Part 2 — live questions from the Telegram community
Q1 from Telegram user @Korryl
May i know what are the reason of using BtcProxy for your project name ? any special meaning behind this name ?
Donn K:
Ill answer this easy one. Proxy was chosen because proxy means representative and BTCpx is a representative of BTC on a different chain.
Q2 from Telegram user @ethcypherpunk
Do you have plans to create pairs of BTCpx / with other tokens such as WBTC or renBTC with concentrated liquidity models to facilitate and incentivize liquidity? something like BTCpx / WBTC / renBTC pair in Curve.
Donn K:
We will create pairs of BTCpx with Ren and Wbtc and possibly a 3rd pair in CRV to establish peg.
But the benefit to these pools is there is no impermanent loss.
Q3 from Telegram user @Ble73
Where can we currently buy your tokens and where have they been listed so far?. And please share all social media handles we can get adequate information on this projecg.
Donn K:
You can buy PRXY right now on uniswap https://app.uniswap.org/#/swap?inputCurrency=ETH&outputCurrency=0x22acaee85ddb83a3a33b7f0928a0e2c3bfdb6a4f
The socials can be found on our telegram group https://t.me/BTC_Proxy
Q4 from Telegram user @surendra040
You mentioned earlier minimum 100$ worth BTCpx can be minted. Do you have any guide for a new beginner like me to participate on it?
Donn K:
Yes you can find all information and instructions on how to use the platform at docs.btcpx.io
Q5 from Telegram user @Kathdm
Since the July 30th launch the $PRXY token has fluctuated in value from as high as $55 to as low as $15. This is still 10x from the private sale price. What was your perspective on the launch of the $PRXY token? I read that after the listing on Uniswap what followed was a 25X from $2 to over $55 in 12 hours and the 1spot on Dextools for multiple days. Did you expect that explosive interest that the community had in PRXY? After launching , what have you been focusing on?
Donn K:
We cannot unfortunately comment on the price as that is out of our control but what I can say is that the price action on Day 1 proved that the protocol has value equivalent and exceeding that of Ren.
Q6 from Telegram user @Nonerlike
I want to know more about your platform roadmap ahead and what are your achievements made till now? Do you have any partnership and collaboration made ?
Donn K:
Yes we have great collaboration with many partners.
Q7 from Telegram user Jorge
There are rumors of being listed in a top 5 CEX soon, can you confirm exchange and date?
Donn K:
Many people have been asking about our CEX exchange listing and as of now we are talking to multiple exchanges but none have been confirmed. CEX exchange listing takes a long time because that process is very centralized but we anticipate that we will be on shortly.
Q8 from Telegram user @captainprice111
What is the function of $PRXY other than as a governance token? Why should I hold $PRXY long term?
Donn K:
The main function of $PRXY is to FARM BITCOIN at app.prxy.fi
Q9 from Telegram user @parmeet1
What do you think is your strongest advantage will keep your team ahead of the market? In contrast, what are your weaknesses?
What strategy does your project use to attract new users and investors and retain them for a long time?
Donn K:
We want to establish the market capture of Bitcoin Farming for PRXY and institutional Bridge to Defi these are our main values.
Part 3 — Quiz Results
In the final part, we tested your knowledge in terms of BtcProxy. They’ve prepared 4 questions for this part. The total reward pool for the quiz was 300$.
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