Ivan Gramovich, Waves Enterprise product manager: We’ll start with a demonstration, then I’ll describe some use cases, we’ll have a little conversation with Sasha and finally we’ll answer your questions.
First of all, I want to show you how our EAST will work. We launch the EAST web client, then we connect the wallet. We have two options for this — with Waves Enterprise wallet extension for Waves Enterprise blockchain or with Waves Keeper extension for Waves blockchain. Now we enter with the Waves Keeper; imagine there are already some EAST issued in the wallet.
From here we just push the plus button, choose any collateral available (WAVES, BTC, ETH), enter the amount and see how many EAST we can issue.
After the issuance we can add extra assets to the vault, and, if the backing ratio is high enough, we can claim overcollateral to issue some new EAST. The other option is to take the overcollateral back from the vault. These are the basic mechanics of EAST. Now I’ll show you how EAST can be used.
Some of EAST collateral assets can be used for PoS staking within the protocol. When you issue EAST, you can stake it, and all its collateral will be sent to PoS nodes, which will participate in network transactions and receive rewards. These rewards will be used to issue more EAST as a reward for the stakers. This is the most transparent mechanism of staking.
Trading with leverage
Let’s say you are a trader and you expect WAVES to grow soon. You take your WAVES, contribute it to the EAST protocol and issue EAST. You take this EAST, go to the market and exchange it for more WAVES. Then you take it back to the EAST protocol and repeat these actions again to get leverage.
After WAVES grows up, you can get your profit. So you return EAST to the protocol and unlock more WAVES. The other option here is to issue more EAST with your overcollateral.
Another way to profit from EAST is liquidating vaults with bad debt. Any backing asset in EAST protocol has its liquidation ratio — 105% for BTC, 110% for ETH and WAVES, and 130% for WEST vaults at the start. When a vault’s collateral level gets down to this, any user can liquidate a part of the vault and get a part of its collateral.
To do it, buy EAST on the market and return it to the protocol during a vault liquidation. As a result, you can get more liquidity than you spend. For example, you spend $1 to buy EAST and receive $1.04 in the vault’s asset. This way you can liquidate up to 50% of a position. Such a partial liquidation comes along with the SafeFi concept; it is used to increase a vault’s BR, so the liquidity won’t be stuck in “whale” positions and vault owners won’t lose all their collateral in a momentary recession. It’s a win-win mechanism.
When EAST costs more than $1, the protocol will let you issue EAST for USDT with 100% backing ratio and no stability fee. This is how we increase EAST emission. Then you can go to the market and sell this EAST at a higher price.
Finally, you have an option to keep your assets with EAST. As EAST is built on SafeFi principles, you can only lose a part of it necessary to increase the backing ratio, when your vault is liquidated. In bad market times, you can take your assets, put them into the vault, issue EAST, change it for fiat money and use it as you want to. Then, in better times, you can buy EAST from the market, return it to your vault and take back your collateral, which will probably cost more then. Just don’t forget to track your vault’s health: if its BR is too low, you may lose it all.
These are the most interesting EAST use cases. Now let’s move on and let Sasha join.
EAST positioning and plans
Sasha Ivanov, Waves founder: Thanks for inviting me here. Ivan, can you please tell more about how all the project teams are connected, including EAST, Waves and Waves Enterprise?
*I.: *The EAST team was a separate team to develop on the Waves Enterprise stack only; they made the first version of EAST. Then the EAST team became a part of Waves Enterprise, but saved its own vision within the project.
S.: Yes, I’d like to emphasize that EAST has no relation to USDN, it’s a totally independent team. EAST is not an official stable coin of Waves, there may be more stable coins, so please, don’t connect EAST to other products. EAST is a totally independent product, and I think its future is very bright.
I would like to ask a couple of questions about how EAST is connected to the WEST ecosystem. What is required for development in the Waves Enterprise ecosystem and how EAST will be integrated there? I heard EAST will be involved in some kind of DAO. Can you tell us more?
I.: Sure. We are developing Waves Enterprise mainnet, and for this EAST is the debut stable coin. A stable coin is the first thing to do in such projects, you should issue a stable coin and let people take profit from your work.
For EAST, we used SafeFi principles. We were inspired by DAI. We decided that EAST can breathe new life into stable coin ecosystem, so we moved to the Waves ecosystem as well. We plan some updates to improve EAST after the release, and one of these will include a native bridge to transfer EAST to other ecosystems.
So now we plan to release EAST with two more updates following, and then we’ll move to DAO. As the British parliament, we have two parts in our DAO, and we’ll update it to implement more features, create a more reliable structure. Then we’ll roll out native staking, so WAVES holders will be able to earn WAVES from EAST PoS-based staking.
By the way, Sasha, can you tell more about PowerDAO? Maybe we can connect it somehow?
S.: Yes, I think it’s possible, any DAO can be connected to PowerDAO. The best way is to launch them independently and maybe combine them later, connect your DAO to the Power platform. It can be very interesting. As for now, I think it’s better to launch these mechanics for the WEST chain and eventually connect them to the Power platform.
I have another question: are there any other DeFi products the Waves Enterprise team is developing? Do you have anything else to be developed in-house or it’s just EAST only? Maybe some swaps or other protocols?
I.: Sure. In Waves Enterprise it’s hard to tell who is in-house or not. We have two other products we are going to launch in the Waves Enterprise blockchain. They’re basically not made by the Waves Enterprise team, but we have very close relationships. We help each other a lot, so it feels like we’re a single team, which knows everything about the product and tries to do its best for it.
One of these products is AMM exchange with some interesting NFT mechanics. Now they’re considering its implementation. The second product is also interesting — a DEX with synthetic assets for gold, gas, oil and so on. This tool will allow users to earn from real world assets on blockchain.
Let’s summarize it. First we’re going to release EAST and two updates, then we’ll upgrade the DAO and then create a swap platform.
S.: Very interesting. I think it’s going to be a new generation of DeFi products, not only in Waves Enterprise, but in general. It’s very important to try and create something new, something more safe. Thank you, Ivan!
Q& A session
I.: I see many questions in our YouTube stream. I’ll try to answer, but some of them may be addressed to you, Sasha.
– Why should we trust this product when our withdrawals are not proceeded for months?
I.: Oh, this is very painful for us, this concerns the bridges. There is a solution, but it’s coming a bit late. There is a separate team involved, we’re trying to help them but we need some more time. As for your reasons to believ in EAST, I should mention these: focus on transparency, smart contract basis and overcollaterization.
– You named EAST a cross-chain protocol, but it works only in the Waves chain, when will it become really cross-chain?
I.: Actually it’s not true. EAST works in Waves and Waves Enterprise chains. These are different blockchains. At start, Waves Enterprise was a fork of Waves blockchain, but it was so long ago that even their main technologies are now completely different. This makes implementing a cross-chain stable coin like EAST rather difficult.
We have plans to introduce more networks, but to show you the product faster, we’ll release with these two blockchains — Waves and Waves Enterprise.
– What makes you think the second version of EAST gains popularity?
I.: I think the timing for EAST is perfect. EAST offers a proven design, trustworthy tokenomics, 100% transparency and overcollateralization. EAST will benefit the whole ecosystem.
All the blockchains need a stable coin. From my point of view, it’s ok for blockchain to have a lot of stable coins, because they can solve different problems. Today the market is quite dangerous, and EAST offers a well-balanced tokenomics, so I think, EAST will gain popularity.
– What’s going on with Waves bridges?
I.: I’m not a Waves developer, so I don’t know the details. I just can tell you that they’re developing new version of the bridges that will work faster and be more reliable.
– Is it ok that EAST is developed by WEST DAO but at the same time is very important for the Waves ecosystem?
I.: Initially, EAST was developed by a separate team. Then we decided to take this team on board, but they still have much freedom, they still keep their own vision.
WEST DAO is very important. We need to give users freedom to rule the blockchain, so they can be sure everything works as it should and everyone hears what users want. That’s why WEST DAO is important for the Waves Enterprise ecosystem.
Waves blockchain is a good option to develop EAST, and EAST will extend its opportunities, give more freedom to Waves users. More products provide more options. Finally, EAST is bringing the experience of Waves Enterprise in building safe, reliable, and predictable products into the Waves ecosystem.
– Will the bridge problems impact EAST?
I.: I already mentioned that we plan to release a bridge between Waves and Waves Enterprise blockchains, so you can transfer EAST natively between the blockchains. These native bridges will make the whole protocol more reliable.
– You didn’t tell what happens if the EAST price goes below $1.
I.: In this case the following mechanics will work. Users get motivation to liquidate vaults with a discount, so the EAST volume on market will decrease and, therefore, EAST price will grow. More details are available in the EAST white paper and in the EAST telegram channel.
– Will EAST be available at Puzzle and other exchanges in the Waves blockchain?
I.: Yes, it surely will.
– Who will be responsible for changing EAST fees and other manual controls?
I.: The protocol will change all its fees automatically. Later, the key solutions will be made by WEST DAO.
– How will the AMM work between two chains?
*I.: * You can issue EAST in the Waves or Waves Enterprise blockchain. We have two smart contracts for it and soon we’ll publish their audit results. Also, we’ll add a native EAST bridge. It means you will be able to transfer EAST between Waves and Waves Enterprise networks.
– Do you have more information about this WEST DAO?
I.: You can find more details at the WEST DAO site. Briefly speaking, the DAO consists of two chambers. The first includes specialists from various blockchain industries (law, development, marketing, etc.). They will сreate proposals. The second chamber includes users who vote for proposals.
– Can EAST be staked to currently running WEST nodes? Or will new nodes be opened?
I.: For EAST staking, you just need to use the contract methods through the protocol interface. You can stake your EAST with just a single button.
– So there will be no public nodes, like for WEST? Only a protocol that gives staking income at a certain fixed or variable rate?
I.: Yes, a node is not required. All staking is on-chain. You’ll be able to see what’s happening with your assets any time.
– Will the WAVES collateral be shared with nodes then?
I.: Yes, the smart contract will send the staked collateral to nodes.
– Will there be a new native gateway for WEST too?
I.: We don’t have such plans. We believe that soon Waves Enterprise will get normal bridges.
– Is EAST equal to $1 now?
I.: Now the price is about $0.92. But this is still the previous version of EAST.
– Will EAST use the new Pepe gateways for ETH, BTC collateral?
I.: Yep! We have great plans for these gateways!
Well, thanks for joining the AMA. We’ll release EAST soon and thus bring a reliable stable coin in two blockchains, a stable coin useful in different scenarios. Stay tuned!