I am joined today by Shahab Behzadi, Platform Manager for Stakenet. Stakenet is the first trustless interchain economy. They are combining Lightning Network and Masternodes into a trustless cross-chain platform with a Lightning DEX, that allows one to operate with any blockchain simply by using XSN.
Q. Can you give us a quick overview of what Stakenet is and what it is trying to accomplish?
A. Stakenet (XSN) is an open source project with a decentralized governance and funding mechanism. This encourages the creation of different and independent companies and organizations that work in the Stakenet network. Currently there are 3 separate companies/teams working on different aspects of Stakenet. We have a software team headed up by the X9 Developers who take care of all the blockchain aspects of Stakenet. Next we have our Cloud team which run Stakenet.io and the Stakenet Cloud services. Finally we have our Hardware Division who are building crypto related hardware devices.
At Stakenet our end goal is to build an interchain economy by connecting all the various blockchain projects together through one seamless interface that is easy to use by everyone at any level of experience. Many projects are building incredible things but they are all on their own little islands, at Stakenet we aren’t in the business of building isolated islands, instead we build the bridges to link them all together.
Q. Plenty of other projects have set out with similar goals but so far none have really succeeded, what makes Stakenet different?
A. For sure many have tried and failed to achieve this goal but many didn’t lay the correct foundations to ensure it success, they used things like there own custom protocols, forcing you to use their coin/token, no plan for an economic model, slow and outdated technologies, too complicated to use or didn’t have the infrastructure in place to support it.
At Stakenet we made sure to have a plan in place for everything before we started building out. So one example would be to build something like this you need to make sure you have a strong and robust network capable of handling all the various blockchains you are going to be dealing with. To tackle this we wanted to use Masternodes as the solution and to ensure we had a very strong Masternode network we needed to make it as easy as possible for someone to run one. With this we created Masternodes as a Service (MNaaS) which makes setting up, maintaining and keeping your Masternode updated extremely easy. It is a trustless service we provide so you always keep full control over your collateral funding in your own local wallet and fees paid for the service are paid in XSN which keeps things simple. It has been extremely successful since it’s launch and currently we have over 2000 Masternode in our network which use up nearly 40% of our circulating supply of XSN.
Q. What are your plans for Masternodes and how do you give them value?
A. Masternodes on our network will be multifunctional to provide the services which facilitate everything needed to build our interchain economy. So as well as hosting the various blockchains supported they will also be able to do things like act as nodes for Lightning Network by hosting channels and WatchTower services, run dApps and smart contracts, route privacy features and more.
As well as 45% of the block rewards to give them further value we need to ensure our Masternode owners are rewarded for providing these services and as such any fees collected will be paid straight back to them. So for example with our upcoming DEX all trading fees collected will be distributed to the Masternodes running it. It is also important to note that we do not force people to use XSN for any of the services, people can use whatever asset they like, if they choose they don’t ever have to hold XSN. If someone just wants to use BTC or a different asset then that is fine. When fees are collected if they are not paid in XSN then we use our Lightning Swap tech to convert the fee instantly during the payment which is then distributed to the Masternode as XSN.
Q. You are doing a lot of work on Lightning Network, what benefits will Stakenet bring to this space?
We have always believed Lightning Network to be crucial for Bitcoin and others as a scaling solution to allow cryptocurrencies to be used as a day to day currency. Since the start our focus has been about building this tech out as a means to solving many problems within the industry. We have been able to make many advancements to Lightning Network and because of how we designed XSN from the beginning with Masternodes it allows us to do things previously not possible on Lightning Network.
You might have heard recently about one of the troubles with Lightning Network is finding a way to reward people for providing the much needed WatchTower services and one of the ideas being floated around was to create a new token specifically to reward them which didn’t seem like a very popular option. With XSN we have this issue solved by default with our Masternodes as when they are Lightning Nodes they can double up as WatchTowers too, so not only will they get their standard block rewards but also the Lightning fees they make from traffic flowing through their nodes. Also by utilising Masternode collateral to fund the Lightning Channels this gives us a huge amount of liquidity on the network to be able to process all the traffic.
These advancements not only benefit XSN but also BTC, LTC and any other asset that uses Lightning Network as they can all be supported by our nodes.This also allows us to use our own developed Lightning Swap technology which allow instant asset conversion over LN. This tech is the foundation on which our DEX is being built on.
Q. Let’s talk about your DEX, what makes your DEX different from the competition and what are you doing to ensure people use it?
A. We see the word DEX being thrown around a lot lately but as I’m sure you are aware many of the DEXs out there are not really a true DEX in that they still have some centralised point of weakness. Our DEX is a true DEX, it is entirely hosted on our Masternode network and as such once it goes live even we would be unable to shut it down. There will be no KYC, no geo-blocking, no accounts, no withdrawal limits, no trusting someone with your real assets while you get an arbitrary token in return. We will do this all directly out of our new Multi-Currency Light Wallet and you will have full control over your assets in your wallet right up until the moment they are sold.
We are also working with Frank Amato a vetran commodities trader who was the Managing Director for Bear Stearns and Executive Director for JP Morgan before moving into the Cryptocurrency industry. He is helping us avoid many of the shortcomings of current exchanges by helping us design a Pro Trader interface that is feature complete with many options currently lacking on exchanges today.
We also have our DEX Aggregator technology which allows us to connect to all the DEXs out there already which will ensure that you can always find the best liquidity and price all directly from the wallet so you will not need to move your assets anywhere else to trade.
Another ace up our sleeve is that any asset we support in our wallet and on the DEX will also now be able to be spent anywhere Bitcoin is accepted. This gives assets on our DEX a huge use case as being able to be spent at an ever growing list of retailers worldwide is a very nice perk. As such we are forming partnerships with the assets we support so that they encourage their communities to move their liquidity to our DEX over any other exchange, this is of course within their own interest as they will need the liquidity to facilitate the cross-chain payments to retailers.
An example of how this would work is if a retailer accepts BTC then when you go to make the payment in a different asset it would be instantly converted via Lightning Swap for the retailer into BTC from the original asset. That way the customer gets to pay with what they want and the retailer gets paid in what they want and everyone is happy. When you factor in things like Bitcoin ATM machines where you will be able to instantly convert your asset to fiat then we can see this being extremely popular.
Q. You also do a lot of work on Staking, what are you doing in this space?
Staking is very important for us and is another vital component for XSN as Staking is what secures the network allowing Masternodes to run the services. We took the same approach to staking as we did with Masternodes in that we wanted to make it as simple as possible for people to do. With that we created various options to make sure there was an option for everyone no matter the level of experience.
For beginners we offer our Multicurrency Cloud Staking service where users can drop their assets into the Cloud wallet and it just starts staking, simple as that. This is of course a centralised service being pooled so we only ever recommend it for small amounts so people can try staking out before they move on to one of our other options.
Next up we have normal wallet staking from our XSN Core wallet, this functions as you would expect like any other Staking wallet does.
Lastly we have Trustless Proof of Stake (TPoS) which is our cold staking solution that we invented. TPoS allows people to Stake their XSN balance while keeping their actual assets safely offline. Normally when staking your wallet is “hot” meaning that it is online and thus can be a target for hackers. As TPoS allows you to keep you actual assets offline then this removes that element of risk. It also allows you to Cold Stake directly from hardware devices such as Ledger and Trezor. We are currently supported by all Ledger devices and Trezor but they have yet to roll out our latest update to their firmware which will give their devices this level of functionality, we expect them to update soon though and then you will be able to Cold Stake directly from their devices.
Another innovation we are building is Cross-Chain Proof of Stake (CCPoS) which will allow you to choose what you want your staking rewards to be paid in. So if you want your rewards paid in BTC or something else then that is no issue. As with everything we do we want to make sure people have flexibility and choice to choose whatever option suits them best.
While on the subject of staking can I take a second to address a misconception about our name. Stakenet is actually a combination of Stakeholders Network in that by holding XSN you are a stakeholder and by contributing to the network by providing security through staking or providing services by running Masternodes you are rewarded. Just thought I would clear that up as many people believe that all we do is staking and that’s where the name came from.
Q. Privacy is something that there is a lot of focus on at the moment, what are you doing in respect to that?
A. We take privacy very seriously at Stakenet and we are exploring multiple options to ensure we offer the best features all in one place. Our first feature which we have already added is our 1 Click TOR privacy functionality in the new Multicurrency Wallet. This gives you a level of privacy by default for all assets supported by the wallet not just XSN and it is literally just a click of a button to activate it. We believe we are the first to ever offer such a simple activation of privacy for a multicurrency wallet, for some projects this is there entire offering but for us it is just one small part of what we do.
We are also looking to implement the widely applauded Mimblewimble for extra privacy and lastly Lightning Network itself offers some unique opportunities that we are looking to take advantage of. Implementing things like random hop secrets and transforming the LN funding from identifiable 2:2 multisigs into untraceable 1:1 standard signature transactions. This combination of features should allow XSN to offer unparalleled levels of privacy even when compared to the top performing privacy focused projects.
Q. How is Stakenet funded and what are the tokenomics behind the project, what will give XSN value and a use case?
A. Stakenet is funded by 10% of the block rewards which get sent into a treasury. Every month Masternode owners must vote to release these funds from the treasury which is then used to pay for development of XSN. This system of Governance ensures no single entity ever has control of the Treasury, once the vote is passed the funds are minted and then can be distributed to the team. This also ensures the team keep working as if we don’t perform then the Masternode owners would just vote no on the monthly budget release.
As for our economic model we believe we have one that is very robust and rewarding for all those that take part. Block rewards are split 45% to Masternodes, 45% to Stakers and 10% to Treasury. So at a basic level Masternodes and Stakers are treated equally, however Masternodes of course can gain access to additional revenue streams by collecting fees from services they run such as the DEX. We want people to think of their Masternodes as their own personal business where they can pick and choose what services they want to provide and then be rewarded for doing so.
XSN itself is a state of the art cryptocurrency that allows a peer to peer method of payment. It is money with unique properties not achievable by any central bank issued currency, as XSN is open, permissionless, decentralized, trustless, censorship-resistant, immutable, smart, interoperable, fungible, secure, and has a fixed emission. So, it is a medium of exchange used for real-world transactions on a global scale, including the transactional activities happening within the Stakenet ecosystem. Each service that generates fees needs to be paid in XSN one way or another – in some cases users won’t even realize they have paid in XSN as it will all be handled by Lightning Swaps in the background. All in all XSN is the currency, the gas, and the foundation of Stakenet, as everything runs on top of it. It is required for the ecosystem to operate but the key is that people do not need to actually use XSN themselves for it to be used.
Q. You are going to launch a dApps platform on your network too, how will that work and what incentive is there to build on it?
A. For starters our DEX is a dApp and proof of what can be built on our platform. We are code agnostic so developers don’t have to learn any special language to build dApps on Stakenet and instead can focus on building what they want and how they want. Additionally we using tokenization with XSN we can ensure that all existing tokens on Ethereum and EOS are supported which give us access to everything developed on those platforms already. We of course will continue to look at and add new platforms as they evolve so things like Binance Chain and it’s tokens can be supported as well.
Q. What and when is your next release?
A. Our next release is our Multicurrency Light Wallet (MCLW) which we are extremely proud of. As we have already discussed it will have many features built in such as the DEX, cross-chain payment tech and our Privacy options.
What makes it unique though is that with many Multicurrency wallets you need to download the various blockchains of the assets you want to hold or for the DEX trade. This makes wallets slow and use a lot of space which is not going to help with adoption. Our solution is to use our Masternode network to hold the various blockchains to keep them in sync with their networks, this means our wallet is extremely lightweight, fast and we can easily port it to any device such as mobile fully featured as it only has to hold your private keys. When you open the wallet it syncs up instantly with the blockchains held on the Masternode Network and you are good to go, simple as that.
We are also working heavily on the UX to make it user friendly as possible so one thing we did is an auto-update feature which whenever you open the wallet up it will automatically check if there is a new update available. If there is it will let you know and if you want to install it just hit yes, the wallet will close briefly to restart with the updated version and you can carry on with whatever you were doing.
We haven’t set a release date just yet as we are still hammering through testing but results have been excellent so we are gearing up to send out early access builds for review to various outlets soon and then a coordinated launch will be set.
Q. What would you say is Stakenets biggest weakness and what are your competitors?
Our biggest weakness is easily marketing ourselves, with such a large and all encompassing project it is extremely difficult for us to explain what we are doing, how and why in a quick snapshot that is easy to understand. When your project is just focused on one area like say privacy it’s easy to streamline that message but when you are doing all that we are doing it is very hard to do that. As such we have kept relatively quiet on the marketing front while we develop and get products ready as we feel that it will be easier for people to understand when they have a product they can use and then see what it does and why it is special.
For competitors there are lots of projects that are doing different aspects of what we are doing but none really that are doing everything we are doing. Things like Lightning Network, Masternodes, Cold Staking, Privacy, dApps and smart contracts and even Hardware too is a lot to be found all in one place.
Q. Any final words you would like to say to wrap this up?
Just to say thank you for taking the time to chat with us and learn more about what we are doing as we really appreciate it. Also if any of your readers want to learn more to check out our Medium page for lots of great articles and our weekly development updates as well as our website which has many resources including a comprehensive FAQ which usually can answer most of the questions we get.
Also feel free to join our Discord or Telegram community where we will be happy to answer any questions that anyone may have.