And now we have Blockswap, which has the potential to democratize the blockchain market by bringing there the fixed income tools from the centralized finance world. Anyone holding even the slightest amount of Proof-of-Stake tokens will be able to participate and get the dividends from the network. From the technical standpoint, it’s just a simple pledge and it’s similar to buying a regular bond paper, but it’s settled on the blockchain. There’s no need for third parties and nobody will be able to take your money from you, as long as you hold your Blockswap debt tokens, you’ll be able to reclaim your assets. Currently, Blockswap works with Ethereum 2.0 and Algorand but shall next be connecting Polkadot, Cardano.
To cut it short, Blockswap is the missing piece, the utility that many DeFinance markets don’t have because usually, they allow farming yield on projects that have a very low or non-existent user base.
Today, we got one of the founders of Blockswap, Scott and we got some questions for him. Scott, nice to meet you.
Q1: Okay, Matt, let’s start with the general overview. Am I getting it right, I’ll be able to buy DOT tokens, send them to Blockswap address and get dTokens and SLOT tokens back? How do I receive monthly interest on my assets then, do you send it monthly to my wallet?
That’s right, Blockswap is decentralised, non custodial protocol. The rewards you earn and how you interact is similar to other DeFi protocols like Uniswap through connecting your own wallet.
Q2: How do you make a profit to pay interest to users? Do you stake all the received tokens in staking pools? What is a Stakehouse?
StakeHouse is an Automated Asset Market Maker (AAM). It is a simple share registry that allows node operators to register their node and associated validators on-chain in order to permit liquidity abstraction.
For stakers we have simplified the staking process and isolated the slashing risk where we enable stakers to bring 32ETH and join a specific onchain staking node called a Stakehouse.
In return for their 32 ETH a users receives 24dETH with dETH being a 100% non slashable 1:1 token to their undying stake (i.e liquid staked ETH) and 8 SLOT token which is the perpetual bond token representing the equity of stakehouse node.
Q3: Can you explain to our audience, how does Open Saver work? How can it be used by startups? What’s the purpose of using it?
OpenSaver is new architecture from ground up for a sustainable saving market for the mainstream. Every asset in the OpenSaver ecosystem will have fixed native yield. In the case of an end user buying a SaverUSD, this gives 7% which comes from a Bonded PoS Asset collateral backing that deposit. We can guarantee the price for the end users where the market has an opportunity to bond the SaverUSD deposit with PoS Assets keeping 150% ratio and go long on Pos asset value getting a Balanced Exposure. OpenSaver smartcontract will then make sure the assets are maintained and well with collateralization ratio.
Q4: Do you have any crypto-fiat gateways or they aren’t necessary?
We are like Uniswap with 100’s of front ends. Any DApp, Wallet, DEX, CEX (through our mintbase model) and even Fintech Apps can plug into Open Saver Protocol through a simple API endpoint. In answer to your questions these applications shall onboard the users and fiat onramp partners.
Q5: Does your project have its own separate blockchain? How do you connect to all the other Proof-of-Stake blockchains? Ethereum 2.0 is still very far from us, how are you even able to integrate your products with it?
We are a middle layer as an L2 that connects various PoS chains with DeFi, so existing chain users can integrate with our solution easily from their native wallets and Dapps. At the same time L2 will give them a gasless endpoint for transaction processing, so integration possibilities are wide from a cross chain market gateway narrative.
BlockSwap is an L2 with a modular architecture. BSN protocol is a fully automated immutable smart-contract suit. The system is architected based on an interdependent two token system (dToken/SLOT). BSN has a specific type of onchain staking node called Stakehouses which holds a SLOT token — a perpetual bond token as equity of the node to incentivize Stakehouses for a continuous cash flow. This ensures the staking operations are taken care of and protects normal stakers from the slashing risk, who receive a non-slashable token 1:1 for their deposit on dToken that continuously accrue yield from staking rewards.
Q6: As we are a Polkadot-oriented team, tell us please a bit about Polkadot integration.
Blockswap have a very detailed plan on deploying our StakeHouse for Polkadot as Automated Asset Market Maker and helping PolkaDOT ecosystem validators to have a sustainable cash flow option from their staking services, whilst stakers to have an easy market where they could make their DOT for additional yield without losing staking yield.
Secondly, PolkaDot is different from other chains with its shared security model revolving around DOT monetary mass, and has a unique auction and leasing mechanism for locking DOT on chain for long term security. This opens a wide market for Blockswap to cater to both DOT and Parachain stakers at the same time, but it needs a holistic framework to make it work cohesively.
POLKASAVER is being designed keeping this in mind and addressing the PolkaDOT ecosystem with a Fixed Income Product suite based on both DOT and Parachain tokens. So whole ecosystem players can lean on for lending and borrowing for their staked tokens and users and institutions to deploy capital directly to Staking without going through additional hurdles of Staking and steep learning curve. In a nutshell we not only go long on Proof of Stake assets, we are also laser focused on making existing small to medium staking validators to have fallback from BlockSwap Liquidity layer.
OpenSaver will have SaverDOT soon with a fixed yield on DeFi, so everyone can enjoy a permissionless yield directly from Polkadot staking on a single click.
Q7: What’s the difference between BSN, $aver, dToken and SLOT?
One liner: Tokenized Cash Flow for different user bucket based risk appetite and participation.
$aver — Dollarized fixed yield from Staked asset for everyday users who want to park their native FIAT or crypto with peace of mind. SaverUSD is a viable alternative for unstable — crypto dollar coins out there Saver always redeems for 1 dollar no matter what.
dTokens (dETH, dDOT, dADA) — Risk free Staked asset for a normal crypto user who would like to have staking yield and not to worry about slashing and associated staking complexities. all they need to do is buy it from Uniswap or any other DEX liek Hydra etc.
SLOT- this is a yield token for Stakers or users who would like to go a bit further and participate with PoS staking for extra yield based on the Validator they are backing, it serves two purposes.
- Takes care of the slashing risk of Staked asset in blockswap system protecting dTokens. Staking validators can have consistent cash flow by making SLOT available for the market to buy and build a tamper proof Brand on a token.
- Gives a direct option for traders and crypto users who want to participate in staking yield exposure on a single ERC20 token without worrying about running a validator themselves but having a fractional ownership for its returns.
BSN : this is the network token that runs the middle layer where its users can run a zkvalidator for transaction processing or have a raspberry pi for network data relay.
If you are not a technical user, you can stake BSN token in our commercial protocol contract for fee earnings from OpenSaver protocols as below. more options will be available as we deploy more products leveraging our network infrastructure in the future.
BSN is our Network protocol token. BSN token holders fee-earning options from Open saver and then later other BSN built protocols .
- Minting fees from $avers 0.74% / $aver batch
- Saverbond rebalancing swap fees 0.30% / batch swap.
- Saverbond excess collateral early withdrawal fees 5% of withdrawn asset value.
For stakers we have simplified the staking process and isolated the slashing risk where we enable stakers to bring 32ETH and join a specific onchain staking node called a Stakehouse. In return for their 32 ETH a users receives 24dETH with dETH being a 100% non slashable 1:1 token to their undying stake (i.e liquid staked ETH) and 8 SLOT token which is the perpetual bond token representing the equity of stakehouse node.
Q8: Do you have plans to add more and more tokens to Blockswap? Do you have liquidity pools and how is your project going to be integrated to DeFinance markets?
OpenSaver is a new architecture built from ground brining sustainable saving market for the mainstream users. Every asset in OpenSaver ecosystem will have a fixed native yield. In this case SaverDollar has 7% which comes from a Bonded PoS Asset as the collateral backing that deposit.
Open Saver is built on a AMM model where users add liquidity to a loader pool (dtoken or SLOT) or bring USD Stable coin to the minter pool to buy the saver bonds from the market (packaged staked assets).
In this scenario adding Liquidity provisions to the dToken pool gives users a 10% APY on staked ETH and for SLOT token holders gives a means to sell their SLOT to the market for USD stable coin.
Q9: How do you provide security to your assets?
Blockswap is fully on-chain with no oracle dependency, and its collaterals are base L1 assets with native yield with tamper-proof data. It’s almost improbable to manipulate Blockswap saver markets with arbitrage that we see in Defi today. We make sure the yield is perpetual by backing it with a PoS asset collateral onchain. Our security derives from the Proof of Stake chain Staking contract since the collateral is a staked asset ( locked in the base chain) . If you want to attack the system you have to attack all PoS chains that we integrated for Opens Saver. Our system only takes chain native information no external data is used in the system such as oracles etc.
OpenSaver is new architecture from the ground up for a sustainable saving market for the mainstream. Every asset in the OpenSaver ecosystem will have a fixed native yield. In this case SaverUSD has 7% which comes from a Bonded PoS Asset collateral backing that deposit. The Market has an opportunity to bond the SaverUSD deposit with the PoS Asset keeping 150% collateral ratio and go long on PoS asset value getting a Balanced Exposure. OpenSaver smart contracts will make sure the assets are maintained with this collateralization ratio.
Q10: What is the current roadmap?
April — CommuntiyNet for ETH2 + Algorand April — Balancer LBP + Uniswap for CommunityNet Token Launch *BlockSwap is part of the Algorand EU Accelerator https://algorand.foundation/news/accelerator-europe
Then Launching Open Saver — Universal Basic Savings Account Scheme for ETH/ALGO. Next Chains (DOT, ADA)
Okay, thank you, that was a very interesting interview.