On Tuesday, June 15th, Dude’s Army community had the great opportunity to host an AMA with Vega Protocol’s team, very instructive and educational. We will share with you a little bit of what this experience was like.
To start the AMA with a good vibe I will give you freedom now to intro yourself and share a bit of your background!
Hi everyone, I’m Barney Mannerings one of the founders of Vega, great to be here
I spent much of my career working in the financial services industry, designing and building trading and risk management software for major investment banks and financial institutions (matching engines, etc).
I am a computer scientist as well, and since university have been interested in cryptography and privacy. I first heard about bitcoin in 2010 and started working with it more seriously in 2013. I also got involved with Ethereum before it launched, and have been thinking about the decentralisation of finance for over 5 years now.
That’s amazing to hear! Thanks for the introduction Barney
Explain our community what Vega Protocol is building and why the market needs it
With pleasure 🙂 we’re building what we call the “web3 derivatives layer” … in the same way that Ethereum allows for smart contracts, and importantly, tokens and other assets to be issued, and that IPFS is optimised for data storage, etc.., Vega is a blockchain that’s totally optimised for trading and derivatives
Why is this important? Well trading, and derivatives particularly, require high performance and high capital efficiency
When you look at alternatives on Ethereum or other general purpose blockchains, they cannot compete — in a number of ways — with traditional centralised markets.
But we really believe in global, open, decentralised, finance and markets, and so we need to be able to compete for defi to start to take real market share and business from traditional finance.
That’s what Vega is designed to do, by being optimised for that task
And Vega integrates with other chains — initially Ethereum, but others to come — so you don’t have to get new assets, you can just connect Metamask and start trading on Vega with your existing ERC20s.
(You can see this on testnet at https://console.fairground.wtf)
How much TPS will Vega be able to handle and also what will be the speed of those TXs? Feel free to comment as well what Perks will Vega have against current blockchains for that application.
Asking this since it will be focused on derivatives trading so it needs a high performance.
Vega can do a few thousand TPS right now in testnet I think (honestly, haven’t done a proper controlled test for a little while!) it should manage up to 10,000 tps with no serious changes on the right hardware.
It can also shard easily so different markets can be on different logical networks, so you can have many more than 10k tps across the whole thing.
And we have some skunkworks projects to go much higher than that.
Other component of performance is latency — we are currently around 0.8–1 second per block, again we have some longer term research projects to get about an order of magnitude better there too
Amazing numbers already for a decentralized derivatives exchange.
How will the token play out in the ecosystem?
Working hard to make it feel great for traders. Testnet feels pretty similar to a centralised exchange speed wise
Token has a few uses:
1) proof of stake token to secure the network
2) create and vote on markets
This means token holders can stake or delegate and earn revenue directly from trading fees (Vega has no gas unlike Ethereum, so you only pay if your order trades)
But token holders also have a role to decide how the network evolves, set fees and risk parameters, and even create and manage markets — it’s all decentralised so the community controls what people can trade on and how it evolves over time.
Q1 from Yaritza:
I understand that the ETH network is extremely important, because despite being the pioneer of decentralization and that it also has the majority of products, but really with ERC20 Vega you get all the products and tools you need for maximum operation? or will it really have to expand to other blockchains in the future?
Depend how defi evolves… Vega will be were the tokens and the protocols and the value are, and Vega has been designed to integrate with other chains easily if needed. But maybe with ETH 2 that’ll be all we need (I doubt it though, I think a few chains will be siuccesful — look at Terra adoption already)
Q2 from Tahani:
Is Vega Protocol intended only for professional and institutional traders? Is there any benefit for novice traders or trainees to use this platform?
The same things that are good for pros are good for everyone, we are exploring simplified UIs for less experienced traders too, including from our community, we recently had some hackathon entries to build simpler UIs and would love a mobile focused one too at some point
Q3 from Kevin| New High:
The main problem with derivatives trading in a decentralized ecosystem is liquidity. How does Vega Protocol incentivize investors to provide liquidity, specifically when they are long tail assets?
Liquidity providers who commit liquidity to a market are rewarded with a share of fees. LP commitments are treated a bit like investments too so getting in ealry while a market is small can pay off in a big way if the market grows.
We have a paper on this here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3651085
Q4 from ꧁ ᒍᑌᗩᑎ ᔕᗩᑎᗪOᐯᗩᒪ ꧂:
You can read on their website that Vega’s mission is to build tools that guarantee freedom of trade. But currently, what tools have they built? And how can these tools guarantee free trade for users? It is not something that has been tried to solve a long time ago and it has not been possible?
Vega is the tool. It will be open source software and the network that thec ommunity will run in theory cannot be shut down (like any good blockchain) so this guarantees people can trade.
Q5 from 💵ⒻⒺⓁⒾⓅⒺ💵:
For now, Vega has characteristics that make it different from other projects, but how could they face an emerging competition with the same characteristics? Do you think Vega has the potential to retain users and continue to prefer it over the competition? How will you get users to stay interested in Vega?
Other projects would have a lot of catching up to do, we have:
- a unique chain optimised for trading
- MEV/front-running prevention (Wendy — see here https://eprint.iacr.org/2020/885)
- a system that can trade almost any product
- an amazing and very experienced team
So I think we’re in a good position to start and stay ahead of other decentralised derivatives protocols. This stuff is hard, both on the blockchain and finance side, and we’ve been working at it for over three years at Vega, and for decades in our careers before Vega
Q6 from Aston Rowi:
Today I saw a news that hacking Bitcoin wallet with Quantum computers could happen. Since you are a computer scientist what do you think about it? Is it possible? And also what security system will you use to make Vega protocol safe from hackers?
I’m no expert in quantum computing, but it is likely possible. It’s also going to be possible I think to build quantum resistant crypto algorithms. If you pop into our Discord or TG and ask Klaus, our blockchain and crypto researcher he’ll give you a MUCH more detailed answer
Q7 from Bea Evolet 🐝:
How is it that Vega manages to solve the problems of the centralized financial system by being a decentralized protocol?
It’s about incentives, competition, and openness:
- noone has an incentive to screw you
- everyone competes to provide the service cheaply and efficiently and well
- anyone can participate with the same rules
Compare to traditional finance where:
- institutions (protected by regulatory moats) massively overcharge, especially small businesses and individuals
- finance is subject to surveillance and censorship, some things are only available to a lucky few
- innovation is super slow, new markers take years to appear and the community has little say
Q8 from Roy Mustang:
On the vega page they say they have a rewards program, how is it that users can participate and contribute in some way to the development of vega?
We’ve just launched an incentivised testnet and https://fairground.wtf — will be lots of different ways to get rewarded for participating in testnet.
We also have a bounty scheme for developer and other community bounties, and will launch grants soonish
Q9 from Gutike95:
If Vega is a completely independent network, why are there no native assets on that network? but are they simply associated and directly connected to the ETH network? Wouldn’t it have been better to develop Vega directly on the ETH blockchain?
It would have been impossible to build Vega on the Ethereum blockchain. Ethereum is slow, has problems with front running and MEV, has fees that are high and not in the protocol designer’s control, and can’t run the kind of risk algorithms etc. that Vega uses to keep the network safe even though is has low margin/high leverage similar to a CEX
Q10 from JA:
Since your successful launch on CoinList what are the current state or status of VegaProtocol right now? Any top priorities that you want to share in the community?
We’re in testnet with incentivised testnet just launched. Big priorities now are doing lots more with the community and getting the Vega software ready for mainnet
Q11 from DeN ShA :
Partnership is essential for a project to grow? Btw any interesting Partnerships you already have Or working on it?
We have a few things in the works but nothing to announce right now. There’s gonna be some really cool stuff soon though.
Q12 from BUM:
The team and staff of any company generate reliability when investing in their projects, what professionals lead the administration of it? Who are you and how many people are behind VEGA?
Vega team is very experienced across startups, tech and crypto, and traditional finance. I’ve designed and built a few trading platforms and systems, we have experienced quantitative finance experts like David Siska on the team as well as ex traders, etc. There’s a bit more detail on the page from our recent Coinlist sale too.
Q13 from Jose Gamboa Candurin:
The VEGA token can be wagered and delegated even while locked, so all members of the VEGA community can participate from day one of a live network. What can the VEGA Token holder do when participating in this live network?
Token holders will be able to delegate to / vote for validators, participate in governance, and propose and vote on new markets
Q14 from SZahir:
Are you planning to release a second version of the Vega platform? Where can we keep up with so many Vega updates? Do you have a platform to manage our assets and rewards? Do you have a platform where the community can express their suggestions?
There will be many iterations, and yes probbaly a v2 upgrade sometime next year
To keep informed check out twitter.com/vegaprotocol vega.xyz/discord and our Telegram @vegacommunity
You can express opinions and ideas on those and our forums at community.vega.xyz or testnet feedback on https://vega-testnet.nolt.io/
There will probably be a governance site in future too.
Q15 from Jazz Music:
When it comes to trading, platform usability and user experience is key to its success. How much work has Vega Protocol put into this? Does it have a really user-friendly interface?
A lot of work goes into Vega Console. The target initially is relatively experienced traders not retail users, so it is designed to be a powerful platform not a simplified Uniswap-like experience, but we will build (and expect others to build) other simpler user interfaces and clients in future. There’s also lots more work to do on the UX and we’re hiring to add a few people to that team to help improve it even quicker.
Q16 from 🌼Aurimar:
It is wonderful that Vega has the initiative to develop software for the future of finance!
What kind of tools and documentation do you use? And how safe are they for financial development?
We use Go for the core of Vega, and they are as safe and secure as the QA, scenario testing, audits, reviews, and experience of it running in production… it will take time to prove it is really secure for big amounts of trading but we’re not going anywhere… This is a long term project and we’re just at the start.
Q17 from Diego 🇮🇹 Venditte:
Vega is the first decentralized derivatives protocol with decentralized cross margins, which means that the gains you make in one market automatically offset the losses you have incurred in another.
SUPER FANTASTIC !!! What other carrier-centric features have you implemented? can you talk a bit about that?
We have MEV and front running resistance with Wendy which is a big deal given how much money is lost to MEV in Ethereum protocols already
We also have lower margin / higher leverage aka more capital efficiency than other defi derivatives protocols, and a highly capital efficient liquidity protocol compared to AMMs.
Q18 from ℝ𝕒𝕚𝕤𝕓𝕖𝕝𝕪𝕤:
Could you give me information about Vega Wallet? What are the privileges that this wallet offers to users? And I understand that you use Ropsten assets on an Ethereum bridge, but being so, are there no high gas fees?
Vega Wallet is a command line wallet and wallet server, this is good for nerds like me and for companies/institutions. There will be a web / browser wallet too soon.
There are Ethereum fees when you deposit to Vega or withdraw from it, but once your assets are on the Vega chain there are no Ethereum fees to pay (and everything happens much faster)
Q19 from Habibi:
Can you comment on how much the trading fees will be within Vega Protocol, do we need $VEGA token for it, will we get any kind of discount for using them?
Fees will be set dynamically by market makers and through governance — if liquidity is low, fees will be higher and very liquid markets should have really low fees.
You don’t need $VEGA to trade, only to participate in governance, stake/delegate, create markets, etc.
So to trade DAI you only need DAI, etc.
About Vega Protocol
Vega will connect to major blockchains for collateral, which can be in any digital asset including Bitcoin, ERC20 tokens, and stable coins, so participants will be able to choose from a range of collateral options.
Any participant will be able to easily create and launch markets, pseudonymously, by using a toolkit of product features and economic primitives from which all cash flows and settlement instructions can be easily specified.
More information about Vega Protocol: