On 23st of May 2020, DJ Qian, CEO of Fusion Foundation, had a Live AMA session with Kevin of AMA SERIES #STAYHOME.
Part 1: 5 questions prepared by AMA SERIES
Kevin: The first question we prepared is What is FUSION? What is the role in blockchain?
DJ Qian: Fusion is a public blockchain, a protocol, targeting to serve as the infrastructure of future finance. It solves key problems in today’s financial world which has been blocker for almost half century.
1. How to extract time value from assets? In today’s financial markets, institutions build financial instruments to extract time value from assets to meet market needs, such as bond, bank acceptance, futures, factorings… However, it is extremely expensive and inefficient. It takes days or even weeks to issue those financial instruments. Fusion innovated a way to extract time value from assets instantly, efficiently, costless in a fundamental and standard way. Anyone could build financial instruments by your own on fusion based on your assets. We call it “Time Lock” or “Time Slice”.
2. How to break the boundary of different systems to be interoperable? This problem is also one of the most important problems for global finance. Same situation for all the blockchain out there. “Interoperability” is heating up recently. Not only many blockchain projects, but also giants like IBM/Delloitte are also trying to solve it. Fusion has a patented invention to solve this interoperability problem on encryption layer: DCRM (Decentralized Control Rights Management) using TSS (Threshold Signature Scheme), MPC (Multiparty Computation). It could serve “cross chain” and “cross banking systems”. Yesterday, Vitalik tweeted his concern of mapping BTC on ETH, while the real BTC private keys are held by a single institution. DCRM is the answer to it. I have replied him that Fusion already launched a decentralized custody alliance in operation with 11 different institutions. Each institution generated the private keys on its own and the entire private key is never generated to guarantee there is no risk of being compromised.
3. How to realize finance automation? Currently, with the emergence of IT/Internet, 99% of processes in a company can be automated. You probably have heard “office automation”, “sales automation”, “supply chain automation”. But the last 1% which has not been automated is finance. It just cannot, because of lack of trust. Have any of you heard any projects doing this? “Defi” is trying to address part of this. Fusion elaborated the concept of “crypto finance” to automate finance process in a company or in an economy in its white paper in 2017. After 2 and half years, we not only have a Turing-Complete VM serving smart contract on fusion, same as Ethereum, but also have innovative function like Quantum Swap realizing decentralized financial assets swap without any counterparts’ risks. With this, when you are doing OTC deal, you don’t need to worry who need to wire first. Fusion is also integrating “Oracle” in physical world to make automated finance which needs a trigger event. There is one saying: Finance is doing nothing but exchange value across different systems/places OR/AND across different time. Any financial instruments are built to do one of these two or both. With fusion, you could do it neatly and beautifully.
Kevin: because of tough market conditions many projects are far from the targets. What is FUSIONs strategy to survive in this long blockchain marathon?
Dj Qian: these are some of my thoughts:
1. Project team should never do pump and dump to waste fund.
2. Always well manage fund well to finish the protocol which could serve the vision.
3. Take “open source community” seriously. We started this work late 2019. Now we have more than 500 vetted developers, designers, and writers. We have sent out rewards of 2 million TL FSN to open source community for their contribution. Fusion will still be promising in this Fusion Open Source Community and keep the special way to reward contributors to make fusion project immortal.
4.Tech/protocol innovation is not charity. So, stimulate use of the network is very important. For fusion, we are putting it on first priority atm. That’s why you see on coinstats.network, we are ranking 24th among all the chains in the world in terms of on chain number of transactions, at the same level of star projects like cosmos/chainlink/zcash. This is a very important index to evaluate how is a chain is used.
Kevin: really good answers, a CEO devoted to his project.
Kevin: what is the main resource that creates the value of the FSN? Can you say some highlights of them?
DJ Qian: FSN is used as gas to use Fusion network. To some extent, Fusion network is designed like a vending machine. And this vending machine only accepts FSN. Those dapps, DeFi projects are like the product (of course they are financial products) in this vending machine.
I would like to say, this gas model is a great invention in human’s history. 30 years ago, companies sell licenses of software to get income. If they want to serve markets in different countries, they need to establish branches in different countries, accept different currencies. Those are all frictions in software/service business. Microsoft is an example. 15 years ago, cloud service emerged. A typical example is salesforce. They charge when customer use. And they don’t need to spend any resources to trace pirated users. However, they still need to set up branches all over the world to provide software services to the world. Now we have “gas model” blockchain service. Although it is a fact, but I found very few people are surprised that our service could natively provide to any corner in the world without opening a single branch until you realize. We don’t need to worry there will be any people who is using Fusion but not paying and we don’t have to deal with hundreds of different currencies at all. FSN is backed by technology we have developed.
Putting aside the irrational hype in cryptos, the value of a coins fully lies in the use of the network. That’s why we put much efforts in adoptions, getting more users and all is reflected in the stats of: coinstats.network.
Also in explorer, you would find the number of transactions, number of unique addresses are growing very fast. You could check by yourself at fsnex.com
Kevin: from an investor’s perspective, I find it difficult to access / value a project in the short term, and it takes longer to fully understand, recognize and value it.
DJ Qian: true. There is no valuation model for blockchain projects yet. But I believe there will be. It looks us a long time to find a proper valuation model for internet companies. And it even took us longer to find a business model for internet companies. Same situation here. But I believe use of the network will always be one of the key metrics to measure a project. After all, if you have a network no one is using, no matter how good it is, it’s just a useless.
Kevin: are you planning to make this social structure in few countries or in every country? What are potential obstacles?
DJ Qian: Fusion did have social structure like ambassador program from the very beginning of our project, might be earlier than most of the projects out there. However, we cancelled it mid-2019.
It’s not because we don’t need supporters. We want fans and supporters as much as any other projects. Nevertheless, fusion is a protocol. We don’t expect everyone to understand protocol. Just like TCP/IP, I don’t need to understand it, but I can use it even without knowing I am using it. That’s the perfect situation for a protocol. Now we have many projects being built on fusion, like wedefi.com, smpcwallet.com, a cross chain “uniswap” project…
I am looking forward to seeing a lot more social structure around those application. That would be success of fusion as well.
PART 2: 10 questions have been asked by the community members
Md Saidul: how does Fusion mediate the emergence of new investment opportunities in companies and corporate markets through the development of digital assets with financial instruments? How does it build a strong ecosystem across sectors?
DJ Qian: yeah, very nice one. Fusion is a protocol. as I explained in previous question. We are targeting to serve as the infrastructure. There are many ways to build financial instruments. But companies and corporate markets will find a most efficient way with the lowest cost.
Based on our previous discussion with Realio and SolidX and other institutions, we have great opportunity in the market. The way is to show them our protocol is working and working amazingly well
Md Saidul: today many new projects enter the market with many promises. However, we find that most of them cannot tolerate extreme market conditions and discounts. But Fusion is very successful and always in a better position than other projects. So, what makes Fusion successful?
DJ Qian: I have to say, among all projects, 50% are scams, 30% are using tokens to raise fund only. 9% will end as a failure. As a founder of a project, I think the most important thing is that we should never forget where we started. Fusion is successful in technology development. More than 80% of what we have designed and planed in white paper has already been realized.
I have to admit, we also had frustrations, setbacks, delays in deliverables. But we never gave up. We hope community could understand real innovation is not like an automobile production line, it may take longer than we expected or it may be finished in one night. There are also long way for fusion to go. We are targeting 1 million users thru application on fusion. Again, only real usage and adoptions could be called a success. Someday, blockchain industry need to verify DAU to evaluate a project.
Md Saidul: how is Fusion revolutionizing the interoperability solution, one of the biggest problems of the financial ecosystem, and how does it aim to be the most connected ecosystem to the cryptocurrency infrastructure?
DJ Qian: this is a great question. Fusion’s interoperability solution is built on cryptography layer. As we all know the reason you could move coins on blockchain is that you are the one holding private keys and you move coins by signing transactions with your private key with a certain algorithm such as ECDSA or EdDSA. As a matter of fact, today’s banking system are doing the same thing. When you are operating on your cellphone to wire money thru mobile bank, you sign with your key stored in your phone with USB dynamic PIN number using encryption algorithm RSA or others. So let’s imagine, if we could have nodes of fusion to sign transactions for you in any chains or banking systems when you sign on fusion network, doesn’t it mean all systems/chains are all interoperable? Fusion’s interoperability solution is very unique:
1. It is highly secure. Sharding of private keys are generated separately in different nodes.
2. It is widely adaptable. No matter to chains or to banking systems.
3. It is compatible with existing chain natively as long as they are using encryption signature. There will be no need to change anything on target chains or systems. This is superior to any other solution in the market.
Md Saidul: can you tell us what makes Fusions protocol an easy choice for developers in China to service the Budding blockchain community there?
DJ Qian: China has a huge market. China government attaches much importance to the development of blockchain technology. As we all know DECP is a great initiative. I personally know of a lot of blockchain communities in China. And I believe there are even more that I don’t know. But as a start developers definitely need to learn how bitcoin and ethereum work. These are basic knowledges. Fusion is fully compatible to Ethereum so any developers who are familiar with Ethereum could try to play with fusion easily.
For misc info, we have fsnfeed.com.
For dev community and task management, we have fsn.dev.
For knowledge management, we have https://github.com/fsn-dev/awesome-fusion.
All above are developed by community and useful facilities to help developers to start play with fusion.
Md Saidul: what is your purpose in establishing fusion network
and what are the benefits for investors?
DJ Qian: in short, we establish fusion network to solve 3 biggest problems in financial world. How to extract time value from assets? How to break the boundary of different systems to be interoperable? How to realize finance automation?
By address these problems, we could have a better infrastructure for finance. The reason we started other project previously is because I found it very difficult to get in finance industry. It is highly regulated and manipulated. You could do it only when you have license or a lot of money. But when we found the key problem we could solve. I started to learn we do have chance to change something. Because those are key problems existing for a very long time
Md Saidul: what does it offer to beginning users who don’t have much knowledge about Fusion? Is there any informative material that can facilitate the use of the Fusion.
DJ Qian: for beginners, you don’t have to read documents to learn. Experience is best teacher: download app from wedefi.com, play with Zero risk staking pool to earn interest, play with risk free lottery “safebet”, and play with “upcoming FSN” and “borrowed FSN”, then you will feel they are exactly financial instruments. Easy and neat.
Md Saidul: I already heard about Decentralized but what is the DCRM means? Kindly describe it more please. And as i know that almost every Decentralized platform is hard to use? So, What do you think about the future world Centralisation or Decentralisation?
DJ Qian: today, the nature of Bitcoin is that you rely on the decentralized nodes to keep ledger of BTC for you. And you need to rely on different bunch of nodes working for Ethereum to keep ledger of ETH for you. So, theoretically, all chains are silo chains. Let’s imagine what if we have a bunch of nodes you could trust to keep ledger of BTC/ETH and any other chains for you? This is what fusion DCRM is doing! The difficulty is that when you control your BTC with your private key, how could the nodes working for fusion help you to manage ledger on BTC or make transfer of BTC on bitcoin network without letting them know your private key? This is what fusion DCRM has solved. Each node generates a shard of private key without know others. And after you sign transactions with fusion private key on your hand, those nodes will follow code to sign transactions on other chains on your behalf. The amazing part is the nodes know nothing about what they are doing. They are just following code and your instructions to sign. The reason you feel every decentralized platform is hard to use is because we are in early stage. I felt internet was hard to use as well 25 years ago. I have to dial up to connect with my modem. Use very strange tools to do very simple thing. But today, you feel it smooth like a butter. So time will change everything.
Regarding the topic of decentralization and centralization. I think there is a balance. Centralization usually brings us speed, high quality service, while decentralization usually brings us democracy. I am gready, so I want both. A balance would be perfect.
Md Saidul: tell us more about Time-Lock? This is really an innovative technology. So, what features do you want to highlights about Time-Lock? What is the minimum and maximum time for lock?
DJ Qian: oh, this one would be very interesting. Time Lock is a very useful, inspiring and mind-blowing technology developed by fusion. Please don’t be misled by the name “Time Lock” that it can only be used to lock up your coins. As a matter of fact, this technology is invented to define time slice/period upon your assets. As we all know, in terms of time, that you own an asset means you could use it from present time to forever. But on fusion, by using “Time Lock” technology, you could split the time into slices.
For example, if you own 100FSN, in terms of time it means you could use it from present time to forever, we use [present time, infinity] to express it. Here start time is present time, end time is infinity. Then we could split it into two (or more) parts like 100FSN [present time, 2020.Dec 31st] + 100FSN [2020.Dec 31st, infinity]. And on fusion both parts are transferrable as any other regular coins. Let’s think about the first part 100FSN [present time, 2020.Dec 31st], it’s just like a loan. Anyone gets this part could use this 100FSN during this period until 2020 Dec 31st. In this period, you could use it for staking to get return or play ‘safebet’ in wedefi.com to win prize or even exchange for something else you are interested in fusion quantum swap market. But when time is in place, this 100FSN will just expire and disappear as if you return your borrowed FSN to original lender. To some extent, it is more like a usufruct. Now let’s take a look at the second part: 100FSN [2020.Dec 31st, infinity]. It is just like financial instruments: bank acceptance or factoring which guarantees you to receive 100 FSN on date of 2020.Dec 31st. But you may ask, is this part more like lock up? NO. This part is also transferrable, which means you could pay someone with this part or sell at a discount in fusion quantum swap market. For example, you probably could get 80FSN [present time, infinity] which you could sell in exchanges immediately.
Fusion’s Time Lock also have below two features:
1. Non-fungible. The 100FSN [present time, 2020 Dec 31st] generated by you are totally the same as the one with same parameter generated by anyone else.
2. Additive. If you have 100FSN [2020.Dec 31st, infinity] in your hand, when you get any 100FSN [present time, 2020. Dec 31st] from anyone, it will be combined with your 100FSN [2020.Dec 31st, infinity] to be 100FSN [present time, infinity] automatically by fusion network, which is whole FSN that could be sold in exchanges immediately.
You could imagine, those financial instruments you see today and we are familiar with like bonds, futures, factorings are just a bunch of Time Lock assets with different time definition.
Md Saidul: why does the Foundation keeps a big part of the liquid supply on shady exchanges now without the community being able to tell when it’ll be sold and what happens should an exchange be hacked? And why the transactions have been split into multiple TL transactions through an intermediate wallet instead of just sending directly?
DJ Qian: I appreciate that community cares all the details of operations especially the finance of foundation. It means you are engaged. Here are some points I would like to share:
1. Foundation does park some FSN in different exchanges to balance our finance.
2. We evaluated each exchanges with risks. Community would not know that I know where the owner of those exchanges lives and would not know if they are scammers or not. But we have our due diligence.
3. Those transactions community saw with TL and finally sent to exchange is not foundation’s movement to send FSN to exchanges.
Md Saidul: what was your first plan to create it, and how many partners and employees were there then? What is the main purpose of your project?
DJ Qian: yup. The idea of Fusion comes from a very interesting discussion with friends. We are curious that where everyone was talking about cryptocurrency, but no one is thinking about cryptofinance. And what is the barrier. Then it leads to the decentralized custody idea. Any value exchange needs an intermediary. No matter bitcoin, stocks, futures, even real estates. But there are too many intermediaries in the world. And they are not efficient at all. We want to build a decentralized custody machine for finance just like routers and switches for internet to realize the internet of value.
Currently, you could find partners on our website. More than 40. And 23 full time employees at the moment. However, we have more than 500 FOSC applicant.
As a conclusion, fusion’s target is to serve as the infrastructure of digital finance. It will lead to the age of internet of value
Kevin: It was honor to host you and your project here. Well defined and planned project indeed.
DJ Qian: thank you all lovely members in AMA Series.
Kevin: thank you DJ Qian
This post is a summary of the AMA, created by Rebuld, a blockchain enthusiast.