ChainX AMA in Hoo
Question 1: ChainX is the first Polkadot project to go online and run successfully. When it comes to Polkadot, ChainX is an indispensable part of the ecology. Can you tell us what the role of ChainX is in Polkadot’s ecology? What is the vision of the project itself?
Kristen: Of course, let me start with the role of ChainX in the Polkadot ecosystem and then the future of the project.
Firstly, ChainX is a Polkadot parachain and a cross-chain asset gateway. Polkadot’s goal is to communicate messages between chains but doesn’t have any user applications. However, most of the data transmitted on a blockchain is still assets, so we have built an asset gateway from the peripheral blockchain world to Polkadot, routing mainstream BTC and similar external assets into the Polkadot ecosystem. This in turn allows for incubating subsequent derivative financial services.
The asset cross-chain we currently have built is just the first step. The greater significance of asset cross-chain is that it can enhance the scalability of the original chain and participate in the future cross-chain ecology. For example, BTC can only perform a few transfers per second on the Bitcoin chain, but after mapping to the ChainX chain, it can not only increase transaction throughput and response speed because of its much faster block time, but also greatly reduce transaction costs and play the base currency in ChainX for various DApp services.
ChainX is developing a DApp market and plans to launch a new smart contract side chain to deploy this on. The cross-chain exchange of main network tokens and side chain tokens will be realized through two-way mapping. The first batch of smart contract market plans that will be launched include a variety of contracts, including Bitcoin Prophecy 2.0, referendum contract, Pawnshop X, task center and others.
In the future, Polkadot will also specialize contract chains and various functional chains. When assets cross-chain through ChainX they can participate in the entire application and cross-chain ecology.
Secondly, ChainX will become Polkadot’s secondary relay chain. As a cross-chain asset gateway, ChainX will play the role of 10,000-chain interconnection, and all chains that are linked to ChainX can be linked to each other. After Polkadot goes online, many people will want to connect to Polkadot, but Polkadot has limited slots with very high costs. At this time, everyone can choose to connect to ChainX first, and be connected to Polkadot’s ecology through ChainX. As more and more chains are linked to ChainX, ChainX will gradually evolve into Polkadot’s secondary relay chain. ChainX’s own vision is closely related to and independent of Polkadot’s development.
As a part of Polkadot, ChainX hopes to do well in the role of an asset gateway and in the future gradually evolve into a secondary relay chain. At the same time, ChainX will also focus on the application expansion of cross-chain assets, especially the development of Bitcoin DEFI, and become the leading project of Bitcoin DEFI. As Polkadot has only just started to come online, Polkadot-based DEFI will be the next hot spot in the market, and ChainX has already launched related products.
Question 2: ChainX successfully cross-chained Bitcoin to the main network, which is technically fully decentralized, but it requires a multi-signature form when it crosses from the main network. Polkadot project Ren is said to be able to achieve two-way automatic X-BTC, why can’t ChainX X-BTC achieve two-way?
Kristen: Firstly, RenBTC is essentially an ERC20 token and is still in the Ethereum ecosystem. ChainX is a BTC cross-chain token issued entirely based on the Polkadot ecology. Secondly, automation isn’t difficult to implement and is not the same as decentralization.
Let’s look at RenBTC from the issuance perspective. Simply put, users need to transfer their bitcoins to a multi-signature address, kept by RenVM. After the transfer is completed, you need to notify RenVM. When it receives the notification, RenVM needs to check whether your transfer is true and valid, deduct the transfer fee and send RenBTC to the user.
ChainX’s X-BTC uses light nodes to lock Bitcoin on the original chain and then issues X-BTC 1:1. The automation and decentralization mentioned in the question are two different concepts. In the process of X-BTC crossover, multiple signings are required. This is because Bitcoin itself is not Turing complete. In simpler words, Bitcoin is not smart enough to accept and process the information and conditions sent to it. This is its innate characteristic and cannot be changed. However, the process of multi-signature address signing can also be automated. As the number of transactions increases, each trust node can write code to automatically sign transactions and speed up the process. Therefore ChainX can achieve this form of automation just as easily.
In its current form, RenBTC is just a single BTC minting and needs other platforms to be used in smart contracts. ChainX’s smart contract platform puts wings on X-BTC and allows direct use of financial derivatives with BTC without the use of other platforms.
Then there is security. For every X-BTC there is BTC recharged to the multi-signature address of the Bitcoin chain, meaning that asset security is maintained on the original chain. Whilst the multi-signature address is safe, everyone’s Bitcoin is safe.
The security of a multi-signature address can be breached in two ways. One is for the private key of a multi-signature is directly compromised, which is virtually impossible. If it is breached, it’s not only the security of everyone’s recharged BTC at stake, but the entire BTC blockchain.
The other is the collusion of trust nodes in charge of the private keys of multi-signature addresses. Each trust node of ChainX maintains one private key of a multi-signature address. All trust nodes have industry endorsements and strong credit guarantees. Multi-party security endorsements are a big step forward compared to centralized exchanges with unilateral endorsements. User X-BTC deposit funds are very safe.
Q3. Why is ChainX not connected to ETH 2.0?
Kristen: ChainX is currently bridging FIL because the storage represented by Filecoin is a key infrastructure of the blockchain industry. Polkadot will be launched this year and we think it is time to participate in the Filecoin ecosystem, combining the Polkadot ecology with the Filecoin ecology to build a new ecosystem of storage infrastructure. In the future, ChainX hopes to use IPFS storage to store all the data on its chain, which can be called at any time when needed.
After bridging Fil, ChainX will selectively dock more cross-chain assets, including Ethereum, Zcash, Binance Chain, Libra and others. Around these cross-chain assets, ChainX will incubate a series of DApp applications.
At present, the ChainX code has been all open source and an ecological fund has been established. The development of the transfer bridge is a key funding direction so if there is a development team or individual interested, you can apply for a grant and start developing the transfer bridge for ETH.
Q4. In addition to listing coins, are there any other collaborations between ChainX and Hoo?
Kristen: We are very happy to finally reach an agreement with Hoo. The launch of the PCX trading pair is just the beginning of the collaboration. For users who hold PCX in Hoo we will jointly launch corresponding financial services on Hoo, so that users can enjoy the high mining revenue of PCX without operating by themselves. Secondly, Hoo will also provide strong support to ChainX’s cross-chain asset X-BTC. We will launch a series of activities around X-BTC, such as X-BTC holding mining, so that more users can experience the convenience of X-BTC. Together we will explore more options for collaboration.
Q5. After Polkadot goes online, what new plans does ChainX have?
Kristen: Our focus will be on these five directions.
Firstly, after Polkadot realizes the transfer, ChainX will begin to bridge DOT. As Polkadot’s governance token, DOT has the function of staking. In order to allow DOT holders to obtain both Polkadot staking income and participate in ChainX mining, the ChainX development team will start to develop the DOT dual mining function so holders can get the best of both worlds.
Secondly, ChainX currently runs as an independent public chain. After Polkadot is officially launched, it will be connected to Polkadot and become a Polkadot parachain! Since ChainX is an independent public chain, access to Polkadot while maintaining the original consensus requires detailed plans and will have to cooperate with the progress of Polkadot slot development.
Thirdly, bridge more public chains and gradually evolve into Polkadot secondary relay chain. ChainX ultimately wants to become Polkadot’s secondary relay chain. Our development team completed the cross-chain of Bitcoin in the early stage, and now the code is all open source. For other mainstream currencies, community members can apply for funds to develop a bridge. We created a special development fund, and the transfer bridge is our key funding direction. The maximum application amount for a team is up to 100,000 US dollars. In addition, if other public chains want to connect to ChainX, they will all receive technical support.
Fourthly, ChainX mentioned in the white paper that on-chain governance is the ideal governance model. Since ChainX went online earlier, it is based on the early version of Substrate 1.0. The on-chain governance model can only be realized after the 2.0 upgrade is completed. The upgrade is currently being carried out steadily, and on-chain governance will be realized soon.
Lastly, the ChainX smart contract platform can greatly expand the applicability of Bitcoin and other cross-chain assets. ChainX core development team is also doing some DApp development, playing a role in attracting new ideas. For example, the Bitcoin oracle launched in May with X-Pawnshop following shortly thereafter. At the same time, ChainX is developing the DApp market and plans to build a new smart contract side chain, on which the DApp market will be deployed. The cross-chain exchange of main network tokens and side chain tokens will be realized through two-way mapping. The first batch of smart contract market plans include Bitcoin Prophecy 2.0, referendum contract, X Pawnshop, task center and others.
In summary, now that Polkadot’s transfer function is enabled, ChainX will fully focus on these five directions of DOT two-way mining, slot auctions, linking more public chains, on-chain governance and DApp market, creating a new ecosystem of interconnection with Polkadot.
Q6. Polkadot is officially launched, what kind of outbreak will ChainX usher in?
Kristen: Last year was the year of Cefi, this year is the year of Defi and next year will be the year of Cross-Fi. Between 2017–2019 was the exploration stage of blockchain technology. In addition to pursuing the high-risk investment demand of currency prices, investors and miners in the market have also demonstrated their demand for derivatives for stable financial management and hedging risk events.
Some innovative wealth management products based on mainstream currencies such as Bitcoin have also attracted the attention of many investors. CeFi wealth management products with simple operations and relatively stable returns have gradually become the main business of exchanges and financial service institutions in the market.
However, with CEFI being centralized, the explosive growth of DeFi in 2020 has led the trend of “Lego Finance” that does not require trusted intermediaries to replace centralized institutions. Lending and derivative transactions are the top positions in the DeFi market. Most DeFi products are based on Ethereum. High handling fees and “barbarous growth” have led to many hidden dangers for DEFI, and single-chain operation makes it impossible to transfer value between chains. Currently DeFi can only rely on Ethereum.
Polkadot represents the next era of Ethereum. Polkadot was officially launched this year, announcing the arrival of the era of multi-chain interoperability and value circulation. Financial products based on cross-chain will be produced one after another and cause a new explosion.
ChainX has made substantial progress in this new Cross-Fi world. ChainX is the first to introduce X-BTC into the Polkadot ecosystem, which is what the Ethereum ecosystem has always wanted to do. Most of the DeFi of Ethereum is based on the Ethereum blockchain, and the DeFi of Bitcoin has not yet exploded. With X-BTC, ChainX has laid the foundation for the Polkadot Cross-Fi ecology.
To kickstart Bitcoin DeFi, ChainX introduced smart contracts for X-BTC. One of these is the X-Pawnshop, a bitcoin lending platform, which will be launched along with the DApp market on ChainX’s sidechain.
Cefi-Defi-Cross-Fi is the inevitable development of blockchain, and ChainX has already made substantial progress.
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