State of the Layer: All Hands – Oct 27 2015

  • Craig
    1. Memo field on Send status
    2. details on action tracking system
    3. Omni Wallet Desktop release prep:
      1. Release candidate for 0.0.10, end of week
      2. Feature activation testing on testnet – results?
      3. Omni Core testing guide to subreddit and blog:
      5. 0.0.10 RPC documentation:
    4. 0.0.10 release dialogue
      2. what items remain?
  • Adam
    1. Omniwallet
      1. Continuing to handling support / monitor updates from last week
      2. Updating Omniengine to match omnicore 0.0.10 updates
      3. Tweaked pending tx support to prune after 1 day instead of 7
    2. Working with 3rd party integrators
  • Patrick
    1. Refund complete, get bullish.
    2. Did little coding, so back on track with my coding priorities now.
  • Marv
    1. curious to understand more about memo field
  • Sean
    1. OmniJ
      1. a little support
      2. Waiting for new Omni Chest API for PR #117
    2. Naming/Identity issues
      1. More work on beeLin
      2. Preparing for Rebooting Web of Trust workshop
    3. Looking for consulting work
  • Zathras
    1. Working on API connector branch further:
      1. UpdatesDB in place
      2. Updates now queryable via RPC
      3. Development being moved back to GitHub in PR 267
      4. Coverage extended, though still does not cover 100% of state actions
  • Dexx
    1. Finalized the raw transaction API to construct Omni transactions as raw transactions, which is useful
      1. to create the feature activation transactions,
      2. it’s the missing piece for multisig/arbitration use-cases,
      3. for more details see:
    2. Other than that, mostly on standby and awaiting a release plan.

Previous State of the Layer Post: Oct 20 2015

State of the Layer: All Hands – Oct 27 2015

State of the Layer: All Hands – Oct 20 2015

  • Adam
    1. Omniwallet
      1. Continuing to handling support / monitor updates from last week
      2. Updating Omniengine to match omnicore 0.0.10 updates
    2. Working with 3rd party integrators
  • Patrick
    1. Refund 60% done.
    2. Got an elaborate test suite going, running stress tests for scale, speed etc.
    3. Time to spec Dex phase 3 fee distributions.
    4. Wrapping up in next 48 hours and going all in on launching trading system after trading system.
  • Marv
    1. follow up on the spec PRs
  • Sean
    1. OmniJ
      1. Thinking about build issues (see below)
      2. Ready to resolve Divisible/Indivisible amount issue and merge PR #117
      3. Merged PR #118 from DexX7.
    2. Looking at code signing issues for OmniJ, bitcoinj-addons, etc.
      1. Decentralized code signing is clearly needed in Java ecosystem and others
      2. Wrote paper “Blockchain-based Trust for Software Components” for “Rebooting the Web of Trust” conference.
  • Zathras
    1. New action tracking system tracks every change to the state along with a USN (unique sequence number) and triggers for the change, the API connector & RPC calls provide access to the this data.  Much more granular delta change tracking than our current “per transaction” model
    2. OmniCore API (developed on AWS ‘Chest test infra) code going up to github for review in next day or so
    3. Request to add a memo/note to simple send not yet implemented, discussion is on whether we implement messaging just for simple send or as a more complete/holistic approach to add messaging to any transaction

Previous State of the Layer Post: Oct 13 2015

State of the Layer: All Hands – Oct 20 2015

The Utility of the Decentralized Exchange

The Blockstream announcement of a production sidechain devoted to inter-exchange clearing got us thinking about the deep questions of utility, financially speaking, that their sidechain or our Dex provides to the public. The Liquid chain they are proposing isn’t a competitor to the Omnilayer Dex per se, but it is a competitor to Tether which allows dollar movements between exchanges and for trade on the open market. A sidechain that has a well-made Dex is likely to emerge in the next quarter or two, probably the Ethereum Dex app will be out in a similar timeframe. It is going to be competitive, but to what end?

The elimination of counterparty risk.

From hence forth human civilization will be able to eliminate the dependency on social trust by making our businesses and economics an efficient procession of smart contracts.

The real competition is not between start-ups, it’s us collectively against the useful service of a Banco Estado, or Banco Central providing mobile money to all citizens, like Ecuador’s closed chain, or the competent apps released by publicly traded financial corporations with their own blockchain infrastructure. It’s early yet but the field is so small right now, some hundreds of millions, we haven’t even seen the second half of the first inning. Now is our time to make a splash and whatever land grabs we accomplish will be followed by a wave of incumbent entrenchments.

Modern financial trading sort of solved this problem by legally segregating the custodial and brokerage functions, but modern stock trading accounts are still trapped in a currency, in a banking system, in a tax code deal like IRAs, in regulatory limits. So looking at the tens of trillions in free invest-able capital floating through offshore bank accounts, the decentralized nature of Bitcoin-recorded assets lends a certain appeal which may well continue to find its self-fulfilling prophecy in higher prices for a while longer. The more efficient but still legally controlled adaptations of blockchain concepts by banks will be better to use but still captive in a strong legal sense.

Look for trends in volume that are up and to the right across the board.

There are a few components to the value that a good Dex provides:

  1. Reduction of opportunity cost due to having capital freely convertible into any of a multitude of denominations. This varies based on one’s country of residence – low value for US persons but higher value for Argentines, Chinese, Venezolanos ect.
  2. Liquidity produced by new market entrants with smaller capital that are able to trade due to SIM-chip compatibility. These are people who would never open a formal trading account with a Bitcoin exchange and have never had a bank account, but they have risk appetites just like you and me.
  3. Reduction in the trading spread for assets relative to their best alternative on centralized exchanges. Could bring the cost of trading down .15% on average.
  4. Reduction in fees to de minimus levels, .05% for liquidity takers, free for providers. Futures at .02% to open.
  5. Operability with decentralized applications on a reliable basis. Big volume driver.
  6. Arbitrage opportunities due to 10 minute lag – also effectively eliminates high-frequency trading.

So you add those things up and you tell me what the utility is. I’d say we’re talking about billions of dollars in savings for traders and applications. It’s a paced price-discovery mechanism with no counterparty risk and a total cost (fees+spread) of 8-15 basis points, at least half the cost of trading anywhere else.

Unfortunately for the VCs that have invested in start-ups at high valuations, the competitive basis comes down to two things: user acquisition rates and cost. We are competing on price gentlemen, and the leaner, more automated environments may well be able to set the price very low, lower than the proposed returns on your equity, maybe lower than the operating expenses of a company with a solid payroll.

I woudn’t want to bake my bread with fee revenue, I want to bake my bread with making those small spreads millions and then billions of times. Servers are cheap employees, hence the savings are passed on to the end-user.

It’s almost like trading algos are mining economic value through the processing order data and logics, worming through a search space of liquidity to discover price, yet price always seems to slip away. Trades stamping on the blockchain, block after block, locking in some profits and losses each turn.

A global commons of free trade: financial, commercial and social.

It’s gotta be simple to plug into… we’ve got that, technically speaking. We need a simple killer app for saving, but it’s easy to plug in Omnicore to build such an app.

It’s gotta be open to everyone… check.

It’s should be extremely low cost to use (optional)… a distributed protocol can afford to go lower, so check.

Here’s a crazy idea, what if a foundation formed to support crypto-finance projects managed to function on a cashflow-positive basis?

Here’s a crazy idea for the exchange business – what if exchanges made money on volume in liquid markets?

The top centralized exchanges will find themselves the dueling-pits for robots trying to carve out a nickle and the inter-exchange arbitrage will manifest on those minute timeframes but clear a settlement on-blockchain. Thus capital cycles a bit more slowly; though well-capitalized systems can optimize that.

Price discovery on-blockchains is going to be a really big thing. Imagine Gold: uncensored, and restricted currencies now more liquid than ever thanks to the advance of modern computer science.

Helping people worldwide to enjoy full use of their money.

The Utility of the Decentralized Exchange

State of the Layer: All Hands – Oct 13 2015

  • Adam
    1. Omniwallet
      1. Continuing to handling support / monitor updates from last week
      2. Updating Omniengine to match omnicore 0.0.10 updates
    2. Working with 3rd party integrators
  • Patrick
    1. First funding hit, stacked up OMNI market
    2. Refactored Indicators module to managed arbitrary new indicators
    3. Starting broomstick test algo to create testnet properties and trade them against exponentially more books
    4. Completing re-brand with exchanges
  • Marv
    1. reviewed 4 or 5 “recent” open Omni spec PRs
      1. need current status so we can merge or take other action
  • Sean
    1. OmniJ
      1. Working on PR #117: Convert BalanceEntry from BigDecimal to OmniValue
      2. Need to be able to tell divisible from indivisible amounts in get balances for property id.
        1. Omni Core – does the right thing
        2. Omniwallet – I wrote a workaround, have created Github Issue for Omniwallet
        3. Omni Chest – Zathras will provide a solution in the new API
      3. Once (ii) is resolved, OmniJ 0.3.4 will be released.
      4. Found issue where Omni Core was returning zero balances unnecessarily #257.
    2. bitcoinj-addons
      1. Ongoing development, no update/release needed for planned OmniJ 0.3.4 release.
    3. beeLīn
      1. Release v0.0.2 – A decent proof-of-concept Namecoin-enabled browser.
      2. Research for possible including of naming functionality in Omni Protocol
  • Zathras
    1. OmniCore API ongoing work
    2. Added PoC for including a memo with simple send as per Craig’s request
    3. OmniChest v6 upgrade continuing

Previous State of the Layer Post: Oct 6 2015

State of the Layer: All Hands – Oct 13 2015

State of the Layer: All Hands – Oct 6 2015

Previous State of the Layer Post: Sep 29 2015

State of the Layer: All Hands – Oct 6 2015