AMA Summary: Zircon V2, NFTs and More

Learn about Zircon's roadmap and some FAQs from the community!

Zircon Finance

May 27, 2022

We had an AMA a few days ago where we answered some of the most common community questions. You can check out the recording at this link, while here is a written summary:

Host: What are the future plans and innovative ideas for Zircon?

Andrey (Co-Founder): In the short term, we want to launch Zircon Gamma, which is a canary network on Moonriver. Zircon Gamma will be the basic version of Zircon, launched on a blockchain that is supposed to be more experimental. That will allow us to test the system and to exit with a product that has the single sided liquidity system.

We will release around June but I can not give any specific dates yet. There might be some delay, as usually it’s better to launch a little bit later while making sure that everything is great (hacks are a constant worry).

For the long term plans, the roadmap is structured in “tech trees”.

The general vision is to become the decentralized trading platform. The same that Binance is doing in the centralized world, we want to do in the DEX world.

The single-sided liquidity system is the first part of that vision but there is a lot more coming. One of the first things that we will want to do is to create a “Zircon Pro” interface.

Zircon Pro is designed for active traders who need more from their interface than what Uniswap offers. It’s going to include the full suite of trading products: margin trading, limit and stop loss orders and detailed data about markets and the user’s portfolio (profit and loss etc.)

That goes into what is eventually going to be Zircon V2: We want to innovate at the core AMM level with a different kind of concentrated liquidity platform.

We will improve on two key weaknesses of Uniswap V3: the first one is that passive liquidity providers are losing on Uniswap V3 because it just makes it much more efficient for professional market makers. The other aspect is more technical: every position in Uniswap V3 is an NFT, which makes it very hard to compose with other platforms, so we want to fix that as well.

Zircon V2 is unique because it will offer true limit orders, where you “supply liquidity” to the platform and are guaranteed to buy or sell at the exact price you want.

Host: If we compare Zircon to its competitors, who are they and what is the difference with Zircon?

Andrey: I would say that the closest DEX to us is Bancor because, like us, they focus on impermanent loss and liquidity providers. Their design is a little bit more complex and less flexible though.

We allow you to join single-sided pools for any random pair with any random combination of tokens, while Bancor tries to compensate for the entirety of the impermanent loss. This means that they are exposed to an infinite bull run on a token, so they can’t provide this protection to all coins.

With us it’s much more permissionless and flexible and you don’t need to wait 30 days to get into a single-sided position. We do not cover 100% of the impermanent loss — this is our trade-off here — but we still cover the vast majority of the losses. The biggest problem with impermanent loss for LPs is that they are splitting their exposure, so they instantly get half of their previous gains, and we fix that.

There are other protocols that are kind of solving this problem but on a different level. As an example, Ondo Finance has risk tranching. The problem there is that all the vaults are for 10, 20, 30 days, so you need to constantly re-enter the position.

That’s what is special about Zircon: as long as the coin that you have does not die, you don’t have to keep watching your position.

Host: Continuing to talk about Zircon’s roadmap, people are wondering if there are plans to expand to other chains as well?

Andrey: For sure. For us Moonbeam and Moonriver represent our core, where we will build our community and most of the traction but we are looking at Ethereum, Arbitrum, and other chains as well.

Something cool that we have started looking into is the possibility of building an application chain and making Zircon a parachain.

The reason for that is that, as an example on Uniswap V3, 50% of the fees generated by traders go to ETH holders and miners as gas fees. Then 40% goes to LPs for the fees paid into the pool and then, if Uniswap had their fee switch active, they would only get 10% of the entire income.

This represents a huge problem for DEXs because they make much less money from their trading activity if compared to centralized exchanges.

By making an “application chain” you get to keep those gas fees and create a really customized experience. As an example, gas fees could be percentages based on your trades, same as it happens on centralized exchanges, so that smaller traders don’t need to pay something like $50 gas for a $1000 swap. There are a lot of customizations that you can do and I am very excited to explore this, although it is a long term plan.

Host: In situations like now with a bear market, how sustainable is Zircon?

Andrey: Zircon was actually always designed for the bear market. The single-sided liquidity system works perfectly fine in a bear market as long as it goes down but not instantly.

Zircon is based on real fees and real usage, and not just on printing tokens.

In a bear market there’s always some activity, and this generates the fees to maintain the system stable.

For us the bear market is not scary because it is a time where fundamentals and product suddenly matter — and we are confident about that.

Host: Talking about airdrops and whitelist rewards we can now switch to Zircon NFTs, Magic Mint. Is this NFT project integrated with Zircon, and in that case how, or is it a completely separate project?

Andrey: It is separate. Magic Mint is an independent project, although it is made by the same team. We want to tie it in with Zircon as much as possible and of course the initial minting process will be reserved to Zircon community members, but in the end it is going to be its own thing.

The idea is to have an ecosystem of NFTs. There is going to be a base core of atoms, molecules, Energy. And then there will be separate crystal collections with different features and purposes. For example there might be a collection that gives you governance rights over the Zircon protocol or over other partner protocols. Maybe there are going to be collections inspired by pop culture such as Blue Meth from Breaking Bad.

Host: How will the NFTs be useful? Will there be staking features?

Andrey: One of our inspirations is Aavegotchi, which is a collection of NFTs that you have to create by putting collateral into Aave. We can do a similar thing for Zircon and ZRN Float tokens, which will become the “Energy” of our collection.

In terms of staking the actual NFT, I don’t think we are going to do that because there is no economic purpose to that.

People focus a lot on “NFT utility” but the truth is that in many cases it’s going to be “forced”, so we are counting on collectors finding value in holding the NFTs by themselves.

Beyond that we see the NFT project as an “accessory” like a wearable NFT, but that also depends on where the NFT market will go. There are lots of derivative profile picture projects and most of them will die, so maybe people will stop caring about flexing profile pictures altogether. We’ll see which projects survive and who will be the best platform to work with.

Thanks again to all those who joined and don’t forget that you can find all news about Zircon and keep up with the project by following our Discord (discord.gg/zircon-finance) and our Twitter (https://twitter.com/Zircon_Finance).