EthCC 2: Jenna Zenk

hey guys hi sorry for the late start I thought that I could plug in my computer and I could not I thought that I had 25 minutes but I have only 20 and I thought I was in a smaller room but I'm here so I clearly didn't get all of the informations I'm sorry about that I'm gonna try to respect the time constraint as much as possible I might over step a little bit at the end but I'll try to go go fast so so I'm Jenna I'm the CTO of melon port melon port is a company that works that has worked for the past few years on the melon project the main project has a vision of building a new infrastructure a decentralized infrastructure for asset management so just for the story and following the past the previous talk about how I see your project spends your money I'm here to tell you how we spend the money that we raised two years ago in February 2017 we raised 2.9 Swiss francs 2.9 million Swiss francs and we the company Mellon port was mandated for the development of the v1 of the melon protocol so we actually released that v1 about a week ago so exactly two years after we raised those funds so we're very happy about that and I think today I'm kind of like gonna walk you through everything that we have worked on and built during those two years so what we're gonna see first of all we're gonna check out the melon v1 so what is the protocol what it is that we built and we're gonna have a sneak peek into the interface then I think I will go kind of fast on the second part Mellon Amex but I think it's still important to mention what is our token model and the token economics behind it and after that we'll see what is our governance model because man and part the company had a defined lifetime of two years meaning that after two years we actually liquidated the company two weeks ago in order to really decentralize the governance and the main hence of the project so we're gonna start with the first part Mellon v1 so for those who don't know we're not familiar with Mellon yet what is Mellon menon is an open source completely open source protocol for decentralized and unchain asset management technically speaking it is set of rules that implement the behavior of an investment fund and those rules are coded into a set of smart contracts that run on on the theorem duct chain so I think the best way to really understand what Mellon is is to take a look at how you would actually use this protocol to set up your fund so hopefully that goes fine so fullscreen and all right so this is the interface that we built that allows you to access easily our smart contract without having any technical skills so when you go in and want to create a fun you're gonna have to define your fund name you're gonna be able to choose the exchanges descent rates exchanges that you want your phone to be allowed to trade on and you're gonna also choose the assets that you accept investment in so you could you know choose all of the asset universe just a few so here I think we're gonna choose investments authorized in wealth and also in Mellon and day so basically the whole fund setup process is about defining the rules and parameters of your your fund the next step is defining your fee structure so as just as in the traditional asset management world you're gonna have to set your management fee and performance fee the only difference here is that all of this happens on smart contracts and everything is calculated on Jane so now this kind of looks like your investment fund prospectus and the next step is actually to deploy this set of rules to the theorem blockchain so in the video so this happens in nine steps like nine transactions we're not going to go through the nine but so I cut the video a little bit but just so you see how it is you have those nine steps you're gonna have to confirm the transactions every time we're integrated with hardware while it's using frame that you see on the right screen on the way the side the right side of the screen so that allows you to use your ledger or treasurer directly to send the transaction of your funds so this is gonna be fast forwarded I think yeah cool so at this point your phone is created and the next step is actually to define more rules for your phone so that is the risk profile so the risk profile what is it it's it is a set of rules that you choose and that you can combine that could be you could be saying I don't want to have more than five positions in my fund 5% is my max concentration I want to only allow a specific specific set of investors to allow to invest in my funds so all of that you can kind of like really customize your rule set and that will define how your phone is going to operate unchain and all of those rules the metric here is that all of those rules are enforced by the smart contract under theorem blockchain so again we're kind of like declaring the rules that we choose and the last the next and last step is actually to invest in your own fund so you can choose in which asset you want to invest so here we're gonna invest in ether in rapt ether because mellon funds only support USD 20 tokens so that again takes two or three transactions we're gonna fast forward because it's not interesting for this presentation so what happens when you invest in a fund you're sending assets to the fund and in return you're receiving shares of that fund those shares are freely redeemable at any time so you're always in control of your assets and now after those three steps you have what we call an Unchained fund or a technology regulated and operated phone so that's how it looks this is the interface for an asset manager you can define more rules you can resume your shares you can claim your fees you can trade on the different decentralized exchanges that are integrated so here we so far in the past few years we have integrated with wasted x0x ki / network and so it's your ex has a few layers that we integrated with so what you see here this order book is actually an aggregation of all of the order books of these different exchanges so that the user sees a unified order book and a deeper order book so that's how it looks there is a longer version of this of this demo so I invite you to check it out online on our medium blog if you're interested and we're gonna go back to the presentation so so what you just saw is the front end the in the user interface to our smart contracts our smart contract system is extremely complicated and really tried to abstract away that complexity from the user that being said it is still a blockchain application so there's still like some barriers in at in the UX or things that we could improve obviously so this this brings us to the the next part so here we kind of like we saw what product mellon port built in the past few years which is a protocol for design choice asset management together with user interface to access those contracts now as we know when you're building a decentralized protocol there are a few other things a few other aspect that you need to think of so when you have a token you need to have proper and well sort of token model if you want to be really decentralized you need to have plans for how the future of your protocol development will look like so those are token economics and governance we're going to start with the token economics which we call Marin omics so this could be your presentation of itself so I'm like really not going to go into the details but I think it's really important to mention and if you're interested in the work that we've done here we wrote extensively on medium on that as well so Menon Amex when we worked on the token economics we really try to do two things the first thing is maximizing network effect which is extremely important if you want your protocol to be successful and the second thing is providing economic incentives to the different stakeholders in the network so that could be developers but also people working on the protocol so the way we do that is twofold the first thing is that we decided to open up the melon token to other teams and other people which means that independent developers we're not from our team can apply for grants in melon token out of the melon inflation pool and get compensated for working on the protocol working on new features improving the protocol in the future the other way is if you're a team who wants to build on top of our protocol because what we've built is very like first layer of this infrastructure and there's so many use cases that people can build if you want to do that you can also apply for a funding request out of the melon inflation pool so opening up the melon token allows us to align different teams and developers behind the same token which we think is you know aligning interest is always good so the second thing which is the kind of like very unique thing about our token model is what we call melon makes - if you want to check it out so basically if we're gonna compensate developers and team working on melon in melon tokens we need to make sure that based token has integrity and has you know desirability has the respect for future value so the way we we worked on that was we really try to make it so that the value and the purchasing power of the token would be linked to the usage of the network that is the success of the network so we do that through something which is called the melon engine it's a specific type of Bay and burn mechanism so as I said this could be a presentation of itself but just very quickly how it works when you use the melon protocol on on a certain set of functions you know all of them so when you set up a font when you invest in a font when you when you claim your fees you're gonna pay what we call the asset management gasps so very simply anything mu payee theorem guess and when you use melanie theorem you're also gonna pay the men and gas on certain functions that gas is paid in ether so as a user you don't really have to own mellon token or to kind of like purchase melons okay and in order to use the protocol you can just pay for that fee in ether and what happens in the background is that that ether is sent to the melon engine contract that is a unidirectional liquidity contract that keeps banging melon out of the open market at the premium and selling the ether so it purchases melon and once it acquires melon it actually burns it so I know it can sound a little bit complicated like that but it's actually very simple and what this provides it actually provides a sink for the melon token so the more the protocol is used the more melons when we burn which kind of also has the nice side effect of really lowering the velocity effect of of many tokens that utility tokens that we know of so the the whole melena makes suite of mechanism allows us to cater for the needs of the token holders and developers when we when we started working on all of that we really try to identify who are all of the stakeholders in our ecosystem and try to make kids that our whole model would cater to the need of each of them so mañana makes really catcher student needs of the token holders and developers working on melon as they're compensated in melon tokens so we still have two other stakeholders in the ecosystem were not looked after yet which are the users and the maintainer of the protocol so that is the next part of this talk the governance model so as I said melon port has liquidated and does not have control over the protocol anymore that being said it doesn't mean that it's not going to be maintained and that it's the end it's actually just the beginning but we really did not want to keep control and being the central you know entity in that whole ecosystem so when we worked on governance we really tried to think about what what are our goals what are we trying to achieve here so first and foremost we're trying to preserve the integrity and security of the network which is extremely important when you're working on asset management infrastructure the second thing is that we want to maximize the user adoption as I said the Menin engine mechanism directly links to token value with the usage of the network so you know from just a logical perspective you you want to maximize the use of the network and third is we are really trying to push the asset management 3.0 space so we want the melon ecosystem to be fostering innovation and encourage innovation in that space so you know the word governance is kind of like used for many many things so I'm just going to define it here but it it refers to an error case so here governance refers to the decisions made with regards to the protocol upgrades in the future the resource allocation so every year we have a certain amount of new melon tokens that are minted this is inflation and that's the research that we have to fund future developments so the governance system is the one who is going to be allocating those resources and then the last thing are the network parameters so there are a few of them but the most important one is the asset management gas price something related to the melon engine that I mentioned earlier all right so how do we do that so when I talked about the stakeholders in our ecosystem the next question that is really important to to think about is what is the most fragile and unprotected stakeholders in your ecosystem in our case these are the users so the users in the melon ecosystem are the fund managers obviously but also the investors who invest in funds because at the end of the day they are the ones putting their assets at risk so we can afflict works backwards from that knowing that we really want to make to make this model protect the user as much as possible and also represent their interests so the way we we try to build a model that is user centric but also skill based because again it's a very complex protocol it is very experimental and it requires it definitely requires technical expertise when making future decisions so that brings us to the Mellon Council which is the new body that took over the control and ownership of the Manon protocol just one or two weeks ago so we had our m1 conference in doog and we handed over the control of the protocol to the men on calcium so what is Mellon Council it's as I said a body that is going to make future decisions the uniqueness about it is that it's composed of two sub groups one of them is the men and technical council and the second one is the men and exposed businesses representatives so we're going to see each of them so the men and technical council is a group of people who are who have technical expertise on the Menin protocol but also finance related protocol things that we could integrate so people who have an expertise on something relevant to the future decisions that we're gonna have to make those people are compensated invested mellon tokens over time and they're their role here in that council is to bring their expertise to help making the best decisions for the future of the protocol but also preserve the security of the network so worth mentioning that the the melon the former melon port team appointed the initial seats on that council so that is we appointed eight eight seats to diverse people in the in the ecosystem and from now on that council can only grow by consensus so the council members have to vote on the inclusion of new camp and new members in the future so this model is not technocratic there's not only technical people in there the second part and very important parts of the man and council are the men and exposed businesses so it's just a fancy word to say users so because we're all Unchained it's very very easy for a user to prove that you that he is a user and that he has assets at risk on the network so as a user being a user gives you one nature right in the melon Network is to elect your representatives to sit on the melon council together with the technical council members so the user elect their representatives and those representatives are are able to represent all of the users and voice their interest and needs on the council so what we get with this is a council that can grow in a consortium like fashion where users are really at the center of the model where they can voice their needs their have their interests represented but at the same time they're not just left with you know a set of smart contract that no one knows what to do with so we have those technical council members who are here it supports the users in in their use of the protocol in the future obviously and in governance you need to be to make sure that you have high ethical standards so the melon council aims at keeping those standards very very high all of the people on the council are known identities identities that actually have been revealed at our conference as well and i think i mean i know that some of them are are in this room but just as a just one thought for an hour model I think it's really important even for other projects is that we this model really recognized the importance of the users because at the end of the day if we don't have users and if we don't protect them enough we're gonna fail so this is not news but these are the initial people on the Menon council that that was announced at m1 two weeks ago so we have really a very diverse set of people in the ecosystem we have security auditors we have people representing the central exchanges we have people from other projects such as maker Dell we have people from Paraty and our team is not going away we have one seat on that council as a team so it means that we have one vote out of all of those eight currently eight but micro will grow in the future hopefully so so that closes the governance part where we actually show how we cater for the needs of the users and the maintainer of the network so as you can see what we've worked on in the past two years was not only delivering the v1 of our protocol but also making sure that we set the ground for for future healthy developments and hopefully successful developments of of the Mandan protocol so thank you and I don't know if I have time for questions no I can take questions outside if right all right thank you thank you very much [Applause]