ZKX Twitter Space - DeFi Summer, Starknet & Everything ZKX

In ZKX’s Twitter Spaces which took place on March 27, 2024, Tanisha from ZKX hosted Eduard and BitPactum from ZKX to discuss ZKX, Starknet, institutions’ trillion-dollar entry, shifts in technology, community engagement amidst market cycles, and more! Read our notes below to learn more.

Background

Tanisha (Host) – Content, PR & Marketing at ZKX Protocol

Eduard (Guest) – Founder at ZKX Protocol

BitPactum (Guest) – Co-Founder & CTO at ZKX Protocol

ZKX Protocol – a perpetual futures DEX with self-custody on StarkNet

Navigating Crypto: Bull Runs, Institutional Capital, and the Rise of Layer 2 Solutions

Eduard describes the experience of being a founder in the crypto space as similar to feeling like Captain Jack Sparrow, highlighting the unpredictable nature of the crypto market but noting the recurring cycles of bull and bear markets.
He points out the significant change with institutions now entering the space, bringing in trillions of dollars of capital due to regulatory and compliance advancements, mentioning BlackRock‘s on-chain fund on Ethereum as a key development.
Eduard anticipates the potential for a bull run in the next two years based on historical patterns and suggests looking at the M2 money supply chart for macroeconomic insights.
BitPactum highlights the difference in the crypto space between last year and this year, noting last year’s focus on building with less noise made it easier to identify good projects. This year, increased noise makes it harder, but believe it’s still possible to identify promising projects by their technology and expects the unveiling of significant projects developed over the years.
Tanisha asks about the sustainability and impact of low transaction costs on layer-2 networks.
BitPactum highlights the substantial reduction in transaction costs and its positive impact on-chain activity and data storage. This reduction allows for more nuanced services and features that were financially unfeasible before, especially with Zk-Rollups and general decentralized exchanges.
Eduard comments on the Ethereum community’s recent advancements with layer-2 solutions, reducing costs and potentially improving user experience to match that of single-chain environments like Solana. He notes the importance of narrative in attracting retail interest, suggesting Ethereum layer-2 projects may soon emulate Solana’s success in this area.
Tanisha observes the growing interest in Ethereum as the ultimate settlement layer, highlighting its unmatched security and the potential for building on top of it with Layer 2 solutions, referencing the surge in meme coin activity on Solana as an example of generating retail interest.

Balancing Utility and Market Cap in Crypto: Strategy and Growth

Tanisha asks about the balance between token utility and market capitalization, noting the shift from focusing on fundamentals during bear markets to adoption in bull markets, and asks where the line between token utility and mere market cap competition lies.
Eduard confirms the importance of providing a sticky trading experience through OG trade on ZKX, highlighting their success in engaging users with fun prompts and competitions and comparing their active user base favorably against other protocols that mainly feature market maker activity.
Eduard mentions plans to grow TVL through various features including a referral program, $USDC deposits from Starknet, and $STRK incentives in partnership with the Starknet Foundation, aimed at attracting new users.
He discusses future community incentive programs, quests, and a token listing plan, aiming to enhance user activity and TVL while highlighting the importance of a smooth user experience on ZKX over merely accumulating a large TVL.
Eduard distinguishes their approach by directly distributing $ZKX tokens to incentivize users, contrasting it with point systems used by others.
Tanisha acknowledges the balance they’ve created between gamification, which attracts people to crypto, and their project’s goals, highlighting insights from the community and market.
Tanisha says that the crypto growth narrative changes rapidly and asks about maintaining trader engagement amidst evolving market trends, particularly concerning points versus tokens.
Eduard says that while many users prioritize rewards and low fees, a significant portion values user experience, as evident from active community engagement on platforms like Discord.
Eduard highlights the need for the platform to be unique, sticky, fun, and engaging, and to offer both the right incentives and enjoyable experiences, contrasting with many other protocols that focus solely on being efficient trading markets.
Tanisha highlights the importance of community involvement and notes the lack of robust communities among their competitors, attributing this to their primary focus on efficiency rather than community engagement.
BitPactum says that while making money is a common goal among users, offering an enjoyable experience is essential. They aim to build a platform where users can profit while enjoying the process, underscoring the importance of a user-friendly interface in attracting and retaining users.

Securing User Funds & Appchain Infrastructure: A Decentralized Exchange Perspective

Tanisha expresses concern about ensuring user funds are protected while offering an experience similar to centralized exchanges. She asks how their infrastructure secures user funds and addresses potential issues like access to user funds by the team or price manipulation.
BitPactum highlights the trust in L2 based on Ethereum’s security layer and how their appchain integrates with this for enhanced security. He explains that each account is self-custodial, meaning users have full control over their funds without the technical possibility of external access.
He explains how transactions on the appchain are batched and stored on Starknet L2, ensuring all financial activities are transparent and verifiable, which is fundamental to their approach to decentralization and security. This setup prevents data tampering and ensures transparency.
BitPactum highlights the impossibility of price manipulation and front-running due to the on-chain transparency, which includes order timestamps. They express pride in their decentralized approach, highlighting it as the future direction for DeFi and the necessity of decentralization for the safety and autonomy of blockchain and crypto spaces.
Tanisha asks how their approach to appchain infrastructure, which includes features like a substrate, a bridge, and a ZK account, differentiates from competitors and what plans they have to optimize this infrastructure.
BitPactum explains that not all appchains are created equal and highlights their chain’s capability to produce two blocks per second, enabling high-frequency trading and addressing scalability.
He says they aim to support the ecosystem’s growth by opening their chain to other protocols, believing it’s essential for decentralized exchanges to offer user experiences comparable to centralized exchanges to become mainstream.
BitPactum mentions the importance of speed and efficiency in decentralized systems to compete with centralized products, stressing that their appchain’s speed allows for an experience akin to centralized exchanges while remaining fully decentralized.
Tanisha highlights the significance of their unique value to the ecosystem and their intention to expand products in a way that meets the needs of various protocols.
Tanisha asks about the future of appchains in terms of growth, scalability, and user experience, mentioning a discussion by Vitalik Buterin on user unawareness of underlying chains for the sake of UX, and its potential implications on security and decentralization.
BitPactum compares the scenario to using credit cards without understanding the underlying technology, suggesting that trust in DeFi systems comes from the certification by knowledgeable individuals and the security guarantees offered by decentralization.
He says demand from users for secure, decentralized protocols will increase, leading to a future where DeFi is fast, transparent, and user-controlled, aligning with true decentralization.

Transforming Perpetual Trading: Social Integration & Community Governance

Eduard introduces the concept of making perps social as a first phase, involving features for shared trading experiences, competitions, group trading, clan wars, and copy trading to engage users and make the platform more interactive and community-oriented.
Eduard outlines a three-phase roadmap for product development:
- Phase one focuses on social trading features;
- Phase two on satellite products like prediction markets to complement trading psychology; and
- Phase three on decentralization and DAO governance aimed for 2025
Tanisha highlights the unique approach of making perps social in a saturated market, stressing the need for differentiation in the platform’s offerings.
Tanisha mentions the recent launch of two products of ZKX, OG Trade in January and Pro Trade in February, and asks about the lessons learned from these launches, including unexpected outcomes and feedback loops for product improvement.
Eduard says that being a DeFi founder is extremely demanding, likening the experience to characters from a movie for relatability, and highlights the constant accountability to the community due to the transparent nature of blockchain technology.
Eduard mentions the critical importance of managing community expectations and fostering a positive environment, given the transparency and openness of blockchain, which demands extreme ownership and energy from founders.
Eduard highlights that they’ve learned to value user experience over incentives and rewards, focusing on a smooth onboarding and trading experience on ZKX as a priority over traditional DeFi incentives.
Eduard notes the importance of continual product improvement and being open to community feedback to ensure that the platform meets users’ needs and expectations.
Eduard discusses the careful consideration of timing for token launches to ensure long-term value for the community, project, and token, indicating that the launch will happen sooner rather than later.

2024 Roadmap: Community Feedback, Collaboration, and Developments

BitPactum reflects on the anticipation and uncertainty of releasing a product developed over two years, highlighting the importance of community feedback in the development process.
BitPactum shares optimism for their 2024 roadmap, buoyed by the positive community response to their launches so far, and expresses gratitude for the community’s feedback, which has been integral to their development process.
Tanisha acknowledges the balanced responses from the participants and highlights the importance of considering the community’s feedback. She mentions the ongoing efforts to address community concerns and hints at recent activities and potential collaboration within the ecosystem.
Eduard reveals their collaboration with the Starknet Foundation to deploy $STRK incentives as part of the DeFi spring. He discusses efforts to enhance the utility of their NFT collections by listing them on Starknet marketplaces and mentions working with AMMs to list $ZKX-$USDC for easier trading within the ecosystem.
Tanisha mentions the pioneering Paymaster feature on Starknet and informs the community about their presence at Token2049 in Dubai, inviting interactions with the team there.
Eduard teases exciting developments for April, including $STARKGATE ($USDC), $STRK incentives, and a referral program, hinting at more announcements leading into May and the summer.
BitPactum promises a year filled with major releases, highlighting their commitment to delivering a user-friendly and secure decentralized financial platform. He highlights the success of the prediction markets and teases further innovative features.

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Show Information

Medium: Twitter (Audio)
Show: ZKX Twitter Space
Show Title: DeFi Summer, Starknet & Everything ZKX
Show Date: March 27, 2024