Rikkei Finance AMA Summary Recap with Shin Chan Community
We held a live AMA with CTO, Vu Thanh Tung from Rikkei Finance on 18th August 9:00 PM (UTC+8). Here’s the recap for those who missed it.
Introduction
Jack| Shin Chan: Please introduce yourself to our community! ❤️
Tung Vu | Rikkei Finance: My name is Tung, Co-founder & CTO of Rikkei Finance. I completed Ph.D. from Nanyang Technology University, Singapore in 2017.
I had previously served as AI scientist, researcher at various reputed institutions.
Before Rikkei Finance, I was CTO of Rikkeisoft, one of the biggest IT company in Vietnam with more than 1300 developers working in multiple countries, including Vietnam, Japan, Singapore, etc.
With Rikkei Finance, I aim to provide better solutions for the users, enhancing their experience and encourage greater participation.
Great to be here to share more info about Rikkei Finance with such an incredible community as Shin Chan family.
Jack| Shin Chan: Can you provide us with a brief description about Rikkei Finance?
Tung Vu | Rikkei Finance: Rikkei.Finance is a revolutionary DeFi protocol that aims remove existing stumbling blocks of the DeFi space with the core features: Cross-chain support, NFTs collateralization, and P2P Insurance.
It utilizes blockchain tech that enables cross-chain integration, meaning it can accept digital assets that operate on any blockchain network and render it at an equivalent rate, making them a real-time currency exchange network as well.
Jack| Shin Chan: Can you tell us the story behind the foundation of the project?
Tung Vu | Rikkei Finance: Most of the information can be found on the internet. Let me share with you something more personal.
Hoa (cofounder and CEO of RiFi) and I, we both come from a company named Rikkeisoft, one of the biggest IT company in Vietnam. Rikkeisoft was established 9 years ago, back then we had only 12 developers, now we have 1300+ in Vietnam, Japan and others places.
You can see that we didn’t raise any money for the seeding round, it’s because we recieved a lot of support from Rikkeisoft, not only the financial aspect but also solidity developers, marketing team or legal support as well.
We also have a guys named Dang Bao Duc, Rikkei Finance’s CFO and a former Quantitative Researcher at Keebeck Alpha. He is passionate about building a sustainable lending protocol with high-standard risk management that can enhance users’ experience and encourage greater participation.
Twitter Section:
Q1: Can you point out a few features or features that you like the most about the platform so that it can compete with other competitors? What are you most confident about for your platform? Do you have a plan to get users to choose your platform?
Tung Vu | Rikkei Finance: Well, it’s true that there’are big players in the lending field like Compound and AAVE. But we believe that there’re plenty of room for improvement and we can still contribute a lot for not only the protocol but also the community.
About the question, the main competitive advantages of Rikkei Finance are:
1. Rikkei Finance is a diverse place for many collateral types. Users are free to decide which assets can be used as collateral based on out asset ranking system. Especially, apart from stablecoins and blockchain-based tokens, users can put their NFT assets up as collateral for a loan, or offer loans to other users on thei non-fungible tokens.
2. Rikkei Finance offfers no-limit cross-chain transaction. Users can lend and borrow any digital assets regardless of its blockchain.
3. Rikkei Finance implements improved interest rate model. Our interest rate model takes into account the cost of borrowing in periods of low utilization rate as well as the cost of capital in periods of high utilization rate, which brings a wealth of benefits to the market and investors.
4. Rikkei Finance promotes worry-free user experiences by liquidation coverage. For the first time, users can ensure their own safety by purchasing coverage for liquidation in their vaults.
Q2: What do you think about NFT? Do you have any plan for implant NFT on your ecosystem?
Tung Vu | Rikkei Finance: Regarding NFT, we are not going to build any NFTs marketplace or to provide any type of NFTs minting services/tools. We want to focus on lending protocol and lending protocol only. Building a solid, safe and sustainable DeFi system like that requires focus and a lot of work.
We will support NFTs as collateral. Right now, beside selling/buying/holding you can’t do much with your NFTs. We will provide you another way to deal with that. You can earn money by lending it!
Sounds good right? But we all have to agree that evaluting the value of NFTs is tricky part, especially NFTs price can be easily manipulated by a group of users. So, to keep lending protocol safe, for NFTs we will do Peer-to-Peer lending system.
There are 2 NFTs lending cases that we support on the RiFi platform:
(1) You are NFT holder and want to borrow money: You lock your NFT in our system with a price tag. If anyone believe that your NFT worths that much, they will deposite money in, we use that money to lend to you. Before the deadline, if you return the money, you get your NFT back; if not the NFT is now owned by the money lender
(2) You have the money and want to borrow NFT: Happen when you play some game, facing a quest that requires a specific item. You don’t want to purchase that item because it’s expensive (!!). You can lock your money in the system and borrow NFT from other person. Return the NFT on time will get you money back, if not, you now are the new owner of that NFT.
Q3: Rikkei Finance has introduced a unique”double-threshold”lending interest rate model that brings a wealth of benefits to the market and investors. How does the double-threshold”lending interest rate model”differ from other interest rate models?How does it benefit the to user?
Tung Vu | Rikkei Finance: Basically, in lending protocol, the borrow interest rate is calculated based on the utilisation (ratio between supply and demand). For example, Compound is using linear borrow interest rate model.
Tung Vu | Rikkei Finance: So when the demand increases (more people borrow from the pool), the borrow interest rate will go up linearly.
There’s nothing wrong with the linear interest rate model, however there are couple of points along the line you need to pay attention to, to make sure that your system are safe.
(1) At the stress point, when everyone is borrowing at max capacity. If there’s big price correction (flash dip) in the market, everyone got liquidated and you can just simply go bankrupt. That why’s at this point (Ut) we expotentially increase the borrow rate.
(2) at the lowpoint, when noone want to borrow anything. We find the way to lower the borrow rate without trading off the supply rate.
Tung Vu | Rikkei Finance: At low point, users get more benefits, at high point, the protocl is so much safer. So win-win for both parties.
Therefore, instead of the traditional linear model, we apply the Multi-Kinked interest rate model, which tackles 2 key points that traditional model does not address: one to make borrowing less cost prohibitive during periods of low utilization, and another to boost liquidity providing incentives during periods of high utilization.
Q4: The BSC has already been the target of multiple hacks of varying sizes aimed at various DeFi protocols. What approach does Rikkei Finance use to ensure the system’s security?
Tung Vu | Rikkei Finance: It’s true that lately there’s many attacks in various sizes targeting different DeFi protocols on BSC.
They exploit different weaknesses of the protocols, normally including (1) Bugs in source code
(2) manipulating token price and
(3) bad risk management control model.
For RiFi, we apply multiple methods to ensure the security of the system:
(1) Multi-kinked Interest rate model
Instead of applying the traditional simple linear interest rate model, RiFi uses the Multi-kinked model.
The strength of the multi-kinked model is that it can handle the stress point of high utilization rate (Ut).
At that point, borrowing demand is significantly high and all users borrow at the maximum.
As a result, if the market witnesses a significant price correction, it will create a mass liquidation effect, directly reducing the liquidity of the protocol and making the system unsustainable.
RiFi’s approach is to increase the borrow interest rate considerably to reduce risk and limit borrowing at this time.
(2) Transparent 5-phase asset selection process.
Through this process, assets will be evaluated using a self-developed Liquidity Ranking System, ensuring that only the most liquid assets are allocated to the pool, minimizing the risk of market manipulation and thereby ensuring system sustainability.
(3) Risk management model.
Our system sustainability is ensured by controlling the collateral factor closely, setting limit for one-time withdrawal; freezing the supply/borrow when there is an attack; and employing complex price oracle.
This allows our system to sustainably respond to any market situations.
(4) RiFi’s source code is audited by experienced parties, namely Hacken and Peckshield. There will be a bug bounty program early on with extremely high value as well.
Q5: Many new projects make a good impression at first, but are suddenly abandoned. How can I be sure that $RIFI will be around for the long term?
Tung Vu | Rikkei Finance: One interesting thing about us is tokenomics.
There are 0% releases at TGE for both strategic and private investors, and they only get their token after 5 and 3 months respectively.
That’s a HUGE barrier and show the world that we are very picky on choosing the investor, they must bring some values to our project and have a long-term investment mindset.
We have a 1-year-ahead plan, and both strategic and private investors are on the same page with us.
Therefore, the early dump or sudden abandon will not occur as all investors are holders.
Telegram Live AMA Begin:
Q6: Can you explain how your Rifi. Liquidity Ranking system work? What are liquidity metrics do you use to rank them?
Tung Vu | Rikkei Finance: First of all, why are we building the liquidity ranking system? The reason is that, recently we witnessed a lot of attacks into DeFi protocol. They exploit different weaknesses of the protocols, normally including (1) Bugs in source code (2) manipulating token price and (3) bad risk management control model.
We can avoid it by applying multiple methods to ensure the security of the system. Transparent 5-phase asset selection process is one of them, and the liquidity ranking system is the core value of it.
Through this process, assets will be evaluated using a self-developed Liquidity Ranking System, ensuring that only the most liquid assets are allocated to the pool, minimizing the risk of market manipulation and thereby ensuring system sustainability.
Some of liquidity metrics we use are: bid-ask spread, turnover ratio, current ratio, Volatility,…
So in short, we only support top coins, which are really really hard to manipulate. Hopefully it will help strengthen the security of the system.
Q7: The collateral types supported on current lending platforms are extremely limited to stablecoins and blockchain based tokens and this is a major problem for the financial lending market. How will Rikkei Finance work on this and what solutions do Rikkei proffer for this problem?
Tung Vu | Rikkei Finance: There is no restriction on collateral types supported on Rikkei Finance platform. Users are free to decide which assets can be used as collateral through our new asset adding process, which is based on our asset ranking system.
Especially, apart from stablecoins and blockchain-based tokens, users can put their NFT assets up as collateral for a loan, or offer loans to other users on their non-fungible tokens.
Q8: You have recently announced your IDO on Redkite Launchpad. Why have you decided to work specifically with the Redkite Launchpad team to take this important step? Could you explain how we can participate and be part of the whitelist?
Tung Vu | Rikkei Finance: Before making our decision on choosing Redkite as our token launchpad, we had thoroughly researched about it. Although this is a new launchpad, it offers remarkable quality:
1- Transparency: Token whitelist phase is carefully and properly evaluated, this was already done with reference!
2- Holders are truly interested in the project, diamon hand, and are long-term holders, especially the phoenix one.
3- Redkite projects are carefully chosen through vetting, which takes everything from the origins of the project teams to legitimacy and implementation capacities into account.
Thi, who is Redkite founder, has wealth experience in the operation process, including cancellation, refund private sale program to protect their community. They also launched a loyalty scoring system so as to ensure that users would not cause a big damage to the project. So win-win for both parties!
From the reasons listed above, we believe that listing on Redkite will benefit for both RiFi and Redkite community.
About the WHITELIST application, please check this link for more details:
Schedule
Whitelist Opening: 02:30 p.m UTC, Tuesday, August 17, 2021
Whitelist Closing: 02:00 p.m UTC, Monday, August 23, 2021
Winner announcement: Tuesday, August 24, 2021
IDO date: Wednesday, August 25, 2021
Buying time — Phase 1 (Guaranteed allocation): 12:00 a.m UTC — 01:00 p.m UTC
Buying time — Phase 2 (FCFS — Max $50/whitelister): 01:00 p.m UTC — 01:30 p.m UTC
Q9: may i know how can i participate for the upcoming farming vault? Could you explain more about the mechanism of this farming vault?
Tung Vu | Rikkei Finance: Users have 3 options to be involved in the farming process:
1. Double farming vault on BSC: Users can stake USDT/BUSD and receive XVS and RiFi in return.
2. Double farming vault on Ethereum: Users can stake DAI/USDC and receive Comp/AAVE plus RiFi in return.
3. NFT vault: Users can stake RiFi and receive NFT in return.
Q10: The Rikkei Finance Protocol consists of two major assets;supplying assets and borrowing assets. Are there any prerequisites for accessing these assets, and what types of asset instruments are accepted?
Tung Vu | Rikkei Finance: RiFi users may supply various supported cryptocurrencies or digital assets on platform, which can be used as collateral for loans, to supply liquidity and to earn reward tokens. On the other hand, users who want to borrow any assets from Rikkei Finance must have collateral locked on the protocol.
Q11: About the “Rikkei” multi-bending interest rate model makes the lending platform strong and sustainable. So the lending protocol also ensures the sustainability of the system through a 5 phase asset selection process.
And how is the 5 phase asset selection process implemented..?
Tung Vu | Rikkei Finance: Basically, our selection process includes 5 stages: Data Crawling, Filter, Liquidity Measure and Ranking, Analysis and Asset Selection and Asset Addition.
Specific information about RiFi 5-phase asset selection process can be found here:
https://rikkei.finance/blog/RiFi-makes-Crypto-Lending-More-Transparent-And-User-friendly
Q12: For a project development first of all main priority is having enough fund. Does your team financially capable to run this project? Do you have enough fund for it’s developement Can you tell us that how your project generate the profit?
Tung Vu | Rikkei Finance: True, a very good question.
A. About initial liquidity providing
(1) RiFi has raised $5.6 millions, definitely not a small amount. This initial fundraising can provide (partly) the initial liquidity for the system, which is as per our plan.
(2) Investors and partners of RiFi all have committed to provide a certain amount of liquidity into the system. The total number is quite impressive, and it will be shared with the community shortly.
(3) We will announce the Stable Vault soon. People can start depositing token in to get high APY as well
B. About long-term profit
Lending is all about the difference between borrowing interest rate and supplying interest rate. This difference will be used as:
(1) interest payment for the lender
(2) risk reserve for the protocol and
(3) system profit.
In the short term, we will not prioritize the profit of the project, but we will focus mainly on risk reserve purpose, ensuring the safety of the protocol as well as users.
We will gradually increase the profit margin in the long run. In general, this will be a profitable and sustainable business model, not relying on selling tokens for profit like some other DeFi protocols.
Q13: How RIFI token will perform a crucial role in the functioning of Rikkei Finance ecosystem ? Can you highlight some of the utilities of this token ?
Tung Vu | Rikkei Finance: RIFI basically have 3 use cases
Payment: As the native platform currency, RiFi would be used by users to pay for all fees on the platform and insurance fees/premiums
Governance: RiFi would allow holders to propose, debate and vote on governance proposals to determine features and/or parameters of the Rikkei Finance platform as well as protocol improvements, with voting weight calculated in proportion to the tokens staked
Reward: In order to promote users to provide liquidity and stake their digital assets into the lending pools for borrowers to utilise, liquidity providers would be rewarded with RiFi tokens according to each user’s relative contribution after various adjustment and correction parameters.
Payment: As the native platform currency, RiFi would be used by users to pay for all fees on the platform and insurance fees/premiums
Governance: RiFi would allow holders to propose, debate and vote on governance proposals to determine features and/or parameters of the Rikkei Finance platform as well as protocol improvements, with voting weight calculated in proportion to the tokens staked
Reward: In order to promote users to provide liquidity and stake their digital assets into the lending pools for borrowers to utilise, liquidity providers would be rewarded with RiFi tokens according to each user’s relative contribution after various adjustment and correction parameters.
About our tokenomics, You can take a look here to have a more clear concept of RiFi’s tokenomics.
https://rikkei.finance/tokenomics
Q14: Can you share with us some information about the fundraising process in #RikkeiFinance?
Because From What I Learned #RikkeiFinance doesn’t raise money for seeding rounds But develops products first?
Tung Vu | Rikkei Finance: Let me share with you guys some information about the fund raising processes
Actually, we didn’t raise any money for the seeding round. We developed our product first, and then when it’s running on testnet we introduced it with individual strategic partner and investors. The evaluation at that time is $30m and $40m respectively.
We raised $1.2m for strategic round and $4.4m for private sale. The usage of fund will be used as below We believe that the fund is enough for 2nd phase developement.
Q15: What kind of Users from the market should look towards the Rikkei Platform? What Products are about to launch on the Platform?
Can You explain a bit about them?
Tung Vu | Rikkei Finance: We believe that what makes our project prominent and keeps users stay with our platform is a solid product. Right now, we set a laser-like focus on launching a core lending platform, which will be supported by a package of other self-developed products as well.
3 of our products, which consists of the RiFi Vault, Market Analysis — Token Ranking System, and the Lending Protocol, are ready for going live.
First, we will deploy Liquidity Vault at the end of August to allow retail users to provide initial liquidity into the system and earn rewards.
Second, we plan to introduce the Liquidity Ranking System around early September. The Liquidity Ranking System is developed to ensure the transparency of our asset selection process and our system sustainability. Assets will be evaluated and ranked based on multiple liquidity metrics, then be further analyzed and entered into the voting section before being officially added into the pool.
Then, we plan to launch the lending product early September. The lending protocol will then be progressively expanded to several platforms, including Etherium, Polkadot, Fantom, and Solana, by the end of 2021. We will also support NFTs in the second half of 2021.
-End-
