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Hive-Peerplays Collaboration Starting To Take Shape

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We are starting to get some more details about what is taking place between Hive and Peerplays. There is a lot going on that will provide much needed expanded functionality to Hive.

Probably the most noticeable change will be the availability of a Decentralized Exchange (DEX). Most are aware how vital this is to ongoing expansion within the industry. Also, with governments starting to circle around, truly decentralized exchanges are taking on a more vital meaning.

Peerplays is already in the process of developing that. It will start with Sidechain Operating Nodes (SONs) for token swapping. The addition of smart contract capability should come later.

pHive and pHBD

For those who are unfamiliar with how a DEX operates, each token created on there is a new item. Therefore, even though it is integrating with an existing one, it is technically creating something additional.

Basically, Hive does not live on Peerplays and never will. What is generated is a Peerplays version of Hive, just like there is an Ethereum and Binance version of Bitcoin.

In this instance, Hive and HBD have their own Peerplays version. So, how does this all operate?

One simply sets up an account on Peerplays. Then, the Hive is sent to the Peerplays' SON account for Hive with the user's personal account in the memo. The system will read that and generate the proper amount of pHive and place it in the Peerplays' wallet. The Hive is held on-chain in the SONs account until someone does the same process in reverse.

Here is a diagram of how this looks.

I would imagine that, shortly after release, some of the front ends like @peakd will develop a simple interface to make the transaction seamless. Most likely, the frontends will have it where one simply enters the Peerplays account and the transaction is made with what was described operating on the backend.

Either way, this is how the process works.

Peerplays Roadmap

The @peerplays account released its roadmap in a post which covers some of what is being discussed here.

What pops out is the fact that the plan is to get the Hive SONs integrated this quarter. In reading the posts by @bobinson, it appears these were already built. It is now just a matter of the Peerplays' team establishing their UI and connecting to the Hive SONs.

This makes sense since much of this started with the @spknetwork starting to look into developing their platform. We can also see the target date for the SpkNetwork airdrop is on there.

Another important factor is the goal if integrating Ethereum into the equation. This is a major step going forward which we will cover in a bit.

The estimated time to go live is in the 3rd quarter.

True Decentralization

Here we have a topic that is discussed a great deal yet seems to be receiving more lip service than anything else. Unfortunately, that is going to cause problems for many with the amount of regulation we are likely to see arriving over the next few years.

Peerplays is a fork of one of the oldest decentralized exchanges in this industry, Bitshares. That project was set up to be the de facto DEX. Unfortunately, in-fighting and complexity hindered its progress.

That said, we can already see how this is shaping up to be untouchable. Each layer is focusing upon decentralization and not having just one source for anything.

For example, in reading about their Bookie Oracle Suite, we see this:

Unlike traditional centralized sports betting applications that rely on perhaps one or two data feeds, Bookie, through BOS, has the potential for almost unlimited data feeds through the use of data proxies.

At its simplest, a data proxy is just middleware that consumes it's own data feed (usually from a commercial supplier) then parses and normalizes that data before sending it to BOS.

Since BOS supports multiple data proxies, it therefore supports multiple data feed providers.

This is where BOS becomes truly decentralized. There is no single source of truth as far as the sports data is concerned. BOS, either automatically or through manual intervention by Witnesses requires a consensus of at least 2 approvals in most cases, before processing incident/event data.

For those who went through the documentation put out by the SpkNetwork, it is easy to see how they are taking the open-source software that is being developed by Peerplays and integrating it into what they are creating. Keep in mind that any, or all, of this can be brought over to Hive's base layer if that is decided.

Nevertheless, as we learned in reading the Light Paper by SpkNetwork, we see the goal for any community to be able to spin up its own token. Having a decentralized exchange makes this process simple and instantly connects that token to all else that is on the exchange.

In other words, a new community is not going to be floating in isolation.

Connection To Ethereum

The integration of Ethereum (and Bitcoin) is vital. They are the two largest tokens by market cap plus, with Ethereum, the ERC-20 protocol is still the most popular for token creation.

There is a problem: these are also two chains where transactions can get costly. Here is where we see the DEX offer a solution.

Let us say that John needs to send some Ethereum to Sally. The total amount that is needed is $300. When John goes to do this, he sees the transaction fee is $150. That is a steep price to pay for the amount he is sending.

With the Peerplays DEX, the fee is nominal. John could send over pETH, $300 worth. The transaction will take place in 3 seconds and the main Ethereum chain never was touched.

We can take the same concept to Bitcoin. After all, isn't this what the Lightning Network essentially does? It is really just a sidechain for Bitcoin.

Of course, there is another situation with Ethereum. Consider the idea of not using Ethereum but the Uniswap token (or potentially any ERC-20). The same idea holds true. As long as it was created on the DEX, the Peerplays alternative can be utilized.

Most of us are familiar with how this is being done with all the forks of EVM taking place. It opens the door for movement of the tokens in a side form. However, with the likes of Binance Smart Chain, the issue of centralization enters the picture.

Why Would Anyone Use This?

Which brings up the final point: with all that is going on, why would anyone use this?

Here we have to engage in a bit of forecasting and speculation but it seems there is a major target market that this DEX can dominate: social tokens.

Thus far, decentralized social media stalled out a bit. It is discussed a great deal yet most development is impractical. We saw a number of projects started on Ethereum which are basically unusable because of the fees. People like Jack Dorsey give a great deal of lip service to this yet we know the idea of Web3 is nothing more than a marketing term to people like that.

At the core is the ability to build something decentralized while also covering the costs of operation. Here is where centralization tends to creep back in. Either someone has to fund the operation or fees need charging. For **Decentralized Finance (DeFi), this is not much of a problem. It is a major hurdle, however, for social media.

There is a lot of talk about the future being social tokens. These are where a "community" gets together and tokenizes their interactions. Here is where we need something that is fact, simple, and inexpensive to use. Putting this together is a challenge as evidenced by the projects that did attempt it.

Hive solves this.

We already see the Hive network operating with the solution in place. There are no direct transaction fees on Hive meaning that any social media activity can occur just like on Web 2.0. The cost of operation is already handled in a decentralized manner through the Witness program. The blockchain funds itself. When we couple this with the Decentralized Hive Fund, we see a powerful combination.

People like Raoul Pal discuss this as the future. However, what he does not delve into is where is this going to be built. It is easy to picture the theoretical yet the engineering behind it is another matter. Where is this being done?

It is very difficult to find decentralized projects out there. While many claim this, the funding is Venture Capital. We only need to scan the headlines of the cryptocurrency media to see the amount of money that is rolling in. By now, we know how this situation will unfold. Users and VCs will end up pitted against each other.

Also, since there is the financial component, expect the regulators to be all over whatever is developed.

While it is still early, we can see where the Hive-Peerplays collaboration is starting to provide this solution. Since open source software is being created, it can be integrated into any decentralized chain. Hive is already at that point. There are over 100 witnesses running nodes along with multiple APIs. Over time, with growth, we can expect this to keep expanding.

There are still a lot of holes in what is being done but we can see how this is taking shape. The team projects can compliment each other on many different levels. This could speed up development while also bringing new coders to the table.

We will have to monitor how things unfold in the next 6 months.


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