Ethereum High Transaction Fees Discourages New Participants From Entering the Ecosystem

Ishan Pandey: Hi Tom Tirman, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind Parsiq?

Tom Tirman: Hello Ishan! I’m the Co-Founder and CEO of PARSIQ, which was founded in 2018 by Andre Kalinowski, Anatoly Ressin, and myself. Most of our team are professional blockchain engineers who have built numerous blockchain systems and backends for crypto exchanges, etc.

Each time we faced the same issue – we had to build something to connect blockchain activity to centralized applications, devices, user-facing front-ends, legacy systems, and other off-chain networks.

So that’s when the decision was made to build a platform available for everyone to bridge the gap between blockchains and real-world apps like Google Sheets, Telegram, Discord, Salesforce, and so on.

The objective was to build a system with:

- No need to host nodes or server infrastructure

- No need to build narrow non-scalable solutions in-house

- No need to spend funds and development resources

- No need to face the complexity of tracking blockchains in real-time at scale

PARSIQ standardizes all chains for users into one easily consumable system to build a blockchain to off-chain automation workflows. You can think of PARSIQ as the bridge between blockchain ecosystems and traditional industries.

Ishan Pandey: Parsiq recently conducted a Hackathon on DeFi and Cross-chain Interoperability, please tell us more about it and how Hackathons help startups?

Tom Tirman: Our ambition was to expand our developer community and to showcase the awesome utility of the tools we are building. Gitcoin’s Hackathon was the perfect platform, as it’s one of the largest and most active developer communities in the space.

The submissions were incredible and totally surpassed our expectations. One of our favorites was a project by a developer nick-named PFed, who built a monitoring solution that instantly notifies users each time there is specific activity related to CryptoPunks on the blockchain.

This could be built by anyone using just PARSIQ’s free account and the guide provided by the submitter.

We are now planning future hackathons to fund more complex and interesting bounties!

Ishan Pandey: Please tell us about IQ protocol and how does it work?

Tom Tirman: Before IQ, crypto didn’t have a subscription model. Now, almost any company can utilize this solution for making their business even better. IQ solves the crypto’s old “Token Not Needed” problem: thus, crypto projects with weak tokenomics can build a circular economy and make everyone happy - traders, hodlers, users.

Our next step is to introduce IQ Protocol for NFT renting so that projects can build marketplaces for trustless renting of NFTs without risk or collateral.

IQ is a customizable, open-source protocol that will allow borrowers to rent NFTs without having to lock collateral. All NFT renting has a specified time limit, which means that lenders will always receive their NFT back, removing the risk of borrower defaults.

How is it possible to rent NFTs without any collateral? Instead of giving the original NFT to the borrower, IQ Protocol mints an expirable version of the NFT, ensuring that the original NFT is always returned to the owner. If there’s a guarantee that the NFT will be returned after a certain period, lending an NFT is essentially risk-free. The terms are governed and executed by trustless smart contracts, removing any middlemen necessary to uphold promises.

Moreover, it eliminates the possibility of borrowers ending in default, since they are getting an expirable version instead of the actual NFT. Therefore, it is impossible for the borrower to keep the original NFT indefinitely because they received an expirable version of the NFT. The minted “iNFT” can be thought of as a utility version of the original NFT, with specified logic such as the expiry period, how many times the NFT can be used for specific actions, the interest rate, and more.

Ishan Pandey: Please tell us how does no-code editor for automation works and what are its use cases?

Tom Tirman: If you use the Trigger Wizard, our no-code editor, the setup process is basically four steps:

● Step 1: Choose what to monitor (set of addresses, wallets, or smart contracts on any blockchain).

● Step 2: Set up transports (delivery channels) where to deliver data or which actions to perform off-chain

● Step 3: Script conditional logic (how to monitor, how to process that data, workflow steps, etc).

● Step 4: Deploy

(All technical documentation, tutorials, videos, etc. are available on the platform.)

Among the myriad of protocol use cases, one is certain to find something useful for themselves or their business. These include monitoring of transactions and user deposits/withdrawals, automation of compliance and risk management, automation of accounting, auditing, financial reporting, automation of trading, and automated notifications for user balance changes, and more.

These days, the protocol is heavily used for business purposes. Here are three basic if-this-then-that automation which enterprise clients can run with the protocol:

1. If my company gets a deposit on Bitcoin addresses A, B, or C, then deliver the aggregated transformed data about the deposits to Google Sheets and send the “thank you” email to the customers.

2. If any of the deposits come from a blacklisted or high-risk address, flag the account for additional screening, then notify our compliance officer via Slack.

3. If the total deposits turnover for the day exceeds the amount X USD, then send the financial report to an accounting program we use.

Ishan Pandey: Please tell us why KYC/AML compliance tools are critical for compliance with FATF and respective AML regulations?

Tom Tirman: Compliance is an integral part of doing business. This is not limited to companies that provide financial services, but it applies to any business with financial dealings. Good governance enables your company to mitigate the risks of illicit activity. It will also ensure your business is more competitive through improved trust and accountability.

Regulators are pushing for the increased use of automation tools in order to stay compliant.

For instance, financial institutions and FinTech services may not let you open an account without such safeguards in place. This all falls to an impact on profitability.

What businesses need are tools that simplify and automate their ability to monitor and keep track of their transactions. For example, using PARSIQ for as low as $40 per month, businesses can set up automated alerts with risk-scoring mechanisms that track all transactions going into digital wallets.

Ishan Pandey: What are your views on the new FATF guidelines which recommend that DeFi protocols may fall under the category of VASPs?

Tom Tirman: We all know that the road to compliance is difficult for the crypto sector. I would say that nothing fundamental has been changed. The industry even sees it as too vague to be worried about. In the foreseeable future, DeFi and NFTs will remain in their current state and nothing can stop the growth of this industry.

FATF proposes to define how NFT should be regulated on a case-by-case basis, and there’s a tricky statement, which says that regulation is applicable for developers that directly profit from a DApp. Again, FATF guidance regarding DeFi is subject to debate and interpretation for years.

However, the trend is pretty clear: regulatory attempts create new costs for businesses that want to remain compliant, and this is true for both centralized and decentralized companies (especially DeFi with centralized governance models), so it is no surprise that the long-term predicted trend in smaller companies shutting down unless they are well AML-prepared.

Ishan Pandey: What are your views on Solana and will it be a success in the long run?

Tom Tirman: As with other integrations, the protocol is deeply integrated inside the Solana network, and we were proud to bring our ideology to Solana users. I’m not supposed to build any forecasts for a blockchain company, but I would definitely say that our development goals for the Solana network are huge.

Ishan Pandey: What are your views on Ethereum rising fees and its impact on the ecosystem?

Tom Tirman: It’s worth acknowledging that high fees indicate a high volume of network utility, which is a net positive for the ecosystem and the space overall.

Ethereum high transaction fees discourages new participants from entering the ecosystem and using layer 1 products.

It will be interesting to see how the Ethereum community and core devs respond to this - there have been new paradigms emerging to counteract the narratives leveled by its competitors, from the London Fork to L2 scaling solutions - both of which have drawbacks - but as of yet, there is no clear path forward…

I have a hunch that we’ll see a proliferation of cross-chain projects over the next 12 months as small teams will move more nimbly than the ecosystems to find a solution. I also think we’ll see more native fiat onboarding directly to L2.

Ishan Pandey: According to you, what next trends are we going to see in the blockchain industry?

Tom Tirman: I’m not the first to say that NFTs are only at the beginning of an exciting journey - with revolutionary concepts of utility and metaverse narratives dominating the wider tech industry, they aren’t going away any time soon.

We’ve been building the IQ Protocol tandem with this trend over the last twelve months, and we’re excited about the ways it can revolutionize NFT ownership.

Let’s say a GameFi player has unlocked a character weapon with a unique utility and they have planned a trip away over the weekend and won’t have the chance to use the item. With the IQ Protocol, they can rent out a wrapped expirable version of the item to another player who’ll be able to make full use of the item during the rental period. When the rental expires, the item will be automatically returned to the owner along with the rental fee.

This is a simplistic example, but hopefully demonstrative of the huge value IQ Protocol can bring to projects and NFT holders who will exploit a previously non-existent rental market and the opportunity for renters to experience the utility of NFTs they don’t own.

Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence, asking the right questions, and equipping readers with better opinions to make informed decisions.

The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company.