AMA with CEO Dmitry Gerasimov: June 15, 2023

Hello! Welcome to our AMA Stream! My name is Dmitry Gerasimov, CEO of Demlabs and the Cellframe project.

I will update you on development progress for all our projects, and about the life of the company. Then I will answer your questions.

Here's what we have for today

• The June 1st exploit
• The CELL staking program
• The current status of our networks (minkowski, mileena, backbone and others)
• The new version of the Explorer Site 
• News about Cellframe Dashboard and Cellframe Wallet
• News from the KelVPN team
• Progress on the mainnet roadmap. Updating and expanding functionality. The Node Release candidate.
• The marketing roadmap 
• Marketing wallet and keys

June 1 Exploit

On the night of June 1st, there was an exploitation of a vulnerability as a result of which 245 BNB were taken out from our LP pool for all tokens. We already described what happened in our social networks: a flash loan attack was used to withdraw the funds.

On PancakeSwap CELL LP pairs with old and new tokens were connected by a migration contract. The liquidity in the old token was very low, which made it possible to manipulate the price using a flash loan.

The smart contract did not take into account the liquidity spread during the migration process. Because our users are actively migrating to the new token (for which we say thank you) the total amount of funds in the old pool was limited. This fact made it so that the amount of funds that could be withdrawn in this way was not critically large. This is the price of experience. That's how we see it.

To give more details I will talk about the events of June 1st, and how we responded.

Monitoring the whole ecosystem, we were alerted to an event that was being characterized as a hack. We began investigating what had happened in less than two hours after it happened.

We blocked the migration process on all sites immediately and smart contracts as well. We withdrew all old-token liquidity from the migration smart contract. We also blocked the staking of pairs with the old token. After the situation became clear, we turned single-token migration back on.

Conclusion: the attack resulted from a vulnerability in LP pair migration, only at this point. We have stopped this migration process, so another attack like this is impossible. Don`t worry. We are now finishing the script for parsing wallets that contain the old token and preparing a token airdrop. This will all happen automatically, no actions are needed from users.

CELL Staking Program

Let's move to the next topic. We have completed development of the CELL staking program. All planned types of staking are now available on the Cellframe staking site: https://stake.cellframe.net/

• Single staking of CELL tokens on the Cellframe native network.
• CELL LP staking on Uniswap on the Ethereum network on both V2 and V3 protocols. We also have V2 staking with automatic migration to V3.
  
• CELL LP staking on PancakeSwap on the BSC network. On V3 we have staking for all pairs, but on V2 we have only CELL/BNB. Please note that LP staking on BSC is available only for the new smart contract.
  

‌You can read more about the staking program and the way rewards are calculated in our article Tokenomics 2.0:

https://cellframe.net/blog/Cellframe-Tokenomics/

‌In short, the total rewards for the first year of staking are 3M CELL, and 1.5M CELL the following year, tentatively. The final decision will be made by a vote of token holders. Don’t wait - this year is the best offer in terms of profitability, and you still have time!

State of Networks

‌Now let's talk about the current state of our networks. Let me remind you that we have several testnets - Minkowski, Mileena, Subzero and a few more, and only one main network - Backbone. This will be default network after the mainnet release.

In recent weeks, we have:

• Restored the work of the Minkowski network. Now transaction are being processed memory consumption is reduced.
• In the test networks, we used Minkowski and Mileena to test the token update functionality. We are finalizing it, and then will put it on the Backbone network.
• We also executed a forkless update for the CELL token - this demonstrates our ability to manage the token on our platform. This feature will upgrade the CELL token to improve the security and resiliency of the bridge.

Explorer Site

‌Our next topic is one we haven’t covered in our AMA sessions in a long time - our Explorer site - Blockchain Explorer.

Earlier, we did UX research for the site, and planned to redesign it, but we postponed it because we were actively finishing the staking program. Now we are working on the Explorer site again (soon, I think, we will return to the staking site also to improve its UX).

Now the developers are refactoring the Explorer network and adding new functionality. This will make it easier to support, scale, and debug it in the future.

Cellframe Dashboard. Refactoring

We recently did a UX research of this app with our team and community. Based on the results, we redesigned and expanded the functionality of the Wallet tab and are planning changes in the Settings tab.

We also started a global refactoring of the application interface. This must be done now, otherwise it will be difficult to implement some functions later.

We are also planning to move the logic from JS to C++. This will improve performance and make the application more responsive. So now the team is working on refactoring the interface, in parallel with adding new functionality to improve the UX.

All refactoring decisions applied in the Cellframe Dashboard will be carried over and used in the Cellframe Wallet app as well. We will talk more about the Wallet app later.

Cellframe Wallet for Android

‌In previous AMAs, we discussed the work we were doing to port Cellframe Wallet for Android. However, at the beginning of the year, we shifted the focus to mainnet launch and maintaining the master version.

Now that we are close to the mainnet launch (I will discuss mainnet later in the show), we started working on this again. So, now our backend team has successfully ported Cellframe Node and Wallet to Android. It's running, it's working. I used them personally. Now the app is being debugged and tested. Frontend work is next. After that, we plan to launch community beta testing for the app.

Cellframe Beta Testers group: https://t.me/cellframebetatest

We will announce the launch of testing separately. The Wallet app will soon be available on Android.

KelVPN News

‌Next in line is news from the KelVPN team. As a reminder, KelVPN, our decentralized blockchain VPN service, is a parachain within the Cellframe ecosystem.

The team has prepared a new, very important build of the application. It contains important changes that are necessary for the transition to the KelVPN mainnet.

What's included in the build: In the previous version, the team implemented the ability to selectively exclude applications from routing. Now this functionality has been expanded - it will be possible, on the contrary, to select only those applications that require a VPN, and add them to the routing.

This feature will optimize traffic and battery when using decentralized mode. In addition, now you do not need to restart the application to make changes to the routing. You only need to restart the VPN connection.

‌We are also continuing to test the KelVPN application. You can test KelVPN from your region of residence and receive a free key for one month. You need to complete the task and send the results.

Post about testing the KelVPN App: https://t.me/kelvpndev/38

KelVPN Testing

The KelVPN team is also finalizing the pairing mode with Cellframe Wallet. This mode will make the VPN service truly decentralized. Users will be able to choose the mode and the server they want to use. They can pay directly with KEL token for VPN usage, and also select the amount of traffic or time they need. But most importantly, they can pay with KEL tokens. And providers will receive a commission for their services.

The team will begin debugging and alpha testing soon, then we will launch beta testing with community participation. At that point, it will be possible to test the new functionality both as a user and as a provider. For your help in testing, you will receive a license key

KelVPN Beta Testers group: https://t.me/kelvpnbetatest

KelVPN Staking

‌And one more important news item from KelVPN: the team has completed the implementation of the staking program! Several types of staking are now available on the KEL staking site: https://stake.kelvpn.com/

Single KEL staking on the CF-20 native network. To transfer tokens to the native network, use the Cellframe bridge. In the first year, 4M KEL will be allocated for single staking.

KEL LP staking on Uniswap on the Ethereum network on the V3 protocol for all pairs. The total rewards for the first year of LP staking will be 5M KEL.

KEL LP staking on PancakeSwap in the BSC network on V2 and V3 protocols, for all pairs. However, the team recommends using v3. The total rewards for the first year of LP staking will be 3M KEL.

‌Funds for rewards during the first year of staking will be taken from the team's reserves, and after that - from network service fees. No further KEL emissions are planned.

Please note that LP staking is only available for KEL tokens on the new smart contracts on Ethereum and BSC.

And one more thing: for the CELL/KEL pair, the team has added an additional bonus: for staking this pair, you get both mCELL and mKEL. Now you need 10 mCELL to run a Cellframe masternode, and 100 mKEL to run a KelVPN masternode. If you plan to run nodes on both Cellframe and KelVPN, staking this pair will be very beneficial for you.

Video instruction on CELL staking: https://www.youtube.com/watch?v=2HC_LcRnfOk&t=19s

Video instruction on KEL staking: https://www.youtube.com/watch?v=_08-pl5KKhE

Cellframe Mainnet

‌And now let's move on to the main topic of all our streams - progress on the Cellframe mainnet roadmap. Again, I will say that planning the development process can be difficult, so the roadmap is always adjusted.

But, in any case, the development process continues. To show our progress visually, we now show you a table of all the commits in the gitlab.

And now you can see the roadmap as well. You can see there's just a little left. It is mostly the same it was last AMA. And later I will list more points detailing what is left for succes.

‌As we prepare for the mainnet launch, we continue to expand and refine the functionality of the release candidate node.

Here’s what we’ve done recently:

• We implemented and debugged a new staking mechanism. It allows you to make one multi-channel staking transaction instead of two. This reduces the fees by half, and makes staking fail-safe.
• We implemented a hash table with a list of hashes of all datums. The table allows us to list all datums, keep track of their status on the chain and ledger, and retrieve the return code of each datum.
• We moved the setting of the validator commission size from the config to the order. This will eliminate the discrepancy between the information specified in the order and the config.
• ‌We updated the DNS balancer mechanism, which will allow us to distribute node connections across the network to spread the load evenly.
• We implemented a feature for protected groups in GDB. Now only certain specific nodes have the right to remove entries from the mempool.

And, of course, a few bugs have been fixed. For example:

• We restored the flow of transactions in the Raiden network.
• We found and fixed all node crashes and memory corruption.

Details on all the new features and improvements will be published separately.

‌We have just a few things left to do before mainnet:

• Add ban lists by IP or node address to zerochain.
• Implement security mechanisms - refine the spam filter for node addresses.
• Port all developments from the master to RC.
• Add a release candidate version of the node to the dashboard.
• Conduct an internal security audit.
• Adjust the data transfer rate to the data processing rate.

And also fix a few bugs: blocking the GDB context; crashing on the GDB notifier and transaction slowdowns; improving synchronization.

Marketing Roadmap

‌We saw the community's concern about the plans for the project's marketing. For now, we keep you updated through social networks and regular AMA sessions.

After the launch of the mainnet, many activities and new directions are planned in our marketing. The priority will be building of the Cellframe developer community, for which workshops on service development, meetups and hackathons will be organized. We will promote and grow this community, constantly preparing new activities and educational events.

The largest of the upcoming events is the International Cryptography Olympiad, which we wrote about in more detail earlier.

https://nsucrypto.nsu.ru/

This year, we are planning for:

- AMA session about the launch of the main network

- Promotion of new platform features development program for other communities

- New partnerships

- Professional events

- Restart of the ambassador program

- A series of cartoons with the main character chipmunk

- Listing on new CEXs

In early 2024, we will launch a new merch line, and establish a system of rewards for community members and ambassadors.

‌Marketing Wallet

Previously, our project had partners who did a lot of important things for the project in the beginning. They put up initial liquidity for BSC and Uniswap. They helped to run our IDO and they were running marketing in the first year. Over the last year they stopped activities in our project and, based on the agreement, in order to terminate the partnership we and they had to fulfill certain conditions, and this was done correctly.

The partners received 2k bnb from the marketing wallet (to which at that time, unfortunately, we did not have direct access anyway), and we received full ownership and management of the project and its resources, including the keys to the smart contract of our tokens, the smart contract of bridges, wallet management with reserves of tokens on BSC and, most importantly, initial liquidity on PancakeSwap. We could not transfer it from the old SC to the new one for a long time until we had all the keys.

‌Now we directly collect all commissions ourselves: from the bridge, from trading on Pancake Swap, and in the near future from trading with Cellframe DEX, VPN and other decentralized services.

Right now almost all of these funds are sent to development in order to complete work on the mainnet faster. After its launch they will go back to marketing. For example, the International Crypto Olympiad is funded from the fees that we are collecting from PancakeSwap.

Therefore, this event is very significant for us, we have included it in the calendar of our corporate holidays and now we plan to celebrate it every year. April 12, Cosmonautics Day.

‌And now we will answer the most frequent and interesting questions that you sent.

Questions:

Are there any plans for a Cellframe lending protocol? What is your general opinion on such functionality?

I welcome such a protocol but I don't think of this mode as something that we need to do by ourselves. I prefer to see somebody from the community or some partnerships from other projects that will join our ecosystem to do it based on our platform. We welcome such functionality, such startups.

According to Tokenomics 2.0, token emission for the staking program has already started. How does it affect overall circulating supply?

New supply appears in native network and until it's bridged back to another, it doesn't affect circulating supply. But if a bridge is connected, of course we will see some effects. Anyay we are paying attention to this. And I think this increase in circulation will be covered by new token locks for masternodes as well.

Does the KelVPN team plan to migrate liquidity from all BSC and ETH contracts to the new one like Cellframe did?

Yes, the team just needs to finish a few things. I think in the next few days it will be done.

Recently you announced the emission of tokens for development support of the Cellframe project. How will these tokens be sold?

Slowly, very slowly. Now we are planning to sell it every two weeks when we pay salaries because we don't need anything except salaries.

Question about dedicated BNB: whose liquidity was it? How does it affect holders of old CELL and old LP-CELL-BNB tokens?

All effects happened when the hack happened, because they sold these tokens and dropped the price a little. Now nothing can affect it. So, don`t worry, everything has already happened.

What has been done by the Cellframe team to prevent such an exploit from happening again?

‌We have already talked about this today. I can also add that we will take into account the volatility of tokens and their pools in further development in order to exclude the possibility of a repeat exploit.

Is there a way to make sure that post-quantum encryption works, since quantum computers are a long way from being available to the public?

Yes, it's simple math because any post-quantum algorithms require a lot of memory to store the implemented calculations results. When you need to build any quantum computer you need to store these intermediate results as well and you will need billions of qubits to store them in memory and in quantum superposition states. So, I think post quantum encryption will be safe enough in the next 100 years.

After that we`ll need to switch from post quantum to just quantum encryption. But for quantum encryption we need special quantum connections, and while we still have no quantum internet, with the normal Internet we should use post-quantum encryption for the nearest 100 years.

Are there plans to extend in China (Hong Kong), Indian & Asian markets in general?

Our company has registration in Hong Kong. So of course we have plans to expand to Asian markets. We are interested a lot in China, India, Vietnam, Thailand, Indonesia, Malaysia and others.

The longer the term of LP staking, the more profitable it is to participate in auctions. And will users who migrate tokens from V2 to V3 retain this advantage?

Yes, this advantage will stay with you forever after migration.

About KelVPN traffic providers. Will they be held liable if a user commits illegal activities on the Internet?

Unfortunately it depends on the laws in your country. Most countries do this with exceptions. So it's better to consult with your lawyer. Really it depends on different countries.

These were all questions that you have sent previously. Now let's see what happens in the group chat on YouTube.

Has CELL hit all-time high or it can go more than that?

Everything is possible. I don't think that ETH will be on top for all time. We need to beat it.

When will the bidirectional bridge open?

We`ll open the bidirectional bridge after a mainnet release. We need to do a security audit to close all the holes. Also I think we`ll make some exceptions for the bidirectional bridges. Maybe for verifiers we'll open it before, or we`ll start to open it step by step. It depends on the results of the security audit. Anyway, it will be our next big milestone.

What is the main reason for transferring 2000 BNB from the marketing wallet to your former partner?

As I said before, we had no control over this. If we had the keys, the situation would be different.

So since 2000 BNB has been used, is there any plan to list on new CEX at mainnet launch? because I don't think we will have more coverage if we don't list on a top tier CEX.

We have other sources for funds. As I said before we have other business. Anyway, we still haven't used all our team emission. We also could use it for listings if you have any good proposals. Anyway I think first we need to launch the mainnet. A lot of things will be different after we launch mainnet and after we launch the bidirectional bridge. These two things are very important. After that listing on the CEX will be our first goal, on a good CEX I mean.

Cellframe DEX is the next PacakeSwap from Russia?

No, it's a different one. Cellframe DEX is a limit-orders-based decentralized exchange. It differs from AMM exchanges like PancakeSwap or UniSwap.

Can you work with Vitalik Buterin?

Anyway it's a good idea. I am open for any collaborations, if he is open as well.

Okay, that was all the questions. We appreciate them a lot. Thank you for all your time. See you next time! Goodbye!