Written interviews with DeFi projects on the Cardano blockchain.
Link to post on my Medium
This week’s Cardano DeFi project proposes a stablecoin-as-a-service framework to create fiat-independent tracercoins: Cogito Protocol.
The previous guest was a cross-chain, portfolio-based decentralized exchange (DEX) that operates on multiple blockchains.
This initiative is a point of reference for Decentralized Finance (DeFi) on Cardano and every week or two we will invite someone to answer some questions and give us an update directly from within the Cardano community.
Hey, awesome to have you here. Please introduce your team, where are you from, what are your backgrounds?
Hi, thanks for having us. My name is Cloris Chen, and I’m a CEO at Cogito Protocol, a DeFi-oriented spin-off from SingularityNET. We are creating alternative stablecoins, called tracercoins, that are AI-powered and fiat-independent.
The founding team behind Cogito Protocol is a combination of expertise within finance, economics, data science, and Artificial Intelligence. The idea behind tracercoins was initiated by Ben Goertzel, and with our collective experience, we are able to tackle regulatory, operational, and security risks.
What is Cogito Protocol? What problems does it solve? Can you give examples of who might use your stablecoin-as-a-service” framework?
Cogito Protocol is a project that proposes a stablecoin-as-a-service framework to create fiat-independent tracercoins. Many of the early cryptocurrencies were created with the goal of providing people with a reliable store of value and payment mechanism that wouldn’t be reliant on centralized fiat currencies. This didn’t work out well because of the hyper volatility.
Stablecoins emerged as a somewhat solution to the problem by creating assets pegged to fiat currencies. Now stablecoins are the primary payment method in crypto, accounting for 16% of total market cap and 78% of daily transaction volume.
The problems with those stablecoins are the following:
regulatory risk: every major government is explicitly targeting stablecoins, with the goal of enacting strict regulations on any stablecoin that matches the value of fiat currencies,
they are highly centralized in nature,
almost all are pegged to USD and are directly impacted by inflation.
This leads to what Cogito is doing — the “stablecoin-as-a-service” framework that utilises AI techniques on blockchain to create new financial instruments (we call “tracercoins”) that achieve stability without being pegged to FIAT. This framework can be used by anyone who wants a payment system that tracks metrics relevant to them, e.g., tracking the company’s development as their system grows.
Your partners include SingularityNET, Djed and Nunet. Can you briefly tell us what these projects do and expand on how these partnerships will work?
As a spin-off from SingularityNET, we use their AI capabilities and know-how to build our algorithms in the Protocol. With the expertise of Ben Goertzel, among many other talented people on the team, we can provide top-notch quality stabilization mechanisms capable of withstanding many market scenarios.
NuNet, similarly to us, is also a spin-off that offers decentralized computing. With the priority of decentralized Protocol, we are looking into ways to improve our qualities with NuNet.
Partnership with COTI Network was an interesting idea because we saw the reliability needed for our treasury. Investing in stablecoins to have the Protocol collateralized is one thing, but the other is to DYOR and choose the assets wisely.
The Artificial Intelligence sector is growing at an incredible pace, what are you most excited about? And why is blockchain important for AI?
I’d say that I’m most excited about the quality of projects that we can see emerging in DeFi. AI is a tool to react to market changes faster and more accurately than a human is able to. It is a very valuable risk measure. With Cogito Protocol, we use AI to make our Protocol secure, efficient, and able to react adequately to a given market scenario. This includes using AI tools for:
Fraud detection. The permissionless nature of Crypto makes it vulnerable to market manipulation and theft. An AI algorithm trained to detect anomalies and patterns in transactions could help to provide an early warning.
Decentralized autonomous agents. Decentralized autonomous agents are ultimately AI-powered fund managers. The agents are coded programs designed to make decisions faster and reduce human errors, therefore can play a critical role in treasury management for many projects.
Risk management. AI-powered natural language processing could get a quick sense of public sentiment towards certain events if it’s fed the right streams of data, like Twitter posts and news articles. This can be used to alert us on negative market movement allowing for prompt reaction.
Artificial Intelligence is still relatively new in decentralized finance, but at the end of the day, this combo creates a potential for community-driven and self-sufficient products.
Amazing. Any closing thoughts? Where can people learn more about Cogito Protocol?
Our tracercoins are not traditional stablecoins. Because of their hybrid nature, we can solve problems with value storage and payments that crypto is facing. With each new concept, there is a big factor concentrated on education, and that’s exactly what we aim to do.
Anybody interested in tracercoins or topics related to stablecoins, DeFi, and AI would find something interesting on our Twitter, Telegram, Discord, and LinkedIn. SingularityNET is sharing information about our development as well.
Disclaimer: The opinions and views of the people interviewed are their own and do not necessarily reflect those of the Cardano Foundation or IOG. Moreover, this content is for educational purposes, it doesn’t constitute financial advice.