AMA Recap Crypto Library with Pinecone


On 23th July 2021, Pinecone conducted an AMA in the Crypto Library Community. Our guest is Jin Wang. Lots of questions as usual from the Community about Pinecone progress. The Pinecone team took part in a very interesting AMA session which included introductions, questions from twitter, and a live AMA session with the Crypto Library community. If you missed the AMA in person, read this recap for a deeper insight into Pinecone.

Let’s take a look at the most interesting points of our conversation.

Crypto Library Team : So, before we start the AMA could you please introduce yourself to our community?

Jin Wang (Pinecone) : Hello everyone, this is Jin, founder of Pinecone Finance. I have been in crypto world since 2017,and was part of the core team at Wabi Project listed on Binance. Before that, I was a business consultant worked in McKinsey and served as Secretary General of Oxford and Cambridge Alumni Society.
Crypto Library Team : What is Pinecone Finance? and how is the story behind the Pinecone Finance project creation?

Jin Wang (Pinecone) : Pinecone Finance is a Yield Optimizer Protocol on Binance Smart Chain. By combining the yield farming and the reflection mechanism of protocols like Safemoon, we offer holders dual rewards in both BNB and our native token PCT. BNB rewards comes from the performance fee generated by our single asset farming valuts, while PCT rewards come from the tranfer tax we charged for all buy, sell and transfer transactions. The idea of Pinecone was originated back in end of last year when we first got into the DeFi world. We were fancinated by the fact that we can generate sizable income by just depositing our crypto assests, thinking at least it helped generate some cash flow of our newly started venture. However soon we got disapointed as we realized a couple of issues associated with yield farming:

1. A lot of high yield promised are neither real nor sustainable. Many times the return are only in the native token of the protocol where the price fluctuates a lot, sometimes can cause huge loss of principles. Attracted by the super high APY, I personally participated in many new projects on BSc… however I ended up losing most of the capital in the end.

2. LP staking looks very attractive with super high APY, but the Impermanent loss is often greater than what we thought especially for the pairs of less established token. Secondly most of the attacks from hackers are associated with LPs.

3. The DeFi world is so new compared to the traditional financial market, to some extent the pricing of small coins is still dominated by whales and bots who can manipulate the market so easily and make huge gains at the cost of other small investors.

4. As a defi farmer myself, the no.1 question is always “is my fund safe?” If we put our money somewhere, not only do we need to make sure the project has put sufficient security mechanisms in place to prevent hackers, but also we have to trust the integrity of the project team so that they will not rug our money and run away.

As such, we decided to create a better yield optimizer which is safer, fairer, more genuine, rewarding and sustainable. The project was actualy ready to launch in May, but just before we pressed the launch button, a series of hacking incidents happened on BSC including the flash loan attack to the largest yield aggregator Pancakebunny. We decided to take a step back, to fully study and understand the potential risks associating with protocols like us. Since then we have been working hard on solutions to defend ourselves from possible hacks and economic exploits, especially flash loan attacks. To ensure every user that our goal is to create long term value rather than to make quick money and run away, I decided to 100% publicize my identity so that everyone can be rest assured that we will not steal fund and disappear. And finally we are here today.

Crypto Library Team : Could you give us some reason why we have to choose Pinecone Finance than other projects out there?

Jin Wang (Pinecone) : Fist of all, we focus only on single asset farming, offering highest possible yield while minizing risk. Currently we have Cake, BNB, BUSD, USTD, BTCB, ETH vaults and for example, the pool APY for cake is up to 300%, exclusive of our own PCT rewards, probably the highest on BSC. Secondly, PCT holders can enjoy dual rewards in both BNB & PCT. Combining the concept of yield farming and reflection token, Pinecone Token (PCT) is the first token of its kind to offer dual rewards in both BNB and the native token PCT. BNB rewards come from the Performance Fee produced by farming vaults , while PCT rewards come from the Transfer Tax charged for any buy, sell and transfer transactions. What is even better is that without any complex staking mechanism,. PCT rewards will be automatically distributed to Holders' wallets and the BNB rewards will be available for harvesting through website every 5 days. Last but not the least, our protocol is designed to be Anti Whales, Bots and Flash Loan Attackers. We noticed that there are some protocols set the Max TX limit per transaction, claiming that they are anti whales and bots but we feel it is far from sufficient as bots can complete multiple transactions in seconds, making the Max TX limit useless. Hence we also set the Max TX Limit per block to keep whales, bots and flash loan attackers away. Furthermore, We also restrict direct interaction of smart contract with our protocols from third parties to further cut off the access from hackers/bots. In a nutshell, Pinecone is safe, simple to use, high reward, and an innovative token that offers dual rewards to users.

Crypto Library Team : Please tell us about Pinecone Finance token $PCT! What are the token use-case, distribution, and where we can buy it?

Jin Wang (Pinecone) : OK, essentially Pinecone Token (PCT) is a profit sharing and governance token. As a profit sharing token, PCT is the world's first productive and reflective token offering dual rewards in both BNB and PCT. Pinecone protocol users (farmers) will also receive PCT token rewards when they deposit their assets on Pinecone. PCT has a unique dual rewards system including both Performance Fee and Transfer Tax:
  • Performance Fee
PCT Holders can earn performance fees (30% of the farming profit) produced by Pinecone vaults in BNB, distributed once in every 5 days.
Simply go to the website and click "Harvest" button to bag your earnings!
  • Transfer Tax
Every transaction (buy, sell or transfer.) of PCT will incur a transfer tax: i.e. 5% for buy transaction, 10% for sell or transfer transaction.

The transfer tax will be distributed in the following ratio:

• 40% goes back to the PCT Holders, automatically distributed to their wallets.
• 40% is automatically restored into LPs
• 10% is burnt
• 10% will go back to the Pinecone Protocol wallet as the Dao Fund

PCT also serves as a governance token to our Pinecone ecosystem. In the near future we will allow PCT Holders to receive voting rights, allowing them to decide on key governance decisions. E.g. we want the PCT fans to decide how and when the DAO fund should be used.

The Pinecone Token (PCT) has a max supply of 1,000,000,000 and will be released in a dynamic manner correlating to the earnings of Pinecone protocol. For every 1 BNB earned through the performance fee, 4,000 PCT are minted and distributed in the following way:
  • 1-2% for presale
  • 78% will be distributed to the users (farmers) of the protocol
  • 10% vesting to seed investors over the entire lifecycle (no less than 2 years)
  • 10% vesting to team and advisors over the entire lifecycle (no less than 2 years)
Crypto Library Team : Could you give us some information about your roadmap, your milestones, and also your future plans?

Jin Wang (Pinecone) : Our roadmap:
1. The immediate next step is to add vaults for more main stream and fast growing crypto assets and diversify our farming strategy. As we have the ability to generate possible the highest yield for single coins on BSc, so it is the other top players natural interest to add their coin to our vaults. Higher rewards (relatively with less risk) will also give their fans more incentive to hold and enjoy passive income. One of the problems yield optimizers often face is the limitation of market liquidity and price fluctuation of other protocols, hence we often see the rapid decrease of APY when TVL goes up, or the APY is greatly dependent on the token price of other protocols. Though we may not be able to elimate 100% of the problem, we will keep exploring and adding more farming strategies to offer users more options to diversify their risk portfolio. E.g BUSD holders can choose to deposit their BUSD in different vaults with different strategies based on the market dynamics and their risk preference etc.

2. We will also expand to Polygon chain soon as it is one of the fastest growing chain and we do see huge potentials out there before end of Q3.

3. We will launch Membership NFT before end of this year. As a token with reflective mechanism, we now charge 5% for buy, 10% for sell and transfer transaction. But we are designing a membership system to offer tiered tranfer tax rate to truly incentive Pinecone lovers and encourage loyalty. For example, all presale participants will enjoy special transfer tax rate, which is 0% for buy and transfer, and 5% for sell. There will be more carefully designed tiers coming up with various transfer tax rate, and a financial NFT structure will be built based on this membership system.

4. The slightly longer term plan for next year is to build our own lending platform as we do see there are still much room to be improved for the current lending protocols on BSC and we believe we can add value in this area.
Crypto Library Team : Smart contracts are still prone to bugs. How secure is the PINECONE FINANCE smart contract? so we believe, your project is safe and good for future investors?

Jin Wang (Pinecone) : Yes indeed. Actually this is a prompt question! I wanna share a good news here. About 1 hour ago we have received the audit report! It is all pass!!  Let me elaborate. As we are not a direct fork of any existing protocols and there are many unique codes in our smart contract, we have spent extra time and resources to ensure code security and have gone through a few rounds of discussions with our tech auditors. The final audit report was just released 1 hour ago and everyone is welcome to review the outcome of the audit. Secondly, our lead developers are top technical experts with over 20 years industry experience who insist on high standard of code security. In the process of developing our protocol, we learnt a lot of lessons from incidents happened to other DeFi projects, especially flash loan attack, hence we have set max tx limit per block, and restriction of access from third party smart contract as an anti flash loan attack measure, which is probably the first among yield optimizers. We are also implementing an ongoing monitoring technique on interacting smart contracts and websites to detect any abnormal activities in time, and will establish prompt security alert protocols to deal with any potential security issues. We also realize that for DeFi projects, comparing to tech risks, sometimes the bigger risk still lies in the purpose of key members, hence I decided to 100% publicize my identity so that everyone can be rest assured that we will not steal fund and disappear.

Crypto Library Team : Collaborations and partnerships are some of the most important cornerstones to help increase adoption. Can you tell us about your current partners, partnership plans and what to expect?

Jin Wang (Pinecone) : This is a good question. As I mentioned before, our ability to produce higher yield for any single coin on Bsc will naturally attract partnerships etc. However, We believe that in DeFi world, the adoption depends on how a project and its token can create value for both users and investors. As a yield optimizer, we can build partnership with many other DeFi protocols such as Dex and lending protocols, helping users to earn more money, and helping platforms to incentivize their token holders for staking their native tokens, e.g we will launch an alpaca vault where alpaca holders can enjoy higher APY. Naturally we will attract more partnerships based on mutual benefit. Personally I do have access to BD resources on BSc, since the last project’s coin was listed on Binance in 2017. Again, I do believe the core is how the product itself can generate benefits to users, holders and third party partnerships. Since our project is fairly new (only released yesterday for blind mining), we want to make the product robust enough before we start partnership with other players.
Crypto Library Team : What are the ways that your project generates profit / revenue to sustain your project and what is its revenue model? How can it be mutually beneficial for both the investor and your project?

Jin Wang (Pinecone) : We take 30% of the yield profit and mint the same value of PCT to users, so that users still have the same apy ( if pct price is above 1/4000 bnb then users make more money). We use the 30% yield profit to reinvest and return most of that profit to pct holders, a little portion of that will be used to buy back pct and add bnb-pct liquidity.

Crypto Library Team : Ambassadors play a very important role in every project, Do you have an ambassador program? If yes, how can I be one?

Jin Wang (Pinecone) : Yes we will have ambassadors program and you are more than welcome to openly discuss with the team to make pinecone adopted more widely. We plan to have pinecone users across the globle?

Crypto Library Team : Flash loan attacks has become very prevalent in the current DeFi space. On pinecone, how will you help to address and curb this issue of flash loan attacks?

Jin Wang (Pinecone) :Flash loan attack often happens in 1 block to attack native coins. 
  1. We have set the transaction limit per transaction so that no one can trade huge amount per transaction. 
  2. We set the tx limit per block, combined with burning mechanism so that it is not economic to achieve flash loan attack. 
  3. We have restricted the direct interaction with our smart contracts from third parties, so that only verified third party can access our code.
Crypto Library Team : I like the great variety of Pools that Pinecone currently has but I was wondering if they will include more soon? Will they at some point have a Pool that only generates PTC but in greater quantity with respect to the rest?

Jin Wang (Pinecone) : Yes we do have plans to add more vaults for other tokens, In addition, we will add more farming strategies as well, which means, if you are BUSD holder, you can choose from different vaults which offers different APY and of course, associating with different risk level. As a PCT holder, you don't need to stake PCT to receive BNB & PCT rewards, simply leave PCT in your wallet to receive PCT and BNB. So there will not be a PCT vaults, but we will add a PCT-BNB LP vaults which offers very high APY in PCT.

Crypto Library Team : One of the special features that Pinecone offers is its focus on Single Asset Farming as a way to better consider the risks associated with farming using LP tokens, even though, can you tell me why this model of farming is way better than others? Plus, how does it mitigate risks?

Jin Wang (Pinecone) : We have used very complex mechanisms to achieve higher yields for single asset. Other yield aggregator normally use one pool mechanism while we use several: 
  1. To achieve higher yields 
  2. Mitigate risks 
  3. Balance liquidity. 
Compared to LP, it was more difficult to exploit single coin farm with flash loan attacks. As to how to migrate risks, apart from adding security measures from codes such as prevent direct interaction from third parties, also multiple tactics means more backs ups, that means even if one protocol faces issues, we can immediately switch to other pools