i am implementing group chat on XMPP ejabberd server so what is the best option? Pubsub or MUC? MUC has only persistent groups which means as soon as the user goes offline the user leaves the group. Or instead i can implement using pubsub which does not have the functionality like presence and other things, so i would have to build them myself. so whats my best option?

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You can implement Whatsapp like chatroom on top of MUC room. You would benefit from Message Archive support for MUC that will allow you to bypass the presence limitation by querying the history.