Ergo Foundation Transparency Report 2022#
The Ergo Foundation (EF) is a non-profit foundation dedicated to advancing the adoption of Ergo. The Foundation's Treasury is sourced from a small portion of mined blocks during the first 2.5 years from Ergo's mainnet launch. This allocation amounted to 4,330,791.5 ERGs or 4.43% of the total supply.
Read more about the emission schedule or check out the whitepaper.
The Ergo Foundation is a community-driven entity focused on the following:
- Promoting non-breaking development of Ergo Platform protocol;
- Promoting the widespread adoption and use of the Ergo Platform and its native token (ERG);
- Developing the ecosystem around the Ergo Platform;
- Promoting the use of the Ergo Platform and blockchain technology for social good;
- Supporting truly decentralised infrastructure and;
- Supporting privacy as a basic human right.
Ergo Platform's primary focus is to provide an efficient and secure way to implement financial contracts, the most widely used application of blockchain technology. This focus is recognised and supported by the Ergo Foundation.
The Ergo Foundation is committed to organic and non-breaking development of the Ergo Platform protocol. The Foundation ensures that protocol changes are approved not only by miners - who express their will directly on the blockchain - but also by users and projects building on top of Ergo.
The Ergo Foundation is committed to maximising the number of valuable ecosystem developments accomplished in open-source with the least permissive licence possible.
The Foundation is also dedicated to helping with building trustless environments, smart contracts and payment frameworks for the public with privacy in mind. The Foundation believes that the Treasury should be distributed mainly to the community, including freelancers, hackers, experts and enthusiasts.
Ergo Foundation Members#
Alexander Chepurnoy (kushti) is an Ergo Foundation board member and director. He has been active in blockchain since 2011, has written over twenty academic papers, and has more than fifteen years of experience in software development. Before co-founding Ergo, he was also a co-founder of smartcontract.com (now Chainlink), a core developer at NXT, and one of the first employees at IOHK, where he was a Research Fellow and Team Scorex Manager.
Alexander Slesarenko (morphic) is an (honourary) Ergo Foundation board member and graduate of Applied Mathematics from Udmurt State University. He has more than 25 years of experience in software development as a team leader, software architect, engineer and researcher, focusing mainly on programming language design and implementation. He is a Blockchain Core Developer and the Lead Developer of ErgoScript Compiler, Sigmastate interpreter, and Appkit at Ergo. He was also an Expert Team Leader at Huawei Research Lab, focusing on high-performance computing and big data processing.
Justin Simpson is an Ergo Foundation board member. With over 13 years of Investment Banking experience, Justin has been involved with crypto and Bitcoin since 2013. Now exclusively focused on crypto, he is passionate about open, permissionless and decentralised blockchain platforms.
Joseph Armeanio is an Ergo Foundation board member and director. Joseph has been involved in crypto on the investment side since 2013 and was a partner CIO at Big Bear Investments. Joseph has been on the board of the Universal Education Foundation, a 501(c)3 organisation, since 2008. He brings a passion for counter-economic frameworks and tools for social good. His role as a business developer is creating partnerships in the crypto industry, educational partnerships, and research opportunities while promoting the adoption of Ergo tooling in the public and non-profit sectors.
Mark Glasgow is an Ergo Foundation board member and director who works across various roles in Ergo, including community management and developer education. As a Computing Science graduate passionate about improving inclusive systems, he is also the Technical Director for Disabled Students UK CIC, a non-profit named one of the most influential disability-led organisations in the UK.
Mohammad Hasan Samadani (mhs_sam) is an (honourary) Ergo Foundation board member. He has a PhD in computer science and over 12 years of experience in security and software development as a product owner, researcher, and team leader. He became an Ergo Foundation Board Member in 2020 after outstanding contributions to developing the Ergo mining infrastructure, Stratum server, and ergopool (smart contract-based pool to bypass pool resistance of Autolykos v1).
Ergo Foundation Officers
Alison Robson (anon_br) is a software engineer passionate about facilitating crypto adoption through enhanced user experience. You will find him helping out in the Portuguese community and wallet chats while building tools to help the user experience, such as the Paper Wallet and Ledger.
Anastasiia Sidorova is the Ergo Foundation Treasurer. She graduated with a degree in "Mathematical methods in Economics" and worked as a banking analyst for four years before pivoting into hospitality; however, she has always been passionate about Analytics and Accounting.
Warwick (CW) is the Marketing Officer for the Ergo Foundation. He was an active community member and was originally appointed Ergo Social Media Manager to build and maintain community engagement before joining the Foundation. He has over 13 years of experience in business and property investment and has been involved in crypto since 2015.
Ergo Foundation Advisors
Daniel Friedman is a Strategic Advisor to the Ergo Foundation. He started his professional career as a developer for a San Francisco-based software company, 2Bridge. After moving to Japan, he became CTO of an Osaka-based software development firm specialising in Augmented Reality mobile applications. He is a strategic advisor to the Ergo Foundation Board and a business developer for IOHK.
- Jan 7, Introducing the Ergo Foundation, a community-driven entity
2020 Key Achievements
- Roadmap released, Discord started
- Partnership with Emurgo and extensive joint research brought us Oracle Pools, SigmaUSD, and the headless dApp framework.
- Listing on CoinEx, Gate.io.
- Joseph Armeanio joins the Ergo Foundation.
- Mark Glasgow joins the Ergo Foundation, replacing Martin S.
- On Nov 1, IOHK Business Developer Daniel Friedman was appointed Advisor to Ergo Foundation Board.
- On Dec 19, The Ergo Foundation incorporates in Singapore.
2021 Key Achievements
- Autolykos v2 Hard-Fork opened Ergo to mining pools, improved liquidity and brought many new users into the ecosystem.
- Partnership with Jinse and China marketing efforts that grew the Chinese community to >10k members.
- Listing on KuCoin, Changelly.
- UTXO Alliance formed.
- EIP-27 Discussions start.
- The EF hired wallet developers to alleviate users' lack of usable wallet options.
- Obtained a written US Legal Opinion that determines Ergo is unlikely to be classified as a security.
- Our first summits and two hackathons.
- Incorporated the first legal entity in Singapore to meet the necessity of formal arrangements now required in the industry.
- Warwick (CW), Stacie, and Alison Robson join the Ergo Foundation as Officers to help expand the EF to the wider community.
- Created and distributed a pitch deck highlighting the 'open source economy' rapidly developing on Ergo and opportunities that present for private investors.
2022 Key Achievements
- Listings on Indodax and Huobi, Bittrue.
- Parallel asset launches on Flux.
- EIP-27 re-emission soft-fork boosting confidence in Ergo and ensuring long-term network security.
- EIP-37 (Difficulty retargeting hard fork).
- Two summits and three hackathons with 45 entries total.
- The redesign & relaunch of ergoplatform.org and sigmaverse.io
- Node V5 JITC.
- Support for protocol research, development of the reference client, alternative clients (if needed), libraries, and developer tooling.
- Improving market access by getting Ergo on centralised exchanges, hardware wallets, bridges, or other means.
- Creating materials to educate developers and users directly or funding their creation through third parties from within the community.
The Foundation aims to promote the adoption of Ergo. While its operations in this area are conservative, it does fund a select few roles in linear marketing for areas not currently met by the community.
The current paid roles within marketing consist of
- Youtube Manager,
- Writers (via paid bounties),
- Chinese Marketing Manager,
- General Marketing Manager,
- Branding Advisor.
Their efforts ensure ample information is available about ongoing developments on Ergo via blog posts and social media, as well as the promoting and operating of various marketing events, such as Ergo Summit and ErgoHack.
Over the past 23 years, network effects have accounted for approximately 70% of the value creation in tech, and this figure is likely higher for a third-generation grassroots blockchain. While the EF strives to lay the foundations and help ignite community marketing and, subsequently, compounding growth, beyond this, the marketing and promotion of Ergo rest principally on the shoulders of the community. (Get Involved!)
The EF does not commonly pay for influencers or ad campaigns and does its best to restrict frivolous spending, which is deemed not cost-effective (i.e. airdrops, giveaways).
The marketing department highlights projects building in the ecosystem. However, these initiatives do not constitute an endorsement from the Ergo Foundation. The Foundation will always use best practices to vet projects and ensure that there is no risk for potential users. Still, in the early stages of development, it is often unknowable if anything of substance will ultimately be produced.
There is no official 'core' team. While some people working on Ergo day-to-day are salaried, many are volunteers, collecting bounties or working on their own projects on top of Ergo. Core Marketing can include keen community members alongside salaried workers. Similarly, anyone with significant contributions to core repositories can be invited to Core Development chats without being a salaried employee.
The Ergo Foundation members and officers discuss proposals before putting them to a formal vote on the ergoforum, passed with a majority of voting members.
Before voting on spending treasury funds, we will approach the Good Whale Fund, DarkFund0, or suggest creating a Raffle if appropriate.
Foundation votes this year have mostly been related to exchanges, market-makers, banks, and grant requests.
- (Dec) MrStahlfelge contract renewal
- (Dec) Expenses reduction plan
- (Sep) Miner subsidise
- (Sep) Graphics support
- (Sep) CW/Allision/Stacie -> EF Officers
- (Sep) [exchange related - details under NDA]
- (Aug) [exchange related - details under NDA]
- (Aug) Market Maker contract
- (Aug) [exchange related - details under NDA]
- (May) GuapSwap Grant Request
- (Apr) Bridge Funding
- (Apr) Marketing Proposal
- (Apr) DeCo Funding
- (Mar) [exchange related - details under NDA]
- (Feb) [exchange related - details under NDA]
- (Feb) Renew development contract with morphic
- (Feb) Vote for Continued Cooperation with Chinese publisher
- (Jan) ErgoDex Funding
- (Jan) Funding for website visual direction.
- (Jan) Bank Account & Crypto custody account
- (Jan) Education Grant
Relationship to Development#
Relationships between the Foundation and development only exist when there is a demand not met by the community, and this role is diminishing over time. Some EF members also have developer positions, and while their development activities are not part of their foundation involvement, they are listed here for transparency.
- Kushti manages any bounties relating to the reference client repository and keeps a watch over sigma-rust development and any other high-level development and research not covered below.
- Morphic manages any JVM-related developers (Wallet devs, Scala devs, etc.) and the sigmastate-interpreter.
- mhs_sam manages a team of graduates and PhD students who have produced Ergo Raffle, ErgoWell, Minotaur-wallet, and Rosen Bridge.
The average day-to-day for foundation members in 2022 mostly consisted of the continued effort of getting a bank account, incorporation, reincorporation, dealing with exchanges, market-makers and our internal accounting & budgeting. As well as overseeing the following activities:
- Salaries for contracted developers.
- Paying 'bounties' set on core repositories.
- Core protocol development.
- Wallet development.
- Exchange listings.
- Paying third parties for admin and miscellaneous expenses.
- Partnership-related expenses.
- Hackathon and summit-related expenses.
- Marketing and promotion-related costs.
The Ergo Foundation does not review or endorse any code specifically. Code reviews are sometimes performed by Ergo Foundation members (due to their expertise in this area), but this does not constitute an endorsement, and users should be aware of their assumptions when interacting with experimental DeFi protocols. (See - Know Your Assumptions)
One of the primary reasons the Ergo Foundation exists is to act as a legal entity to deal with centralised exchanges. Since genesis, Ergo has been listed on several exchanges, including three Tier 1 exchanges (KuCoin, gate.io, Huobi).
A tier 1 exchange is defined as an exchange that appears in the top 10 of exchange ranking sites such as defillama.com/cexs
Exchange discussions and details are always under Non-Disclosure Agreement ('NDA'). To clear up some misconceptions, we can release the following details.
- Listings are usually expensive.
- Exchanges do not buy liquidity or any of the native tokens or coins on the open market generally. Instead, we use a third-party Market Maker ('MM'), which has access to an API with a preallocated amount of ERG and USDT it uses to create a liquid market. The MM can only buy/sell and lacks the credentials to withdraw assets.
- All major exchanges have been approached, and the EF has not rejected any exchanges due to them being too expensive.
‘But why is coin x listed?’
Possible reasons include the following:
- They are a native asset on an already integrated chain (i.e., ERC20, Cosmos, etc.). Therefore, very little work is required to add and maintain a new chain here.
- For Layer 1's:
- Have venture-capitalist funding and connections, which they can utilise to get listed early.
- Have a smaller public distribution than ERG and can bargain with exchanges for a percentage of their total supply.
- Are less complex than Ergo, with no native asset support, no need to worry about UTXO dust, etc.
- They may be older than Ergo and were listed during the last bear.
- Even though they are a unique Layer-1, they may only have a wrapped asset (i.e., on BSC) listed.
You can follow along on our Weekly AMAs to catch any hints regarding the current exchange listing efforts.
The initial allocation was 4,330,776 ERG, or 4.43% of the total supply.
You can find the Ergo Foundation treasury and current balance on-chain.
The Ergo Foundation has spent the majority of the Treasury for the benefit of the protocol and community. Funds were even spent when the ERG price was low, as it was necessary to bootstrap the thriving community Ergo now boasts.
Salaries account for 70-90% of spending in most months, with the remainder in order of amounts usually being Bounties and Grants, Marketing expenses, and Administrative/General expenses. However, big one-off expenses, mainly exchange listings, lower this percentage substantially when looking at a longer time frame.
Twenty people receive monthly salaries or rewards for their contributions. The vast majority (16/20) were promoted from within the community after exceptional contributions.
A monthly breakdown of long-term salary commitments is as follows:
- EF Members, Advisors and Officers: 6,320 ERG
- Marketing: 1,500 ERG + 7,000 USD
- Development: 5,600 ERG + 10,000 USD.
Not included in the Salary section above are short-term commitments such as funding for Spectrum and Rosen in 2022. Full details will be given at a later date.
Outgoings are reviewed consistently depending on price and more formally every 60-90 days. The EF reduced their outgoings by ~15% at the end of 2022 in response to market conditions.
Please note that the Foundation's primary role is to bootstrap the ecosystem. There are funds for at least another 2-3 years, excluding development financiers and token allocations from ecosystem projects we have supported in the pipeline.
The Ergo Foundations Future#
The Foundation's role was to bootstrap the Ergo ecosystem in the initial years and build up the infrastructure required for adoption, solving the 'hard side' of Ergo and leading to the vibrant ecosystem we see today with:
- 300+ community devs
- 100+ Active contributors in the weekly dev chats
- 45 Hackathon participants in 2022 alone.
- 140+ projects are developing on Ergo.
- Stack consistently ranks Ergo as one of the highest in developer activity.
As time goes on, the importance of the EF should diminish and shift towards the community entirely. This is essential for both the strength of the ecosystem and ensuring that Ergo is not classified as a security.
The Sigmanauts Programme was launched at the start of 2022 to fill this need and build the required structures to pass the baton to the community.
The Ergo Foundation will likely exist for some time yet, and it may exist in some form for perpetuity as a legal entity to take counterparty risk when dealing with centralised actors.
Alternatively, it could continue to exist as a research branch to encourage the development of applications and protocols which adhere to its original goals of supporting blockchain technology for social good, truly decentralised infrastructure and privacy as a basic human right.
The best course of action is to grind and build infrastructure for when liquidity leaks or flees existing systems. Focus on user security assumptions, privacy and longer-term non-fragility.
Not something we can necessarily force, time or predict, but we can position ourselves.