When an individual or team come(s) up with an innovative idea, often the first source of funding they turn to is in the form of a grant. Grants in the blockchain ecosystem are usually milestone-driven and issued by either foundations or patron organisations. Recently though, there has been a new approach to promote ecosystem development. Free TON, a blockchain with roots stemming from the Telegram Open Network community and a live instantiation of the Telegram Open Network protocol, has focused on endorsing ‘permissionless innovation’ within its ecosystem. Free TON has been using decentralised contests as opposed to issuing grants to reward those that are making contributions to its network. Whilst it is still early days, this innovative rewarding mechanism used by Free TON could be a secret ingredient that other blockchains could adopt, to assist them to foster faster innovation and community growth within their own ecosystem.
When it comes to fundraising, grants are often a good place to start. Grants are distributed to individuals or teams with no expectation of return from grantors (e.g. there is no surrendering of equity or requirement to pay back the principle and/or interest in the future). There is usually immense competition to receive grant money as there are limited amounts of funds available to be distributed by grantors and receiving funds without needing to make a return on the original investment is a highly lucrative prospect for grantees.
In blockchain, grants are generally issued on a milestone basis to ensure the grantor’s funds are being used appropriately. If an individual or team shares the same vision as a foundation or patron organisation, they can request funds from them to bootstrap their project. Once both grantor and grantee are aligned, a grant ensues and the grantee begins work on reaching deliverables specified in their grant application.
There are two typical types of grants a team can apply for in the cryptocurrency ecosystem: foundation grants and ecosystem grants.
Foundation grants in the blockchain industry are given by non-profit organisations dedicated to supporting growth within their own ecosystem. A longstanding foundation is the Ethereum Foundation, an organisation committed to fostering Ethereum’s research, development and community. In February, the Ethereum Foundation announced an allocation of more than $1M across 25 grants to make the Ethereum staking experience easier, safer, and more secure.
Ecosystem grants are grants from patron organisations [1], meant for supporting blockchain development. Ecosystem grants come from organisations that have an interest in developing an ecosystem for the benefit of their organisation, rather than the benefit of the blockchain itself. For example, Huobi is a patron organisation that has recently announced a $10m fund for Polkadot ecosystem grants. Patron organisations are prepared to disperse grants to ecosystems (such as Polkadot in this example) because the development of the ecosystem brings their organisation more business.
Non-repayable funds have traditionally been dispersed by foundations and patron organisations in the form of grants to encourage development of software that helps grow an ecosystem, often specifically focused on applications and tools that might be hard to monetise in a different way.
Recently an argument has been made by Lane Rettig on grants:
Grants do not make the most of one of blockchain’s core properties, permissionless innovation as grants are given first to people we already know and trust, then to people who are like us.
In turn, this leads to conflicts of interest from grantors and there is a lack of transparency over how biases affect decision processes to issue grants. For this reason, Free TON has introduced a novel way to disperse non-repayable funds in order to develop their blockchain in a more decentralised manner, using contests to reward contributions rather than grants.
Free TON is a blockchain derived from the original Telegram Open Network protocol. Telegram Open Network itself was halted by the SEC for being considered a security in 2020. However, the underlying code of TON was already open-sourced and therefore some individuals in the TON community that were excited about the original TON project, decided to use and continue developing the code from TON repositories to deploy the blockchain in a completely decentralised manner, without any corporate entity backing it. In fact, just 5 days prior to Telegram officially announcing that it was completely removing itself from any association with the blockchain it had created on May 12 2020, a collective banded together to announce they would continue advancing the technology that had been created by developers working on TON, completely separate to Telegram under a new name, Free TON. Free TON has unique features, such as the “self-healing” vertical blockchain mechanism and Instant Hypercube Routing, which enable it to be fast, reliable, scalable and self-consistent at the same time. What separates Free TON from other projects re-using Telegram Open Network’s code is the large community they have managed to build around the project. To date, there have been 3,000 entities join contests to earn TON Crystals (the token for Free TON blockchain) and there are 10,000 members in the Free TON community globally.
As it stands, Free TON contests are the only way to receive TON Crystals, meaning TON is only distributed amongst those who have contributed to the network. There are 5 billion Free TON Crystals; 85% of these will be distributed to those who contribute to the project (partners and users), 10% will be distributed to developers and 5% will be distributed to validators. To date, there has been 528,444,782 Ton Crystals distributed to 115,874 unique addresses out of a total supply of 5,022,346,449 TON Crystals (i.e. 10.5% of tokens have been distributed to contributors so far). Founders of Free TON wanted to distribute TON Crystals in a meritocratic way by rewarding users with TON Crystals who are actively involved in developing the project. Currently, it is very difficult to obtain TON Crystals on secondary markets. Meaning for now, the main utility of TON Crystals is to use them in governance processes (e.g. voting on contests). Free TON is committed to empowering their community to engage, contribute and make decisions via decentralised governance.
To spur innovation within Free TON blockchain, contests are created with rewards of TON Crystals for winners. Anyone in the Free TON community can propose/vote on contests, vote on solutions to contests and propose/vote on jurors to judge the solutions to contests. Contests are wide-ranging in Free TON and there are 19 different Free TON sub-governance groups, all hosting their own contests. Contests are not just for developers in Free TON, it is also possible for those with non-technical backgrounds to participate.
Using an example, Free TON has a DeFi sub-governance group. The first proposal was to select a jury, which would judge future submissions to Free TON DeFi contests. There were 7 Free TON Sub-Governance DeFi members initially in charge of selecting additional members for the jury. Any Free TON community member could apply to be a Free TON DeFi Juror by submitting a CV (if it had adequate DeFi experience, they would be selected). All selected DeFi Jurors receive rewards as incentive to monitor and vote on DeFi contest submissions. Once a DeFi Jury was established, it was possible to propose Free TON DeFi contests in the sub-governance group. In order for a Free TON DeFi contest to be initiated, it must first be discussed in the DeFi sub-governance forum and before it is officially proposed as a contest. Once it is proposed as a contest, it must receive over 50% of votes in favour from Free TON community members to initiate the contest. Once a Free TON DeFi contest has reached quorum at over 50% and been initiated, anyone with a Free TON address is then able to submit responses to the contest. Descriptions of contests are clear and include: description, motivation, requirements, terms, criteria, artefacts, rewards and voting process for each one. The most recent Free TON DeFi contest was a Stablecoin Architecture and Design contest with 137,000 TON Crystals available as a reward for submissions reaching the Top 10. The contest had 13 submissions and 12 jurors voting on each submission. Votes (and comments) from jurors on submissions are transparent and publicly available to see.
Free TON has introduced a novel way to engage community members in the longevity of the project. Contests are a fast and accessible way for participants to contribute to a blockchain. Free TON has decentralised all aspects of their contests, meaning rewards are going to those who truly deserve them. Contests remove the conflict of interest that sometimes arise from foundations or patron organisations giving grants to projects they might have a previous relationship with. Contests that are decentralised are in line with the ethos of blockchain and decentralisation. Traditionally, grants have been issued by centralised foundations or patron organisations. A centralised entity fostering development of a blockchain might not achieve the same efficiency and innovation as what Free TON can achieve with their decentralised contests. Free TON are already improving their contest process and are now discussing BFT governance as the new Free TON governance system for contests. Innovative governance and accessible contests without reward distribution bias is Free TON’s competitive advantage over other blockchains. Building an active, decentralised community around a blockchain is perhaps one of the most critical facets to get right to ensure longevity of a blockchain. Using contests to reward individuals or teams working on development of a blockchain has rarely been seen prior to Free TON. We find innovative governance that uses contests to promote innovation within a blockchain might be a trend that other blockchains could use to foster their own ecosystem development in the future. For now, Free TON’s community continues to grow, albeit slightly in the shadows, as there has been little speculation on the token due to the fact it is not widely available on secondary markets. When the token is eventually widely able to be traded on secondary markets, those that have participated in contests to contribute to developing the blockchain might be handsomely rewarded by the time the rest of the ecosystem discovers the blockchain’s capabilities and community.
Today, we are excited to announce that we will acquire and continue operating Cryptium Labs validator nodes on Tezos, Near, Polkadot, and Kusama following their announcement to terminate their services to focus on other ventures.
This first of its kind acquisition will enable Cryptium’s delegators staking over $125M worth of assets to continue earning rewards through a professional (and likewise Swiss-based) staking provider.
“Cryptium Labs has been one of the pioneers of Proof-of-Stake. They were among the first professional validators and contributors to protocol development, especially on Tezos. It’s an honor for us to continue operating their nodes and ensure a continuous high-quality service for their customers. We have no doubts that the Cryptium Labs team will go on to do great work through their new venture and make major contributions to the crypto industry.”
Brian Fabian Crain, CEO and Co-Founder of Chorus One
“Looking back it has been a wild journey and while it’s sad to leave the validation game, the team is incredibly excited to share with the world what we have been working on. We started Cryptium Labs as one of the first Proof-of-Stake validation companies in the world with the simple premise to provide secure and available validation from the Swiss Alps. Chorus One has been there with us since the beginning and has been incredibly innovative in the PoS space. I am excited that they will continue providing high-quality validation services to all the original Cryptium Labs delegators.“
Adrian Brink, Managing Director & Co-Founder of Cryptium Labs
If you have been delegating to Cryptium Labs on Near, Polkadot, Tezos, or Kusama, you do not need to take any action. You should be aware that there will be a migration from Cryptium Labs’ to Chorus One’s infrastructure within the coming weeks. We will maintain the former Cryptium Labs validators with the same care we operate our existing validator nodes and will relocate all server infrastructure and migrate cryptographic material to our platform.
As a result of the acquisition, the display name, commission rates, and other metadata related to the respective validators will be adjusted. Validators will be Chorus One branded and, on networks we are already active on, commission rates will be brought in line with our existing nodes to remain consistent. On Tezos, where we do not operate a baker as of now, we will maintain the commission rate Cryptium established.
This acquisition serves as our entry into the Tezos ecosystem. Our initial focus on Cosmos and Tendermint resulted in us never launching a Tezos baker. With the acquisition of the Cryptium Labs baker, we are finally becoming a part of this long-standing and established Proof-of-Stake network and its community. We are thrilled to expand our portfolio of networks to Tezos and are hopeful to maintain and even improve upon the secure and stable operation Cryptium set up.
While Cryptium Labs is dissolving, its former team centered around Adrian Brink, Awa Sun Yin, and Christopher Goes will work on bringing financial privacy and sovereignty to everyone. Stay tuned for future announcements!
The Chorus One team wishes them the best of luck for their future endeavours; we are thankful for their contributions to the staking ecosystem and grateful to be able to continue their legacy!
Finally, we would like to welcome all former Cryptium Labs delegators into our community. Please don’t hesitate to reach out through our channels linked below if you have any questions or want to learn more.
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
Telegram: https://t.me/chorusone
Newsletter: https://substack.chorusone.com
Cover background photo by Isaac Struna on Unsplash.
Originally published at https://blog.chorus.one on March 1, 2021.
Happy New Year! Today, we are excited to announce the launch of our The Graph mainnet indexer node. Find us e.g. on the official dashboard (chorusone.eth). This post will focus on our journey so far and what you can expect when considering to delegate GRT tokens.
The Graph has become the industry standard for retrieving data from Ethereum applications, with prominent users including Coingecko, Uniswap, and many others.
We have experienced ourselves what it means to write custom code to retrieve blockchain data, to store it, and to service it for our staking platform Anthem. One of the reasons that makes us excited about The Graph is the potential to make extracting valuable information from any blockchain much easier, while at the same time not relying on a centralized party to maintain availability and to ensure integrity of the data.
The Graph is a core piece to enable truly trustless applications. By providing our infrastructure and expertise to the community, we hope to accelerate the growth of this ecosystem!
The Graph is one of the most complex decentralized protocols with various, highly interconnected elements. The intricate economic design that features multiple roles (check out a primer here) is designed to optimally provide indexing and querying capabilities through a decentralized network of participants.
As a GRT holder, one option to participate in the system is by delegating to indexer nodes that are storing and servicing data. By delegating, GRT holders essentially increase the power of their chosen indexer operator in the protocol. Indexers need to allocate stake to subgraphs and are required to service queries from data consumers, the volume of which is determined by their relative stake allocated to a specific subgraph. To compensate delegators for putting up their capital to back indexing nodes, they receive a portion of the query and inflation rewards earned by the indexer. Indexers can determine their reward cut (the commission taken on newly minted GRT from the protocol) and their query cut (the commission taken on fees from queries served).
The rest of this post will focus on the inflation and reward cut dynamics, since these are expected to have the majority impact on the staking rewards received, especially in this early bootstrapping phase of the network.
If you are seeking to find out how much you will earn at the start, when queries fees are still low, these are the things you need to consider:
There’s also a one-time 0.5% fee when delegating GRT that is burned lowering the circulating GRT supply. At the time of writing there is around 9% of the GRT supply staking meaning the APR for staking GRT is 30% (before commission). Since our indexer does not have many delegations yet, our effective commission rate is actually negative meaning you’ll earn an even higher APR until delegations fill up!
Fellow indexers and community members have already written delegation guides and built dashboards that are helpful if you want to put your GRT to work, here is a selection:
Official The Graph Dashboard: https://network.thegraph.com/
Staking Facilities Guide for Ledger + Metamask: https://stakingfac.medium.com/the-graph-staking-guide-5ec1455f4783
Graphlets Dashboard: https://graphlets.io/
The Graph Portal: https://thegraphportal.com/
Cover background image by Arash Ashgari on Unsplash.
Originally published at https://blog.chorus.one on January 1, 2021.
It’s been over 2 months since the decentralization of the SKALE Network ( mainnet phase 2) began. With an unique approach of requiring participating investors to stake a minimum of 50% of their tokens for a period of at least 2 months ( Proof-of-Use), the SKALE team focused on attracting long-term supporters of the project, as opposed to speculators looking for a quick flip.
In this post, I want to take a look at a snapshot of the on-chain data that shines light on how SKL holders are engaging with the network now that the Proof-of-Use period has come to an end.
SKL is an ERC-777 token (backwards compatible with ERC-20), so information about it is available on Etherscan. We can see that there are 4,083,530,877 SKL tokens, which are held by 3,903 different addresses. 166,857,860, or roughly 4%, of those were sold in a public sale through the Activate platform. For a detailed breakdown of the supply and associated lockups, check out this 1-pager.
I want to start this analysis by taking a look at token transfers. Visualizing the transaction counts and amounts, we can clearly see how the initial tokens were distributed to investors leading up to the phase 2 mainnet launch on October 1. We can also note an uptick in activity when the first SKALE staking period ended Dec 1 (as of now, tokens can only be staked for periods of 2 months). At this point, the first tokens unlocked and the SKL token gets listed, e.g. on Binance. On Dec 1, 6,358 transfers were carried out moving 267m SKL, or around 6.5% of the supply (see chart). Right after, activity declined significantly with on average around 500 transfers happening per day during the past week.
Looking at the total stake in the network, which e.g. can be found here, we see that the overwhelming majority of tokens are involved in staking. 74.5% of all tokens are delegated, which places SKALE in the company of established networks such as Cosmos (71.42%) and Tezos (79.44%, see Staking Rewards). In terms of addresses that are involved in staking, we see that there are 1,167 unique delegators. 30% of all addresses that hold the SKL token are also staking.
Furthermore, one may wonder how many SKL tokens have been unstaked or are planning to unstake at the next boundary (Feb 1). The official dashboard shows 112m SKL (~3.7% of the currently staked supply) have been unbonded after the first staking period. So it seems like a majority of token holders plan to continue staking (it should be noted that a majority of token holders like the foundation, team, and early investors have longer lockup periods and cannot transfer their tokens yet).
Generally speaking, the interest in staking seems to remain high. While this amount will likely increase as the month continues, we can currently see that 15m SKL tokens plan to unstake at the next boundary (Feb 1). This is three times as much as new delegations that are coming in (i.e. accepted and proposed), which amount to around 5m SKL tokens at the time of writing. If we assume constant growth and that this ratio will remain until the end of January, then the staked supply would decline by roughly 80m, which would barely impact the staking ratio.
There are currently 47 validator organizations running a grand total of 152 nodes, whose resources are distributed across elastic SKALE-Chains. The average reward per node, which is split between the node operating entity and its delegators, is 211,075 SKL per node. With 152 nodes, this means the SKALE Network is currently paying out 32,083,400 SKL (or 1.04% of the supply) per epoch.
Using the median commission rate across validators of 12%, this means the average SKL delegator is currently earning 0.9152% per month on his SKL, translating to an APR of 11.55% (including compounding).
Looking at the stake distribution among nodes, we can see that a majority of the stake is controlled by a small subset of validators with only 3 of the 47 entities controlling right about 33% of the stake (see chart).
SKALE’s design seems to have successfully incentivized an engaged base of holders that are interested in supporting the project through staking. Nevertheless, it should be noted that the project is still in a very early phase of decentralization, which can be seen both by looking at the token distribution among addresses (the top 100 addresses hold a majority of all tokens), as well as in the stake distribution across validators. For more on the importance of censorship resistance in Proof-of-Stake, check out e.g. this thread by the Solana team.
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
We are an active validator on the SKALE Network. Support our work by delegating to us. Learn more here.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
SKALE is an elastic blockchain network that gives developers the ability to easily provision highly configurable fully decentralized chains that are instantly compatible with Ethereum. SKALE chains can execute sub-second block times, run up to 2,000 tps per chain, and run full-state smart contracts in addition to decentralized storage, execute Rollups, and machine learning in EVM.
Website: https://skale.network/
Twitter: https://twitter.com/skalenetwork
Originally published at https://blog.chorus.one on December 10, 2020.
