Happy 2nd ErgoVersary!
Happy birthday to us! Can you believe it has been two whole years already?! In recent months we’ve seen an explosion in growth while the core developers have been quietly pumping out the next generation of decentralised financial tooling. Unlike a lot of projects in this age, Ergo is not merely a speculative token but rather a groundbreaking, novel cryptocurrency that can execute complex multi-stage contracts. This year alone, we have hosted a Hackathon and launched an algorithmic stablecoin, while developing a Crowdfund protocol and the highly anticipated ErgoDEX.
What is Ergo?
Ergo, a resilient platform for contractual money, is an open-source, decentralized network that is designed for creating and implementing efficient and secure financial contracts. It lays the bedrock for the future of DeFi with an ecosystem tailored to the needs of a trustless banking system. Ergo’s native language, ErgoScript, is revolutionary in its ability to create and execute complex multi-stage smart contracts with its Σ-protocols (Sigma-protocols —a type of zero-knowledge proof). Enabling Turing complete capabilities with the use of extended UtxO, Ergo is a powerful vehicle for the future of blockchain technology and DeFi. The potential for developers to design and create robust dApps with the highest security and efficiency positions Ergo as one of the most important developments in cryptocurrency.
Ergonauts can already access several dApps on the Ergo Platform on sigmaverse.io:
- The Ergo Auction House - a decentralized, secure and easy to use NFT marketplace. It is a simple way to sell or buy Ergo’s tokens, artworks, NFTs, and/or other native tokens.
- SigmaUSD - a crypto-backed algorithmic stablecoin based on the AgeUSD protocol developed in a joint partnership between IOHK, Emurgo and Ergo.
- Oracle Pools - reliable, secure and efficient decentralized data pools developed with Ergo.
- ErgoMixer - The world’s first non-custodial and non-interactive mixer.
Additionally, users will soon be able to access ErgoDEX: a non-custodial, decentralized exchange. This exchange will eventually feature both an AMM (automated market maker) and order book exchange on top of both the Ergo and Cardano blockchain natively, allowing users to to pay fees with their native Ergo and Cardano tokens.
Tokenomics
Ergo is a Proof of Work blockchain that has fairness packed into its core. It had no ICO (Initial Coin Offering) and no pre-mine - meaning no coins were mined before the release by the developers. There was also no private funding from venture capitalist firms or otherwise to kickstart the project. Instead, Ergo has set a modest hard cap on the amount of ERG that can be delegated to the Ergo Foundation for development and promotion. That allotment is set at ~5% of the total supply from the mining rewards over the first two years.
Thereafter, all future rewards will be delegated solely to the miners. Future funding for the Ergo Foundation will be facilitated through the ErgoFund and other grassroots strategies, allowing the community to actively decide and guide the types of projects they want to see developed and pursued.
The maximum number of ERG is capped at 97,739,925 ERG and is set to be fully mined by July 2027. At this point, approximately 39 million ERG (or ~40%) are in circulation. For more details, please see the emission schedule. In comparison, Bitcoin’s emission is to be completed over a staggering one hundred years — with almost 75% of that to be mined within its first eight years. So how does Ergo plan to secure the blockchain after all ERG has been mined?
The Ergo protocol has ‘storage rent’ built into the protocol which allows lost, frozen or otherwise inaccessible ERG (that is unmoved for four years) to slowly return into circulation (~0.13ERG every four years). This is an insignificant amount for any individual person but helps ensure the resiliency of the protocol going forward, as mentioned in “A Systematic Approach To Cryptocurrency Fees”, by preventing the cost of unreasonable storage growth. By developing this strategy, the protocol helps prevent the situation we see in Bitcoin today where 20% of all BTC are lost forever.
Mining ERG
After helping to build the first pure Proof-of-Stake system (NXT), and subsequently working on developing Cardano at IOHK, Alex Chepurnoy created Ergo as a resilient platform for contractual money. Ergo endeavors to utilise the breadth of research since Bitcoin’s genesis to create a robust platform that comes with all the battle-tested advantages of Proof of Work.
Ergo’s fixed supply is mined over an 8-year emission schedule through an original ASIC-resistant Proof‐of‐Work algorithm called Autolykos. It employs a difficulty adjustment algorithm smoothed over several days, helping to prevent manipulation by large miners. The algorithm reduces their ability to perform successful coin-hopping attacks - wherein they jump on and off the network in an attempt to lower the difficulty and claim more tokens.
Autolykos is written in Scala, a functional programming language similar to Cardano’s Haskell - giving it an edge in performance and leading to it consistently topping whattomine in terms of profitability. Along with its extension block and the ability for easy soft or velvet forks, Autolykos aims to ensure Ergo is adaptable and future-proofed.
Ergo’s Vision
Ergo was envisioned to be a platform for the people, a network where individuals are not at the mercy of centralized entities, banks and/or monopolized power. The tools, products and services of blockchain technology should benefit all, regardless of country or background. Community is at the core of Ergo’s identity. This grassroots initiative grows stronger every day with the input from community developers and the desire to build a leading cryptocurrency that creates value and security for all people. Please see the Ergo Manifesto for further insight into the vision and inspiration behind Ergo.
