Ergoversary: The Last Five Years, And The Next Five

It’s hard to believe it’s been five years since Ergo launched on July 1, 2019. Community members who have been with us since the start will know some of the amazing milestones we’ve achieved. Those who have joined us later will have seen the fruits of that early work, but may not know all of the decisions, developments, and dApps that have shaped the Ergo protocol in its journey to the present day.

This video gives a rundown of some of the highlights from the last five years, and some of what we hope to create over the coming half decade. This article unpacks that decade-long roadmap further, giving some more details about Ergo’s origins story and the plans we have for the future.

So here it is: A necessarily incomplete tour of 2019-2029, Ergo-style.

2019

July 1: Ergo Mainnet Launch

Ergo launched at a critical point in the crypto market cycle. Bitcoin had recently undergone a year-long bear market following its 2017 peak at $20,000, finally bottoming out at just over $3,000. There had been speculation that crypto might never recover. A rapid recovery in April 2019 saw BTC peak at almost $14,000 by June, but then this mini-bubble was followed by a mini-bear market – during which time Ergo launched.

It was a tough time for crypto, and the markets finally bottomed out in March the following year, during the COVID crash. It may not have been the ideal time to start a new project, but of course it’s impossible to know these things at the time. Moreover, projects that launch in bear markets are tested early on. Those that survive have a strong chance of making it in the long term.

This was the case for Ergo. Despite the headwinds from crashing crypto markets and renewed uncertainty, the Ergo Foundation was established and the first tools were released for the platform.

Among the first smart contracts deployed were Crowdfunding contracts, which allowed new initiatives to raise money for development and marketing. Formal verification was also introduced. This uses mathematical methods to prove or disprove the correctness of a blockchain protocol's algorithms and smart contracts. It ensures that the blockchain system functions as intended without bugs, vulnerabilities, or unintended behaviors, enhancing its security and reliability, and giving users greater confidence in the applications with which they are interacting.

2020

Six months later and the Ergo ecosystem was off to a flying start. 2020 would be a golden year for Ergo, with the introduction of the first applications.

The first Oracle Pool was released in August 2020. Oracles are a critical element for DeFi, providing a link between the outside world and the siloed, self-contained world of the blockchain. Ergo takes a different approach to oracles than other platforms, treating them as a kind of public good, rather than a service run by private companies that users need to pay for. This decision was taken to help bootstrap Ergo’s network of DeFi services, many of which need to obtain information from external sources – including other blockchains.

Another major application that launched in 2020 was the Zero-Knowledge Treasury, a multi-sig treasury solution that uses Sigma protocols to allow organizations to disburse funds, while maintaining a high degree of privacy.

Finally, as the NFT scene heated up, the Auction House was the first of many NFT marketplaces to be released on Ergo. This trustless, decentralized marketplace allows users to buy and sell NFTs with ERG.

2021

The following year was a huge one for crypto. In many ways, this was the year in which crypto and blockchain went mainstream, with major news outlets saturated with stories from the crypto world – both good and bad.

Ergo rode that wave, deploying more DeFi services and building its presence within the crypto sphere to a new high. SigUSD, an ERG-backed stablecoin, was launched, along with other DeFi dApps, including Spectrum Finance (soon to become Splash) – an AMM that would later integrate cross-chain capabilities.

Of course, as anyone familiar with the digital asset world knows, crypto tends to lurch from one extreme to another. Following the bubble that peaked at the end of 2021, a lengthy bear market followed. Ergo was not immune to the loss of value and confidence that affected every part of the crypto world, but it was in the position of having built a strong foundation for the future.

2022

Despite the punishing conditions that affected the crypto world over the course of 2022, the Ergo ecosystem continued to grow and progress. The number of devs increased, along with the amount of tooling.

The year saw a number of upgrades to the network, with both planned and unplanned forks. One of the key changes introduced a new Difficulty adjustment algorithm.

2022 also saw the creation of the Sigmanauts organization: a collection of developers and other community members dedicated to the goal of building decentralized applications of all kinds on Ergo, using the platform’s unique smart contract language and cryptographic protocols.

2023

Hope slowly returned to the crypto sphere in 2023, as the bear market ended and broader interest – beyond the growing core of true believers – once again spread.

The year saw the growth of Ergo’s DeFi ecosystem, which included the launch of two major lending applications. Sigma Finance is a bond protocol that allows borrowers to create custom bond requests. Lenders can view the offers available, which include different maturity dates, APYs, principal amounts, and collateral, and decide whether to deploy their cash. These “Sigma Bonds” include a 0.5% developer fee.

Duck Pools is a more conventional (Compound- or Aave-like) pool-based lending protocol, with algorithmically-determined interest rates. This caters to a broad section of the DeFi community who do not need or want a custom lending solution.

2024

The first six months of this year have seen all the pieces come together for Ergo, which now has a full ecosystem of DeFi dApps.

The final element required was a cross-chain bridge. Bridges are a vital but often problematic technology in DeFi. They are critical for enabling the flow of liquidity between otherwise siloed blockchains, but their complexity poses a number of risks. In particular, bridges have traditionally featured a very large attack surface, making them a target for hackers. Some of the largest exploits in the crypto space have been bridge attacks.

Ergo’s Rosen Bridge addresses previous bridge vulnerabilities with a simple, elegant model that does not rely unduly on complex smart contracts. Instead, an oracle-based system of Watchers and Guards waits for relevant transactions to occur on the target blockchain, then executes corresponding transactions on Ergo. Cardano was the first blockchain to be connected to Ergo by the bridge, followed more recently by Bitcoin. In the coming months, integration of EVM chains is planned, allowing tokens to flow freely between Ergo and other major blockchains. The ultimate aim is that tokens from these chains will be bridged to Ergo, where they can be deployed as collateral within Ergo’s growing ecosystem of DeFi dApps, powered by safe smart contracts and highly flexible cryptographic protocols.

In other news, a new Ergo organization was created alongside the Ergo Foundation and Sigmanauts: the ErgoDevs DAO. Two additional stablecoins, Dexy and Gluon, are also ready for launch. Like SigmaUSD, these are crypto-backed tokens. The Ergoverse is also preparing to bridge popular stablecoins from other ecosystems (e.g. USDC), adding fiat-backed options to the decentralized coins already available.

State Of The Nation

These are just some of the milestones that Ergo has reached. All are precedents for other dApps and services like them. At the five-year mark, Ergo has achieved a great deal, with a vibrant ecosystem of applications and users.

Here are some of the many dApps that now exist on Ergo, following in the footsteps of those early leaders. (Again, this list is necessarily incomplete.)

DEXes

Alongside Spectrum/Splash, Ergo now offers at least three other decentralized exchanges, each offering something unique. TradeHouse is a fully on-chain DEX, featuring an orderbook like traditional centralized exchanges (and therefore a familiar TradFi-style UX), instead of the liquidity-pool approach offered by AMMs. CrystalPool is another orderbook-powered DEX, but in this instance, it has centralized matching. While trades are settled trustlessly on-chain, this hybrid approach gives it the benefit of greater speed and potential privacy.

Finally, there is Telefragged. This is an intriguing idea which allows self-sovereign grid trading (a technique ideal for ranging markets), using AMM pools as the other side of the trade.

NFTs And Games

Alongside Auction House, Ergo now also has the SkyHarbor NFT marketplace. The Ergoverse is populated with games that leverage the capabilities of the platform’s NFTs and smart contracts. This includes the open-world pixel game Cyberverse, and BlitzTCG, a trading card game that launched on Ergo in April this year.

DAOs And Crowdfunding

New projects need funding, and they need governance. Ergo provides for both of these. The ErgoRaffle contract was one of the first applications to launch on the platform, offering crowdfunding capabilities. Meanwhile, Paideia enables a community to set up a DAO to make collective decision-making and allocate funds. This is already being used by organizations such as ErgoDevs DAO.

Other

Finally, Ergo has a number of projects that could be characterized as monetary experiments, exploring the possibility of new forms of cash and digital assets on the blockchain.

Hodlcoin takes the form of a game in which ERG can be deposited to a contract. Withdrawing ERG is subject to a fee, which is shared among remaining users – meaning the longer you hold compared to other players, the more your share of the pool will be worth. AuctionCoin is a decentralized and trustless token distribution protocol, which manages price discovery for new assets. Then there is SigmaO, an options trading platform, which allows users to buy and sell put and call options, so they can effectively bet on the future price of assets.

As stated, these are just some of the many projects that developers and communities have launched and popularized on Ergo. For a more complete rundown of what’s available, check out the ErgoDocs Ecosystem pages.

The Next Five Years

This is an impressive foundation, and it puts Ergo in a strong position for the future. Considering all the engineering and work thus far, the following projects, upgrades, and strategies aim to make Ergo more useful in the real world going forward.

Maintaining and extending Ergo’s Core Protocol remains a priority. Sigma 6.0 will update the protocol with new features and a new contractual layer. Further research and development is intended to pinpoint the best way to enable fast confirmations and improved block propagation, likely using sub-blocks or microblocks. Storage rent will become more and more important over time, since this is levied on dormant UTXOs after four years – so an increasing number of addresses will fall into this category from now on.

As well as the core layer, sidechains will be a vital means of expanding Ergo’s functionality and reach. Sidechains are under active development and have already been designed, with much of the work being completed over the last two ErgoHacks. It will soon be possible to work with mainchain UTXOs within sidechain contracts, offering a new era of use cases and possibilities.

Alongside these upgrades, Ergo’s mining ecosystem must remain robust, since miners both secure the network and process transactions. At least two significant developments, sidechains and storage rent, will provide extra revenue for miners, making mining Ergo more attractive and increasing hashrate (and therefore security). Lithos (decentralized mining pool infrastructure) is expected to launch at the end of 2024, and will facilitate a greater degree of decentralization in mining. Lastly, we also hope to see the reintroduction of FIMOs, or Fair Initial Mining Offerings, as a means of distributing tokens for new projects. Instead of airdropping tokens, FIMOs ensure that those who receive tokens have done work (proof of work), rather than leaving the ecosystem vulnerable to mercenary airdrop farmers.

Interoperability remains an important priority, and a number of cross-chain developments are planned. A version of Bitcoin Runes will be deployed on Ergo: A layer that allows users to create and manage fungible tokens in a different way than Ergo’s native method. Bitcoin Cash, Nervos, and other UTXO chains will be bridged via Rosen, along with Ethereum and other EVM chains that use the Account model. RGB++, a “colored coins” protocol pioneered by Nervos, will also be deployed.

Additionally, we’re looking at integrating more tooling for development. In addition to ErgoScript, support for a form of Rust and JavaScript will be available, and we’re exploring the possibility of using more high-level languages like Lisp. Error-checking and debugging will be improved, and we’ll be revisiting the use of formal verification.

These developments will benefit from enhanced governance. Overall, we need to define the rules that govern new releases and frameworks for research-driven development. We would also like to see the launch of new organizations to act as key stakeholders, influencers, and decision-makers within the Ergo ecosystem, acting alongside the three major entities (Ergo Foundation, Sigmanauts, and ErgoDevs).

Finally, we want to see Ergo’s technologies and community leveraged to expand the ecosystem’s money supply, using protocols such as ChainCash (self-sovereign elastic-supply blockchain money), more stablecoins, and additional derivatives.

Ergo 2029

In another five years, we might imagine Ergo as:

• A hyper-connected ecosystem of blockchains, with Ergo as the hub.
• A rich ecosystem of Ergo sidechains, alongside those externally-bridged chains.
• A vibrant, safe DeFi space.
• A blockchain with real-world use cases and value, where high-quality digital assets act as units of account and a store of value.
• Developed and maintained by a decentralized community of enthusiasts.

Thank you for your support over the last five years. We hope you’ll join us on our journey over the next five!