Transparency Report

Purpose

The purpose of the report is to update ETC Cooperative stakeholders and the public about the activities, operations, and progress of the ETC Cooperative, during the last fiscal quarter.

A full 2020 annual report, similar to the 2019 retrospective, will be completed in 2021. These presentations will include a financial section as well as progress towards the annual goals and objectives.

Overview

  • Staffing changes – Yaz, Kevin and Stev.
  • ETC suffered three 51% attacks within a month
  • Return of Charles Hoskinson and IOHK.
  • All the proposals for 51% attack resistance.
  • Work begun on 1099 for Besu with Thanos hardfork in November.
  • All infrastructure switched to Besu (ethercluster, BlockScout, full and boot nodes)
  • Rebooting of grants process deferred. Funding Besu is the new focus.

Staffing Changes

  • Kevin Lord joined the ETC Cooperative as Community Manager at the start of July on a part-time basis. He turned full-time in September.
  • Stevan Lohja joined the ETC Cooperative in September, replacing Yaz Khoury as Director of Developer Relations.

Protocol

Three 51% attacks within a month

  • CoinDesk article on 31 July attack, reorg of 3,600 blocks (12 hours mining)
  • CoinDesk article on 6 August attack, reorg of 4,200 blocks (15 hours mining)
  • CoinDesk article on 29 August attack, reorg of 7,000 blocks (2 days mining)

ETC experienced a 51% attack on 31 July with double spends and a network split. Here is our blog post about this first attack with links to various articles from other parties. Bitquery later identified $5.6M in double-spends against the OKEx exchange.

On August 21 Coinbase published an analysis of the first two attacks, identifying a $3.2M double-spend in the second attack. We are unaware of any detailed analysis of the third attack.

On August 19 we co-published an “ETC Network Security Plan” put together by Afri and co-signed by Terry Culver and Bob, enumerating various proposals.

New 51% proposals

Numerous proposals were brought to the table during August for possible protocol changes in reaction to the 51% attacks, some short-term, some long-term.

  • ECIP-1092: 51-percent attack solution PirlGuard by Callisto
  • ECIP-1093: If GPU-friendly Ethash is removed then change the ETC Proof of Work Algorithm to CPU-friendly RandomX
  • ECIP-1094: VeriBlock Proof-of-Proof 51%-Attack Prevention
  • ECIP-1096: 51% Attack protection system based on Bitcoin Merged Mining
  • ECIP-1097: Checkpointing based 51% attack resistance
  • ECIP-1098: Proto Treasury System

Existing proposals

There was also renewed support for these long-standing proposals:

  • ECIP-1043: Fixed DAG limit restriction
  • ECIP-1049: Funded work by Whiteblock at the start of the year.

Thanos Hardfork

A hardfork named “Thanos” is planned for late November 2020.

  • ECIP 1099: Calibrate Epoch Duration
  • The essence of the change is to reduce both the size and rate of growth of the DAG, so that 3GB and 4GB mining hardware can continue to mine ETC, with the goal to raise the hash-rate.

Infrastructure

During this quarter, all the ETC Cooperative’s infrastructure was migrated to use Hyperledger Besu exclusively. This includes BlockScout, Ethercluster, full nodes, boot nodes and the Kotti validator. No further development is planned at the time of writing.

Comms and Marketing

  • In early Q3 the ETC Cooperative and Connext announced collaboration on deploying State Channels on the ETC network. We released a blog post on how to integrate this tech into their Dapps.
  • The ETC Messari Disclosures Registry Application was completed and is now displaying accurate information on the Messari site.
  • Over the course of Q3 all ETC Core Dev Calls and dev meetings were recorded and posted to the ETC Coop YouTube.
  • The Coop helped many ECIP authors of proposals to mitigate 51% attacks create their Github Presentation Pages.
  • Ongoing social media management, content creation and curation, and overall community management.

Grants

We paused our spending on grants during Q2 as the global pandemic raged. Spending will instead be focused on the Hyperledger Besu client, which has become critically important now that OpenEthereum and Multi-Geth are gone.

Some likely funded activities include:

  • ECIP-1099 support for Thanos HF
  • First-class mining support
  • Checkpointing support
  • General bug-fixing and support.

Finance

Financial Summary

Category Sept 2020 Actual Sept 2020 Budget Variance Sept 2019 Actual Variance
Overhead & Management $17,002 $20,854 $(3,852) $17,606 $(604)
Development $14,800 $10,000 $4,800 $15,214 $(414)
Protocol $21,000 $20,000 $1,000 $0 $21,000
Comms & Marketing $3,125 $0 $3,125 $2,083 $1,042
Finance $1,170 $5,325 $(4,155) $2,938 $(1,768)
Infrastructure $4,383 $15,750 $(11,367) $3,050 $1,333
Partnerships $250 $0 $250 $500 $(250)
Total Expenditures $61,730 $71,929 $(10,199) $41,391 $20,339
Total Operating Expenses $61,730 $71,929 $(10,199) $41,391 $20,339

Overall, spending on regular recurring items such as salaries and overhead has been fairly consistent. However, there will be a slight increase in salaries, due to the change in headcount. Most spending is related to protocol work around BESU.

Net (Loss)/Income in $US

September 2020

Sept 2020 Actual Sept 2020 Budget Sept 2019 Actual
Income $59,318 $44,160 $70,746
Operating Expenses $61,730 $71,929 $41,391
Net (Loss)/Income $(2,412) $(27,769) $29,355
Adjusted Net Income $(2,412) $(27,769) $29,355

Financial Positions in $US

30-Sep-20 30-Jun-20 31-Mar-20 31-Dec-19
Cash & Cash Equivalents $273,538 $233,278 $195,538 $146,318
Total Assets $399,741 $363,992 $322,100 $333,796
Total Liabilities $29,889 $34,888 $26,905 $43,393
Total Equity $369,853 $329,104 $295,195 $290,403
Total Liabilities & Equity $399,741 $363,992 $322,100 $333,796

Goals & Objectives – Q3 Update

The quarterly update to the goals and objectives is too comprehensive to summarize. Please see separate workbook.