ErgoPlatform $ERG <-> $1ERG xClaim BRIDGE

[eddnorris]

Name of Project

ErgoPlatform $ERG <-> $1ERG xClaim BRIDGE
An Ergo Foundation x Harmony Core-Team Limited Partnership centered around creating support for an Ergo Blockchain Bridge to bring $ERG to/from the Harmony ONE Network as $1ERG.

Proposal overview

WHAT IS ERGO

Ergo is an Energy Efficient, Proof-of-Work blockchain based on the Extended Unspent Transaction Output (eUTxO) architecture similar to what is used by Bitcoin, but it also has native smart contract and native assets support.
https://ergoplatform.org/en/

The Ergo Platform has many things in common with the Harmony Protocol.

It has a shared mission in empowering humanity with affordable and effective infrastructure for safely exchanging value with each other, all over the world (rich and poor).
https://ergoplatform.org/en/blog/2021-04-26-the-ergo-manifesto/

The Ergo Foundation has been setup to help guide and develop the Ergo Platform:
https://ergoplatform.org/en/blog/2021-12-10-ergo-foundation-announces-official-incorporation/

Proposal

I am proposing that the Harmony Core Team create a Limited Partnership with the Ergo Foundation, in order to work together to fund and discuss how the 1BTC bridge architecture can easily be ported to deploy a 1ERG Bridge.

This would include retooling the 1BTC bridge to allow support for a 1ERG bridge.

With support from the Ergo Foundation, @harmony_dev_dao, and the members of the team which helped build the 1BTC bridge, there could be bounties defined to help complete this tasks required for deploying an 1ERG xClaim bridge.

Where are we now:

1. I have spoken with several members of the Ergo Foundation via their discord, all of which seem very open to further discussions on the possibility of a partnership.

2. I have spoken with a staking protocol on Ergo called ergopad.io
   they have had success as a launch-pad, and fund raiser on Ergo and seemed open to helping with creating liquidity for this endeavor. https://ergopad.io/ and are very excited to bring Ergo to a EVM compatible chain.

3. I have spoken with @ganesha about the feasibility of this project and he believes it should be fairly easy to implement technically.

4. Ergo has had active community growth over the past year. Both in developers and in Community members and like Harmony is both looking for partners and excited to build.
   

   
   
   
   

Technically, we’re just getting started with this project but because this should actually be, in some ways, easier to accomplish than the 1BTC bridge, because it’s been done before with a similar technology and Ergo has native smart contract support, I believe this work is in many ways very far along.

Additionally, because Ergo has native assets, unlike BTC, we should be able to setup an $eONE & $1sigUSD (an algorithmic stable-coin on Ergo) token on the Ergo and Harmony blockchains respectively, so as a follow up for this project, we’ll be able to bring $ONE and all Harmony HRC-20/HRC-721/HRC-XXX Tokens to the Ergo Blockchain.

Which means 2 ways vaults! Which is a great follow up but is beyond the scope of this initial Limited Partnership.

Non-technically, this project needs a good amount of community support to do well from here.

Both from the Harmony Community and the Ergo Community.
$ERG holders would need to bring and use their $ERG to Harmony.
$ONE holders would need to stake their $ONE in order to provide liquidity for the bridge.
$ERG Holders would hopefully use their $1ERG to transact, provide liquidity, and use/play within the Harmony Ecosystem.
Additionally, $ONE Holders would hopefully use the privacy features which are present on the Ergo Blockchain if we can extend the functionality present in this partnership to create an Ergo Wrapped $ONE tokens.

There would need to be some mechanism for providing rewards for for those that stake liquidity.

From speaking to ErgoPad.io, the Ergo Foundation and from my experience working with the Ergo community at large, I believe there is a large interested in using the utility of Ergo as a privacy focused store of value, to bridge to chains like Harmony.

I believe this project, if given even moderate attention from required parties could be up and running within 3-4 months.

Proposal ask

75,000 USD in $ONE fo Development Incentives (bounties)
75,000 USD in $ERG fo Development Incentives (bounties)
I believe these funds could actually be given to some kind of 1BTC DAO or xClaim Bridge DAO (@lij) so that it could formulate a process for any bridge project like this to come online, which would be based off of the 1BTC bridge.

To create a stable return for Vault deposits ( helping pay a flat APY to cover the 0.05% fees over 10 years)

150,000 USD in $ONE for Vault Rewards
50,000 USD in $ERG for Vault Rewards

Target Vault Balance

1,500,000 USD in $ONE for Vaults on Harmony
From the Harmony (+Ergo) Community
From the Harmony Core Team
From the Ergo Foundation

Target Staked ERG ( for 75% Utilization)

1,125,000 USD in $ERG for Deposits on Ergo
From the Ergo (+Harmony) Community
From the Ergo Foundation
From the Harmony Core Team

Metrics for success

Software Deliverables

xClaim Ergo Implementation (~15k USD)
xClaim Harmony Implementation (~15k USD)
Harmony Vault System Implementation (~15k USD)
Harmony 1ERG Bridge Front End Implementation (~15k USD)
Ergo ERG->Harmony Bridge Front End Implementation (~15k USD)
1ERG Bridge deployed to Testnet (~15k USD)
1ERG Bridge audited, tested & validated (~40k USD)
1ERG Bridge deployed to Mainnet (Beta) (~10k USD)
1ERG Bridge deployed to Mainnet (Launch) (~10k USD)

Utilization Targets

Target Bridge Liquidity ($ONE)

115,000 $ONE Staked in Vaults (~150,000 USD) 1/4
230,000 $ONE Staked in Vaults (~300,000 USD) 2/4
5,750,000 $ONE Staked in Vaults (~750,000 USD) 3/4
11,500,000 $ONE Staked in Vaults (~1,500,000 USD) 4/4

Target Current-Bridged-Assets ($ERG)

(More total bridged, less liquidity in Vaults; Max 75% of target Liquidity ($ONE) )
37,000 $ERG Locked in Vaults (~112,500 USD) 1/4
73,500 $ERG Locked in Vaults (~225,000 USD) 2/4
183,000 $ERG Locked in Vaults (~560,000 USD) 3/4
367,000 $ERG Locked in Vaults (~1,125,000 USD) 4/4

Target Bridging Activity Volume ($ERG → $1ERG || $1ERG → $ERG )

(More bridging, healthier vault incentives)
1,000 $ERG Locking/Unlocking in Vaults per Month 1/4
2,500 $ERG Locking/Unlocking in Vaults per Month 2/4
5,000 $ERG Locking/Unlocking in Vaults per Month 3/4
10,000 $ERG Locking/Unlocking in Vaults per Month 4/4

Target Bridging Activity DAU ($ERG → $1ERG || $1ERG → $ERG )

100 Bridge Transactions per day 1/4
250 Bridge Transactions per day 2/4
500 Bridge Transactions per day 3/4
1000 Bridge Transactions per day 4/4

Note about ecosystem value-add

Based on the growth of both Harmony and Ergo over the past year, the mutual benefit that both ecosystems can provide to each other and the overall messaging of Ergo gaining access to $ONE as their initial EVM Over-Collateralized/Trustless/xClaim Bridge, I believe this project has the ability to benefit both ecosystems as a whole more than any of the contributions required individually.

Comments welcomed!

I would very much appreciate comments about the amounts I’m suggesting, This is honestly to get the conversation going, and while I tried to be realistic with my developer estimates, I believe it is possible to complete this project with much less developer funding, and believe the 1BTC DAO or xClaim Bridge DAO could play a huge role in streamlining these costs.

[eddnorris]

Please note:
I have had to update some of the funding/bridging targets referenced in this proposal to communicate the actual goals and value of this bridge initiative;
the value of $ERG was calculated incorrectly & the amount of Liquidity which was able to be utilized was not correctly represented.

[eddnorris]

@stse
@lij
@leo
@Jacksteroo
@ganesha
@dpagan-harmony
@giv
@harmony_dev_dao
@HarmonyCommunityDAO
@HarmonyValidatorDAO

Seeking additional feedback for this proposal.

[Jacksteroo]

Thank you for submitting a proposal to Harmony’s $300M Ecosystem Fund. Allow me to be your representative on behalf of the Grants committee.

Thanks for being a liaison here @eddnorris, I’ve reviewed this a couple of instances and wondering why we would prioritize funds and focus on Ergo vs other initiatives. I was looking for utility metrics around Ergo and haven’t been able to grasp a good sense of a vibrant ecosystem. Are there any key differentiators with projects built on Ergo that are sustainable, compatible and impactful which we aren’t able to replicate at Harmony? Don’t get me wrong, we would really like to have Harmony bridge to all chains some day. Question is motivations and timing. Why Ergo and why now?

[eddnorris]

I have a quick answer for this @Jacksteroo !

I’d still like to tap some of the leadership from the Ergo Foundation @Armeanio and some bigger voices in the Ergo Community to try to speak their piece but here we go!

My biggest reason for pushing this proposal forward is because I believe this will effectively be a reuse of the investment made with the 1BTC Bridge, we’ll largely get the ability to bridge both $ERG and Ergo native assets (which will soon include ergo Wrapped Cardano Assets) if we do a small amount of coding and some front end deployment.

While #Ergo is a smaller player in the blockchain space their growth has been impressive, both in end-user adoption but especially in their developer ecosystem.

Their developer tools and developer ecosystem is growing and reaching an important maturity;

There are new wallets, exchanges, games, art marketplaces and social experiences starting up or about to start up on Ergo.

Ergo has native Privacy and Mixing features that allow wallet identity to be hidden.

Ergo has a block confirmation of a few minutes (2+)…

Which makes it good for certain applications but not as good for others; harmony could become effectively a side-chain Layer2 for ergo.
This could lead to transactions both to and from harmony.
Currently there’s been a lot more 1-way traffic on the 1BTC bridge.

Ergo is based on eUTxO model

Which means it can do transactions using assets from both the sender and the receiver at the point the transaction takes place;
This SHOULD allow developers to do some interesting and complex accounting but this means it is more challenging to understand, which has slowed their dev ecosystem in the past but I believe we will be seeing a lot more development in the future.

Luckily Ergo development has in many ways been kickstarted/fueled by the funding for education done by the Cardano Foundations, as their eUTxO models are very similar; except I would say that Ergo’s is actually easier to work with and understand.

This bridge opens the door to creating a bridge to Cardano.

BUT In many ways a lot of the same valuable technology exists on Ergo; but Cardano does have a lot of liquidity.
In my opinion it would be much easier and much more straight forward to deploy this concept on the Ergo Platform; including support that would be possible from the Ergo foundation.

There are Ergonauts among Harmonauts… & vice versa

because these two community have similar values around economic identity and fairness.
It will expand and add to the harmony ecosystem, and will create a nice marketing story about the ease of deployment of our existing tech, access to ergo wrapped Cardano assets, and will eventually serve as a guide to how this same deployment might be done with Cardano…

Ergo is better for the environment

Ergo’s method of mining is less taxing on GPUs than most other GPU mining Blockchains.
Ergo method of mining also is built to be ASIC resistant.
Because of this, Ergo results is far less e-Waste and can be more energy efficient.

Fair launch

Ergo was not VC funded and will only receive 4% to a foundation treasury for it’s operation, meaning that it is a fairly launched store of digital value.

In the words of my people #Ergonauts #Ergo2Top10 #ThisIsErgo

There is an active and die-hard community, obsessed with fundamentals, technology, and financial sovereignty.
I have been a part of this community for more than a year and can also mention that many of the same people that use Ergo, have been active in the harmony community.

There’s probably other things I’m forgetting but that was what sparked my interested to push for this…

[eddnorris]

Also comparing Ergo to other privacy focused tokens, Ergo seems far and away more user friendly/ready for mainstream adoption.
In some ways because it harnesses the power of NiPoPows to make light clients and the user experience far superior by default, compared to something like Monero $XMR which has some light clients but has very little active development; because it’s MUCH harder to develop for.

This also seems like a good opportunity to test out what a 1BTC/xClaim Bridge DAO could do for scaling up deploying bridges and refining the process of deploying bridges on Harmony.

[Jacksteroo]

We’re focusing on building out the trustless bridge for Ethereum at the moment. Let’s circle back on this in the quarters to come.

[eddnorris]

Thank you for the response and attention @Jacksteroo

I can understand the prioritization.

The Trustless ETH Bridge is definitely needed ASAP.

I think this is exactly something that the 1BTC Bridge DAO could be extremely helpful with, considering it would involve retooling the same code.

Perhaps once that DAO is setup and operational, this plan could be revisited as a way of leveraging the power of the xClaim Bridge architecture on as many chains as possible.

Or as a straight forward proof of concept of how such things can be deployed all over.

-EDD
Harmonaut/Ergonaut

[NathanFarms]

Not interested on this one FOR NOW, as ERGO doesn’t have much users in its ecosystem. Quick look on defillama, ERGO only has 2.9M TVL. We can priorize bridge to other ecosystems with much TVL and user base.