This document summarizes the Ergo platform, a decentralized platform for contractual sound money. It describes Ergo as a permissionless cryptocurrency focused on decentralization and long-term stability. Key aspects covered include Ergo's Autolykos proof-of-work consensus protocol, lightweight client support, the ErgoScript smart contract language, native token properties, voting and upgrade mechanisms, storage rent system, and current status with mining and listings on exchanges. The goal of Ergo is to serve as digital gold and a platform for building decentralized financial applications and tokenized assets.

1. September 2019
Ergo, a Resilient
Decentralized Platform
for Contractual Sound Money
Alexander Chepurnoy

2. Bitcoin
What Was New

3. Bitcoin: Blockchain
Decentralized Replicated Database (a.k.a. Blockchain)

4. Bitcoin: Digital Gold
Perfectly Scarce Digital Resource (a.k.a Digital Gold)

5. Bitcoin: Digital Gold
Perfectly Scarce Digital Resource (a.k.a Digital Gold)

6. Bitcoin: Digital Gold
Perfectly Scarce Digital Resource (a.k.a Digital Gold)
Under certain assumptions (cryptographic primitives not
broken, majority of miners are following the protocol etc)
Bitcoin is even better store-of-value than gold.

7. Bitcoin: Programmable Money
Money Before: The Same Contract for Each Banknote
Now: A Banknote Has Individual Contract In Form Of Code
0.2517 BTC
“Could be spent by providing a
signature, which is corresponding
to Alice’s public key, on spending
transaction bytes”
(<AlicePubKey> OP_CHECKSIG)

8. Bitcoin: What’s New
Decentralized Replicated Database (a.k.a. Blockchain)
Perfectly Scarce Digital Resource (a.k.a Digital Gold)
Programmable (or Contractual) Money

9. Ergo
Vision

10. Vision
Conservative Store-of-Value Proof-of-Work CryptoCurrency
Permissionless and Open
Decentralization First
Platform for Contractual Money
Long-term Focus

11. Autolykos
consensus
protocol

12. Consensus: Why Proof-of-Work?
Widely studied and tested
Has high security guarantees
Truly permissionless
Light validation
1
2
3
4

13. Proof-of-Work: problems
With specialized hardware (ASICs) very few advanced players dominate the field
With mining pools, only few players in the network generate block candidates (easy censorship)

14. Consensus: Mining pools
Regardless of the PoW algorithm, 2-4 pools control the network
BTC.com
ViaBTC
AntPool
F2Pool
BTC.top
Others
Hashrate distributions for 06.11.2018 (for 24 hours), taken from blockchain.com, etherchain.org, explorer.zcha.in
BTC ETH ZEC
Ethermine
Sparkpool
f2poo2
Nanopool
Others AndPool
Poolin
F2Pool
FlyPool
Slushpool
Others

15. Ergo Solution: Autolykos
New Proof-of-Work algorithm based on well-known problem (k-sum problem)
Resistant to centralized pools (secret is needed to mine)
ASIC-resistant (for best efficiency, top-level GPU with 8GB RAM is needed)
Light verification (~100 bytes solution, 2Kb of memory needed for validation)
Solution verification is done over public keys
Improved difficulty adjustment based on last 8 epochs 1024 blocks each

16. Autolykos: Hash Power Distribution
~1 Th/s from the beginning
75% of hashrate - by small (<1%) miners

17. Light
clients

18. Light clients: Now
You must set up a node or trust someone
Node bootstrapping is slow, unreliable and resource intensive
Thus most users trust third party
If service provider is hacked (or become malicious), users may lose their funds
And may not even notice this, because they use trusted block explorer
Better alternatives (e.g. SPV nodes in Bitcoin) exist, but only allows to validate
some subset of rules

19. Light clients: Ergo
Ergo block header supports Non-Interactive Proofs of Proof-of-Work, that allows
to synchronize the network, by downloading < 1Mb of data
“Partially stateless clients” - a non-mining node can have full-node security
guarantees without storing the current state
Flexible configuration for node regimes

20. Node modes: Ergo
It is possible to use Ergo from
a smartphone with
SPV+ security.
It is possible to join the network
and start mining within few hours.
No performance degradation
over time.

21. Smart
contracts

22. Motivation
Safe (for both the users and the blockchain) contracts
Easy templates
Easy but limited persistence
Simple and safe high-level languages
More powerful than Bitcoin Script
Support for variety of cryptographic protocols
Support for custom tokens and financial applications

23. Solution
Bitcoin-like UTXO model
Native support for ring (1-out-of-n) and threshold (k-out-of-n) signatures
Native custom tokens

24. Ergo script: environment
UTXO = Box, current Ergo state is a set of boxes then
Box contains ten registers with monetary value, script, custom tokens, transaction info and additional data
Spending proof: signature + additional data (key-value pairs)
Complicated scripts are possible due to extended access to environment: self box, inputs, outputs, read-only
data inputs, last block headers
Tokens may play role of account id

25. Ergo script: Safety
Strict upper-bound for computation time
Only scripts that allow execution cost estimation before actual execution
Operation costs are chosen in order to validate any possible block within 1 second (on commodity laptop)
Constant-time access to environment

26. Ergo script: Emission
Atomic swaps, DEX, crowdfunding, and more at https://git.io/fpDhE
Emission box: every block miner can take a part from it, returning the rest to the same script
It should be spent in such a transaction, that has exactly one output, which creation height is current
height, and proposition is: Height >= SELF.creationHeight + 720 && minerPk
Emission
box
Reward
box
User box
Emission
box
Reward
box
User box
Emission
box
Reward
box
User box

27. Ergo script: Applications
Ergo Notary ( https://github.com/sininen-taivas/ergo-notary/ )
proof-of-authorship and certification of files
Crowdfunding ( https://github.com/robkorn/ergo-crowdfunding-cli )
Pricing oracle ( to be released soon )
Non-Interactive Mixing
Local Exchange Trading System
P2P loans
Cold wallets

28. Voting
system

29. Development
Environment is not static, therefore the network parameters should also be changeable
But how to make these changes?
Velvet- and Soft-forks are preferrable

30. Development: Voting protocol
Ergo allows to change a lot of parameters via miners voting:
block size, contract costs, demurrage coefficients and more...
Parameters are changed with a small step (1% per 1024 blocks)
But it allows to make big changes step by step

31. Development: Soft-forkability
If more fundamental changes are needed, it’s better to avoid hard forks
Ergo is trying to be friendly for soft forks
All validation rules are enumerated and some (non-critical) of them may be
disabled via miners voting (90% of 32 epochs length)
If old node sees new version activated, it skips validation of deactivated rules
(and also newly introduced rules)

32. Storage
Rent

33. Demurrage: Storage rent
Demurrage – payment from users to miners for keeping their data in the state
Similar to regular cloud storage payment is proportional to space*time
Payment is collected from the box not being moving every 4 years
If there are not enough coins in the box at this point, then it is to be removed from the state.
Storage price may be changed via miners voting

34. Demurrage: Effects
We'll see actual effects 4 years later
Upper-bound of the state size become predictable
Prevent circulating supply decrease due to lost keys, incorrect contracts, etc.
Stabilizes miners profits by providing additional fixed reward
Incentivizing people to use the money

35. Social
Contract

36. Social Contract: Importance
A contract between developers and others is utterly important.
User money is in question!
Also, money of investors in applications built on top of Ergo!
Also, mining profits

37. Social Contract: Features
No Proof-of-Work function or monetary policy changes are possible (if no bugs there).
Developers should not do ICOs or be VC-backed startup founders.
Ergo is for regular people.
Ergo is open and permissionless.
Decentralization is top priority!

38. Native
Token

39. Native Token: Emission
Total supply: 97,739,924.5 ERG , to be issued in 8 years
Treasury: 4,330,791.5 ERG to be release in 2.5 years

40. Native Token: Properties
Not worse digital gold as Bitcoin because of PoW, supply cap, fixed monetary policy
Maybe even better in the long-term due to improved survivability (storage rent, light full-
nodes etc)

41. Native Token: Properties
So perfect store-of-value!
Under certain assumptions (crypto primitives not broken, 50+% miners follow the protocol)
But on top of this gold you can issue tokens (e.g. tied to fiat currencies) and build
contracts!
The native token is the only with minimal trust (only assumptions above)
The native digital gold token is good as collateral
In Ethereum, more than $500M in ETH locked as collateral in contracts currently!

42. Current
Status

43. Current Status: History
Smooth launch on July, 1st
Mining hashrate: 1.2 TH/s (~ 40K to-level GPUs)
Listed on: Tidex, P2PB2B, WavesDex, Vite
Listing announced for: HotBit, Bisq, SWFT
Wallets: in-built, Magnum
ErgoNotary: command-line tool for certifying files on the blockchain
First smart contract based decentralized crowdfunding campaign done
ErgoCrowdfundingCLI: command-line tool for decentralized crowdfunding

44. Current Status: What Do We Need
Projects building on top of Ergo
Investors in those projects
Issuers of fiat- and commodity-based Ergo tokens
More exchanges
More contributors(development, documentation, translations etc)
Spread the word!

45. Thank You
https://ergoplatform.org
https://twitter.com/chepurnoy
kushti@protonmail.ch