## Intro

SigmaUSD.io is the worlds first UTxO-based stable coin. The foundation on which a new era of digital finance will be built. A 100% cryptocurrency pegged decentralised stable coin that has no forced liquidation. (but is not without risk - as we’re about to find out).

It is an instantiation of the [AgeUSD protocol](https://github.com/Emurgo/age-usd) designed in partnership by IOHK, Ergo, and Emurgo.

It maintains the conservative settings for collateral reserves, avoiding the need for liquidations. Along with that, it supports a fully decentralised stablecoin emission setup. 

Thus, SigmaUSD offers the world a stable, simple, and decentralised stablecoin.

* [SigmaUSD vs the competition.](https://curiaregiscrypto.medium.com/sigmausd-vs-the-competition-e70b23fe37a3)
* [SigmaUSD on Ergo - Privacy, Stability and Governance](https://curiaregiscrypto.medium.com/sigmausd-on-ergo-a36e0cdff743)

SigmaUSD is a complex beast, but you need to know for this article the following. 

**SigmaUSD**

* Stable to $1
* If you buy SigmaUSD, and the price of Erg dips - you can claim more Erg for the same dollar value.

**SigmaRSV**

* SigmaRSV is similar to book value per share. Its value depends on both the size of the reserve and how it is utilised.
* When the price dips, SigUSD holders who exit at a lower point than they entered must be rewarded extra Erg to make their SigUSD up to $1
* SigRSV profits depend on these accumulated transaction fees plus any losses SigUSD holders experienced when exiting.

The 2% fee taken during minting goes back into the reserve. This fee accumulates in the reserve, appreciating the value of SigRSV and helping to prevent speculative orders.

Additionally, the contract locks at certain ratios, this is to ensure both that there is always enough reserve to meet the needs of the stablecoin under market conditions, and that the SigRSV position doesn’t suffer from significant dilution. 

![](https://ergonaut.space/photo_2021-05-26_01.56.49.jpeg)

## SigmaUSD V1

Shortly after the contract was live, we noticed a large player was jumping in and out of SigUSD at a semi-regular schedule. After some research, we identified that the Bearwhale was frontrunning the oracle price in an attempt to profit at the expense of reserve holders (SigRSV).

This type of oracle frontrunning is not uncommon and has happened before in the Ethereum DeFi ecosystem. It is a factor at play because oracle there must always be some amount of delay before a data point is accepted into a block, which opens up the ability for frontrunning to exist.

In our scenario, the Bearwhale was taking advantage of this by minting SigUSD early during the "Live Epoch" period of the oracle pool, once it was reasonably clear what the upcoming new Erg/USD datapoint would be—profiting on the price difference once the oracle pool finalised the datapoint. You can take a look at the whale's address [here](<https://explorer.ergoplatform.com/en/addresses/9hyDXH72HoNTiG2pvxFQwxAhWBU8CrbvwtJDtnYoa4jfpaSk1d3)>) (who appears to be an early miner in the Ergo ecosystem.

We decided at this stage to freeze the oracle price to allow people to redeem. The contract would then be relaunched with a higher fee, and governance tokens enabled.

Read the full blog post regarding this on the blog: [Finding The Right Balance](https://ergoplatform.org/blog/2021_03_04-finding-right-balance/).

## SigmaUSD V2

As soon as we launched V2, the Bearwhale was back with several attacks on different fronts. Thankfully, this led to some minor issues with the protocol coming to light and quickly being patched - improving the resiliency going forward. Don't you love free stress tests?

They initially purchased a significant stake in SigRSV - which most took as a sign of hope and that the Bearwhale was instead backing the protocol going forward. Unfortunately, ultimately, they discovered a loophole that allowed a mimicking of the SigmaUSD treasury, interjecting when someone was making a transaction, selling SigRSV to users while pocketing the fee.

When this was blocked, next was spamming the proxy addresses that ERG move through while being swapped for Sigma. This prevented the redemption of SigmaRSV and allowed the cycle into a short position, and keep the reserve ratio locked at 400%. Scripts from community members to counter his attempts, and subsequently, we rolled out a patch to prevent the attack.

Indeed, there were likely many other efforts to misuse and manipulate the oracle pools and the protocol itself, which were unsuccessful and we are not aware of.

While we cannot say for sure that the dumping on the open market was connected, 150,000 ERG sell-walls appearing shortly after the short positioned was entered was telling.

During the BTC-flash crash, the price of Erg fluctuated sharply to under $2; however, the robustness and smoothness of Oracle Pools came into play. 

They are limited to an update of 0.5% every 30minutes - up or down. The markets slowly recovered throughout the day, and the power of the Oracle Pools power was demonstrated. The Bearwhale had the chance to exit at a minimal loss during this period, but they did not. Maybe they were looking for lower prices of Erg.

Unfortunately, for his sake, the marketing machine is well-greased and roaring, and when we finally broke through $4, the whale exited his position with a loss of around 170,000 ERG, compared to his starting position at the beginning of V2. The exact amount made during V1 is hard to quantity, as the first transactions we see are withdrawals from the SigmaUSD bank (presumably, deposits made with another wallet). The Bearwhale's main address can be found [here](https://explorer.ergoplatform.com/en/addresses/9hyDXH72HoNTiG2pvxFQwxAhWBU8CrbvwtJDtnYoa4jfpaSk1d3), and [this second one](https://explorer.ergoplatform.com/en/addresses/9eyXNatnA6YM4tS1TjadEA6TFrd9bdufbFuykV89iX9vE9RBZZe) appeared later on. He likely has many others or friends helping him. 

Those who minted SigRSV at the start of the contract and cashed out here made a healthy profit.

At the moment, SigRSV holders might want to consider an exit. The size of the reserve compared to SigUSD utilisation is unbalanced and is high-risk for reserve holders. The Bearwhale is continuously rotating back into a short at a higher price point and try to redeem some of those ERGs. This is a risky gamble for him, and while he's a proficient hacker. He appears to be terrible at trading.

Is the game finished? No, we do not think so. But, from now on, the game is changed, and it is a fair game. Now, anyone can Mint/Redeem whatever they wish; the RR and SigRSV price are moving up and down as usual. No individual is preventing you from minting/redeeming USD/RSV, and it is ultimately you that decides on your position.

We must keep in mind that this protocol is not to benefit only the RSV holders; The war declared on the Bearwhale was because they were not playing fair. 

From now, lots of individuals and whales may enter into both positions and take profits or losses; that's fair. So, let us leave the bearwhale story behind and use the protocol wisely. I think all of us learned a lot from the battle and got more familiar with the risks/rewards of the protocol and the chaotic nature and wars waged behind the scenes in decentralised finance.

## The Future

The success of the SigmaUSD stablecoin depends not only on the price of Erg but also on the utilisation of SigUSD itself. 

anon_2020s has already integrated the mixing of SigmaUSD/RSV into the ErgoMixer. The first working non-custodial, programmable, non-interactive mixer in the cryptocurrency space. 

Both ERG and SigUSD are now accepted on [Cryptocurrency Checkout.](https://cryptocurrencycheckout.com/coin/sigmausd) This is a Non-Custodial Payment Gateway that provides plugins that make accepting multiple cryptocurrencies for your products and services as easy as entering your wallet addresses and copying some code into your website or application. 

The team is also working on SigUSD/USDx stablecoin pairs which would enable robust off-ramps; we have support upcoming for Auction House, the tip bot for Telegram, and, more significantly - ErgoDex on the horizon, which will likely be another serious test for autonomous contracts and the DeFi space as a whole. 

[Discussions are already budding on the forums](https://www.ergoforum.org/t/sigmausd-dao-bank-is-a-complex-beast/767/14) of how we can improve these contracts so that we can ensure the robustness and resilience of the protocol going forward. 

If you've made it this far, check out [The Ergo Manifesto](https://ergoplatform.org/blog/2021-04-26-the-ergo-manifesto/) to see what Ergo is really about. Head over to [ergonaut.space/en/SigmaUSD](https://ergonaut.space/en/SigmaUSD) for more information on the protocol, or [r/ergonauts/faq](https://www.reddit.com/r/ergonauts/search?q=bearwhale&restrict_sr=on&sort=relevance&t=all) for a comprehensive overview of all the components that make up Erg. 

We're not sure who minted the graphic above (a developer working on an NFT gallery stumbled on it). But it's [up for sale](https://ergoauctions.org/#/auction/specific/83643ed47afb08fab54a89b26f0077ddde3a02c01ee15aa52f5980231cf13e8e) on the auction house.

Finally, join the fight and help bring crypto back to its roots. There's a SigmaUSD group on [Telegram](https://t.me/SigmaUSD), a dedicated channel on [Discord](https://discord.gg/GkpppkfHAV), or head over to our rapidly growing community at [/r/ergonauts/](https://www.reddit.com/r/ergonauts/).

Bearwhale Saga

We’re happy to announce our collaboration with [Tesseract Systems](https://tesseract.one/) through our grants program that is going to provide full integration with the  [Ledger hardware wallet](https://www.ledger.com/). This integration will allow Ergonauts to safely store their ERG tokens with the world's most secure hardware wallet.



While there are many other ways users can store and interact with their ERG and tokens, the ledger provides a fully secure way to do this, ensuring that the private keys are never exposed to the internet directly when making a transaction. 



This ongoing collaboration will be a continuation of our constant search for better compatibility features, allowing users to access, store and manage ERG tokens on their Ledger devices.



The ledger hardware wallet, along with the live app, enables users to secure and control their portfolios fully. The two main wallets introduced by the company are the base model Nano S, for everyday crypto enthusiasts who are looking to secure their assets from home, or the upgraded Nano X model that allows them to manage it on the go from their smartphone. 



## Ledger Benefits and security



Ledger is pioneering hardware wallet technology, providing unprecedented levels of security for crypto assets by creating devices that are secure by design.



All hardware wallets created by the company possess a certified chip built to hold off any attacks. Aptly named the  “[Secure element](https://www.ledger.com/academy/security/the-secure-element-whistanding-security-attacks/)”. This provides an extra layer of security through cryptography. These chips are similar to the ones used in likes of passports and SIM cards. Nano wallets also have a unique and customized OS called “Bolos” explicitly designed to protect crypto assets which grant the higher protection against attacks possible.



Ledger wallets are the first and only certified hardware wallets on the market, approved by ANSSI, the french independent cybersecurity agency.



### About ERGO



Founded by some of the leading technologists in the sector. ERGO is a Proof of Work blockchain platform featuring smart contract capabilities that allow for full integration with the decentralized finance (DeFi) sector.



ERGOs [Sigma protocols](https://ergoplatform.org/blog/2020_03_16_ergo_sigma/) and blockchain architecture allow for what otherwise would be very difficult in conventional smart contract platforms. The use cases for financial contracts are endless, including the issuance of decentralized [stablecoins](https://ergoplatform.org/blog/2021-02-05-building-ergo-how-the-ageusd-stablecoin-works/), [NFTs](https://ergoplatform.org/blog/2020-10-16-announcing-the-auction-house-nft-marketplace-on-ergo/), [Oracle pools](https://ergoplatform.org/blog/2020-08-31-ergos-oracle-pools-and-what-they-mean-for-the-ecosystem/), and [decentralized mixers](https://ergoplatform.org/blog/2020_03_20_ergo_mixer/), among many other things.



You can read Ergo’s Manifesto [here](https://ergoplatform.org/blog/2021-04-26-the-ergo-manifesto/)



### About Tesseract



Tesseract is a protocol that allows dApps to run without having access to the user's private key. Instead, it facilitates communication with the Wallets to request transaction and data signatures.



The main goal of the Tesseract protocol is to enable dApp developers to provide a secure but at the same time smooth and easy-to-understand user experience without compromising privacy and decentralization. 



In contrast to the case-specific solutions, Tesseract protocol can work in various environments: on the smartphone, desktop, or even crossing the border of a single device (i.e. a dApp runs on the computer, and the wallet is on the smartphone).



You can test the demo dApp that utilizes Tesseract to work on iPhone here: <https://tesseract.one/#demo>

### About Ledger



The renowned leader in the industry of security solutions for crypto assets was founded in 2014. With its headquarters in San Francisco and Paris, Ledger has more than 200 employees developing a wide variety of products and services to shield assets either for companies or individuals. Their wallets support more than 1500 cryptocurrencies and can now be sold worldwide, making security reachable and affordable to all.

Ledger Integration begins


With the recent launch of the bootstrap period of the SigUSD stablecoin, the Ergo community participation rates have exceeded our expectation. This can be clearly seen by the total value locked (TVL) of over 6 million dollars worth of Ergs within the dApp as of writing. We at the Ergo Foundation have been closely monitoring how the community is using the SigUSD dApp, understanding the mechanics, and all of the different factors at play.

## Front-running Identified

Shortly after the dApp went live, we noticed a large whale was going in and out of SigUSD at a semi-regular schedule. After doing some research into the patterns this whale was using, it was identified that he was front-running the oracle price in an attempt to profit.

This type of oracle front-running has happened before in the Ethereum DeFi ecosystem, and is a factor at play because oracle datapoint updates can never be 100% immediate. There must always be some amount of delay before a datapoint is accepted into a block, which opens up the ability for frontrunning to exist.

In our scenario, the whale was taking advantage of this by minting SigUSD early during the “Live Epoch” period of the oracle pool (once it was reasonably clear what the upcoming new Erg/USD datapoint would be) and would profit on the price difference once the oracle pool finalized the datapoint. You can take a look at the whale’s address here (who appears to be an early miner in the Ergo ecosystem: https://explorer.ergoplatform.com/en/addresses/9hyDXH72HoNTiG2pvxFQwxAhWBU8CrbvwtJDtnYoa4jfpaSk1d3) 

## Pre-Launch Front-Running Mitigation Strategy

When designing the protocol underneath SigUSD (named the AgeUSD protocol), it was understood that frontrunning could be an issue. As such, a mechanism was put in place in the protocol to combat this; that being fees for minting and redeeming. In short, the fees for minting/redeeming SigUSD act as a barrier which prevents front-running from being profitable. This front-running barrier can be calculated by simply adding the fee for minting SigUSD plus the fee for redeeming SigUSD.

For the deployed SigUSD dApp the fees were set to be a low 1% per mint/redeem by the deployer (DarkSideBrrrrr) to provide the community a seamless experience for acquiring SigUSD/SigRSV without having to pay a lot extra. This decision for low fees however also made it more attractive for a greedy whale to abuse and attempt to front-run the dApp for profit. With only 1% fee on each action, this means that the front-running barrier ends up being 1% + 1%.

With an up-and-coming Blockchain like Ergo with a decent amount of price volatility, these 1% fees have been shown to be insufficient by the whale. Thus it was agreed upon that this front-running issue needed to be addressed immediately.


## Post-Launch Front-Running Mitigation Strategy

In order to protect Erg holders from being gamed by the front-running the whale was performing, the oracle pool was stopped in order to have the most fair way possible to upgrade the protocol. This means that the oracle rate for Erg/USD has been frozen at $3.16143 as can be seen in the [SigmaUSD web dApp](https://sigmausd.io/#/stablecoin).

This allows all SigmaUSD and SigmaRSV holders to redeem their tokens for Ergs safely. If the rate was not frozen, then the users who read this post first would be able to exit cleanly at the cost of other users who would continue to be negatively affected. As such, all SigmaUSD holders can redeem their tokens immediately, which will also allow all SigmaRSV holders to redeem their tokens as well.

Moving forward, this provides us with an opportunity to strike a new balance for SigmaUSD and address these issues with a multi-pronged approach.

The Ergo Foundation is recommending that community member DarksideBrrrr issues a new deployment of SigmaUSD with a 2% fee. This will double the barrier for all types of frontrunning any whale may wish to try to take advantage of.

Furthermore, the goal is to prevent the currently used risk-free front-running in its entirety. As such new oracle pools will be deployed with a “hardening upgrade”.

The first part of this upgrade involves setting a cap for price variations between datapoint updates. In other words, because front-running will be prevented by 2% fees (a 4% front-running barrier), datapoint updates can now be smoothed-out to only move up/down in 4% increments. (With very sharp movements allowed as to not prevent real major market movements from taking place). This change prevents the front-running technique that the whale was using.

Furthermore we also want to do even better and improve the experience for all oracle-based dApps while we’re making such large changes. As such we will be doubling the speed of the oracle pool datapoint posting. Originally being 60 minutes, the posting schedule is being sped up to 30 minutes.

This naturally works in tandem with the smoothed-out price updates thereby providing higher quality, fresher, and more useful on-chain data points.


## Going Forward
 
With novel updates to both oracle pools and the SigmaUSD dApp, the ecosystem and all Ergonauts are able to feel assured that the ecosystem is moving forward in the right direction.

The current plan is to launch the new oracle pool update within the next week, and we expect DarkSideBrrrr to be able to deploy a new instance of SigmaUSD shortly after that.

The Ergo community is one of the most valuable assets that we have, and we intend this transition to go as smoothly as possible so that everyone can get back to enjoying using SigmaUSD and SigmaRSV. We will keep you up to date as things progress in the coming week.



Finding The Right Balance

*Your portal to Ergo’s dApp universe is opening.*

Ergo has some amazing tech and some talented developers. However, as a decentralised and community-powered platform, it’s not always easy to know what’s going on all the time. Different people are developing different dApps and use cases, formally and informally. Connecting them to the same users and building that all-important DeFi network effect isn’t always easy.

That’s what the [Sigmaverse](https://sigmaverse.io) is about. Sigmaverse is a one-stop portal to the Ergo dApp ecosystem: a place where users can find all the cool functionality that community developers are building on Ergo, all in one place.

The idea is that developers can create their apps, and then list them on Sigmaverse using GitHub.

As it becomes the default site for accessing dApps, more and more devs will add their own, making it easy to learn about new additions to the Ergo ecosystem. A search bar allows users to check for a specific type of dApp.

So far, five dApps are listed on Sigmaverse:

* [Ergo Auction House](https://ergoauctions.org/): Ergo’s NFT market ([read more](https://ergoplatform.org/blog/2020-10-16-announcing-the-auction-house-nft-marketplace-on-ergo/))
* [ErgoMixer](https://github.com/ergoMixer/ergoMixBack): trustless, self-sovereign mixing for ERG and Ergo tokens ([read more](https://ergoplatform.org/blog/2020_03_20_ergo_mixer/))
* [ErgoUtils](https://ergoutils.org/): Issue tokens and NFTs on Ergo 
* [Oracle Pools](https://explorer.ergoplatform.com/en/oracle-pools-list): Ergo’s decentralised, extended UTXO approach to oracles ([read more](https://ergoplatform.org/blog/2020-08-31-ergos-oracle-pools-and-what-they-mean-for-the-ecosystem/))
* [Zero-Knowledge Treasury](https://github.com/anon-real/DistributedSigsServer): create joint digital signatures with bespoke conditions ([read more](https://ergoplatform.org/blog/2020-09-04-announcing-the-zk-treasury-on-ergo/))

To include your dApp in Sigmaverse, create a new folder at https://github.com/ergoplatform/sigmaverse folder applications/{dAppName}, and in this folder create a new file, overview.md, with the following contents and structure:

```markdown
------
name: name of dApp
description: description of dApp
website: dApp website
logo_image: “{logotypeName}” – if you want to include this, save the image at applications/{dAppName}/{logotypeName}
preview_image: “{previewName}” – if you want to include this, save the image at applications/{dAppName}/{previewName}
appCategory: [“web” or/and “cli” or/and “desktop”]
------
```

That’s all! The process is fast and straightforward. To check out the dApps already available in the Sigmaverse, visit [](http://sigmaverse.io/)[Sigmaverse.io](https://sigmaverse.io).

Introducing the Sigmaverse

*The Ergo Foundation will consider proposals for grants towards projects that will support significant ecosystem developments.*

Ergo is a community-oriented project, with many contributors to various aspects of the ecosystem. Grants are available from the Ergo Foundation to help fund this work, which is vital for building out the everyday products and services required by users, as well as more diverse DeFi applications. 

The Foundation is actively seeking to make new grants, and has just voted to accept a brand new proposal that will improve the experience for all dApp developers.

**Ergo dApp Infrastructure Setup tool**

This latest proposal was made by Marek of [FiveBinaries](https://www.fivebinaries.com/), who was also responsible for building the first [Cardano-Ergo oracle solution](https://ergoplatform.org/blog/2020-11-09-first-steps-towards-interoperability-with-cardano-oracles/).

At present, setting up the necessary infrastructure to support your dApps as a developer is difficult due to the limited documentation. The project targets this ecosystem pain-point by developing a tool which streamlines the process of setting up an Ergo node, explorer backend/frontend instance, and vital monitoring/logging tools. 

This will make the dApp developer experience significantly better by enabling devs to host their own infrastructure by merely running a command or two. As such the ecosystem will decentralise further, with many more nodes/explorer instances being scattered all across the world. Resiliency of both the blockchain itself and the dApp infrastructure on top will increase significantly as a result, while at the same time improving the experience for developers considerably.

**Submit your proposal**

The Ergo Foundation invites developers to submit new grant proposals, in order to speed up and decentralise the process of building key Ergo ecosystem services. Proposals should include:

* An overall summary of the project
* Intended goals
* Timeline
* Size of grant requested

The first two sections of FiveBinaries’ grant proposal are included below as an example:

> ```
> # Ergo hosted infrastructure
>
> To make it easier for dApps developers to host their infrastructure, either as a service to their users or development of their applications, I would like to propose a project to improve the experience by providing an out of the box solution.  
>
> ## Deliverables
>
> The out-of-box experience would be a cluster consisting of the following components.
>
> * Ergo node
>
> * Ergo explorer
>
> * Ergo frontend
>
> * Ergo backend (chain-grabber, explorer-api, utx-broadcaster and utx-watcher)
>
> * Monitoring
>
> * Grafana (metrics)
>
> * ELK (logs)
>
> The project will make use of docker-compose to setup a number of containers forming a cluster.
> ```

If you have a great idea which you are looking to implement that would improve the Ergo ecosystem as a whole, please feel free to apply for an Ergo Foundation grant by emailing your proposal to: [team@ergoplatform.org](mailto:team@ergoplatform.org).

Ergo Foundation Makes Key dApp Infrastructure Grant 

*This major auction will help fund the dev work carried out by our anons, and offers the opportunity for anyone to get their hands on a piece of Ergo history, thanks to the updated Auction House working with any Ergo wallet!*

The [launch of Ergo’s Auction House](http://ergoplatform.org/en/blog/2020-10-16-announcing-the-auction-house-nft-marketplace-on-ergo/) was a great milestone for Ergo Platform. Ergo NFTs offer additional features to those on other blockchains, and our auction back in October sold the [first ever PoW-backed NFT](https://ergoplatform.org/blog/2020-10-19-the-first-ergo-nft-auction-is-under-way/) to raise funds for developers. The NFT [sold for 1,027 ERG](http://ergoauctions.org/#/auction/history).

At that point, it was only possible to bid on the auction if you ran your own node, making it difficult for most of the community to participate. 

Now, we’re launching another auction, again to raise funds for our anon devs, who have done so much amazing work. And this time, a new service means any wallet can be used!

<center>

![](/img/uploads/ergonaut11.jpg)

</center>

This auction is something a little bit different. The NFT will represent the first image of our new Ergo mascot, the Ergonaut. Featured here with his futuristic multi-tool, we’ll be seeing more of this character in due course. We wanted to sell this image to introduce the Ergonaut to the community, and mark recent updates to the Auction House.

The NFT linked to the Ergonaut will contain certain information:

* A digital monument to our anons. The token id was built from a box which contains (in its registers) the string “anon_92048 | anon2020* | anon_real”. Anons have made many contributions to the Ergo ecosystem, including ErgoMixer, ZK Treasury and the Auction House. 
* 32 bits of work (token id: 000000002306564c7b03a78b76a2ce1d9d4e748ddf462cb73cc30b48e43e6e44).
* The Ergonaut character image associated with the NFT (no rights to the concept). The token issuing box contains the image hash “059c321fad7e0b2bb474ebea46c8978d1957eb1b5f11c589e52f129d14b3bde4” in Register #8.

All the funds from this sale will go to our anon devs, enabling them to continue building cool new features for the Ergo ecosystem.

If you don’t run your own node, you can still bid on [this auction](http://ergoauctions.org/#/auction/active) using the transaction Assembler service. Click on the ‘Configure Wallet’ button in the top right corner of the Auction site, click ‘Any Wallet’, and fill in your address. 

When you place a bid, you’ll be given an address to send your ERG to. The standard rules apply: if you are outbid, your ERG will immediately and automatically be sent back to you.

Good luck and happy bidding!

You can find out more about the [Tx Assembler service on ErgoForum](https://www.ergoforum.org/t/tx-assembler-service-bypassing-node-requirement-for-dapps/443).

Introducing the ‘Ergonaut’: the Ergo Foundation NFT sale!

*Magnum, a popular lite wallet for ERG and other currencies, will cease to operate at the end of the month.*

Many of the Ergo community use Magnum, a lite multi-wallet that was one of the first solutions to provide support for ERG.

Unfortunately, Magnum will be suspended at the end of the month. The Magnum team recently posted in Telegram:

> *Dear users,*
>
> *today we are forced to inform you that in 20 days Magnum Wallet will be suspended.*
>
> *It was a difficult year and a difficult decision for us.*
>
> *We remind you that Magnum Wallet is a non-custodial wallet. Magnum Wallet doesn't have access to and doesn't store your personal data, and only provides you with viewing data from the blockchain. You can use any other cryptocurrency wallets to access the blockchain through your private keys.*
>
> *We also remind you that it is you who should keep your private keys. We regularly suggest that you save them from Magnum Wallet. If you haven't done this yet or don't remember the place where you store your private keys, then below are instructions on how to do it right now.*
>
> *We highly recommend doing this soon.*
>
> *Magnum Wallet will be suspended on the 30th of November at 6pm GMT.*
>
> *Thank you for using our product.*

It is therefore vital that you move your funds to another Ergo wallet as soon as possible.

Fortunately, thanks to the [recent integration of Ergo into Yoroi](https://ergoplatform.org/blog/2020-10-09-yoroi-your-gateway-to-ergo-dapps/), the Cardano lite wallet developed by Emurgo, an excellent alternative is available.

[Yoroi](https://yoroi-wallet.com/#/) is extremely easy to use. It’s a very popular web wallet that acts as a super gateway to the Ergo blockchain. Furthermore it is slated to support smart contract capabilities in the futurle, similar to MetaMask, a popular browser extension wallet and dApp interface for Ethereum. There are a few key differentiating features such as the full-page design and the way multiple addresses can be created for the same wallet (similar to a Bitcoin wallet). These are great additions which improve the user experience while still keeping it simple to get started.

One important thing to note when switching over from Magnum: **you won’t be able to import your addresses from Magnum directly to Yoroi**. This is because the two wallets derive addresses from the mnemonic seed in a different way. (There’s technically nothing stopping you using your Magnum mnemonic to create a new account using Yoroi, but it will open up into a different wallet than you expect.)

Thus after creating a new Ergo account within Yoroi, simply send your ERGs from Magnum to your new Yoroi address and wait for your transaction to be confirmed on the blockchain.

The whole process won’t take more than a few minutes. What’s more, you’ll also be upgrading to a wallet that is both better supported, and has a bright future ahead. Yoroi is going to become an increasingly important element within the Ergo ecosystem, offering support for dApps and Ergo-enabled websites – while also providing another strand to the [interoperability between Ergo and Cardano](https://ergoplatform.org/blog/2020-11-09-first-steps-towards-interoperability-with-cardano-oracles/).

Magnum Wallet to be Suspended – Transfer Your ERG to Yoroi

*The oracle solution for Cardano will post data from Ergo’s oracle pools, treating the pre-processed data as a trusted source for its own records to the blockchain.*

Back at the end of August, we announced [Oracle Pools](https://ergoplatform.org/blog/2020-08-31-ergos-oracle-pools-and-what-they-mean-for-the-ecosystem/): a new approach to oracles, powered by Ergo’s extended-UTXO model. The benefits of these oracles over existing models are considerable, and they allow the creation of new types of dApp.

Now, one of Cardano’s oracles is using data provided by Ergo’s oracle pools. Marek, a Cardano Stake Pool operator, has created a simple solution for Cardano. Information from Ergo’s oracle is posted onto the Cardano blockchain via tx metadata.

The NUTS oracle, which you can find at [nut.link](https://nut.link/), currently serves six data streams. It has two sources of data for ERG/USD: Coingecko, and Ergo oracle pools. These two sources are also used for ADA/USD price. Additionally, NUTS records ADA/EUR and the price of TSLA shares. 

Furthermore, NUTS uses a funding scheme inspired by Ergo’s approach to oracle pools, which treats external data as a public good to be made freely available. You can follow NUTS on Twitter at [@stakenuts](https://twitter.com/stakenuts).

**Connecting chains**

This is a great development, for at least two reasons. Firstly, it reuses work already done by Ergo’s oracle pools – thereby enabling Cardano to post a reliable price feed more efficiently. Sharing data in this way will benefit both chains in the future, since once reliable oracles have been established, any other platform can use that data with relatively little extra overhead.

Secondly, this provides the first steps in building interoperability between the two platforms. Both Cardano and Ergo now share the same source of data about the same cryptos. This opens the way for greater collaboration and cross-chain interaction, solidifying the connection between the two chains.

Ultimately, this functionality might power complex DeFi solutions such as Ergo-Cardano atomic swaps, with cross-chain liquidity pools and pricing decided by mutually-agreed oracle data. While that’s some way down the line, it does demonstrate what should one day be possible.

In the meantime, stay tuned for a new update on oracle pools, and further research from Emurgo that will develop interoperability between Cardano and Ergo.

First steps towards interoperability with Cardano oracles

*Ergo’s Zero-Knowledge Treasury enables users to easily create joint digital signatures, with bespoke conditions for spending funds, while ensuring the signatories to the created address remain hidden.*

Zero-Knowledge (ZK) cryptography offers lots of powerful use cases. The benefit of ZK operations is that not only are they secure, but they’re private.

Imagine you find a smartphone on the ground in the park. A woman close by claims it’s hers, but you don’t trust her. Perhaps she just wants the phone. She could give you the unlock code, but then you’d gain information that, as the owner, she wouldn’t want you to have. So, you close your eyes and hold out the phone, and when you open them, the screen is unlocked. She has proved ownership without giving away sensitive information. That’s a simple example of a zero-knowledge proof.

The applications in the blockchain world are compelling. Consider a conventional two-of-three multi-sig address on the Bitcoin blockchain. This requires that any two out of the total of three private key holders for that address have to sign a transaction for funds to be moved. It’s a lot more secure than a single-signature address, but it lacks privacy. Anyone can look at the blockchain and know exactly who signed the transaction.

With a zero-knowledge signature, no one knows who is responsible for a transaction – only that the required number of private keys have signed it.

Ergo’s Sigma Protocols are excellent for creating composable ZK signatures. In other words, a group of users can get together and create an address with the conditions they specify. For example, five users could create an address that any three of them need to sign to make a transaction. Or the conditions could be more complicated. A startup consisting of seven people could create an address whereby the CEO and CFO both have to sign to release funds, or else any five key holders can sign a transaction (offering an insurance policy if either CEO or CFO is out of action).

Ergo has always been a community-driven project, and we’ve always had strong and enthusiastic support from our developers, many of whom prefer to remain anonymous. One of our anons has pioneered a user-friendly interface that makes it easy to form joint spending groups that require a quorum of signatories to make a transaction (since the process for doing this was previously complex, even for more technical users).

*User [‘anon_real’ writes](https://www.ergoforum.org/t/app-on-distributed-signatures/342):*

*This project contains two separate apps, server, and client.*

*The server is accessible by everyone who can propose ideas and ask for funds from a team.*

*On the other hand, every team member has to set up the client app which will be in charge of interacting with their secret, node, explorer, and server to create the necessary proofs for approved proposals.*

*If a proposal is marked as fully approved (enough approvals have been collected based on the team’s signature), then client apps will generate necessary proofs and transactions in the background without needing any intervention by members.*

![](/img/uploads/ergsig.jpg)

You can find further [discussion of the Zero Knowledge Treasury on the Ergo forum](https://www.ergoforum.org/t/zero-knowledge-treasury-on-top-of-ergo/354/3).

There are lots of use cases for this application beyond securely spending funds on Ergo. For example, a similar interface could be the foundation of decentralised [public key infrastructure](https://www.ssh.com/pki/) (dPKI): a means of generating and managing public/private keypairs to authenticate users and devices, but without the centralised points of failure that exist in trusted PKI setups.

A big thanks to anon_real, and we look forward to seeing the ZK Treasury used in the Ergo community!

Announcing the ZK Treasury on Ergo!

"This board appointment serves to further strengthen EMURGO’s recently announced partnership with Ergo...and strategically positions EMURGO at the forefront of development of this emerging industry area of UTXO-based smart contracts that is being worked on by Cardano and Ergo."

"EMURGO is pleased to officially announce that EMURGO’s Head of R&D and smart contract developer Robert Kornacki was appointed as a new board member of the Ergo Foundation."


*The joint research on oracle pools will be implemented in the Ergo stablecoin project.*

[Oracles](https://ergoplatform.org/blog/2020_04_04_building_ergo_oracles/) are one of the critical elements of DeFi, providing a link between the siloed and self-contained world of the blockchain, and real-world data. It is imperative that dApps have access to reliable price data, among other information, in order to execute effectively and securely.

New research from the [Ergo-Emurgo partnership](https://ergoplatform.org/blog/2020_06_09_press_release/) offers a new way to approach the problem of achieving consensus and posting data to the blockchain: [Oracle Pools](https://github.com/Emurgo/Emurgo-Research/blob/master/oracles/Oracle-Pools.md).

Despite the importance of oracles in providing data feeds to dApps, the research notes that ‘oracles schemes today lack transparency, accountability, and operational robustness’. This makes them a potential single point of failure, threatening the security of any software that relies on them. In the case of a [stablecoin](https://ergoplatform.org/blog/2020_05_05_stablecoins/), it can mean the risk of losing its peg, and opening it to attack and exploits.

## Oracle pools

The concept of oracles pools was designed for Ergo’s extended UTXO smart contract model, though the high-level overview can be adapted for use in Account-based systems (like Ethereum).

> Oracle pools are a new model which attempt to address said issues, while also providing further new capabilities. From guaranteeing the data posting schedule, incorporating game theoretic incentives + disincentives, built-in governance, potential dynamic entry, and building oracle datapoint hierarchies of confidence, there are many possibilities unlocked with this model.

Oracle pools involve several oracles operating together, with different shares in the pool, and receiving payouts based on the reliability of the data they provide. (To determine the ‘true’ value of the data, outliers are removed and the data points averaged.) To participate, an oracle needs to post collateral, and can be ‘fined’ for failure to provide high-quality data on time. 

Thus – as in the PoW consensus approach itself – honest oracles are rewarded, while fraudulent or unreliable ones waste their resources.

## Stablecoin

When the new model is implemented, it will become a key part of the technology that will underpin the Ergo stablecoin. (This will take an algorithmic or collateralised approach, rather than being a fiat-backed coin like USDT or USDC.)

Further details about the new stablecoin will be published in due course, with the new project expected to launch later in 2020.

To find out more about Oracle pools, [read the new research](https://github.com/Emurgo/Emurgo-Research/blob/master/oracles/Oracle-Pools.md).


Ergo-Emurgo partnership yields new model for oracles


_The collaboration will encompass a range of objectives – including exploration of a decentralised stablecoin solution._

[Ergo](https://ergoplatform.org/en/), the smart contracts platform designed by former IOHK engineers, and [Emurgo](https://emurgo.io/en), a global blockchain solutions firm and one of the founding entities of Cardano, have entered into a partnership with the aim of furthering the DeFi space with ambitious new research and technology.

## Research-driven technology

Both Ergo and Emurgo have a reputation for taking an academically-rigorous approach to development, basing their technology on peer-reviewed research by top cryptographers and blockchain specialists. 

The purpose of the collaboration is the creation of new decentralised fintech applications, with a particular interest in enterprise users. One promising area of research and development will be a joint stablecoin project. Emurgo brings deep expertise in Cardano’s technical infrastructure, while Ergo’s team has pioneered UTXO-based smart contracts and Sigma protocols.

## Yoroi integration

The partnership will also see Ergo’s native network token (ERG) added to Emurgo’s [Yoroi wallet](https://yoroi-wallet.com/). Yoroi is a secure desktop and mobile lite wallet for Cardano.

‘This is a fantastic opportunity to work with a well-respected technology partner, whose areas of expertise perfectly complement our own,’ comments Alexey Chepurnoy, the founder and lead developer of Ergo. ‘The values of the two organisations are closely aligned, particularly with regards to the emphasis on implementing the latest research. Moreover, integration with Emurgo’s Yoroi wallet will see Ergo placed before tens of thousands of new users, further improving the strength of the Ergo community and the decentralisation of the network.’ 

## About Emurgo

[Emurgo](https://emurgo.io) is a global blockchain technology company providing solutions for developers, startups, enterprises and governments. Emurgo develops enterprise-grade applications, builds developer tools, invests in startups, and provides blockchain education.

The company has offices and manages projects in Singapore, Japan, the USA, India, and Indonesia, and is a founding member of the Cardano protocol – arguably the most research-driven project in the blockchain space. Emurgo has recently launched a key piece of technology, the Traceability Solution, signalling its entry into the enterprise space.

## About Ergo

The Ergo platform, meanwhile, is a proof-of-work based blockchain that takes a unique approach to smart contracts and dApps. Ergo builds on the strongest and best-established features of the Bitcoin protocol, adding extensive new features for DeFi.

These include UTXO-based smart contracts and Sigma protocols: efficient, zero-knowledge protocols that enable implementation of tasks that would be impossible, risky or expensive on other platforms. This includes out-of-the-box support for custom ring and threshold signatures. 

Together, Ergo and Emurgo will develop solutions to meet the growing demand from forward-thinking enterprises, enabling them to improve efficiency, security and privacy. Interoperability between Ergo and Cardano will facilitate implementation of both bespoke and larger projects.

For more information about Ergo, visit [ergoplatform.org](https://ergoplatform.org)
