Ethereum Foundation, one of the main powerhouses behind Ethereum, recently published a blog post on their allocation of funds for the next 12 months and the approximate funds held by it. The funds allocated for the next year will contribute to projects working on Ethereum 1.0, Ethereum 2.0, and the overall development of the ecosystem.
The non-profit organization stated,
“As the ecosystem has matured, the Ethereum Foundation has refined its focus. “Doing what is best for Ethereum” doesn’t mean trying to do everything – it means focusing on where we can add the most value, and leaving space for others to add value in the areas that they will be the most effective.”
The organization also stated that its role was to be an allocator, an advocate, and a voice in the ecosystem. Further, the Foundation also revealed that it has control of around 0.6 percent of all Ether [around $163 million worth of ETH, at press time], along with cash reserves that would be spent on the development of Ethereum. Additionally, the Foundation stated that they would be working on the development of fundraising platforms such as Gitcoin and MolochDAO.
The blog post read,
“These resources are intended to decrease over time, as they are invested in critical work across the ecosystem. These are significant amounts of capital but they are not infinite. It is our responsibility to ensure that every last dollar and wei is spent effectively.”
For Ethereum 2.0, the “client teams supported by the Foundation” includes Sigma Prime, Substrate Shasper, Nimbus, and Prysm. Out of these teams, Nimbus, Prysm and Sigma Prime have already launched their Lighthouse Testnets for 2.0.
For Ethereum 1.x, the Foundation said,
“Efforts we’ve funded include Alexey Akhunov’s research into stateless clients and state fees, and Andrew Ashikhmin’s research into sync protocol improvements. Work continues on essential projects like Geth and Solidity as well, and regular updates from all supported teams are on the way.”
The Foundation further revealed the amount of funds it has allocated for Ethereum’s development. The organization has allocated a sum of $30 million on “key projects across ecosystem,” which includes projects working on the current state of Ethereum, projects working on the future of Ethereum, and spreading awareness/developer growth.
For projects working on the future of Ethereum like ETH 2.0 and Zero-knowledge, a total of $19 million has been allocated for the next 12 months. For projects working on the current state of Ethereum, ETH 1.0, the Foundation has allocated $8 million for the next year. For developer growth and awareness, the Foundation allocated $3 million.
The blog post read,
“Allocating across such a large and vibrant ecosystem is a substantial optimization challenge. We are constantly re-evaluating and optimizing our decisions, and new opportunities for leverage appear every day.”
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Coin Metrics data reveals inaccuracies in Kik’s claim of being as dominant as BTC, ETH blockchains
Upon investigating Kik’s claims in response to SEC’s lawsuit filed earlier this month, CoinMetric data reported inconsistencies in the on-chain activity and adoption rate of its native token, Kin.
In a study dubbed, “An Analysis of Kin’s On-Chain Activity,” the crypto-asset elaborated on the two assertions made by Kik in its letter to the US Securities and Exchange Commission.
Kik’s first claim was regarding its blockchain activity. Its in-house token, Kin, supposedly exceeded Ether and Bitcoin to record the fifth highest daily blockchain activity. This was debunked by CoinMetric’s investigation after taking into account its “Operation Count” [the same metric used by Kik to support their claim] and “Transfer Value.”
In terms of the Operation Count, the report explained,
“According to Kik’s source for the metric, “blockchain activity” is defined as “the number of operations on the blockchain in the last 24 hours.” Operations are broadly defined as any type of action that could be recorded on chain. But operations are not standardized across blockchains which makes comparing across chains difficult.”
Besides, drawing parallel comparisons across blockchains with radically different use cases and operations is difficult.
Although Kik’s original research showed a high number of account creations, Coin Metrics data revealed that many of these accounts were empty.
Additionally, Kin’s “create account” operation has a fee of .001 Kin. The report highlighted that a metric such as “operations count” for the purpose of blockchain activity cannot be used as a measurement tool since Bitcoin and Ethereum blockchains do not track account creations on-chain.
In terms of Transfer of Value, the report elaborated,
“Theoretically, high daily transfer value should signify high activity. But transfer value is often quite noisy, especially on low fee blockchains where there are minimal costs to sending transactions. Some transfers might simply be users moving money around between addresses they own”
Instead, Coin Metrics contrived “adjusted transfer value” metric to eliminate what it called, “noise and certain artifacts like self-sends, or deliberate spammy behavior.” Coin Metric noted that this gives a clearer picture of the on-chain activity, resulting in a decreased transfer value when compared to other blockchains, even if it had a high number of daily blockchain operations.
Additionally, Kin’s average transaction value was also low, when compared to other blockchains. For the first claim, Coin Metrics concluded that the Kin platform had more micro-transactions than Bitcoin and other dominant blockchains, while highlighting the fact that the latter blockchains are not primarily used for such transactions.
Regarding Kik’s second claim that said that over 300,000 users were earning and spending Kin as a currency, Coin Metrics assessed its blockchain usage. The number of addresses is not necessarily equal to the number of users since a single user could have multiple addresses. Hence, Coin Metrics took the number of active users into account, which the report defined as “the number of unique addresses that were active in the network [either as a recipient or originator of a ledger change] during that day.” The report noted,
“Kin 2 has significantly more originating active addresses than Kin 3. Although Kin is in the process of migrating to Kin 3, it appears that Kik is using data from the Kin 2 chain to support their claims about usage.”
Further, Kin 2 and Kin 3 had more active addresses that received payments than originated payments, which meant that there were more “earners” on Kin than “spenders,” also noting that only 35,000 addresses held over 10,000 kin [nearly $0.23]. The report added that the figures are lower than other blockchains which have a minimum of 1,000,000 addresses with at least $1.
After examining multiple critical aspects, Coin Metrics concluded that Kin fell below dominant blockchains in terms of daily active addresses, despite maintaining steady growth. It said,
“A majority of Kin’s active addresses have small account balances. While this makes sense for a network built around micropayments, when viewed across multiple metrics, our data show that Kin is not more widely used than dominant chains such as Bitcoin or Ethereum.”
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