Thanks once again for supporting the project! We’ve been pushing hard at CHAINFLIP LABS, but I figured enough time has passed to warrant an official update to our community, so let’s get into it.
This update is a big boy, here’s the breakdown:
Part One: The Update
Part Two: Network & Token Rollout Plan
Part Three: Call to Action: How you can help!
Get a cup/mug/stein of your favourite caffeinated beverage and strap in…
Part One: The Update
First, let’s talk about technology. CTO Tom Nash has started churning out fortnightly development updates which you’ll also start receiving. They’ll be posted to medium too. Overall though, the progress on the development team has been strong, with our TLA+ state machine as good as completed by Maxim and Kyle, ticking off our formal verification process. Now begins the process of turning weeks of planning and designing into cold, hard Rust. By Rust, I of course mean our substrate state chain (written in Rust 😉). Using all the various components and systems we’ve engineered since halfway through last year, we are now well and truly rolling towards a viable testnet. More on that later.
Communications have been a bit….well…minimal. That’s changing fast. The communications team and some of the devs have been hard at work generating the initial content for our new website coming out next week. It’s a glorified hub for links, but equipped with our new FAQ and lots of helpful links, we hope we can use it to start producing a range of medium articles and analysis pieces which we’re going to use to start building up the following of the project — but between the investment, technology, legal, and operational work happening under the hood, it’s been hard to really sink our teeth into executing much of this work visibly. We do however have a community management plan ready to roll out upon command, and a fleshed out communications strategy. Despite the quiet comms, demand for FLIP has been exceptional.
On the investment side, since Blockchain Capital signed a $1.5m deal with us to close out our 19mm sapling round and take a further $1.1m at a 29mm valuation, we have had many exciting calls with some amazing potential backers. After assessing these calls and the demand for the token, we have decided that instead of continuing at a 29mm valuation and then running a further 40mm with little room left for the wider ecosystem, we thought it best to condense our final rounds down into a single 45mm round, raising $5–6m, and overall selling fewer tokens privately than initially planned. As previously mentioned, we anticipate wrapping up the private round in April/May, most likely the final week of April. Our goal here is to attract a smaller pool of highly active and engaged stakeholders who can bring influence to the project. With the list we’ve built so far we are well on the way to achieving this. There have been dozens and dozens of other investors also interested in the project. The goal at this stage isn’t just to raise more funds, but instead to raise greater awareness and buy in from key stakeholders in the space, and make sure as many of the participants we are including now make commitments to become validators.
Condensing the final rounds and slightly reducing the number of tokens for sale allows us to retain more tokens to be deployed to a wider audience through the TGE — which I’ll tell you more about in Part Two. In any case, things on the investment side are strong and the demand is very encouraging.
That being said, I did want to take this opportunity to define expectations. The mission to build a decentralised shapeshift backed by AMMs and brand new decentralised custody solutions is fraught with dozens of tightly coupled engineering challenges. Frankly, recruitment was also quite a lot slower than expected, but has improved significantly in the last few weeks. The net result of this has been that we are a couple of months behind where we thought we might be scaling wise at this time — but not without something to show for it. Our design is now crystallised — this will now allow us to take our suddenly very large engineering team of 11 full time mid-senior level engineers (and set to expand a little more with 4 active candidates) and convert that into visible results at pace.
In terms of timelines, we’re aggressively pursuing a Q4 product release. If all goes well, we expect to hit that goal. Software being software though, we wanted to level expectations that engineering challenges as complex as Chainflip do tend to throw curveballs. As they say though, spend 80% of your time planning and 20% of it doing — we’ve spent a lot of time planning lately and found multiple areas for major improvement which will serve to reduce development time and improve the end product without introducing too much scope creep.
While the user facing product won’t be out for some time yet, with Q4 21 as an aggressive target and Q1 22 as a conservative estimate, we do have an updated plan to progressively roll-out the network so that plenty will be happening throughout the year regardless.
Part Two: Network & Token Rollout Plan
CAVEAT CAVEAT CAVEAT**** — This whole plan is subject to change — as you know we at Chainflip remain flexible and are ready for all of the various curveballs that could come our way. The plan you see here is a plan, but it is only a plan. Pretty please, don’t be salty if they change…
This updated plan aligns with our current TGE (Token Generation Event, in other words “making the token exist”) plans. You may have heard plans floating around to launch the token through a Balancer Liquidity Bootstrapping Pool, also known as an LBP. If you’d like to read more about LBPs, check this out: https://docs.balancer.finance/smart-contracts/smart-pools/liquidity-bootstrapping-faq.
If a better option pops up in the next couple of months, we’ll consider it — ideas welcome! In any case, the question you likely have on your mind is “wen token, wen unlock??” The answer remains the same: Likely in July, August at the latest. We want to make sure we’ve built up a groundswell in the crypto community and before releasing the token into the wild blue yonder.
One of the major challenges with launching a network like Chainflip is that it’s security largely depends on the amount of collateral stored in the validators. Thus, launching the main network and the product at the same time introduces a range of complexities and risks that can be avoided. Thus, we’re now planning to launch our validator network earlier than anticipated, well before product launch. This means that investors and FLIP holders will be able to stake their FLIP into validators and start earning (some) yields and participating in community activities much sooner. This achieves several things, with the main benefit being that it:
- Allows the network (through limited emission) to begin increasing collateralisation of validators over time, meaning Chainflip can allow time for validators to be onboarded and set up their infrastructure before the product is launched, which should mean a much higher collateralisation and security when trading goes live;
- Gives users a means of participating in the project before the product is live, creating token lockup and offering a yield for exhibiting positive behaviour; and
- Tests some of the core features of the network in the wild before the full suite of audits are completed, and could offer us insights as to how to improve the validator UX over time.
To execute on the main network rollout plan, we’ve devised a potential roadmap which would achieve the above goals in a progressive fashion:
Mainnet Phase One — “SANDSTORM” :
Anticipated between August and October, The sandstorm release will have the following features:
- 150 validators with auctions for validator slots occurring every 7 days
- Substrate based State Chain run by the validators
- Aggregate 25519/Schnorr aggregate key generation and signing
- The state chain tracks token balances and regulates emissions of the FLIP ERC20 token through aggregate signature generation and validation in the FLIP Validator staking smart contract
- Liveness checks for the validators with penalisation and slashing mechanisms for inactive nodes
- Witness Engine hooked up to Ethereum
- Signing Module hooked up to Ethereum
- Emissions of about 6% per annum to incentivise collateralisation to approximately 35% of FLIP supply
Mainnet Phase Two — “IBIZA”:
Anticipated 1–3 months after the Sandstorm rollout, the Ibiza rollout will have all of the features of the Stakenet, plus:
- Witness and output engines connected to other 25519/Schnorr supporting chains
- Liquidity pool logic and balance tracking logic bootstrapped
- Periodic signing tests to add to the slashing logic
- All remaining logic and software in the Testnet pushed to the mainnet nodes but remain inactive (liquidity provision disabled, quoters inactive)
- Emissions of about 9% per annum to incentivise collateralisation to approximately 45% of FLIP supply
Mainnet Phase Three/Product Launch — “REVOLVER”:
Anticipated 1–3 months after phase two, taking into consideration audit progress, the Phase Three of the Chainflip Network Rollout — otherwise known as product launch — will enable quotes and liquidity provision on the mainnet.
- Witness and output engines hooked up to non 25519 chains (ie. BTC, etc) through sub vaults and vault randomisation. Subvaults and randomisation may be avoided if Bitcoin’s Taproot upgrade rolls out in November.
- Auction frequency decreased to the full 28 day period with a 2 day overlap for non-smart contract vault rotations
- Quotes and Liquidity provision enabled
- Frontends launched and users can start swapping
- Security ratio kept low but set on a programmatic curve
- Audits completed and any findings addressed before Phase Three
- Validator emissions boosted to about 11% per year Emissions of about 9% per annum to incentivise collateralisation to approximately 55%+ of FLIP supply
- Liquidity reward emissions created to bootstrap liquidity in the main pools
Again, these plans are subject to change — I just wanted to give you something more solid than “soon.” In any case, we’d love any feedback or ideas this plan has brought to your (very powerful) brain. The best forum for this would be our new community discord server!
Then there’s the Testnet. The above rollout plan exclusively refers to the main Chainflip network — but of course getting a test network out with the full suite of AMM cross-chain swapping glory is an essential step to product launch that can not be discounted. Our testnet/test product using testnet coins is what we will be handing over to auditing companies to ensure that when we do roll out Phase Three mainnet, LPs can rest assured that they are depositing their internet money into a network that has been thoroughly screened for vulnerabilities and bugs.
For those not in the know, Audits take an amazing amount of time. To even start one, firms typically need to book in months in advance, and the audits themselves can take months to complete based on the scope and scale of the audit. Being fully aware of this, and with the team having had experience with auditors previously, we are getting onto this early and booking in audits long before we have the final code ready to look at. We’re already in talks with several firms, and are also doing our best to break down the scope of such audits into smaller manageable chunks and dividing and conquering our own codebase between multiple parties to ensure timely auditing and delivery.
Chainflip is a product that is very hard to do iterative design with. Practically every core component of the system needs to be fully functional for the product to work in even its most basic form. The good news is, the core components are the tricky bit, and once completed, they create a framework to iterate and extend with relative ease. Integrations, additional chain support, tokenomic changes, and a vast array of user facing features are all pretty easy to work on.
In terms of timelines for the testnet and audits, we believe we’ll be able to launch a functional testnet with all core components and have audits commence around the July/August window. This would line up well with our TGE event, so that shortly after the token starts trading, we’d hopefully have something to show the community. The Stakenet would shortly follow.
THAT WAS SUPER LONG. However, I now hope that you’ve got a pretty comprehensive understanding of what’s going on. If you have any ideas or feedback on this update, we’d like to hear it on the Discord.
Part Three: Call to Action
We’ve had the privilege of picking and choosing our stakeholders and the honour of a loyal following — and we recognize the immense capabilities that they hold. We’d be silly to not ask. We’d also be quite arrogant in assuming we can do everything by ourselves — so take it as a compliment — you’re an amazing community member and we’d love your help.
Rather than simply asking for undefined “help” and expecting anything to come back, what I’ve done is prepared a list of some of the problems we currently face that we think our community members might have some ideas on. Some are large and some are small, but if any jump out at you, let us know — it’d greatly advance the progress of the project.
In no particular order, here’s a range of problems we would love input on:
Twitter: It’s tricky balancing all of our existing tasks and also producing killer tweets on a regular basis. We would appreciate the following:
- Retweeting our stuff, shouting us out, help us build our following and audience by talking about the project on Twitter.
- If you come up with any slick tweets for us, or have any topics or spot any conversations we should join in on, ping us!
- We are looking for additional support for our social media and comms. If you know any crypto natives that are really good at twitter that you think would fit our brand voice and style, we would love to pay someone on a full or part time basis in cash and/or tokens to help us build our audience and generate slick twitter content.
Protocol Design Feedback/Discord: If you have a flair for DeFi protocol design, we’re going to start opening up our discussions to our stakeholder network and the general community in the ‘formal discussions’ section of our newly created Discord server. Over the coming weeks, we’ll be putting out some more granular details of the AMM design into medium posts and opening up discussion about them in the Discord. If this interests you, even to just observe, please head to this link https://discord.gg/C3cwVVvtRz and us to get a role which will allow you to participate in these discussions. We’ve seen ‘whitelisted’ Discord channels (visible by all, but free from ‘wen moon’ spam) work quite well in other communities, so we wanted to replicate it for Chainflip.
Validator Commitments: Something we decided to do a couple of months ago is offer investors the opportunity to opt for a different lockup schedule where they would be able to stake into validators as soon as slots become available instead of taking the linear unlock. The catch is the tokens won’t be freely tradable for a year — but because of the accelerated timeline for validator slots opening up, we’d like to gauge interest for validators from our existing stakeholders now. If this is you, or you’d like more information on this, please ping the #validators channel in Discord.
Recruitment: Our recruitment efforts in the last couple of months have led to significant growth in the team, with additions every other week on average this year. That being said, we are still looking for talented engineers, security professionals, designers, marketers, and communicators. If anyone comes to mind or you have access to a platform to reach potential high value candidates, Lorenzo and I would appreciate these leads. You can see our current listings at https://angel.co/company/chainflip/jobs
Additional investors: And of course, if there’s one thing investors do well, its sharing deal flow. Allocations in the future round are limited, and we’ve earmarked most of the round to key strategic investors we’ve been speaking with over the last several weeks — but there is still always room and value in communicating the project to potential investors. In particular, we’re looking for strong ecosystem participants in terms of validator operators, liquidity providers, and other strategic investors. There is no minimum or maximum investment size — it completely depends on the investor — if there are particularly interesting angels out there who you think could add value to the project (god I hate saying “add value”), then we’d love any and all introductions. If nothing else, we love telling the story about the project and want to make sure we are engaging with as many active investors in the space as possible. Head to the discord for more info.
Other Areas which help is always appreciated in:
- PR contacts (with content/articles)
- Website feedback
- General Marketing contacts/help
- Go to market strategy
- Other partnerships/collaborations
If any of the above points has struck a chord with you and you think you can help, it’d help all of us. We’re hoping to keep our stakeholder network much more engaged and in the loop through our Discord — so if nothing else, I’d head there (https://discord.gg/C3cwVVvtRz).
That’s the end of our wall of text. Future updates will not be this long. I promise. I really need to get better at not writing walls of text and using brevity as much as possible, but wanted to give you a fairly comprehensive overview of our plans.
Thanks for your support once again, and hope this update gets you as pumped up as I am right now.