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This report covers activities for June to and including September 2022 which have predominantly been financed by the Kusama Treasury. As mentioned in our proposal, there are no fixed deliverables within a fixed timeframe defined for acceptance of our work. We stated our plans and budgets and here we report about how the funds have been used and what has been achieved. For acceptance, we ask reviewers to judge whether the funds have been used on target and efficiently so.
A critical bug has been fixed with a runtime upgrade to v8 on Aug 15th. With the same upgrade, we also improved the protocol based on the first field experience in Zurich.
The following changes will be deployed with our upcoming parachain runtime upgrade, if approved by the Kusama governance.
Implementation of minimum viable democracy pallets for one-person-one-vote has progressed well and a minimum viable PR will be ready to merge soon. Deployment might be delayed because this needs thorough testing on our Gesell testnet.
We have started working on our concept to make usage of the encointer protocol privacy-preserving and significantly decrease latency through community sidechains. We had previously demonstrated a similar approach with Testnet Cantillon, developed with support by the web3 foundation. The SDK from integritee has advanced a lot since then and we think it is ready to be applied.
During this reporting period, we have only made little progress in terms of integrating our sybil-resistance service with other parachains. The main reasons are:
Based on these insights we have de-prioritized activities for technical integration with other parachains for the time being and will re-evaluate in a couple of months.
Our new app developer team in Kyrgyzstan was onboarded successfully and has already merged many valuable PRs for the Encointer Wallet app. Apart from many tiny cleanups and improvements, the most noteworthy changes are:
The valuable experiences made with the first Encointer community in Zurich serve to remove friction and adjust the Encointer system. The early months were used to identify bottlenecks and test different approaches to solve these.
The Pioneer community serves as a field experiment primarily. Secondly, we are striving to make Leu a successful example which other communities can use as a role model.
In general, the first mover needs significantly more resources to establish a new system than the subsequent ones. For Encointer we assume that this principle will apply as well, which puts the significant spendings for the Leu community into perspective.
As of October 22nd, the Leu pioneer community looks back on:
The first months clearly indicated the choice of businesses accepting the new currency as the bottleneck. A strategy to mitigate this bottleneck has been developed:
Firstly, we are focusing on finding owner-managed companies, sharing Encointer vision of financial inclusivity and towards a global Universal Basic Income.
This process has been set up and a part-time $Leu sales force has been recruited. The first person is starting in the beginning of November to approach suitable businesses.
Secondly, to relieve the current points of acceptance from accumulating too much LEU and to start building a circular economy, we are targeting secondary suppliers and we are incorporating a participatory, community-owned “market maker” as an association for circular economy. This association buys the LEU at a 20% discounted price and sells it consumers with 10% discount towards its face value. The spread is used to finance the associations' operation and to fulfill its purpose: fostering the local economy. The association for circular economy is designed to be controlled by the community from day one, which is why we invited the current places of acceptances to co-found the association with us. So far we received soft commitments from the first two initial LEU places of acceptance.
Thirdly, we are suggesting that businesses distribute a part of the community currency revenue directly to their employees as a bonus. This point has a dependency with the growth of points of acceptance, since the attractiveness of community currency correlates strongly with possible places to spend it.
The key to success is a strong and flourishing community. At Leu we use the three step process postulated by the experts from Get Together as as mental model:
The spark the flame phase was concluded with the 5th LEUträff. In the following summer months more routines were added:
Firstly, suggesting to all community members to have a coffee after the ceremonies and using this social events to involve the members.
Secondly, the Info Point was launched as new office hours format. We were lucky enough to find a community managed space in the busiest street in Zurich (L200). On particular days, community leaders are present at he Info Point and answer question and help with setting up the wallet. This format is very important in order to the strengthen the trust in the community and establish legitimacy as Leu may appear to some as too good to be true.
We are working towards a tipping point in Zurich, by focusing our efforts in one district: All ceremony locations, LEUträffs and the major points of acceptances are in this district. The news article did help to create awareness. Next up is a small billboard campaign, running in mid-November accompanied with a focused effort of the part-time advocates to introduce the concept to local businesses.
In the last few days one could overhear a few conversations in bars or clubs, where people were discussing this new community currency in Zurich - what an encouraging observation for the Leu leadership. Further, the Leu community is present on Twitter and Instagram. The LinkedIN page was recentely created by a motivated new community member.
In order to have regulatory security, the Encointer and Leu concepts were discussed with a legal counsel Eversheds Sutherland. According to their preliminary assessment, Leu and Encointer both can operate under Swiss Law without facing any legal risk. Even the envisaged association for circular economy can initially be operated without any creating regulatory hurdles. With increasing number of business partners, the association will need to become a financiel intermediary. This, however, is a challenge we will face with pleasure as it will be sign of success.
The Encointer Association also supports new communities during their launch phase. Depending on their needs, we support with:
Three communities are currently in the process of launching on Encointer Network and a few more are considering a launch. See our Trello board for their recent status
A group of Polkadotters has formed that aims to launch a local community in Berlin. The leadership team is in the progress of finding a first pioneer acceptance point and assembling the fist set of bootstrappers.
Polkadot Ambassador Joab is leading the launch of the Aslah community. After successfully completing the Testnet Ceremony with 3 bootstrappers, they are about to launch on mainnet imminently.
Steeber Solutions is launching an Encointer community in Green Bay. They have succssfully completed a Testnet ceremony and are now defining their launch plan.
Encointer publishes thought pieces on a regular basis as blog posts on its website.
Further around three weekly posts on LinkedIN and Twitter keep the online communities informed about latest achievements and updates.
To streamline the bidirectional communication of the global Encointer efforts as well the different local communities, a forum based on Discourse has been designed and deployed. Currently it is being populated by the Encointer team, to prepare for a public launch within the next weeks.
The search engine marketing campaigns, financed by the Google NPO grant, have been implemented and drive traffic to the Encointer website, ultimately paying in towards the creation of new communities.
Our lead developer Christian Langenbacher has demonstrated Encointer at the LATAM Hackathon on Oct 13th
With the successful launch of the Zurich community the dependency the Encointer founder Alain Brenzikofer reached a critical point. To mitigate the risk of a SPOF and liberate Alain from his many operational duties, Malik El Bay was onboarded as deputy. Malik El Bay brings extensive experience in building and managing growing organisations to the table. Further, his deep knowledge of the blockchain technology ecosystem, qualifies him to [teach Blockchain courses at Swiss Universities of Applied Sciences](https://www.ffhs.ch/de/ffhs/personen/person/el-bay-malik.
During September, we focused on knowledge transfer, such that Alain Brenzikofer is freed from many operational tasks since the beginning of October, enabling him to focus on onboarding communities in the global south.
To streamline the different teams working on Encointer and to set the direction for the next six months, a two-stage workshop has been conducted to yield clear objectives and measurable key results.
Objective for Leu Pioneer Community:
The diverse Leu community is successful through and for Encointer
With Key Results
Objective for Global Impact:
Encointer is growing and able to create sustainable social value on a global level
With Key Results:
By 1.3.2023, 3 new active communities have launched on Encointer mainnet and 10 new communities are in the onboarding process.
By 1.3.2023, a funding strategy involving different financial sources is implemented such that the next 18 months of development are secured.
Until 1.3.2023 The Encointer platform and its communities are not operational for maximally 2 days in total.
By 1.3.2023, 5 case studies show that the Encointer communities deliver social added value
Based on this OKRs, the four teams (marketing, communication, community and technology) suggested 13 initatives to work on, in order to contribtue towards reaching the two global objectives. Here a few examples of the initatives:
We will report on sunk cost shortly. This will be prepared jointly with our next treasury proposal which will give a better overview.
tl;dr: We have used about all the funds and realized a little loss on the granted KSM.
The Encointer team has significantly ramped up and diversified its workforce to meet its ambitious goals. The midterm goals have been shaped more clearly and measurably with help of an OKR process. The organizational structure of Encointer was made more resilient by distributing knowledge and power.
An MVP for onchain one-person-on-vote democracy based on Encointer's sybil resistance will be entering testnet phase shortly.
While the Leu pioneer community in Zürich is growing nicely, we may also report 3 new communities in Germany, USA, and Rwanda which are approaching their launch on mainnet.
As stated in our proposal document we will submit a second proposal for the remainder of our common good lease periods. Soon thereafter we will submit a request for extension of our common good lease.
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