# Report of Activities and Achievements

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.

## Encointer Protocol

A critical bug has been fixed with a [runtime upgrade to v8](https://kusama.subsquare.io/democracy/referendum/221) on Aug 15th. With the same upgrade, we also improved the protocol based on the first field experience in Zurich.

### Noteworthy PRs

The following changes will be deployed with our upcoming parachain runtime upgrade, if approved by the Kusama governance.

* [254](https://github.com/encointer/pallets/pull/254) allow to update/cancel registration for ceremonies. This helps maintaining reputation as a no-show will be punished by downgrading reputation status
* [255](https://github.com/encointer/pallets/pull/255) lift permissioning for non-destructive actions on Testnet Gesell. This way, anyone can run through our tutorials without intervention from the team. This helps with scaling up onboarding of new communities
* [268](https://github.com/encointer/pallets/pull/268) New social endorsement scheme. Before, only bootstrappers could endorse newbies such that they get assigned for the next ceremony for sure. This was too restricitve because in our experience, bootstrappers are not necessarily the most active growth hackerss who has reputation can endorse newbies. This will greatly help for community growth

### One Person One Vote Democracy

Implementation of minimum viable [democracy pallets for one-person-one-vote](http://book.encointer.org/protocol-democracy.html) has progressed well and a [minimum viable PR](https://github.com/encointer/pallets/pull/273) will be ready to merge soon. Deployment might be delayed because this needs thorough testing on our Gesell testnet.

### Scalability and Privacy

We have started working on our concept to make usage of the encointer protocol privacy-preserving and significantly decrease latency through [community sidechains](https://github.com/encointer/encointer-parachain/issues/144). We had previously demonstrated a similar approach with Testnet Cantillon, developed with support by the web3 foundation. The [SDK from integritee](https://docs.integritee.network/3-our-technology/3.1-software-development-kit) has advanced a lot since then and we think it is ready to be applied.

### Integration With Other Parachains

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:

* While we have talked to a few potentially integrating parachain teams, we have experienced that sybil resistance is interesting for them, but not the top priority. As all teams are facing very limited resources to get things done, concrete integration work has been postponed.
* The active global Encointer community is still small and geographically concentrated. Sybil resistance would not yet be very inclusive under these conditions so our service is not yet attractive enough for other teams to integrate with. Encointer can only grow organically, so we ask for patience in this regard.
* We came to the conclusion that HRMP (which we used for our first [demo](https://github.com/encointer/encointer-wallet-flutter/issues/836) is not a good way to integrate Encointer's sybil-resistance with other parachains. The argument is that the third-party parachain only needs trustless read access but does not need to invoke any action on Encointer Network. Therefore, HRMP is inefficient and a proper read-proof which can be verified by the third-party parachain is a more scalable solution. However, finality proofs on parachains are still non-trivial and with the recent advancements of BEEFY we expect this to get easier soon.

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.

## Encointer Wallet App

Our new app developer team in Kyrgyzstan was onboarded successfully and has already merged [many valuable PRs](https://github.com/encointer/encointer-wallet-flutter/pulls?q=is%3Apr+is%3Aclosed+user%3AEldar2021+user%3ASourbaevaJanaraJ+) for the Encointer Wallet app. Apart from many tiny cleanups and improvements, the most noteworthy changes are:

* An overdue refactoring took place to get rid of some legacy architecture we forked from polkawallet.io
* [678](https://github.com/encointer/encointer-wallet-flutter/pull/678) Flutter 3.x upgrade. Very involved
* [776](https://github.com/encointer/encointer-wallet-flutter/pull/776),[792](https://github.com/encointer/encointer-wallet-flutter/pull/792),[799](https://github.com/encointer/encointer-wallet-flutter/pull/792) Push messaging.
Our field experience showed that communication with our community is tricky. People forget to attend the ceremony. The best communication channel would be the app, to talk directly and focused to communities, remind them to attend or register, but also inform them about changes. Therefore, we have implemented a custom push messaging which in the future will be aware of community subscriptions and reputation status and can be used for well-targeted broadcasts to the community. The challenge here was that our app shall only use purely open source dependencies and avoid any trackers. Unfortunately, that prohibits the use of the most popular solutions out there. Moreover, background tasks are made excessively difficult by iOS

## Peripherals

* A new developer is [working](https://github.com/encointer/explorer) on our [explorer](https://explorer.encointer.org/) to make it easier for less-technical community leaders to overview their community metrics.
* We are setting up our own indexing with [SubQuery](https://subquery.network/), customized to our custom types and processes. This step was necessary, because [subscan](https://encointer.subscan.io/) didn't respond to our repeated requests to add support for our custom protocol.

## Leu Pioneer Community, Zürich

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.

### Facts and Figures

As of October 22nd, the Leu pioneer community looks back on:

* A total of 20 ceremonies with
* A total 401 ceremony attendances
* The Encointer Wallet has been installed >1'100 times
* The circulating supply of Leu passed 10'000 LEU (at a value of 1 Leu = 1 CHF)
* The total turnover of known acceptance points: is at 3'800 LEU
* A total of 5 permanent places of acceptance (+3 temporarily)
* 11 community events (LEUträff, Info Point and Visiting)

### Noteworthy Achievements Jun-Sep
* 4 more points of acceptance joined our previous pioneer café. Besides coffee, meals and beer, Leu can now buy locally produced delicacies, sustainable activewear, stationary and local honey. Find the complete [list of points of acceptance here](https://https://leu.zuerich/bazaar/)
* After the [newspaper article on June 12th](https://www.20min.ch/story/zuercher-kryptowaehrung-leu-soll-ungleichheit-bekaempfen-610404225283) (german) we have experienced a surge in registrations which the protocol was not able to assign immediately because it only allows a fraction of all assignees to be newbies for security reasons.
* Successful increase of the nominal income by the community in Zurich from 22 $LEU to 44 $LEU.
* [LeuTräff - a Meetup Series](https://www.meetup.com/leu-zuerich/events/past/) to give updates and discuss the community currency Leu and reach new members has been engrained. Renowned guest speakers and around ~35 people are attending each event. Here is a picture from the last one [with Hongyang Wang.](https://twitter.com/leu_zuerich/status/1573704328153600000) [LEUträff #7](https://www.meetup.com/de-DE/leu-zuerich/events/288817222/) is coming up
* Due to a critical bug on protocol level the Leu community was purged twice. The timely resolution and transparent communication, strengthened the trust in the Leu's leadership.

### Points of Acceptance
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.

### Community Building

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](https://https://gettogether.world/resources) as as mental model:

1. Spark the flame - Find early adopters and establish routines
2. Stoke the fire - Attract new people and build on top of established routines
3. Pass the torch - Enable community leaders to take over

The *spark the flame* phase was concluded with the [5th LEUträff](https://www.meetup.com/leu-zuerich/events/286416075/). 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](https://langstrasse200.ch/)). On particular days, community leaders are present at he *Info Point* and answer question and [help with setting up the wallet](https://twitter.com/MalikElBay/status/1580531589594763265). 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.

### Marketing and Communication

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](https://mobile.twitter.com/leu_zuerich) and [Instagram](https://www.instagram.com/leu.zuerich/). The LinkedIN page was recentely created by a motivated new community member.

### Misc

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.

## Other Communities

The Encointer Association also supports new communities during their launch phase. Depending on their needs, we support with:

* conceptual workshops
* marketing and branding
* fixed grants for measureable progress (exact numbers and milestone definitions are still being worked on). These grants shall be at the discretion of the community leadership and the Encointer Association does not define how they should be applied. While we do share our experiences with the pioneer community, we believe the individual communities know best what helps growing their communities.

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](https://trello.com/b/1Yhln6NT/encointer-community-leader-applications)

### Berlin, Germany

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.

### Kigali, Rwanda

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.

### Green Bay, Wisconsin, USA

[Steeber Solutions](https://www.steebersolutions.com/) is launching an Encointer community in Green Bay. They have succssfully completed a Testnet ceremony and are now defining their launch plan.

## Global Marketing and Communication

Encointer publishes thought pieces on a regular basis as [blog posts on its website](https://encointer.org/blog/).
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](https://www.discourse.org/) 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](https://www.youtube.com/watch?v=SWPAikGifCE) on Oct 13th

## Organisational Scaling

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](https://www.linkedin.com/in/malikelbay/) 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.

### OKR Process

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

1. A 7,5% week over week growth, leads to around 15 points of acceptance in Zurich by 1.3.2023
2. A 7,5% week over week growth, leads to an average of 100 participants in Zurich by 1.3.2023
3. By 1.3.2023, 5 valuable and functioning resources and templates used by the Leu community, were used as examples for other communities
4. By 1.3.2023, 1 democratic vote on a high-impact topic has engaged 10% of the community (entitled to vote).

**Objective for Global Impact**:

> Encointer is growing and able to create sustainable social value on a global level

With Key Results:
1. By 1.3.2023, 3 new active communities have launched on Encointer mainnet and 10 new communities are in the onboarding process.

1. By 1.3.2023, a funding strategy involving different financial sources is implemented such that the next 18 months of development are secured.

1. Until 1.3.2023 The Encointer platform and its communities are not operational for maximally 2 days in total.

1. 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:

- Leu: Circular Economy (keep Leu flowing)
- Leu: Fame (random people in Zurich know Leu)
- Stability (technical soundness and availability)
- Fundraising
- Facilitate community growth (improve UX, remove hurdles to adoption)
- Business Model (how can communities become self-sustaining?)

## Budget

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.

## Conclusion

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.

## Future Treasury Proposals

As stated in our [proposal document](https://docs.google.com/document/d/1eTyZGCTCzo7ZGonVtAmJmc5QYYI0qYHab6z8w56B_F0) 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.