A review of “Ethereum’s crowdfunding road 8 years ago, $620 can buy 4,000 ETH? ! | Moving Zone – The Most Influential Blockchain Media (Bitcoin, Cryptocurrency)

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A review of “Ethereum’s crowdfunding road 8 years ago, 0 can buy 4,000 ETH?  !  | Moving Zone – The Most Influential Blockchain Media (Bitcoin, Cryptocurrency)
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Buterin revealed at the EthCC conference in Paris that Ethereum’s developers are working on five long-term phases aimed at improving the network’s overall capabilities. The first item on the agenda is The Merge, which is 90% complete and just needs to be tested on Ropsten. Once the “merge” has successfully occurred, validators can withdraw their ETH locked in the ETH 2.0 deposit contract. This article is derived from the Substack research report “The Ethereum Crowdsale 8 Years Later” by Coin Metric analysts Kyle Waters, Nate Maddrey and Matías Andrade, compiled, compiled and written by Defi Zhidao, a columnist in the dynamic zone. (Recap:Buterin: Ethereum mainnet merger (ETH2.0) will not immediately affect the currency price) (background supplement:V God speech: Ethereum merge test is 90% completed; Merge is the first step, and Surge, Verge…)

Ethereum crowdfunding 8 years ago

After years of testing, research, and development, there is excitement about the potential timeline for Ethereum’s planned transition to proof-of-stake (PoS) via The Merge. The merger, arguably the biggest protocol-level change in Ethereum history, eliminated mining and introduced a validator system, where validators would stake their ETH to earn rewards for creating and validating new blocks.

Tracking ETH supply continues to attract attention as ETH holdings directly determine a user’s ability to participate in PoS. At the same time, moving to PoS will also introduce a new ETH issuance model and affect ETH’s monetary policy. However, to better understand the current supply of Ethereum, observers need to go back to the year before the launch of the Ethereum network, the critical period from July 22, 2014 to September 2, 2014: ETH crowdfunding.

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This article will review the data of ETH crowdfunding through ATLAS data from Coin Metrics. While reviewing the data behind the sale, current Genesis accounts (those who participated in crowdfunding) were also checked.

Background introduction

How should cryptocurrencies be initially distributed? The question has been a source of debate for years. There are now many initial release models with different amounts of rewards for early adopters and contributors, resulting in stark differences in supply distribution.

For Bitcoin, Satoshi Nakamoto solved this problem when he released the first version of the Bitcoin code in 2009:

“You can run a node and generate blocks by asking someone to send you some coins, or by opening Options->Generate Coins. I set the difficulty of the proof-of-work very simple, so for a while at the beginning, a An ordinary computer will be able to generate coins in just a few hours.”

Anyone can download Bitcoin’s open-source software and contribute computing power to secure the network in exchange for newly minted BTC. According to Bitcoin’s supply schedule, the first 50 BTC were produced in the genesis block, the same amount as any other block, until the block reward dropped to 25 BTC during the first halving in 2012 (interestingly, this 50 Genesis coins are unusable and proven lost).

Since then, new models have been tested as Bitcoin has proliferated as an alternative to cryptocurrencies. In 2013, Mastercoin (MSC), the predecessor of Bitcoin’s Omni layer, launched a fundraising campaign using Bitcoin as a crowdfunding platform. Anyone can send BTC to a specified address and receive a certain amount of MSC at a pre-determined rate. The project raised more than 5,000 bitcoins at the time, worth about $500,000. And the success of this model will also pave the way for Ethereum’s high-risk ETH crowdfunding in 2014.

What ethereum.org looked like during the summer 2014 ETH crowdsale (source)

Like Mastercoin, Ethereum crowdfunding trades BTC for ETH. When Ethereum launched the following year, participants in the crowdsale were promised to distribute ETH. By using Bitcoin as a crowdfunding platform, anyone in the world can theoretically participate. Author and Defiant News founder Camila Russo sums up the profound implications of ETH crowdfunding in her book, The Infinite Machine, which offers a brilliant description of Ethereum’s roots:

“Before, anyone who wanted to buy stock in a big tech company like Facebook or Google needed a U.S. bank account; things got more complicated for those who wanted to invest in startups that didn’t raise money on the public market. Now , anyone can become an investor in one of the cutting edge tech companies. All they need is an internet connection and at least 0.01 bitcoin.”

The crowdfunding was launched on July 22, 2014 and is planned to last for 42 days. So far, Vitalik and other early contributors have presented the Ethereum vision to the world, most notably with the 2013 Ethereum white paper and a talk at Bitcoin Miami 2014 in January of that year.

Crowdfunding has an interesting set of incentives for those willing to participate early. In the first two weeks of the sale, 1 BTC (at current price of $619) can buy 2,000 ETH, after which the price changes linearly, and finally each BTC can buy 1337 ETH. The chart below shows the price of ETH in BTC to show the discounted price of ETH in the initial stage of the crowdsale and the price increase from the 14th day to the 36th day of the sale.

Source: Terms and Conditions of Ethereum Genesis Sale
Source: Terms and Conditions of Ethereum Genesis Sale

At the time, using Bitcoin as a crowdfunding mechanism was a novel experiment on many levels. However, one consequence of crowdfunding on a public ledger is that we can easily access this rich dataset of contributions years later. Unsurprisingly, the data has been the subject of considerable scrutiny so far — most intensely, a 2018 remark by Preston Byrnes and a data-driven follow-up analysis by independent cryptocurrency researcher Hasu.

Bitcoin “Exodus” Address Statistics

The graph below shows the total amount of BTC sent to a Bitcoin address (36PrZ1KHYMpqSyAQXSG8VwbUiq2EogxLo2) controlled by the Ethereum team (called the “Exodus Wallet”). Notably, this address was one of the most valuable multisig addresses at the time.

It also shows the total amount of BTC and USD equivalents raised and the total amount of ETH sold during the crowdsale. Raised over 31,000 BTC, worth about $18.3 million, and sold a total of 60 million ETH (making Ethereum the second-largest crowdfunding campaign at the time).

Source: Coin Metrics ATLAS and Coin Metrics Reference Rates
Source: Coin Metrics ATLAS and Coin Metrics Reference Rates

Of the 60 million ETH sold, about 50 million were sold in the first two weeks of the heavily discounted price — a notable spike in sales early in the sale and on the last day of buying 2,000 ETH per BTC.

Between the minimum purchase amount of 0.01 BTC and the maximum purchase amount of 500 BTC, there are a total of 8437 transactions (although theoretically there is no way to limit contributors from splitting larger amounts into multiple addresses). The three largest purchases were 500, 466 and 330 BTC. The average purchase volume is 3.65 BTC or about 7000 ETH.

Ultimately, given the pseudo-anonymity of Bitcoin addresses, it’s hard to tell more about the participants, but these results provide valuable insight into one of the most important events in cryptocurrency history to date.

Current crowdfunding supply ratio

In addition to the 60 million ETH sold in the crowdsale, early ETH contributors received an additional amount equivalent to about 10% of the total ETH sold, with about 10% set aside for the Ethereum Foundation.

This means that the total supply of Ethereum at network launch was around 72 million ETH, spread across 8893 addresses. But as additional ETH is distributed through mining, crowdfunding participants and early contributors control a smaller and smaller percentage of the total supply over time. The total ETH supply today is close to 120 million, and nearly 50 million new ETH has been issued since genesis.

Source: Coin Metrics Formula Builder
Source: Coin Metrics Formula Builder

Note that the graph above is for comparison only with Proof of Work (PoW) issuance over time and does not reflect the distribution of its tokens by the Genesis account over time. In other words, the set of accounts controlling 72 million ETH has been changing and growing since Genesis.

Over 92% of Genesis accounts have moved their ETH so far, only 693 accounts have never moved their ETH so far (the largest being 0x2b6ed29a95753c3ad948348e3e7b1a251080ffb9ETH, which controls 250,000 ETH).

Looking at all the genesis accounts, by the amount of ETH held today, the largest is 0x1b3cb81e51011b549d78bf720b0d924ac763a7c2, which controls 347,000 ETH (about $530 million at today’s ETH price), and the address received 560,000 ETH at genesis (About 213k ETH was transferred until this year).

But overall, Ethereum accounts created at genesis control only 2.66 million ETH today, or about 2% of the total ETH supply, down from 7 million ETH in 2018 (of course, some holdings Someone might just transfer their ETH to a custodian/exchange or a new account).

While its lasting impact on supply distribution is often debated, it is undeniable that ETH crowdfunding is an ambitious project whose success reflects a new era around programmable blockchains to support smart contracts and decentralized applications enthusiasm. With The Merge just around the corner, many eyes are on Ethereum as it enters a pivotal phase in its less than ten-year history.

Also check out other resources covering ETH supply and its presale:

Galaxy Digital Research: Breakdown of Ethereum Supply Distribution Since Genesis Takens Theorem: Visualizing Ethereum’s History 📍Related Reports 📍

ETH2.0 | Ethereum Merger Leader: The Merge is expected to launch on September 19!

Dry goods | Simple understanding of Taproot soft fork: why is Bitcoin the most important upgrade after 4 years?

Ethereum Classic soared more than 70% in one week! Block reward production reduced by 20% at the end of April; ETC official: ETH miners welcome

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