Origins of the Callisto Network
Tags: Security, Standards, Nft Collectibles, Ethereum, Nft

A long time ago in a chain far, far away….

This article mostly describes my personal vision and the reasons why I am here doing what I have been doing for the past 5 years starting from the moment before Callisto Network came to existence.

4 years have passed since the founding of Callisto Network. A lot has happened over the years as in our team, our project and the entire crypto industry as a whole.

I usually write an annual report on the work done and the state of Callisto development. However, this time I would like to write in more detail about how it all began, how everything happened and why everything happened exactly as we can now see.

And it started during the ETC/ETH split right after TheDAO hack…

Picking the side in ETC/ETH split

I was engaged in many interviews and I was often asked why at that moment I picked the side of the ETC community. I’ve never gave a fulfilling answer so far. It’s time to explain in more details.

I was watching the progress of Ethereum project since its very beginning. And then there was TheDAO. And then it was hacked and about 3,600,000 ETH were drained from it — the most interesting thing however was the ideological background of “TheDAO event” because technically it was not a hack.

The nitpicky part here is that Ethereum Foundation declared an absurd “code is law” paradigm and promoted their smart-contracts as immutable decentralized applications. They stated that smart-contracts should work exactly as programmed when the code is deployed, although it is obvious to any sane person that any program should work as INTENDED and not as it was CODED because programs can be prone to bugs and it’s a normal practice.

For any person who has minimal experience in programming it should be obvious that program’s code cannot be immutable nor should it! Mistakes are the inevitable part of any software development. Programmers spend 80% of their time dealing with bugs, not writing the code. There is plenty of evidence that a 200-line program has been patched over the decades (like this one).

And then Ethereum developers felt victims of their own mistakes — TheDAO got exploited.

They decided to perform the softfork but it was rejected by the community. After that Ethereum Foundation performed the “DAO bailout hardfork” violating all the core principles of blockchains, decentralization and their own declaration of immutability paradigm. Even though, I would not blame them for doing this. If this were my project, I would also do everything to save my users from losses that were not the result of their faults.

However, I was a strong supporter of decentralization ideology that was later described in “Crypto Decentralists Manifesto” which is still available to anyone as an open document.

Neutrality is necessary. It’s important for anyone participating in blockchain-enabled cooperation to be on an equal footing with everyone else. It doesn’t matter if you wield huge economic power or only a tiny amount. It doesn’t matter whether you’re a saintly Mother Theresa or a vicious drug dealer. It doesn’t matter whether you’re a human or a refrigerator. It doesn’t matter what you believe in, what political theory you subscribe to, or whether you’re a moral or immoral person. A participant’s ethnicity, age, sex, profession, social standing, friends or affiliations, make or model, goals, purposes or intentions — none of this matters to the blockchain even a bit. — A Crypto-Decentralist Manifesto

The actions performed by Ethereum foundation violated the neutrality principle and the opposite side of the conflict was worth supporting in my opinion. There were a lot of those who disagreed with the Ethereum Foundation, and this was the first time in my life when a part of the community showed such an inexorable resistance to censorship in action — they splitted off and supported the “original” chain.

I was clearly supporting both sides of the conflict — ETH and ETC. However, there were people on both sides who supported their ideas with their efforts and investments. All these people, regardless of whether they chose the side of ETH or ETC at that moment, in my opinion, deserve all the best, since the conflict was ideological and the fact that they were involved was already a significant contribution to the history of TheDAO drama.

The difference between ETH supporters and ETC supporters was that ETH side had a well-funded already-existing development team and all their media resources. They already had exchange support and all those benefits remained with them. As the result, I decided that I will join the Ethereum CLassic community to support the minority and learn the underground of “establishing your own crypto project from scratch”.

I picked the pseudo-name “Dexaran” and joined ETC from day0 even before Poloniex Exchange listed ETC and finally gave it a birth.

The Lord of Ethereum CLassic

During the ETC / ETH split and in the early days of the ETC chain, I gained invaluable experience in creating my own project / chain, as well as the process of driving the fork-off successfully.

A number of random facts regarding my early contributions to ETC project:

At the very beginning I sponsored Russian community media resources. Russian community was a big part of ETC lead by BitNovosti (the creator of Crypto Decentralists Manifesto and owner of bitnovosti.com)

After the hack of classicetherwallet.com on July, 2017 I took on the main web wallet of Ethereum CLassic ecosystem and continued it’s development. Currently the wallet.callisto.network is a descendant of that-days classicetherwallet.com

TheDAO hacker paid me 1000 ETC (~$16,000 at that moment) for the security audit of ETC Multisig.

Fun art of good ol’ times. Source: https://www.reddit.com/r/EthereumClassic/comments/7z9r5u/etc_overlords/

After the excitement of the success of ETC birth calmed down we started to realize the reality of driving the project forwards. While the “moral winner” status of ETC was a strong background in TheDAO drama it was the only valuable part of ETC as a project. ETC community started to experience governance and technical problems from the first days.

Ethereum had strong ecosystem represented by rapidly developed wallets, blockchain explorers, bigger community, a team of talented developers with a clear vision. They also had Unicorns!

ETC had none of those (especially unicorns…) and started to lag behind from it’s very first days as it’s wallets needed constant maintenance, explorers were worse than those of ETH and a lot of efforts were required just to keep up with Ethereum.

Two development teams emerged in ETC at that moment:

Apparently it turned out that both teams were focusing on their own vision and none were interested in solving the actual problems of “ETC deprecation” as compared to rapidly evolving Ethereum.

I decided to step in and solve these actual problems myself. I’ve seen Ethereum CLassic as an “ideologically different” copy of Ethereum that experienced no need to differentiate on tech level. You can find my position described here at that time. I realized that a lot of efforts to “make it different” are going to waste because this turned into development for the sake of development. Afterall Ethereum was the most progressive project in the whole industry at that moment and trying to compete with it while having less resources was not so smart idea.

I did some research and found a number of Ethereum-Fork-Coins, including Musicoin, UBQ, Expanse, Pirl etc.

They all required similar resources — blockchian explorers, wallets, RPC nodes. They all solved this similar problems by developing their own versions of these.

At this time I formed the ideology of unifying all the Ethereum-based chains under one project so that we could join our efforts and avoid double work when solving similar problems independently.

I decided to form the Ethereum Commonwealth. I needed a team.

The time of Ethereum Commonwealth

I have described my ideas and launched the Ethereum Commonwealth ICO. It was not as successful as I wanted it to be but I gathered enough funds to hire developers to work on what I thought was necessary for the success of ETC. At that time I hired Yohan Graterol as a programmer who became a co-founder of Callisto Network afterwards.

Shortly after this event, we had a falling out with ETCDEV over some controversial posts on Reddit, and I was accused of discrediting them (although I did not).

At that moment our internal disagreements became obvious. We had 3 teams with different visions and the result was that we couldn’t implement what we wanted to. Charles Hoskinson was proposing a Treasury and governance system ideas developed by IOHK and it looked reasonable at that moment. For me it was obvious that any governance system would be better than no governance system at all.

However, we could not reach a consensus, and whatever changes were made to the protocol, they were made by the protocol developers (ETCDEV team) disregarding what other development teams were proposing.

The main argument was “the impact of these changes is unknown, the risks are too high. Better keep things as they are because somehow it works now”.

At this moment I came to the idea of creating a “live proof” for our ideas. It should have been a separate chain where we could implement the experimental features to show that they do work and it would not hurt the chain. The plan was to port those changes to ETC once they are live tested.

Those changes that I considered necessary were:

Simplified Treasury based on what Hoskinson and IOHK proposed

Security Auditing DAO (view on github) to prevent hacks of DAPPs (this required Treasury and it would have been impossible without it)

“Cold Staking” — a financial feature developed to compensate the effect of extra selling pressure that came as a result of free-of-charge security audits that were paid by the Treasury

Financial transparency — all the “ecosystem” expenses must be covered transparently and must be available to everyone at any time with no restrictions. As the result, we needed an open financial report at the beginning and later we moved to commenting Treasury transaction on-chain.

Decentralization of media resources — to avoid a situation where teams are working on the same project, but one has an employee who controls media resources. Then this employee can ignore the progress of all teams and only cover what his team has done, as if this is the only development in the project. This happened to ETC community.

I have designed the structure of this chain with all the above named features. It was decided to launch it via the airdrop for ETC holders and it was announced at ETC reddit. You can find this announcement here.

At this time, I offered Yohan to become a Callisto co-founder. The Treasury of Callisto Network was just a simple address and we both shared it’s private key (so technically we both had access to the funds at all times). We had an agreement that 33% of Treasury income could be spent by each party (my part of Callisto Team and Yohan’s part of Callisto Team) independently at their will. Another 34% should be allocated for common expenses such as exchange listings, compensations, extra marketing expenses etc.

Callisto Network came to existence

Callito Mainnet was successfully launched on April 15, 2018.

The mainnet launch was not as smooth as planned. Firstly, I was hospitalized during the most important moment of this event and Yohan drived the process on his own. After the launch there was a chain split caused by the 2miners pool that had more than 51% of the network hashrate. We agreed with the owners of 2miners pool to compensate their losses and resync the network. The compensation was paid with Treasury funds (Treasury is a very good idea, you know).

Here you can find more info on the chain split accident.

When the post-launch accidents were resolved we have expanded the team and hired a team of dedicated developers who would work on Callisto Network development only.

Callisto Network was designed, funded and launched as a sub-project of Ethereum Commonwealth with the initial goal of researching experimental improvements of Ethereum protocol that could be proposed to ETC afterwards.

At the stage of pre-launch development all the salaries and expenses were covered with Ethereum Commonwealth ICO funds. In addition, I’ve spent over $500,000 of my personal funds to cover exchange listing fees and paid promotion before the first official exchange listing. At that point of time CLO had no value as it was not traded.

Callisto Network & ETC

In the past years we did everything that we originally planned. You can follow the links above to find my proposals that have been submitted to ETC for the experimental improvements we originally announced as a goal of Callisto launch.

In 2020 ETC suffered a number of 51% attacks. As it was a big issue for Callisto Network earlier, we already had a ready-to-go solution to this problem.

The ECIP-1092: 51%-attack solution was submitted to ETC community that suggested to copy&paste our code as a protection measure that could effectively stop the attacks. This was a live tested solution that was implemented in Callisto and proved to be efficient ‘in real environment’.

Here you can find the video presentation of the ECIP-1092.

Here you can find a technical discussion where all questions were addressed.

The ETC team employee in control of @eth_classic twitter account openly refused to give my proposal the announcement. Here you can find the record of this media censorship on github.

All the Ethereum CLassic Improvement Proposals (ECIPs) that came from Callisto Team were rejected by ETC community (or ETC team leaders) including the proposal for 51%-attack solution.

My proposal to solve 51%-attacks by copying our already-existing code was submitted on 18 August, 2020. ETC community kept suffering 51%-attacks until February 3, 2021 when the MESS solution was presented.

As the result it was decided that Callisto Network must choose its own way instead of following the initial goal of developing improvements for ETC.

Callisto Network 2021 report

In 2021 Callisto Team experienced a significant reorganization. A new entity of Callisto Enterprise was formed and joined the Callisto ecosystem.

Yohan Graterol resigned from his CEO role and Callisto legal entity was transferred from him to Vladimir Vencalek, CEO of Callisto Enterprise.

Key members of the Callisto Network team were also hired as employees of Callisto Enterprise. I took over the role of COO at Callisto Enterprise.

We focused on directing Callisto’s development towards improving the blockchain ecosystem in a more sensible way than keeping ETC protocol up-to-date with Ethereum. As the result, we have introduced:

The SOY.Finance — a new generation DeFi, the only decentralized exchange that support ERC223 token standard.

ERC223 improvement for global adoption.

Crosschain bridge — already live on mainnet.

CallistoNFT — better NFT standard as a superset of ERC721 features.

A number of token offerings that driven attention of investors, such as CHOAM token.

The most important thing in the industry of tokens

2022 is going to be a year of token standards.

You can remember the time of ERC20-ERC223 standard disputes. It was a hot topic but it calmed down then. Despite the fact that ERC20 tokens are still vulnerable.

The same goes for ERC721 and CallistoNFT — we have a better standard to offer this world.

This is not an easy task to change the ecosystem that already formed. However this needs to be done in order to make significant improvements. Now we have the team, experience and desire to achieve this goal.

We will introduce and promote better token standards, better token exchanges, better explorers for better user experience.