Annual Report 2023, and Beyond

Today, we are sharing our 2023 Annual Report, together with added reporting regarding our expenditures along the year, and a review of the current ongoing initiatives the Interchain Foundation is undertaking during 2024, and onward into 2025, to strengthen itself towards achieving its mission.

We are aware this annual report comes later than the previous year’s. It was delayed by recent leadership changes. We wanted to ensure that our strategy is coherent and we’re presenting the community with an accountable and up to date picture of where things stand, despite these changes.

The annual report highlights the ongoing efforts of the ICF and the key developments that shaped the growth of the interchain in 2023. Said year was pivotal for the ICF, the Interchain Stack, and the broader ecosystem, setting the necessary ground for the organization to begin a stronger maturation phase. The report includes messages from our current Foundation Council, and from Maria Gomez, the former MD, who shared a thoughtful parting message on the context and future of the organization, reflecting back on 2023.

In this update, we share new communication initiatives that will follow and share these changes through more frequent, and wide-encompassing updates; as well as an update on ongoing initiatives lined up for 2024 / 2025, for the foundation’s growth.

A look back at 2023

Expanding our Governance

In 2023, the ICF expanded its Foundation Council (FC) to enhance its capabilities and support its mission of empowering builders to create custom interoperable blockchains. New members Josh Cincinnati and Maxime Monod joined in December 2023, adding fresh perspectives and skills.

The first stage of the Interchain Stack Roadmap

The ICF launched the Interchain Stack Roadmap in September 2023, driven by community input. The roadmap included an optimized Funding Program for 2024 to support key deliverables and provide stability and predictability for businesses in the interchain. This initiative marked a significant step toward better planning for 2024 and beyond.

Starting Interchain Stack Stewardship

In 2023, the ICF initiated a pilot stewardship model to empower primary developers and maintainers of the Interchain Stack. Selected for their expertise, stewards focused on product and engineering direction, product security, community building, and product marketing. The model showed promising results in decentralized collaboration, with ongoing efforts to improve release cycles, technical standards, testing, security, and team coordination in 2024.

Delegation Program Expansion

The ICF expanded its Delegation Program to include Osmosis, Celestia, and IRISnet in 2023. Improvements such as weighted allocations, extended delegation cycles, and a points cap for larger validators aimed to balance token distribution and support a diverse ecosystem.

Security Audits

While mentioned briefly in the report, the Interchain Foundation and its stewards promoted several security-oriented initiatives such as audits.

In regards to audits, the ICF has invested a total of $546,360. These figures include reimbursements towards audit of $178,000 to Binary Builders, $59,000 to Strangelove, $5,560 to Zondax AG, $193,800 to Informal Systems towards their owned components of the stack (audits proposals are submitted to the ICF by stewards, who propose providers) — reflected in the total funding figures of the report to each team. An additional $110,000 were spent in audits paid directly by the ICF to Halborn and not as a reimbursement, therefore not represented in the funding allocated to teams in the report. These spends, and the spends on the security program will be expanded in the coming Annual Report 2024 and future updates.

Read the Full 2023 Report

Download and read the full Annual Report here and share your feedback via this form. We really appreciate the feedback, and are actively listening.

From here to the end of year, and beyond

Quote from Josh Cincinnati, President of the Foundation Council of the Interchain Foundation:

“In the last couple of months, the foundation has gone through several organizational changes aimed at strengthening the ICF in governance and operations. These changes are not limited to changing our representatives and leadership, but also to improve areas of the foundation that have repeatedly received feedback from the community:

• Product: the role of the foundation in driving an impactful roadmap and funding program for the Interchain, its stack, ecosystem, and stewards
• Growth: enabling the ICF to provide services that help scale the ecosystem, and expand beyond its borders
• Operations: to make the foundation more efficient, and properly resourced to conduct effective programs and services for the ecosystem
• and last but not least, Trust: improving our transparency efforts by communicating how the foundation plans and operates, and how it processes change and feedback.

There are plenty of areas for improvement, we know — but that makes the opportunity even greater. A critical part of that is improvements to the cadence, quality, and effectiveness of our institutional communications. A big part of this reset is to bring clarity on progress and active initiatives, and to maintain clear paths for feedback to happen and be acted on constructively.”

Evolving management and leadership at the ICF

Leadership at the ICF is at a transition stage, where the new ICF leadership and Foundation Council members are working hand-in-hand to set the path to refreshed management, expertise, and governance. The FC is expanding to enter a new stage of representation and professionalization, as past leadership transitions off, and the ICF is hiring a new MD to drive this change onward. While we serve continuity towards our mission, we believe that it is critical to give room to new representatives, who can now grow the strategic development of the ICF through more precise areas of expertise.

This core will be focused on developing some of the initiatives outlined below, and that will be further expanded in future updates.

The purpose of the Interchain Foundation

As stated in our mission (original), the ICF has a commitment to decentralized technology development, focused on the interchain and the Interchain Stack, in continuation and growth of the initial Cosmos vision — This is the core of our public focus, and obligations. We ratified this commitment and focus in 2023 — with a focus on the broader interchain, and the Interchain Stack, while the Cosmos Hub pursued a path to sovereignty to drive its strategic direction and product vision through its governance, supporting treasury, and DAOs.

While our relationship with the Hub remains strong in support, as seen in Annual Report, our activities are directed at the Interchain Stack and, not exclusively, at the general public of the interchain. Due to the above, as well as the ICF’s legal framing detailed below, the Interchain Foundation is agnostic in its approach to supporting, and adapting its priorities towards the development of the interchain as a continuation of the Cosmos vision.

The Hub, along with all other ecosystem members, builders, chains, and communities, provide input, contributions, and support towards our mission. Ultimately, we are building towards the same vision: an internet of blockchains, powered by a neutral, longevous stack. The interchain is broad, and the ICF is one of many contributors, with public goods rising beyond its programs.

Efforts were conducted in the past to better integrate the ecosystem’s input (e.g. TAB / Technical Advisory Board) with some successes (and some misses). The first TAB was dissolved when the grants program was put on hold in 2021. The second TAB succeeded in directing the ICF’s budget reduction into 2023, before spinning down. We recognize the need for paths to process ecosystem input, and rewarding collaboration. This year, we will pursue new initiatives to drive collaboration forward:

New collaboration initiatives for 24/25

1. New ecosystem input mechanism will be introduced this year in the ongoing 25’ roadmap / funding program efforts, developed by the new CPO and Product vertical.
2. The Product and Growth vertical has kicked-off feedback loops with core builders, contributors, and developers to inform strategy development. The revamped roadmap process already includes interviews as a step, and the Growth vertical will pursue the same route to build the ICF’s Services roadmap.
3. With a new MD & FC board in place, we will resurface discussions pertaining to building Advisory groups, or initiatives of similar nature. We want to ensure these key decisions are taken by the complete new leadership team, to ensure their longevity.

The ICF’s fiduciary responsibilities

The Interchain Foundation operates under Swiss legislation. As a public-interest non-profit organization (Stiftung), the ICF has no shareholders/owners, nor profit distribution or profit-driven goals, and founders have no rights with respect to the ICF either. Any incurred profits are to be reinvested towards the mission. The ICF’s fiduciary responsibilities are defined by its public mission, as well as its legal obligations to Swiss Law including those mandated by the Supervisory Authority of Foundations (FSAF / ESA — acronym used interchangeably).

Unlike private organizations, the ICF does not have direct beneficiaries (recipients of profits / support) other than those it funds to achieve its purpose, which are declared and audited yearly. While chains on the interchain, like the Hub, and projects or participants within these chains indirectly benefit from the success of our shared goals, they do not constitute direct legal beneficiaries of the ICF, but form part of the general public that benefits from our mission. This is the reason why the ICF is subject to direct, constant, oversight by ESA.

Among the responsibilities of the Interchain Foundation to ESA, the ICF is subject to a yearly ordinary full audit (Art.) from its auditor following the guidelines of the Swiss Code of Obligations. The audit report is submitted to ESA within the framework of the legally required annual reporting. These analyze not only financials and statements, but verification of internal controls, risk assessments, compliance, and upon any indication of fraud, authorities would take action. Controls exist in place to address potential conflicts of interest, where all related parties to ICF personnel are declared and measures are taken to avoid conflicts (e.g. vote abstains), and include a related-party transaction yearly review.

Based on the submitted reports, ESA has not required further actions to date.

To deepen its commitment to transparency, and continue expanding the initiatives it takes to bring proactive updates, the ICF will pursue:

New transparency initiatives for 24/25

1. The ICF will begin to conduct a quarterly FC Presidential update that overviews current initiatives in progress starting at the end of Q3 2024. Roadmap, direction, treasury, and other short-term service-oriented adjustments, as well as other institutional/strategic communications will be shared in these updates if available.
2. The financial team will instantiate monthly treasury snapshots to be shared as updates.
3. The Annual Report will be expanded for its 2024 edition, and onwards, to be more comprehensive, including how we create value in areas such as security, investments, business development, and other services from the foundation as they are developed. It will constitute an expanded version of the end of Q1 2025 Presidential report.

Better directing our impact & maturing our services

One of the key areas of operations of the Interchain Foundation is impacting its mission through development, resources, and services that support said mission. Development, through the Interchain Stack Funding Program & Roadmap; resources through grants, and investments; and services through ecosystem, marketing, operations and other initiatives.

These initiatives, both at the resource/treasury level and at the services level, have been reshaped and adapted to the challenges the ICF has faced. As a non-traditional organization, the main role of the ICF, in its services and treasury management, is to be able to sustain and pursue its goal effectively, and sustainably.

Part of the changes in the last two years to the ICF’s services and overall treasury management were aimed at reducing risk, increasing focus, and sustainability following the economic market downturn of 2022. At the time, commitments were set towards growth — and had to be readjusted swiftly to face the context responsibly from a treasury perspective, a period that was hard for the ICF and its providers to transition — and the speed of initiatives such as the grants program had to be reduced.

Now, with stability in-hand and systems for sustainable growth in place, the ICF can redefine its services and support framework, and grow responsibly. This is the core reason behind the ICF’s Board of Management/Leadership expansion. The following initiative are being undertaken by the ICF’s leadership:

New impact-guiding initiatives for 24/25

The new BoM and Foundation Council are working on refining the following strategic artifacts:

• The Interchain Stack North Star and Product theses for 2025, informed by market and product insights, ecosystem stakeholders, and stewards.
• The Interchain Foundation’s Services Goals for 2025, separating the technological goals for the first time from the goals of the foundation as a service-provider towards the success of the Interchain Stack (e.g. operations, ecosystem, business development, marketing, etc.).

These two artifacts will bring an all-encompassing decision-making framework for the ICF, enabling the ICF to pursue:

• The Roadmapping and Funding Program process for 2025, led by the new CPO and the new Product vertical of the ICF — introducing a hypothesis pitch system towards the North Star & product theses, as well as a new funding allocation framework to select and prioritize these development proposals. This format evolves the goal-driven approach from 2024 into an impact and product driven approach, and includes SLDC, release coordination, quality assurance and security as part of the program itself. We will make an announcement detailing these, including the expansion of our Security initiatives.
• The ICF’s Services Roadmap — defining the Service verticals (e.g. the likes of Ecosystem, Marketing, Business, DevEx) the ICF will focus and nurture for 2025, and its resource / responsibility allocation for these. Led by the CMO and the Growth vertical. This approach will allow each vertical to be professionalized and expanded as a service to the wider interchain.
• The ICF’s Operational Roadmap. Informed by the above, the Operations group (Finances, Operations, Legal and other supporting functions) and its policy book will evolve to meet the demand of the ICF’s services, as well as the Roadmapping and Funding Program framework itself. If those Roadmaps look outward, this Roadmap looks inward. This area is the fundamental cornerstone to enable the foundation’s day to day — and as activities such as the delegation program expand, so does this area to support. This includes current efforts to expand HR support to the team, governance training at the FC level, and BoM policy development support.

*Updates regarding the above will be shared in deep-dive follow-ups as each process reaches critical mass, and is ready for ecosystem feedback.

Closing

These last few months of 2024 are fundamental for the Interchain Foundation, and its core support of the ecosystem. We thank everyone for the feedback, and their collaboration on the road to building the Internet of Blockchains. We look forward to sharing more updates regarding all of the initiatives above, while ushering in a new time of growth and renewal for the ICF, the ecosystem, and its public goods.

Want to hear more from us? Have some feedback to share regarding our reporting, or goals? Please let us know your thoughts in this feedback form. We appreciate, and will continue to listen.