A letter from Arthur & Kathleen Breitman to the Tezos community.

Dear members of the Tezos community,

In July of 2017, the Tezos foundation ran a successful fundraiser, substantially endowing it to promote and grow the Tezos protocol and ecosystem. While this is a boon to the Tezos project, progress since July has fallen short of our expectations, and the community has understandably expressed concerns over the lack of communication around this sudden change of pace.

The momentum we had prior to the fundraiser has slowed despite the resources now available for supporting the project. Some development has continued and we have personally been working to create strong relationships with successful entrepreneurs looking to build with Tezos. Unfortunately, other aspects have fallen behind, such as:

• Creating online resources for contributors and developers to learn more about Tezos.

• Scaling up the development team.

• Articulating our vision for the project more clearly through a series of explanatory blog posts, as we used to produce.

• Engaging with the community of Tezos contributors and makers, and helping them in their endeavors.

These issues were partially alleviated by the work of our amazing community.

Tezos.community, myCryptoDelegate.com, tezos.help, preview.tezosChain.io, tezosAgora.com, tezos.rocks are but a few examples of some of the great contributions that have come from our community.

We have been working on tackling the root of the slowdown for a while and, now that we are nearing a resolution, we can share what’s been going on.

The Tezos project has been the work of two entities. DLS, a company we (Arthur & Kathleen) co-founded to develop the technology, and the Tezos Foundation, a Swiss based non-profit foundation created to foster the development and adoption of the Tezos protocol. We supported the creation of an independent foundation in order to provide transparency and accountability over the use of funds. To that end, neither of us sits on the board of the foundation.

At the time of the fundraiser, the Tezos foundation took over the responsibility of financing the development of the Tezos ecosystem. The role of the foundation was to provide oversight, transparency, and financial controls, ensuring that funds were properly directed towards the growth of the Tezos project and ecosystem.

From the outset, we worked nonstop to make the transition as smooth as possible, making suggestions to the foundation to help them continue the work we had been doing. However, getting anything done proved difficult. Recruiting came to a standstill and communications to the community languished waiting for approval.

In early September we became aware that the president of the Tezos Foundation, Johann Gevers, engaged in an attempt at self-dealing, misrepresenting to the council the value of a bonus he attempted to grant himself. We have been working with the Tezos foundation to resolve the matter and have advocated for his removal from the foundation council. We are confident in the council’s ability to handle this sensitive matter with care and diligence. In the meantime, Johann’s operational role in the foundation has been suspended, pending an investigation by the council’s auditor.

Up to this point, we have respected the confidentiality of this matter at the request of the foundation council, so as not to let a media uproar become a distraction during deliberations.

Based on our discussions with the other council members, we are optimistic that they will be taking further steps to improve governance in several ways:

• Increase the number of council members to between five and seven people (as is typically recommended for Swiss foundations) as soon as practical by enlisting council members with board experience and a track record of integrity in leadership positions.

• Commit to greater transparency through the creation of a transparency commission observing and reporting publicly on the activities of the council.

• Adopt bylaws and policies that expressly provide guidance on conflicts of interest and self-dealing.

• Establish an organizational structure that will allow for operations to run in a more agile manner.

Specifically on this last point, the foundation has agreed in principle to set up a structure whereby most operations will be conducted by a wholly owned subsidiary, Tezos AG. Under this structure, the foundation council will approve a budget for Tezos AG, allowing the company to operate with less overhead than if each decision were made at the foundation council level. This structure, recommended by the foundation’s lawyers and others, promises to reduce the bottlenecks we have experienced. It will also preserve the ability of the foundation to supervise the use of funds based on overall results, without a need for micromanagement.

We maintain that an independent council is the right structure for our project, provided it adopts an effective approach to the work that needs to be done. However, it has also become apparent that it would be beneficial for the project to formalize our (Arthur and Kathleen’s) roles going forward. These will most likely be within Tezos AG, the subsidiary. A better-defined relationship will give us a clear scope for working with the foundation towards its mission. Needless to say, we are not looking for additional compensation for this involvement. Our interest is plain and obvious: we want the project to be the great success we know it can be.

Assuming that the foundation council acts on the plans it has shared with us, we believe that the community will see:

• A faster pace of progress, as the foundation can now commit resources to finally hire the talented people who have expressed interest in working with Tezos and the Tezos community.

• Clearer and more frequent communications.

• A steady increase in the pace of the remaining work to be done to bring the Tezos technology to the point where it is sufficiently secure and scalable to be launched. Our current best estimate for shipping the main net is now February of 2018, though the firm date remains “when it’s ready”. To say that we regret the delay is an understatement.

• More research projects, as the foundation commits resources to research groups working on formal verification, consensus algorithms, and cryptography.

• Announcing partnerships with businesses, as the foundation will be able to commit resources to working with the many talented entrepreneurs who have expressed strong interest in Tezos.

The Tezos project is breaking new ground in a variety of ways. It has been an exciting time for the larger cryptocurrency community as innovation has taken off and the technology has gained traction. But breaking a trail will always come with unexpected turns, serious challenges, and hard decisions. During these times, it is especially important to remain true to the principles of the project: practicality, integrity, sound governance, and preservation of the interests of the community. These four pillars have taken on new meaning for us over the last two months and, we hope, have guided us well.

We remain resolute in our commitment to the vision of Tezos and to those who have adopted this vision with us and are helping us drive it forward.

Regards,

Arthur and Kathleen