by Magnussen, Moriarty translated by Granny Hudson

This review is written exclusively for

Website: (previously Emotiq)

Short description: a scalable and private blockchain with a built-in  transaction mixer/tumbler that can be run on mobile devices

MVP: there is a demo on YouTube as well as GitHub. Currently, users can set up a test node on Windows, MacOS, and Linux.


  • Ticker: STG, native token
  • Total supply: 1 billion

Token distribution:

Here we can see a rational distribution scheme with >50% of SGT allocated for sale. In addition, there are no unnecessary tokens going to “foundations”, that, as it is often the case, will eventually end up in the team members’ pockets. We’d like to point out that the overall supply will increase 14% for the first 4 years with a follow-up halving every 4 years, i.e year 5-8 7.5%, year 9-12 – 3.75%, etc.

Tokens will be issued as a reward for miners and node validators.

The sale itself is split into various stages that are shown in the table below:

The first striking thing is the total cap of the project. It is true that a $20mil cap is overkill in the current market conditions. However, the total amount includes funds from the Emotiq ICO where $15.8mil has been pledged. The team obviously did not turn all the ETH into stable coins and, due to the downtrend, ended up with around $2-3mil at the moment of writing. Thus, we can speculate that the total cap of the project should be in a realm of $7-8mil. Considering that the token price during a possible IEO will be 2-3 times cheaper than in most of the finished rounds, we can assume it won’t be hard to reach desired multipliers upon listing.

Another noteworthy moment has to do with the seed round lock-ups. Initially, there was none which resulted in many investors left disappointed.  Eventually, the team managed to correct it through exploiting a vulnerability in the smart-contract, thus, allowing themselves to stay afloat. On the other hand, they lost a number of high-profile investors from Asia. As people say, any bear market cools your appetite down and makes you think. Unfortunately, you have to pay for it big time.


Crowdsale tokens will be unlocked right away. Tokens issued during other stages are unlocked accordingly to the number of months after Mainnet Launch. Note that in the 1st month 50% of Round 1 and 70% of Round 2 tokens will be released.  See details below:

50% of team tokens will be unlocked 1 year after mainnet launch which is a fairly regular practice. However, there is a provision that the remaining 50% could be sold in small chunks accordingly to the needs of the team.  Nevertheless, it only represents 5% of the total supply instead of your typical IEO-style distribution which is normally 20% to the team+15% to the “Foundation” that ends up dumped right after listing.

The team members said that lock-ups would be a subject to change depending on the IEO requirements of a given exchange.

Overall, the total cap of $6-8mil supported by market-making done right seems to be reasonable enough to make the investors happy upon listing. As for the listing itself: it won’t be possible until the mainnet launch because the SGT token is a native one and not erc20.

Legal aspects:

Stegos were registered on 12/18/2017 in Zug, Switzerland at Alpenstrasse 15, UID CHE-204.561.942. Their former enterprise, Emotiq,  is listed under the same registration number. On October 15th 2018, Emotiq was rebranded as Stegos keeping the same reg# and beneficiaries.

Another interesting company in the list is Moore Stephens: auditors that are working closely with Stegos. Normally, ICOs either not have any audits or prefer not to mention any companies by name. You could’ve noticed a Slavic-sounding last name of the CEO. Read about it in the part about the team.

The website has recently been updated but does not get many visits due to the lack of hype.

Social network:


The roadmap from the white paper is fairly straightforward without any excessive details. There is a more comprehensive one on their GitHub: Overall, it seems that the team is following it.

The first significant date is May 31st, 2019 where both Mainnet and a native token will be launched. Everything is in public access, and we will keep a close eye on the roadmap.


Here lies the main reason why the project attracted our attention. They simply have a quality GitHub with one of the most in-depth wiki in the industry. If we compare it with the GitHub of Emotiq, you can see that the Stegos’s one is on a completely different level.  In addition, there are no private repos and everything is open to the public. Let’s dive into it in more detail:

There are 10 repos overall. The only directory that is identical to Emotiq is a wallet repository based on Electron: a standard solution for mobile wallets, like Exodus and so on.  Other similar-looking repos are forks of the solution ready to be implemented. For example, libp2p is used for decentralized single-rank apps and is very widespread. Even well-known projects like Polkadot use the same fork.

The main repo, Stegos, is the blockchain itself that has been in development since September 2018. It is very well-structured with the frequency of commits on an acceptable level. The blockchain is written in Rust and the contributors do not seem to have any private repos.

The only questions we had concerned a small repo, pbc-example, that had no readme files or any commits. The repo has been closed and it was used for experimental purposes where the team tested new features before rolling them out. Stegos puts transparency ahead and that’s why they published the repo first and then closed it to avoid unnecessary questions.

Generally speaking, GitHub is active and the coding skills of the team members seem to be on an appropriate level.



Originally, Emotiq positioned itself as a direct competition to Dfinity: layer2 solution for Ethereum. After re-evaluating the team’s finances and positioning on the market, it was decided to narrow the niche down. We could say, that they succeeded in it.

The key point of the technology is their consensus algorithm: PoS+pBFT. To solve a scalability problem, they use transactional sharding as well as a cryptographic pruning in order to prevent the blockchain from oversizing. It makes it is easier to scale and use the blockchain on mobile devices by deleting spent data and coins. A complete version of the blockchain is not stored on every single device, but on the separate machines owned by the validators.

At the moment, the whitepaper is combined with a technical paper. The original version of the papers was too diluted, especially, when it came to explaining the key feature of Stegos: privacy and confidentiality. Here Stegos compare themselves with the likes of MimbleWimble, Zcash, Monero, Dash, and Grin.

The yellow paper, which is included in the whitepaper, everything is written clearer and we could see that people who wrote it have a deep understanding of current problems in cryptography. They also included some research on the main competitors pointing out their advantages and drawbacks, that Stegos plans to fix.

Monero – a solid project. However, it has a common problem among most blockchains, i.e. constant growth of the data volume for the nodes within the chain. The implementation of Bulletproofs decreased the size of a block from 13kb to 2.5kb, but it is not a permanent solution. In addition, they use a PoW consensus that is very resource intensive.

Zcash – same story: PoW and a constantly expanding blockchain, despite the fact that every transaction weighs only 2kb. In addition, Zcash has scalability and privacy issues, because only validated and confirmed nodes are allowed clear anonymous transactions through the zk-SNARKs protocol. Many agree that it contradicts the idea of privacy through decentralization.

Dash – another song from the same opera: PoW and enlarged blockchain. Like in Zcash, there is a nuance with running masternodes, that can only be done on a static IP-address. Also, one of the main privacy features of Dash, PrivateSend, is not stable at the moment. When using PrivateSend, every transaction from 3 users is combined into one, then mixed for up to 8 times before going through generated single-use addresses. All 3 transactions should be the same size with the same amount of Dash, which, in theory, makes it possible to track the transactions based on their size and create a potential vulnerability.

Mimblewimble (Grin) uses the same PoW consensus, but they have solved the privacy problem by using Blinding Factor. When a recipient uses this randomly generated factor, it allows hiding the amount being sent as well as makes it impossible to identify the participants of the network based on the size of cleared transactions.  The team also managed to solve the UTXO (Unspent Transaction Output) problem that made previous versions of the blockchains cluttered. They used the same way as Stegos: cryptographic pruning. However, Grin, being a typical project built on Mimblewimble, has a number of drawbacks:

  1. The sender has to contact a recipient in advance in order to get a value for Blinding Factor and complete a halfway-done transaction.
  2. It is in theory possible, like in the case of Dash,  to track the users based on their transaction history and output data. It is a common problem for many blockchains currently

What Stegos is planning to do to solve these problems:

  • Implementaion of single-use addresses that cannot be connected to the main wallet address, like in Monero or Zcash;
  • Individual transactions merge into a massive super-transaction with all the coins being shuffled within it. The ValueShuffle protocol makes it impossible to track transaction history.
  • Transaction sizes are hidden by using a Pederson commitment scheme. Many similar projects implement it as a means to hide concrete numbers and replace them with cyprotgraphic commitments and ranges of numeric values.
  • Transactions are confirmed by comparing input-output values, and the total amount of coins does not play any role in it.

Stegos also uses transaction sharding in order to speed up the confirmations. Separate groups of Stegos’s validators keep a complete blockchain but check only the subsets of incoming transactions by using atomic commits to avoid double-spending. This approach allows Stegos to process hundreds of thousands of transactions per second. They use a PoS consensus algo in combination with pBFT and collective signatures. Every new block within the network must be checked and confirmed by a group of validators, where each one of them has to stake a certain number of coins. The total amount of coins dictates the probability of becoming a “leader” within the block and getting a transaction commission. Rewards for a discovered block use a lottery format powered by the RandHound++ algorithm. The more coins a validator has staked and the longer they process transactions, the higher the chance to win in a “lottery”. All the probabilities and outcomes are described in a technical paper.

Now, let’s move on to how Stegos works on mobile devices. In the Stegos network, there are lightweight, compact and full nodes. The full nodes stake STG, become validators, participate in CoSi, and respond to inquiries made by the lightweight nodes. The lightweight nodes do not support the full version of the blockchain. They only contain block hashes and make contact with the validators. These nodes are, in fact, simple wallets for the non-staking users to interact with the blockchain. The compact nodes have the same functionality as the full ones but run on mobile devices. They also participate in consensus and are designed to work over wi-fi if a device is plugged into the wall. However, the team is developing an optimized version that will allow the participants to save battery life and use the blockchain on the go. There are also basic nodes with the addresses recorded on the blockchain itself. They keep a list of single-ranked nodes and alert the system upon the discovery of new nodes.

ValueShuffle – is an extension protocol working with the CoinShuffle mixed networks, where all the transactions are blended and anonymized. In the traditional tumbling systems there is always a 3rd party that does the mixing. For instance, there is a vulnerability in zk-SNARK that, in theory, allows to create “counterfeit coins” if there is access to secrets that are used to generate a reference line for the network participants to identify each other.  In order to get rid of this bug, they have to use a separate hash where they store all the serial numbers of all the coins ever created. This leads to an unnecessary expansion of the blockchain, even though there is a possibility to transfer this hash to a separate set of nodes. Ring signatures, in this case, store all the data from all the cleared transactions (UTXO), which, in turn, harms scalability. The key feature of  CoinShuffle ++ is a more effective anonymity mechanism. The original CoinShuffle uses mixed networks that require sequential processing with the several rounds of node identification in the ever-growing system. CoinShuffle ++ uses cryptographic DC-networks that allow parallel mixing and keeps rounds of validation at a constant value regardless of the total number of the participants.

ValueShuffle – is a step further that makes confidential transactions possible. ValueShuffle guarantees the anonymity of the participants by mixing the transactions and hiding the total amount of coins. However, ValueShuffle doesn’t fully describe how the network participants are able to identify each other and doesn’t include explanations on how to insert a multi-signature at the end of a combined transaction.

Stegos has improved upon ValueShuffle by developing a protocol where a coordinator, chosen from a list of validators, runs a kind of a “bulletin board” for those who wish to send the coins.

Generally speaking, one of the appealing moments of Stegos is that they are not trying to create another blockchain from scratch. Instead, the team is using proven solutions that include minor tweaks and added features.

There is no point of describing tokenomics here. It is fairly standard: staking+transactions+rewads for the validators. Unlike Grin, there is no infinite supply of STG, that might dump the price.

The team:

Joel Reymont CEO Twitter  GitHub

A guy who doesn’t suffer from false modesty by calling himself a “kick-ass” developer. 25 years of coding experience with 17 as a contractor. Joel specialized in developing server applications that brought him a certain amount of fame within the Erlang community. He mostly codes in С++, Java, Rust, and applies his smart-contract and software developing skills for Linux, Windows, MacOS, and Android.  In addition, he was spotted trading options. Also, he used to be a CTO at Aeternity that develop a blockchain to solve governance and scalability issues, and ranked #53 on CMC at the moment of writing. Joel left AE due to disagreements with the CEO, ex. PoW vs PoS and use of an outdated Bitcoin NG technology. His exit from Aeternity resulted in a 30% crash of AE. Afterward, Joel managed to gather $2mil in 3 days and got to work on his own project. He is also the owner of a software developing company Wager Labs OÜ that was liquidated in January 2019  after 2 years of operation. Joel is a blockchain specialist at BlockSeer and a cyber-security solution developer at Invincea.

As for his Slavic-sounding last name that can be spotted in official documents: Joes was born and grew up in Russia. However, at the moment of writing, he does not hold a Russian passport and is a citizen of Spain.


Vladimir Lebedev VP of Engineering. LinkedIn GitHub

Vladimir boasts a solid experience in fintech, telecom and IT. He moved to Stegos from occupying a position as a director of a Eurasian branch at VEON, a giant telecom firm. Co-founder and COO of Cybertonica, an e-payment security company. Vladimir worked as a technical director at Sberbank Digital Ventures, as well as in other big companies. On the official website, his work experience in group is also mentioned but we were not able to find confirmation. His online trace is pretty weak and GitHub is not active. In some reviews of Emotiq there is info that he was a CTO of Group. However, Vladimir worked for 3 months as a COO at Data Storage Systems Business Unit, whose CEO was a subordinate of a CEO.

David McClain    Twitter GitHub 

Ph.D., astrophysicist and a lecturer in the field of computing and low-level programming. He as a CEO of a now-defunct start-up Acudora, where they were developing algorithms to fine-tune and improve the sound. We could not find any information on what happened to the start-up in the end. Overall, Mr. McClain has a strong online presence with plenty of confirmations. His GitHub is well-developed and we could see that he is a coder with vast experience.

Roman Tsisyk Core Blockchain Team Lead LinkedIn GitHub

Core Blockchain Team Lead from Russia with 6 years of experience at Since 2004 he has been connected with the development of databases. His GitHub is active and updated regularly.

Eugene Chupriyanov Senior Software Engineer LinkedIn

Eugene has one of the most well-developed LinkedIn in the whole team. Like Vladimir, he is from Novosibirsk, Russia and worked together with the various team members at Group, Nokia, CPM Ltd., Cybertonica, and VEON. Over 30 years of experience in development, telecom, databases, and computations.

Vladimir Motylenko Software Engineer GitHub LinkedIn

Rust developer. GitHub shows that he entered the crypto space in 2017. There is no additional information on him. However, despite Stegos not listed in his LinkedIn, he is a full-time member of the team.

Team conclusions

Generally, despite lacking a vast experience in the blockchain field, the team looks solid. The members’ GitHubs are updated fairly regularly, everything is neat and tidy. Some might remember that a part of the team was let go in August 2018 due to constant misses of deadlines and sub-par quality of work.  The team coded in Lisp, a language, that is very romanticized in the community. The team thought that by hiring experienced Lisp developers, everything will work on its own. However, it was not the case and the tools of Lisp proved to be not capable of efficiently corresponding to the goals of the project. Currently, the team is trying to patch everything up and hire more experienced developers. They also chose not to hire any advisors and pay them to show their faces on the website. Instead, the team chose to hire more new members.


J LAD – a Chinese fund, created in 2007. They invested in projects like NKN, Ankr, Arweave, Fantom, Newton Project.

CoinBene – Singapore-based crypto-exchange that does not yet have a solid reputation in the current market.

SFM Capital – an investment fund that took part in the Perlin offering. We were not able to open the official website though.

Hive Labs – ICO-incubator from Silicon Valley. Partnered with another interesting project: MXC.

Thomas Capital–seems to be another Asia-based fund with only a Facebook page.

Partnerships Conclusions

Funds, more funds, and even more funds. There is a serious lack of strong tech/blockchain names that make investors excited about taking part in Stegos.



In terms of technology, Stegos looks exciting and solid. There is no hype at the moment: but it’s a double-edged sword. On one hand, the team focused on developing a product and doesn’t pay much attention to marketing. However, marketing is a crucial part of crypto-industry.  CIS-team does not raise any red flags in this case: all the members are competent coders but lack experience in cryptography. Their competitor Beam also has a Russian team that didn’t stop it from making investors happy upon listing.

The tech paper is well-written and not diluted by unnecessary chapters. The GitHub is active and well-developed.  The team also has the courage to admit that $15mil gathered during the Emotiq offering was not immediately cashed out but kept in ETH that resulted in the team left with $2-3mil at the moment of writing. This money is being spent on changing the direction of the company and active development. Also, we need to mention that the project is going through an audit after re-branding.  As we know, the majority of the projects would’ve abandoned development by this time but Stegos manages to stay afloat. Other drawbacks include partnerships and the abundance of investment funds in the list. Why not have functional and useful partners instead?

Overall, it will all depend on listings and good market-making. Considering that the mainnet launch and a large amount on tokens will be unlocked on May 30th, we still see a possibility of making 3-4x returns provided that the total cap does not exceed $7-8mil. All we need to do is wait and see.

If you liked (or hated) this review, feel free to join a conversation in our chat “Sherlock Club”. It is mostly in Russian but let it not scare you away, we are a friendly and inclusive bunch.

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