The Ethereum Foundation Supports Parity Technologies with a Grant

Parity Technologies, which is beset by large-scale hacks, just received a $5 million grant from the Ethereum Foundation.

The Ethereum Foundation, an organization with a mission of community building, announced a grant to Parity Technologies, to the tune of $5 million. The startup is one of the chief producers of Ethereum wallets:

“By all metrics, Parity is a major technical contributor to the Ethereum project, and they’ve notably done so as a self-financed and open-sourced effort since their founding.”

Unfortunately, Parity has also been hit by two large hacks to its multisig wallet, including a non-malicious but misguided attempt from a novice who locked up roughly $300 million at near-peak ETH prices.

The grant will be sent out in tranches, with the clear expectation that it will be used on covering important milestones for the Ethereum network. The $5 million is too small to cover the losses of the two hacks of the multisig wallets, and are instead meant as a boost to development.

“This grant will fund Parity’s work on Casper, sharding, light clients, developer tools, QA, audits and infrastructure improvements. Funding will be delivered in several tranches, the first of which supports development that Parity has already completed,” explained the Foundation.

The most affected party of the Parity hack was the Polkadot ICO wallet, which lost its entire ETH fundraising. The Polkadot fundraising continued, and Parity also worked on several goals. Initially, both organizations attempted to negotiate a form of bailout from the Ethereum network, including a hard fork, but this time, the community disagreed to roll back blockchain history and erase the losses.

The Parity team, however, believes there may be a way to recover the funds locked in multisig wallets, as explained in a recent Reddit thread:

“We will continue working closely with the Ethereum community to find a solution to unlock the funds. We are confident that this community has the capacity to deliver a governance process that allows critical bugs and errors leading to security issues in running code to be corrected. If we've learned anything building Ethereum over the last five years, it is that there will be bugs.”

The continued involvement of Parity, which helps run 40% of Ethereum nodes, arrives about a week before the expected Constantinople hard fork, which is supposed to further improve the output and efficiency of the Ethereum network.

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