There are several important points that should be taken into consideration related to accounting for DAOs organizations
Financial Reporting Standards (IFRS)-International Accounting Standards (IAS) and Cryptocurrencies
Cryptocurrencies, NFT, and other concepts of the crypto world are new to the world
maybe the theory and concepts known from long time but emergence of applications based on this concept just from few years
Bitcoin “bitcoin org” was registered as a domain and first version of the coin was released in January 2009
With the emergence of the cryptocurrency, a new form of money appeared that will change the world and the future and this change can never be stopped
However, there are many countries that still consider cryptocurrency illegal
because of this accountant when dealing with cryptocurrencies, he faces many problems
Cryptocurrency is something unique that never existed before it combines several qualities, It takes the attributes of money,inventory ,investment and also sometimes it like stocks when you own it, you have the right to vote in the companies that issue it.
and when looking at Financial Reporting Standards (IFRS)-International Accounting Standards (IAS) we don’t find a standard for cryptocurrency until now so when we look at this criteria
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
“In the absence of an IFRS Standard that specifically applies to a transaction, other event or condition, management uses its judgement in developing and applying an accounting policy that results in information that is relevant and reliable. In making that judgement management refers to the following sources in descending order:
the requirements and guidance in IFRS Standards dealing with similar and related issues; and
the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the Conceptual Framework”
This means that there is room for multiple opinions as long as it doesn’t break the standards the topic is complicated and there are many opinions, but here I will summarize it
Most opinions say that cryptocurrencies should not be consider as money
Some opinions say to consider it as Inventory Therefore, it is under criteria Inventory (IAS 2) but Most of the opinions it consider as Intangible assets Therefore, it is under criteria Intangible assets (IAS 38) there are also other opinions
and the matter is not completely specified because there is no specific standard for dealing with cryptocurrencies
What does the DAO want from accounting department?
1.Preparation of financial reports for DAO it want financial reports Periodically maybe every week- month - quarterly -year
2.They also want to be next to the specialized financial reports, another version of it,
which is simplified and easy to understand for everyone, not all DAO members are specialists in accounting and understand accounting terminology.
3.The accounting department should be patient and has high capabilities in communicating and have great ability to simplify information because there will certainly be many discussions and inquiries.
4.In DAO view, the accounting department is responsible for financial transparency and the accuracy and validity of financial transactions, and is fulfilling the rules, conditions, and interests of DAO and report anything that violates the interests or laws of the organization from a financial point of view
In fact this task is subject to many discussions, because accounting department to perform this task and be worthy of the organization’s trust that means accounting department have some degree of independence that allows to do that
5.DAO not want numbers and reports that they not understand their meaning but want it to be accompanied by an explanation and simplification that explains exactly what the numbers mean, and with description of financial problems and proposed solutions.
Accounting department with cryptocurrency tools
There are many tools that we need to deal with
1.Cryptocurrency wallets
They are very many types, and choosing the appropriate wallet depends on several factors such as what cryptocurrencies we own and which blockchain network it works on examples of crypto wallets Metamask , Trust Wallet , Exodus and many other wallets there are also cold wallets like Ledger: Hardware Wallet and there are other types of cold wallets
2.The different types of blockchain networks, the most famous is Ethereum
there are other types such as Solana, polygon ,Binance Smart Chain and other types
3.Blockchain browsers like etherscan-io ,bscscan , explorer.solana , polygonscan and other
4.Centralized Cryptocurrency Exchanges like Binance , KuCoin , gate-io and other
5.Decentralized Cryptocurrency Exchanges like Uniswap, Sushiswap, Pancakeswap and other
6.Website like CoinMarketCap , CoinGecko , DappRadar and other
7.Platforms for dealing with taxes in the area of cryptocurrency and digital assets
like TaxBit , Koinly , CoinTracker and other
There are also accounting programs specialized in the field of crypto like SoftLedger ,Cryptio ,Cryptoworth and oher but they may not be useful
8.Decentralized Insurance such as InsurAce Protocol, Nexus Mutual, Opium Insurance, Unslashed Finance
This is if the organization wants to insure the risks of smart contracts or any risks
If the organization invests part of Its Cryptocurrencies may use the following tools:
9.If the DAO deals with NFT, for example invests part of its money in NFT it will need to deal with websites such as OpenSea and Rarible In fact, the field of NFT is a very diverse field, and there are very many NFT sites, some of which specialize in certain types of NFT.
10.compound.finance , yearn.finance
In fact, there are a lot of tools for investing in cryptocurrencies in futures , lending, Staking and many other things it has a wide variety of tools it need multiple separate topics explaining the options available for cryptocurrency investment it would be hard to mention all of this here
I think that these are the basic tools that the accounting department deals with in the field of crypto ,There are many other tools, but these are the main ones
One of the biggest problems facing the accounting department in dealing in the field of blockchain is the need for automation and making the accounting process and data collection to be done in an automated manner
So we need to use sometimes tools to do that if we do not find tools that are able to implement as we want, so we build software tools that help us in automation process
We should have a background with web scraping and API
Accounting points related to DappRadar
Contribute2Earn , Stake RADAR and get rewarded , RADAR Airdrop , DappRadar PRO
These points need to be dealt with by the accounting department and to establish an accurate accounting system for them, and this is not a problem
the problem is how do make the process automatically and accurately ,if accounting operations are done manually there will be many errors and the effort expended is big
especially in the field of crypto and blockchain
I mean here the method of collecting data and entering it into the accounting system.
we should always look for solutions to make the process of collecting data and entering it into the accounting system is done automatically, this saves time and reduces errors to a minimum and this can be done
RADAR token
I want to talk about a point that may be different from the context of the topic DappRadar has good marketing but it focus on product marketing not focus on marketing RADAR token
In fact, tokens and coins in the crypto world can be considered product that needs marketing , there are already cryptocurrencies that are very famous and achieve excellent sales and are linked to a very weak project or not linked to any project at all It is in itself the product.
It depends on good marketing and promotion this is what makes it valuable ,investors buy these cryptocurrencies in the hope that their price will rise and achieve high profits, and they know very well that these currencies not have real value because
it not linked to a strong project
RADAR token related to a good project but I don’t think it has a strong promotion
if a marketing and promotion plan is developed to RADAR token itself and deal with it as separate product maybe the situation will change
From coinmarketcap
From coingecko
I found some differences between the data on coinmarketcap and coingecko but there are small differences
The following data I brought is from coingecko
RADAR token appeared in coingecko in 2021-12-14 by price 0.03281 and it started to rise to reach a price that it did not achieve later 2021-12-23 - 0.050081
Then it starts to go down again and then rise and fluctuates in the price to go down and rise many times , at the moment of writing this topic is at a price $0.0114 on Coin Market Cap
Due to the global crises in the past period, many governments around the world have raised the interest rate on money in banks to reduce inflation and attract money, and this affected on cryptocurrency market a lot , it is much better to put your money in banks than to invest it in cryptocurrencies
But this situation will end in the long run the interest in banks will decline, and the crypto market will rise again
The best era of cryptocurrency is not in the past , It’s coming in the future
and with it RADAR token will rise but in the short and medium term, I do not expect a big increase in RADAR token price
The RADAR token is linked to a stable and good project DappRadar
and it is good and can guarantee that to some extent that we will not wake up one day to find it completely collapsed and disappeared
Behind this token is an excellent team and good management with a vision and a
real project that makes it a very good token for investment, even if it drops sometimes for any reason, it is always able to rise again it has the ability always to correct the situation
It is safe and in the long run, It is excellent investment that may make good profits
It is now low in price, but its price will rise a lot in the long run , but in the short and medium term, the price may rise, but I do not expect it will rise explosively
The situation may change if DappRadar started strong marketing for it ,or launched additional crypto products related to RADAR token and achieved great success
The whole topic is up for discussion and any difference or comment is welcome