DAO Finance workstream discussions

[madeafterdeath]

So pretty much echoing what @bayar said The groups of people.

Financial reporting will be going down to the account side of things and analyze. @mixmore you want to do this most from what i seen so you should ask about who u can reach out to to see what you can do to start with this. Also i was thinking about what u said other day as in currencies and thinking it over if you want to do it like that you should and write it up as you would but there should be a small group of you doing it say 3/4 different people and you can cross check to see if everything is the same this would help and save on mistakes before they happen.

Tokenomics reporting is another analyze job sorta they would be doing it while also helping with the financial reporting side of things. end of month reports on holders, Transactions, Price averages, ect Thoughts on how to make it better, the community as a whole could help with this as well cuz its what do they want to see? what would they like to happen with the token for utility.

Governance reporting is what’s happing and trying to think of events and reporting what everyone is doing its basically like trying to keep track of how events went if they was a success or not, Trying to think of ways to make stuff better but every group should be doing that. Also keeping track of the community as a whole from numbers to mood. Basically like a customer support almost. (like at moment i feel were inactive almost we get engagement but i feel we should be getting more) look at how many people have posted on here about it? barely any. (fingers crossed this changes)

Operational reporting this is Dev’s jobs as well as users of dappradar if something isn’t working right it need reporting if something is working right how well is it working how often is it being engaged with does it need any updates upgrades? Could it be upgraded if so how? All coding needs to be checked, how often is the site being viewed accessed as a day. as well as keeping track of how many new projects have been listed of dappradar as well as chain integrations and possible new ones.

Now these 4 groups it feels like are solely for us…(tho tokenomics would be keeping track of pools so tec would be keeping track of other token prices but they would be attached to are liquidity) The dappradar community apart from governance who has to keep track as much as possible and play middle man to all the other groups tho every group should be getting on best they can its just governance is the people you go to for help reaching out for other people which is why i said they are almost like customer support anyone governance reporting should be able to help reaching out to other certain groups if you cant but seen as we are doing it on here that shouldn’t be a problem id hope.

Now that i echoed pretty much what Bayar said in my own words i can break down the graphs’ in my head and understand them a little better.

If im wrong on any of this please someone correct me =)

I think we should have a outreach group and if not it should be part of governance where basically trying to talent seek and find projects that could be possibly brought to listed, or possibly even used on dappradar, or social medias and write up a report of why you think it would be a good idea. share with the community and team see what they think?

[bayar]

By the way @mixmore

@mixmore

This is an example. In this link, we find the financial statements, but matters need more clarification.

yearn-pm/financials/reports at master · yearn/yearn-pm · GitHub

But let’s discuss things differently.

Just looking at those financials proves my point about equity:

They firstly refer to Net assets, but there’s none on the balance sheet (or zero if you make the calculation). They include a line called “Total liabilities and equity” but there is no equity on their balance sheet.

We have to create a new definition of a DAO’s net assets.

[mixmore]

@bayar
Thank you for your response and interest.

Please see the following reports: They are also from the same link and the same protocol.
Three different ways were used.

The second

One time, the accountant used the Protocol equity account.

The second is that he uses the Total token holders equity account.

The third method is that the accountant did not use any account for equity and ignored the matter as if it did not exist.

All three methods were used in the same year.

I attached this link, not to take it as a model for us to build something like it.

I attached it as evidence of the confusion that exists in accounting for DAO organizations.

Of course, I examined it carefully before attaching it, and I know that he used three completely different methods.

One time, the accountant tried to put equity in the Protocol equity account, and then he thought he needs to change this policy

Once again, he tries to put equity in the total token holders equity account, and then he also thinks he needs to change this policy again

The third way he decided to make tricks and avoid all of that and not put any equity account in the balance sheet in this form has become unacceptable.

Because it is simply unbalanced, there is a difference between assets and liabilities.

He made a trick and said liabilities and equity without mentioning an equity account maybe to avoid a headache and this accounting problem.

And to protect himself, he added this to the beginning of all reports and by this way he avoids responsibility .

Although he is supposed to explain and defend the accounting policies he chose and why he chose to do what he did

The data, statements and information presented in this report is for informational purposes
only, and it does not constitute financial or investment advice. Further, the financial statements
presented have not undergone a comprehensive financial statement audit from a third-party
professional accounting firm. As such, there may exist errors or inaccuracies that materially
misstate the financial statements. We are not responsible for any financial losses or adverse
outcomes that may result from making investment decision based on the data presented
herein. Further, by viewing this report you agree that the statements in this report do not
constitute a representation, warranty or guaranty regarding any matter, and you are not relying
thereon, but will conduct your own due diligence. You hereby release, waive and relinquish any
and all claims, causes of action and disputes against Yearn Finance, its contributors, and the
creators of this document. THIS REPORT DOES NOT CONSTITUTE ADVICE FOR ANY PURPOSE.
The forward-looking statements in this report are subject to numerous assumptions, risks and
uncertainties which are subject to change over time. There are many risk factors, including
those relating to blockchain and cryptographic technology generally, as well as Yearn
specifically, that could cause actual results or developments anticipated by us not to be realized
or, even if substantially realized, to fail to achieve any or all of the benefits that could be
expected therefrom. We reserve the right to change the plans, expectations and intentions
stated herein at any time, and we undertake no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information, future developments or
otherwise. ACCORDINGLY, WE RECOMMEND THAT YOU DO NOT RELY ON, AND DO NOT MAKE
ANY FINANCIAL DECISION OR INVESTMENT BASED ON, THE STATEMENTS CONTAINED IN THIS
UPDATE — INCLUDING BUT NOT LIMITED TO ANY SELLING OR TRADING OF YFI TOKENS, ETHER
OR ANY OTHER CRYPTOGRAPHIC OR BLOCKCHAIN TOKEN.

And many balance sheets and income statements that we find for DAO organizations, they add similar sections because they know very well that it is not ideal and has problems, and they did not think and research to find accounting solutions and defend them. They took the easy path.

I am not against the idea “create a new definition of a DAO’s net assets”

But from my experience, I have an opinion.

The solutions to all accounting problems for DAO organizations will be very easy if we first try to find the most accurate description of the web3 elements.

The first element we need to describe in a true and accurate way is “decentralized autonomous organization (DAO)”.

It is clear to me that you are very keen in your work to reach the optimal accounting policy and you research a lot, and you are not like others who rely on accounting tricks.

That’s great, so it makes sense that you wouldn’t trust my opinions easily. You want to form your own opinions that you trust.

Therefore, I have a suggestion that search in a different direction, to search for the exact definition of decentralized autonomous organization (DAO)

The definition you will reach will help you follow the correct accounting policy.

You can place in the introduction to the financial reports a section in which you place all the definitions you have arrived at to define the DAO and other Web3 elements related to financial reports. Therefore, you can also set the accounting policies that you have chosen, which are based on the definitions of the DAO and other Web3 elements.

In this way, we will end the controversy completely, and you will protect yourself, and no one will be able to object to these reports and financial statements because there is an explanation of why we used these accounting policies.

So in the end, if you found the definition of the decentralized autonomous organization (DAO)

Like what I mentioned before

Is it really an independent, intangible entity that no one can own it , and the holders of the cryptocurrency, can not own any part of it - they only have right to vote - and at the same time , it is an entity capable of owning money and property like a natural person.

Meaning that it is an organization that can own things, and in same time no one can own any part of it.
Like the blockchain network, no one can own it.

Or does it have another definition?

If yes you will find yourself using the same solution that I suggested, and if you find it different, it is possible to use another solution. You will find this solution appearing directly to you once you determine the most accurate description of the decentralized autonomous organization (DAO).

I am interested in this matter, and the results you will find will benefit me personally and may benefit many other DAO organizations. As you can see, there are many accounting problems.

I am always available and open to discussion and assistance.

If we can reach an accurate model of accounting in DAO organizations, it will certainly help many, and you will certainly share it with others once the reports are published here in the forum.

Then it will be possible for everyone to create something like it.

[Alex-Mammoth]

We had a great session this Monday with @bayar, covering various educational topics in DAO finance. As Bayar mentioned, this topic is extensive and requires thorough explanation, but we made a solid start. We covered DAO reporting, token supply & demand, DAO portfolio structure, payment flows, and fund allocation.

Make sure to drop your comments, suggestions, and any input you have in the replies below.
Presentation Recording
Slides in PDF

Thank you Happy Holidays $RADAR community

[bayar]

Hey, I hope everyone is doing well!

In case you haven’t seen it yet, here is the first DAO Annual report, which was managed and prepared by @vandynathan @saragher22 @Alex-Mammoth with other contributions as well - and to whom I’d like to wholeheartedly say thank you for doing an amazing work!

For the finance side, we’ve pitched in with a lite version based on what we can do at this point, which is on-chain transactions (basically a cash flow statement) and tokenomics update and insights for the last couple of years.

As I’ve mentioned in last week’s X Spaces, we’re on the path to identifying the best crypto accounting tool that we can use to do the bookkeeping of the DAO, as well as we’re working on the accounting policies and journal entries, going back to the TGE.

For example, an initial recognition of the RADAR supply at TGE would warrant a fair value measurement at that point, which would not be possible. So we had 2 choices:

• Choice 1 - Capitalize RADAR at cost of development and after initial recognition, measure at fair value, as the highest value added accounting polcy for the readers
• Choice 2 - Book RADAR value only when market price is available and revalue monthly at fair value

Both choices would end up with the same result, it was only a techincality, so we decided with Choice 2 as the easier way to do, and from the transparency need to recongize costs to launch the DAO in operating expenses instead of capitalizing and amortising them

With regard to the “equity” side of it, I’m thinking whether we should recognize all fluctuations in the value of RADAR in reserves instead of directly in the P&L, as to avoid the P&L to be distorted by all the price movements in our core token. All other token price fluctuations, as well as realized gains & losses from RADAR would hit the FX gains/(losses) in the P&L.

So as you can see, we have a long way to go, and I’m happy to share this update with you as part of that journey.

Cheres, all!

Bayar