Community Asks from Secret Foundation - Petition Proposal

I think it is fair to say that every single person has views that are slightly different to one another. Whether you bring it down to a couple of people, all contributors to the proposal or all members of the community.

In my personal view, there are some big areas that bring me discomfort:

  1. Lack of depth in the current transparency reports and no public budgeting;
  2. Distribution of power to ensure operations are for the betterment of the Network (I have no reason to doubt Tor, however - we are in a space where trustlessness is key). This is where various different ideas into a Board of Directors come in, or an NPO; and
  3. Inability to replace leaving staff to ensure operations continue running smoothly.

With regards to (3) - Tor has taken responsibility for this and that it is a priority to have this resolved.

4 Likes

A lot to digest here. I’ve done an initial read through. I think we all want the same thing. I understand there is frustration with the speed at which foundation concerns are addressed and that this sometimes leads people to infer ill-intent. I don’t view the Foundations delays in providing additional clarity as ill-intended whatsoever. It is extremely clear to anyone in productive channels how much is going on on a day to day basis and that the void left by Jordan needs to be filled for some of these operational tasks. I also believe hiring is a time consuming task in and of itself and one that reasonably could take a backseat to “just getting shit done.”

“Bi-partisan” assumes more than one party by definition. We are one community, one network, and all have the exact same goals. I understand what is being said about the petition, but let’s try moving forward to use language that frames things as being cooperative rather than adversarial. More transparency is what’s sought for the benefit of all and I think most of us agree on this.

1 Like

Thanks everyone for their input on this, here is the latest version of the draft that will go on chain soon:

Community Requests for the Secret Foundation (“the Foundation”)

The Secret Foundation has been a positive contributor to the growth of Secret Network and the Community would like to see this continue for the foreseeable future. However, we recognise that the Foundation has fallen short in some aspects and would like to take this opportunity to correct these and create greater network alignment on our shared mission.

Transparency & Accountability: The Foundation commits to providing greater accountability and transparency that communicates unalienated answers to the Community, with the following recommendations and requests:

Quarterly transparency reports should include:

  • Quarterly transparency reports should be provided as management accounts.
  • Prompt disclosure of any conflict of interest held by foundation staff and leadership. These disclosures should becommunicated through transparency reports. This includes affiliations with network validators, dapps, or other key organizations. This should include a note clarifying why the conflict of interest does not compromise or negatively impact the Foundation.

Annual transparency reports should include:

  • Providing the community with a growth roadmap and budget for the year (we understand that these may deviate with changesin the wider market but plans for a range of outcomes will be beneficial for all parties).
  • Detailed financial statements presented to the community each quarter up to six weeks after the conclusion of the quarter. Thisshould show the income received in the quarter as well as costs incurred by the Foundation (which are broken down by type).Reports should also include a balance sheet reflecting the assets and liabilities of the Foundation.
  • Transparency reports should also include total remuneration for key employees, board members, officers, and directors. Separately the following should also be disclosed, token vesting agreements with any key employees, board members,officers, or director & aggregate vested tokens to employees per year.
  • Official public description of foundation scope, and associated KPIs for each function within scope of foundation.
  • Annual transparency reports should include an audit.

The Foundation should also take further steps in this regard by disclosing or doing the following:

  • Regarding an initial plan to do so, we seek information on whether or not the foundation still intends to form a board ofdirectors. This should include pros and cons considered by the Foundation.
  • Regarding the Secret Foundations initial pitch of being a non-profit, and existing commitments to research the viability ofconverting to one, we request the conclusions of this research be well communicated in an upcoming transparency report
  • A combination of Key Mans Insurance and Hit by Bus Document to ensure the community is the beneficiary of the Foundationor that the Foundation returns to the Community in case of any conflict.
  • The Foundation commits to hiring a person responsible for operations and who is able to ensure the continuity oftransparency, and the delivery of transparency on previous years of operation by way of audits for the calendar years.
  • Add a section to the https://scrt.network website with links to each transparency report from the Secret Foundation.

These are requests which we believe fulfilling will allow the community to have greater trust in the Foundation. This greater trust is critical as it potentially provides a viable alternative, or otherwise mitigates the need to obtain trust through the implementation of a Board of Directors or transitioning to an NPO.

Secret Foundation Neutrality & Alignment: The Secret Foundation affirms their commitment to implementing a neutral stance across the Network. To this extent, the Foundation, should:

  • Provide neutral grounds for proposals on the Network. Any proposer should be offered an equal promotion opportunity of their proposal from official network channels. This is with the exception of proposals which are widely deemed to be dangerous to the Network and proposals which do not follow the norms agreed by the Community; and.
  • Provide consistent treatment to all dApps on the Network. While it is not expected that all dApps will be equally promoted, the Foundation should ensure that no dApp receives preferential treatment.

The above requests are fundamental in giving the Community the ability to reduce the amount of faith required in the Foundation and replace it with greater trust. This creates a much healthier relationship which will enable all parties to better work towards the success of the network.

Voting Yes is signing your support of these community asks.

Voting No is signaling your non-approval of this list of community asks.

Voting Abstain is signaling you wish to participate, but not with a yes or non-approval.

Voting No With Veto is signaling you think parts of this list pose a danger to the network.

3 Likes

Thank you for the updates; I have a couple clarifying questions.

Is the gap between current transparency reporting and the desired reporting mostly balance statements? We already report all expenditures, monthly change in net balances, etc.

Re: disclosure, is this being requested of all employees, or just director level and above? Is there a standard definition of “conflict of interest” to be used here?

  • A combination of Key Mans Insurance and Hit by Bus Document to ensure the community is the beneficiary of the Foundation or that the Foundation returns to the Community in case of any conflict.
  • The Foundation commits to hiring a person responsible for operations and who is able to ensure the continuity of transparency, and the delivery of transparency on previous years of operation by way of audits for the calendar years.

These are likely associated. It’s clear the #1 priority is to add a responsible party for Operations that would assist with all these key points.

  • Regarding an initial plan to do so, we seek information on whether or not the foundation still intends to form a board ofdirectors. This should include pros and cons considered by the Foundation.

We have had conversations on this topic with some key network stakeholders, and there is general alignment that establishing a new Board would indeed benefit the ecosystem. However, we do still want and require clarity on the prospective structure of the Foundation entity going forward. If the Foundation remains in its current operative form and remains a US-based for-profit entity (but with more transparent reporting) we will reach this milestone more quickly since we won’t simultaneously be pursuing other major changes. This transition could be facilitated by the above-mentioned Operations director.

Secret Foundation Neutrality & Alignment: The Secret Foundation affirms their commitment to implementing a neutral stance across the Network. To this extent, the Foundation, should:

  • Provide neutral grounds for proposals on the Network. Any proposer should be offered an equal promotion opportunity of their proposal from official network channels. This is with the exception of proposals which are widely deemed to be dangerous to the Network and proposals which do not follow the norms agreed by the Community; and.

“Dangerous to the network” is too squishy. Shouldn’t a dangerous proposal be promoted as well so that people understand the danger and can vote no, or veto? Who makes the determination of a “dangerous” proposal - the governance lead unilaterally? Foundation, who does not vote? Broader network leadership, who are also the voting validators? Is a proposal dangerous if it can damage the network brand? If it uses the gov module to confiscate funds? If it is deliberately worded in a contentious manner?

  • Provide consistent treatment to all dApps on the Network. While it is not expected that all dApps will be equally promoted, the Foundation should ensure that no dApp receives preferential treatment.

There isn’t much reluctance to promote any dApp provided they get in touch with us directly to highlight their needs and can communicate what value they hope the Foundation can provide. We just do our best to at least ensure we’re not promoting vaporware. Anyone interested in promotion or support should use our Linktree.

What is the definition of “preferential treatment”? In general we have few mainnet dApps, and these tend to get the majority of promotion because we focus on dApps that have clear calls to action for the Secret community. As more mainnet dApps go live I expect to see broader communications that highlight the wider ecosystem.

Thanks everyone for the continued work!

5 Likes

Hi Tor, thanks for the comments above. Thought I’d jot a few quick thoughts:

  • It’s clear that an Operations person is extremely valuable and hopefully we see progress in hiring sooner rather than later (I appreciate the struggles you mentioned in regards to this earlier);
  • It would be nice to have succinct tables that show receipts all the way down to the net change for the quarter. Currently, a person has to fish around the tables for different expenses per month (in stables), and different expenses per quarter (in USD) and the numbers still don’t appear to line up completely. Otherwise, yes - the big gap in reporting is balance sheets;
  • I’d be happy to see a Board of Directors on a for-profit entity (with transparent reporting). However, it would need to be explained why other routes (i.e. NPO) are not the best way forward; and
  • I agree here - the Foundation should share all proposals regardless of what they are. This allows people to find the information and vote as they will.
3 Likes

Thanks for everyone who put this together. Overall, this feels like a much more balanced proposal than previous (somewhat adversarial) attempts. It’s really encouraging to see the respectful discourse here.

Let me start by saying that the SF, and Tor in particular, are indeed extremely valuable in our ecosystem. I think their contribution and dedication to date should be applauded and appreciated. This goes without saying, but at the same time, this needs to be said and acknowledged more by anyone in the community, SCRT Labs included.

Generally speaking, we’re very aligned with the proposal as it stands, as it coincides with the original values and responsibilities SF was meant to encompass. However, there are several areas that I feel have not been sufficiently discussed or incorporated, which are also material:

  • Taxes - there is no logic in SF paying (~21%-30%) taxes. Accounting for that as part of the budget therefore makes no sense. SF’s statement is that any funds received are meant to be used to benefit the ecosystem. SF is meant to operate at 0% margin (as would an NPO), whether it’s structured as such or no. The only reasonable way to therefore record income received is as a liability, for which there are no taxes. I’m a bit concerned that this isn’t being tackled heads on. Why, to date, has SF paid taxes at all? Why wasn’t income recorded as a liability?

  • Hiring an ops person - I agree this is important, and whatever budget SF builds should include this. I also hear Tor’s side when he says that hiring for this position is challenging. I therefore suggest to put a reasonable deadline for this. I would say up to 6 months to fill that position makes sense (but a serious effort to fill the gap sooner should be made). In my experience, seriously hiring someone good takes around 3 months, so 6 months would give a reasonable buffer.

  • Audits, Financial Reports, Compensation disclosures - I feel that this continues to get overly complicated, where there’s in fact a very simple solution. Just follow the industry standards:

a. Financial reports should be prepared in one of the industry accepted standards - either US GAAP or IFRS, and audited externally (not by the company’s CPA, but by a certified auditor) once a year. If anything, the current transparency reports take too much time from SF’s staff. This should all be done by professionals, exercising common industry standards.

b. To bridge the gap between quarterly and annual reporting, I suggest presenting a non-audited semi-annually report (so at the end of the year, the full audited financials are presented, and every half year, non audited financials are presented)

c. Compensation - C-level and up should be reported personally. This likely only includes Tor right now, but may extend as SF grows. Otherwise it’s an aggregate amount on the audited financial statements.

d. Note on costs - I hear a lot that this is expensive. Having done that, and given that the reports are not going to be official like public companies, I believe the costs would be fairly manageable. My very rough estimation that it would be between $50K-$100K annually, which based on the importance the community puts on this, doesn’t seem like a too big of a budget item

  • Budget - Annual budget is important, but it’s also important for the community to recognize that SF should work with a big buffer given market volatility. As long as everything mentioned above is done, I don’t see a problem with it. I also like the idea of having some commitment from SF to be able to return funds in some extreme situation. With all of these checks and balances, there’s no reason to attempt to defund SF - it needs to have some warchest to be able to swiftly adjust to market conditions (both bull and bear!). A strong SF should be top of mind for everyone.
  • NPO: I believe there should be a well-diverse set of 3-5 people from the community who handle this, and a timeline of 12-24 months should be allocated to this transition. An outside committee from the community that overseas this is probably the most neutral way to go. Also, a relatively long timeline would not make this something that takes a lot of attention from people.

My (our) two cents.

14 Likes

Here’s the latest draft after @guy input and after the discussions in the gov call for everyone:

Community Requests for the Secret Foundation (“the Foundation”)

The Secret Foundation is a positive contributor toward the growth of Secret Network. The Community would like to see this continue for the foreseeable future. We recognize the Foundation has room for improvement in several aspects. We wish to create greater network alignment on our shared mission.

Transparency & Accountability: The Foundation commits to providing greater accountability and transparency with the following recommendations and requests:

Quarterly transparency reports should include:

  • Quarterly transparency reports should be provided as management accounts.

  • Prompt disclosure of any conflict of interest held by foundation staff and leadership. These disclosures should be communicated through transparency reports. This includes affiliations with network validators, dapps, or other key organizations. This should include a note clarifying why the conflict of interest does not compromise or negatively impact the Foundation.

  1. Financial Statements

    a) To bridge the gap between quarterly and annual reporting, I suggest presenting a non-audited semi-annually report (so at the end of the year, the full audited financials are presented, and every half year, non audited financials are presented)

Annual transparency reports should include:

  • Providing the community with a growth roadmap and budget for the year. We expect the Foundation to plan for a range of outcomes to account for market volatility and to have network buy-in on growth map and budget.

  • Transparency reports should include total remuneration for key employees, board members, officers, and directors. The following should be disclosed: token vesting agreements with key employees, board members, officers, or director & aggregate vested tokens to employees per year.

  • Official public description of foundation scope and associated KPIs for each function within scope.

  • Annual transparency reports should include an audit.

  1. Financial Statements

    a) Financial reports should be prepared in one of the industry accepted standards - either US GAAP or IFRS, and audited externally (not by the company’s CPA, but by a certified auditor) once a year. This should all be done by professionals, exercising common industry standards.

    b) Compensation - C-level and up should be reported personally. Otherwise as an aggregate amount on the audited financial statements.

The Foundation should take further steps in this regard by disclosing or doing the following:

  • We seek information on whether or not the foundation still intends to form a board of directors as was initially stated. This should include pros and cons considered by the Foundation.

  • Regarding the Secret Foundations’ initial pitch of being a non-profit, and existing commitments to research the viability of converting to one, we request the conclusions of this research be communicated in a future transparency report.

  • A combination of Key Mans Insurance and Hit by Bus Document to ensure the community is the beneficiary of the Foundation or that the Foundation returns to the Community in case of any conflict.

  • The Foundation commits to hiring a person responsible for operations within 6 months with a serious effort to hire this person ASAP. This individual should ensure the continuity of transparency in the future as well as the past by way of audits for the calendar years.

  • Add a section to the https://scrt.network website with links to each transparency report from the Secret Foundation.

  • Taxes - Reassess tax approach going forward and potentially looking backwards. We ask the Foundation to explain why it’s paying taxes or accounting for that as part of the budget. Why, to date, has SF paid taxes at all? Why wasn’t income recorded as a liability?

These are requests which we believe fulfilling will allow the community to have greater trust in the Foundation. This greater trust is critical as it potentially provides a viable alternative, or otherwise mitigates the need to obtain trust through the implementation of a Board of Directors and or transitioning to an NPO.

Secret Foundation Neutrality & Alignment: The Secret Foundation affirms its commitment to neutrality across the Network. To this extent, the Foundation, should:

  • Provide neutral grounds for proposals on the Network. Any proposer should be offered an equal opportunity of their proposal from official network channels; and.

  • While it is not expected that all dApps will be equally promoted, the Foundation should ensure that no dApp receives exclusive or special access to foundation resources.

The above requests are fundamental in giving the Community the ability to reduce the amount of faith required in the Foundation and replace it with greater trust. This creates a healthier relationship which will enable all parties to work towards the success of the network.

Voting Yes is signing your support of these community asks.

Voting No is signaling your non-approval of this list of community asks.

Voting Abstain is signaling you wish to participate, but not with a yes or non-approval.

Voting No With Veto is signaling you think parts of this list pose a danger to the network.

1 Like

1- I prefer to reduce of APY Staking to decrease circulation supply and inflation rate (try to focus on healthier tokenize)

2- The team should focus how to increase more partnerships that lead to attract more Users

These two are main catalyzer for increasing Community :chart_with_upwards_trend:

I proud to be part of Secret Community

thanks #SCRTFam

1 Like