Thanks for everyone who put this together. Overall, this feels like a much more balanced proposal than previous (somewhat adversarial) attempts. Itâs 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, weâre 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:
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Taxes - there is no logic in SF paying (~21%-30%) taxes. Accounting for that as part of the budget therefore makes no sense. SFâs 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 itâs structured as such or no. The only reasonable way to therefore record income received is as a liability, for which there are no taxes. Iâm a bit concerned that this isnât being tackled heads on. Why, to date, has SF paid taxes at all? Why wasnât income recorded as a liability?
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Hiring an ops person - I agree this is important, and whatever budget SF builds should include this. I also hear Torâs 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.
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Audits, Financial Reports, Compensation disclosures - I feel that this continues to get overly complicated, where thereâs 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 companyâs CPA, but by a certified auditor) once a year. If anything, the current transparency reports take too much time from SFâs 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 itâs 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, doesnât seem like a too big of a budget item
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Budget - Annual budget is important, but itâs 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 donât 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, thereâs 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.