CIP-13: Transparency project

Proposals (CIPs)
1

Abstract

To make ownership of DAO assets/credentials transparent, provide visibilty into spending/finances, and to implement robust processes to ensure they remain so.

Motivation

While there has been some good work in providing transparency (e.g. Financials here, and description of multisig setup in the FAQ), in many cases it’s not clear:

  • what accounts/products/assets the DAO owns
  • what spending is occurring
  • which people specifically control the assets

Without transparency in these areas, it makes it harder for DAO community members to audit activity and offer suggestions on spending, security, and decision making.

Specification

  1. Design and implement an agreed process for regular financial reporting - this should include rough format, cadence, and responsibility. NB. The format need not be fixed however we can describe the minimum info that should be included in each report.

  2. Audit and make visible all ownership and control mechanisms for DAO assets - all Citizens should be able to see what assets the DAO owns/controls, how access is managed for each and by whom.

  3. Exemptions - visibility on some ownership/access/processes may be private if necessitated by security considerations, however this should only be in exceptional circumstances and the exemption and rationale should be listed publicly.

Out of scope

  • Decisions relating to who has control/access - this is a governance issue
  • Decisions relating to use of DAO funds - this is a governance issue

Plan

Ownership, control, and access:

  1. Audit existing credntials/assets and enumerate in private
  2. Review for any security considerations/changes with the project team/core team
  3. Publish info publicly on Notion
  4. Agree and publish process for keeping this information up-to-date

Financial reporting:

  1. Agree initial format, publishing cadence, and responsibility
  2. Publish reporting process on Notion, and publish first report on Notion

This should not be a long or complex project - the aim should be to complete within 2 weeks as part of Season 0. The aim is for processes to be lightweight and flexible. i.e. Minimal paperwork on Notion, and easy to keep everything up-to-date.

Let me know what you think. I’m very happy to lead this project and I have experience in this area. E.g. Leading GDPR compliance in a tech company which involved auditing existing processes and some associated processes/documentation.

8 Likes
2

Big fan of this. Was discussing something similar as we’d like to have a provision for this to be required in the constitution. We could even have a contract that holds all addresses the DAO owns and their uses, so everything is on-chain and visible. Then a frontend dashboard to show the on-chain data and how funds are being used in a readable format.

2 Likes
3

Love the on-chain idea.

FWIW, I wouldn’t be too specific in the constitution around the exact solution as we should keep that flexible. Perhaps a statement to the effect that this info should be public by default, and independently verifiable where possible. But that’s a separate discussion!

2 Likes
4

Love the idea regarding frontend to visualize DAO assets. Transparency will be fundamental, so it will be a nice feature to have a landing page of sorts where citizens can go to get a summary of where their City is spending resources, combined with links and historical data regarding the proposal that kicked off the acquisition of any assets and the smart contracts that bind them

1 Like
5

Yep! This is the proposed text:

Financial Statements. No less than once per month, the DAO shall prepare a balance showing in reasonable detail the financial condition of this DAO as of the close of each month, a profit and loss statement showing the results of the operations of this DAO during that period and the previous year, and any other financial statements as may be required by a resolution of the citizens.

6

Something in line with this I brought up awhile back was establishing best accounting practices early-on. Here’s what I think a quick framework looks like.

  1. . Approve a year subscription to QBO for irl CityDAO bank acct (unless someone knows a better way) ….from this acct we can maybe spin up monthly reports and mint them as NFTs etcetera (open for discussion on best transparency practices)

  2. Incorporate a crypto tax service, two I’m familiar with is the open source Rotki and a premium service TaxBit (which I am subscribed to but haven’t dug too deep yet.)

  3. Explore services like Llama etcetera for ways to natively communicate between irl and url tax accounting but in the meantime just elbow grease probably. Llama bots can interact with Discord members to show in/outflow etcetera.

I’d love to be more involved and I’m capable of setting most of this up and maintaining I’m just not on what the best services might be for us, but I’m confident in the above steps for getting us on some sort of path for a real accountant to step in one day.

Transparency has been something I’ve hoped we can grow towards as well.

2 Likes