Here is a financial report from 2020-2024, produced by @DAOplomats.eth for the Uniswap DAO. We hope that this will aid the DAO in making decisions about its financial decisions going forward. We look forward to feedback on these reports from the DAO which will be used in future work.
Hey team—just a couple of points:
A large portion of the outflows has historically gone towards treasury-based delegation, which is not an expense—just a flow of tokens to DAO-owned/controlled Franchiser contracts. This makes the “expense” during Q4 2023 look very large while it isn’t.
I would refrain from considering the unlocks from the token vester contracts as income since that could have future unwanted implications. Therefore, we probably don’t want an income statement at all. The best path would just be a “token flow statement” that points only towards the movement of UNI. We also do not want to imply any profit. This is especially the case if we want to view the treasury as an issuance vehicle as opposed to a pure balance sheet.
Once a legal entity is in place, however, we can structure an accounting setup that accommodates for operating and non-operating income. A more formalized non-native token balance sheet that pertains to the DAO as a whole—and not solely to a certain working group—can more feasibly be constructed then.
I would just zero out any dust tokens in the treasury and would not include them as part of a balance sheet (“on-chain treasury balance”):
A more formalized non-native token balance sheet that pertains to the DAO as a whole—and not solely to a certain working group—can more feasibly be constructed then.
The accounting treatment of crypto-assets has been problematic due to the overlapping positioning as utility (access to network), currency (barter-style payment), and intermediated security (as defined under Swiss DTL legislation). My suggestion is to divy up the UNI into 3 major categories
a. the UNI held (indefinitely) by the community as a non-payment monetary based used for protocol linked operations - under a trustee-like arrangement (treating the original 60% as “donation” or clear and free “gift” from UniLabs - then you can argue from an accounting PoV that it has value of zero since it is never used apart from internal ops
b. a time-locked UNI (I think 3 days is the voting interval) which under the DAO acts as pure governance tokens. If (big if) you can prove it is for preference revelation (eg conviction voting) and not price discovery then it represents a participation right in the functional electoral college of delegates. Arguably this is dimensionless but in practice there will be various fiat conversions (which arguably is the opportunity cost for swing proxy vote)
c. a liquid “float” … from a design point of view, you want to separate economic rights (which comes with regulatory implications) from access rights but this can be part of the DAO legal structure debate
@jengajojo can you add one more page indicating b) the staked UNI which is used for voting and the active delegates (about a dozen) and the top account holders eligible to submit proposals (or latent veto)? This would emphasise the non-economic aspects of participation rights. The floating UNI (c) could be given a LTV ratio (how much of it could be converted to pure economic benefit) which is a reflection of beta (price volitility) and credible evidence that the DAO is sustainable (eg a LTV of 99.5% suggests that only 0.5% likehood of dropping in intrinsic value over the voting period).
Arguing for a non-payment monetary unit for emissions (a) is harder but the goal is to take it off the “books” as it becomes intrinsic to the protocol and never traded.
