Accounting: the Most Pressing Need for Crypto w/ Twali's Accounting Guild & Vasanth Thiruvadi
Debut is looking for DeFi Research, Ed3 DAO needs Accountants, and a Reminder that Demonstrating Financial Health Matters
Available Werk / Opportunities
NEW! Debut is looking for DeFi research and product strategy
For: Product Strategy, Other Apply by: 2022-05-13
We are looking for freelancers who are on top of their DeFi game.
We are a startup on a mission to bring the benefits of DeFi to the masses. We want to stand up an alternative banking option for those who are new to crypto and get overwhelmed with the fast-changing space and the complexities of wallets, protocols etc. We need freelancers to help us with the underlying DeFi strategies and portfolio risk management.
The following factors govern our portfolio strategy: The principal and earned returns must NOT go down. Overall yield rates must be significantly better than what banks are offering We only use STABLECOINS in our DeFi strategies, ideally backed by crypto collateral (e.g. DAI) and not Fiat (USDC).
We need freelancers to help us research and define robust, institution-grade, scalable DeFi strategies using stable coins to generate 10X better returns than banks offer and help us proactively manage DeFi portfolio risk.
NEW! Ed3 DAO needs help filing for tax exception!
For: Accounting, Tax Apply by: 2022-05-13
We're looking for an accountant for the Ed3 DAO, the first DAO for educators by educators, catalyzing innovation in education through web3. The Ed3 DAO incorporated as a WY UNA about a week ago, and we were already awarded a grant, so we want to start the process of filing for tax exemption.
We will also want to better understand reporting obligations from the start. In terms of income, we anticipate payments from schools and districts in paper checks, and also crypto from activities in web3. In terms of expenses, we plan to offer bounties as well as payments to consultants.
And here’s the master list of all open werk.
To apply for any opportunity, comment in # 🧳 werk "!apply (recordID) [your Twali profile link]”.
From the Community
Among the most pressing needs for crypto right now is accounting expertise: talent to make sense of the streams of transactions so federal governments aren’t the only ones left to do it.
To draw this talent, there needs to be education on the relationship between traditional accounting and DAO accounting to demonstrate differences, similarities, and gaps in tooling. Twali’s Accounting Guild has been hard at work these past few weeks doing just that. Below you’ll find excerpts from their guide — comparisons of the two arenas, and summaries of the best tooling.
What’s Different about DAO Accounting?
While a corporation uses a bank account that syncs to its accounting software, a DAO may use a shared wallet that sends and receives transactions on the blockchain. The blockchain itself has the transaction history of a DAO. This transaction history is viewable by anyone using a tool like Etherscan, making DAO accounting radically transparent. However, looking at Etherscan alone won’t reveal what the transactions were for. They would only show the amount, date and recipient. A DAO accountant is needed to review these transactions, record them under the correct accounting treatment, and add any supporting documentation.
DAO Accounting Tools are Still Early
DAO financial accounting tools are nascent today. As of this writing, DAOs that do accounting are using software that weren’t designed with DAOs in mind: QuickBooks, Xero, NetSuite and others. These traditional accounting software were not made to sync blockchain transactions. Some DAO tooling are starting to emerge such as;
Request Finance - provides an invoicing solution for all inbound and outbound payment flows, and allows DAOs to have a complete record of their invoices and be compliant.
Utopia Labs - DAO-native tool to pay contributors, add supporting documentation to payments, and bookkeeping for transactions.
Cryptio - Allows the synchronization of blockchain transactions from wallets and exchanges into accounting softwares to facilitate accounting, audit and tax filings. The irony is that even if payments reside on the blockchain, all these transactions still have to be transferred to the above-mentioned traditional accounting softwares like Xero/Quickbooks which rely on centralized cloud servers. We are still very early in DAO accounting tools, and we are yet to see a decentralized accounting software which provides access to its own chart of accounts and trial balance.
On the Current State of Accounting in DAOs w/ Vasanth Thiruvadi, CPA. - Head of Finance for SLCF and Chainforest
Vasanth Thiruvadi and I have been going back and forth for a few weeks now on the current state of accounting in DAOs. Head of Finance for SLCF and Chainforest — )a venture capital DAO incubated with Superlayer) — Vasanth has a wealth of experience when it comes to accounting.
Last week we sat down to put a few points pen to paper, discuss the most pressing issues for DAO accounting, and give a reminder that financial health is something necessary to measure — regardless of the strength of “community.”
D: What are the most pressing issues for DAO accountants?
V: That's a great question. I think basically, if you were to compare DAO accounting the way it is right now to traditional accounting (the way it's done at a corporation or some sort of business in the real world), we're so far off still.
What is missing, and is most pressing, is simply financial reporting. This is the purpose of an accountant: to have the accounts cleaned up to drive intelligence for leadership. They want to look at these numbers and be able to make strategic decisions, looking forward to future.
Another point of view on it is obligation to your stakeholders. DAOs have stakeholders of many kinds. It is not just leadership. It is contributors to the DAO. It is people intending to join the DAO. The evolution of who is a stakeholder in a DAO makes financial reporting all the more necessary as something to refer to as a single source of truth.
Should I join this DAO? Should I continue to stay in this DAO? I know the financial component is just one component of many different things. But I think treasury diversification and health are a large draw for people to join DAOs. Thus demonstrating such health should be the end goal and the purpose of a good accountant.
While DAOs are a new paradigm, and it is not fair to look at them generally through the same lens as you would to analyze a traditional organization, both models share the same goal — to make an impact. The balance sheet and the income statement are good ways to measure the quality and longevity of this impact. It’s how I evaluate DAOs — how they manage their protocol’s finances, how much attention they give to their treasury. While community is an important metric, DAOs must be self-sustaining to be able to really focus on their mission and vision. Knowing how much money we're burning every month, how much money we're bringing in every month, and our runway based on what's sitting in the treasury. But just knowing these three things is so important to operating and determining the success of a DAO, or any organization even, longterm.
D: What is the toolkit for a DAO Accountant?
V: The tooling in the space is actually improving at a really, really quick pace. You have products like Cryptio, which are pretty great. Utopia: another great one. It is hard to compare these products with traditional software products like QuickBooks that have been around for 10, 15 years, with hundreds of millions of dollars of R&D put into them. So it's hard to compare the 3two. But I think we're getting there. I think the tools will actually get there much quicker than the DAOs will in finding the talent to make use of these tools. That is the bigger challenge in my opinion.
At a typical organization, you have the tool for bookkeeping — Utopia, for example. Then, you'd have a tool for FP&A — though there isn’t a tool for this yet, I don’t think.
When it comes to the current tools being used, I love Utopia. I really cannot emphasize enough how great their platform is. They have actually made a solution equivalent to a one click checkout which, with one click of a button, lets you do a mass transaction using the same hash ID. It is just one transaction on the blockchain, limiting your gas, and allowing you to send multiple different tokens to multiple different parties.
On top of that, their UI makes it so easy to look at your bookkeeping and go through each of these different transactions. I know they're working on creating new versions and adding features. I’m excited to see what they do.
Other than that, Google Sheets is especially fantastic. There are so many add ons that you can use with the API's for Etherscan, and Coin Gecko and such. They let you get real time price information on Google Sheets that constantly updates. Even if you are brand new to APIs, it only takes around 30 minutes of Googling to set up your sheets. It is a great tool generally for anyone, or any organization, doing their own sort of portfolio tracking.
D: What are the largest complications for transacting across chains?
V: There are two primary complications.
The blockchain explorers haven't developed enough for the accountant to be able to go and find particular transactions going back many months. And that is a big problem, obviously, because accountants spend all their time looking into the past to account for transactions from the past.
Basis tracking across chains. I don't know if any organization has developed a really good approach—I'm actually curious, what would a good approach to basis tracking look like? Because I think you would actually have to create a software that does it for you. It's pretty difficult to do manually as an accountant.