It is our pleasure to now publicly announce another major step for the BitShares Blockchain Foundation towards transparency, openness and accountability.
Since we are in the fortunate position to have received sufficient trust from BitShares shareholders to successfully operate multiple escrow workers, we feel the need to be as transparent as humanly possible to these shareholders as to how the funds are used.
Thus, we started working with an accounting system that allows us to
- treat crypto currencies properly,
- publish the accounts balances and transactions in a way that is publicly auditable, and
- ensure we properly pay our debts and pay back unnecessary funds to the BitShares reserve fund.
Plain Text Accounting
After some research, we decided to use a plain text accounting system, in particular, we are using Ledger - the name kind of fits :)
You can find the accounting files published on github.com/bitshares-foundation regularly including a quick README that shows how to use these files properly.
Please allow us to briefly go through the tool before we show an overview of the books.
Usage of Ledger-cli
Show balance of all accounts
ledger -f ledger.ledger balanceShow full register
ledger -f ledger.ledger registerShow register of an individual account
ledger -f ledger.ledger register BitShares:Shareholders
Explanations
In double-entry accounting systems, each transaction affects at least two accounts in a way that the amounts sum to zero. This means that "funds move from one account to another" while the transactions of a particular account are the actual register. This will become more clear when we go into details of the foundation's accounting.
BitShares Blockchain Foundation Accounting
Account Hierarchy
Let us start with first describing what accounts we are looking into and what the hierarchy of accounts looks like:
BitSharesFoundation # Accounts controlled by the foundation
bitshares.foundation # account `bitshares.foundation`
donations.bitshares.foundation # account `donations.bitshares.foundation`
BitSharesShareholders # accounts owned by the shareholders (ultimately)
workers.bitshares.foundation # account `workers.bitshares.foundation`
BitSharesReserves # Funds obtained from the reserves (in BTS)
Income # Income for the BitShares Blockchain Foundation
Donations # How much did people donate (in USD terms)
Expenses # Expenses
TransactionFees # How much did we pay the network in transaction fees (in USD)
WorkerProposals # Worker Proposal accounts
Outstanding # How much do we "owe" escrow workers in total
Proposals # How much have the workers been asking for initially
This hierarchy may be subject to change as we find more efficient ways to organize and use individual accounts.
Escrow Worker Procedure
The procedure of dealing with a worker proposal and its payment (if the shareholders approve the worker) is as follows.
- The worker pay is obtained through the
workers.bitshares.foundationaccount which has created the workers on the blockchain to begin with. - Then, the BTS are traded into USD in that account.
- Afterwards, USD are transferred into escrow by
bitshares.foundation. - Freelancers that applied for the worker/job get paid through
bitshares.foundationwith bitUSD (or possibly other bitassets)
It is important to remark that funds that are in workers.bitshares.foundation are owned by the BitShares shareholders and not technically owned by the foundation.
In order to keep track of which worker has obtained how many BTS (in the workers.bitshares.foundation account), we make use of sub accounts where possible (see below). These sub accounts only appear in the accounting and are not reflected on the blockchain. After a worker has complete, we will thus be able to directly say how many BTS have been obtained from reserves, how many have been used to obtain USD and how many are to be returned to the reserves.
Foundation Accounts
With the help of ledger we can give a quick summary of the accounting and individual balances. Let's dig into this real quick:
1 3,000 BEYONDBIT
2 13,196.23774 BTS
3 20.0000 CNY
4 23,400.0000 USD BitSharesFoundation
5 3,196.23774 BTS
6 23,400.0000 USD bitshares.foundation
7 23,000.0000 USD 201707-bsip18
8 -0.23131 BTS
9 400.0000 USD 201708-bitsharesui
10 3,000 BEYONDBIT
11 10,000.00000 BTS
12 20.0000 CNY donations.bitshares.foundation
13 -1,099,749.76262 BTS BitSharesReserves
14 -469,333.09938 BTS 201707-bsip18
15 -599,666.66324 BTS 201708-bitsharesui
16 -30,750.00000 BTS 201709-steemfest
17 578,259.29542 BTS
18 4,219.2236 USD BitSharesShareholders:workers.bitshares.foundation
19 261,718.25619 BTS
20 421.0994 USD 201707-bsip18
21 282,879.53812 BTS
22 3,798.1242 USD 201708-bitsharesui
23 30,118.73689 BTS 201709-steemfest
24 438.6994 USD Expenses:TransactionFees
25 -3,000 BEYONDBIT
26 -10,000.00000 BTS
27 -20.0000 CNY
28 -1,000.0000 USD Income:Donations
29 26,812.5000 USD WorkerProposals
30 -152,853.5000 USD Outstanding
31 -23,000.0000 USD 201707-bsip18
32 -4,000.0000 USD chainsquad
33 -19,000.0000 USD cyrano
34 -123,187.5000 USD 201708-bitsharesui
35 -108,187.5000 USD bitshares-ui
36 -15,000.0000 USD chainsquad
37 -6,666.0000 USD 201709-steemfest:roelandp
38 179,666.0000 USD Proposals
39 23,000.0000 USD 201707-bsip18
40 150,000.0000 USD 201708-bitsharesui
41 6,666.0000 USD 201709-steemfest
42 --------------------
43 -518,294.22946 BTS
44 53,870.4230 USD
Line 1-4
Total funds in control (not owned) by the bitshares blockchain foundation.
line 5-9
Total funds in account bitshares.foundation. The BTS are for operational costs (tx fee) while the USD are separated into subaccounts for each individual worker for which the BitShares Blockchain Foundation is escrow for.
line 10-12
Donations made to the bitshares blockchain foundation.
line 13-16
These are the BTS that have been obtained from the BitShares reserves for each individual worker (and in total)
line 17-23
Funds in account workers.bitshares.foundation. This account is owned by the BitShares shareholders and used to track claiming of worker pay as well as trading. There is a separation into subaccounts for each individual worker.
line 24
Transaction fees that have been paid (in USD). Technically, most of those fees occur in the workers account when creating actual workers on the blockchain. Thus, those fees are mostly paid by BitShares shareholders.
line 25-28
Total income
line 29
Funds that have been paid to Worker proposals (these are separated into Proposals and Outstanding)
line 30-37
Outstanding payments to approved worker proposals separated into worker proposals as well as involved entities (for worker, review, accounting, management, etc.)
line 38-41
These are the funds asked for in total by all worker proposals, separated into the individual workers.
Individual Trades
Currently, the worker account only obtains USD by buying them from the internal markets. These orders are recorded on the blockchain as well as in the off-chain books. These entries look like this:
2017/09/13 * Create Order for 201707-bsip18 into USD @ 10.434788520 BTS/USD
; 201707-bsip18 -50000.0 BTS @ 10.43479 BTS
; 201707-bsip18 4791.66395 USD
workers.bitshares.foundation:201707-bsip18 -0.01213 BTS @ 0.1092 USD
Transactionfee (0.01213 * 0.1092 USD)
P 2017/09/13 USD 9.69688187 BTS
2017/09/13 * Trade (#20011420)
workers.bitshares.foundation:201707-bsip18 -209.10550 BTS
workers.bitshares.foundation:201707-bsip18 21.5642 USD @@ 209.10550 BTS
Here, we created an order and payed a fee of 0.01213 BTS. Later on, this order is partially filled, obtaining roughly 21 USD by paying 209 BTS. There are plenty of those fill order transactions in each of the workers' individual ledger files.
The corresponding account's registers can be obtained with
ledger -f ledger.ledger reg workers.bitshares.foundation:201707
and looks like this
2017/09/13 Create Order for 201707-bsip18 into USD @ 10.434788520 BT.. BitShares:Foundation:workers.bitshares.foundation:201707-bsip18 -0.01213 BTS 273,166.59654 BTS
409.5059 USD
2017/09/13 Trade (#20011420) BitShares:Foundation:workers.bitshares.foundation:201707-bsip18 -209.10550 BTS 272,957.49104 BTS
409.5059 USD
BitShares:Foundation:workers.bitshares.foundation:201707-bsip18 21.5642 USD 272,957.49104 BTS
431.0701 USD
Moving those funds into escrow is done with an entry of this type:
2017/09/13 * Transfering to bitshares.foundation 201707-bsip18
workers.bitshares.foundation:201707-bsip18 -5000.0 USD
bitshares.foundation:201707-bsip18 5000.0 USD
workers.bitshares.foundation:201707-bsip18 -0.23131 BTS @ 0.1095 USD
Transactionfee (0.23131 * 0.1095 USD)
and results in a register entry similar to:
2017/09/13 Transfering to bitshares.foundation 201707-bsip18 BitShares:Foundation:workers.bitshares.foundation:201707-bsip18 -5,000.0000 USD 223,166.59654 BTS
269.9826 USD
BitShares:Foundation:workers.bitshares.foundation:201707-bsip18 -0.23131 BTS 223,166.36523 BTS
269.9826 USD
As you can see, every action on the blockchain that affects the accounts balance, is also recorded in our books.
Further Remarks
We would like to highlight a few points in what we were able to achieve in recent months:
- Proposals worth almost 180k USD have been approved and are covered by the foundation
- Over 13k USD have been paid out to freelancers already
- 700k BTS have been claimed from the BitShares Reserves of which over 420k BTS are unused in the currently covered workers.
- This means that 60% of the funds in the worker account will probably be returned to the BitShares Shareholders (after the individual workers have terminated)
- 1000 USD have been donated to
donations.bitshares.foundationso far. - Over 430 USD have been paid as transaction fees of which 240 USD are used to create workers and 177 USD have been paid to upgrade the workers account.
Automation and Management
In the outstanding worker operational costs for workers, you may have noticed that a fraction of the payouts (except for the steemfest worker) is asked for by the chainsquad account owned by ChainSquad GmbH. This fee covered the technical management of workers as well as developing automation for maintaining reoccurring tasks to facilitate escrow workers more efficiently over time. As these tools near completion, the fraction asked for in order to develop automation and development tools will drastically decrease.
Review and Code Audits
Additionally to management tools, the code produced by freelancers needs to be reviewed by 3rd parties before funds can be released. This ensures that the produced code fits into the high quality standards of the existing code base. It is our wish to be able to hand over the work of auditing code to more and more entities (companies and individual high-profile developers) to grow the knowledge of the underlying technology. Hence, if you have a profile of providing excellent code review and have experience in the Graphene library, you may want to contact the BitShares Blockchain Foundation.
Final Words
In the future you can expect regular updates on the accounting of BitShares Blockchain Foundation to ensure the highest standards in transparency and accountability. We feel the deep desire to support the BitShares community and ensure that uncertainties that appear are covered and resolved as quickly as possible.
Further, we hope that we can continue to grow our reputation within the BitShares shareholders and the whole community to receive sufficient trust to do what we are planning to do with BitShares.
If you want to support our efforts, please don't hesitate to get in contact with us (info@bitshares.foundation) or donate to donations.bitshares.foundation. We would like to emphasise that the BitShares Blockchain Foundation is a registered non-profit entity in the Netherlands which means that all funds donated will need to go into following our foundations' goals: Growing BitShares.