Transparency is important for foundations. Especially for a project like Ravencoin that allows the community to contribute to bounties and projects that enhance the Ravencoin ecosystem.
Two separate events prompted me to write this article. First, it came to my attention that at least one person, was hesitant to contribute through the foundation to a project. They felt like the funds were not sufficiently accounted for, and that transparency was lacking. Second, foundation Board members, in an effort to help, had questions about the way the accounting was being done, which indicated to me that it isn’t as clear as it should be.
The Ravencoin Foundation has both USD and RVN. The USD, which was generously provided upon its creation by Overstock. The RVN held by the foundation is a combination of funds that were gifted to a multi-sig before the foundation existed with the purpose being for a legal fund, and other RVN gifted for projects, and security code audits.
The USD is used for infrastructure like AWS, SendGrid, Google Cloud, Digital Ocean, and others to run nodes, domains, explorers, monitoring, e-mail, mailing list, etc. It is relatively automated using Divvy and virtual credit cards that are paid by the bank account. Each Divvy virtual card has a budget limit, which occasionally needs to be adjusted based on increased demand (bandwidth, disk space required, new nodes).
The RVN is used for bounties, code security audits, and for other non-infrastructure payments.
This requires dual accounting. One for USD, and one for RVN.
I won’t bore you with USD accounting, but there are some unique challenges when accounting for RVN.
The Challenges of Crypto Accounting
- The RVN is held in different addresses to keep it segmented for projects.
- The USD value of the RVN varies from day to day.
- The RVN is treated like property by the IRS and needs its value needs to be accounted for at the beginning, end, and upon disposal.
- The payments over $600 need to have a 1099 sent out, or a W8-BEN to show non-US taxpayer.
- Sending from an address to another address will empty UTXOs and…