[Update] New Community Payout Process - still in progress

Happy NEAR-Year!

January 2022 and its new beginning has us looking to a new legally compliant and more proactive approach to regulation in the ecosystem, as evidenced in our payout process (as referenced in @grace’s November and December update posts).

Simply put, we will be installing a new payout process which involves identity verification(s), ideally by the end of January. And until this new process is in effect, all payouts to Guilds, projects, contributors via NF Community Team established channels (i.e. Ecosystem Development DAO, Marketing DAO, invoice or otherwise) will be on hold.

These identity verifications protect all of us (DAO Vertical Council members, NEAR Foundation team members, to general community members and Guilds looking for sincere and genuine contributors) from scammers, malicious agents, and individuals residing in banned countries or regions. They are also required by NF legal counsel before we can proceed with the further dissemination of tokens for any activity.

We are looking to make the new process consistent and seamless across the different access points to funding whether via NF Funding, Education, or Community. This cross-team level collaboration does take additional time and coordination but it’s sure to result in a smoother funding pathway for all of our community members regardless of the kind of funding support they’re looking for!



Interested to see a sneak peek at what the new funding process will look like?

Read on to see the STILL UNCONFIRMED working flow:

  1. Continue to post your [Proposal] in the appropriate category on the Governance Forum based on the content of the proposal and the affiliated Guild. For clarified information on how we’re encouraging Guilds to self-identify and apply for funding based on a new tiering structure, see more here.

  2. After the proposal has received sufficient offline discussion on the Forum i.e. there are no more comments on the post to be addressed and the community has had time to respond to the contents of the proposal and receive clarification, the proposal receives implicit community approval.

    • Please refer to the Marketing DAO and Creatives DAO funding guides for more information on their approval processes as their approval needs to be explicitly granted by the respective DAO Council on the Forum.
    • This discussion and engagement on the Forum is key to this entire process, so please share your thoughts positively and respectfully.
  3. For Ecosystem Development DAO: after approval has been granted implicitly, the Guild representative must post their proposal as a poll on the Astro DAO: Vote > Propose a Poll. When the DAO Council votes in favour of the poll, the silent NEAR Foundation FLO (Finance, Legal, Operations) team member will note that the payout can proceed provided a successful identity verification check.

    • If the DAO Verticals would like to follow this process by using Astro polls, they are more than welcome to! We ask that they then also make a point of sharing the poll’s results in the comments of the Forum post proposal to make the outcome of the proposal clear and easy to reference.
  4. To get the payout process started, the Guild Leader, DAO, or Community representative (‘representative’) must:

    • complete a Google Form requesting your personal information, and your acknowledgment and agreement to the new Guilds Terms & Conditions and NEAR’s Privacy Policy;
    • then be directed to a third-party service provider powered ‘Know Your Customer’ / KYC identity verification check that will require a piece of formal ID and photo. [ONE-TIME STEP]
  5. Denomination of the payment ($NEAR for now) and amount will be doubly confirmed in the new comments feature for polls on Astro by the DAO Council. The representative will then receive an email to a ‘Reward Agreement’ confirming the token amount and requesting the representative’s signature.

    • The agreement will need to be signed for every unique USD $10,000 transaction AND for all cumulative transactions equal to USD $10,000. The NF FLO Team will be tracking the transaction amounts but it is good practice for Guild representatives themselves to do so also so the agreement email is expected.
    • Any proposals requesting USD $20K or higher will be encouraged to apply to the NF Funding for a grant.
  6. After the above paperwork has been completed - and the outcome of the Astro DAO poll is favourable - NEAR Foundation Finance will execute on the approved payment.

    • The funds will be sent to the personal NEAR wallet address provided in the Google Form and it is up to the Guild or project representative to ensure these funds are transferred to the appropriate DAO.

Please give a maximum 2 weeks for your payout to be processed, especially for the first payout instance under this new process.


Thank you for your patience as we work through this new payout flow and feel free to tag @communitysquad if there are any questions or concerns!

65 Likes

Great. Perfect solution also. I will foward this to the guild. @brunoqual @whoiscavenaghi @Kynetikus @tesfon

5 Likes

going to support it! good job!

3 Likes

Dear @mecsbecs,

I am a little concern with some topics… This amount of money will go to a physical person’s wallet and then to the DAO’s? This person can receive this amount of money as a grant? Can we receive from NEAR a certificate that we are receiving a grant for a project? I am asking that because if this money is not a grant, then we would have to pay taxes. But if this is a grant or a donation, it s different. So I would like to know how to classify the resource provided by NEAR and to know if we can receive some proof it is a grant (in case it really is). If it is not a grant, can I add the taxes as part of the budget?

And do we have to send our signature? Or are we talking about blockchain signature?

I dont know whether I am right or wrong, but this approach to payments seems to increase the liability on individuals, instead of diluting it in the community. Would you clarify that for me, if you may?

All the best,

The Philosopher

9 Likes

I believe this is a step in the right direction. Kudos NEAR

2 Likes

Congrats on this update ! Great work from the Core Team :100:

This was indeed needed, even when privacy is a human right and we have the #cypherpunk-guild to be on watch, we need to do this sort of KYC for members who are receiving money, to avoid all type of malicious agents, like double account leadership, scammers with false projects, scammers with false communities, or any similar.

The good ones, we are more ! And thanks to all the good ones we are here today with all this advances, the internet is the democratization of the information, now Blockchain allows the democratization of the money, and with NEAR we are on the right path into the web3 !!!

Let’s protect our awesome NEAR community :star_struck:

image

9 Likes

Wow that’s cool and we are patience we know all things is for the good of the ecosystem.

2 Likes

Hello @thephilosopher - you raise an incredibly valid point!

The ‘Reward Agreement’ mentioned above in step 5 is the paperwork I believe you’re looking for as an acknowledgment of tokens given / acknowledging the grant awarded to the individual. Please check in your respective regions / wherever you file your taxes if this is sufficient documentation as only someone familiar with the requirements of your specific jurisdiction can advise you on this.

This agreement does ask for a digital signature, not a blockchain one. The provider is HelloSign if you’re familiar.

For this:

A great philosophical question from thephilosopher! You’ve hit the nail on the head to my mind as to the big piece of accountability when it comes to funding. It is difficult to have true ownership (or liability) and responsibility without identity checks and verification; and identity checking entire communities for the sake of encouraging greater responsibility would be unnecessarily autocratic.

However, it is feasible for representatives of communities to assume that responsibility on the community’s behalf, solidifying a trusted relationship without sacrificing the openness and inclusivity we strive for. A community is made up of individuals and cannot function well or sustainably without its leaders and accountable members. It is then up to the leaders and the community itself to determine how they would like to ‘dilute’ that liability - as you so aptly called it - and NF shouldn’t have a place in that self-organization.

The only way in which the NF Community Team is able to assist is with leading governance experiments - to develop potential governance options - to help communities/Guilds determine ways to help delegate that accountability and responsibility through DAOs. In particular, we have the upcoming Community DAO experiment, but removing the added risk of funding. For those interested, stay tuned for more info there on how you can be involved!

11 Likes

Thanks for this @mecsbecs and after all those discussions we had both here in Lisbon and via Creatives DAO it’s great to see some direction forming.

Just so that I understand correctly, the signatory who takes responsibility for the incoming funds to a Guild or DAO receives the funds in a wallet under their control, which could be a dedicated wallet for the specific project correct? Or does it have to be their main personal wallet?

Also, if the role of the signatory is to sherpa those funds to a DAO, then there shouldn’t be any tax implications because they are not holding on to those funds or off-ramping them, am I right?

I’m also curious to see how it works if any of those funds are routed into DeFi, like for example Ref Finance. If those funds are held in the Ref Finance wallet are there still any potential tax implications?

I probably have more questions, but these likely get to the crux of what I’m asking.

Cheers!

8 Likes

Yes, definitely! This has been many moons in the making.
The wallet receiving the funds can be a personal one or a wallet dedicated to the specific project. The general concern is that the wallet is secure, i.e. the seed phrase isn’t widely shared, and the representative is able to access it. Otherwise, it is up to you.

You raise a good point: if the individual is simply moving the funds from their wallet to the DAO, and then the DAO has a legal wrapper or is protected so that the individual is not independently liable for those funds, then the tax implications should be minimal. Although a tax accountant should be consulted about this in greater detail as this is my current understanding.

Generally as we’re developing this new process, we’re playing to the more complex cases where the individual is using the DAO more for the management of their business - which means, it’s more like a multi-sig. bank account - and so the liability for the use of funds is concentrated to a few or one individual(s). I too am interested as to how Ref Finance and the Community Board are handling the legal and tax implications!

Appreciate your questions and the drive to a gradual build to understanding for us all with these tricky concepts.

11 Likes

Thank you @mecsbecs, for answering me, and sorry for taking too long to come back. I am still getting used with how forum works. Sometimes I lost the answers.

Oh, nice! So it is a grant to the individual! That is wonderful! Would it be possible to see a model of this agreement, for me to take to a Brazilian lawyer? Thank you very much. I will look for some legal advice about that (my uncle is a tax lawyer, maybe he can help).

Do you think that, even that the leader receives the resources directly and then passes to the DAO, we could dilute liability by the structure of our self-organization? Or the leader would be forever liable? I think that maybe I should ask for a Brazilian lawyer, as you told me, given the specificities of each country.

Wow, Community DAO experiment! Loved that. Let me see it better.

1 Like

That is a wonderful question, Vandal. I was asking myself that too, if we can use the external wallet from our DAO to receive the resources…

One question can be important here: when we take DAO funds and swap it for DAI on ref, could there be any tax implications? In Brazil, right now, there is an ongoing discussion about taxing swaps (even from crypto to crypto), if they imply profit (relative to FIAT) and if it is above a certain quantity per month (if I am not wrong, if you sell above R$35,000.00/month). [R$ = Brazilian fiduciary currency: REAL]

5 Likes

Not a problem @thephilosopher! As long as you come back :hugs:

A template of the agreement will be included with the finalized process when it goes live.
Checking in with a lawyer in Brazil/your region will hopefully be clarifying on a number of fronts.

5 Likes

Amazing.
Looking forward to see the result of this proposal

2 Likes

Wonderful then. Thank you very much for clarifying; and I will look for it and bring here the results, as soon as we get the process ready.
:smiling_face_with_three_hearts:

1 Like

Congratulations!!! :seedling::seedling::seedling::seedling:

2 Likes

A great solution to protect the Near Foundation from fraud and scammers. Also great questions from @vandal and @thephilosopher. I’m just excited about what’s going forward and support this! :mechanical_arm:

5 Likes

Congrats, I am so happy to receive the news of this update, it’s a good one. Kudos to the core team

2 Likes

@mecsbecs , how are u doing? I am having some problems with the system. It seems KYC rejects my document and accept my selfie, or alternatively, it accepts my document but rejects the selfie. What should I do? I am council member of 2 DAOs for which I am doing KYC. Would you help me, please?

1 Like

Hi @thephilosopher, check your email :smile:

2 Likes