Clarifications and follow ups Re on-chain audit(s) and claims

In addition to the AMAs and answers on Twitter, Discord etc we wanted to put out more of the information and context to the voluntary “3rd party audits” taking place by a couple of Cosmos contributors over the last month.

We do greatly appreciate that people spend their time and resources in helping secure the community and help to keep accountability and transparency. All of the onchain data is there to be seen, be audited and enforce this transparency and this is one of the main reasons to build in Web3.

This post is supposed to be adding more of the background and to ensure that people are aware of the mechanisms, SolarBankDAOs purpose, the organization and team allocations, state where we think we definitely should have done a better job and been clearer and earlier in communication, but also debunk a couple of the more serious allegations that are, also by the same audited onchain data, incorrect:

1. SolarBankDAO is a for profit organization, not a non-profit and not a decentralized community blockchain. It is to be viewed as a sustainability driving business with the core mission to push the green-shift, to push more grid-connected solar energy and to create value for DAO members while doing it.
2. The SolarBankDAO will also in the future make its decisions based on the optimal value creation for its members, and this will potentially include swapping $Solar for other tokens and/or buying more $Solar, depending on the market fluctuations and what we believe gives the most value to the DAO. It is not a charity. The current 14 day proposal period makes it harder to act and inform enough ongoingly, but we’ll set out general principles and also move this into SubDaos to the degree possible to both ensure more transparency and faster action.
3. The reason to use the DAODAO structure is to ensure transparency and accountability, enable grass-root participation and make it a better tool than typical trad-fi investment vehicles and make sure that it, and by that also those running it, can be held accountable. In this sense we are thankful for people like Wyles who have done a great and objective work mapping out onchain data and presented them in a good way pointing out the unknowns needing further context. Then there are also some cases where people have used that and other data without context to put out claims that are misleading or directly untrue, causing damage to people and investors by doing that, but in the big picture this mechanism should help both this DAO, DAODAOs and auditing functionalities to mature and improve.
4. The DAODAO community and tools could perhaps benefit a lot from having core contributors and stakeholders establishing a voluntary Auditing DAO where new and existing DAOs could sign up to provide contextual data, be doxxed and open for random/regular audits? This could bring the DAODAO another step towards being a really valuable and de risking tool for the broader communities, but also create a better environment with more precise data, more trust, more accurate criticism and less fud among those who chose to participate. Ultimately making Juno the real, trusted grass-root IBC incubator.
5. We do believe DAODAO will be a great tool to run organizations and businesses and in many ways already superior to the web2 equivalents both in ease of use and transparency, especially compared to how this is done in traditional systems of business registries and trad-fi, where small investors always will end up on the worst side with the least information and data.
6. The ability for anyone to audit all movements and wallets is a great value add and brings a level of accountability that the world needs to improve, but it can obviously also be abused by bad actors trying to misrepresent info and drive unjustified fud. DAODAOs also makes us enthusiastic about Juno and the potential real world impact of the Cosmos Ecosystem, with Hubs like DAODAO, Osmosis and other chains providing real and useful tools and infrastructure.

Team Allocation

The SolarBankDAO does not have any traditional investors, VCs and have not done any pre-sale, we have only used the Cosmos tools and infrastructure to launch this in what we believe is an amazing way to show how Cosmos can generate value just by using the technology and IBC connected tools and modules to attract teams, incubate new disruptive ideas and technology without being reliant on “allocators”, exploitation of community pools and other means more common to Cosmos.

1. The Team is not paid in other than an allocation of $Solar. Of the 16 % / 16 million dropped to the core team, about 90% was staked and is staked in the DAO. 10% of these are not locked there. Of this most is still held on Juno, while some also has been put into Osmosis LP.
2. So, out of the 16% Core Team Allocation about 90% is long-term staked in the DAO with zero rewards/apr at this point, some is held liquid on Juno (to be staked as the DAO get its own operational wallets), and about 2% is held/LPed or sold on Osmosis Frontier. Most of it was added as LP, and from the actually sold Solar most of it has gone directly to the SolarBankDAO treasury and can be verified there. Also, in the longer term, the Team have and will have to sell some Solar to fund themselves through the bootstrapping period and until the SolarBankDAO would have funds to start employing and paying directly.
3. We have considered this to be within usual reason and norm in Cosmos, and it is clear that the team will need to also cover cost and this can’t be done with Solar, so some selling will happen, just as for any project, chain or dao. We are happy to be guided to projects where this is done differently and compare the outcome for developers and core teams. At the moment the core team has more Solar than allocated initially.
4. The Team did also not get any free NFTs or Airdrops, but invested directly in the NFT minting on Stargaze themselves on same terms as everyone else could, also earning the last and further Solar airdrops on equal terms to anyone who invested in NFTs, where only 1/10 have been distributed so far. From the NFT mint proceeds, the net proceeds are allocated to minting $WP on behalf of each NFT, and as such the full mint backing is still intact and the value will accrue to the NFT holders, in addition to the airdrops and other benefits from holding them.
5. Lastly, on ex Team sales, a dev who was part of the team back in August, but that left in December also had an allocation of 400k $Solar from August, he sold of about 60,000 solar in the initial phase of the LP, and then returned the remaining 340k Solar to the DAO again. We screwed up in not adding a vesting schedule or buy-back at the time of allocations, setting up the distribution, and he was of course free to sell as he wanted. This caused a lot of confusion initially on who was selling, but he graciously returned the remaining tokens once approached and we appreciate how that was solved quickly to the best of the DAO, where we guess others would not have acted in the same way, so all credit and respect to him for single-handedly solving that.
6. Still, we should have communicated this much earlier and clearer and we should also have had a vesting schedule in place from the beginning and dont leave this up for speculation and fear of dumping. We’ll propose a schedule in the DAO so that for the future any release / allowed sales can be calculated by members and investors in the DAO and more easily be taken into consideration before participating.

Team Vesting Proposal

Since there is no inflation on the $Solar tokens and no other compensation at this point, the team will have to sell some of their tokens on a regular basis to cover/recover some costs, expenses etc, there won’t be a fixed amount of inflation, rewards or other to replace this with the current fixed tokenomics and max-cap. But to make this more transparent and clear;

1. We propose to make the following DAO Proposal; a 5 year vesting period (to be discussed and finally determined by the community, as the yield of $WP will be for 30+ years, incentives for long-term engagement in case of success is in place..), where a maximum of 50,000 $Solar could be sold by any single team member in any single month up until that point, this would at Today’s rate equal to about maximum $1200 / month and where consideration should be given to liquidity and price impact (a max % cap of liquidity could be implemented?).
2. This would add a maximum of about 3000 Solar per day which would then be less than 10% of the Dailly rewards of the LP and the monthly allocation of NFT airdrops. Of course, if the market/Solar rallies the USD amount will naturally also go up, ideally aligning the team and community with respect to creating token value.
3. The team would otherwise be free to sell staking rewards, LP rewards, airdrops from NFTs they have bought and otherwise invest in projects, tokens or NFTs on the same terms like anyone else.

Regarding false statements / clarifications

That said, there have also been some directly false statements put out on Twitter both with regards to the size of team allocation and the amounts sold and “cashed-in” by individual team members. These allegations have to some degree already been corrected by the “auditor” with more context added and we are of course happy to see this and appreciate the fairness of this being corrected, but we’ll briefly address some of the key points here as well:

1. Especially that IFN Scouting received 8% team allocation and not 16% as claimed, also IFN Scoutings wallet was used for the swap of the DAOs Solar to Juno on behalf of the DAO treasury, and also to cover other direct costs related to setting up the Osmosis Frontier listing and LPing, including providing initial liquidity etc. IFN has in addition been selling NFT Airdrops and LP rewards, but the larger share of the proceeds of total sales have been put in to the SolarBankDAO and allocated to investing in the tech development (through the Development SubDAO) and investments into solar parks that will bring yield back to DAO members. The claim that IFNscouting sold solar for 75k USD and cashed it in is not true and this onchain data can be verified.
2. IFN scouting has indeed been “cashing in” (as in realizing losses) money from Cosmos to Crypto.com in the same period, with the major share of any transactions to Crypto.com coming from unbonding staked ATOM and selling that off for anything more promising. This has been due to the lack of faith in a conflicted appchain having a current value of 3 bn USD, and rather believe 0.3–0–5 bn USD would be a great valuation of the App-chain version of the Cosmos Hub at this point, and has nothing to do with Solar or the SolarBankDAO business.

SolarBankDAO Swaps from Solar to Juno / Osmo

1. With regards to the sales on behalf of the DAO: Swapping Solar into Juno / Osmo to be able to run and grow the DAO business and develop its modules, this has been communicated with DAO proposals and in discord, but We should have made this clearer and earlier, indeed it might have been too little too late and something we will have to work on. The full sales schedules and dates of the sales and transfers to the DAO Treasury are to be found in the DAO proposals.
2. We will also be working to be even more detailed in upcoming DAO proposals. The limitation we have put on 14 days proposal time is great to ensure that some information and transparency is there and leave time for discussions, updating and changing proposals before they pass, but it also is an operational limitation when coming to daily actions, investments, sales/trading decisions etc.
3. We are working to set up a set of SubDAOs with their own wallets and together with a lot of DAODAO and ICA related developments, we believe that most if not all actions of the SolarBankDAO could be done through its own wallets in the future, and we are happy to share our experience on constraints so far to the DAODAO team and help to make this an even more perfect tool, bringing even more transparency and clarity, and leaving less information and context out, facilitating both our and the auditors / other stakeholders work related to keeping DAOs accountable and transparent.
4. The core team members all have more solar now than upon launch of the DAO, so the claims about dumping are not exactly correct as they with the current ratio get a higher % of the DAO, as opposed to dumping.

With regards to SolarBankDAO, $Solar, $WP, SolarParkTokens and SolarBankCorp

• There has also been questions around the different older and newer entities of SolarBank and also the various tokens. This has led to additional lack of clarity for “auditors” due to some outdated pages about the SolarBank Corp from a couple of years ago in the earlier phases of the project development.
• The DAO and the Corp are to completely independent legal entities and it needs to be like that to ensure a functional and financially sustainable mechanism for converting tokenised solar park assets (SolarParkTokens NFTs) into the fungible $WP which represents a Wp of production capacity and enables a disruptive way of creating sound money, that is both transactional, yield generating and financially sustainably backed.
• The $WattPeak White Paper tries to explain the different mechanisms and rationale for the split between the DAO and the Corp and the relationship and value accrual between the various tokens. Please read this to further get the full picture of the SolarBankDAO and $WP project as some of the information on older websites are out of date and the tokenomics have been thoroughly updated in the process of solving the scaling issues that comes with SolarParkTokens having several separate functions. We have since then rather split them into the SolarParkTokens and the $WP for each individual purpose of the Corp vs the DAO which will make it both simpler and more scalable.

Future looking statements with regards to distribution of the SolarBankDAO treasury of $Solar, value creation, value accrual and technology

SolarBankDAO Staking

We have had some initial discussions on the best way to align with members, incentivise staking, but at the same time avoid dumping — as we already experienced with high LP rewards and the NFT airdrops on top of that.

This is becoming less of an issue now of course as the price already has dumped back to a level where it really should make sense to invest, selling the rewards makes less sense now, if you do believe in the project, those who don’t and were just in for the APR, which is a significant % of the LP providers, will continue to dump regardless of course and that is their prerogative.

The ideas we have been discussing so far with regards to DAO staking rewards:

1. $WP incentives til DAO stakers — This is one with very few potential negative consequences and I think it will come regardless as and when the minter is up, revenue generated from royalties on NFTs will go to mint $WP and this can be distributed to DAO stakers (alternative is for it to be held by the DAO treasury, but using it to incentivise members sounds like a good use case).
2. $Solar incentives/rewards to DAO stakers? The risk of this is putting more Solar in the market and that people will stake some only to get the rewards and dump them, but learning from the last month, perhaps this can be done with a vesting schedule and reasonable APR and especially as LP rewards comes to an end, staking in the DAO should become the most attractive option providing both $WP and $Solar rewards?
3. This would come with a limitation on team rewards either by a cap, zero or reduced rewards in the distribution/decentralization phase.
4. Distribution of (all or parts of?) dApp fees. Both the $WP minter and $WP staking module will provide fees to the SolarBankDAO (in various Tokens), this can be split between DAO treasury and rewards to SolarBankDAO stakers: There should also not be any negative on this, it will be driven by real value creation and yield, and it might even bring in multiple reward tokens to DAO stakers, you could see both $Solar, $WP, $Atom and $USDC coming as staking rewards at the same time…

In addition to this, there will be WLs, potential $MPWR airdrop and other benefits from staking in the SolarBankDAO. The SolarBankDAO is for profit and with an aim to create value for its members also in the long term.