Senate Financial Activity: A Cumulative Report
The original version of the Senate Cumulative Financials Report complete with URL links to verify past transactions, higher-quality formatting, and extra detail can be read here. This linked PDF is the recommended version. Our report is also being shared here on the main Kujira Medium for ease of hosting and to maximize transparency & accessibility.
FOREWORD
This report was the last artifact created by the Kujira Senate before going on hiatus. The title, description of the involved processes, funding expenditures, next steps, etc. were all written based on the perspective and knowledge at the time of creating the report.
As a result, some forward-looking aspects such as the next steps are now out of date and may not necessarily apply as stated due to changes that could occur before the Senate may be reintroduced in the future. The piece is also written in the present tense, anticipating what may happen in the future, rather than as a retrospective of past processes.
Furthermore, while future grant expenditures will likely be close to what has been described, the involved timing or amounts may see changes. In particular, Kujira’s wider team will be directly involved in ‘light touch evaluation of grant applications’, to relieve any burden on the Kujira founders and enable them to focus on building top-notch applications for the ecosystem.
These changes will hopefully allow Kujira to expand faster as an ecosystem at this early stage and foster a healthy environment for prospective developers, while also preserving the key features of a careful, thorough, and comprehensive grant structure for a later date once the ecosystem has been bootstrapped appropriately.
As stated in the report itself, the Senate is happy to answer any questions about its processes, methodology, and various considerations or deliberations that were made up until now.
We hope to continue to grow the Kujira community in our own individual capacities. Many of us are involved in Kujira outside of our role as Senators. And we believe we can foster a better, more robust ecosystem by contributing however we can.
SENATE FINANCIAL REPORT
CONTENTS
- 1) INTRODUCTION
- 2) SENATE FUNDING PROCESS
- 3) DIFFERENT SENATE USES OF COMMUNITY FUNDS
- 4) SENATE FUNDING ACTIVITY SINCE INCEPTION
- 4a) GRANT PROPOSALS
- 4b) FUND MOVEMENTS
- 4bi) INFLOWS
- 4bii) OUTFLOWS
- 4c) TREASURY SENATE MULTISIG BALANCES
- 4d) STRATEGIES
- 4di) DCA & SELL ACTIVITY
- 4dii) OTHER FINANCIAL ACTIVITY
- 5) CONCLUSION
INTRODUCTION
For the sake of transparency and clear communication, the Senate has decided to create quarterly reports detailing all related financial activity. These reports will be directly accessible to the community who are encouraged to ask questions on Discord, Telegram, or Twitter about any aspects they would like further elaboration on.
Since this first financial report has been compiled after the first two financial quarters of 2023, this first version will describe our various activities over both quarters. We will move to a quarterly format starting with the next entry.
As part of this report, the Senate will give an overview of the Senate funding process, a breakdown of different ways the Senate uses community funds, a timeline of Senate funding activity in each quarter, and finally a conclusion projecting future expenditures as well as next steps.
SENATE FUNDING PROCESS
To properly understand the Senate’s financial activities, it helps to understand the Senate’s methodology in funding projects. In general, the Senate grant process takes approximately three to four weeks on average.
First, projects create a grant application by filling out a detailed Senate form. They supply information about funding request size, the product to be built, a set of milestones for tracking progress and dispensing funds, how the funding will be used, aspects that will enrich the community, and various other details (like team make-up).
In general, the Senate takes around a week to review the application before discussing it at a session. Next, after holding a discussion the Senate will request various changes and clarifications to ensure solid conditions. Once both parties are in agreement on the grant request details the Senate will then have a project lead come on to one of our weekly calls and present in detail about their project and answer questions.
Finally, after additional discussions–the Senate proceeds to hold an internal vote to decide whether to approve or deny a grant for the project. As a last step, the Senate Multisig executes the vote. Sometimes, it is clear early on in the process that a grant will be rejected and related discussions halt at that point in time.
The Senate generally prefers to fund projects with USDC–as grants are meant to be spent out of necessity. Sometimes, special cases are dispensed as KUJI–such as for project specific mechanics that require KUJI (rather than stables). In order to ensure that the Senate has sufficient cash on hand to fund projects, the Senate first creates governance proposals to move funds from the Community Pool to the Treasury which is managed by the Senate Multisig. To ensure the Senate has a sufficient stablecoin balance to fund projects we will, from time to time, initiate DCA strategies (typically using Calc Finance) to swap KUJI for USDC & USK. Any DCA strategies are carefully managed to have minimal impact on KUJI market price.
The Senate funds public goods (non-profit community infrastructure) and for-profit projects. The Senate’s funding criteria vary depending on project type. For example, public infrastructure is meant to provide fundamental services to the chain and make the chain more attractive for builders and users. For-profit projects are often evaluated from the perspective of encouraging growth of the Kujira ecosystem. Such projects tend to have larger raises but are generally held to higher standards in terms of how they provide value to the community (revenue share, exclusivity, airdrops, etc.). In our grant discussions, we hold projects accountable by asking them to specify how they plan to achieve this. When necessary, we come back with requested changes.
HOW THE SENATE USES TREASURY FUNDS
In addition to moving funds to the treasury and DCAing KUJI to stables for the sake of funding projects, the Senate also manages treasury funds in a variety of ways to make the most of the community pool. In general, we provide ecosystem liquidity in a way that avoids cannibalizing APRs.
For example, the Senate does not stake Treasury KUJI to avoid lowering the chain-wide staking APR. We also avoid staking large BOW LPs which would lower liquidity rewards to Kujira DeFi participants. For the time being, we have deposited liquidity in BOW and provided liquidity to GHOST. We may consider putting idle Treasury funds to work in the future by using other Kujira dApps such as ORCA after polling the community.
SENATE FINANCIAL ACTIVITY IN 2023 Q1-Q2
SENATE GRANT PROPOSALS
This is an exhaustive list of all Senate Grant Proposals (accepted, rejected, withdrawn, unsubmitted, or in-progress) from throughout 2023 Q1-Q2.
SENATE MULTISIG FUND INFLOWS
These governance proposal transactions show fund inflows from the Kujira Community Pool to the Treasury over 2023 Q1-Q2.
SENATE MULTISIG FUND OUTFLOWS
These transactions show all fund outflows from the Kujira Treasury over 2023 Q1-Q2.
SENATE MULTISIG BALANCES
The Kujira Treasury is controlled by the Senate Multisig contract. Find current balances and links below.
Senate MultiSig Contract on Kujira FINDER
SENATE DOLLAR COST AVERAGE (DCA) AND RELATED SELL ACTIVITY
Each Senate DCA proposal converts KUJI or other Treasury tokens to stables over time. FIN limit order Senate proposals convert tokens to stables at a preselected exchange rate. The tokens converted (i.e. the KUJI) are called the base denomination. The received stables are called the receipt denomination.
OTHER FINANCIAL ACTIVITY
This section covers all financial activity that doesn’t fit into any previously mentioned categories.
CONCLUSION
In addition to the above financial activity, the Senate has predictable future financial expenditures predicated on past milestone funding schedules for projects such as Blend. The Senate has already promised to fund BLEND in total for $72K + $20K in audit costs. For these future financial expenses and other unforeseen new project requests, the Senate does its best to maintain a rather healthy balance of stables in the Treasury to help manage risk to ensure ability to continue growing the ecosystem and avoid speculation as much as possible.
As part of its evolution over the past 6 months, the Senate has worked hard towards setting up a responsible and transparent grant program. For the time being, as the program has worked to get on its legs, we are relying on our relatively long-lasting runway, future expected appreciation of the KUJI token, and community pool inflows from the Kujira distribution module, to fund the Treasury management program.
For the sake of future longevity, we are working towards ensuring that total community pool income eventually outweighs the total amount spent on grants by focusing on funding high-quality projects. At the moment, 180 day Kujira blockchain revenue is sitting at $611.28K, which means that since the community pool captures 2% of this revenue, the community pool has seen an influx of approximately $12.23K. As the Kujira user base grows with our expanding ecosystem, we plan to narrow this gap.
For the time being, we aim to present a sharpened Senate report covering the third financial quarter of 2023. Please follow our future communications to better understand our overall progress. The Senate subsection of Kujira’s docs also has helpful information about the Senate. And as always, feel free to mention us on Twitter and/or provide feedback in the relevant Senate Kujira Discord channels. Here’s to another successful quarter!
