Proposal to Create Indigo Foundation Financial Structures
TL:DR: Now that Indigo Protocol V2 has been implemented, the DAO Treasury is accessible to transfer INDY to the Indigo Foundation to pay past and future Protocol expenses. In this Proposal, the Labs team seeks approval from the DAO members of the service providers retained to assist in creating and operating the Foundation’s financial structure and creation of the multi-sigs needed as part of that.
A ‘yes’ vote on this Proposal provides the DAO’s approval of Lemma and CLS as services providers, and approves the creation of bank accounts and several Foundation-controlled multisig wallets.
Lemma
In anticipation of the unlocking of the DAO Treasury with Protocol V2, on April 4, 2024 the Foundation directors executed a services agreement with the Cayman Islands-based service provider Lemma Ltd. Lemma is a leading provider of financial and account management services to blockchain projects. While the full text of the Services Agreement is not public, we can state that Lemma is in the process of:
- opening bank and exchange/Market Maker accounts;
- managing of all accounts set-up and continued monitoring;
- setting up and maintaining a database with all relevant financial information located on a central drive;
- providing monthly accounting services, payments processing, financial accounts available to the directors on-demand and via quarterly statements; and
- providing wallet management services.
Lemma is available to provide other services as well at the Foundation requests. Lemma has already started gathering information and building out the accounting functions that the Foundation requires.
The cost of Lemma is over $10,000 USD per month, but the Directors considered alternatives to retaining a service provider like Lemma – mainly, having the Foundation directly hire contractors or employees to provide such services – and determined that all alternatives would be materially more expensive to the Foundation (particularly in the Cayman Islands).
CLS
Similarly, in late March 2024 the Directors executed a services agreement with CLS Global FZC LLC, a UAE company with registration number 3219. CLS provides access to services and software for order flow, sell and buy flow, and trading so that any necessary sales of the INDY token can be done in ways which maximize the short- and long-term value of INDY. Some selling of INDY will be necessary to pay service providers that do not or cannot accept INDY as payment.
The cost of CLS is approximately $2,000 per month. As with Lemma, the Directors considered alternatives and determined that CLS was the least expensive way to secure these necessary services.
Multisig Wallets
The Labs team suggests that four Foundation-controlled wallets be created as soon as possible for use by the Foundation, and that all should be multisig wallets. Each wallet will be identified to the DAO once created, and Lemma will provide quarterly reports on all transactions.
The suggested wallets are:
| Wallet | Purpose | Multi-Sig Signors |
|---|---|---|
| Payments to Protocol Service Providers | This wallet would receive INDY that the DAO has voted to be paid to a Service Provider that is supporting the Protocol - e.g., developers, AWS, TxPipe, etc. |
The Foundation would hold the INDY and make payments when due according to the terms of each Services Agreement, if the service provider has fulfilled their obligations.|3 of 5 signor requirement with the following signors:
-
One appointed by the Indigo Foundation;
-
Two appointed by Lemma
-
One appointed by Indigo Labs; and
-
One outside legal counsel.|
|Protocol Support|This wallet would hold INDY that the DAO has voted to be used for support of the Protocol, such as: -
stipends to Working Groups or other contributors;
-
rewards/yield farming;
-
grant, hackathon, or bounty programs.
potentially staking of any DAO Treasury ADA to a stake pool.|
|Foundation Operations|This wallet would hold INDY that the DAO has voted be used for payment of Foundation-specific service providers (such as Lemma, CLS, Zedra, etc.), legal counsel to the Foundation, and other general administrative expenses as the Foundation grows.|
|Exchange Funds Account
(ETH wallet)|This wallet accepts USDT or USDC from exchange accounts (where INDY is sold using CLS to generate stablecoins as needed to pay service providers).|
Additional wallets would be created as directed by the DAO in future Proposals.
Summary
To reiterate, a ‘yes’ vote on this Proposal approves the above-listed work to be done by Lemma and CLS, and the creation of the multisig wallets listed above.
These additional steps to get the Foundation operating more fully have been two years in the making and part of the Indigo Protocol’s decentralization story from the start. We hope to have everyone’s support and look forward to answering any questions.
