[KGP-12] 3Q23 Klaytn treasury plan

[Kaia_Treasury]

1. Summary

Klaytn Foundation respectfully submits a request to the Governance Council for the approval of its regular budget plan. Provided in the table above is the Foundation’s comprehensive KLAY distribution plan, which outlines the intended expenditures predominantly allocated for the second half of 2023.

Regarding the 40,465,692 KLAY budget approved for 2Q, it is important to note that only 1,046,209 KLAY KLAY has been disbursed thus far, excluding the 29 million KLAY disbursement which has been responsibly staked on nodes.

Moreover, following the initial budget approval, we have taken the opportunity to evaluate and refine our approach. We recognize the need for a broader timeframe to encompass items covered in the regular quarterly budget approval. As a result, we have proactively included a list of items with visible expenditures for the fourth quarter within this quarter’s budget. We firmly believe that the budget presented in this agenda will be expended over a period of more than half a year.

2. Adding a new KCF category
Klaytn Foundation seeks approval for an additional agenda during the 3Q regular deliberation. Currently, KCF expenditure encompasses ecosystem service and infrastructure grants, developer community grants, eco fund indirect investment, and gas fee programs. To further enhance the Klaytn ecosystem, we propose including liquidity provision from the third quarter onwards.

Liquidity provision entails various functions, such as providing initial KLAY liquidity to decentralized exchanges (DEX) through liquidity pools for new protocols or updated features of existing dApps. If this initiative is anticipated to energize the ecosystem, we are committed to supporting it by KCF under the approval of GC and later reclaiming it to KCF. In the near future, we plan to actively support the establishment of streamlined processes for individual projects to directly apply for support through GC discussions and on-chain voting. Moreover, in the medium to long run, the Klaytn network aims to introduce a wide range of liquidity provision mechanisms within this decentralized system.

Concurrently, establishing KLAY pair pools in other blockchain networks can be included in liquidity provision programs. This strategic move helps to facilitate seamless cross-chain interactions when there is increased interest in Klaytn ecosystem assets or services. Detailed explanations and reports on these KCF items should be provided on a case-by-case basis, ensuring full transparency and accountability and requiring GC approval.

3. KCF / KFF budget details (Assumed KLAY price of $0.17)

4. Voting Schedule
Within 7 days of the governance proposal forum posting, this proposal will be moved to Klaytn Square for on-chain voting

[Vincent_SKNetworks]

Can you give us some information about the company ‘inveag’?

[Kaia_Treasury]

Thank you for your inquiry.
Klaytn Foundation entered into an outsourcing agreement with Inveag to engage a team of community managers responsible for the 24/7 operation of the Klaytn community. These managers are tasked with monitoring and analyzing activities within the Telegram and Discord platforms. Subsequently, they generate comprehensive reports for the Klaytn Foundation while implementing a community guidance system aimed at maintaining a respectful online environment. The allocated budget amounts to $24,000 for the current quarter, which covers a six-month period of outsourcing.
If you require any further information, please let us know.

[yongyoung.kim_MK]

Can we know who is Klaytn Contributors in 2H23 Personnel Cost?

[Kaia_Treasury]

Klaytn Contributors are those who have played vital roles in the launch and operation of the blockchain network and continue to hold valid eligibility for their contributions.

[yongyoung.kim_MK]

First of all, Maeil business newspaper(Mblock), a klaytn GC, voted ‘NO’ for the KGP-12 agenda, the 3Q23 Klaytn Treasury Plan.

Voting NO in a open ballot is not an easy decision. However, we believe that the most powerful way to suggest improvements for the development of the Klaytn ecosystem to the foundation, holders, and community is to vote NO. That is the reason that we decided to vote NO for the first time.

There are two main reasons for the negative vote. First is the opacity of information. It is a well-known fact that klaytn is making new attempts while drastically reorganizing tokenomics through KGP-6. New attempts always come with unexpected challenges. In the process of handling challenges, the resolution of information asymmetry tends to be lower in priority. However, information asymmetry causes conflict between the foundation, GC and holders, and the community, sometimes causing serious antagonism. This is why we must always pay attention to resolving information asymmetry.

The information asymmetry that we pay particular attention to is a detail of each cost structure. This is the same for both KCF and KFF. Both operating budgets are written only on a total basis for budgeted entities. It may be a bit difficult, but you need to add classification according to detailed items such as service fee. Even if it is only $100,000, it is a large amount of money, reaching 120 million won in Korean currency. A little more refinement is needed.

The second is large-scale budget execution where the details are not confirmed. This is especially confirmed by KFF. According to KGP-6, KFF allocates about 40 million KLAY per year, 20 million per half year. About half of this is captured as labor costs for klaytn contributors. The foundation has described klaytn contributors as those who play an vital roles, as Heston mentioned above. but we need to confirm who they are. Klaytn is a solid mainnet that has been in its 4th year since its launch. It is not easy to understand that such a large amount is continuously provided to early contributors as a reward on a mainnet that has been maintained for 4 years. Additional information is required for understanding.

In addition, it seems that the cost of community agencies in Korea and overseas is larger than expected. Additional information is required.

The above points are also necessary to meet increasingly stringent accounting and tax standards in the field of virtual assets. GC contributes to the stable operation and continuous development of the klaytn network and receives rewards accordingly. Compensation received must be recorded in accordance with Korean accounting standards. We believe that not only GC but also the foundation should prepare for a response. Therefore, careful review of each detail and appropriate information disclosure should be made.

We hope that this ‘no’ vote will help the development of the entire ecosystem, including the klaytn foundation, GC, holders and community. Thank you for reading.