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Add ERC: Transparent Financial Statements #659
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title: Transparent Financial Statements description: A.P.I. for Protocols to Ensure Open Transparent Financial Data for all Investors. author: Ignacio Ceaglio (@Nachoxt17) <ignacioceaglio@gmail.com> discussions-to: https://ethereum-magicians.org/t/e-i-p-8900-transparent-financial-statements/21191 status: Review type: Standards Track category: Interface created: 2024-09-20 requires: 20
The commit 4597eb9 (as a parent of 2ffba9e) contains errors. |
All Format checks passed ✅. @Mc01 , @axic, @lightclient and @SamWilsn, you are invited to review :D @abcoathup please also let me know if the formatting is correct here. In the If I wrote something wrong regarding the E.I.P./E.R.C. number or |
Improved Specification for more Transparency.
Co-authored-by: Sam Wilson <57262657+SamWilsn@users.noreply.github.com>
Co-authored-by: Sam Wilson <57262657+SamWilsn@users.noreply.github.com>
Co-authored-by: Sam Wilson <57262657+SamWilsn@users.noreply.github.com>
"All Transparent Financial Statements Standard implementations MUST implement ERC-20 to represent shares, and the financial numbers such as Revenue, Costs of Goods Sold, Operating Expenses, Operating Income, EBITDA, Other Income and Expenses, Net Income and Earnings Per Share MUST be displayed in the value of the protocol's stablecoin of choice."
Co-authored-by: Sam Wilson <57262657+SamWilsn@users.noreply.github.com>
Co-authored-by: Sam Wilson <57262657+SamWilsn@users.noreply.github.com>
Co-authored-by: Sam Wilson <57262657+SamWilsn@users.noreply.github.com>
All Conversations Resolved ✅(except from one with @SamWilsn in which I'm awaiting for further feedback). @Mc01 , @axic, @lightclient and @SamWilsn, you are invited to re-review and offer further and deeper feedback! :D After I have taken care of all of your further and deeper feedback, I will remove the 2 |
Complete Reference Implementation and Source code HERE.
title: Transparent Financial Statements
description: A.P.I. for Protocols to Ensure Open Transparent Financial Data for all Investors.
author: Ignacio Ceaglio (@Nachoxt17) ignacioceaglio@gmail.com
discussions-to: https://ethereum-magicians.org/t/erc-xxxx-transparent-financial-statements/21191
status: Review
type: Standards Track
category: Interface
created: 2024-09-20
requires: 20
Abstract
This proposal defines a standard A.P.I. that enables E.V.M. Blockchain-based companies (or also called "Protocols") to publish their financial information, specifically Income Statements and Balance Sheets, on-chain in a transparent and accessible manner through Solidity Smart Contracts. This standard aims to emulate the reporting structure used by publicly traded companies in traditional stocks markets, like the S.E.C. 10-Q filings. The financial statements include key information, namely as Revenue, Cost of Goods Sold, Operating Expenses, Operating Income, Earnings before Interest, Taxes, Depreciation, and Amortization (E.B.I.T.D.A.) and
Earnings Per Token (E.P.Share-Token), allowing investors to assess the financial health of blockchain-based companies in a standardized, transparent, clear and reliable format.
Motivation
The motivation of this E.I.P. is to Bring Seriousness to the CryptoCurrencies Investments Market. Currently, the situation is as follows:
Most ERC-20 Tokens representing E.V.M. Blockchain-based companies (or also called "Protocols"), DO NOT work the same way as a Publicly Traded Stock that represents a Share of ownership of the equity of that such company (so the user who buys a Protocol's ERC-20, is also now a share-holder and co-owner of the business, its profits and/or its dividends), but rather function as "Commodities" such as oil; they are consumable items created by said E.V.M. Blockchain-based company (or "Protocol") to be spent in their platform. They are Publicly Traded and advertised to be representing the underlying Protocol like a Share, working in practice the same way as a Commodity and without any Public, Transparent and Clear Financial Information as publicly traded stocks have.
Added to that, most token research analysis reports that can be currently found on the internet are informal Substack or Twitter posts, with lots of abstract explanations about the features of the said Protocol to invest in, that lack of transparent financial numbers and factual financial information, that are made by anonymous users without real exposed reputations to affect.
This E.I.P. will improve that by giving users and investors transparent, clear and factual financial information to work with when analyzing as a potential investment the such
E.V.M. Blockchain-based company that implements this E.I.P. in their Solidity Smart Contracts, and that will generate Trust, Transparency and Seriousness in the CryptoCurrencies Investments Market long term.
Specification
The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT", "SHOULD", "SHOULD NOT", "RECOMMENDED", "NOT RECOMMENDED", "MAY", and "OPTIONAL" in this document are to be interpreted as described in RFC 2119 and RFC 8174.
All Transparent Financial Statements Standard implementations MUST implement ERC-20 to represent shares, and the financial numbers displayed in a StableCoin's value.
All Transparent Financial Statements MUST implement ERC-20's optional metadata extensions.
The
name
andsymbol
functions SHOULD reflect the underlying token'sname
andsymbol
in some way.All methods MUST be of visibility
public
.All methods MUST return the
stablecoin
.Timestamp Constraint: For all methods, startTimestamp MUST be less than or equal to endTimestamp. If startTimestamp is equal to endTimestamp, the method returns a balance sheet snapshot. If startTimestamp is less than endTimestamp, the method returns an income statement for that period.
Output Structs: Instead of a single
uint256
value, each method returns aStruct
with one or OPTIONAL moreuint256
entries to allow for detailed financial data, each one with their own customized entryname
.Definitions:
Methods
currency
Returns the
address
of the individual StableCoin used to value the publicly displayed financial numbers.revenue
Returns total revenue generated by the protocol within a time period.
cogs
Returns the cost of goods sold within a specified period.
operatingExpenses
Returns the total operating expenses within a specified period.
operatingIncome
Returns operating income for the specified period (Revenue - COGS - Operating Expenses).
ebitda
Returns EBITDA for the given period.
otherIncomeExpenses
Returns non-operating income and expenses, such as interest and investment gains or losses, for the specified period.
netIncome
Returns net income for the period (Operating Income + Other Income/Expenses - Taxes - Depreciation).
earningsPerShare
Returns Earnings Per Share Token (EPS) for the period.
fullFinancialReport
Returns a comprehensive struct that includes all the prior financial details of the Protocol combined: Revenue, COGS, Operating Expenses, Operating Income, EBITDA, Other Incomes and Expenses, Net income, and EPS into a unified
Struct
.