MEMORANDUM
RE: Cosmoverse 2024 Grant and Associated Temporary Loan
Date: July 29, 2024
I. Background
A. In March 2024, AADAO approved a $100,000 grant to support the 2024 Cosmoverse event, following previous grants of $110,000 for Cosmoverse 2023 and $40,000 to StakeCito in 2023.
B. AADAO transitioned from deploying grants in $ATOM to $USDC in Feb this year. AADAO asserts that their contributors explicitly communicated to the grantee team that the 2024 Cosmoverse grant would be deployed in Noble USDC. The grantees dispute this claim.
II. Initial Grant Disbursement
A. On March 20, 2024, AADAO transferred 80,000 $USDC (referenced as A-00022 Milestone Payments in the Grants DAODAO page) to the address cosmos12m4dshpc5qqvrafw46pu6rg4743aswljupx445, identified by the grantee team as the recipient address.
B. A critical misunderstanding occurred, as AADAO assumed this address was fully controlled by the grantee team. However, it was subsequently revealed to be a CEX Kraken address suitable exclusively for $ATOM transactions, rendering the grantee unable to access the $USDC funds.
III. Temporary Loan
A. To ensure uninterrupted work on the conference, the Cosmoverse team requested a loan, according to AADAO contributors.
B. Given the grantee’s status as a recurring recipient and the perceived good faith in the relationship,
AADAO approved and disbursed a temporary loan of $80,000 on May 24, 2024.
IV. Initial Review
A. As the elected member of Oversight, I conducted an initial review in early June, limited to assessing the necessity and reasonableness of the temporary loan provided.
B. I concluded that the loan was necessary due to the cultural significance of Cosmoverse, and noted a joint effort to reclaim the $USDC stuck at Kraken, with primary responsibility for recovery lying with the grantee team.
V. Current Status and Next Steps
A. As of July 28, 2024, I’ve decided to examine the role of faulty information transmission and or the role of potential missing internal measures that lead to this situation.
B. Meetings have been scheduled to review all perspectives of the incident. I have asked for documents that substantiate various perspectives.
C. A comprehensive incident report will be delivered to the community by Friday, August 16, 2024, pending full cooperation of all relevant parties.
D. This report will outline:
- The sequence of events
- Applicable responsibility of parties involved
- Loan terms – (should be established irrespective of recovery of $USDC). If a “loan” was made, requires maturity date, for example.
E. From my end, there’s no suspicion of intentional misconduct in this situation. Rather, this is primarily a matter of examining processes. Oversight actions and related purview can involve review of procedures that may be suboptimal for the proper management of public funds.
Such review applies equally to both the grant-making organization and the grant recipient.
By examining this incident, my focus is on strengthening processes (where and if needed) – to prevent similar issues in the future, ultimately benefiting both the DAO and its grantees.
VI. Conclusion
All concerned parties are hereby advised to await the forthcoming report for further guidance and resolution of this matter.
I respectfully ask the community members to hold their recommendations for what could have been done differently (by any of the parties involved), until the full incident report is delivered. Thank you.
Note: There are a total of five (5) $USDC milestone payments referenced in A-00022 Milestone Payments. Only the $80,000 $USDC disbursement is relevant to Cosmoverse 2024. Milestone payments disbursed in this multi-send include: Fairblocks $18,000, Metamask Snaps $12,750, Cosmos Brazil $22,500, Kado Money $30,000, Cosmoverse 2024 $80,000