[Proposal 952][PASSED] Declaration of No Confidence in ICF Leadership & Call to Action

Hub Proposals Signaling/Text
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Thank you for your comment.
The only way to enforce or initiate an audit on the ICF is through the FSAF. The community would need to justify reasons why an additional or a more extensive audit needs to be performed than the audits performed for FSAF compliance.

For this reason, #952 asks for comprehensive reporting for all fiscal years since inception. And asks ICF to confirm audit scope performed for each fiscal year bc there is no way community can compel a Stiftung (not for profit purpose foundation) to perform an independent audit in addition to the audits already performed by virtue of annual reporting obligation.

The no confidence measure is added to help the ICF understand the context as to why stakeholders demand more comprehensive reporting.

The audit filings remain sealed and confidential as per Swiss laws.

And the audits performed as reporting obligation are by nature independent in that it’s performed by an external party. But the ICF gets to choose the auditor.

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how about yes voters and AiB’s delegations?

i guess it must remain opaque right?

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What “personal” vendetta?
952 is neither vendetta or an unenforceable rebuke.

Nice try.

Proposal #952 is about promoting good governance practices and establishing good governance as an established expectation in the Cosmos ecosystem rather than using the demand for good governance as a punitive measure.

However, it’s quite telling that Informal employees experience and or distort the call to set better standards for stakeholder reporting as a form of punishment or attempt to do harm.

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Grace and AiB’s alignment is full, what a surprise?
Meanwhile, the reality:

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The Interchain Foundation follows up today with the first installment of its monthly treasury snapshot updates, as per the latest commitments towards new transparency and communication initiatives in the 2023 Annual Report release.

Things are starting to change… we recommend the community to start looking at facts and actions instead of speculation and politics. Surely there is way more to deliver to durably shift the trajectory, but we should commend these favorable moves.

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Really?

Idk what you see in these monthly treasury snapshots. It’s not the lean-in to transparency it claims to be.

Instead, it’s a smokescreen that obscures more than it reveals.

Here’s why:

Missing Historical Context: A single snapshot, without the full financial history, is like trying to understand a movie from a single frame. It’s impossible to grasp the full picture of the ICF’s financial management without time and context.

Unexplained Discrepancies: The ICF’s 2023 annual report, released on August 15, 2024, stated a treasury value of $420M for Q4 2023.

The August 31, 2024 snapshot of current treasury shows a drastically reduced value of $295M.

The treasury value plummeted by $125M over just 8 months, with no explanation offered. Are these changes due to market volatility, expenditures, deficient asset management strategies/risk management strategies or other factors? Without context, who knows?

Asset Allocation Mystery: rudimentary historical data shows the ICF’s crypto holdings have swung wildly, from 62.8% to 91% of total assets between 2020 and 2023. The latest snapshot shows 73.2%. Without a complete record, and a record for the allocation strategies explained, it’s impossible to understand what the snapshots are indicating. Context is everything.

Operational Costs Opacity: Without detailed breakdowns dating back to 2017, we can’t assess trends in operational costs or their proportion to overall expenditure. This lack of transparency prevents any meaningful review of what gets preserved in treasury via asset mgmt and fiscal responsibility.

This is precisely why Proposal #952 is absolutely crucial for achieving real transparency from the ICF.

If you leave the ICF to define transparency on their own terms, you won’t get it.

The current approach of providing sporadic, contextless information is a hollow gesture designed to give the appearance of transparency without delivering substance. And you fell for it.

By passing Proposal #952, the community can formalize the demand for what it truly needs: comprehensive annual reports from 2017 to the last fiscal yr.

The requested scope of comprehensive annual reports include:

  • A complete historical context of the ICF’s financial management since inception.
  • Detailed breakdowns of expenditures, grants, and investment strategies over time.
  • Explanations for significant fluctuations in treasury value and asset allocation.
  • Insights into how the ICF has fulfilled its mandated purpose year by year.
  • Confirmation of audited financial statements and scope of annual audits performed in a given fiscal year.

Under discussed – 952 also specifies scope of reports requested. Structure is appended as link in proposal text.

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Respectfully, you seem pretty naive if you perceive this transparency promo as meaningful information. You must not be familiar with the normative standards for stakeholder reporting, especially when a Stiftung has a clear fiduciary reporting obligation to donors involved. The snapshot is rubbish.

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@Cosmos_Nanny I saw a bunch of validators voting NO or NWV specifically because of FSAF involvement. Not sure whether this proposal would pass or not, but in case it wouldn’t, do you plan to submit another proposal that removes the FSAF involvement part? I’m curious whether you consider this an option, and if not, why.

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Sure. If I can get a clear sentiment that community would like me to redo the proposal will do so without reserving the option to refer lack of progress on transparency requests to the FSAF.

That said, originally this proposal began strictly as a direct petitioning request to the FSAF to audit the ICF. And while measuring sentiment in forum and beyond remains an inexact science, the dominant view shared in this channel was support for such a measure.

To expand the tent of plausible support a bit more, I amended the proposal so that we first ask the ICF to produce comprehensive reports from 2017, with specific reference to how the qualitative and quantitative information the reports should capture (eg audit scope reference appended as link in the proposal).

Outreach to the FSAF would only be explored as a contingency in the current proposal. Which means it’s just an option to explore if needed.

In my mind, due to the imprecision of gauging community consensus via social channels, if 952 passes. And if it is the case the ICF refuses to produce requested reports. If it passes 60 days, I may put up another signaling proposal asking community if it is necessary to progress the issue to the FSAF.

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Thank you for clarifying the limitations related to the auditing process for ICF under Swiss law. We understand that a Stiftung’s governance and audit procedures come with inherent restrictions, and that the proposal seeks to address gaps in transparency. However, after reviewing ICF’s latest communication, it seems that they are already moving toward increased transparency by committing to publish the necessary financial information. This makes us believe that we should give some time to ICF to adapt to community requirements.

While we agree that community pressure is vital for ensuring accountability, and this proposal has already achieved partial success, we believe a vote of no confidence may create unnecessary friction without achieving the desired outcome. Instead, continuing to engage the ICF in good faith as they fulfill their commitment would likely lead to better results without risking legal complications or escalating tensions within the ecosystem.

Based on this, we have decided to vote “No” on Proposal 952, trusting that the ICF’s forthcoming actions will meet the community’s transparency expectations.

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@Cosmos_Nanny thanks for your detailed response.

I think it’s really important to avoid a FSAF involvement unless the community agrees specifically with this step, so nice we’re on the same page here.

As for me, I’m not a big fan of involving legal authorities in a web3 world, so I’d likely vote against that signalling prop, as it’ll probably do more harm than good. Despite that, I treat this proposal as both the statement that we need more transparency and a request for it, so with that in mind, I voted Yes on that.

It’s actually nice that we see ICF starting to move towards that since this proposal has launched, and I hope to see even more transparency further.

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Willing to share that we(Bro_n_Bro) are on the side of the val’s who voted no mostly cause of the legal “motivational” part. We still strongly support the initial movement, and would surely support a second revised prop if the current one fails. Mb I’m a bit late with these comments, but I guess here it’s better later than never.

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#952 ELI5: IT’S A “TEST”

  1. The ICF manages critical and vast resources for the Cosmos Hub and ecosystem.

  2. The ICF claims to be doing a good job, but have provided little concrete evidence.

  3. 952 demands the ICF produce detailed historic reports of their activities and resource utilization since establishment.

  4. If governance and operations are in order, the ICF should be able to easily share this information.

  5. Reluctance to share raises red flags: Are they hiding something? Or are they incapable of providing this information?

  6. If they claim inability to share, it’s deeply concerning. This could indicate:

  • Poor record-keeping practices
  • Their renewed promises of transparency and accountability are false

  1. If the ICF fails to provide these reports - for any reason - because 952 passed, it substantiates a consensus reached agreement via cosmos hub governance for stakeholders to escalate the matter to the Swiss Federal Supervisory Authority for Foundations (FSAF), the only agency legally empowered to exercise oversight and regulation over Swiss foundations like the ICF.

  2. In essence, 952 is a straightforward test.

PASS: ICF delivers comprehensive annual reports from 2017-2023; as per requested scope and structure appended to 952 text, by November 4th (60 days from proposal’s passing).

FAIL: ICF does not or cannot provide the requested reports.

  1. If the ICF fails this test, it’s crucial to understand why.
    Don’t you agree?

The community deserves answers. And instead of wasting my time putting up another governance proposal to formalize the ask, we can ask the FSAF to ask for us.

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Tbf, 952 explicitly mentioned fsaf involvement as a contingency. And the proposal passed.

Bc it was reserved as a contingency, I feel after 60 days, pending on what is or is not delivered by the ICF – the community will have more context to determine the necessity of engagement.

May I ask however, what is the source of the profound fear of engaging w FSAF? Do you think it makes the hub less blockchain? Or less decentralized? Wake up. It’s not decentralized at all.

And it’s not made less decentralized by any enforcement or intervention action by the FSAF. It’s made less decentralized by the ICF. Order of effects.

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I’m not as privy to everything (technology, reputation) as the average member of the community. From this post, do people suggest that I sell my ATOM and move it over to a competitor like DOT?