Transparency Report
Introduction
This document sets forth a transparent summary of what has occurred thus far; the structure of a decentralized autonomous organization (the "KARRATco"), that is governed by holders of $KARRAT, responsible for fostering, developing, authorizing and governing the KARRATco and its governance powers over the Karrat Foundation (as described in more detail in the Constitution of the KARRATco) .
The establishment of KARRAT Foundation, a Cayman Islands foundation company, was a critical first step in the establishment of the KARRATco. Karrat Foundation serves the KARRATco and is governed by it, aiming to foster the growth and development of the Karrat Protocol while remaining accountable to the community.
This document acknowledges the actions that were required in advance of the KARRATco setup in order to legally comply with registration and operational requirements. The Karrat Foundation believes it is important for the community to understand all actions taken in the lead-up to KARRATco formation, and therefore seeks to describe documents and activities conducted by the Karrat Foundation on the KARRATco's behalf to launch community governance.
The KARRATco has the ability to submit Karrat Improvement Proposals ("KIPs"), vote on them and approve them through on-chain execution or actions of the Karrat Foundation. The guiding values of the Karrat Foundation and KARRATco are described in Section 4 of the KARRATco Constitution.
Through the submission of KIPs in line with the KARRATco Constitution, the KARRATco is able to collectively decide and effectuate changes ranging from core protocol technology to non-technical decisions that otherwise impact the community and $KARRAT token holders. Throughout this transparency report below, it's noted where decisions made during governance launch can be modified by a KIP, and the process for doing so.
Foundation Constituents:
Directors
As a Cayman Islands foundation company, the Karrat Foundation is required to have at least 1 director responsible for the management and operation of the Karrat Foundation, in particular approving and entering into contractual arrangements on behalf of the Karrat Foundation (i.e., the entity actually approving and signing agreements). These directors were required to be appointed as part of the initial set-up of the Foundation.
The initial directors of the Karrat Foundation are the following individuals:
Matt Shaw - Matt has a mainstream finance background, having been an investment banker for over 25 years. Currently CEO of Webslinger Advisors, based in the Cayman Islands, he has been involved in crypto since 2017 and has a broad range of advisory mandates.
Campbell Law
As laid out in the Foundation's governing documents, the KARRATco has significant authority regarding the directors as it may remove the Karrat Foundation's directors at any time pursuant to a Constitutional KIP.
Supervisor
As a Cayman Islands foundation company, the Karrat Foundation is required to have at least 1 supervisor responsible for ensuring that the director(s) act in accordance with their mandate and in the best interest of the Foundation. In short, they act as a check on the power of the director(s). The supervisor was required to be appointed as part of the initial set-up of the Foundation.
The initial supervisor of the Karrat Foundation is the following individual:
Leeward Management
As laid out in the Foundation's governing documents, the KARRATco has significant authority regarding the supervisor as it may remove the supervisor at any time pursuant to a Constitutional KIP.
Initial Set-up Costs of the Karrat Foundation. The KARRATco and Initial Operating Funds
The Karrat Foundation incurred pre-launch costs to set up the KARRATco and governance. The work included careful consideration and guidance of legal structures, technical expertise and development. This was done to provide a safe, legal and technical framework to allow KARRATco to self-govern from both a technical and legal perspective.
As part of its responsibilities to the KARRATco, the Karrat Foundation has assumed the costs of paying for operations, blockchain operation, infrastructure, service contracts, and ongoing improvements to the Karrat Protocol. As such, the KARRATco will need to ensure the Karrat Foundation is adequately funded going forward to continue operating core infrastructure for the Karrat Protocol.
In total, 14% of the token supply was distributed to the Karrat Foundation’s administrative budget when the token supply was generated. This has been distributed to the Foundation in order to satisfy these upfront and near-term costs on behalf of the KARRATco.
These tokens will fund the following incurred expenses or other transactions:
KARRATco administration setup and registration fees
Legal costs
Protocol service provider fees
Director fees
Loans to institutional borrowers
Fund near-term operating costs
Contracts with third parties
Strategic collaborations in furtherance of the KARRAT Foundation’s mission
Aside from the distribution of 14% of the token supply to the Foundation Treasury wallet, 30% of the token supply was distributed to the on-chain KARRATco treasury, and 6% of the token supply was claimable by individual wallets, 5% of this immediately and 1% after a year.
On-Chain KARRATco Governance
The Governance Structure was established in line with the The Constitution of the KARRATco.
Governance powers breakdown
$KARRAT Token holders $KARRAT token holders, who make up the KARRATco, play the most critical role in the proper functioning of decentralized governance in the pursuit of a trustless, transparent and verifiable Karrat Protocol. As the Karrat Protocol is intended to be a public good, it is only right that governance over it should be directed by those for whom such public good is intended.
Security Council The Security Council is a committee of 3 members of a multi-sig wallet which has the ability to perform both Emergency and delayed Non-Emergency Actions, further detailed in Section 2 of the KARRATco Constitution.
The Security Council was required to be operational at the time the KARRATco launched, as Security Council members would be required to mobilize in cases where a critical vulnerability has been identified that could significantly compromise the integrity or availability of a chain governed by the KARRATco, or to ensure that any actions of the DAO abide by the rules of the Constitution.
The initial Security Council members:
Chris Morris - Chris Morris has worked in Entertainment Business and Legal Affairs since 2022. He co-founded and is a partner at MB Consulting which focuses on small businesses/start-ups - 0x9A5AdD141bf9E9EE7A0881f65636E86b6a9B5Ab7
Webslinger Security Council Nominee - Webslinger is a DAO administrator based in the Cayman Island - 0x12cdc625e085A54A01c8646d9aa7f7685F24093c
Davide Barra - Davide Barra is dedicated to fostering innovation and entrepreneurship in Florence's vibrant startup ecosystem, guiding ventures from conception to market readiness and empowering entrepreneurs to drive positive change in Italy's startup community - 0x53b896D518DfaE60E4FCABC73b3C73F711Fbb701
Security Council Elections:
Section 3 of the KARRATco Constitution describes the Security Council election process.
For absolute clarity, as laid out in the Constitution, the KARRATco may appoint and elect members of the Security Council and may even expand or reduce the powers of the Security Council through a Constitutional KIP.
KARRAT Voting Protocol Procedure Section 2 of the KARRATco Constitution lays out the KIP process and voting procedures, as well as the various categories of KIPs and is not incorporated in this report. There are several governance avenues available, each serving its own purpose.
Discourse: The KARRATco Forum is a discourse forum for governance related discussions. Community members must register for an account before sharing or liking posts.
Snapshot: The KARRATco Snapshot is an off-chain voting interface that allows the community to signal sentiment on the proposed KIP.
Tally: Tally serves as the initial on-chain voting platform for the KARRATco to submit and vote on KIPs
Tally serves as a front-end user interface that allows KARRATco members to do several things, namely:
Create KIPs;
View delegates and their voting share;
Re-delegate votes to a different delegate;
View current and past KIPs;
Vote on KIPs on-chain, interacting with the on-chain governance contracts via the Tally front-end; and
View the status of KIP execution during all voting stages
The process of voting, choice of any of the tools, and length of voting can be changed by the community through a Constitutional KIP.
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