$PAC Treasury Quarterly Report Q4/2018

$PAC Treasury Quarterly Report Q4/2018

Dear $PAC Community,

We are very happy to be of service to you, the community, as well as the several departments that make up the $PAC family. It has been a challenging start for us, having to deal with several hurdles, such as the malicious attacks on the network earlier this year that caused a shift in focus on our reporting to our dev team.

However, we believe that we are off to a good start, building a framework that will create a sustainable and professional environment, ensuring the success of the $PAC collaborative. As we continue to solidify our current projects, and build out those on our proverbial whiteboards, we are very excited to discover the possibilities that will undoubtedly be born out of our newfound infrastructure. Please let us begin with the basics.

Standard Infrastructure Development

To date, we have developed a few processes, which are standard and unexciting, yet crucial to the proper allocation and tracking of financial resources. The first example of these tools is a budgeting process, which is being integrated into the departments presently. This process will require each department to classify and account for their monthly budget and report how it is being allocated. Once we start tracking this, we can more finely tune the allocation of these funds, as well as adjust the amounts based on need, availability, and effect. This process will be applicable to both budgets provided by the Treasury as well as DAO payments made to any $PAC departments. This will allow the Treasury to provide the highest level of assurance to the community that the use of ALL $PAC funding is being utilized responsibly and effectively.

The second process we have implemented is an expense reporting and reimbursement process. Again, this is simply a standard requirement, which keeps expense spending accountable, trackable, and creates a historical record. For those of you who have ever had to fill out expenses, we are handling this in a standard fashion. Expenses are limited based on type, receipts are required for reimbursement, and all expense reports are approved by a higher level of management. We are planning on building this area out some more, going forward, in order to help minimize expenses and provide planning assistance to our team. Please be on the lookout if you would like to help our gradually growing support structure.

In Process Improvements

We are very excited about some of the projects that we have in process and in the planning stages. There are several, but we will highlight a few of them here. The first project in process we would like to introduce is an expansion on the DAO incubator model, which has been ongoing for several months. This will be an optional process that may be taken advantage of by a proposal creator. The goal of this will enhance a creator’s chances of both launching a successful campaign, and creating a measurable, positive impact on the $PAC brand. This will also give the community higher visibility of the effects of that project, which will help the community more accurately gauge their support going forward. Another benefit is that it will help the proposal creators more finely tune their projects as they continue, in order to achieve even greater successes. We feel that this is a crucial service that we can bring to $PAC, which will greatly enhance the effective use of our resources.

Another project we have planned is also associated to our DAO, and this will provide an amount of stability to our proposal creators. We intend to provide successful proposal creators with a type of “insurance”, which will cover drastic market fluctuations and ensure the successful funding of their projects. An example of this would be, when a creator designs a proposal based on $PAC being worth X, and the project will be ongoing for 3 months, if the value of $PAC drops to 0.6X, we will “insure” that drop and provide the missing 0.4X $PAC.

We will of course need to allocate funds to this “insurance” fund, which leads us to that mechanism in the following project. In order to creatively provide multiple solutions, we have also recently launched a proposal to fund an OTC (Over The Counter) $PAC purchasing program, which will have several effects on our community and infrastructure. This will be offered in the form of both large “block buys” for investors, and simple OTC offerings for smaller purchases. We will use the proceeds from this program to perform a variety of functions, including the previously mentioned “DAO insurance” fund.

Another use for the liquidity created by this program will be to fund “emergency and irregular” expenses. As you will see in the following financial report, we incurred two such types of expenses in Q4/2018, which were the exchange reimbursements and the October proposals coverage we provided.

Financial Report

As mentioned previously, we had a challenging integrating quarter, but we should be able to stabilize in the coming months. Please see the chart (Fig. 1) and data (Table 1) referenced below. As can be seen here, we have already begun the process of providing OTC purchases to those who have inquired, which is one of the reasons that we are expanding this offering. These transactions accounted for 13% of our outgoing $PAC last quarter, which translates to just over 12 Mil $PAC. The categorization of the expenditures allocated from the BTC generated by these transactions can be seen in Figure 2, and Table 2, and will be referenced alongside the $PAC figures going forward.

The standard budget accounted for the majority of our Q4 expenditure but is even still much lower than we would expect under normal circumstances. This would be, of course, if we ever happen to experience a normal scenario in the real world. In any case, 35% (51% BTC) of
the expenditures were allocated to our standard budget, which was just under 35 Mil $PAC (1.784 BTC). This figure will likely change for Q1/2019, as we implement measurable data points to track the effective use of these resources. Gathering and measuring this data is the first step toward being able more effectively allocate these resources and help the $PAC team develop more efficient strategies.

Our expenses may seem small, which they were, based on the percent of total expenditures, however, this is another area where we will aim for improvement. At 6% (32% BTC) of our Q4 out flow, it accounted for approximately 5.5 Mil $PAC (1.108 BTC).

Many thanks to our founders, as they covered a great amount of our actual expenses “out of pocket” for the several shows that we attended last year. As mentioned previously, we are exploring options to assist the team in travel planning going forward, which will allow us to more efficiently attend events in the coming year. This will be another area which we will explore and determine measurable effects of our involvement, in order to more finely tune our focus, attendance, and activity level at these venues.

Another area of interest will be the Network Stabilization nodes that we have established. This $PAC has been set aside in order to create emissions, which will be used in the event of another 51% attack. In the case of another such attack, we will use the funds created from these nodes to purchase hash to combat the attempted attack. We obviously hope that we will not need to use this, but we will have it in the event of another attack.

Finally, the exchange fees/reimbursements and the October proposal reimbursement, as previously covered, were unexpected expenditures, attributed to the malicious attacks we were subjected to during the final quarter of last year. These categories accounted for 18% (17% BTC) and 28%, respectively, of our total financial obligations for this period, which equated to just about 18 Mil $PAC (0.6 BTC) and around 27.5 Mil $PAC. As can be seen by these illustrations and figures, these two categories were a large portion of our expenditures and needed emergency style coverage. After experiencing these events, we realized that we would need to plan for these types of events in the future, which is what led us to developing the proposals that we recently posted. A small portion of the exchange category did go to new exchange listing fees, however the vast majority reimbursed exchanges for their losses. Exchange fees will be another type of expense that will be stockpiled using the OTC mechanism.

In Conclusion

We would like to thank you all, again, for the opportunity to serve both the community and the $PAC team. While it hasn’t been an easy beginning, it should become easier by comparison as we move forward. We will continue to move forward with those projects mentioned, as well as periodically brainstorming with the group to come up with new ways to innovate in this space. This is a very exciting environment in which to be working during this quickly evolving time period, and the team and community are a pleasure to be working with.

We thank you all very much for your support and look forward to a promising 2019!

$PAC Treasury

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