The Space and Time protocol published an analysis on the challenges that Web3 protocol treasuries will face in meeting disclosure standards comparable to those of public companies, in the context of the requirements that the CLARITY Act would impose if enacted in its current form.
The document, published by the Space and Time Foundation, an independent organization dedicated to the adoption of the protocol, notes that producing auditable treasury reports remains a manual process in the majority of protocols.
According to Space and Time’s analysis, two factors complicate the workflow: the scope of the treasury, which is distributed across multi-sigs, program accounts, grants, incentive contracts and cross-chain positions, and the counterparty context, whose relationship to the protocol is not always recorded on-chain.
Space and Time’s verifiable treasury infrastructure indexes addresses and affiliations already established by the protocol, runs classification queries against the protocol’s own related-party definitions, and generates a transactional record with cryptographic proof of each categorization.
From that single record, both the quarterly report and the regulatory disclosures and token holder updates are extracted, ensuring that the finance function, the auditor and the regulator all work from the same evidence.
Source:Â https://www.spaceandtime.io/blog/clarity-compliance-treasury-reporting
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