Why Are Regenerative Treasuries Better On-Chain?
Transparency, programmability, and automation
If equity-issuance, expenses, revenues, and assets exist entirely on-chain in the form of tokens, we can assure unprecedented certainties and transparency for investments, liquidation, financials, tax compliance, and anti-money laundering.
Public Cap Tables. The public can view, audit, and analyze cap tables with no hidden agreements. All investments (likely made in the form of USDC) by investors will be visible on-chain. The cap table will be entirely visible to all parties.
Instant Taxation. Taxation may occur instantly and programmatically at the point transfer if it is based on transaction amounts (i.e. income taxes). For the government, this accelerates tax collections, removes the need for collection, and automates auditing. The government can run a simple script to determine if all company’s contracts include tax deductions for salaries, revenues, etc.
Superior Financial Reporting. Rather than relying on archaic, opaque, and sporadic financial reporting that provides advantages to insiders, on-chain organizations can have 100% real-time reporting with total transparency. If all transactions occur on public blockchains, all data is totally visible to parties. Of course, if the organization has any US bank accounts or cash assets, this assurance disappears.
Programmatic Liquidation. The liquidation waterfall is simply programmed into the treasury’s smart contract. Anyone may view the liquidation contract at any time. It is simple to generate a “liquidation dashboard” that models the outcomes of liquidation for employees, investors, market participants, regulators, and others.