I propose a one time kickoff fund of 800,000,000 SC to help spin up the Sia Foundation, with the full fund being assigned to Skynet Labs.
There are numerous significant expenses involved with spinning up the foundation. The first is that, because of our prior SEC settlements, Skynet Labs needs to have a legal conversation with the SEC establishing the changes to Sia and establishing that these changes to not constitute an illegal securities offering. This will be an expensive process, and Skynet Labs will be footing the bill for the full process.
A second major expense will be the establishment of the legal entity. We intend to engage a major firm for setting up the entity, and we expect that the jurisdiction of the foundation is likely to be Switzerland, though we will know more after we have had more conversations. Picking a jurisdiction carefully is key to a healthy tax structure. The difference between a good setup and a bad setup could be as much 300,000,000 SC per year in taxes. It’s worth spending more up-front to ensure that you are established in the best way possible. Skynet Labs will be engaging the legal firms and footing the bill for this process as well.
The final hurdle is the transfer of key assets from Skynet Labs to the Foundation. As we’ve repeated multiple times throughout the process of creating the Foundation, Skynet Labs is a for-profit entity and needs to have substantial business justification behind every action. Skynet Labs recognizes key IP such as the Sia tradmark and sia.tech domain name to be highly valuable. The Sia trademark currently gives Skynet Labs the discretion to decide what is legally allowed to be called the Sia network, a network comprising more than $100 million USD in user-owned assets. This also has considerable impact on what exchanges would determine to be the true Sia network in the event of a contentious fork. As a for -profit entity, we need to be fairly compensated for the release of these network-critical assets.
There are a number of smaller items as well, such as the ongoing employment of Luke in the interim between the proposal of the foundation and the establishment of the foundation. Skynet Labs has also historically contributed significant low-return development towards the network such as the integration of deterministic builds for the network. As Skynet hands over significant control of the protocol to another entity, we feel that this large one-time fee is a fair value exchange, especially given all the expenses that Skynet Labs will incur in advance of the hardfork.