Add ERC: Transparent Financial Statements

[Nachoxt17]

Complete Reference Implementation and Source code HERE.
title: Transparent Financial Statements

---

eip: 7776
title: Transparent Financial Statements
description: Open Transparent Financial Data such as Revenue, Costs of Goods Sold, Operating Expenses, EBITDA and Earnings Per Share for all Investors.
author: Ignacio Ceaglio (@Nachoxt17) [email protected]
discussions-to: https://ethereum-magicians.org/t/erc-xxxx-transparent-financial-statements/21191
status: Review
type: Standards Track
category: ERC
created: 2024-09-20
requires: 20

Abstract

This proposal defines a standard API that enables EVM Blockchain-based companies (or also called "protocols") to publish their financial information, specifically Income Statements and Balance Sheets, on-
chain in a transparent and accessible manner through solidity smart contracts. This standard aims to emulate the reporting structure used by publicly traded companies in traditional stocks markets, like
the SEC 10-Q filings. The financial statements include key information, namely as Revenue, Cost of Goods Sold, Operating Expenses, Operating Income, Earnings before Interest, Taxes, Depreciation, and
Amortization (EBITDA) and
Earnings Per Share-Token (EPS), allowing investors to assess the financial health of blockchain-based companies in a standardized, transparent, clear and reliable format.

Motivation

The motivation of this ERC is to bring seriousness to the cryptocurrencies investments market. Currently, the situation is as follows:

The current state of token investment analysis is opaque, with most information presented in an abstract and non-quantitative form. This standard API ensures a consistent and reliable way for investors to
evaluate blockchain projects based on real financial data published directly on-chain, not just speculative promises. This will establish a greater
trust in the cryptocurrency markets and align token analysis with the standards of traditional equity markets.

Most ERC-20 Tokens representing EVM Blockchain-based companies (or also called "protocols"), DO NOT work the same way as a publicly traded stock that represents a share of ownership of the
equity of that such company (so the user who buys a protocol's ERC-20, is also now a share-holder and co-owner of the business, its profits and/or its dividends), but rather function as "commodities" such
as oil; they are consumable items created by said EVM Blockchain-based company (or "protocol") to be spent in their platform. They are publicly traded and advertised to be representing the underlying
protocol like a share, working in practice the same way as a commodity and without any public, transparent and Clear Financial Information as publicly traded stocks have.

Added to that, most token research analysis reports that can be currently found on the internet are informal Substack or Twitter posts, with lots of abstract explanations about the features of the said
protocol to invest in, that lack of transparent financial numbers and factual financial information, that are made by anonymous users without real exposed reputations to affect.

This ERC will improve that by giving users and investors transparent, clear and factual financial information to work with when analyzing as a potential investment the such
EVM Blockchain-based company that implements this ERC in their solidity smart contracts, and that will generate trust, transparency and seriousness in the cryptocurrencies investments market long term.

Specification

The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT", "SHOULD", "SHOULD NOT", "RECOMMENDED", "NOT RECOMMENDED", "MAY", and "OPTIONAL" in this document are to be interpreted as described in
RFC 2119 and RFC 8174.

All Transparent Financial Statements Standard implementations MUST implement ERC-20 to represent shares, and the financial numbers such as Revenue, Costs of Goods Sold, Operating Expenses, Operating
Income, EBITDA, Other Income and Expenses, Net Income and Earnings Per Share MUST be displayed in the value of the protocol's stablecoin of choice.

All Transparent Financial Statements MUST implement ERC-20's optional metadata extensions.
The name and symbol functions SHOULD reflect the underlying token's name and symbol in some way.

All methods MUST be of visibility external.

All methods MUST return their financial numbers valued in the provided stablecoin.

If the contract owner uses data or methods from other owned smart contracts external to their smart contract implementation of this standard, those smart contracts MUST be verified in the correspondent
blockchain explorer and of open and visible source code.

Timestamp Constraint: For all methods, startTimestamp MUST be less than or equal to endTimestamp. If startTimestamp is equal to endTimestamp, the method returns a balance sheet snapshot. If
startTimestamp is less than endTimestamp, the method returns an income statement for that period.

Output Structs: Instead of a single uint256 value, each method returns a struct with one or OPTIONAL more uint256 entries to allow for detailed financial data, each one with their own customized
entry name.

[eip-review-bot]

File ERCS/erc-7776.md

Requires 1 more reviewers from @axic, @g11tech, @SamWilsn, @xinbenlv

[github-actions]

The commit 4597eb9 (as a parent of 2ffba9e) contains errors.
Please inspect the Run Summary for details.

[Nachoxt17]

All Format checks passed ✅. @Mc01 , @axic, @lightclient and @SamWilsn, you are invited to review :D

@abcoathup please also let me know if the formatting is correct here. In the .md file, I used as a file name erc-659.md because before I tried with eip-review_t_financial_statements_s.md, erc-review_t_financial_statements_s.md, eip-XXXX.md and erc-XXXX.md but in all cases the eth-bot reverted, and inside the file in the header I specified eip: 659, because if I left it blank the eth-bot will revert.

If I wrote something wrong regarding the E.I.P./E.R.C. number or .md file name, please tell me exactly for what to replace it instead.

[Nachoxt17]

All Conversations Resolved ✅(except from one with @SamWilsn in which I'm awaiting for further feedback). @Mc01 , @axic, @lightclient and @SamWilsn, you are invited to re-review and offer further and deeper feedback! :D

After I have taken care of all of your further and deeper feedback, I will remove the 2 <!-- TODO --> present in the document.

[Nachoxt17]

All Conversations Resolved ✅(except from one with @SamWilsn in which I'm awaiting for further feedback). @Mc01 , @axic, @lightclient and @SamWilsn, you are invited to re-review and offer further and deeper feedback! :D

After I have taken care of all of your further and deeper feedback, I will remove the 2 <!-- TODO --> present in the document.

X2 I insist in having updates since it has been 2 weeks since the last comments were resolved.

[Nachoxt17]

All Conversations Resolved ✅(except from one with @SamWilsn in which I'm awaiting for further feedback). @Mc01 , @axic, @lightclient and @SamWilsn, you are invited to re-review and offer further and deeper feedback! :D

After I have taken care of all of your further and deeper feedback, I will remove the 2 <!-- TODO --> present in the document.

X3 I insist in having updates since it has been 2 weeks since the last comments were resolved.