Board meeting

The OffChain Luxembourg a.s.b.l. Board has held a meeting on Feb 14 in hybrid mode.

@warman2g - President - online
@chrisinlux - Treasurer - on site
@trafalgarlaw918 - Secretary - online
@frankyboy - Vice President - power of attorney (PoA) to @sorin.offchain
@kevcrypto - Vice President - connected after the voting took place
@cryptogia - Vice President - online
@sub7security - Vice President - PoA to @sorin.offchain
@nicky25 - Vice President - online
@sorin.offchain - Vice President - on site

The Secretary opened the discussions and presented a few housekeeping topics:

• the minutes will be published on the blockchain
• the suggested frequency of Board meetings is every other month (everybody agreed)
  He then gave the floor to the President

The President thanked everybody in the association for the effort that has been done and the progress achieved and reminded what OffChain Luxembourg a.s.b.l. stands for: its missions and vision.

He then introduced the topics on the agenda:

1. Whether OffChain, currently a bankless organization, should open a bank account or not
2. Whether to issue new OCLT backed by future work ("credit money").

Opening of a bank account

The topic was put on the agenda by our member @reload.finance in the context of streamlining contributions. As a reminder, realizing OffChain's mission requires financial resources. While some income streams from membership fees and the educational activities, the main source of income is expected to be our Initial Token Offering

Currently the contributions in euro are processed by Transak and transformed in Hive thanks to Binance before arriving in our dedicated blockchain account. This process creates significant friction because of the on-ramp step that triggers a KYC from Transak.

We argued with Transak that KYC is not required for several motives:

1. The contribution is a donation to a non-profit organization.
2. If nevertheless the OCLT reward is considered a "sale", we are still talking about the sale of a digital product, like an Audible/Kindle book, or a Spotify song, which do not require KYC.
3. Specifically, MiCA Title II does not mandates KYC for crypto-assets other than ART and EMT.
4. The Luxembourg AML law waives KYC for transactions below a certain threshold established by a "Réglement Grand-Ducal". That threshold is currently 1000€ and our maximum contribution is capped at 999€.

However we were not, up-to-now, successful in our arguments. Thus contributors are submitted to a certain degree of KYC by Transak (exact degree is determined by their mysterious "risk engine").

In contrast, if OffChain were to have a bank account, we could integrate a payment processor such a Stripe in the flow instead of Transak. There would be no "on ramp" and therefore no KYC, which would make the experience of contributing much smoother and better.

If we were to open a bank account, @sorin.offchain pointed out that we should open it with a bank that has an image aligned to ours. The recent "brand strategy" exercise concluded that OffChain Luxembourg is 70% Creator and 30% Explorer. Aside from Revolut, an online bank, among the banks in Luxembourg that could potentially align with our image is Swissquote, which vehiculates a "modern, open-minded" image and is crypto-friendly. Besides, we do have some contacts there.

Among the drawbacks that were brought forward:

• a serious blow to our image: we are unique and stand-out because we are bankless. Doing an about-turn and opening a bank account could amount, in the eyes of some people, to a betrayal and imperil our credibility and trustworthyness
• costs: whereas holding our treasury on Hive as HBD produces interests at no cost, holding our money as fiat in a bank produces very little interest at a significant cost. Recently, local banks have jacked up fees for non-profit accounts to 25€/month (before any other costs for normal operations). That is significant in the context of a small non-profit like us. Besides, if the account does not have transactions (that would allow the bank to extract fees), it risks being qualified as "dormant" and slapped with different (and very significant) fees.

^{Holding our treasury on the blockchain produces monthly interest with no fees}

A relevant question was asked by @nicky25 : did we actually lose potential contributors because of the current on-ramp friction? Given that our smart contract is not yet ready, no relevant answer can yet be provided, as the only contributions we received until now were "test contributions".

A vote was taken after 15' of discussions. All the members present and represented unanimously voted in favour of revisiting the topic in the next Board meeting.

Issuing new, "future work"-backed OCLT

@sorin.offchain reminded the theoretical basis of money and OCLT's claim to function as money.

There are two types of money, "commodity money" that is backed by "past work", and "credit money" that is a claim on "future work" (a credit).

Gold coins and Bitcoin are "hard money", backed by past work. The euro that enters the OffChain Luxembourg eco-system and generates an OCLT issuance also represents the past work of those that earned it and use it to pay for OCLT. So the OCLT that has been issued to accompany new membership requests, income from education, the significant contributions that currently constitute our treasury and the contributions from our ITO counts as "commodity money".

However our experiment was based on the postulate that "people can come together, collaborate and produce value together if each contribution is accounted for in a fair manner, thanks to a dedicated token". The introduction of a "unit of account", functioning as a selective incentive, is expected to help solve or alleviate the "freerider problem" that is at the root of the "collective action" problem theoreticized by Mancur Olson 60 years ago.

We therefore started by issuing 20 000 000 OCLT that were to be used as incentive to reward people for the work they will be doing to advance the organisation toward its objectives. Almost 17 000 000 have been disbursed so far (since June 2024).

In comparison, more than 130 000 000 OCLT that have been issued (not all in circulation yet) were in relationship to euro influx - whether "significant contributions" (~49 000 000 OCLT), or other revenue such as membership fees and income from education (1 700 000 OCLT).

We were so far very successful as an organization, having incentivized members to input around 1500 hours of work, out of which around 244h in the last month (January) alone, the equivalent of about 1.4 FTE.

By looking back at 2024, the amount of work being contributed toward the cause of OffChain Luxembourg has been constantly increasing. Yet at the current rate of expenditure, the total OCLT treasury cumulated over all the nodes appears insufficient to compensate the work expected to be done during the month of February.

Therefore a proposal was put to the vote for the issuance of an additional 20 000 000 OCLT to the @ocl-paymaster account in order to allow compensating the work that will be done for the organization in the next months. It is expected that this sum will be sufficient for the next 4 to 6 months.

All the members present and represented unanimously voted in favour of issuing an additional 20 000 000 OCLT to @ocl-paymaster.

These tokens have been issued on Feb. 22, in transaction
https://hivehub.dev/tx/8726520ed990af21241e1a7d9240cf6e12e361b3

Any other business

Once the main points of the agenda were exhausted, we discussed about:

• recruiting an intern
• the impact of the recent change of strategy of the Government (that materialized in the mothballing of the Luxembourg Blockchain Lab)
• strengthening the partnership with House of Web3 by, for instance, offering them our help in case they want to step in and take up the organisation of the 2025 Luxembourg Blockchain Week.

Special thanks to @inalloush for preparing the powerpoint presentation (and for all the invaluable contribution he has made to our organisation).