Financial Update for November 2022
Every month the Lisk Foundation provides a financial report in which monthly expenditures are transparently broken down.
Total Assets Held
An overview of all fiat currencies, stablecoins, cryptocurrencies, and managed assets currently in possession of the Lisk Foundation is illustrated below.
Generally, the Lisk Foundation is continuously liquidating BTC in order to have enough fiat and fiat equivalents to cover expenses for at least 12 months. This is currently the case.
Additionally, assets are deposited into a managed fund and are continuously invested into forms of green energy production, e.g. power plants, to reach environmental sustainability with the Lisk network.
Lending and Buybacks
BlockFi
The Lisk Foundation was previously using BlockFi to provide interest on 6,500,000 USDC in order to generate additional income. These funds were scheduled to be locked until the 16th December of 2022.
On November 10, 2022, BlockFi announced that they were pausing withdrawals to their wallet and interest accounts. Then, on November 28, 2022, BlockFi announced that they were filing for Chapter 11 bankruptcy protection, with the “First Day Hearing” occurring the following day. BlockFi’s "Second Day Hearing" is scheduled for January 9th, 2023. All information concerning BlockFi court dates can be found here: http://njb.uscourts.gov/BlockFi.
As always, the Lisk Foundation will continue to be fully transparent and continually update the community on the situation as information becomes available.
Other Lending
The Lisk Foundation is also lending away directly to third-party companies. This generates additional interest and ranges between 6% and 8% APY.
Currently, 1,450,000 USDC are still locked in loans with the interest becoming available only after the lock-up period is over. All lock-up periods will end in 2022. Due to the current market situation, we are currently assessing the safety of these funds and will provide a report in the next Financial Update for December.
Buybacks
In October, 525,743 USDC was deployed to buy back LSK tokens from the open market. The large increase of our buyback is due to a collaboration with a liquidity enhancing service planned for 2023, which requires a large amount of LSK tokens. Previously, we announced that this buyback will continue for several months, with each monthly amount dynamically adjusted depending on the current market situation. Due to the uncertainty with BlockFi we have for now paused this effort and will re-evaluate it in the new year.
Monthly Expenditures
The overview shown below depicts the overall expenditures of the Lisk Foundation for the last month and is broken down into 2 main categories: Lisk Foundation and Lightcurve.
As a solution to the current market situation we are saving costs to bring down our burn-rate and to increase our run-time. The full execution of the cost savings will take a few months to settle. The current plan is that our current fiat and fiat equivalents will be used throughout 2023. With new cryptocurrency liquidations into fiat or fiat equivalents to be executed towards the end of 2023.
