DECENTRALIZATION FOUNDATION

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Financial Vulnerability Assessment (Tuckman-Chang)

4 risk indicators measuring financial stability and operational resilience

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Financial Trends

Organization Details

Formation Year

2018

Legal Domicile

Principal Officer

CHRISTIAN PEEL

Phone

8013694909

Tax Period

2020-01-01 to 2020-12-31

DECENTRALIZATION FOUNDATION, founded in 2018, is a small nonprofit in the Education sector that reported $301K in total revenue in fiscal year 2020. Revenue surged 2190% from the prior year, signaling strong growth momentum. Expenses of $286K left a modest 5% surplus.

Mission

The Decentralization Foundation seeks to support education and scientific research about decentralization of technology and to encourage public discourse regarding decentralization through providing educational tools and learning opportunities about decentralized technology, building the decentralization community to encourage public and informed discourse on developing technology, and funding relevant scientific research in order to make the scientific information publicly available.

Program Service Accomplishments

Program 1

Expenses: $180,000 Revenue: $0

The foundation hired Professor Tim Roughgarden to prepare the scientific report "Transaction Fee Mechanism Design for the Ethereum Blockchain, An Economic Analysis of EIP 1559". The goal of Ethereum Improvement Proposal EIP 1559 is to smooth the price paid for transactions on the Ethereum blockchains such that the price paid for smart contracts is more predictable. We believe that stable prices for smart contracts are useful, and that this work will help guide the development of other, non-Ethereum blockchains. Not only is the work directly useful, the basic idea of using negative feedback to stabilize a price is a useful one and is a good idea to promote among the crypto token community. We contracted with Prof Roughgarden to spend 45 hours engaging with the community on his research and related topics.

Program 2

Expenses: $100,000 Revenue: $0

The foundation made a grant in November 2020 to Sigma Prime, an Australian company for continued scientific research and development related to Ethereum 2, which is a long-planned upgrade focusing on scalability and proof-of-stake. Sigma Prime will deliver a scientific report that includes an educational summary aimed at a non-technical audience. We anticipate that the scientific work and software that Sigma Prime produces will benefit the Ethereum community and the broader ecosystem of blockchains. Sigma Prime has implemented Phase 0 of Ethereum 2 in the Lighthouse client, which is a leading implementation.

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Trantor Score

Financial Health Score (300–850) · Liquidity · Solvency · Sustainability · Efficiency

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Liquidity (40%) • Solvency (30%) • Sustainability (20%) • Efficiency (10%)

Financial Overview (2020)

Revenue Breakdown

Contributions & Grants $302,880

Program Service Revenue $0

Investment Income $-2,106

Other Revenue $0

TOTAL REVENUE $300,774

Expense Breakdown

Grants Paid $100,000

Salaries & Benefits $0

Fundraising Expenses $0

Program Expenses $280,416

Other Expenses $185,918

TOTAL EXPENSES $285,918

Year-over-Year Comparison

	2020	2019	Change
Revenue	$300,774	$13,135	+21.9%
Expenses	$285,918	$8,082	+34.4%
Net Income	$14,856	$5,053	+1.9%

Key Indicators

✗ Grants to Organizations ✗ Grants to Individuals ✗ Lobbying ✗ Political Activity ✓ Foreign Activities ✗ Donor Advised Fund ✓ Schedule B Required

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Financial Health Indicators

Comprehensive financial analysis: Altman Z-Score, liquidity, solvency, sustainability, efficiency, and growth metrics

Financial Distress Indicator

Liquidity & Cash Position

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Altman Z-Score • Liquidity Ratios • Solvency Analysis • Growth Indicators • Efficiency Metrics

Governance

Voting Members

Independent Members

Employees

N/A

Volunteers

Governance Policies

✓ Conflict of Interest Policy

✗ Whistleblower Policy

✗ Document Retention Policy

Special Practices & Reported Activities

✗ Operated a School

✗ Operated a Hospital

✗ Provided First Class Travel

✗ Reported Conflict of Interest

✗ Reported Asset Diversion

✗ Excess Benefit Transaction

✗ Made Political Expenditures

✗ Engaged in Lobbying

✗ Operated Donor Advised Fund

✗ Maintained Art Collections

✗ Filed Form 720

Compensation of Officers, Directors & Key Employees

Total Officers

Total Directors

Key Employees

Highest Compensated

reported

Name	Title	Hours/Week	Role	Reportable Comp	Other Comp	Total
Christian Peel	President	10	Officer Director	$0	$0	$0
Elaine Ou	Board Member	1	Director	$0	$0	$0
Steve Waldman	Treasurer, Secretary, and Director	2	Officer Director	$0	$0	$0
Jeffrey Flowers	Vice President	1	Officer	$0	$0	$0

Note: Compensation data is self-reported by the organization on their Form 990. "Reportable Comp" includes salary, bonuses, and other reportable compensation from the organization and related organizations. "Other Comp" includes benefits, deferred compensation, and non-taxable benefits.

Historical Data

Year	Revenue	Expenses	Assets	Net Income
2020	$300,774	$285,918	$41,038	$14,856