Episode 34 | Mackenzie Patel from Figment on Proof of Stake Accounting

Proof of stake (PoS) blockchains will form the foundation of a more inclusive and user-owned Internet. If institutional token holders are primed to enjoy the staking rewards embedded within these blockchains, either by acting as validators or delegators on the network, accounting for those rewards remains a headache. Reason being that there is currently limited guidance from the accounting standards, be it US GAAP or the IFRS, on revenue recognition for staking rewards. To help us better understand the accounting treatment on proof of stake networks, I spoke to Mackenzie Patel, a CPA and Senior Revenue Accountant at Figment, a validator on over 50 POS networks. Topics covered; Mackenzie’s story of how she got into web3 and started working at Figment (2:56) What is proof of stake (including rewards & governance) (5:26) Considerations when choosing a validator (6:56) How validators secure the network (7:45) DeFi staking v/s POS staking (10:12) Liquid staking and DeFi opportunities (11:40) What does Figment do (13:32) How to start staking with Figment (14:39) Revenue recognition of staking rewards for a validator under 5 step principle (17:32) Challenges when recognizing staking rewards under the accrual concept (25:51) Accounting rewards as token receivable (29:19) Grouping POS blockchains under a network family for recognizing revenue (31:58) How to trust data from block explorers in the absence of SOC report (33:30) How are auditors auditing POS blockchains data (36:58) Working part time at dOrg as a DAO Accountant, & contributing to DAOs (38:43) Prerequisites for web2 accountants to transition to web3 (41:09) Mackenzie’s message to FASB (45:05) Brought to you by Request Finance - an all in one platform to manage and track invoices, salaries & expenses in crypto. 👉 Earn $10 in REQ tokens when you sign up using promo link at theaccountantquits.com/request Review If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes. Website For show notes and past guests, please visit theaccountantquits.com/podcast/ Follow The Accountant Quits: Instagram: instagram.com/theaccountantquits/  LinkedIN: linkedin.com/company/the-accountant-quits Twitter: twitter.com/accountantquits