I would ask DAOtalk participants to stop using the term KYC unless they actually mean it. The term comes out of the AML (anti money laundering) trans-national efforts for financial system monitoring and surveillance, with the aim of curbing the attempts to hide proceeds of criminal activity and to avoid taxation of profits from both criminal and common enterprises.
As such, it’s a requirement imposed on banks by the regulators, to establish detailed ownership and the ‘ultimate beneficiary’ of the funds and to track and report activity and transactions that could be suspect. In other words, they shift onto banks the burden to see through shell companies and to report on their customers in the course of business. Some of the national agencies involved in these types of oversight are FinCEN in the US under the Treasury and FINMA in Switzerland.
This terminology got pulled into the domain of cryptocurrencies through the banking relationships of the exchanges, for the fiat transfers between the customer and the exchange banks. This is orthogonal to the securities designation of coins and tokens, as the regulators like the SEC have requirements for the brokerages to ascertain customer’s financial status and investment experience, in relation to the “suitability”.of investment choices, e.g. accredited or qualified investor status. Again, this is separate from establishing the customer identity for the purposes of tax reporting and withholding.
What does all this have to do with DAOs? NOTHING
I see two separate concerns that the members of Genesis can have - proper use of accounts with REP and financial responsibility of the recipients of fungible grants.
If one could simply sign-up with an ETH address and receive REP (and ETH), a certain population would start creating such en-masse, at a minimum stranding the tokens and at worst affecting the outcome of votes.
Current core membership of the Genesis DAO includes several DAOstack employees and European DAO enthusiasts who know each other personally by now, having gone to the same Meetups, conferences and events. At a minimum, everyone’s a friend of a friend. They have a large and often overlapping online presence, not only on consumer social media sites but on professional online environments, like Github or LinkedIn. This network effect is amplified by the regional proximity and the prevalence of OSS techies and crypto enthusiasts. So identity confirmation and suitability assessment happens partly off-line and entirely off-chain. This is wonderful but simply does not scale.
The current system of the social proof via online presence is predicated on the candidates using similar outlets in a similar fashion, and very substantial individuals do not. Some cybersecurity or financial professionals have no online presence as an OpSec choice. Academics in a range of disciplines have never heard of Github or Reddit and would think that Twitter is Facebook for ADHD preteens.
Let me suggest that since personal references are already playing a huge role, but perhaps behind the scenes, we make them more explicit, as a supplement or a possible alternative to the ‘social media proof’’.
Perhaps we should look at Keybase as an online resource for constructed identity.
Unlike the proprietary Telegram beloved by spammers and scammers, DAOtalk Discourse verifies email, so perhaps candidates can be directed to spend some time there and cross reference the account in the application proposal. None of this will stop dedicated practitioners of social engineering, but we do raise the bar somewhat.
More importantly we should reduce the enticement by granting initially only say 10 REP for a “candidate” status, but provide a clear path to grow it to 100 and more, through participation in designated channels, voting on proposals, completing small tasks. Then, say after 60 days there can be an expectation of another proposal to a full status, with a corresponding REP level. Also, I think that 0.05 ETH is too much by a wide margin, only necessary for people who use the default fee settings. Some people in poorer regions will setup accounts just to get that, and the only reason you are not seeing a hundred of those today is that the word did not get out yet.
Separate entirely is the question of sending 1000 DAI to someone you never met, on a promise of some future work. Having solid identification and contact information seems only prudent but likely insufficient. Personally I’d never pay a new vendor up front, unless they were established and it was for a purchase of a COTS item. I’d aim to pay on delivery but may consider a deposit of at most 20%, with the balance upon completion. A better formula is progress payments, with say 40% mid-way and the balance on complete delivery. Of course, by the time it’s our third gig, all the terms are up for discussion.